OPINION OF THE COURT
LINGLE V. CHEVRON U. S. A. INC.
544 U. S. ____ (2005)
SUPREME COURT OF THE UNITED STATES
NO. 04-163
LINDA LINGLE, GOVERNOR OF HAWAII, et al.,
PETITIONERS
v. CHEVRON U. S. A. INC.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[May 23, 2005]
Justice O’Connor delivered the
opinion of the Court.
On occasion, a would-be doctrinal
rule or test finds its way into our case law through simple
repetition of a phrase—however fortuitously coined. A quarter
century ago, in
Agins v.
City of Tiburon,
447 U. S. 255
(1980), the Court declared that government regulation of private
property “effects a taking if [such regulation] does not
substantially advance legitimate state interests … .”
Id., at 260. Through reiteration in a half dozen or so
decisions since
Agins, this language has been ensconced in
our Fifth Amendment takings jurisprudence. See
Monterey v.
Del Monte Dunes at Monterey, Ltd.,
526 U. S. 687, 704
(1999) (citing cases).
In the case before us, the lower courts
applied
Agins’ “substantially advances” formula to strike
down a Hawaii statute that limits the rent that oil companies may
charge to dealers who lease service stations owned by the
companies. The lower courts held that the rent cap effects an
uncompensated taking of private property in violation of the Fifth
and Fourteenth Amendments because it does not substantially advance
Hawaii’s asserted interest in controlling retail gasoline prices.
This case requires us to decide whether the “substantially
advances” formula announced in
Agins is an appropriate
test for determining whether a regulation effects a Fifth Amendment
taking. We conclude that it is not.
I
The State of Hawaii, whose
territory comprises an archipelago of 132 islands clustered in the
midst of the Pacific Ocean, is located over 1,600 miles from the U.
S. mainland and ranks among the least populous of the 50 States.
Because of Hawaii’s small size and geographic isolation, its
wholesale market for oil products is highly concentrated. When this
lawsuit began in 1997, only two refineries and six gasoline
wholesalers were doing business in the State. As of that time,
respondent Chevron U. S. A. Inc. was the largest refiner and
marketer of gasoline in Hawaii: It controlled 60 percent of the
market for gasoline produced or refined in-state and 30 percent of
the wholesale market on the State’s most populous island, Oahu.
Gasoline is sold at retail in
Hawaii from about 300 different service stations. About half of
these stations are leased from oil companies by independent
lessee-dealers, another 75 or so are owned and operated by “open”
dealers, and the remainder are owned and operated by the oil
companies. Chevron sells most of its product through 64 independent
lessee-dealer stations. In a typical lessee-dealer arrangement,
Chevron buys or leases land from a third party, builds a service
station, and then leases the station to a dealer on a turnkey
basis. Chevron charges the lessee-dealer a monthly rent, defined as
a percentage of the dealer’s margin on retail sales of gasoline and
other goods. In addition, Chevron requires the lessee-dealer to
enter into a supply contract, under which the dealer agrees to
purchase from Chevron whatever is necessary to satisfy demand at
the station for Chevron’s product. Chevron unilaterally sets the
wholesale price of its product.
The Hawaii Legislature enacted Act 257 in June
1997, apparently in response to concerns about the effects of
market concentration on retail gasoline prices. See 1997 Haw. Sess.
Laws no. 257, §1. The statute seeks to protect independent dealers
by imposing certain restrictions on the ownership and leasing of
service stations by oil companies. It prohibits oil companies from
converting existing lessee-dealer stations to company-operated
stations and from locating new company-operated stations in close
proximity to existing dealer-operated stations. Haw. Rev. Stat.
§§486H–10.4(a), (b) (1998 Cum. Supp.). More importantly for present
purposes, Act 257 limits the amount of rent that an oil company may
charge a lessee-dealer to 15 percent of the dealer’s gross profits
from gasoline sales plus 15 percent of gross sales of products
other than gasoline. §486H–10.4(c).
Thirty days after Act 257’s enactment, Chevron
sued the Governor and Attorney General of Hawaii in their official
capacities (collectively Hawaii) in the United States District
Court for the District of Hawaii, raising several federal
constitutional challenges to the statute. As pertinent here,
Chevron claimed that the statute’s rent cap provision, on its face,
effected a taking of Chevron’s property in violation of the Fifth
and Fourteenth Amendments. Chevron sought a declaration to this
effect as well as an injunction against the application of the rent
cap to its stations. Chevron swiftly moved for summary judgment on
its takings claim, arguing that the rent cap does not substantially
advance any legitimate government interest. Hawaii filed a
cross-motion for summary judgment on all of Chevron’s claims.
To facilitate resolution of the summary
judgment motions, the parties jointly stipulated to certain
relevant facts. They agreed that Act 257 reduces by about $207,000
per year the aggregate rent that Chevron would otherwise charge on
11 of its 64 lessee-dealer stations. On the other hand, the statute
allows Chevron to collect more rent than it would otherwise charge
at its remaining 53 lessee-dealer stations, such that Chevron could
increase its overall rental income from all 64 stations by nearly
$1.1 million per year. The parties further stipulated that, over
the past 20 years, Chevron has not fully recovered the costs of
maintaining lessee-dealer stations in any State through rent alone.
Rather, the company recoups its expenses through a combination of
rent and product sales. Finally, the joint stipulation states that
Chevron has earned in the past, and anticipates that it will
continue to earn under Act 257, a return on its investment in
lessee-dealer stations in Hawaii that satisfies any constitutional
standard.
The District Court granted summary judgment to
Chevron, holding that “Act 257 fails to substantially advance a
legitimate state interest, and as such, effects an unconstitutional
taking in violation of the Fifth and Fourteenth Amendments.”
Chevron U. S. A. Inc. v.
Cayetano, 57
F. Supp. 2d 1003, 1014 (1998). The District Court accepted
Hawaii’s argument that the rent cap was intended to prevent
concentration of the retail gasoline market—and, more importantly,
resultant high prices for consumers—by maintaining the viability of
independent lessee-dealers.
Id., at 1009–1010. The court
concluded that the statute would not substantially advance this
interest, however, because it would not actually reduce
lessee-dealers’ costs or retail prices. It found that the rent cap
would allow incumbent lessee-dealers, upon transferring occupancy
rights to a new lessee, to charge the incoming lessee a premium
reflecting the value of the rent reduction. Accordingly, the
District Court reasoned, the incoming lessee’s overall expenses
would be the same as in the absence of the rent cap, so there would
be no savings to pass along to consumers.
Id., at
1010–1012. Nor would incumbent lessees benefit from the rent cap,
the court found, because the oil company lessors would unilaterally
raise wholesale fuel prices in order to offset the reduction in
their rental income.
Id., at 1012–1014.
On appeal, a divided panel of the Court of
Appeals for the Ninth Circuit held that the District Court had
applied the correct legal standard to Chevron’s takings claim.
Chevron U. S. A. Inc. v.
Cayetano, 224
F. 3d 1030, 1033–1037 (2000). The Court of Appeals vacated the
grant of summary judgment, however, on the ground that a genuine
issue of material fact remained as to whether the Act would benefit
consumers.
Id., at 1037–1042. Judge William Fletcher
concurred in the judgment, maintaining that the “reasonableness”
standard applicable to “ordinary rent and price control laws”
should instead govern Chevron’s claim.
Id., at 1048.
On remand, the District Court entered judgment
for Chevron after a 1-day bench trial in which Chevron and Hawaii
called competing expert witnesses (both economists) to testify. 198
F. Supp. 2d 1182 (2002). Finding Chevron’s expert witness to
be “more persuasive” than the State’s expert, the District Court
once again concluded that oil companies would raise wholesale
gasoline prices to offset any rent reduction required by Act 257,
and that the result would be an increase in retail gasoline prices.
Id., at 1187–1189. Even if the rent cap did reduce
lessee-dealers’ costs, the court found, they would not pass on any
savings to consumers.
Id., at 1189. The court went on to
reiterate its determination that Act 257 would enable incumbent
lessee-dealers to sell their leaseholds at a premium, such that
incoming lessees would not obtain any of the benefits of the rent
cap.
Id., at 1189–1190. And while it acknowledged that the
rent cap could preclude oil companies from constructively evicting
dealers through excessive rents, the court found no evidence that
Chevron or any other oil company would attempt to charge such rents
in the absence of the cap.
Id., at 1191. Finally, the
court concluded that Act 257 would in fact decrease the number of
lessee-dealer stations because the rent cap would discourage oil
companies from building such stations.
Id., at 1191–1192.
Based on these findings, the District Court held that “Act 257
effect[ed] an unconstitutional regulatory taking given its failure
to substantially advance any legitimate state interest.”
Id., at 1193.
The Ninth Circuit affirmed, holding that its
decision in the prior appeal barred Hawaii from challenging the
application of the “substantially advances” test to Chevron’s
takings claim or from arguing for a more deferential standard of
review. 363 F. 3d 846, 849–855 (2004). The panel majority went
on to reject Hawaii’s challenge to the application of the standard
to the facts of the case.
Id., at 855–858. Judge Fletcher
dissented, renewing his contention that Act 257 should not be
reviewed under the “substantially advances” standard.
Id.,
at 859–861. We granted certiorari, 543 U. S. ___ (2004), and now
reverse.
II
A
The Takings Clause of the Fifth
Amendment, made applicable to the States through the Fourteenth,
see
Chicago, B. & Q. R. Co. v.
Chicago,
166 U. S. 226
(1897), provides that private property shall not “be taken for
public use, without just compensation.” As its text makes plain,
the Takings Clause “does not prohibit the taking of private
property, but instead places a condition on the exercise of that
power.”
First English Evangelical Lutheran Church of
Glendale v.
County of Los Angeles,
482 U. S. 304, 314
(1987). In other words, it “is designed not to limit the
governmental interference with property rights
per se, but
rather to secure
compensation in the event of otherwise
proper interference amounting to a taking.”
Id., at 315
(emphasis in original). While scholars have offered various
justifications for this regime, we have emphasized its role in
“bar[ring] Government from forcing some people alone to bear public
burdens which, in all fairness and justice, should be borne by the
public as a whole.”
Armstrong v.
United States,
364 U. S. 40, 49
(1960); see also
Monongahela Nav. Co. v.
United
States,
148 U.
S. 312, 325 (1893).
The paradigmatic taking requiring
just compensation is a direct government appropriation or physical
invasion of private property. See,
e.g.,
United
States v.
Pewee Coal Co.,
341 U. S. 114 (1951)
(Government’s seizure and operation of a coal mine to prevent a
national strike of coal miners effected a taking);
United
States v.
General Motors Corp.,
323 U. S. 373 (1945)
(Government’s occupation of private warehouse effected a taking).
Indeed, until the Court’s watershed decision in
Pennsylvania
Coal Co. v.
Mahon,
260 U. S. 393 (1922),
“it was generally thought that the Takings Clause reached
only a ‘direct appropriation’ of property, or the
functional equivalent of a ‘practical ouster of [the owner’s]
possession.’ ”
Lucas v.
South Carolina Coastal
Council,
505
U. S. 1003, 1014 (1992) (citations omitted and emphasis added;
brackets in original); see also
id., at 1028, n. 15
(“[E]arly constitutional theorists did not believe the Takings
Clause embraced regulations of property at all”).
Beginning with Mahon,
however, the Court recognized that government regulation of private
property may, in some instances, be so onerous that its effect is
tantamount to a direct appropriation or ouster—and that such
“regulatory takings” may be compensable under the Fifth Amendment.
In Justice Holmes’ storied but cryptic formulation, “while property
may be regulated to a certain extent, if regulation goes too far it
will be recognized as a taking.” 260 U. S., at 415. The rub, of
course, has been—and remains—how to discern how far is “too far.”
In answering that question, we must remain cognizant that
“government regulation—by definition—involves the adjustment of
rights for the public good,” Andrus v. Allard,
444 U. S. 51, 65
(1979), and that “Government hardly could go on if to some extent
values incident to property could not be diminished without paying
for every such change in the general law,” Mahon,
supra, at 413.
Our precedents stake out two
categories of regulatory action that generally will be deemed
per se takings for Fifth Amendment purposes. First, where
government requires an owner to suffer a permanent physical
invasion of her property—however minor—it must provide just
compensation. See Loretto v. Teleprompter Manhattan
CATV Corp., 458
U. S. 419 (1982) (state law requiring landlords to permit cable
companies to install cable facilities in apartment buildings
effected a taking). A second categorical rule applies to
regulations that completely deprive an owner of “all
economically beneficial us[e]” of her property. Lucas, 505
U. S., at 1019 (emphasis in original). We held in Lucas
that the government must pay just compensation for such “total
regulatory takings,” except to the extent that “background
principles of nuisance and property law” independently restrict the
owner’s intended use of the property. Id., at
1026–1032.
Outside these two relatively
narrow categories (and the special context of land-use exactions
discussed below, see infra, at 16–18), regulatory takings
challenges are governed by the standards set forth in Penn
Central Transp. Co. v. New York City, 438 U. S. 104 (1978). The Court in
Penn Central acknowledged that it had hitherto been
“unable to develop any ‘set formula’ ” for evaluating
regulatory takings claims, but identified “several factors that
have particular significance.” Id., at 124. Primary among
those factors are “[t]he economic impact of the regulation on the
claimant and, particularly, the extent to which the regulation has
interfered with distinct investment-backed expectations.”
Ibid. In addition, the “character of the governmental
action”—for instance whether it amounts to a physical invasion or
instead merely affects property interests through “some public
program adjusting the benefits and burdens of economic life to
promote the common good”—may be relevant in discerning whether a
taking has occurred. Ibid. The Penn Central
factors—though each has given rise to vexing subsidiary
questions—have served as the principal guidelines for resolving
regulatory takings claims that do not fall within the physical
takings or Lucas rules. See, e.g.,
Palazzolo v. Rhode Island, 533 U. S. 606, 617–618
(2001); id., at 632–634 (O’Connor, J.,
concurring).
Although our regulatory takings
jurisprudence cannot be characterized as unified, these three
inquiries (reflected in Loretto, Lucas, and
Penn Central) share a common touchstone. Each aims to
identify regulatory actions that are functionally equivalent to the
classic taking in which government directly appropriates private
property or ousts the owner from his domain. Accordingly, each of
these tests focuses directly upon the severity of the burden that
government imposes upon private property rights. The Court has held
that physical takings require compensation because of the unique
burden they impose: A permanent physical invasion, however minimal
the economic cost it entails, eviscerates the owner’s right to
exclude others from entering and using her property—perhaps the
most fundamental of all property interests. See Dolan v.
City of Tigard, 512 U. S. 374, 384 (1994);
Nollan v. California Coastal Comm’n, 483 U. S. 825, 831–832 (1987);
Loretto, supra, at 433; Kaiser Aetna v.
United States, 444 U. S. 164, 176
(1979). In the Lucas context, of course, the complete
elimination of a property’s value is the determinative factor. See
Lucas, supra, at 1017 (positing that “total
deprivation of beneficial use is, from the landowner’s point of
view, the equivalent of a physical appropriation”). And the
Penn Central inquiry turns in large part, albeit not
exclusively, upon the magnitude of a regulation’s economic impact
and the degree to which it interferes with legitimate property
interests.
B
In
Agins v. City of Tiburon, a case involving a
facial takings challenge to certain municipal zoning ordinances,
the Court declared that “[t]he application of a general zoning law
to particular property effects a taking if the ordinance does not
substantially advance legitimate state interests, see
Nectow v. Cambridge, 277 U. S. 183, 188 (1928), or denies
an owner economically viable use of his land, see Penn Central
Transp. Co. v. New York City, 438 U. S. 104, 138, n. 36 (1978).” 447
U. S., at 260. Because this statement is phrased in the
disjunctive, Agins’ “substantially advances” language has
been read to announce a stand-alone regulatory takings test that is
wholly independent of Penn Central or any other test.
Indeed, the lower courts in this case struck down Hawaii’s rent
control statute as an “unconstitutional regulatory taking,” 198
F. Supp. 2d, at 1193, based solely upon a finding that it does
not substantially advance the State’s asserted interest in
controlling retail gasoline prices. See supra, at 6–7.
Although a number of our takings precedents have recited the
“substantially advances” formula minted in Agins, this is
our first opportunity to consider its validity as a freestanding
takings test. We conclude that this formula prescribes an inquiry
in the nature of a due process, not a takings, test, and that it
has no proper place in our takings jurisprudence.
There is no question
that the “substantially advances” formula was derived from due
process, not takings, precedents. In support of this new language,
Agins cited Nectow v. Cambridge,
277 U. S. 183, a 1928 case in which
the plaintiff claimed that a city zoning ordinance “deprived him of
his property without due process of law in contravention of the
Fourteenth Amendment,” id., at 185. Agins then
went on to discuss Village of Euclid v. Ambler Realty
Co., 272 U. S.
365 (1926), a historic decision holding that a municipal zoning
ordinance would survive a substantive due process challenge so long
as it was not “clearly arbitrary and unreasonable, having no
substantial relation to the public health, safety, morals, or
general welfare.” Id., at 395 (emphasis added); see
also Nectow, supra, at 188 (quoting the same
“substantial relation” language from Euclid).
When viewed in historical context,
the Court’s reliance on Nectow and Euclid is
understandable. Agins was the Court’s first case involving
a challenge to zoning regulations in many decades, so it was
natural to turn to these seminal zoning precedents for guidance.
See Brief for United States as Amicus Curiae in
Agins v. City of Tiburon, O. T. 1979, No.
602, pp. 12–13 (arguing that Euclid “set out the
principles applicable to a determination of the facial validity of
a zoning ordinance attacked as a violation of the Takings Clause of
the Fifth Amendment”). Moreover, Agins’ apparent
commingling of due process and takings inquiries had some precedent
in the Court’s then-recent decision in Penn Central. See
438 U. S., at 127 (stating in dicta that “[i]t is … implicit in
Goldblatt [v. Hempstead, 369 U. S. 590 (1962),]
that a use restriction on real property may constitute a ‘taking’
if not reasonably necessary to the effectuation of a substantial
public purpose, see Nectow v. Cambridge,
supra”). But see Goldblatt, supra, at
594–595 (quoting “ ‘reasonably necessary’ ” language from
Lawton v. Steele, 152 U. S. 133, 137
(1894), a due process case, and applying a deferential
“ ‘reasonableness’ ” standard to determine whether a
challenged regulation was a “valid exercise of the … police power”
under the Due Process Clause). Finally, when Agins was
decided, there had been some history of referring to deprivations
of property without due process of law as “takings,” see,
e.g., Rowan v. Post Office Dept.,
397 U. S. 728,
740 (1970), and the Court had yet to clarify whether “regulatory
takings” claims were properly cognizable under the Takings Clause
or the Due Process Clause, see Williamson County Regional
Planning Comm’n v. Hamilton Bank of Jefferson City,
473 U. S. 172,
197–199 (1985).
Although Agins’ reliance
on due process precedents is understandable, the language the Court
selected was regrettably imprecise. The “substantially advances”
formula suggests a means-ends test: It asks, in essence, whether a
regulation of private property is effective in achieving
some legitimate public purpose. An inquiry of this nature has some
logic in the context of a due process challenge, for a regulation
that fails to serve any legitimate governmental objective may be so
arbitrary or irrational that it runs afoul of the Due Process
Clause. See, e.g., County of Sacramento v.
Lewis, 523
U. S. 833, 846 (1998) (stating that the Due Process Clause is
intended, in part, to protect the individual against “the exercise
of power without any reasonable justification in the service of a
legitimate governmental objective”). But such a test is
not a valid method of discerning whether private property has been
“taken” for purposes of the Fifth Amendment.
In stark contrast to
the three regulatory takings tests discussed above, the
“substantially advances” inquiry reveals nothing about the
magnitude or character of the burden a particular
regulation imposes upon private property rights. Nor does it
provide any information about how any regulatory burden is
distributed among property owners. In consequence, this
test does not help to identify those regulations whose effects are
functionally comparable to government appropriation or invasion of
private property; it is tethered neither to the text of the Takings
Clause nor to the basic justification for allowing regulatory
actions to be challenged under the Clause.
Chevron appeals to the
general principle that the Takings Clause is meant “ ‘to bar
Government from forcing some people alone to bear public burdens
which, in all fairness and justice, should be borne by the public
as a whole.’ ” Brief for Respondent 17–21 (quoting
Armstrong, 364 U. S., at 49). But that appeal is clearly
misplaced, for the reasons just indicated. A test that tells us
nothing about the actual burden imposed on property rights, or how
that burden is allocated cannot tell us when justice might require
that the burden be spread among taxpayers through the payment of
compensation. The owner of a property subject to a regulation that
effectively serves a legitimate state interest may be just
as singled out and just as burdened as the owner of a property
subject to an ineffective regulation. It would make little
sense to say that the second owner has suffered a taking while the
first has not. Likewise, an ineffective regulation may not
significantly burden property rights at all, and it may distribute
any burden broadly and evenly among property owners. The notion
that such a regulation nevertheless “takes” private property for
public use merely by virtue of its ineffectiveness or foolishness
is untenable.
Instead of addressing
a challenged regulation’s effect on private property, the
“substantially advances” inquiry probes the regulation’s underlying
validity. But such an inquiry is logically prior to and distinct
from the question whether a regulation effects a taking, for the
Takings Clause presupposes that the government has acted in pursuit
of a valid public purpose. The Clause expressly requires
compensation where government takes private property “for
public use.” It does not bar government from interfering with
property rights, but rather requires compensation “in the event of
otherwise proper interference amounting to a taking.”
First English Evangelical Lutheran Church, 482 U. S., at
315 (emphasis added). Conversely, if a government action is found
to be impermissible—for instance because it fails to meet the
“public use” requirement or is so arbitrary as to violate due
process—that is the end of the inquiry. No amount of compensation
can authorize such action.
Chevron’s challenge to
the Hawaii statute in this case illustrates the flaws in the
“substantially advances” theory. To begin with, it is unclear how
significantly Hawaii’s rent cap actually burdens Chevron’s property
rights. The parties stipulated below that the cap would reduce
Chevron’s aggregate rental income on 11 of its 64 lessee-dealer
stations by about $207,000 per year, but that Chevron nevertheless
expects to receive a return on its investment in these stations
that satisfies any constitutional standard. See supra, at
4. Moreover, Chevron asserted below, and the District Court found,
that Chevron would recoup any reductions in its rental income by
raising wholesale gasoline prices. See supra, at 5. In
short, Chevron has not clearly argued—let alone established—that it
has been singled out to bear any particularly severe regulatory
burden. Rather, the gravamen of Chevron’s claim is simply that
Hawaii’s rent cap will not actually serve the State’s legitimate
interest in protecting consumers against high gasoline prices.
Whatever the merits of that claim, it does not sound under the
Takings Clause. Chevron plainly does not seek compensation for a
taking of its property for a legitimate public use, but rather an
injunction against the enforcement of a regulation that it alleges
to be fundamentally arbitrary and irrational.
Finally, the
“substantially advances” formula is not only doctrinally
untenable as a takings test—its application as such would also
present serious practical difficulties. The Agins formula
can be read to demand heightened means-ends review of virtually any
regulation of private property. If so interpreted, it would require
courts to scrutinize the efficacy of a vast array of state and
federal regulations—a task for which courts are not well suited.
Moreover, it would empower—and might often require—courts to
substitute their predictive judgments for those of elected
legislatures and expert agencies.
Although the instant
case is only the tip of the proverbial iceberg, it foreshadows the
hazards of placing courts in this role. To resolve Chevron’s
takings claim, the District Court was required to choose between
the views of two opposing economists as to whether Hawaii’s rent
control statute would help to prevent concentration and
supracompetitive prices in the State’s retail gasoline market.
Finding one expert to be “more persuasive” than the other, the
court concluded that the Hawaii Legislature’s chosen regulatory
strategy would not actually achieve its objectives. See 198
F. Supp. 2d, at 1187–1193. Along the way, the court determined
that the State was not entitled to enact a prophylactic rent cap
without actual evidence that oil companies had charged, or would
charge, excessive rents. See id., at 1191. Based
on these findings, the District Court enjoined further enforcement
of Act 257’s rent cap provision against Chevron. We find the
proceedings below remarkable, to say the least, given that we have
long eschewed such heightened scrutiny when addressing substantive
due process challenges to government regulation. See,
e.g., Exxon Corp. v. Governor of
Maryland, 437
U. S. 117, 124–125 (1978); Ferguson v.
Skrupa, 372
U. S. 726, 730–732 (1963). The reasons for deference to
legislative judgments about the need for, and likely effectiveness
of, regulatory actions are by now well established, and we think
they are no less applicable here.
For the foregoing
reasons, we conclude that the “substantially advances” formula
announced in Agins is not a valid method of identifying
regulatory takings for which the Fifth Amendment requires just
compensation. Since Chevron argued only a “substantially advances”
theory in support of its takings claim, it was not entitled to
summary judgment on that claim.
III
We
emphasize that our holding today—that the “substantially advances”
formula is not a valid takings test—does not require us to disturb
any of our prior holdings. To be sure, we applied a “substantially
advances” inquiry in Agins itself, see 447 U. S., at
261–262 (finding that the challenged zoning ordinances
“substantially advance[d] legitimate governmental goals”), and
arguably also in Keystone Bituminous Coal Assn. v.
DeBenedictis, 480 U. S. 470, 485–492
(1987) (quoting “ ‘substantially advance[s]’ ” language
and then finding that the challenged statute was intended to
further a substantial public interest). But in no case have we
found a compensable taking based on such an inquiry. Indeed, in
most of the cases reciting the “substantially advances” formula,
the Court has merely assumed its validity when referring to it in
dicta. See Tahoe-Sierra Preservation Council, Inc. v.
Tahoe Regional Planning Agency, 535 U. S. 302, 334
(2002); Del Monte Dunes, 526 U. S., at 704;
Lucas, 505 U. S., at 1016; Yee v.
Escondido, 503 U. S. 519, 534
(1992); United States v. Riverside Bayview Homes,
Inc., 474 U. S.
121, 126 (1985).
It might
be argued that this formula played a role in our decisions in
Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and
Dolan v. City of Tigard, 512 U. S. 374 (1994). See Brief for
Respondent 21–23. But while the Court drew upon the language of
Agins in these cases, it did not apply the “substantially
advances” test that is the subject of today’s decision. Both
Nollan and Dolan involved Fifth Amendment takings
challenges to adjudicative land-use exactions—specifically,
government demands that a landowner dedicate an easement allowing
public access to her property as a condition of obtaining a
development permit. See Dolan, supra, at 379–380
(permit to expand a store and parking lot conditioned on the
dedication of a portion of the relevant property for a “greenway,”
including a bike/pedestrian path); Nollan, supra,
at 828 (permit to build a larger residence on beachfront property
conditioned on dedication of an easement allowing the public to
traverse a strip of the property between the owner’s seawall and
the mean high-tide line).
In each case, the
Court began with the premise that, had the government simply
appropriated the easement in question, this would have been a
per se physical taking. Dolan, supra, at
384; Nollan, supra, at 831–832. The question was
whether the government could, without paying the compensation that
would otherwise be required upon effecting such a taking, demand
the easement as a condition for granting a development permit the
government was entitled to deny. The Court in Nolan
answered in the affirmative, provided that the exaction would
substantially advance the same government interest that would
furnish a valid ground for denial of the permit. 483 U. S., at
834–837. The Court further refined this requirement in
Dolan, holding that an adjudicative exaction requiring
dedication of private property must also be “ ‘rough[ly]
proportiona[l]’ … both in nature and extent to the impact of the
proposed development.” 512 U. S., at 391; see also Del Monte
Dunes, supra, at 702 (emphasizing that we have not
extended this standard “beyond the special context of [such]
exactions”).
Although
Nollan and Dolan quoted Agins’ language,
see Dolan, supra, at 385; Nollan,
supra, at 834, the rule those decisions established is
entirely distinct from the “substantially advances” test we address
today. Whereas the “substantially advances” inquiry before us now
is unconcerned with the degree or type of burden a regulation
places upon property, Nollan and Dolan both
involved dedications of property so onerous that, outside the
exactions context, they would be deemed per se physical
takings. In neither case did the Court question whether the
exaction would substantially advance some legitimate state
interest. See Dolan, supra, at 387–388;
Nollan, supra, at 841. Rather, the issue was
whether the exactions substantially advanced the same
interests that land-use authorities asserted would allow them to
deny the permit altogether. As the Court explained in
Dolan, these cases involve a special application of the
“doctrine of ‘unconstitutional conditions,’ ” which provides
that “the government may not require a person to give up a
constitutional right—here the right to receive just compensation
when property is taken for a public use—in exchange for a
discretionary benefit conferred by the government where the benefit
has little or no relationship to the property.” 512 U. S., at 385.
That is worlds apart from a rule that says a regulation affecting
property constitutes a taking on its face solely because it does
not substantially advance a legitimate government interest. In
short, Nollan and Dolan cannot be characterized
as applying the “substantially advances” test we address today, and
our decision should not be read to disturb these
precedents.
***
Twenty-five years ago, the Court posited that
a regulation of private property “effects a taking if [it] does not
substantially advance [a] legitimate state interes[t].”
Agins, supra, at 260. The lower courts in this
case took that statement to its logical conclusion, and in so
doing, revealed its imprecision. Today we correct course. We hold
that the “substantially advances” formula is not a valid takings
test, and indeed conclude that it has no proper place in our
takings jurisprudence. In so doing, we reaffirm that a plaintiff
seeking to challenge a government regulation as an uncompensated
taking of private property may proceed under one of the other
theories discussed above—by alleging a “physical” taking, a
Lucas-type “total regulatory taking,” a Penn
Central taking, or a land-use exaction violating the standards
set forth in Nollan and Dolan. Because Chevron
argued only a “substantially advances” theory in support of its
takings claim, it was not entitled to summary judgment on that
claim. Accordingly, we reverse the judgment of the Ninth Circuit
and remand the case for further proceedings consistent with this
opinion.
It is so
ordered.
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