Regulatory Takings

Lingle v. Chevron U.S.A., Inc

 

Courts are currently divided as to which of two tests should be used to analyze a regulatory takings challenge to a rent control statute. One test analyzes the challenge under theTakings Clause, inquiring whether the statute substantially advances a legitimate state interest. The other test analyzes the challenge under the Due Process Clause, inquiring merely whether the legislature could have rationally believed that the statute would substantially advance a legitimate state interest -- a less stringent test. The Supreme Court will resolve the issue of which test is to be applied.

Questions as Framed for the Court by the Parties

Whether the Just Compensation Clause authorizes a court to invalidate state economic legislation on its face and enjoin enforcement of the law on the basis that the legislation does not substantially advance a legitimate state interest, without regard to whether the challenged law diminishes the economic value or usefulness of any property.
Whether a court, in determining under the Just Compensation Clause whether state economic legislation substantially advances a legitimate state interest, should apply a deferential standard of review equivalent to that traditionally applied to economic legislation under the Due Process and Equal Protection Clauses, or may instead substitute its judgment for that of the legislature by determining de novo, by a preponderance of the evidence at trial, whether the legislation will be effective in achieving its goals.

In 1997, the Hawaii Legislature enacted Act 257 in reaction to the high gasoline prices in the state. The act, an attempt to curb gas prices for consumers in Hawaii, controls the maximum rent that oil companies operating in the state can receive from dealers who lease company-owned service stations. The aim of the legislature was to have the lessee-dealers ultimately pass their lower operating costs on to consumers.

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Town of Chester v. Laroe Estates, Inc.

Issues

Under Federal Rules of Civil Procedure, are intervenors participating in a lawsuit required to have Article III standing, or is standing presumed if there is a valid case or controversy between the parties?

The Supreme Court will consider whether under Federal Rule of Civil Procedure 24(a) intervenors in a lawsuit must have Article III standing or whether a case or controversy between the named parties satisfies Article III. Petitioner, the Town of Chester, argues that courts should not permit parties to intervene in an action unless they can prove they have independent Article III standing, which it argues is required by Federal Rule of Civil Procedure 24. In contrast, Respondent Laroe Estates contends that so long as the initial party who brought the action has Article III standing, other parties can intervene without showing standing. The outcome of this case will have implications for the separation of powers and the potential litigation burdens on courts and parties. 

Questions as Framed for the Court by the Parties

Whether intervenors participating in a lawsuit as of right under Federal Rule of Civil Procedure 24(a) must have Article III standing, or whether Article III is satisfied so long as there is a valid case or controversy between the named parties.

Steven Sherman, now deceased, was a land developer in the Town of Chester who applied in 2000 to subdivide a $2.7 million piece of land that measured close to 400 acres. See Brief for Petitioner at 2. Over the next decade, the Town and Sherman went back and forth, with the Town passing new regulations that barred Sherman’s subdivision and Sherman submitting new proposals to satisfy the new regulations.

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