Environmental Politics and Law

EVST 255 - Lecture 19 - Land Use Law and Property Rights

Chapter 1. Property Rights: Fractured by Law and Custom [00:00:00]

Professor John Wargo: Okay everybody, let's start in. I've got a couple of announcements. One is to take a look at this first slide and realize that this is lecture nineteen and it's April 6, and you have two weeks after this week left of classes. So the term is running away from us. The second is that I know that a number of you were disappointed in performance or grading of the midterm, those that were on the low end of the scale. And we're going to offer an opportunity to better your grade. And on Thursday, you will receive an opportunity to write an additional five-page paper. And what we'll do with that is we'll take the grade from that second paper, and we will average the result with your grade from the five-page paper that you submitted back in early March. So that if you are down in the sixty-five point range from your midterm, you will have a significant increase in your opportunity to do well in the class. So you'll have a week to prepare that and turn it back in.

I want to continue talking about property rights today. And I'm going to also address most of the lecture to the problem of takings and when the government has the right to take private property for public purposes and under what kinds of circumstances compensation is required. You recall the Fifth Amendment of the Constitution, that private property can't be taken without compensation if it's going to be used for public purposes.

Before we get there, I want you to think about the way that property rights are fractured by law, but also by jurisdictional boundaries. And I wanted to just spend a moment to give you a sense of the kinds of problems that are experienced out in Wyoming in the northwestern corner known as the greater Yellowstone ecosystem. And this is an extraordinary area. It's one of the last great tracts of forest lands in the northern Rockies. And it also is a habitat to a variety of large mammals, many of which are either threatened or rare or endangered. And the jurisdictional boundaries are really complicated and I think very interesting. There are several national parks: the Yellowstone National Park, also the national forests, the Grand Teton National Forest, several other national wildlife refuges are also in this area. Several Native American reservations are in this area as well.

And what you see on the right hand side of this slide is just one example of one species of wolves that cross these different boundaries. So the purpose of this chart is to give you a sense that there are a wide number of laws that are at play that give implementation authority to different agencies, such as the Forest Service, the Bureau of Land Management, the National Park Service, the Fish and Wildlife Service, and also complimentary state agencies. And there are also a large set of private landowners that own huge tracts of land. So that it's a mixture of public and private rights that have a complexity that often does not fare well for the natural resources in the area. And the area is also rich in natural gas as well as oil reserves that create some other types of conflicts. So timber harvesting, oil extraction, water rights, all of these different resources need to be managed very carefully.

And the central problem represented by this map is that certain kinds of resources, such as wolves or grizzly bears or complexes of species, transcend these jurisdictional boundaries. And the Forest Service may have a very different policy than the National Park Service in determining how they're managed. So the same species of unusual timber might exist on Forest Service land, and the Forest Service may be giving out leases to extract those timber resources, whereas the Park Service would not do so. And I mentioned the problem of fire crossing these jurisdictional boundaries as well, and having the Forest Service have a policy of fire suppression, as opposed to the Park Service's policy of "let it burn." So that the fundamental problem here is that these resources are spanning the jurisdictional boundaries and there is inconsistency in the mission and intent of these different agencies.

I want you also to think just a moment about the grizzly bears. Grizzly bears are found in Yellowstone. They're found in Canada and Alaska as well. But consider that this bear was really a common property resource in legal terms. It basically would cross from one area to another. This bear would be protected if it happened to be wandering through National Park lands. But if it had wandered on National Park lands say, up in Alaska that were also Native American lands that had been dedicated by the Native Claim Settlement Act that applies to Alaskan lands, then this bear would be appropriable. In other words, Native Americans that lived in that area would have the right to hunt this bear.

So I mean, think also about the idea of fish, in addition to mammals such as this. They are public resources until they're killed. So if you get the right to go hunting, once you kill the animal, then it becomes your private property, unless of course it's a rare, threatened, or endangered species. But even they may be appropriable or shot or caught under some provisions of Native populations' rights.

So also think about the way that we allocate fishing rights. In class, I was asked in section about the boundary that surrounds nations and where the rights are to fish, and can a different country come into the waters of the United States, the jurisdictional boundary of the United States. And we have a 200-mile limit as do other nations within which we have the right to exclude other parties or other groups from coming in and fishing for valuable species.

I also want you to think about the Maine coast for a moment. This is an island. I had an opportunity to become a steward or a manager of a Nature Conservancy preserve when I was a Ph.D. student here. And I actually had writing block, I was having a hard time writing my doctoral dissertation. And I called a friend who I knew was managing some lands for the Nature Conservancy, and asked if they had a reserve that they needed help with for a period of about six months. And I'll never forget her. She was delighted to offer me a chance to sit on this island, which is about 250 acres, it has a population of zero. So I would be the only person there. And that was my house for six months. I had a picnic table that looked out over these waters. This little shed was right about there, the picnic table sat right there. And so I cranked — no electricity, no running water, just a little outhouse, and the only person on the island. And I had a little Smith Corona non-electric typewriter. So I cranked out 350 pages of my Ph.D. sitting there looking out to sea. It was really quite an experience. But I also learned a lot about property rights and how rights are allocated to fishermen on the Maine Coast. And, you know, lobster is a valuable resource. So how are fishermen allowed to set traps? How is this regulated?

It turns out that it's regulated differently by different local governments, and it's regulated in a variety of ways. Each of these different buoys represented by the different colors you see here basically are allocated to individuals. So a color is assigned to a single individual. They have a legal right to fish via a license that is provided by a local community. And it's a license that is not gained easily. In most of these communities, you are not allowed to get a license unless you've lived there for a good part of your life or unless your parents or grandparents have also fished in the area. And they also regulate the number of traps that are allowed to be put on a line. So the deal is that you have a buoy here, it's tied by a rope to one of these traps, and that is linked by rope to another trap, and maybe nine, ten traps. In times of lobster scarcity or during certain seasons of the year, they may restrict the number of traps. So you stuff the bait inside the trap and then you throw it overboard, and you have a buoy on either end.

Well some lobstermen are fishing without licenses. And it's kind of curious that the culture in Maine is extremely protective of property rights. If you look out across the water in the Maine area, you see the coastline literally dotted by these different buoys. And it's very common for one boat to run over another boat's line and basically cut the trap from the buoy. That's why they have two buoys to protect against the loss, basically reduces the risk in half.

But what happened in the instance that I'm going to tell you about when I was on the island was that there was a newcomer, a young guy about eighteen years old, who wanted to set traps in this area that had been formerly allocated to different members of the community. He wasn't from that town. He was thought of as an outsider. They saw the new colored buoys and they decided that they would teach him a lesson. So that first thing that they did was they cut the line to one of the buoys. And they cut it cleanly so he would recognize that this was an intentional cut. If a propeller runs over one of these lines, it basically frays the end of it and it looks like it's not been cleanly cut. So he didn't go away. He came back, reset his traps. And so they cut the second buoy off in addition to the first buoy. So he lost all of his traps. Each one of these traps costs about $200. So if you have five or six of them, which he had, it's not a minor investment.

So he came back. The same color buoys popped up in the area, a little bit further out to sea. So they decided that they were going to have to take further action. One lobsterman pulled up and pulled a gun out and shot over his bow, a warning shot over the bow, but literally a shot over the bow. And that didn't seem to work either. So one night they found where he kept his boat in the evening, and they unscrewed one of his sparkplugs from his engine and put the sparkplug inside his gas tank. So he showed up the next morning and turned over his engine and the boat was blown to smithereens. Luckily, he was not seriously injured. So that basically taught him the lesson that this was not his territory and that he should move on.

But what's curious about this is that they have this belief in tradition, this belief in custom, and belief that they had right to fish in that area and no one else should come in this area. And the local government doesn't have the capacity to monitor or police this, nor does the state government or the Coast Guard or the National Marine Fisheries Service, so they take the law into their own hands. So now, if you ever are around a coastal area, including the Connecticut coast, and you see these lobster buoys out there, you'll know that they are territorial boundaries that have really important economic and legal significance.

Think about the case of national forests. Every time I fly to California and I look down at the Rocky Mountains, I shake my head thinking that most of the lands that I'm looking at that look like they're denuded of forest are national, public domain. And they've been basically denuded, and the soils have washed off the steeper parts, such as this example on the Tongass National Forest in Alaska. And they have no capacity to regenerate. And this is because the Forest Service gave out leases to timber companies to clear cut on lands that really did not have the capacity to sustain that form of timber harvesting. Clear cutting may be okay if lands are flatter and you would not have this likelihood of loss of soil and organic matter that literally prevents any form of sustainable timber harvesting. So that hundreds of thousands of acres in these steeper areas at higher elevations now are incapable of supporting timber because of the pressure that's been put on the Forest Service to give out these property rights in a sense, these timber harvesting rights.

Chapter 2. Managing Coastal Development and Resources [00:12:46]

I'd like to switch gears for a moment, and I'm going to begin talking about a number of cases that involve how we manage coastal development and coastal resources. And I'd like you to think for a moment about the California coastline. And this is being managed under the California Coastal Act of 1976 that created the California Coastal Commission. And what's unusual about this, and important, is that they basically took the idea that's invented in the Adirondack Park Agency Act, the idea of zoning, restricting density, of trying to cluster development in areas that have existing services. And then take areas that were undeveloped and apply rules that demanded very large acreages before new development could occur.

So this area lies within roughly about a quarter- to a half-mile of the California coast. And it demands that the state get involved in permitting, just the way that the state gets involved in permitting new development up in the Adirondacks. So that California is unusual in its history of public ownership of much of the coastline, either as state parks or county parks, or in some instances, such as the Point Reyes National Seashore that was carved out from lands that I'll speak about in just a moment.

So think about the diverse set of tools. What strategies could you use to manage coastal development? Well, the government might just go in and buy up the land, exercise their right of eminent domain. Take it out of the private sector, bring it into the public domain, which they did at the Point Reyes National Seashore. They also did this at the Cape Code National Seashore, Fire Island National Seashore, Assateague Island in Maryland, and also Padre Island in Texas. So this idea of going in and buying up private land in the coastal zone should have strong interest to us here in New Haven, given our proximity to Long Island Sound. But if you put this idea of protecting resources in the coastal zone in the context of what we now know about climate change and the probability of sea level rise and the increased frequency of storms that are severe and increased severity of storms, then you should begin to think about the degree of liability that we face collectively as a nation, about the intensity of development that we have allowed in the coastal zone.

So these coastal zone management strategies bear a lot of attention. They're worth thinking about. What works in protecting critical resources? What doesn't, and why? And how property rights might be allocated in different ways. And remember the idea that rights are not unitary, they are a bundle. They can be allocated a variety of different ways.

So that the Point Reyes National Seashore that lies right next to the San Andreas Fault is a wonderful area to go out and camp on, hike on, bike on. But it also is a really interesting example of this idea of buying up part of the bundle of rights. So the Park Service went into this area that was owned by farmers that had fairly large tracts of land, some hundreds or thousands of acres in size. But because of its proximity to San Francisco, property values were increasing quite rapidly during the 1960s and 1970s, and there were a variety of different condominium development plans that the Park Service began worrying about. And this increase in development pressure coincided with the Park Service's intent to create more recreational opportunities in coastal areas.

Why would they do that? Well, in part because there were not many National Parks in coastal areas, but also in part because the U.S. population is concentrated more heavily in coastal areas than it is in the interior part of the country. And they could expand their political and thereby economic base of support if they located them in areas such as Massachusetts or Texas or California. So they would enjoy a larger budget, they would have a more diverse set of supporters in Congress.

So in this case, they bought up the development rights to these farms. Some twenty different farmers agreed to sell the land. And when the Park Service does this, they may come in and offer you X amount of dollars for your development rights. Or they may tell you that if you don't agree to this deal, then we're going to exercise eminent domain in full and we're going to take over your lands. So in this case, all the farmers eventually agreed to sell the development rights. In part, the idea was to protect the open space agricultural character of the area, which is really quite unique. You see these rolling pastoral landscapes, and if it were in the form of a traditional National Park, where timber would not be allowed to be harvested, no timber leasing, no mineral extraction in National Parks, no leasing of grazing rights, and no farming. So that these restrictions inside a National Park made this split of the bundle of rights kind of an interesting strategy to maintain the pastoral character of the area.

Chapter 3. Surface and Mineral Rights on Public Lands [00:18:41]

I'd also like you to think about a different kind of problem that we face with respect to mining. And the Mining Law of 1872 was quite curious and important in environmental history. And it basically states that all valuable minerals in and on lands belonging to the U.S. are free and open to exploration and purchase by U.S. citizens. So that you could go out and try to stake a claim to mine on public lands, provided that they were not National Park lands or designated Federal Wilderness lands, and try to make your fortune. This was amended by the Mining and Minerals Policy Act of 1970, and I'm not going to go through all of this. But the intent and the purpose was really to promote economic development on the public lands.

So if you think about the public domain, many of you think of public lands as being areas that the government is protecting and managing for future generations. Well, most of the public lands are thought of as economic development opportunities by those that are responsible for their management. Whether or not it's mining, whether or not it's timber resources or grazing rights or water resources, the public lands have long been thought of as playing a critical role in the economic development of the nation.

This explains in part why the underlying mineral rights or the oil and gas rights are separable from the surface rights. And many people do not understand this. So here's an example of a problem that we're facing in the West right now. They're called coal bed methane gas reserves. And from this hand-drawn map in The High Country News, you can see that they're scattered from Arizona and New Mexico all the way up into Montana and North Dakota. By the way, a plug for The High Country News, one of Yale's graduates, Florence Williams, has been a reporter for The High Country News, a Yale graduate back in I think the early 1990s. But I commend that journal to you if you're interested in western environmental politics.

In this case, what has happened is that those that own surface rights are often not aware that the federal government has often sold off the underlying oil and gas rights. So that farmers are waking up in the morning to notices that their lands are going to be invaded by bulldozers, and roads are going to be constructed to get mining equipment in that look like this kind of a drilling rig. The technology is quite simple actually. There are a variety of different approaches to this. But basically, the predominant method now used is that — forget about the direction of these arrows for the moment. If you want to extract the methane gas out of a coal bed, and that gas sits in the fissures, it's often kept there by the water that's also in those interstices within the coal bed. So one way of getting and releasing the methane gas is to pump the water out of the area. And the analogy that's commonly used is that it's like opening a soda can, and you hear that pop. So you release the pressure and the gas comes up and is pumped into a storage area.

Well, what happens when you pump a whole lot of water out of an area such as this? And to give you an example of the scale of this extraction operation in the West right now, as of about five years ago, there were nearly 10,000 of these extraction wells that were being actively used. In Wyoming alone, in the Powder River Basin especially, up near Sheridan. And Ashley Roberts, who graduated in the Environmental Studies major a few years ago, wrote her senior essay on this problem in Sheridan, Wyoming, and conducted her own research that demonstrated that this groundwater extraction is occurring at such an enormous rate that it's causing a change in the chemical composition and the biological diversity of this region. So there are trillions of cubic feet of natural gas beneath the surface here. The scale of this operation is really quite remarkable. And other firms, looking at this diagram, now paying attention to the arrows where the gas is being extracted this way. The gas is being extracted in this method by pumping CO2 down into the underlying coal bed. So this is thought of as a win-win situation from a miner's perspective in that CO2 is being injected and sequestered under this hypothesis, while the natural gas is being extracted.

Here's an example of one of the unintended consequences from a rancher in southwestern Colorado in La Plata County. "Well, in the late 1980s, the kids started lighting the lemonade on fire, so I knew something was going on." Why would the lemonade catch fire? Well, it would catch fire because the methane wasn't completely extracted. It would seep into the groundwater resources, so that the lemonade had methane that was flammable.

Another example, you may have read or seen the Horse Whisperer's film or book. So this is a story that has to do with a Horse Whisperer's complaint about coal bed methane extraction on his property. The real Horse Whisperer, the trainer, woke up one morning to bulldozers carving a road across his property and he was outraged. And he was one of the ranchers that was not aware that the underlying mineral rights were separable from the surface rights. And he got his gun out and thought that he could drive these people off the land. And checking with authorities, he found that they actually had purchased the lease to extract the minerals from beneath the land. So that he was basically left with trying to figure out how he could minimize the damage. So that he did not have a right to stop them. They built the roads, they built the wells, they extracted the gas. The water that was pumped up changed the chemical composition of water on his lands and in his streams and drainage areas. And also the ditching and the diking that was necessary to control the water made it dangerous for him to run his cattle. So a lot of the farmers are experiencing a more dangerous situation to pursue their own livelihood.

So here's another example of what it looks like from the air now. These patches, this patchwork quilt of extraction sites. So now tens of thousands of things have been constructed across the western United States.

Chapter 4. Nuisance Law; Takings Law [00:26:13]

So one way to think about this is to think about the law of nuisance, an act, an object or practice that interferes with another's rights or interests by being offensive, annoying, dangerous, obstructive, or unhealthful. There's a distinction between what's thought of as a public nuisance and a private nuisance. So a public nuisance interferes with the collective interest and criminal prosecution may be the remedy. But a private nuisance may be thought of as a tort or a civil wrong at any activity that interferes with the enjoyment and use of one's property, i.e., the Horse Whisperer's property. And it may be the basis for civil litigation.  

So the Horse Whisperer does have, as would these other ranchers, the opportunity to take the drilling company, the gas company, the mining company to court. But you know that form of litigation often spans long periods of time. So that to avoid litigation, if you were the miner or the gas extractor, what would you do? You would try to enter into some sort of a legal agreement with each of the farmers that you would pay them X amount of money if they would agree not to litigate. So there's a lot of legal agreements that underlie these wells.

And another nuisance case from the 1880s that has a bearing on this, if land use is considered to be a nuisance, it may be regulated without compensation. Well, so that the damages in this case might be regulated by a local government agency. So local governments traditionally have the role of adopting zoning and subdivision regulations in a way that would control these kinds of nuisances. So in one case, this nuisance was defined by Mugler v. Kansas, a Supreme Court decision back in 1887, where the sale of alcoholic beverages was believed to be a public nuisance and prevented by regulation. And in this case, compensation was not required. So not all rights to use the land were removed, as the land could still be used for other purposes. So the idea that government could regulate land and not be required to compensate the landowner, in this case, the owner of the store that sold alcoholic beverages, that's an interesting idea. But the condition here is that not all of the rights were removed and that he had other opportunities to make economic use of that land. So keep that in mind as you think about takings law.

Another famous case in takings law history is Euclid v. Ambler. The origin, this is a Supreme Court decision from 1926 where a land use ordinance that segregated residential and commercial districts was challenged, its constitutionality was challenged. And it was believed by private interests that the restrictions on new development in each zone was a taking because it removed the value of that property. So if an individual was in a residential zone and they wanted to build a store or a shopping center or a casino, they would not be allowed to do so. So that the authority of the state or local governments acting on behalf of states to restrict land use, to segregate land use, to control density. This has been substantiated as early as 1926. So the Supreme Court concluded that state police power may be used to classify and regulate land use to prevent nuisances.

Another case that's interesting, and one that I'm sure all of you have been to, is the case of Penn Central Transportation Company v. The City of New York, decided in 1978. So the question here surrounded Grand Central Station. Now, Grand Central Station at that time was managed by the Penn Central Transportation Company. And the City of New York decided that it wanted to designate Grand Central Station as an historic landmark and thereby prohibit development above the terminal. Now, would this constitute a taking of property without compensation? So here's another kind of right. So the right to subsurface resources, such as oil and gas needs to be considered. The right associated with building on the surface needs to be considered.

But this is an argument about air rights. So if you own the surface rights, do you also own the air rights? Or could the government come in and restrict your ability to build to an infinite height? Well, zoning ordinances commonly have building height restrictions. And in this case, it was a bit unusual because the district that Grand Central Station is in, I mean, you walk out and you see the Yale Club. The Yale Club is just about as high as Grand Central Station. But then look around you and you see office buildings that are towering, dozens and dozens of stories in height. And in this case, the Supreme Court affirmed that the restrictions imposed by the New York City's landmark preservation law on Penn Central's right to construct an office building above the terminal do not constitute a taking of private property. So that it upheld the legitimacy of the designation of the site as an historic landmark and the authority of New York to regulate air rights. So one cannot presume that they have a kind of infinite freedom to build to a greater height.

I want to bring another Supreme Court case to your attention that's curious. This is Hawaii Housing Authority v. Midkiff, decided in 1984. Now, Hawaii is really an unusual state. And prior to this time, ninety-six percent of the state was owned by seventy-two land owners or the state or the federal government. Just think about that for a moment. So ninety-six percent of the state was owned by just a handful of landowners. So that in 1967, the Hawaii legislature approved the use of eminent domain to condemn residential lots and sell land to existing tenants.

Now, if there are only seventy-two landowners in Hawaii, and I don't know what the population of Hawaii was at that time, but let's just say for sake of argument that it was a million people, basically that meant that most of those people, the overwhelming majority of them, would be forced into a tenancy relationship with the landowner so that they would have to enter into a lease agreement. But the legislature said, "Well we basically want to break up this oligopoly, even if the landowners object. And we should have the right to do that." So they literally went in and appropriated the land, but they compensated the landowners, so that these seventy-two landowners did receive compensation. And then they sold the land back to the existing tenants.

So this is really a fairly dramatic act on the part of any state government. And it also raised questions about the use of eminent domain. And the Supreme Court in this case found that this was a legitimate use of the constitutional right that the government has to exercise eminent domain, and that it's not a taking. That the single most important criterion to justify the use of eminent domain is the nature of the public use. And a public use is created even when immediately turned over to private hands. And in this case, the public use, or the key public interest, was defined by the breakup of the land oligopoly.

Another take on what public use is was decided just several years ago right here in Connecticut, about forty miles away in New London in a case known as Kilo v. City of New London, where the Supreme Court found that the use of eminent domain in that case by the City of New London, because it wanted to encourage redevelopment of an area that was in private ownership, it decided that it would use eminent domain and then it would sell the land back to a private developer. So that as in the Hawaii case, either the large landholding was broken up and then redistributed to willing buyers. In this case, the developer was already known to the City of New London, so that the private rights were transferred first to the city but then back to the private development organization. And the court found that if an economic project creates new jobs, increases taxes or other city revenues and revitalizes a depressed urban area, then that qualifies as a public use and it's a legitimate exercise of eminent domain and does not require compensation. Now this was decried by many who argued that the Supreme Court really had lost its bearing. And this cartoon gives you a sense of that. And this cartoon is the Supreme Court sitting on its front steps with a wrecking ball sitting in front of it with a caption, "Thanks to your ruling on eminent domain, we can finally level this building to make way for a Chuck-E Cheese."

So that the decision about when a taking has occurred is often dependent upon when a regulatory action renders property to be valueless. So I'll take you back to the Adirondacks for a moment and have you think about the way that the Adirondack Park was regulated. So rewind back to 1972, before the Park Agency existed. Just assume that you had a hundred acres of land and you had intended that you were going to sell off one acre per year, and that was really going to also provide retirement for you and your family. In 1973, the state legislature passes a law, and lo and behold, you're in the green area. So that means that you require forty-two point three acres for a new building. Now, shouldn't that constitute a taking? So that your expectation that you could sell off a hundred lots under the old zoning ordinance was being dashed, and now you could only sell off two lots. Shouldn't the government have the obligation to compensate you for that loss in right and that loss in value?

Well, the Supreme Court has argued across a wide diversity of cases that if you are left with a property right that has some lingering remnant value, then a taking has not occurred. This was established back in 1922 in a case that's quite interesting, Pennsylvania Coal Company v. Mahon. A statute that prohibited the mining of coal underground in a manner that causes subsidence of homes on the surface went too far and did constitute a taking. So imagine if a coal company started digging under your family home and the extent of the digging or the instability of the geology caused your land surface to subside and cave in and harm your property, does the government have the right to prohibit a mining company from digging underground? Well, in this case, the court had argued that the prohibition of mining did constitute a taking. Why? Well, because the underlying mineral rights became worthless. All the value was taken away from the underlying mineral value. Oliver Wendell Holmes wrote: "While property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking." So the key question in most of these regulatory cases is when has it gone too far?

I'll give you another example from the Adirondacks from a personal experience. There was a developer that wanted to build on a river area that was designated under the New York State Scenic and Recreational Rivers Act. And this developer wanted to build about a hundred new units right along the river. The Park Agency came along and decided that it would damage the floodplain, it would cause physical structures to sit in the floodplain. The floodplain, for those of you that don't know the term, is an area that's designated by a boundary that sits at the location and elevation of a probable one hundred year flood, so that it's probable that that intensity of storm will not occur except once every hundred years. By the way, New Haven and my home experienced almost a hundred year storm just last week. So all of the low-lying lands were flooded in the area. Connecticut River is just cresting now from a storm last week. So that many people aren't aware of this hundred-year flood plain.

So in this case, the decision was made not to allow the development in the flood plain and basically to permit the land to be used for a different kind of a purpose. In that particular instance, it was a campground that was allowed. So that the property owner went to court and claimed that his property rights and his value had been taken by the government and that he demanded compensation. And in New York State, the Supreme Court found that no, it was not taken. In fact, he was left with a perfectly viable economic use, which would be the continuance of his campground.

Chapter 5. Taking without Compensation [00:40:21]

I'll give you another example here from a coastal area in California, Nolan v. The California Coastal Commission. Nolan had leased property in Ventura, California. He leased it with the option to buy, but it was conditioned on the replacement of a 500 square foot bungalow. And it required a permit from the agency I mentioned a few moments ago, the California Coastal Commission. The Coastal Commission found that the new house would block the ocean view, contributing to the development of a wall of residential structures that would prevent the public psychologically from realizing a stretch of coastline that exists nearby that they have every right to visit.

So to give you some sense of this case, here's an aerial shot looking down at the Nolan bungalow here. And you can see that all these structures are actually sitting at the base of a cliff north of Los Angeles. And like many of the California coast area that is privately owned, you find these houses separated only by several feet, these bungalows. So what would be the effect of Nolan building higher? Well, the California Coastal Commission was concerned about the obstruction of the view from the public. So in effect, it was a question about psychological or visual access. The court found that the new house would increase private use of the shorefront and would cumulatively burden the public's ability to traverse to and along the shorefront. So the Coastal Commission granted a permit requiring a public access easement.

So this is kind of interesting. So that the problem that they found was blocked visual access, but the remedy that they required was physical access. Now, you may not understand that in California, physical access to the coastal area is thought of as a very important public right. So Nolan, the person who had bought the option to buy, looked at the access condition as a taking. He didn't want to provide access across his property for the public. He didn't want to worry about the public traipsing over his land or concerns about security. And the Supreme Court listened to the case and it said that California wants an easement across Nolan's property, it must pay for it. This constituted a taking without compensation.

And this is the definition of what's come to be known as the "nexus argument." So that the projected damage, in this case, the lack of visual access from a higher building, was being remedied by an easement demand on the part of the state to provide public access. So the court looked at that and said, you know, there's no real connection between the remedy and the hypothetical damage. So that in cases where there is a damage that is being claimed by a private landowner, this would demand that any successful attempt to seek compensation look to this, the quality and the strength of the nexus argument.

I'm going to leave you with one final case here. And this is the case of Florida. And given my earlier comments about climate change and the vulnerability of coastal environments, I can think of almost no other state in the Union that has more property value that is susceptible to loss than the state of Florida. And the state of Florida has a very active beach renourishment program. So in the face of storms and hurricane damage, one of the responses is to — I'm going to scoot ahead here. One of the responses is to park barges offshore and pump sand from offshore areas onto the beach. For those of you that are interested in geology, there's kind of a very interesting science about grain size. And they test very carefully the grain size of the sands offshore, and they know that some of the larger grains are more stable than the smaller grains, so that they would be less prone to erosion.

So just think about what you're looking at here. This is sitting on a barrier island. It's a strip of land that literally is no more than a quarter of a mile in width, and behind it lies a bay. This is typical of barrier islands in the United States. And in this case, you probably have hundreds of millions of dollars of real estate value that is highly vulnerable. So that in the face of sea level rise, we're going to be basically looking at coastal areas as those in the Netherlands have. In other words, thinking about how to keep the coast safe, how to push back the water, how to reflect the wave energy by building dikes or sea walls, or in this case, beach nourishment. There's another example of buildings almost sitting in the water and the erosion that is occurring following storms. So and here's another example of what the state of Florida is doing to build up that beachfront.

So just a quick version here. In Walton County, Florida wanted to renourish the shorefront with sand under the provisions of Florida's Beach and Shore Preservation Act that was recently adopted. It fixed a boundary between the publically owned land and privately owned land. So that imagine that this is your house, and imagine that you have a thin strip of sand between your house and the ocean, which is this open area in front of the stage here. And then imagine that the state wants — and you think of yourself as being a shorefront owner and that the public has no right of access across your area because the mean high watermark sits down a ways from where you are.

Now, supposing that the state comes through and decides they want to nourish the beach. They're going to build up that area. So that the state literally set a boundary between the private land and the public land. And the property owners, the private property owners, argued that that was a taking. That was a taking of their property right to own shorefront, because now there was private land up to the edge of the stage, and then beyond that, where the sand had been deposited, that was a strip of public land that was open for public access. So that these landowners wanted exclusive right to control that area.

Well, they alleged that the Florida Supreme Court violated the due process and takings clauses by suddenly and unpredictably changing state substantive law that deprived these owners of their private property without compensation. And the Florida Supreme Court ruled that beachfront property owners had no right to their property to continue contact with the water, nor any vested right of future breach accretion. So the court argued that basically they didn't know what was going to happen in that area that is now open water, that the private landowner doesn't have any right of expectation that their land would just simply extend all the way down to the mean high watermark if the state kept dumping sand in front of it.

So that this has become a very popular case that's pending before the Supreme Court now. And it may be decided in the next week or so. So it's stop the beach nourishment versus the county, and a coalition of twenty-six states have supported amici briefs, including the Obama Administration. So that during the argument in front of the Supreme Court, it was interesting, because the Solicitor General that represents the United States government in the Supreme Court made a case in favor of the state's rights to renourish the lands. Every state in the country that has coastal property has an interest in this because they do not want to have to compensate private landowners for any activity that they take to try to prevent additional property damage.

I'm going to zoom ahead here and then we'll conclude in just a minute. But remember also that pesticide regulation raises the questions of property rights and takings. Because the government's required — in a case where the government bans a chemical that is already licensed — it's required to purchase existing stocks of newly-banned products. So that even though they find that a chemical is more dangerous than they thought and they had previously licensed it, if they've gotten new evidence of risk and they take away the right to market that product, the chemical companies can successfully argue and have argued that that constitutes a taking that is compensable. So there are 23,000 of these registrations out there.

I'm going to conclude with one final thought, and that is that among all these strategies that might be applied to protect public resources and also to protect against private damage to the environment, the use of regulation is an extremely important opportunity for state and local governments. So that if you apply a strict standard against takings, in other words, if you demand that taking of all property value be required prior to the grant of compensation, that offers the greatest opportunity for governments to be effective in pursuing environmental agendas. So we'll come back and talk a bit more at the end of the week about several alternative strategies, particularly marketing of ecosystem service payments. Thank you.

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