Feuer v. South Carolina Coastal Council

No. D:88-3073-1 (D.S.C. October 13, 1989)

The court holds that amendments to the South Carolina Beachfront Management Act preventing construction within 20 feet of the coastal baseline do not violate the Due Process Clause because the statutes are substantially related to an important state interest. The statutes seek to protect the beaches by creating a no-construction zone. The court initially holds that plaintiff's claim that the Act constitutes a taking is not ripe, since plaintiff may petition for a change in the boundaries of the no-construction zone. Even assuming the claim is ripe, the claim would fail because the statutes are substantially related to a legitimate government interest and do not deprive owners of existing houses of all economically viable uses. The court also holds that the statutes do not violate the Contracts Clause because the contract for sale was signed after the statutes were enacted.

Counsel for Plaintiffs
Randall Chastain
Lourie, Curlee, Barrett & Popowski
1224 Pickens St., P.O. Box 12089, Capitol Station, Columbia SC 29211
(803) 799-9805

John V. Esposito
P.O. Box 5705, Hilton Head SC 29938
(304) 752-7300

Counsel for Defendants
C. C. Herness III, General Counsel
South Carolina Coastal Council
Saber Pl., Ste. 300, Charleston SC 29405
(803) 744-5838

Joseph R. Barker
Bethea, Jordan & Griffin
Shelter Cove Executive Park, Ste. 400, 23-B Shelter Cove Lane, P.O. Drawer 3, Hilton Head SC 29938-5666
(803) 785-2171

[20 ELR 20402]

Hawkins, J.:

Order

This is an action charging the defendants with violations of the fifth amendment and Article I, § 10 of the United States Constitution. Specifically, the plaintiff contends that the enactment of the 1988 amendments to Title 48, Chapter 39 of the Code of Laws of South Carolina, 1976 (48-39-270 through 48-39-360) violates the due process and just compensation provisions of the fifth amendment. Also, Feuer asserts that the legislation violates the contracts clause because it prevented him from enforcing a contract for the sale of his property. Originally, the defendants denied all material allegations of the complaint; however, prior to trial, the parties stipulated to all of the relevant facts. Those stipulations are adopted as the factual findings of the court and they are incorporated into this order by reference. (See exhibits 1 and 2 attached.)¹

On September 5, 1989, the parties appeared before this court, sitting without a jury, for oral argument on the legal issues. The court, having considered the stipulated facts and the proposed findings of fact and conclusions of law submitted by the parties, makes the following Conclusions of Law in accordance with Rule 52(a) of the Federal Rules of Civil Procedure.

Conclusions of Law

1. This court has jurisdiction over the parties to this action.

2. This court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331.

The Takings Clause Claim

3. As a preliminary matter, the court feels compelled to note that the plaintiff's claim under the takings clause is not mature. The Supreme Court has stated that

[g]iven the "essentially ad hoc, factual inquir[y]" involved in the takings analysis, . . . we have found it particularly important in takings cases to adhere to our admonition that "the constitutionality of statutes ought not be decided except in an actual factual setting that makes such a decision necessary."

Pennell v. San Jose, U.S. , 108 S. Ct. 849 (1988). The record reveals that although the plaintiff's property is located within the area in which all construction and reconstruction is prohibited, the location of that boundary is subject to change. (Ex. 1, Par. XX, XXXVI.) Because the plaintiff may petition for a change in the baseline or the setback line, the takings issue is not ripe for resolution by this tribunal.

4. Even if the court accepts the plaintiff's contention that his takings claim is sufficiently mature, he cannot prevail on that issue. The final clause of the fifth amendment prohibits the taking of private property "for public use, without just compensation." U.S. Const. amend. V. When determining whether or not the terms of this prohibition have been transgressed, the Supreme Court has traditionally examined the character of the government action and the economic impact of that action on the property owner. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922); Penn Central Transportation Company et al. v. City of New York et al., 438 U.S. 104 [8 ELR 20528] (1978); Nollan v. California Coastal Commission, U.S. , 107 S. Ct. 3141 [17 ELR 20918] (1987). The Court has long adhered to the view that a particular land use regulation does not constitute "a taking if it 'substantially advance[s] legitimate state interests' and does not 'den[y] an owner economically viable use of his land.'" Nollan, U.S. at , 107 S. Ct. at 3146.

5. The stated purpose of the challenged statutes is to protect South Carolina's beaches (Ex. 1, Para. IV), and it is beyond dispute that this is an objective in which the state has an important interest. The beaches are a valuable resource providing both recreational opportunities and tourist revenue to the state. (See Ex. 1, Para. XLII, XLIV.) The thrust of the plaintiff's claim is that the statutes at issue are not substantially related to the attainment of this end; however, that contention is not supported by the record. Essentially, the statutes purport to preserve the beaches by restoring the beach/dune system to its natural equilibrium. (Ex. 1, Para. IV.) Further, the legislature decided that the best method of rejuvenating the beach/dune system is by preventing all new construction and/or reconstruction in that area. (Ex. 1, Para. XXIV-XXV.) The internal logic of this scheme is apparent, and thus the court concludes that the statutory restrictions are substantially related to the important goal of preserving South Carolina's beaches.²

6. Additionally, the plaintiff has failed to demonstrate an economic injury sufficient to invoke the protection of the takings clause. When considering this aspect of the takings inquiry, a court must draw a "distinction between a claim that the mere enactment of a statute constitutes a taking and a claim that the particular impact of government action on a specific piece of property requires the payment of just compensation. Keystone Bituminous Coal Association v. DeBenedictis, U.S. , 107 S. Ct. 1232, 1247 [17 ELR 20440] (1987). In an action involving a facial challenge to the validity of regulatory activity, the Court has held that a statute regulating the use of private property effects a taking only if the mere enactment of the legislation denies an owner economically viable use of his land. Hodel v. Virginia Surface Mining and Reclamation Association, Inc., 452 U.S. 264, 296-296 [11 ELR 20569] (1981) (citation omitted); Keystone, U.S. at , 107 S. Ct. at 1247 (citing Hodel).³ However, in an action contesting the enforcement of a statute, the inquiry focuses on the economic impact of a specific application of the regulation. Penn Central, 438 U.S. at 136.

7. The stipulated facts reveal that this plaintiff has suffered no concrete injury as a result of the defendants' application of the statutes. The statutes prevent any new construction in the area twenty (20) feet landward of the baseline. (Ex. 1, Para. XXIV.) Further, with regard to habitable structures currently located in that area, the statutes prevent reconstruction of those dwellings if they are destroyed beyond repair. (Ex. 1, Para. XXV.) While it is undisputed that the plaintiff's home is located within this no construction zone (Ex. 1, Para. XXXII; Ex. 2, Para. XVII), there is no evidence indicating that he has been denied permission to build, or rebuild, any structure or recreational amenity within this area. Additionally, although the record contains evidence that the plaintiff has been unable to sell his home (Ex. 2, Para. XIX), that situation is not the result of any direct restriction on alienability contained in the statutes. Rather, this predicament is the result of a chilling effect on the real estate market caused by the enactment of the statutes. Since the plaintiff has not suffered any adverse consequences as a result of the enforcement of the statutes, the court must decide if he has been deprived of economically viable use of his property.

8. Application of these principles to the instant action indicates that the enactment of the statutes at issue does not amount to an uncompensated taking. As the stipulated facts indicate, the Town of Hilton Head Island has been developed to offer residents and vacationers an exclusive resort environment. (Ex. 1, Para. XLIII.) The economic utility of this scheme is reflected in the growing popularity of the town among those visiting South Carolina. (Ex. 1, Para. XLIV.) Consistent with this concept, the plaintiff used his property [20 ELR 20403] as a temporary vacation residence prior to the enactment of the statutes. (Ex. 2, Para. I.) Furthermore, nothing in the statutes prevents the plaintiff from continuing to use his property in this manner. Consequently, as the enactment of the statutes did not deprive the plaintiff of economically viable use of his real estate, he is not entitled to relief under the takings clause of the fifth amendment.

The Due Process Clause Claim

9. Alternatively, the plaintiff asserts that the enactment of the statutes violated the due process clause of the fifth amendment. In pertinent part that amendment states that "[n]o person shall be . . . deprived of life, liberty, or property without due process of law . . . ." U.S. Const. amend. V. This limitation on the power of the federal government is likewise applicable to the states under the fourteenth amendment. U.S. Const. amend. XIV, § 1. A legislative restriction on the use of privately owned property does not violate the due process clause unless it is "clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, moral or general welfare." First Assembly of God v. City of Alexandria, Virginia, 739 F.2d 942, 944 (4th Cir. 1984), citing Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926); See also Spring Branch Mining Co. v. United Mine Workers of America, 854 F.2d 37 (4th Cir. 1988). As stated in the previous section, the statutes at issue are substantially related to the important state interest in preserving the beaches; thus, the plaintiff's due process claim must fail.

10. The record also contains a significant amount of evidence concerning the South Carolina Legislature's delegation of rulemaking authority to the defendants. To the extent that this evidence is intended to support the plaintiff's due process claim, the court concludes that this action does not render the statutes arbitrary and capricious. Moreover, to the extent that this evidence could be construed as a challenge to the rules and regulations promulgated by the defendants, the court does not reach that issue because it was not specifically raised by either party.

The Contract Clause Claim

11. Finally, the plaintiff asserts that the statutes offend the terms of the contract clause because they prevented him from enforcing a contract for the sale of his property. The contracts clause prevents state governments from enacting any "Law impairing the Obligation of Contracts." U.S. Const. Art. I, § 10. Recently, the Supreme Court commented that

[t]he context in which the contract clause is found, the historical setting in which it was adopted, and our cases construing the clause, indicate that its primary focus was upon legislation that was designed to repudiate or adjust pre-existing debtor-creditor relationships that obligors were unable to satisfy.

Keystone, U.S. at , 107 S. Ct. at 1251. (Citations and footnoted omitted.) As this passage makes clear, the contracts clause was narrowly drafted to protect only those contractual rights existing prior to the effective date of the relevant legislation. Reding v. Texaco, Inc., 598 F.2d 513 (9th Cir. 1979). Presently, the statutes under attack were signed into law on June 7, 1988 (Ex. 2, Para. XXIII), and became effective on July 1, 1988; however, the contract that was allegedly impaired was not executed until July 24, 1988. (Ex. 2, Para. XI.) For this reason, the court declines to address the merits of the plaintiff's contract clause claim.

Conclusion:

Accordingly, based upon the foregoing, it is

ORDERED, that the Clerk of Court enter judgment in favor of the defendants as the fifth amendment takings claim. It is

ORDERED FURTHER, that the Clerk of Court enter judgment in favor of the defendants as to the fifth amendment due process claim. It is

ORDERED FURTHER, that the Clerk of Court enter judgment in favor of the defendants as to the claim under Article I, § 10 of the United States Constitution.

AND IT IS SO ORDERED.

1. The stipulations marked as Exhibit 1 contain references to the affidavits of Chris Jones, Dr. Per Bruun, Dr. Robert Dolan, Steven Linsday, and Steven Moore. (Ex. 1, Para. XLVI-L.) These affidavits contain conflicting expert testimony regarding various factual issues which are not addressed in the stipulations. Obviously, because the court has not had an opportunity to hear the testimony of these witnesses, their credibility cannot be evaluated at this time. Hence, this evidence will not be relied upon or incorporated into this order.

2. This conclusion has been reached without the benefit of the technical evidence concerning the validity of the methods used to define the area encompassed by the beach/dune system. See fn. 1.

3. The distinction between the doctrine of ripeness and the concept of a facial challenge to legislative action merits some discussion. In this context, the ripeness inquiry is designed to ascertain whether or not the plaintiff has alternate means of obtaining the relief requested, such as seeking a variance or filing an inverse condemnation suit in state court. Naegele Outdoor Advertising, Inc. v. City of Durham, 844 F.2d 172, 175 (4th Cir. 1988). Conversely, the facial challenge concept allows the plaintiff to question the constitutionality of a statute without showing a concrete injury resulting from the enforcement of the statute. Keystone, U.S. at , 107 S. Ct. at 1246.