Background Principles and the Rule of Law: Fifteen Years after Lucas

Abstract

The Supreme Court’s 1992 decision in Lucas v. South Carolina Coastal Council was welcomed by property right advocates. Justice Scalia’s opinion for the Court established a categorical taking where all economic value is lost as a result of regulation. Not surprisingly, advocates of unconstrained environmental and land use regulation were dismayed, although many were quick to suggest (hopefully) that Lucas’s impacts would be minimal since most regulations do not destroy all economic value. Fifteen years later some who saw only dark clouds on the regulatory horizon as a consequence of Lucas now see a rainbow with a pot of gold at its end. The source of this newly optimistic understanding of Lucas is Justice Scalia’s reference to “background principles” of common law nuisance and property. In a nutshell the argument is that background principles serve not only as an exception in categorical takings where all economic value is lost, but also as an affirmative defense that immunizes government from virtually all takings claims. In this article I argue that there is nothing extraordinary in Justice Scalia’s statement that background principles of the common law are relevant to the definition of property rights. What is extraordinary is the claim that, consistent with the historic evolution of the common law, these principles are almost infinitely malleable in the hands of courts and legislatures. It is this claim that creates a pot of gold at the end of the Lucas rainbow, but it reflects a misunderstanding of the common law process, a clear distortion of Justice Scalia’s meaning in Lucas, and a blatant disregard for the requirements of the 5th amendment takings clause.