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At least two discrete categories exist of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical invasion of his property. In general (at least with regard to permanent invasions), no matter how minute the intrusion, and no matter how weighty the public purpose behind it, the Supreme Court of the United States has required compensation. The second situation in which the Supreme Court of the United States has found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land.
Petitioner landowner purchased two residential lots on which he intended to build homes. In 1988, the State enacted the Beachfront Management Act, which barred the landowner from erecting any permanent habitable structures on his two parcels. A state trial court found that this prohibition rendered the landowner's parcels valueless. The landowner asserted the effect of the Act on the value of the lots accomplished a taking under the Fifth and Fourteenth Amendments. The state supreme court concluded that petitioner was not entitled to compensation from the State under the Takings Clause of the Fifth Amendment. On review, the court reversed and remanded.
Did the state supreme court err in rejecting the developer's claim on the merits on the basis of the state legislature's recitation of a noxious-use justification for the Act?
The court held that where a state seeks to sustain a regulation that deprives land of all economically beneficial use, it may resist compensation only if the logically antecedent inquiry into the nature of the owner's estate showed that the proscribed use interests were not part of his title to begin with. In the case of land, however, the court thought the notion pressed by the Council that title is somehow held subject to the "implied limitation" that the State may subsequently eliminate all economically valuable use is inconsistent with the historical compact recorded in the Takings Clause that has become part of our constitutional culture. South Carolina must identify background principles of nuisance and property law that prohibit the uses it now intends in the circumstances in which the property is presently found. Only on this showing can the State fairly claim that, in proscribing all such beneficial uses, the Beachfront Management Act is taking nothing.