On the Twenty-Fifth Anniversary of Lucas: Making or Breaking the Takings Claim

Abstract

In Lucas v. South Carolina Coastal Council, the United States Supreme Court established the premier categorical regulatory takings standard with certain limited exceptions. The Lucas rule establishes that private property owners are entitled to compensation for a taking under the Fifth Amendment Takings Clause when a government regulation “denies all economically beneficial or productive use of land.” Today, Lucas remains the controlling law on categorical regulatory takings. But in application, how much does Lucas still matter?

My review of more than 1,600 cases in state and federal court reveals only twenty-seven cases in twenty-five years in which courts found a categorical regulatory taking under Lucas. By percentage, that works out to a Lucas claim success rate of just 1.6 percent. This does not mean Lucas is unimportant, however. Rather, the paucity of successful Lucas claims itself tells a significant story about the importance of pleading takings claims. I contend that Lucas’ most enduring value is not its contribution to the positive law but rather its effect on how litigants shape their cases. A crucial aspect of the Lucas categorical regulatory takings analysis has been, and will continue to be, the problem of defining the denominator in the regulatory takings equation. My research suggests that Lucas’ holding incentivizes the private contractual agreements entered into by property owners to shrink the takings denominator and tilt the scales slightly in favor of the plaintiff. The ability of a property owner to reduce the denominator remains the loadstar for a Lucas case-winning strategy.

This is important for not only theorists but also for practitioners to know — those who litigate and conduct transactions in Lucas’ shadow. 

Keywords: Regulatory Takings, Real Property, Denominator, Categorical Takings, Lucas, Whole Parcel Rule, Takings, Land Use