Lingle v. Chevron

Act 257 was passed by the Hawaii legislature due to the concern it had on the market concentration effects on the prices of retail gasoline. This act limited the rent that the oil companies would charge the dealers who leased service stations owned by the company. In Hawaii, one of the largest companies for oil was Chevron U.S and therefore the company argued that this cap resulted to an unconstitutional taking of the company’s property.  Therefore, the Lingle v. chevron case of 2005 was one of the landmark cases in the United State’s regulatory takings. Following this act, Chevron sued the state. This was done in the Hawaii District Court. The claim was that the cap on rent resulted to a taking of the property of Chevron and this violated the 5th and 14th amendments. According to the 5th amendment, private property would not be obtained for use by the public. This amendment is applied to the states by the 14th amendment.

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 In this case, the court overruled standard that had found creation in Agins v. City of Tiburon in 1980. According to Agins, private property regulation by the government resulted to a taking if the regulation did not advance the legal interests of the state. Thus, the question here was whether a regulation led to unconstitutional taking if it did not advance the legal interests of the state. The opinion of the court on this case was delivered by Justice Sandra O’Connor. The justice found out that the test was weak. However, she did nit grant relief for Chevron because the motion that Chevron presented in the court for judgment was specific about “substantially advances’ theory and therefore was limited. The justice said that there was need for the court to clearly state that this ‘substantially advances’ theory that had been forwarded in Agins was not appropriate in the determination of if a regulation would lead to a taking of the 5th amendment.

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Therefore, challenges on the clauses had to be on the basis of how severe a burden the regulation imposed on the right to property. This would however not be based on how effective the regulation was in advancing the interests of the government. Further, the court remanded to the ninth circuit as a way of determining if the statute was exact on central-like taking. There was thus an insisting that the ruling of the court was not a disturbance to any of the holdings that had been previously held.  To concur with this, Justice Kennedy wrote an emphasis that the decision of the court did not bar the chances of Chevron of becoming established even on a process claim.

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This decision may result to local communities being unable to control their growth because of the belief that the law did not serve the interest of the public. This further would mean that the law did not give property owners the right to gain benefits following the increase in property value.

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Reference

LINGLE V. CHEVRON U.S. A. INC. (04-163) 544 U.S. 528 (2005). Retrieved on February 21, 2011 from: http://www.law.cornell.edu/supct/html/04-163.ZS.html.