Lucas v. South Carolina Coastal Council

David Lucas purchased two residential lots on a South Carolina barrier island for $975,000, intending to build single-family homes. Two years later, the South Carolina legislature enacted the Beachfront Management Act, which barred Lucas from erecting any permanent habitable structures on his parcels. The state conceded that the Act rendered Lucas's parcels valueless. Lucas sued, arguing the regulation constituted an unconstitutional taking.

Justice Scalia, writing for the majority, reasoned that total deprivation of economic value is functionally equivalent to a physical appropriation and should receive the same categorical treatment. He rejected the South Carolina Supreme Court's reasoning that regulations preventing harmful uses can never constitute takings, arguing that the line between preventing harm and extracting benefits is impossible to draw objectively. Scalia held that the only basis for denying compensation when all value is destroyed is if the prohibited use was never part of the owner's title to begin with — that is, if background principles of nuisance or property law already restricted that use. The Court remanded to determine whether South Carolina common law nuisance principles would have barred Lucas's intended construction.

Lucas established a powerful tool for property owners challenging land use regulations that destroy all economic value, though such total takings are relatively rare. The decision's 'background principles' exception has generated substantial litigation about the scope of common law nuisance. The case heightened scrutiny of environmental and coastal regulations and influenced the broader debate about the relationship between environmental protection and property rights.