lingle governor hawaii et al chevron argued february decided may concerned effects market concentration retail gasoline prices hawaii legislature passed act limits rent oil companies may charge dealers leasing service stations respondent chevron one largest oil companies hawaii brought suit seeking declaration rent cap effected unconstitutional taking property injunction application cap stations applying agins city tiburon declared government regulation private property effects taking substantially advance legitimate state interests district held rent cap effects uncompensated taking violation fifth fourteenth amendments substantially advance hawaii asserted interest controlling retail gas prices ninth circuit affirmed held agins substantially advance formula appropriate test determining whether regulation effects fifth amendment taking pp paradigmatic taking requiring compensation direct government appropriation physical invasion private property see pewee coal beginning pennsylvania coal mahon however recognized government regulation private property may onerous effect tantamount direct appropriation ouster regulatory actions generally deemed per se takings fifth amendment purposes government requires owner suffer permanent physical invasion property see loretto teleprompter manhattan catv regulations completely deprive owner economically beneficial us property lucas south carolina coastal council outside two categories special context exactions discussed regulatory takings challenges governed penn central transportation new york city penn central identified several factors including regulation economic impact claimant extent interferes distinct expectations character government action particularly significant determining whether regulation effects taking three inquiries reflected loretto lucas penn central aim identify regulatory actions functionally equivalent direct appropriation ouster private property focuses upon severity burden government imposes upon property rights pp substantially advances formula valid method identifying compensable regulatory takings prescribes inquiry nature due process test proper place takings jurisprudence formula unquestionably derived due process precedents since agins supported citations nectow cambridge village euclid ambler realty although agins reliance precedents understandable viewed historical context language selected imprecise suggests test asking essence whether regulation private property effective achieving legitimate public purpose inquiry valid method discerning whether private property taken fifth amendment purposes stark contrast three regulatory takings tests discussed substantially advances inquiry reveals nothing magnitude character burden particular regulation imposes upon private property rights regulatory burden distributed among property owners thus test help identify regulations whose effects functionally comparable government appropriation invasion private property tethered neither text takings clause basic justification allowing regulatory actions challenged clause moreover agins formula application takings test present serious practical difficulties reading demand heightened review virtually regulation private property require courts scrutinize efficacy vast array state federal regulations task well suited also empower might often require courts substitute predictive judgments elected legislatures expert agencies pp holding require disturb prior holdings although applied substantially advances inquiry agins see never found compensable taking based inquiry moreover cases reciting agins formula merely assumed validity referring dicta see preservation council tahoe regional planning agency although nollan california coastal commission dolan city tigard drew upon agins language rule cases established entirely distinct substantially advances test involved special application doctrine unconstitutional conditions provides government may require person give constitutional right receive compensation property taken public use exchange discretionary benefit little relationship property ibid pp plaintiff seeking challenge government regulation uncompensated taking private property may proceed alleging physical taking total regulatory taking penn central taking exaction violating nollan dolan standards chevron argued substantially advances theory entitled summary judgment takings claim pp reversed remanded delivered opinion unanimous kennedy filed concurring opinion linda lingle governor hawaii et petitioners chevron writ certiorari appeals ninth circuit may justice delivered opinion occasion doctrinal rule test finds way case law simple repetition phrase however fortuitously coined quarter century ago agins city tiburon declared government regulation private property effects taking regulation substantially advance legitimate state interests reiteration half dozen decisions since agins language ensconced fifth amendment takings jurisprudence see monterey del monte dunes monterey citing cases case us lower courts applied agins substantially advances formula strike hawaii statute limits rent oil companies may charge dealers lease service stations owned companies lower courts held rent cap effects uncompensated taking private property violation fifth fourteenth amendments substantially advance hawaii asserted interest controlling retail gasoline prices case requires us decide whether substantially advances formula announced agins appropriate test determining whether regulation effects fifth amendment taking conclude state hawaii whose territory comprises archipelago islands clustered midst pacific ocean located miles mainland ranks among least populous hawaii small size geographic isolation wholesale market oil products highly concentrated lawsuit began two refineries six gasoline wholesalers business state time respondent chevron largest refiner marketer gasoline hawaii controlled percent market gasoline produced refined percent wholesale market state populous island oahu gasoline sold retail hawaii different service stations half stations leased oil companies independent another owned operated open dealers remainder owned operated oil companies chevron sells product independent stations typical arrangement chevron buys leases land third party builds service station leases station dealer turnkey basis chevron charges monthly rent defined percentage dealer margin retail sales gasoline goods addition chevron requires enter supply contract dealer agrees purchase chevron whatever necessary satisfy demand station chevron product chevron unilaterally sets wholesale price product hawaii legislature enacted act june apparently response concerns effects market concentration retail gasoline prices see haw sess laws statute seeks protect independent dealers imposing certain restrictions ownership leasing service stations oil companies prohibits oil companies converting existing stations stations locating new stations close proximity existing stations haw rev stat cum importantly present purposes act limits amount rent oil company may charge percent dealer gross profits gasoline sales plus percent gross sales products gasoline thirty days act enactment chevron sued governor attorney general hawaii official capacities collectively hawaii district district hawaii raising several federal constitutional challenges statute pertinent chevron claimed statute rent cap provision face effected taking chevron property violation fifth fourteenth amendments chevron sought declaration effect well injunction application rent cap stations chevron swiftly moved summary judgment takings claim arguing rent cap substantially advance legitimate government interest hawaii filed summary judgment chevron claims facilitate resolution summary judgment motions parties jointly stipulated certain relevant facts agreed act reduces per year aggregate rent chevron otherwise charge stations hand statute allows chevron collect rent otherwise charge remaining stations chevron increase overall rental income stations nearly million per year parties stipulated past years chevron fully recovered costs maintaining stations state rent alone rather company recoups expenses combination rent product sales finally joint stipulation chevron earned past anticipates continue earn act return investment stations hawaii satisfies constitutional standard district granted summary judgment chevron holding act fails substantially advance legitimate state interest effects unconstitutional taking violation fifth fourteenth amendments chevron cayetano supp district accepted hawaii argument rent cap intended prevent concentration retail gasoline market importantly resultant high prices consumers maintaining viability independent concluded statute substantially advance interest however actually reduce costs retail prices found rent cap allow incumbent upon transferring occupancy rights new lessee charge incoming lessee premium reflecting value rent reduction accordingly district reasoned incoming lessee overall expenses absence rent cap savings pass along consumers incumbent lessees benefit rent cap found oil company lessors unilaterally raise wholesale fuel prices order offset reduction rental income appeal divided panel appeals ninth circuit held district applied correct legal standard chevron takings claim chevron cayetano appeals vacated grant summary judgment however ground genuine issue material fact remained whether act benefit consumers judge william fletcher concurred judgment maintaining reasonableness standard applicable ordinary rent price control laws instead govern chevron claim remand district entered judgment chevron bench trial chevron hawaii called competing expert witnesses economists testify supp finding chevron expert witness persuasive state expert district concluded oil companies raise wholesale gasoline prices offset rent reduction required act result increase retail gasoline prices even rent cap reduce costs found pass savings consumers went reiterate determination act enable incumbent sell leaseholds premium incoming lessees obtain benefits rent cap acknowledged rent cap preclude oil companies constructively evicting dealers excessive rents found evidence chevron oil company attempt charge rents absence cap finally concluded act fact decrease number stations rent cap discourage oil companies building stations based findings district held act effect ed unconstitutional regulatory taking given failure substantially advance legitimate state interest ninth circuit affirmed holding decision prior appeal barred hawaii challenging application substantially advances test chevron takings claim arguing deferential standard review panel majority went reject hawaii challenge application standard facts case judge fletcher dissented renewing contention act reviewed substantially advances standard granted certiorari reverse ii takings clause fifth amendment made applicable fourteenth see chicago chicago provides private property shall taken public use without compensation text makes plain takings clause prohibit taking private property instead places condition exercise power first english evangelical lutheran church glendale county los angeles words designed limit governmental interference property rights per se rather secure compensation event otherwise proper interference amounting taking emphasis original scholars offered various justifications regime emphasized role bar ring government forcing people alone bear public burdens fairness justice borne public whole armstrong see also monongahela nav paradigmatic taking requiring compensation direct government appropriation physical invasion private property see pewee coal government seizure operation coal mine prevent national strike coal miners effected taking general motors government occupation private warehouse effected taking indeed watershed decision pennsylvania coal mahon generally thought takings clause reached appropriation property functional equivalent ouster owner possession lucas south carolina coastal council citations omitted emphasis added brackets original see also arly constitutional theorists believe takings clause embraced regulations property beginning mahon however recognized government regulation private property may instances onerous effect tantamount direct appropriation ouster regulatory takings may compensable fifth amendment justice holmes storied cryptic formulation property may regulated certain extent regulation goes far recognized taking rub course remains discern far far answering question must remain cognizant government regulation definition involves adjustment rights public good andrus allard government hardly go extent values incident property diminished without paying every change general law mahon supra precedents stake two categories regulatory action generally deemed per se takings fifth amendment purposes first government requires owner suffer permanent physical invasion property however minor must provide compensation see loretto teleprompter manhattan catv state law requiring landlords permit cable companies install cable facilities apartment buildings effected taking second categorical rule applies regulations completely deprive owner economically beneficial us property lucas emphasis original held lucas government must pay compensation total regulatory takings except extent background principles nuisance property law independently restrict owner intended use property outside two relatively narrow categories special context exactions discussed see infra regulatory takings challenges governed standards set forth penn central transp new york city penn central acknowledged hitherto unable develop evaluating regulatory takings claims identified several factors particular significance primary among factors economic impact regulation claimant particularly extent regulation interfered distinct expectations ibid addition character governmental action instance whether amounts physical invasion instead merely affects property interests public program adjusting benefits burdens economic life promote common good may relevant discerning whether taking occurred ibid penn central factors though given rise vexing subsidiary questions served principal guidelines resolving regulatory takings claims fall within physical takings lucas rules see palazzolo rhode island concurring although regulatory takings jurisprudence characterized unified three inquiries reflected loretto lucas penn central share common touchstone aims identify regulatory actions functionally equivalent classic taking government directly appropriates private property ousts owner domain accordingly tests focuses directly upon severity burden government imposes upon private property rights held physical takings require compensation unique burden impose permanent physical invasion however minimal economic cost entails eviscerates owner right exclude others entering using property perhaps fundamental property interests see dolan city tigard nollan california coastal loretto supra kaiser aetna lucas context course complete elimination property value determinative factor see lucas supra positing total deprivation beneficial use landowner point view equivalent physical appropriation penn central inquiry turns large part albeit exclusively upon magnitude regulation economic impact degree interferes legitimate property interests agins city tiburon case involving facial takings challenge certain municipal zoning ordinances declared application general zoning law particular property effects taking ordinance substantially advance legitimate state interests see nectow cambridge denies owner economically viable use land see penn central transp new york city statement phrased disjunctive agins substantially advances language read announce regulatory takings test wholly independent penn central test indeed lower courts case struck hawaii rent control statute unconstitutional regulatory taking supp based solely upon finding substantially advance state asserted interest controlling retail gasoline prices see supra although number takings precedents recited substantially advances formula minted agins first opportunity consider validity freestanding takings test conclude formula prescribes inquiry nature due process takings test proper place takings jurisprudence question substantially advances formula derived due process takings precedents support new language agins cited nectow cambridge case plaintiff claimed city zoning ordinance deprived property without due process law contravention fourteenth amendment agins went discuss village euclid ambler realty historic decision holding municipal zoning ordinance survive substantive due process challenge long clearly arbitrary unreasonable substantial relation public health safety morals general welfare emphasis added see also nectow supra quoting substantial relation language euclid viewed historical context reliance nectow euclid understandable agins first case involving challenge zoning regulations many decades natural turn seminal zoning precedents guidance see brief amicus curiae agins city tiburon pp arguing euclid set principles applicable determination facial validity zoning ordinance attacked violation takings clause fifth amendment moreover agins apparent commingling due process takings inquiries precedent decision penn central see use restriction real property may constitute reasonably necessary effectuation substantial public purpose see nectow cambridge supra see goldblatt supra quoting language lawton steele due process case applying deferential standard determine whether challenged regulation valid exercise police power due process clause finally agins decided history referring deprivations property without due process law takings see rowan post office yet clarify whether regulatory takings claims properly cognizable takings clause due process clause see williamson county regional planning hamilton bank jefferson city although agins reliance due process precedents understandable language selected regrettably imprecise substantially advances formula suggests test asks essence whether regulation private property effective achieving legitimate public purpose inquiry nature logic context due process challenge regulation fails serve legitimate governmental objective may arbitrary irrational runs afoul due process clause see county sacramento lewis stating due process clause intended part protect individual exercise power without reasonable justification service legitimate governmental objective test valid method discerning whether private property taken purposes fifth amendment stark contrast three regulatory takings tests discussed substantially advances inquiry reveals nothing magnitude character burden particular regulation imposes upon private property rights provide information regulatory burden distributed among property owners consequence test help identify regulations whose effects functionally comparable government appropriation invasion private property tethered neither text takings clause basic justification allowing regulatory actions challenged clause chevron appeals general principle takings clause meant bar government forcing people alone bear public burdens fairness justice borne public whole brief respondent quoting armstrong appeal clearly misplaced reasons indicated test tells us nothing actual burden imposed property rights burden allocated tell us justice might require burden spread among taxpayers payment compensation owner property subject regulation effectively serves legitimate state interest may singled burdened owner property subject ineffective regulation make little sense say second owner suffered taking first likewise ineffective regulation may significantly burden property rights may distribute burden broadly evenly among property owners notion regulation nevertheless takes private property public use merely virtue ineffectiveness foolishness untenable instead addressing challenged regulation effect private property substantially advances inquiry probes regulation underlying validity inquiry logically prior distinct question whether regulation effects taking takings clause presupposes government acted pursuit valid public purpose clause expressly requires compensation government takes private property public use bar government interfering property rights rather requires compensation event otherwise proper interference amounting taking first english evangelical lutheran church emphasis added conversely government action found impermissible instance fails meet public use requirement arbitrary violate due process end inquiry amount compensation authorize action chevron challenge hawaii statute case illustrates flaws substantially advances theory begin unclear significantly hawaii rent cap actually burdens chevron property rights parties stipulated cap reduce chevron aggregate rental income stations per year chevron nevertheless expects receive return investment stations satisfies constitutional standard see supra moreover chevron asserted district found chevron recoup reductions rental income raising wholesale gasoline prices see supra short chevron clearly argued let alone established singled bear particularly severe regulatory burden rather gravamen chevron claim simply hawaii rent cap actually serve state legitimate interest protecting consumers high gasoline prices whatever merits claim sound takings clause chevron plainly seek compensation taking property legitimate public use rather injunction enforcement regulation alleges fundamentally arbitrary irrational finally substantially advances formula doctrinally untenable takings test application also present serious practical difficulties agins formula read demand heightened review virtually regulation private property interpreted require courts scrutinize efficacy vast array state federal regulations task courts well suited moreover empower might often require courts substitute predictive judgments elected legislatures expert agencies although instant case tip proverbial iceberg foreshadows hazards placing courts role resolve chevron takings claim district required choose views two opposing economists whether hawaii rent control statute help prevent concentration supracompetitive prices state retail gasoline market finding one expert persuasive concluded hawaii legislature chosen regulatory strategy actually achieve objectives see supp along way determined state entitled enact prophylactic rent cap without actual evidence oil companies charged charge excessive rents see based findings district enjoined enforcement act rent cap provision chevron find proceedings remarkable say least given long eschewed heightened scrutiny addressing substantive due process challenges government regulation see exxon governor maryland ferguson skrupa reasons deference legislative judgments need likely effectiveness regulatory actions well established think less applicable foregoing reasons conclude substantially advances formula announced agins valid method identifying regulatory takings fifth amendment requires compensation since chevron argued substantially advances theory support takings claim entitled summary judgment claim iii emphasize holding today substantially advances formula valid takings test require us disturb prior holdings sure applied substantially advances inquiry agins see quoting advance language finding challenged statute intended substantial public interest case found compensable taking based inquiry indeed cases reciting substantially advances formula merely assumed validity referring dicta see preservation council tahoe regional planning agency del monte dunes riverside bayview homes might argued formula played role decisions nollan california coastal dolan city tigard see brief respondent drew upon language agins cases apply substantially advances test subject today decision nollan dolan involved fifth amendment takings challenges adjudicative exactions specifically government demands landowner dedicate easement allowing public access property condition obtaining development permit see dolan supra permit expand store parking lot conditioned dedication portion relevant property greenway including path nollan supra permit build larger residence beachfront property conditioned dedication easement allowing public traverse strip property owner seawall mean line case began premise government simply appropriated easement question per se physical taking dolan supra nollan supra question whether government without paying compensation otherwise required upon effecting taking demand easement condition granting development permit government entitled deny nolan answered affirmative provided exaction substantially advance government interest furnish valid ground denial permit refined requirement dolan holding adjudicative exaction requiring dedication private property must also ly proportiona nature extent impact proposed development see also del monte dunes supra emphasizing extended standard beyond special context exactions although nollan dolan quoted agins language see dolan supra nollan supra rule decisions established entirely distinct substantially advances test address today whereas substantially advances inquiry us unconcerned degree type burden regulation places upon property nollan dolan involved dedications property onerous outside exactions context deemed per se physical takings neither case question whether exaction substantially advance legitimate state interest see dolan supra nollan supra rather issue whether exactions substantially advanced interests authorities asserted allow deny permit altogether explained dolan cases involve special application doctrine conditions provides government may require person give constitutional right right receive compensation property taken public use exchange discretionary benefit conferred government benefit little relationship property worlds apart rule says regulation affecting property constitutes taking face solely substantially advance legitimate government interest short nollan dolan characterized applying substantially advances test address today decision read disturb precedents years ago posited regulation private property effects taking substantially advance legitimate state interes agins supra lower courts case took statement logical conclusion revealed imprecision today correct course hold substantially advances formula valid takings test indeed conclude proper place takings jurisprudence reaffirm plaintiff seeking challenge government regulation uncompensated taking private property may proceed one theories discussed alleging physical taking total regulatory taking penn central taking exaction violating standards set forth nollan dolan chevron argued substantially advances theory support takings claim entitled summary judgment claim accordingly reverse judgment ninth circuit remand case proceedings consistent opinion ordered linda lingle governor hawaii et petitioners chevron writ certiorari appeals ninth circuit may justice kennedy concurring separate writing note today decision foreclose possibility regulation might arbitrary irrational violate due process eastern enterprises apfel kennedy concurring judgment dissenting part failure regulation accomplish stated obvious objective relevant inquiry chevron voluntarily dismissed due process claim without prejudice however occasion consider whether act hawaii session laws represents one rare instances even permissive standard violated apfel supra observations join opinion