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Regulation of Natural Resources Use and Development in Light of the "New" Takings Clause

Jan G. Laitos, Proceedings of 34th Annual Rocky Mountain Mineral Law Institute (1988)

Until the late 1980s, there were few winnable legal challenges available to resource developers wishing to resist costly, time-consuming, or generally unreasonable regulations. Victories were possible with allegations either of ultra vires government actions, or of agency failure to follow required procedures. But constitutional law attacks on the regulations, based on the Takings, Due Process, or Contract Clauses, were almost certain to lose. These constitutional challenges were futile in large part because laws affecting resource development were categorized by courts as social and economic regulation of property, entailing minimum rationality review and judicial deference to the law.1

However, in 1987 the United States Supreme Court decided a number of cases involving the Takings Clause.2 These cases [1-4] suggest that the Supreme Court may be prepared to resurrect the Takings Clause as a realistic check on excessive regulation of natural resources use and development. Since 1987, several lower courts have hinted that they too may be willing to follow the Supreme Court's lead.3

This paper will consider natural resources use and development in light of this new judicial respect for the Takings Clause of the United States Constitution.4 The paper is divided into three parts. Part I will outline the legal framework of Takings Clause challenges in a natural re