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Oil Company Seeks Over $1 Billion In Takings Claim Against California County...


Citadel is arguing that the ban constitutes a regulatory taking and that it is entitled to the value lost, which it says amounts to 20-40 millions barrels of oil and a profit of $1.2 billion. It is a troubling case for environmentalists and land use advocates seeking to place limitations on certain industrial activities viewed as harmful.

At issue is Measure J, which bans all fracking and other high-intensity oil extraction.

For environmentalists, such cases could reignite the debate over constitutional takings: the need to compensate private owners like Seadrift of public easements.

In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), the Court required compensation for regulatory takings. In that case. South Carolina's Coastal Zone Management Act (1977) required owners of coast land in "critical areas" near beaches to obtain permits from South Carolina Coastal Council before committing the land to new uses. The Court found that the regulation deprives Lucas of value that had to be returned in the form of public compensation.

One exception is common law nuisance where a coastal authority can show that the regulation is designed to prevent a public nuisance such as run-off or erosion etc.

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