LINGLE, GOVERNOR OF HAWAII, et al. v. CHEVRON U. S. A. INC.

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528 OCTOBER TERM, 2004
Syllabus
LINGLE, GOVERNOR OF HAWAII, et al. v.
CHEVRON U. S. A. INC.
certiorari to the united states court of appeals for
the ninth circuit
No. 04–163. Argued February 22, 2005—Decided May 23, 2005
Concerned about the effects of market concentration on retail gasoline
prices, the Hawaii Legislature passed Act 257, which limits the rent oil
companies may charge dealers leasing company-owned service stations.
Respondent Chevron U. S. A. Inc., then one of the largest oil companies
in Hawaii, brought this suit seeking a declaration that the rent cap ef-
fected an unconstitutional taking of its property and an injunction
against application of the cap to its stations. Applying Agins v. City of
Tiburon, 447 U. S. 255, 260—where this Court declared that government
regulation of private property “effects a taking if [it] does not substan-
tially advance legitimate state interests”—the District Court held that
the rent cap effects an uncompensated taking in violation of the Fifth
and Fourteenth Amendments because it does not substantially advance
Hawaii’s asserted interest in controlling retail gas prices. The Ninth
Circuit affirmed.
Held: Agins’ “substantially advance[s]” formula is not an appropriate test
for determining whether a regulation effects a Fifth Amendment tak-
ing. Pp. 536–548.
(a) The paradigmatic taking requiring just compensation is a direct
government appropriation or physical invasion of private property.
See, e. g., United States v. Pewee Coal Co., 341 U. S. 114. Beginning
with Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, however, the
Court recognized that government regulation of private property may
be so onerous that its effect is tantamount to a direct appropriation or
ouster. Regulatory actions generally will be deemed per se takings for
Fifth Amendment purposes (1) where government requires an owner
to suffer a permanent physical invasion of her property, see Loretto
v. Teleprompter Manhattan CATV Corp., 458 U. S. 419, or (2) where
regulations completely deprive an owner of “all economically beneficial
us[e]” of her property, Lucas v. South Carolina Coastal Council, 505
U. S. 1003, 1019. Outside these two categories (and the special context
of land-use exactions discussed below), regulatory takings challenges
are governed by Penn Central Transp. Co. v. New York City, 438 U. S.
104, 124. Penn Central identified several factors—including the regula-
tion’s economic impact on the claimant, the extent to which it interferes

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Syllabus
with distinct investment-backed expectations, and the character of the
government action—that are particularly significant in determining
whether a regulation effects a taking. Because the three inquiries re-
flected in Loretto, Lucas, and Penn Central all aim to identify regu-
latory actions that are functionally equivalent to a direct appropriation
of or ouster from private property, each of them focuses upon the se-
verity of the burden that government imposes upon property rights.
Pp. 536–540.
(b) The “substantially advances” formula is not a valid method of
identifying compensable regulatory takings. It prescribes an inquiry
in the nature of a due process test, which has no proper place in the
Court’s takings jurisprudence. The formula unquestionably was de-
rived from due process precedents, since Agins supported it with cita-
tions to Nectow v. Cambridge, 277 U. S. 183, 185, and Village of Euclid
v. Ambler Realty Co., 272 U. S. 365, 395. Although Agins’ reliance on
those precedents is understandable when viewed in historical context,
the language the Court selected was imprecise. It suggests a means-
ends test, asking, in essence, whether a regulation of private property
is effective in achieving some legitimate public purpose. Such an in-
quiry is not a valid method of discerning whether private property has
been “taken” for Fifth Amendment purposes. In stark contrast to the
three regulatory takings tests discussed above, the “substantially ad-
vances” inquiry reveals nothing about the magnitude or character of
the burden a particular regulation imposes upon private property rights
or how any regulatory burden is distributed among property owners.
Thus, this test does not help to identify those regulations whose effects
are functionally comparable to government appropriation or invasion of
private property; it is tethered neither to the text of the Takings Clause
nor to the basic justification for allowing regulatory actions to be chal-
lenged under the Clause. Moreover, the Agins formula’s application as
a takings test would present serious practical difficulties. Reading it
to demand heightened means-ends review of virtually all regulation of
private property would require courts to scrutinize the efficacy of a vast
array of state and federal regulations—a task for which they are not
well suited. It would also empower—and might often require—courts
to substitute their predictive judgments for those of elected legislatures
and expert agencies. Pp. 540–545.
(c) The Court’s holding here does not require it to disturb any of its
prior holdings. Although it applied a “substantially advances” inquiry
in Agins itself, see 447 U. S., at 261–262, and arguably in Keystone
Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 485–492, it has
never found a compensable taking based on such an inquiry. Moreover,
in most of the cases reciting the Agins formula, the Court has merely

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530 LINGLE v. CHEVRON U. S. A. INC.
Syllabus
assumed its validity when referring to it in dicta. See, e. g., Tahoe-
Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency,
535 U. S. 302, 334. Although Nollan v. California Coastal Comm’n,
483 U. S. 825, 834, and Dolan v. City of Tigard, 512 U. S. 374, 385, drew
upon Agins’ language, the rule those cases established is entirely dis-
tinct from the “substantially advances” test: They involved a special
application of the “doctrine of unconstitutional conditions,” which pro-
vides that the government may not require a person to give up the
constitutional right to receive just compensation when property is taken
for a public use in exchange for a discretionary benefit that has little or
no relationship to the property. 512 U. S., at 385. Pp. 545–548.
(d) A plaintiff seeking to challenge a government regulation as an
uncompensated taking of private property may proceed by alleging a
“physical” taking, a Lucas-type total regulatory taking, a Penn Central
taking, or a land-use exaction violating the Nollan and Dolan standards.
Because Chevron argued only a “substantially advances” theory, it was
not entitled to summary judgment on its takings claim. P. 548.
363 F. 3d 846, reversed and remanded.
O’Connor, J., delivered the opinion for a unanimous Court. Kennedy,
J., filed a concurring opinion, post, p. 548.
Mark J. Bennett, Attorney General of Hawaii, argued the
cause for petitioners. With him on the briefs were Michael
L. Meaney, Deputy Attorney General, Seth P. Waxman, Paul
R. Q. Wolfson, Robert G. Dreher, and John D. Echeverria.
Deputy Solicitor General Kneedler argued the cause for
the United States as amicus curiae in support of petitioners.
With him on the brief were Acting Solicitor General Clem-
ent, Assistant Attorney General Keisler, Malcolm L. Stew-
art, Mark B. Stern, and Sharon Swingle.
Craig E. Stewart argued the cause for respondent. With
him on the brief were Donald B. Ayer, Michael S. Fried,
and Louis K. Fisher.*
*Briefs of amici curiae urging reversal were filed for the State of New
York et al. by Eliot Spitzer, Attorney General of New York, Caitlin J.
Halligan, Solicitor General, Daniel Smirlock, Deputy Solicitor General,
and John J. Sipos, Assistant Attorney General, by Bill Lockyer, Attorney
General of California, Manuel Medeiros, State Solicitor General, Thomas
Greene, Chief Assistant Attorney General, J. Matthew Rodriquez, Senior

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531 Cite as: 544 U. S. 528 (2005)
Opinion of the Court
Justice O’Connor delivered the opinion of the Court.
On occasion, a would-be doctrinal rule or test finds its way
into our case law through simple repetition of a phrase—
however fortuitously coined. A quarter century ago, in
Agins v. City of Tiburon, 447 U. S. 255 (1980), the Court
declared that government regulation of private property “ef-
fects a taking if [such regulation] does not substantially ad-
vance legitimate state interests . . . .” Id., at 260. Through
reiteration in a half dozen or so decisions since Agins, this
Assistant Attorney General, and Daniel L. Siegel, Supervising Deputy
Attorney General, by William Va´ zquez Irizarry, Secretary of Justice of
Puerto Rico, and by the Attorneys General for their respective jurisdic-
tions as follows: Gregg D. Renkes of Alaska, Fiti Sunia of American
Samoa, Terry Goddard of Arizona, Ken Salazar of Colorado, Richard Blu-
menthal of Connecticut, M. Jane Brady of Delaware, Douglas B. Moylan
of Guam, Lawrence G. Wasden of Idaho, Lisa Madigan of Illinois, Thomas
J. Miller of Iowa, Gregory D. Stumbo of Kentucky, G. Steven Rowe of
Maine, J. Joseph Curran, Jr., of Maryland, Thomas F. Reilly of Massachu-
setts, Mike Hatch of Minnesota, Jim Hood of Mississippi, Mike McGrath
of Montana, Peter C. Harvey of New Jersey, Pamela Brown of the North-
ern Mariana Islands, W. A. Drew Edmondson of Oklahoma, Hardy Myers
of Oregon, Gerald J. Pappert of Pennsylvania, Patrick Lynch of Rhode
Island, Paul G. Summers of Tennessee, Mark L. Shurtleff of Utah, Wil-
liam H. Sorrell of Vermont, Iver A. Stridiron of the Virgin Islands, Chris-
tine O. Gregoire of Washington, and Darrell V. McGraw, Jr., of West Vir-
ginia; for the American Planning Association by Edward J. Sullivan; for
the League of California Cities by Andrew W. Schwartz; for the National
Conference of State Legislatures et al. by Richard Ruda, Timothy J. Dow-
ling, and Jason C. Rylander; and for the Service Station Dealers of
America by Peter H. Gunst.
Briefs of amici curiae urging affirmance were filed for the Action
Apartment Association, Inc., by Rosario Perry; for the Cato Institute by
Richard A. Epstein; for Equity Lifestyle Properties, Inc., et al. by David
J. Bradford, David W. DeBruin, and Terri L. Mascherin; for Manufac-
tured Housing Communities of Arizona, Inc., by Michael A. Parham; for
the National Association of Home Builders by Michael M. Berger and
Duane J. Desiderio; for the Pacific Legal Foundation et al. by R. S. Rad-
ford and Nancie G. Marzulla; for the Small Property Owners of San Fran-
cisco Institute et al. by Paul F. Utrecht; and for Charles W. Coupe et al.
by Kenneth R. Kupchak and Robert H. Thomas.

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language has been ensconced in our Fifth Amendment tak-
ings jurisprudence. See Monterey v. Del Monte Dunes at
Monterey, Ltd., 526 U. S. 687, 704 (1999) (citing cases).
In the case before us, the lower courts applied Agins’
“substantially advances” formula to strike down a Hawaii
statute that limits the rent that oil companies may charge to
dealers who lease service stations owned by the companies.
The lower courts held that the rent cap effects an uncompen-
sated taking of private property in violation of the Fifth and
Fourteenth Amendments because it does not substantially
advance Hawaii’s asserted interest in controlling retail gaso-
line prices. This case requires us to decide whether the
“substantially advances” formula announced in Agins is an
appropriate test for determining whether a regulation ef-
fects a Fifth Amendment taking. We conclude that it is not.
I
The State of Hawaii, whose territory comprises an archi-
pelago of 132 islands clustered in the midst of the Pacific
Ocean, is located over 1,600 miles from the U. S. mainland
and ranks among the least populous of the 50 States. Be-
cause of Hawaii’s small size and geographic isolation, its
wholesale market for oil products is highly concentrated.
When this lawsuit began in 1997, only two refineries and six
gasoline wholesalers were doing business in the State. As
of that time, respondent Chevron U. S. A. Inc. was the
largest refiner and marketer of gasoline in Hawaii: It con-
trolled 60 percent of the market for gasoline produced or
refined in-state and 30 percent of the wholesale market on
the State’s most populous island, Oahu.
Gasoline is sold at retail in Hawaii from about 300 different
service stations. About half of these stations are leased
from oil companies by independent lessee-dealers, another 75
or so are owned and operated by “open” dealers, and the
remainder are owned and operated by the oil companies.
Chevron sells most of its product through 64 independent

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lessee-dealer stations. In a typical lessee-dealer arrange-
ment, Chevron buys or leases land from a third party, builds
a service station, and then leases the station to a dealer
on a turnkey basis. Chevron charges the lessee-dealer a
monthly rent, defined as a percentage of the dealer’s margin
on retail sales of gasoline and other goods. In addition,
Chevron requires the lessee-dealer to enter into a supply
contract, under which the dealer agrees to purchase from
Chevron whatever is necessary to satisfy demand at the sta-
tion for Chevron’s product. Chevron unilaterally sets the
wholesale price of its product.
The Hawaii Legislature enacted Act 257 in June 1997, ap-
parently in response to concerns about the effects of market
concentration on retail gasoline prices. See 1997 Haw. Sess.
Laws no. 257, § 1. The statute seeks to protect independent
dealers by imposing certain restrictions on the ownership
and leasing of service stations by oil companies. It prohib-
its oil companies from converting existing lessee-dealer sta-
tions to company-operated stations and from locating new
company-operated stations in close proximity to existing
dealer-operated stations. Haw. Rev. Stat. §§ 486H–10.4(a),
(b) (1998 Cum. Supp.). More importantly for present pur-
poses, Act 257 limits the amount of rent that an oil company
may charge a lessee-dealer to 15 percent of the dealer’s gross
profits from gasoline sales plus 15 percent of gross sales of
products other than gasoline. § 486H–10.4(c).
Thirty days after Act 257’s enactment, Chevron sued the
Governor and Attorney General of Hawaii in their official
capacities (collectively Hawaii) in the United States District
Court for the District of Hawaii, raising several federal con-
stitutional challenges to the statute. As pertinent here,
Chevron claimed that the statute’s rent cap provision, on its
face, effected a taking of Chevron’s property in violation of
the Fifth and Fourteenth Amendments. Chevron sought a
declaration to this effect as well as an injunction against the
application of the rent cap to its stations. Chevron swiftly

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moved for summary judgment on its takings claim, arguing
that the rent cap does not substantially advance any legiti-
mate government interest. Hawaii filed a cross-motion for
summary judgment on all of Chevron’s claims.
To facilitate resolution of the summary judgment motions,
the parties jointly stipulated to certain relevant facts. They
agreed that Act 257 reduces by about $207,000 per year the
aggregate rent that Chevron would otherwise charge on 11
of its 64 lessee-dealer stations. On the other hand, the stat-
ute allows Chevron to collect more rent than it would other-
wise charge at its remaining 53 lessee-dealer stations, such
that Chevron could increase its overall rental income from
all 64 stations by nearly $1.1 million per year. The parties
further stipulated that, over the past 20 years, Chevron has
not fully recovered the costs of maintaining lessee-dealer
stations in any State through rent alone. Rather, the com-
pany recoups its expenses through a combination of rent and
product sales. Finally, the joint stipulation states that
Chevron has earned in the past, and anticipates that it will
continue to earn under Act 257, a return on its investment
in lessee-dealer stations in Hawaii that satisfies any constitu-
tional standard.
The District Court granted summary judgment to Chev-
ron, holding that “Act 257 fails to substantially advance a
legitimate state interest, and as such, effects an unconsti-
tutional taking in violation of the Fifth and Fourteenth
Amendments.” Chevron U. S. A. Inc. v. Cayetano, 57 F.
Supp. 2d 1003, 1014 (1998). The District Court accepted
Hawaii’s argument that the rent cap was intended to prevent
concentration of the retail gasoline market—and, more
importantly, resultant high prices for consumers—by main-
taining the viability of independent lessee-dealers. Id., at
1009–1010. The court concluded that the statute would not
substantially advance this interest, however, because it
would not actually reduce lessee-dealers’ costs or retail
prices. It found that the rent cap would allow incumbent

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lessee-dealers, upon transferring occupancy rights to a new
lessee, to charge the incoming lessee a premium reflecting
the value of the rent reduction. Accordingly, the District
Court reasoned, the incoming lessee’s overall expenses
would be the same as in the absence of the rent cap, so there
would be no savings to pass along to consumers. Id., at
1010–1012. Nor would incumbent lessees benefit from the
rent cap, the court found, because the oil company lessors
would unilaterally raise wholesale fuel prices in order to off-
set the reduction in their rental income. Id., at 1012–1014.
On appeal, a divided panel of the Court of Appeals for the
Ninth Circuit held that the District Court had applied the
correct legal standard to Chevron’s takings claim. Chevron
U. S. A. Inc. v. Cayetano, 224 F. 3d 1030, 1033–1037 (2000).
The Court of Appeals vacated the grant of summary judg-
ment, however, on the ground that a genuine issue of ma-
terial fact remained as to whether the Act would benefit
consumers. Id., at 1037–1042. Judge William Fletcher
concurred in the judgment, maintaining that the “reason-
ableness” standard applicable to “ordinary rent and price
control laws” should instead govern Chevron’s claim. Id.,
at 1048.
On remand, the District Court entered judgment for Chev-
ron after a 1-day bench trial in which Chevron and Hawaii
called competing expert witnesses (both economists) to tes-
tify. 198 F. Supp. 2d 1182 (2002). Finding Chevron’s expert
witness to be “more persuasive” than the State’s expert, the
District Court once again concluded that oil companies would
raise wholesale gasoline prices to offset any rent reduction
required by Act 257, and that the result would be an increase
in retail gasoline prices. Id., at 1187–1189. Even if the rent
cap did reduce lessee-dealers’ costs, the court found, they
would not pass on any savings to consumers. Id., at 1189.
The court went on to reiterate its determination that Act
257 would enable incumbent lessee-dealers to sell their lease-
holds at a premium, such that incoming lessees would not

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obtain any of the benefits of the rent cap. Id., at 1189–1190.
And while it acknowledged that the rent cap could preclude
oil companies from constructively evicting dealers through
excessive rents, the court found no evidence that Chevron or
any other oil company would attempt to charge such rents
in the absence of the cap. Id., at 1191. Finally, the court
concluded that Act 257 would in fact decrease the number of
lessee-dealer stations because the rent cap would discourage
oil companies from building such stations. Id., at 1191–1192.
Based on these findings, the District Court held that “Act
257 effect[ed] an unconstitutional regulatory taking given its
failure to substantially advance any legitimate state inter-
est.” Id., at 1193.
The Ninth Circuit affirmed, holding that its decision in the
prior appeal barred Hawaii from challenging the application
of the “substantially advances” test to Chevron’s takings
claim or from arguing for a more deferential standard of re-
view. 363 F. 3d 846, 849–855 (2004). The panel majority
went on to reject Hawaii’s challenge to the application of the
standard to the facts of the case. Id., at 855–858. Judge
Fletcher dissented, renewing his contention that Act 257
should not be reviewed under the “substantially advances”
standard. Id., at 859–861. We granted certiorari, 543 U. S.
924 (2004), and now reverse.
II
A
The Takings Clause of the Fifth Amendment, made appli-
cable to the States through the Fourteenth, see Chicago,
B. & Q. R. Co. v. Chicago, 166 U. S. 226 (1897), provides that
private property shall not “be taken for public use, without
just compensation.” As its text makes plain, the Takings
Clause “does not prohibit the taking of private property, but
instead places a condition on the exercise of that power.”
First English Evangelical Lutheran Church of Glendale v.
County of Los Angeles, 482 U. S. 304, 314 (1987). In other

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words, it “is designed not to limit the governmental interfer-
ence with property rights per se, but rather to secure com-
pensation in the event of otherwise proper interference
amounting to a taking.” Id., at 315 (emphasis in original).
While scholars have offered various justifications for this re-
gime, we have emphasized its role in “bar[ring] Government
from forcing some people alone to bear public burdens which,
in all fairness and justice, should be borne by the public as a
whole.” Armstrong v. United States, 364 U. S. 40, 49 (1960);
see also Monongahela Nav. Co. v. United States, 148 U. S.
312, 325 (1893).
The paradigmatic taking requiring just compensation is a
direct government appropriation or physical invasion of pri-
vate property. See, e. g., United States v. Pewee Coal Co.,
341 U. S. 114 (1951) (Government’s seizure and operation of
a coal mine to prevent a national strike of coal miners ef-
fected a taking); United States v. General Motors Corp., 323
U. S. 373 (1945) (Government’s occupation of private ware-
house effected a taking). Indeed, until the Court’s water-
shed decision in Pennsylvania Coal Co. v. Mahon, 260 U. S.
393 (1922), “it was generally thought that the Takings Clause
reached only a ‘direct appropriation’ of property, or the func-
tional equivalent of a ‘practical ouster of [the owner’s] pos-
session.’ ” Lucas v. South Carolina Coastal Council, 505
U. S. 1003, 1014 (1992) (citations omitted and emphasis added;
brackets in original); see also id., at 1028, n. 15 (“[E]arly
constitutional theorists did not believe the Takings Clause
embraced regulations of property at all”).
Beginning with Mahon, however, the Court recognized
that government regulation of private property may, in some
instances, be so onerous that its effect is tantamount to a
direct appropriation or ouster—and that such “regulatory
takings” may be compensable under the Fifth Amendment.
In Justice Holmes’ storied but cryptic formulation, “while
property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking.” 260 U. S.,

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at 415. The rub, of course, has been—and remains—how to
discern how far is “too far.” In answering that question,
we must remain cognizant that “government regulation—by
definition—involves the adjustment of rights for the public
good,” Andrus v. Allard, 444 U. S. 51, 65 (1979), and that
“Government hardly could go on if to some extent values
incident to property could not be diminished without paying
for every such change in the general law,” Mahon, supra,
at 413.
Our precedents stake out two categories of regulatory ac-
tion that generally will be deemed per se takings for Fifth
Amendment purposes. First, where government requires
an owner to suffer a permanent physical invasion of her
property—however minor—it must provide just compensa-
tion. See Loretto v. Teleprompter Manhattan CATV Corp.,
458 U. S. 419 (1982) (state law requiring landlords to permit
cable companies to install cable facilities in apartment build-
ings effected a taking). A second categorical rule applies to
regulations that completely deprive an owner of “all eco-
nomically beneficial us[e]” of her property. Lucas, 505 U. S.,
at 1019 (emphasis in original). We held in Lucas that the
government must pay just compensation for such “total reg-
ulatory takings,” except to the extent that “background
principles of nuisance and property law” independently re-
strict the owner’s intended use of the property. Id., at
1026–1032.
Outside these two relatively narrow categories (and the
special context of land-use exactions discussed below, see
infra, at 546–548), regulatory takings challenges are gov-
erned by the standards set forth in Penn Central Transp.
Co. v. New York City, 438 U. S. 104 (1978). The Court in
Penn Central acknowledged that it had hitherto been “un-
able to develop any ‘set formula’ ” for evaluating regulatory
takings claims, but identified “several factors that have par-
ticular significance.” Id., at 124. Primary among those fac-
tors are “[t]he economic impact of the regulation on the

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claimant and, particularly, the extent to which the regulation
has interfered with distinct investment-backed expecta-
tions.” Ibid. In addition, the “character of the governmen-
tal action”—for instance whether it amounts to a physical
invasion or instead merely affects property interests through
“some public program adjusting the benefits and burdens of
economic life to promote the common good”—may be rele-
vant in discerning whether a taking has occurred. Ibid.
The Penn Central factors—though each has given rise to
vexing subsidiary questions—have served as the principal
guidelines for resolving regulatory takings claims that do
not fall within the physical takings or Lucas rules. See,
e. g., Palazzolo v. Rhode Island, 533 U. S. 606, 617–618 (2001);
id., at 632–634 (O’Connor, J., concurring).
Although our regulatory takings jurisprudence cannot be
characterized as unified, these three inquiries (reflected in
Loretto, Lucas, and Penn Central) share a common touch-
stone. Each aims to identify regulatory actions that are
functionally equivalent to the classic taking in which govern-
ment directly appropriates private property or ousts the
owner from his domain. Accordingly, each of these tests fo-
cuses directly upon the severity of the burden that govern-
ment imposes upon private property rights. The Court has
held that physical takings require compensation because of
the unique burden they impose: A permanent physical inva-
sion, however minimal the economic cost it entails, eviscer-
ates the owner’s right to exclude others from entering and
using her property—perhaps the most fundamental of all
property interests. See Dolan v. City of Tigard, 512 U. S.
374, 384 (1994); Nollan v. California Coastal Comm’n, 483
U. S. 825, 831–832 (1987); Loretto, supra, at 433; Kaiser
Aetna v. United States, 444 U. S. 164, 176 (1979). In the
Lucas context, of course, the complete elimination of a prop-
erty’s value is the determinative factor. See Lucas, supra,
at 1017 (positing that “total deprivation of beneficial use is,
from the landowner’s point of view, the equivalent of a physi-

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cal appropriation”). And the Penn Central inquiry turns in
large part, albeit not exclusively, upon the magnitude of a
regulation’s economic impact and the degree to which it in-
terferes with legitimate property interests.
B
In Agins v. City of Tiburon, a case involving a facial tak-
ings challenge to certain municipal zoning ordinances, the
Court declared that “[t]he application of a general zoning law
to particular property effects a taking if the ordinance does
not substantially advance legitimate state interests, see
Nectow v. Cambridge, 277 U. S. 183, 188 (1928), or denies an
owner economically viable use of his land, see Penn Central
Transp. Co. v. New York City, 438 U. S. 104, 138, n. 36
(1978). ” 447 U. S., at 260. Because this statement is
phrased in the disjunctive, Agins’ “substantially advances”
language has been read to announce a stand-alone regulatory
takings test that is wholly independent of Penn Central or
any other test. Indeed, the lower courts in this case struck
down Hawaii’s rent control statute based solely upon their
findings that it does not substantially advance a legitimate
state interest. See supra, at 534, 536. Although a number
of our takings precedents have recited the “substantially ad-
vances” formula minted in Agins, this is our first opportunity
to consider its validity as a freestanding takings test. We
conclude that this formula prescribes an inquiry in the na-
ture of a due process, not a takings, test, and that it has no
proper place in our takings jurisprudence.
There is no question that the “substantially advances” for-
mula was derived from due process, not takings, precedents.
In support of this new language, Agins cited Nectow v. Cam-
bridge, 277 U. S. 183, a 1928 case in which the plaintiff
claimed that a city zoning ordinance “deprived him of his
property without due process of law in contravention of the
Fourteenth Amendment,” id., at 185. Agins then went on
to discuss Village of Euclid v. Ambler Realty Co., 272 U. S.

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541 Cite as: 544 U. S. 528 (2005)
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365 (1926), a historic decision holding that a municipal zoning
ordinance would survive a substantive due process challenge
so long as it was not “clearly arbitrary and unreasonable,
having no substantial relation to the public health, safety,
morals, or general welfare.” Id., at 395 (emphasis added);
see also Nectow, supra, at 187–188 (quoting the same “sub-
stantial relation” language from Euclid).
When viewed in historical context, the Court’s reliance
on Nectow and Euclid is understandable. Agins was the
Court’s first case involving a challenge to zoning regulations
in many decades, so it was natural to turn to these seminal
zoning precedents for guidance. See Brief for United States
as Amicus Curiae in Agins v. City of Tiburon, O. T. 1979,
No. 79–602, pp. 12–13 (arguing that Euclid “set out the prin-
ciples applicable to a determination of the facial validity of a
zoning ordinance attacked as a violation of the Takings
Clause of the Fifth Amendment”). Moreover, Agins’ appar-
ent commingling of due process and takings inquiries had
some precedent in the Court’s then-recent decision in Penn
Central. See 438 U. S., at 127 (stating in dicta that “[i]t
is . . . implicit in Goldblatt [v. Hempstead, 369 U. S. 590
(1962),] that a use restriction on real property may constitute
a ‘taking’ if not reasonably necessary to the effectuation of
a substantial public purpose, see Nectow v. Cambridge,
supra”). But see Goldblatt v. Hempstead, 369 U. S. 590,
594–595 (1962) (quoting “ ‘reasonably necessary’ ” language
from Lawton v. Steele, 152 U. S. 133, 137 (1894), a due process
case, and applying a deferential “ ‘reasonableness’ ” standard
to determine whether a challenged regulation was a “valid
exercise of the . . . police power” under the Due Process
Clause). Finally, when Agins was decided, there had been
some history of referring to deprivations of property without
due process of law as “takings,” see, e. g., Rowan v. Post
Office Dept., 397 U. S. 728, 740 (1970), and the Court had yet
to clarify whether “regulatory takings” claims were properly
cognizable under the Takings Clause or the Due Process

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542 LINGLE v. CHEVRON U. S. A. INC.
Opinion of the Court
Clause, see Williamson County Regional Planning Comm’n
v. Hamilton Bank of Johnson City, 473 U. S. 172, 197–199
(1985).
Although Agins’ reliance on due process precedents is un-
derstandable, the language the Court selected was regretta-
bly imprecise. The “substantially advances” formula sug-
gests a means-ends test: It asks, in essence, whether a
regulation of private property is effective in achieving some
legitimate public purpose. An inquiry of this nature has
some logic in the context of a due process challenge, for a
regulation that fails to serve any legitimate governmental
objective may be so arbitrary or irrational that it runs afoul
of the Due Process Clause. See, e. g., County of Sacramento
v. Lewis, 523 U. S. 833, 846 (1998) (stating that the Due Proc-
ess Clause is intended, in part, to protect the individual
against “the exercise of power without any reasonable justi-
fication in the service of a legitimate governmental objec-
tive”). But such a test is not a valid method of discerning
whether private property has been “taken” for purposes of
the Fifth Amendment.
In stark contrast to the three regulatory takings tests dis-
cussed above, the “substantially advances” inquiry reveals
nothing about the magnitude or character of the burden a
particular regulation imposes upon private property rights.
Nor does it provide any information about how any regula-
tory burden is distributed among property owners. In con-
sequence, this test does not help to identify those regulations
whose effects are functionally comparable to government
appropriation or invasion of private property; it is tethered
neither to the text of the Takings Clause nor to the basic
justification for allowing regulatory actions to be challenged
under the Clause.
Chevron appeals to the general principle that the Takings
Clause is meant “ ‘to bar Government from forcing some peo-
ple alone to bear public burdens which, in all fairness and
justice, should be borne by the public as a whole.’ ” Brief

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543 Cite as: 544 U. S. 528 (2005)
Opinion of the Court
for Respondent 17–21 (quoting Armstrong, 364 U. S., at 49).
But that appeal is clearly misplaced, for the reasons just indi-
cated. A test that tells us nothing about the actual burden
imposed on property rights, or how that burden is allocated,
cannot tell us when justice might require that the burden be
spread among taxpayers through the payment of compensa-
tion. The owner of a property subject to a regulation that
effectively serves a legitimate state interest may be just as
singled out and just as burdened as the owner of a property
subject to an ineffective regulation. It would make little
sense to say that the second owner has suffered a taking
while the first has not. Likewise, an ineffective regulation
may not significantly burden property rights at all, and it
may distribute any burden broadly and evenly among prop-
erty owners. The notion that such a regulation neverthe-
less “takes” private property for public use merely by virtue
of its ineffectiveness or foolishness is untenable.
Instead of addressing a challenged regulation’s effect on
private property, the “substantially advances” inquiry
probes the regulation’s underlying validity. But such an in-
quiry is logically prior to and distinct from the question
whether a regulation effects a taking, for the Takings Clause
presupposes that the government has acted in pursuit of a
valid public purpose. The Clause expressly requires com-
pensation where government takes private property “for
public use.” It does not bar government from interfering
with property rights, but rather requires compensation “in
the event of otherwise proper interference amounting to a
taking.” First English Evangelical Lutheran Church, 482
U. S., at 315 (emphasis added). Conversely, if a government
action is found to be impermissible—for instance because it
fails to meet the “public use” requirement or is so arbitrary
as to violate due process—that is the end of the inquiry. No
amount of compensation can authorize such action.
Chevron’s challenge to the Hawaii statute in this case illus-
trates the flaws in the “substantially advances” theory. To

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544 LINGLE v. CHEVRON U. S. A. INC.
Opinion of the Court
begin with, it is unclear how significantly Hawaii’s rent cap
actually burdens Chevron’s property rights. The parties
stipulated below that the cap would reduce Chevron’s aggre-
gate rental income on 11 of its 64 lessee-dealer stations by
about $207,000 per year, but that Chevron nevertheless ex-
pects to receive a return on its investment in these stations
that satisfies any constitutional standard. See supra, at 534.
Moreover, Chevron asserted below, and the District Court
found, that Chevron would recoup any reductions in its
rental income by raising wholesale gasoline prices. See
supra, at 535. In short, Chevron has not clearly argued—
let alone established—that it has been singled out to bear
any particularly severe regulatory burden. Rather, the gra-
vamen of Chevron’s claim is simply that Hawaii’s rent cap
will not actually serve the State’s legitimate interest in pro-
tecting consumers against high gasoline prices. Whatever
the merits of that claim, it does not sound under the Takings
Clause. Chevron plainly does not seek compensation for a
taking of its property for a legitimate public use, but rather
an injunction against the enforcement of a regulation that it
alleges to be fundamentally arbitrary and irrational.
Finally, the “substantially advances” formula is not only
doctrinally untenable as a takings test—its application as
such would also present serious practical difficulties. The
Agins formula can be read to demand heightened means-
ends review of virtually any regulation of private property.
If so interpreted, it would require courts to scrutinize the
efficacy of a vast array of state and federal regulations—a
task for which courts are not well suited. Moreover, it
would empower—and might often require—courts to substi-
tute their predictive judgments for those of elected legisla-
tures and expert agencies.
Although the instant case is only the tip of the proverbial
iceberg, it foreshadows the hazards of placing courts in this
role. To resolve Chevron’s takings claim, the District Court
was required to choose between the views of two opposing

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545 Cite as: 544 U. S. 528 (2005)
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economists as to whether Hawaii’s rent control statute would
help to prevent concentration and supracompetitive prices in
the State’s retail gasoline market. Finding one expert to be
“more persuasive” than the other, the court concluded that
the Hawaii Legislature’s chosen regulatory strategy would
not actually achieve its objectives. See 198 F. Supp. 2d, at
1187–1193. The court determined that there was no evi-
dence that oil companies had charged, or would charge, ex-
cessive rents. See id., at 1191. Based on this and other
findings, the District Court enjoined further enforcement of
Act 257’s rent cap provision against Chevron. We find the
proceedings below remarkable, to say the least, given that
we have long eschewed such heightened scrutiny when ad-
dressing substantive due process challenges to government
regulation. See, e. g., Exxon Corp. v. Governor of Mary-
land, 437 U. S. 117, 124–125 (1978); Ferguson v. Skrupa, 372
U. S. 726, 730–732 (1963). The reasons for deference to leg-
islative judgments about the need for, and likely effective-
ness of, regulatory actions are by now well established, and
we think they are no less applicable here.
For the foregoing reasons, we conclude that the “substan-
tially advances” formula announced in Agins is not a valid
method of identifying regulatory takings for which the Fifth
Amendment requires just compensation. Since Chevron ar-
gued only a “substantially advances” theory in support of its
takings claim, it was not entitled to summary judgment on
that claim.
III
We emphasize that our holding today—that the “substan-
tially advances” formula is not a valid takings test—does not
require us to disturb any of our prior holdings. To be sure,
we applied a “substantially advances” inquiry in Agins itself,
see 447 U. S., at 261–262 (finding that the challenged zoning
ordinances “substantially advance[d] legitimate governmen-
tal goals”), and arguably also in Keystone Bituminous Coal
Assn. v. DeBenedictis, 480 U. S. 470, 485–492 (1987) (quoting

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546 LINGLE v. CHEVRON U. S. A. INC.
Opinion of the Court
“ ‘substantially advance[s]’ ” language and then finding that
the challenged statute was intended to further a substantial
public interest). But in no case have we found a compensa-
ble taking based on such an inquiry. Indeed, in most of the
cases reciting the “substantially advances” formula, the
Court has merely assumed its validity when referring to it
in dicta. See Tahoe-Sierra Preservation Council, Inc. v.
Tahoe Regional Planning Agency, 535 U. S. 302, 334 (2002);
Del Monte Dunes, 526 U. S., at 704; Lucas, 505 U. S., at 1016;
Yee v. Escondido, 503 U. S. 519, 534 (1992); United States v.
Riverside Bayview Homes, Inc., 474 U. S. 121, 126 (1985).
It might be argued that this formula played a role in our
decisions in Nollan v. California Coastal Comm’n, 483 U. S.
825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994).
See Brief for Respondent 21–23. But while the Court drew
upon the language of Agins in these cases, it did not apply
the “substantially advances” test that is the subject of to-
day’s decision. Both Nollan and Dolan involved Fifth
Amendment takings challenges to adjudicative land-use ex-
actions—specifically, government demands that a landowner
dedicate an easement allowing public access to her property
as a condition of obtaining a development permit. See
Dolan, supra, at 379–380 (permit to expand a store and park-
ing lot conditioned on the dedication of a portion of the rele-
vant property for a “greenway,” including a bike/pedestrian
path); Nollan, supra, at 828 (permit to build a larger resi-
dence on beachfront property conditioned on dedication of an
easement allowing the public to traverse a strip of the prop-
erty between the owner’s seawall and the mean high-tide
line).
In each case, the Court began with the premise that, had
the government simply appropriated the easement in ques-
tion, this would have been a per se physical taking. Dolan,
supra, at 384; Nollan, supra, at 831–832. The question was
whether the government could, without paying the compen-
sation that would otherwise be required upon effecting such

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a taking, demand the easement as a condition for granting a
development permit the government was entitled to deny.
The Court in Nollan answered in the affirmative, provided
that the exaction would substantially advance the same gov-
ernment interest that would furnish a valid ground for denial
of the permit. 483 U. S., at 834–837. The Court further re-
fined this requirement in Dolan, holding that an adjudicative
exaction requiring dedication of private property must also
be “ ‘rough[ly] proportiona[l]’ . . . both in nature and extent
to the impact of the proposed development.” 512 U. S., at
391; see also Del Monte Dunes, supra, at 702 (emphasizing
that we have not extended this standard “beyond the special
context of [such] exactions”).
Although Nollan and Dolan quoted Agins’ language, see
Dolan, supra, at 385; Nollan, supra, at 834, the rule those
decisions established is entirely distinct from the “substan-
tially advances” test we address today. Whereas the “sub-
stantially advances” inquiry before us now is unconcerned
with the degree or type of burden a regulation places upon
property, Nollan and Dolan both involved dedications of
property so onerous that, outside the exactions context, they
would be deemed per se physical takings. In neither case
did the Court question whether the exaction would substan-
tially advance some legitimate state interest. See Dolan,
supra, at 387–388; Nollan, supra, at 841. Rather, the issue
was whether the exactions substantially advanced the same
interests that land-use authorities asserted would allow
them to deny the permit altogether. As the Court ex-
plained in Dolan, these cases involve a special application of
the “doctrine of ‘unconstitutional conditions,’ ” which pro-
vides that “the government may not require a person to give
up a constitutional right—here the right to receive just com-
pensation when property is taken for a public use—in ex-
change for a discretionary benefit conferred by the govern-
ment where the benefit has little or no relationship to the
property.” 512 U. S., at 385. That is worlds apart from a

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Kennedy, J., concurring
rule that says a regulation affecting property constitutes a
taking on its face solely because it does not substantially
advance a legitimate government interest. In short, Nollan
and Dolan cannot be characterized as applying the “substan-
tially advances” test we address today, and our decision
should not be read to disturb these precedents.
* * *
Twenty-five years ago, the Court posited that a regulation
of private property “effects a taking if [it] does not substan-
tially advance [a] legitimate state interes[t].” Agins, 447
U. S., at 260. The lower courts in this case took that state-
ment to its logical conclusion, and in so doing, revealed its
imprecision. Today we correct course. We hold that the
“substantially advances” formula is not a valid takings test,
and indeed conclude that it has no proper place in our takings
jurisprudence. In so doing, we reaffirm that a plaintiff seek-
ing to challenge a government regulation as an uncompen-
sated taking of private property may proceed under one of
the other theories discussed above—by alleging a “physical”
taking, a Lucas-type “total regulatory taking,” a Penn Cen-
tral taking, or a land-use exaction violating the standards
set forth in Nollan and Dolan. Because Chevron argued
only a “substantially advances” theory in support of its tak-
ings claim, it was not entitled to summary judgment on that
claim. Accordingly, we reverse the judgment of the Ninth
Circuit and remand the case for further proceedings consist-
ent with this opinion.
It is so ordered.
Justice Kennedy, concurring.
This separate writing is to note that today’s decision does
not foreclose the possibility that a regulation might be so
arbitrary or irrational as to violate due process. Eastern
Enterprises v. Apfel, 524 U. S. 498, 539 (1998) (Kennedy, J.,
concurring in judgment and dissenting in part). The failure

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Kennedy, J., concurring
of a regulation to accomplish a stated or obvious objective
would be relevant to that inquiry. Chevron voluntarily dis-
missed its due process claim without prejudice, however, and
we have no occasion to consider whether Act 257 of the 1997
Hawaii Session Laws “represents one of the rare instances
in which even such a permissive standard has been violated.”
Apfel, supra, at 550. With these observations, I join the
opinion of the Court.