Lingle v. Chevron, U.S.A.

Facts

In Hawaii, approximately 300 service stations sell gasoline. Many of those stations in Hawaii are leased from oil companies,under an independent lessee-dealers. Pursuant to the arrangement, the oil company buys the land, builds a service station, and then leases the station to a lessee-dealer. In 1997, Hawaii’s legislature passed a law that did not allow oil companies from converting existing lessee-dealer-owned gasoline stations to company-owned stations, from locating company-operated stations in close proximity to already present lessee-dealer-operated stations, and restrained the amount of rent that an oil company could impose on a lessee-dealer. Chevron, the largest marketer and supplier of gasoline in Hawaii, sued the state’s governor, Lingle and others challenging the statute. Chevron contended that the statute’s rent cap was a taking of Chevron’s property, violating the Fifth and Fourteenth Amendments. Thereafter, the district court held in Chevron’s favor by granting Chevron’s motion for summary judgment and holding that the statute failed to “substantially advance” a legitimate state interest. Thus, the statute constituted an unconstitutional taking. Lingle appealed. The appellate court affirmed, and United States Supreme Court granted certiorari to review.