Lingle v. Chevron, U.S.A.

Facts

In Hawaii, gasoline is sold from approximately 300 service stations. Many of the stations are leased from oil companies by independent lessee-dealers. Under such an arrangement, the oil company purchased the land, constructed a service station, and then leased the station to a lessee-dealer. In 1997, Hawaii’s legislature enacted a law that prohibited oil companies from converting existing lessee-dealer-owned gasoline stations to company-owned stations, from locating company-operated stations in close proximity to existing lessee-dealer-operated stations, and limited the amount of rent that an oil company could charge a lessee-dealer. Plaintiff (Plaintiff), the largest marketer and supplier of gasoline in Hawaii, sued in federal district court against the state’s governor, Lingle (Defendant), and others challenging the statute. Specifically, Plaintiff alleged that the statute’s rent cap provision constituted a taking of Plaintiff’s property in violation of the Fifth and Fourteenth Amendments. The district court granted Plaintiff’s motion for summary judgment and held that the statute failed to “substantially advance” a legitimate state interest and resulted in an unconstitutional taking. Defendant appealed. The court of appeals affirmed. The U.S. Supreme Court granted certiorari to review.