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The Supreme Court ruled Monday that Hawaii did not overstep its authority when it moved to keep gasoline prices in line by imposing caps on the rent paid by dealer-run stations. The unanimous decision was a defeat for Chevron USA, which argued that Hawaii’s law was an unconstitutional “taking” of private property. The ruling means that state legislatures preserve their authority to set local economic regulations without extensive second-guessing by federal courts. Ruling otherwise 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,” Justice Sandra Day O’Connor wrote for the court. “Moreover, it would empower — and might often require — courts to substitute their predictive judgments for those of elected legislatures and expert agencies,” she wrote. The stakes were high, although the outcome was expected. A ruling for Chevron would have opened the door to lawsuits from businesses challenging numerous laws — from residential rent control to environmental regulations and even minimum-wage requirements — on grounds they were an unfair “taking” of profits. Hawaii, which has had some of the nation’s highest gasoline prices, passed the law in 1997 to protect independent dealers and promote competition. It restricted lease prices that oil companies could charge their dealer-owned stations and barred the companies from taking over those stations. Chevron then sued, arguing the law was an unconstitutional “taking” of the company’s profits because it failed to “substantially advance” the state’s goal of lowering retail gasoline prices. The Fifth Amendment provides that private property should not be taken for public use without just compensation. Two lower courts agreed, ruling the law was unconstitutional because it failed to achieve Hawaii’s objective of limiting gasoline costs. Hawaii was backed in its appeal by the Bush administration and 32 states and territories, which argued that judges should give deference to elected state and local governments to set economic policy. Those states and territories supporting Hawaii were: New York, California, Alaska, Arizona, Colorado, Connecticut, Delaware, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, New Jersey, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, and West Virginia, the Commonwealths of Puerto Rico and the Northern Mariana Islands, and the Territories of American Samoa, Guam, and the Virgin Islands. The case was one of three this term seeking to delineate the rights of property owners. The other two, which have not yet been decided, examine whether local governments may seize people’s homes and businesses for private economic development; and whether property owners can bring their claims to federal court after losing in state court. Monday’s case is Lingle v. Chevron USA, 04-163. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, rewritten, or redistributed.

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