## Facts

- Sam B. McQueen bought two noncontiguous canal-front lots in North Myrtle Beach, South Carolina (1961 and 1963); the lots were created by fill in an area where many neighboring lots were developed.
- Over time, erosion and tidal action altered the parcels so that, by the early 1990s, most of each lot was tidelands or critical-area saltwater wetlands and largely submerged at high tide.
- In 1991 McQueen sought permits to build bulkheads to stop erosion; the agency issued a permit for one lot but required a setback that prevented construction of a zoning-compliant house, and administrative confusion delayed action on the other lot.
- In 1993 McQueen reapplied for permits to (1) build bulkheads and (2) backfill behind the bulkheads to recreate dry, buildable land for residential use.
- The coastal agency denied the applications, relying on coastal regulations that disfavor filling wetlands to create residential lots for private gain; administrative bodies affirmed, finding the proposal would fill critical-area wetlands and harm coastal resources.
- McQueen filed an inverse-condemnation action alleging the denials effected a regulatory taking; a trial-level court awarded damages per lot, and the intermediate appellate court affirmed.
- The state supreme court initially reversed, the U.S. Supreme Court vacated and remanded for reconsideration in light of *Palazzolo*, and the state supreme court again rejected the takings claim on remand.

## Issues

1. Whether denying permits to bulkhead and backfill parcels that had become tidelands/critical-area wetlands constituted a compensable regulatory taking.
2. Whether the public trust doctrine and related state-law limits on filling tidelands and coastal wetlands are “background principles” that define and limit the owner’s title, defeating the takings claim.
3. Whether *Palazzolo v. Rhode Island* required a different result regarding the relevance of preexisting restrictions and background principles.

## Decision

- The South Carolina Supreme Court reversed the Court of Appeals and rejected McQueen’s inverse-condemnation claim.
- The court held the permit denials were not a compensable taking because McQueen’s title did not include a right to fill and build on tidelands subject to the public trust.
- The court concluded *Palazzolo* did not alter the analysis because it preserves the rule that background principles of state property law can defeat a takings claim.

## Legal Principles

- A regulation that eliminates all economically beneficial use may constitute a per se taking under *Lucas* unless “background principles” of state property and nuisance law already prohibit the claimed use.
- The public trust doctrine operates as a background limitation on private rights in tidelands subject to the ebb and flow of the tide; a claimed right to fill such areas may be outside the owner’s title.
- *Palazzolo* rejects a categorical “notice” bar to takings claims based solely on acquisition after regulation, but it does not prevent a state from showing that the asserted use was never part of the claimant’s property rights under background principles.
- Coastal-zone regulations denying wetland filling for private residential lot creation may be applied consistently with background public-trust limits without triggering compensation where the owner lacks the claimed entitlement to the use.

## Conclusion

Because the parcels had become tidelands/critical-area wetlands subject to the public trust and associated background limits on filling, the agency’s denial of permits to backfill for residential development did not take a property right McQueen possessed, and no compensation was required even after reconsideration in light of *Palazzolo*.


McQueen v. S.C. Coastal Council, 580 S.E.2d 116 (S.C. 2003)