Supreme Court Will Hear Case on Rent Control
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WASHINGTON – The Supreme Court said Tuesday it would decide whether Hawaii went too far to keep gasoline affordable for residents when it imposed rent caps on dealer run stations.
Lower courts said the 1997 law, intended to protect independent dealers and promote competition, was unconstitutional.
The case to be argued early next year will set guidelines for other states. Nineteen states, including Connecticut, and many city and legislative leaders had urged the Supreme Court to hear Hawaii’s appeal, arguing that their own regulations of various types could be affected.
“The list could be virtually endless,” justices were told by lawyers for the National Conference of State Legislatures, National League of Cities, and other groups.
Chevron USA filed a challenge to the law, which restricted lease prices that oil companies could charge their dealer-owned stations and barred the companies from taking over those stations.
The company won on the grounds that the law was an unconstitutional taking of its property.
In the appeal, Hawaii argues that such economic regulations are not property takings and that judges should consider states’ authority to determine policy.
Hawaii has been trying to control island motorists’ gas prices. It also passed a law that imposed limits on gas prices, but the restrictions haven’t started yet. Last month, Honolulu had the highest gas prices in the nation at $2.26 for self-serve regular. The average national price was $1.91, according to the Lundberg Survey.
Chevron attorney Craig Stewart of San Francisco told justices in a filing that Hawaii imposed “fundamentally irrational restrictions” on lease arrangements between oil companies and gas station operators.
He said Chevron sells most of its gas in Hawaii through 64 stations, which the company leases to independent operators. The contested law required Chevron to charge less rent than needed to recover its expenses, Mr. Stewart said.
The 19 states that urged the Supreme Court to take the appeal are: California, Colorado, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Maryland, Minnesota, Mississippi, Missouri, Montana, New York, Oklahoma, Oregon, Utah, Vermont, and Washington. The case is Lingle v. Chevron USA, 04-163.
