Coastal Petroleum v. Chiles

The Florida Constitution provided that the lands under its territorial navigable waters were held by the State of Florida (Florida) (defendant) in trust for all the people and that private use of such lands could be authorized only if the use was not against the public interest. The Florida Constitution also provided that the state must compensate owners of private property taken for public use. Before the 1970s, Coastal Petroleum (Coastal) (plaintiff) obtained the right to receive royalties from oil leases on some of the land within Florida’s waters. Florida authorities retained the discretion to grant or refuse to grant such leases. In 1990, Florida passed a statute barring exploration and drilling for oil and gas in certain areas off the Florida coast (the 1990 statute). Some of the areas affected by the 1990 statute included those from which Coastal might have received royalties (affected areas). However, between 1975 and 1990, no one had asked for an oil lease within the affected areas. None of the affected areas’ test wells, drilled before 1976, had found oil. Coastal sued Florida, arguing that the 1990 statute amounted to a taking of its right to royalties, for which Coastal ought to be compensated. The trial court ruled that in enacting the 1990 statute, Florida had merely exercised its authority to protect lands held in trust for the people and ruled against Coastal. Coastal appealed, arguing that even if Florida had acted under the public-trust doctrine, Coastal was still owed compensation.