Cayetano

Opinion by Judge BEEZER; Concurrence by Judge W. FLETCHER.

Hawaii Governor Benjamin J. Cayetano and Attorney General Earl I. Anzai (collectively “the State”) appeal the district court’s judgment in favor of Chevron U.S.A., Inc. Chevron filed suit for declaratory and injunctive relief against enforcement of Section 3(c) of Act 257 of the 1997 Hawaii State Legislature (“Act 257”). Act 257, inter alia, proscribes the maximum rent that oil companies can collect from dealers who' lease company-owned service stations. Both parties moved for summary judgment on whether the maximum permissible regulated rent effects an unconstitutional regulatory taking. After concluding that it does, the district court granted Chevron’s motion and denied the State’s motion. The State appeals only the grant of summary judgment to Chevron; it does not appeal the denial of its own motion. We have jurisdiction under 28 U.S.C. § 1291 . Because genuine issues of material fact exist, we vacate the judgment and remand for further proceedings.

I

In response to concerns about the highly concentrated gasoline market in Hawaii and the resulting high cost of gasoline to consumers, the Hawaii Legislature enacted…

concurring in the judgment:

I disagree with the majority’s analysis. Plaintiff Chevron 'challenges Hawaii Act 257, a rent control law limiting the amount an oil company can charge a dealer who leases a service station from the company. *1043 In a motion for summary judgment, Chevron argued that Act 257 is unconstitutional. The district court found Act 257 unconstitutional, granted Chevron’s motion, and entered final judgment for Chevron. Defendant Cayetano timely appealed. We reverse and remand.

For the reasons that follow, I concur in the reversal of the grant of summary judgment to Chevron. I disagree, however, with the majority’s rationale and with the task the majority has set for the district court on remand.

I

There are two distinct tests of constitutionality potentially applicable to Act 257. The first is a “reasonableness” test normally applied to rent control laws. The second is a “substantially advances a legitimate state interest” test normally applied to zoning and land use regulations. Relying on our earlier decision in Richardson v. City and County of Honolulu, 124 F.3d 1150 (9th Cir.1997), the majority analyzes Act 257 under the second test. The problem in this…