Bronster

Hawaii Governor Linda Lingle (“Hawaii”) appeals the district court’s holding on remand that Section 3(c) of Act 257 of the 1997 Hawaii State Legislature (“Act 257” or “the Act”) effects a regulatory taking in violation of the Takings Clause of the Fifth Amendment to the United States Constitution. Chevron USA, Inc. (“Chevron”) challenged the Act, which, inter alia, proscribes the maximum rent that oil companies can collect from dealers who lease company-owned service stations.

We have jurisdiction pursuant to 28 U.S.C. § 1331 , and we affirm.

I

In response to concerns about the highly concentrated wholesale gasoline market in Hawaii and the resulting high cost of gasoline to consumers, the Hawaii Legislature enacted Act 257 in 1997. Act 257, among other things, regulates the maximum rent an oil company can charge dealers who lease its service stations. More specifically, Act 257 caps the rent that Chevron and other oil companies can collect from lessee-dealers at 15% of the dealer’s profit on gasoline sales and 15% of the dealer’s gross sales on products other than gasoline, plus a percentage increase equal to any increase the oil company may be required to pay on its ground…

dissenting:

At issue in this case is the constitutionality of Hawai’i’s Act 257, which controls the rent an oil company can charge its dealer/lessees. There are two different constitutional tests that could conceivably apply *859 to Act 257. The first is the “reasonableness” test ordinarily applied to rent and price control statutes. See, e.g., Pennell v. City of San Jose, 485 U.S. 1, 11 , 108 S.Ct. 849 , 99 L.Ed.2d 1 (1988) (upholding a rent control ordinance because it was not “arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt”) (quoting Permian Basin Area Rate Cases, 390 U.S. 747, 769-70 , 88 S.Ct. 1344 , 20 L.Ed.2d 312 (1968)). The second is the “substantially advances a legitimate state interest” test ordinarily applied to zoning and other land use regulations. See, e.g., Agins v. City of Tiburon, 447 U.S. 255, 261 , 100 S.Ct. 2138 , 65 L.Ed.2d 106 (1980) (upholding a zoning ordinance because if’substantially advance[d] legitimate governmental goals”); Dolan v. City of Tigard, 512 U.S. 374 , 114 S.Ct. 2309 , 129 L.Ed.2d 304 (1994); Nollan v. California Coastal Comm’n, 483 U.S. 825 , 107 S.Ct. 3141 , 97 L.Ed.2d 677…