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On April 23, the Supreme Court gave Lake Tahoe, planners,
and local officials a marvelous Earth Day present in Tahoe-Sierra
Preservation Council, Inc. v. Tahoe Regional Planning Agency
[cited as "Slip op."]. At long last, Tahoe-Sierra
breaks a string of government losses in regulatory takings
rulings by the Supreme Court, and it does so in dramatic fashion.
Although the 6-3 ruling is narrow on the surface -- holding
that a 32-month moratorium designed to protect Lake Tahoe
did not work a per se taking under Lucas v. South Carolina
Coastal Council, 505 U.S. 1003 (1992) -- it contains a
broad analysis that will be helpful to planners and government
lawyers for years to come. The two swing Justices, Kennedy
and O'Connor, fully embraced Justice Steven's majority opinion
without the confusing concurrences that have characterized
other recent takings rulings. Although Justices Kennedy and
O'Connor have sent signals in previous cases that they were
unwilling to follow the property rights movement over the
cliff, Tahoe-Sierra stands as an exclamation point
on their break from ideologues who argue for an overly expansive
application of the Takings Clause.
This article first explains why the Court ruled for the Agency.
It then summarizes the broader ramifications of the case that
go beyond the takings implications of moratoria.
Why Did the Tahoe-Sierra Claimants Lose?
In view of the repeated landowner victories in Supreme Court
takings cases in recent years, it is only natural to ask why
the Court resoundingly ruled in favor of the government in
Tahoe-Sierra. The answer is threefold.
First, the claimants presented a phantom case to the Supreme
Court. In their initial filings seeking review, they repeatedly
asserted that the Agency had prevented development on all
land owned by the claimants for more than 20 years. To make
this allegation, they necessarily relied on the purported
impact of the 1987 regional development plan now in effect.
The trial record is silent, however, regarding the impact
of that plan on the claimants' land. The trial court rejected
their challenge to the 1987 plan as untimely because the claimants
attempted to add that challenge to their lawsuit years after
the applicable statute of limitations had run. The Ninth Circuit
affirmed the statute of limitations ruling, and the claimants
did not ask the Supreme Court to review it.
Because the record is devoid of evidence regarding the 1987
plan, the Supreme Court rewrote the question presented so
that it excluded that plan from consideration, focusing exclusively
on whether the Agency's "temporary moratorium" caused
a taking. 533 U.S. 948 (2001). Not surprisingly, the Tahoe-Sierra
opinion says little about the 1987 plan, and it expressly
declines to consider the unsupported allegation that the Agency
permanently banned development of the claimants' land. Not
even Chief Justice Rehnquist's dissent addresses the 1987
plan.
The claimants' allegations regarding the 1987 plan were unsupported
not only by the record, but also by reality. The record shows
that many owners of restricted lots sold them to private parties
for as much as $110,000 from 1981-1987. Trial Transcript at
1380-1415. An expert appraiser testified that lands covered
by the moratorium retained reasonable economic value on the
open market during the moratorium. Id. at 1408. Of the claimants
who did not sell, a pre-trial order shows that fully two-thirds
are permitted to build under the 1987 plan. Moreover, that
plan established an innovative system of transferable development
credits to alleviate whatever undue burden the plan might
impose on isolated landowners. Despite these facts, to this
day (perhaps even in this publication) the claimants' allies
falsely assert that the Agency permanently rendered worthless
all land owned by the claimants.
Second, the claimants relied exclusively on an extreme theory.
The trial court ruled that the 32-month moratorium did not
work a taking under the multifactor test articulated in Penn
Central Transp. Co. v. New York City, 438 U.S. 104 (1978).
In so ruling, the trial court found that the moratorium was
a reasonable, proportionate, and good faith response to the
threats to the Lake posed by uncontrolled development. The
claimants did not appeal this ruling, affirmatively disavowing
any argument that the Lake protections worked a taking under
Penn Central. Slip op. at 12-13, 16.
Instead, the claimants argued that every moratorium on all
development -- "for whatever period of time," to
quote their brief -- is always a taking per se under Lucas,
no matter how reasonable in scope and duration, no matter
how slight the economic impact, and no matter how important
the government purpose. At oral argument, counsel for the
claimants laid bare the radical nature of their theory by
asserting that even a ten-minute denial of land use works
a taking:
QUESTION: . . . But your view is, even if the regulation
prohibits all use of a piece of property, an automobile, whatever
it may be, for 10 or 15 minutes, there is a taking. . . .
.
MR. BERGER: If there is a total prohibition of use --
QUESTION: For 10 minutes.
MR. BERGER: -- there is liability.
Oral Argument Transcript at 12. When asked whether this proposed
per se rule would require compensation for a delay in rebuilding
the World Trade Center site -- say, to allow for consideration
of national security concerns -- the claimants' counsel understandably
equivocated and then changed the subject. Id. at 4, 15-17.
The Court rejected the claimants' extreme per se rule, ruling
that the takings implications of moratoria turn on the particular
circumstances of each case under the Penn Central multifactor
test. It stressed that an absolute rule of automatic liability
has no foundation in the text or jurisprudence of the Takings
Clause, and would require compensation not only for reasonable
planning delays, but also temporary denials of access to crime
scenes and fire-damaged buildings and many other government
actions. The Court also emphasized that requiring compensation
for every moratorium on development, no matter how reasonable,
would improperly render this important planning technique
prohibitively expensive.
Not even the dissenters agreed with the claimants' radical
theory that every denial of all use is an automatic taking.
Rather, they recognized that many moratoria may be insulated
from takings attack by background principles of state law.
Slip op. (Rehnquist dissent) at 10-12.
Third, one cannot overlook the role that the Lake itself
played in the outcome. Lake Tahoe is the world's largest alpine
lake, covering more than 192 square miles. Surrounded by the
snow-capped peaks of the Sierra Nevada Mountains, it is world-renowned
for its remarkable clarity. Mark Twain marveled that the Lake's
dazzling clarity allowed him to see fish put their noses to
the bait at a depth of 84 feet. He concluded that "with
the shadows of the mountains brilliantly photographed upon
its still surface . . . it must be the fairest picture the
whole earth affords."
The Lake's beauty and popularity, however, contain the seed
of its own destruction, for increased development in the Tahoe
Basin is slowly ruining the Lake. Homes, roads, parking lots,
and other impervious surfaces cover sensitive lands that previously
absorbed rain and snowmelt. The increased runoff contains
nitrogen and phosphorous that spur the growth of algae, and
the Lake was losing about a foot of clarity each year. If
development were left uncontrolled, the Lake's cobalt-blue
waters would turn green and opaque for all eternity. The
Tahoe-Sierra Court was understandably reluctant to require
across-the-board compensation for every landowner temporarily
inconvenienced by good-faith efforts to save this unique treasure.
The Court recognized that the moratorium generated a "reciprocity
of advantage" for all Tahoe Basin landowners because
it prevented immediate construction that would undermine the
final regional development plan and the protection of the
Lake. Slip op. at 37. It observed that because land values
in the Tahoe Basin are so heavily based on the beauty of the
Lake, one could reasonably expect those values to increase,
not decrease, as a result of the moratorium. Id. at 38. In
fact, expert appraisal evidence offered at trial showed that
many restricted lots appreciated in value during the moratorium.
Trial Transcript at 1380-1415.
The Broader Implications
Tahoe-Sierra emphatically reaffirmed that in analyzing
a takings claim, a court should consider the effect of the
challenged regulation on claimant's entire parcel, not just
the affected portion. Slip op. at 18-19, 22-23, 27-28. Tahoe-Sierra
rejects both physical and conceptual segmentation, emphasizing
that "[a]n interest in real property is defined by the
metes and bounds that describe its geographic dimensions and
the term of years that describes the temporal aspect of the
owner's interest. . . . Both dimensions must be considered
if the interest is to be viewed in its entirety." Id.
at 27-28. Although the parcel-as-a-whole rule is supported
by decades of precedent, this reaffirmation was especially
welcome in the wake of confusing dicta in Palazzolo v.
Rhode Island, 121 S. Ct. 2448 (2001), which suggested
that the Court might want to revisit the rule. Tahoe-Sierra
will provide tremendous assistance to local officials who
face takings challenges to mining restrictions, wetland protections,
and many other government actions that affect only a portion
of the claimant's entire parcel.
The Tahoe-Sierra Court also clarified that to show
a per se claim under Lucas, the claimant must show a complete
obliteration of all value: "Anything less than a 'complete
elimination of value,' or a 'total loss' . . . would require
the kind of analysis applied in Penn Central."
Slip op. at 26. The Court stressed that Lucas made
clear that even a 95 percent loss in value does not trigger
the per se rule. Id. This analysis rejects arguments by some
claimants that Lucas recognized a constitutional "right
to develop" and that the Lucas per se rule applies
whenever regulation prohibits development, even where the
land retains value due to recreational or other uses.
In addition, Tahoe-Sierra instructs that First
English Evangelical Lutheran Church v. County of Los Angeles,
482 U.S. 304 (1987), is a case about remedies, not substantive
takings law. Slip op. at 24-25. Despite their protestations,
this ruling should come as little surprise to the claimants
since First English expressly limits its ruling to
the remedial question. Id. Indeed, counsel of record for the
Tahoe-Sierra claimants also represented the landowner
in First English, and his briefs in First English
emphasized that "this case contains no issue of whether
a taking occurred" and that the only issue presented
by First English was a remedial issue. First English,
Brief for Appellant at 5. The claimants' suggestion that First
English worked a sea change in standards for substantive
takings liability is flatly contradicted by First English
itself.
The Tahoe-Sierra Court also preserved the analytical
divide between physical and regulatory takings, rejecting
strenuous efforts by the claimants and their amici to blur
the distinction. The Court's comprehensive discussion of this
issue shows that the claimants' proposal to treat physical
invasions and land-use regulations as identical would contravene
the text of the Takings Clause and the entire corpus of regulatory
takings jurisprudence. Slip op. at 17-20.
Just as important, the entire tone of the Tahoe-Sierra
opinion is markedly different from earlier rulings, which
sometimes dripped with skepticism regarding planning and land-use
regulation. In contrast, Tahoe-Sierra defers to the
consensus of the planning community regarding the importance
of moratoria, and it weighs concerns about inefficient and
ill-conceived growth in its consideration of fairness. And
it acknowledges the importance of thoughtful, careful planning
in protecting our communities from harmful land use.
In short, Tahoe-Sierra is the best news for planners
and local officials from the Supreme Court on takings in 20
years. The ruling received widespread publicity, making the
front page of newspapers across the country and generating
more than 25 favorable editorials. It should encourage planners
and local officials to continue to protect our neighborhood
and communities through reasonable land-use controls that
advance the public interest.
* Timothy J. Dowling is Chief Counsel of Community Rights
Counsel, a public interest law firm in Washington, D.C., that
filed an amicus curiae brief on behalf of a broad coalition
of organizations that represent our nation's governors, mayors,
and other state and local officials.
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