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CRC Op-eds and Letters to the Editor

 


Happy Earth Day, Lake Tahoe!

By Timothy J. Dowling
Published at 54 Land Use Law & Zoning Digest 8(2002)


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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