The New York Times
Wednesday, April 24, 2002
The Supreme Court ruled today that a government-imposed
moratorium on property development, even one that lasts for
years, does not automatically amount to a "taking"
of private property for which taxpayers must compensate the
The 6-to-3 decision was a sharp setback for the property rights
movement, which has scored many recent successes in the Supreme
Court. The ruling came in a case that sought millions of dollars
in compensation for a prolonged restriction on development
along the shores of Lake Tahoe.
The plaintiffs, hundreds of people who had bought undeveloped
lots in the expectation of building houses on the scenic lake,
argued that a restriction that even temporarily deprives property
owners of all "economically viable" use of their
land is a taking for which the Constitution requires compensation.
Supreme Court decisions over the last 15 years had suggested
that this in fact might be the law, a prospect that galvanized
a broad coalition of government and planning groups to urge
the justices to reject such a categorical rule. The Bush administration
entered the case against the property owners.
Writing for the court today, Justice John Paul Stevens said,
"A rule that required compensation for every delay in
the use of property would render routine government processes
prohibitively expensive or encourage hasty decision making."
He added: "Such an important change in the law should
be the product of legislative rule making rather than adjudication."
The complex law of "takings" is based on the Fifth
Amendment's provision that private property shall not "be
taken for public use without just compensation."
Today's decision had the effect of limiting some of the court's
recent property rights rulings and left property rights advocates
scrambling to minimize the scope of their defeat, at least
for public consumption. One such group, the Pacific Legal
Foundation, called the decision "an unfortunate blip
in the forward progress of property rights."
On the other side, Community Rights Counsel, a public interest
law firm that filed a brief for government groups that included
the Council of State Governments, the National League of Cities
and the National Governors Association, called the decision
"the best news from the Supreme Court on takings law
in more than 20 years."
The majority opinion was joined by Justices Sandra Day O'Connor,
Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and
Stephen G. Breyer. Chief Justice William H. Rehnquist and
Justice Clarence Thomas both filed dissenting opinions, and
Justice Antonin Scalia, usually the court's most vocal advocate
of increased protection for private property rights, signed
both of those opinions without writing one of his own.
For Justice Scalia, the decision today in Tahoe-Sierra
Preservation Council v. Tahoe Regional Planning Agency,
No. 00-1167, must have been a particularly bitter defeat in
First, the majority rejected an expansive ruling of one of
his most important opinions, a 10-year-old decision called
Lucas v. South Carolina Coastal Council in which the court
announced for the first time that a land-use regulation that,
while leaving the property in the owner's hands, permanently
deprived it of all economic use was a "categorical taking"
that must be compensated.
The Lucas decision breached what had been a doctrinal
wall between a physical taking, in which the government actually
takes possession of private property and for which compensation
has always been required, and a "regulatory taking,"
in which the government restricts the owner's use of the property.
Under the court's precedents, regulatory takings were subject
to a case-by-case balancing test that weighed the government's
interests against the owner's legitimate expectations. But
the Lucas case involved a regulatory taking, an environmental
ban on coastal development, so the decision raised the prospect
that even temporary restrictions might be subject to the categorical
The court today made clear that the distinction between a
physical and a regulatory taking would remain a vital one.
Justice Stevens relegated the Lucas decision to "the
extraordinary case in which a regulation permanently deprives
property of all value," a rule with no application to
a temporary even if prolonged moratorium.
As Justice Stevens explained the reason for treating the two
categories of takings differently: "Land-use regulations
are ubiquitous and most of them impact property values in
some tangential way - often in completely unanticipated ways.
Treating them all as per se takings would transform government
regulation into a luxury few governments could afford. By
contrast, physical appropriations are relatively rare, easily
identified, and usually represent a greater affront to individual
In a second defeat for Justice Scalia, the court revisited
a property rights case it had inconclusively decided last
June. In that case, Palazzolo v. Rhode Island, the court held
by a 5-to-4 vote that restrictions on a coastal landowner's
use of his property might amount to a taking and sent the
case back to the Rhode Island courts to decide whether a taking
had actually occurred.
Two members of Justice Kennedy's majority in that case, Justices
O'Connor and Scalia, battled in separate opinions over what
factors the state courts should consider. Justice O'Connor
argued that "all relevant circumstances" should
be weighed, cautioning that because the restriction was already
in place when the land owner acquired the property, the courts
should guard against a "windfall" takings award.
Justice Scalia advocated a flat rule: the pre-existing restriction
should have no bearing on the analysis.
The majority today firmly embraced Justice O'Connor's position
over Justice Scalia's. Courts should examine "a number
of factors rather than a simple mathematically precise formula,"
Justice Stevens said, quoting from her concurring opinion.
Today's decision upheld a ruling by the United States Court
of Appeals for the Ninth Circuit in San Francisco that no
categorical taking had occurred in two sequential regulations
issued by a regional planning agency that blocked development
around Lake Tahoe for 32 months from 1981 to 1984.
The Tahoe Regional Planning Agency was set up under an interstate
compact between California and Nevada, which share the Lake
Tahoe coastline. Concerned that the lake's famously crystalline
water was being degraded by run-off from developed areas above
the shore, the agency used the moratorium to study the problem
and develop a long-term land-use plan.
In his dissenting opinion, Chief Justice Rehnquist objected
that the court should have considered a longer period, beginning
in 1981, in which development was restricted. In any event,
he said, "a distinction between `temporary' and `permanent'
prohibitions is tenuous" and had been effectively erased
by the Lucas decision. "The rationale for the Lucas rule
applies just as strongly in this case," the chief justice
One important aspect of the decision was its reaffirmation
of a doctrine, disputed by property rights advocates, known
as the "parcel as a whole" rule. Under this rule,
the analysis of whether a regulation that affects only part
of a piece of land, typically a wetlands or wildlife habitat,
must take into account the impact on the property as a whole
and not just on the regulated portion. Professor Patrick A.
Parenteau, a land use expert at Vermont Law School, said in
an interview today that without the protection of the "parcel
as a whole" rule, much environmental land use regulation
would be considered a taking and would be prohibitively expensive.