Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency

535 U.S. 302

Case Year: 2002

Case Ruling: 6-3, Affirmed

Opinion Justice: Stevens

FACTS

Lake Tahoe, located along the border of California and Nevada, is particularly well known for its natural beauty and clear blue water. During the 1960s concern over the environmental quality of the lake began to grow as increased development along its shores caused runoff and pollution. In response, California and Nevada created the Tahoe Regional Planning Agency (TRPA) to develop plans to protect the lake from deterioration. This litigation centers on two orders issued by the agency. The first barred any further development in the Lake Tahoe Basin from August 24, 1981, until August 26, 1983. The second extended the moratorium an additional eight months, until April 25, 1984. During the thirty-two months the moratorium was in effect TRPA conducted a study of the problem and developed plans to protect the lake. In 1984 TRPA issued a land-use plan for the region, but it was enjoined by the district court for allowing excessive soil erosion. It was not until 1987 that an acceptable plan was put into effect and the landowners regained the ability to develop their property.

The Tahoe-Sierra Preservation Council, a nonprofit membership corporation consisting of two thousand property owners in the Lake Tahoe Basin, filed suit, arguing that its members had purchased property in the area intending to build homes, and that the moratorium against development constituted a taking of their property that required compensation. The litigation flowing from this claim resulted in numerous district court and court of appeals decisions over a period of almost two decades. The case finally was appealed to the Supreme Court, with the council requesting that the Court impose a categorical rule that such building moratoria constitute a taking within the meaning of the Fifth Amendment. The district court had supported this position, but the court of appeals had reversed. The Supreme Court focused exclusively on the twenty-four-month and eight-month development moratoria issued by TRPA in 1981 and 1983.

 

JUSTICE STEVENS DELIVERED THE OPINION OF THE COURT.

The question presented is whether a moratorium on development imposed during the process of devising a comprehensive land-use plan constitutes a per se taking of property requiring compensation under the Takings Clause of the United States Constitution....

The text of the Fifth Amendment itself provides a basis for drawing a distinction between physical takings and regulatory takings. Its plain language requires the payment of compensation whenever the government acquires private property for a public purpose, whether the acquisition is the result of a condemnation proceeding or a physical appropriation. But the Constitution contains no comparable reference to regulations that prohibit a property owner from making certain uses of her private property. Our jurisprudence involving condemnations and physical takings is as old as the Republic and, for the most part, involves the straightforward application of per se rules. Our regulatory takings jurisprudence, in contrast, is of more recent vintage and is characterized by “essentially ad hoc, factual inquiries,” Penn Central [ Transp. Co. v. New York City (1978)], designed to allow “careful examination and weighing of all the relevant circumstances.”

When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner, United States v. Pewee Coal Co. (1951), regardless of whether the interest that is taken constitutes an entire parcel or merely a part thereof. Thus, compensation is mandated when a leasehold is taken and the government occupies the property for its own purposes, even though that use is temporary. Similarly, when the government appropriates part of a rooftop in order to provide cable TV access for apartment tenants, Loretto v. Teleprompter Manhattan CATV Corp. (1982); or when its planes use private airspace to approach a government airport,United States v. Causby (1946), it is required to pay for that share no matter how small. But a government regulation that merely prohibits landlords from evicting tenants unwilling to pay a higher rent, Block v. Hirsh (1921); that bans certain private uses of a portion of an owner’s property, Village of Euclid v. Ambler Realty Co. (1926); or that forbids the private use of certain airspace, Penn Central Transp. Co. v. New York City (1978), does not constitute a categorical taking. “The first category of cases requires courts to apply a clear rule; the second necessarily entails complex factual assessments of the purposes and economic effects of government actions.” Yee v. Escondido (1992).

This longstanding distinction between acquisitions of property for public use, on the one hand, and regulations prohibiting private uses, on the other, makes it inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a “regulatory taking,” and vice versa. For the same reason that we do not ask whether a physical appropriation advances a substantial government interest or whether it deprives the owner of all economically valuable use, we do not apply our precedent from the physical takings context to regulatory takings claims. 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 property rights....

Perhaps recognizing this fundamental distinction, petitioners wisely do not place all their emphasis on analogies to physical takings cases. Instead, they rely principally on our decision in Lucas v. South Carolina Coastal Council (1992)--a regulatory takings case that, nevertheless, applied a categorical rule--to argue that the Penn Central framework is inapplicable here. A brief review of some of the cases that led to our decision in Lucas, however, will help to explain why the holding in that case does not answer the question presented here.

As we noted in Lucas, it was Justice Holmes’ opinion in Pennsylvania Coal Co. v. Mahon (1922), that gave birth to our regulatory takings jurisprudence. In subsequent opinions we have repeatedly and consistently endorsed Holmes’ observation that “if regulation goes too far it will be recognized as a taking.” Justice Holmes did not provide a standard for determining when a regulation goes “too far,” but he did reject the view expressed in Justice Brandeis’ dissent that there could not be a taking because the property remained in the possession of the owner and had not been appropriated or used by the public. After Mahon, neither a physical appropriation nor a public use has ever been a necessary component of a “regulatory taking.”

In the decades following that decision, we have “generally eschewed” any set formula for determining how far is too far, choosing instead to engage in “‘essentially ad hoc, factual inquiries.’” Lucas, (quoting Penn Central). Indeed, we still resist the temptation to adopt per se rules in our cases involving partial regulatory takings, preferring to examine “a number of factors” rather than a simple “mathematically precise” formula. Justice Brennan’s opinion for the Court in Penn Centraldid, however, make it clear that even though multiple factors are relevant in the analysis of regulatory takings claims, in such cases we must focus on “the parcel as a whole”....

This requirement that “the aggregate must be viewed in its entirety” explains why, for example, a regulation that prohibited commercial transactions in eagle feathers, but did not bar other uses or impose any physical invasion or restraint upon them, was not a taking. Andrus v. Allard (1979). It also clarifies why restrictions on the use of only limited portions of the parcel, such as set-back ordinances, Gorieb v. Fox (1927), or a requirement that coal pillars be left in place to prevent mine subsidence, Keystone Bituminous Coal Assn. v. DeBenedictis, were not considered regulatory takings. In each of these cases, we affirmed that “where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’ of the bundle is not a taking.”...

[In First English Evangelical Church of Glendale v. County of Los Angeles (1989)] we identified two reasons why a regulation temporarily denying an owner all use of her property might not constitute a taking. First, we recognized that “the county might avoid the conclusion that a compensable taking had occurred by establishing that the denial of all use was insulated as a part of the State’s authority to enact safety regulations.” Second, we limited our holding “to the facts presented” and recognized “the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like which [were] not before us.” Thus, our decision in First English surely did not approve, and implicitly rejected, the categorical submission that petitioners are now advocating.

Similarly, our decision in Lucas is not dispositive of the question presented. Although Lucas endorsed and applied a categorical rule, it was not the one that petitioners propose. Lucas purchased two residential lots in 1988 for $975,000. These lots were rendered “valueless” by a statute enacted two years later. The trial court found that a taking had occurred and ordered compensation of $1,232,387.50, representing the value of the fee simple estate, plus interest. As the statute read at the time of the trial, it effected a taking that “was unconditional and permanent.”...

The categorical rule that we applied in Lucas states that compensation is required when a regulation deprives an owner of “all economically beneficial uses” of his land. Under that rule, a statute that “wholly eliminated the value” of Lucas’ fee simple title clearly qualified as a taking. But our holding was limited to “the extraordinary circumstance when no productive or economically beneficial use of land is permitted.” The emphasis on the word “no” in the text of the opinion was, in effect, reiterated in a footnote explaining that the categorical rule would not apply if the diminution in value were 95% instead of 100%. Anything less than a “complete elimination of value,” or a “total loss,” the Court acknowledged, would require the kind of analysis applied in Penn Central.

Certainly, our holding that the permanent “obliteration of the value” of a fee simple estate constitutes a categorical taking does not answer the question whether a regulation prohibiting any economic use of land for a 32-month period has the same legal effect. Petitioners seek to bring this case under the rule announced in Lucas by arguing that we can effectively sever a 32-month segment from the remainder of each landowner’s fee simple estate, and then ask whether that segment has been taken in its entirety by the moratoria. Of course, defining the property interest taken in terms of the very regulation being challenged is circular. With property so divided, every delay would become a total ban; the moratorium and the normal permit process alike would constitute categorical takings. Petitioners’ “conceptual severance” argument is unavailing because it ignores Penn Central’s admonition that in regulatory takings cases we must focus on “the parcel as a whole.” We have consistently rejected such an approach to the “denominator” question. Thus, the District Court erred when it disaggregated petitioners’ property into temporal segments corresponding to the regulations at issue and then analyzed whether petitioners were deprived of all economically viable use during each period. The starting point for the court’s analysis should have been to ask whether there was a total taking of the entire parcel; if not, then Penn Central was the proper framework.

An 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. Hence, a permanent deprivation of the owner’s use of the entire area is a taking of “the parcel as a whole,” whereas a temporary restriction that merely causes a diminution in value is not. Logically, a fee simple estate cannot be rendered valueless by a temporary prohibition on economic use, because the property will recover value as soon as the prohibition is lifted.

Neither Lucas, nor First English, nor any of our other regulatory takings cases compels us to accept petitioners’ categorical submission. In fact, these cases make clear that the categorical rule in Lucas was carved out for the “extraordinary case” in which a regulation permanently deprives property of all value; the default rule remains that, in the regulatory taking context, we require a more fact specific inquiry. Nevertheless, we will consider whether the interest in protecting individual property owners from bearing public burdens “which, in all fairness and justice, should be borne by the public as a whole,”Armstrong v. United States, justifies creating a new rule for these circumstances....

... [T]he ultimate constitutional question is whether the concepts of “fairness and justice” that underlie the Takings Clause will be better served by one of these categorical rules or by a Penn Central inquiry into all of the relevant circumstances in particular cases. From that perspective, the extreme categorical rule that any deprivation of all economic use, no matter how brief, constitutes a compensable taking surely cannot be sustained. Petitioners’ broad submission would apply to numerous “normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like,” as well as to orders temporarily prohibiting access to crime scenes, businesses that violate health codes, fire-damaged buildings, or other areas that we cannot now foresee. Such a rule would undoubtedly require changes in numerous practices that have long been considered permissible exercises of the police power. As Justice Holmes warned in Mahon, “[g]overnment hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.” 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. Such an important change in the law should be the product of legislative rulemaking rather than adjudication.

More importantly, for reasons set out at some length by Justice O’Connor in her concurring opinion in Palazzolo v. Rhode Island (2001), we are persuaded that the better approach to claims that a regulation has effected a temporary taking “requires careful examination and weighing of all the relevant circumstances.”...

In rejecting petitioners’ per se rule, we do not hold that the temporary nature of a land-use restriction precludes finding that it effects a taking; we simply recognize that it should not be given exclusive significance one way or the other....

The interest in facilitating informed decision making by regulatory agencies counsels against adopting a per se rule that would impose such severe costs on their deliberations. Otherwise, the financial constraints of compensating property owners during a moratorium may force officials to rush through the planning process or to abandon the practice altogether. To the extent that communities are forced to abandon using moratoria, landowners will have incentives to develop their property quickly before a comprehensive plan can be enacted, thereby fostering inefficient and ill-conceived growth....

Indeed, the interest in protecting the decisional process is even stronger when an agency is developing a regional plan than when it is considering a permit for a single parcel....

Accordingly, the judgment of the Court of Appeals is affirmed. It is so ordered.

CHIEF JUSTICE REHNQUIST, WITH WHOM JUSTICE SCALIAAND JUSTICE THOMAS JOIN, DISSENTING.

For over half a decade petitioners were prohibited from building homes, or any other structures, on their land. Because the Takings Clause requires the government to pay compensation when it deprives owners of all economically viable use of their land, see Lucas v. South Carolina Coastal Council (1992), and because a ban on all development lasting almost six years does not resemble any traditional land-use planning device, I dissent....

When a regulation merely delays a final land use decision, we have recognized that there are other background principles of state property law that prevent the delay from being deemed a taking. We thus noted in First English that our discussion of temporary takings did not apply “in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like.”...

But a moratorium prohibiting all economic use for a period of six years is not one of the longstanding, implied limitations of state property law.

... [T]he duration of this “moratorium” far exceeds that of ordinary moratoria....

Because the prohibition on development of nearly six years in this case cannot be said to resemble any “implied limitation” of state property law, it is a taking that requires compensation.

Lake Tahoe is a national treasure and I do not doubt that respondent’s efforts at preventing further degradation of the lake were made in good faith in furtherance of the public interest. But, as is the case with most governmental action that furthers the public interest, the Constitution requires that the costs and burdens be borne by the public at large, not by a few targeted citizens. Justice Holmes’ admonition of 80 years ago again rings true: “We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” Mahon.

JUSTICE THOMAS, WITH WHOM JUSTICE SCALIA JOINS, DISSENTING.

I join the Chief Justice’s dissent. I write separately to address the majority’s conclusion that the temporary moratorium at issue here was not a taking because it was not a “taking of ‘the parcel as a whole.’” While this questionable rule has been applied to various alleged regulatory takings, it was, in my view, rejected in the context of temporal deprivations of property by First English Evangelical Lutheran Church of Glendale v. County of Los Angeles (1987), which held that temporary and permanent takings “are not different in kind” when a landowner is deprived of all beneficial use of his land. I had thought that First English put to rest the notion that the “relevant denominator” is land’s infinite life. Consequently, a regulation effecting a total deprivation of the use of a so-called “temporal slice” of property is compensable under the Takings Clause unless background principles of state property law prevent it from being deemed a taking; “total deprivation of use is, from the landowner’s point of view, the equivalent of a physical appropriation.” Lucas v. South Carolina Coastal Council (1992).

A taking is exactly what occurred in this case. No one seriously doubts that the land use regulations at issue rendered petitioners’ land unsusceptible of any economically beneficial use. This was true at the inception of the moratorium, and it remains true today. These individuals and families were deprived of the opportunity to build single-family homes as permanent, retirement, or vacation residences on land upon which such construction was authorized when purchased. The Court assures them that “a temporary prohibition on economic use” cannot be a taking because “logically ... the property will recover value as soon as the prohibition is lifted.” But the “logical” assurance that a “temporary restriction ... merely causes a diminution in value,” is cold comfort to the property owners in this case or any other. After all, “ [i]n the long runwe are all dead.” John Maynard Keynes, (1924).

I would hold that regulations prohibiting all productive uses of property are subject to Lucas’ per se rule, regardless of whether the property so burdened retains theoretical useful life and value if, and when, the “temporary” moratorium is lifted. To my mind, such potential future value bears on the amount of compensation due and has nothing to do with the question whether there was a taking in the first place. It is regrettable that the Court has charted a markedly different path today.