You asked us to summarize Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency (2002 WL 654431; 535 U. S. ____(2002)).

SUMMARY

In Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, the U. S. Supreme Court held that temporary development moratoria do not automatically constitute regulatory takings requiring just compensation under the U. S. Constitution's Fifth Amendment. The case arose when the Tahoe Regional Planning Agency (TRPA) needed more time than was authorized by a regional planning compact to adopt environmental standards and incorporate them into its regional development plan. Consequently, it imposed two moratoria, which banned most new development from 1981 until 1984 when TRPA adopted its plan. A subsequent court injunction extended the ban until TRPA adopted a more stringent plan in 1987.

The Court reaffirmed the distinction between categorical and partial regulatory takings and how courts must examine them to determine if compensation is required. While compensation is clearly required when regulations deprive owners of any use of their land, they may not be

required when they deprive owners from using some of their land or all of it for a limited time. (The Connecticut Supreme Court upheld the use of land use moratoria in Arnold Bernhard & Co. v. Planning Commission, 194 Conn. 152 (1984)).

The court refused to put temporary moratoria in the same class of regulations it previously found to deprive owners of all beneficial economic use of their land (i. e. , categorical takings). Moratoria are different because they are temporary. For this reason, courts must balance a number of factors in order to determine if compensation is required. These factors include the moratorium's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government's action.

Chief Justice Rehnquist argued in his dissent that the owners were entitled to compensation because the moratoria and court order prevented them from making any use of their property for nearly six years. The length and scope of the combined moratoria and injunction set them apart from traditional moratoria, which are generally limited in scope and duration. Justice Thomas, in a separate dissent opinion, argued that owners are entitled to compensation whenever a regulation prevents them from making any use of their land, regardless of how long it remains in effect.

FACTS AND LOWER COURT PROCEEDINGS

The case arose when TRPA extended a moratorium on new residential development in the Lake Tahoe Basin. California and Nevada created the TRPA under a 1968 Congressionally sanctioned interstate compact designed to protect and preserve the lake's water quality, which had begun to diminish as people began building more homes and apartments in the basin. A 1980 compact amendment required TRPA to adopt new environmental standards and incorporate them in its regional plan.

The amendment prohibited new residential development in the basin until TRPA completed these tasks or May 1, 1983, whichever came first. California and Nevada imposed this ban to keep new development from reducing the lake's water quality before TRPA could develop and enforce the environmental standards. But when TRPA realized it could not meet the May 1^st deadline, it issued two separate rules that banned new development until it adopted the revised plan. The compact's amendment and TRPA's two extensions of that moratorium blocked development for 32 months, until April 26, 1984.

Development did not resume after TRPA adopted the 1984 revised plan because California filed and obtained a federal injunction against its implementation, claiming that the standards were not stringent enough to protect the basin. The injunction lasted until TRPA revised the plan again, which was completed in 1987.

The two moratoria led the property owners to sue TRPA, claiming that it should compensate them for not being able to make any use of their property during the moratoria. They claimed that TRPA's enactment of the moratoria automatically entitled them to compensation, and thus did not present any evidence that they were actually harmed by the development ban.

The District Court agreed that the moratoria constituted per se takings. It ordered TRPA to compensate the owners for the time during which the moratoria prevented them from using their property. It rejected their claims that the 1984 plan also was a taking because the landowners did not make this claim within the statutory limitations period.

TRPA appealed the district court's determination that the moratoria were takings, and the landowners appealed the court's conclusion that their challenge to the 1984 plan was not timely. The 9^th Circuit Court of Appeals ruled the moratoria were not takings, but agreed that the additional claims were untimely. The landowners petitioned the U. S. Supreme Court to review the case.

ISSUE

As framed by the majority, the issue was whether a development moratorium constitutes a per se taking requiring compensation under the U. S. Constitution's Takings' Clause. Specifically, the majority examined whether governments must compensate a landowner whenever they impose a development moratorium while they revise a land use plan.

RULE

The Fifth Amendment's Takings' Clause provides: "nor shall private property be taken for public use without just compensation. " This provision applies to states as well as to the federal government (Chicago B&QR Co. v. Chicago, 166 US 226 (1987).

DECISION

By a six to three margin, the Supreme Court affirmed the Circuit Court's ruling that the moratoria were not "takings" within the meaning of the Fifth Amendment and, for this reason, the landowners were not entitled to compensation. It also agreed with that court's rationale, which rested on the temporary nature of the moratoria and the public purpose they served. They stated "whether a temporary moratorium effects a taking is neither a `yes, always' nor `no never'; the answer depends on the particular circumstances of the case (Slip Op. , p. 17).

Chief Justice Rehnquist, joined by justices Scalia and Thomas, disagreed, arguing that the owners were entitled to compensation because the moratoria, when combined with TRPA's other actions, prevented the landowners from using their property for almost six years. This timeframe "does not resemble any traditional land use planning device. " In a separate dissenting opinion, Justice Thomas, joined by Scalia, argued that the owners were automatically entitled to compensation since the moratoria, even though they were temporary, prevented them from making any use of their land.

RATIONALE

Categorical v. Partial Taking

The owners had based their claim on a line of Supreme Court decisions holding that the government must automatically compensate owners when a regulation deprives them of all economically beneficial uses of the land (Lucas v. South Carolina Coastal Council, 505 U. S. 1003 (1992) and First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304 (1987)). In rejecting this claim, the Court reaffirmed the distinction between categorical and partial regulatory takings and how courts must determine whether the latter constitutes a taking.

Like physical takings, categorical regulatory takings automatically entitle property owners to compensation because they clearly deny them of economically beneficial uses of the land. Since it is clear when this type of taking has occurred, courts can require compensation under a straightforward per se or categorical rule. But regulations that deny some about not all economically beneficial uses do not constitute a categorical taking.

The outcome is not always clear with respect to most regulations, since the government does not actually take title away from the owners. Some regulations, for example, limit the ways in which an owner can use his property. They may allow him to build a house on the land, but not stores and factories. Other regulations may restrict where the owner can build a structure on the parcel. These regulations generally apply to all properties within a designated area, but could affect them differently depending on their particular shape, size, and location.

For this reason, courts must examine how a regulation affects a specific property to determine if a taking has occurred. They must determine if a taking has occurred on a case-by-case basis by examining the facts surrounding each case and weighing several factors, including how the regulation affects the property's economic value, the extent to which the regulation interferes with the owner's reasonable expectations about how he could use the property when he acquired it, and the public purpose the regulation serves (Penn Central v. New York City 438 U. S. 104 (1978)).

Temporary Taking

The Court rejected the owners' claim that its earlier decisions required TRPA to compensate them because they were unable to develop their land while the moratoria were in effect. Citing Lucas, the Court ruled that a landowner was entitled to compensation because a regulation permanently deprived him of all economically beneficial use of his land.

The Court found the Tahoe Basin landowners' situation different because the moratoria did not permanently prevent them from making any use of their land. A taking occurs only when a regulation affects property as a whole, which includes its physical and temporal dimensions. In other words, a regulation results in a taking only when it affects the entire parcel or the entire time in which the owner possesses it. In Tahoe, the landowners' rights were only temporarily blocked by the moratoria. Thus, the Court concluded that the proper constitutional test was an ad hoc balancing of interests required by Penn Central. (But the Supreme Court could not review the district court's application of that test, because the owners had not asked the court to review it. )

Nor did the Court's holding in First English support the owners' claim for compensation. That case mainly addressed whether compensation was the right remedy for a temporary taking, not whether a taking had occurred. Significantly, language in that decision described situations where a regulation could prevent an owner from making any use of his land without constituting a taking. Examples included limited-time moratoria and normal delays pending decisions on site plans, variances, and other land use approvals (First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304 (1987)).

Fairness and Justice

The court also considered whether fairness and justice required a finding that TRPA's moratoria, although temporary, amounted to takings that did not require the kind of analysis specified in Penn Central. Again, the court preferred to examine and weigh the evidence on a case-by-case basis instead of applying a categorical rule.

The court was concerned about how a categorical rule would affect other land use regulations that temporarily prevented owners from using their property. 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" (Slip Op. , p. 35). If communities try to develop new regulations without imposing a moratorium, property owners might try to "develop their property quickly before a comprehensive plan can be enacted, thereby fostering inefficient and ill-conceived growth. "

The court conceded that moratoria lasting over a year should be viewed skeptically, but still could not be declared automatically unconstitutional. "In our view, the duration of the restriction is one of the important factors that a court must consider in the appraisal of a regulatory takings claim, but with respect to that factor as with respect to other factors, the `temptation to adopt what amount to per se rules in either direction must be resisted'" (Slip Op. , pp 338-39).

Dissenting Opinions

Justice Rehnquist argued that the owners were entitled to compensation because TRPA prevented them from making any use of their property for almost six years. As he viewed the case, the Court should have considered the duration of the amended compact, TRPA's moratoria, and the three-year period the federal court injunction barred development. He also dismissed the distinction between permanent and temporary deprivations, warning that governments can repeatedly extend a temporary ban so that it has the same effect as a long-term one.

Rehnquist also stated that First English and Lucas entitled owners to compensation even when a regulation temporarily prevents them from using their property. Distinguishing a permanent taking from a temporary one contradicts the Lucas rule, which is "derived from the fact that a `total deprivation of use is, from the landowner's point of view, the equivalent of a physical appropriation,'" he wrote (Rehnquist dissent, Slip Op. , pp. 6-7).

Interpreting Lucas in this manner does not turn short-term moratoria and other land use planning tools into takings, Rehnquist added. First English recognized that short-term delays in land use regulation are a "longstanding feature of state property law and part of a landowner's reasonable investment-back expectations. " A six-year moratorium, however, was not a short-term delay and thus constituted a taking.

In his separate dissent, Justice Thomas argued that owners must be compensated any time a moratorium denies them all productive use of their property, regardless of whether the property retains useful life and value once the moratorium was lifted. In his view, this should be the rule "unless background principles of state property law prevent it from being deemed a taking..." (Thomas dissent, Slip Op. , p. 2).

JR: eh