Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002)

Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002)

535 U.S. 302

When the Tahoe Regional Planning Agency (TRPA) imposed two moratoriums, totaling thirty-two months, on development in the Lake Tahoe Basin as it formulated a comprehensive land-use plan for the area, an association of real estate owners affected by the moratoriums filed suit, claiming that TRPA’s actions constituted a taking of their property without just compensation. The district court found for the petitioners, concluding that the moratoriums constituted a taking under the categorical rule announced in Lucas v. South Carolina Coastal Council (1992) because TRPA temporarily deprived petitioners of all economically viable use of their land. On appeal, the Ninth Circuit reversed, holding that because the regulations had only a temporary impact on petitioners’ property, no categorical taking had occurred, and that Lucas applies only to the relatively rare case in which a regulation permanently denies all productive use of an entire parcel, whereas the moratoriums in this case involved “only a temporal slice of the fee interest.” The appellate court also concluded that the ad hoc balancing approach developed by the Supreme Court in Penn Central Transportation Co. v. New York City (1978) was the proper framework for analyzing whether a taking had occurred. Over the dissent of five judges, the Ninth Circuit denied a petition for a rehearing, and the Supreme Court granted certiorari.

Opinion of the Court: Stevens, O’Connor, Kennedy, Souter, Ginsburg, Breyer.

Dissenting opinions: Rehnquist, Scalia, Thomas; Thomas, Scalia.

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.

. . . Petitioners contend that the mere enactment of a temporary regulation that, while in effect, denies a property owner all viable economic use of her property gives rise to an unqualified constitutional obligation to compensate her for the value of its use during that period. . . . Petitioners assert that our opinion in . . . Lucas v. South Carolina Coastal Council (1992) ha[s] already endorsed their view, and that it is a logical application of the principle that the Takings Clause was “designed to bar Government from forcing some people alone to bear burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, (1960).

We shall first explain why our cases do not support their proposed categorical rule—
indeed, fairly read, they implicitly reject it. Next, we shall explain why the Armstrong principle requires rejection of that rule. . . . In our view the answer to the abstract question whether a temporary moratorium effects a taking is neither “yes, always” nor “no, never”; the answer depends upon the particular circumstances of the case. Resisting “the temptation to adopt what amount to per se rules in either direction,” we conclude that the circumstances in this case are best analyzed within the Penn Central framework.

The text of the Fifth Amendment itself provides a basis for drawing a distinction between physical takings and regulatory takings. . . . 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, 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, or when its planes use private airspace to approach a government airport, 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, that bans certain private uses of a portion of an owner’s property, or that forbids the private use of certain airspace, 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.”

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—a regulatory takings case that, nevertheless, applied a categorical rule—to argue that the Penn Central framework is inapplicable here. A brief review of . . . Lucas, however, will help to explain why the holding in that case does not answer the question presented here. . . .

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.” . . .

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.

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 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 . . . 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. . . . A rule that required compensation for every delay in the use of property would render routine government processes prohibitively expensive or encourage hasty decisionmaking. Such an important change in the law should be the product of legislative rulemaking rather than adjudication. . . .

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.

A narrower rule that excluded the normal delays associated with processing permits, or that covered only delays of more than a year, would certainly have a less severe impact on prevailing practices, but it would still impose serious financial constraints on the planning process. Unlike the “extraordinary circumstance” in which the government deprives a property owner of all economic use, moratoria like [those in this case] are used widely among land-use planners to preserve the status quo while formulating a more permanent development strategy. In fact, the consensus in the planning community appears to be that moratoria, or “interim development controls” as they are often called, are an essential tool of successful development. . . . The interest in facilitating informed decisionmaking 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. In the proceedings involving the Lake Tahoe Basin, for example, the moratoria enabled TRPA to obtain the benefit of comments and criticisms from interested parties, such as the petitioners, during its deliberations. Since a categorical rule tied to the length of deliberations would likely create added pressure on decisionmakers to reach a quick resolution of land-use questions, it would only serve to disadvantage those landowners and interest groups who are not as organized or familiar with the planning process. Moreover, with a temporary ban on development there is a lesser risk that individual landowners will be “singled out” to bear a special burden that should be shared by the public as a whole. At least with a moratorium there is a clear “reciprocity of advantage,” because it protects the interests of all affected landowners against immediate construction that might be inconsistent with the provisions of the plan that is ultimately adopted. In fact, there is reason to believe property values often will continue to increase despite a moratorium. Such an increase makes sense in this context because property values throughout the Basin can be expected to reflect the added assurance that Lake Tahoe will remain in its pristine state. Since in some cases a 1-year moratorium may not impose a burden at all, we should not adopt a rule that assumes moratoria always force individuals to bear a special burden that should be shared by the public as a whole.

It may well be true that any moratorium that lasts for more than one year should be viewed with special skepticism. But given the fact that the District Court found that the 32 months required by TRPA to formulate the Regional Plan was not unreasonable, we could not possibly conclude that every delay of over one year is constitutionally unacceptable. Formulating a general rule of this kind is a suitable task for state legislatures. 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. . . . There may be moratoria that last longer than one year which interfere with reasonable investment-backed expectations, but as the District Court’s opinion illustrates, petitioners’ proposed rule is simply “too blunt an instrument,” for identifying those cases. We conclude, therefore, that the interest in “fairness and justice” will be best served by relying on the familiar Penn Central approach when deciding cases like this, rather than by attempting to craft a new categorical rule. Accordingly, the judgment of the Court of Appeals is affirmed.

CHIEF JUSTICE REHNQUIST, with whom JUSTICE SCALIA and 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, and because a ban on all development lasting almost six years does not resemble any traditional land-use planning device, I dissent.

 . . . [T]he Court ignores much of the impact of respondent’s conduct on petitioners. Instead, it relies on the flawed determination of the Court of Appeals that the relevant time period lasted only from August 1981 until April 1984. . . . The adoption of the 1984 Regional Plan did not, however, change anything from the petitioners’ standpoint. After the adoption of the 1984 Plan, petitioners still could make no use of their land.

The Court of Appeals disregarded this post-April 1984 deprivation on the ground that respondent did not “cause” it. . . . [T]he Court of Appeals held that the 1984 Regional Plan did not amount to a taking because the Plan actually allowed permits to issue for the construction of single-family residences. Those permits were never issued because the District Court immediately issued a temporary restraining order, and later a permanent injunction that lasted until 1987, prohibiting the approval of any building projects under the 1984 Plan. Thus, the Court of Appeals concluded that the “1984 Plan itself could not have constituted a taking,” because it was the injunction, not the Plan, that prohibited development during this period. The Court of Appeals is correct that the 1984 Plan did not cause petitioners’ injury. But that is the right answer to the wrong question. The causation question is not limited to whether the 1984 Plan caused petitioners’ injury; the question is whether respondent caused petitioners’ injury.

We have never addressed the §1983 causation requirement in the context of a regulatory takings claim, though language in Penn Central suggests that ordinary principles of proximate cause govern the causation inquiry for takings claims. The causation standard does not require much elaboration in this case, because respondent was undoubtedly the “moving force” behind petitioners’ inability to build on their land from August 1984 through 1987. The injunction in this case was issued because the 1984 Plan did not comply with the 1980 Tahoe Regional Planning Compact and regulations issued pursuant to the Compact. And, of course, respondent is responsible for the Compact and its regulations. . . . [T]he District Court enjoined the 1984 Plan because the Plan did not comply with the environmental requirements of respondent’s regulations and of the Compact itself.

Respondent is surely responsible for its own regulations, and it is also responsible for the Compact as it is the governmental agency charged with administering the Compact. It follows that respondent was the “moving force” behind petitioners’ inability to develop its land from April 1984 through the enactment of the 1987 plan. Without the environmental thresholds established by the Compact, the 1984 Plan would have gone into effect and petitioners would have been able to build single-family residences. And it was certainly foreseeable that development projects exceeding the environmental thresholds would be prohibited; indeed, that was the very purpose of enacting the thresholds. Because respondent caused petitioners’ inability to use their land from 1981 through 1987, that is the appropriate period of time from which to consider their takings claim.

I now turn to determining whether a ban on all economic development lasting almost six years is a taking. Lucas reaffirmed our “frequently expressed” view that “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.” The District Court in this case held that the ordinances and resolutions in effect between August 24, 1981, and April 25, 1984, “did in fact deny the plaintiffs all economically viable use of their land.” The Court of Appeals did not overturn this finding. And the 1984 injunction, issued because the environmental thresholds issued by respondent did not permit the development of single-family residences, forced petitioners to leave their land economically idle for at least another three years. The Court does not dispute that petitioners were forced to leave their land economically idle during this period. But the Court refuses to apply Lucas on the ground that the deprivation was ­“temporary.”

Neither the Takings Clause nor our case law supports such a distinction. For one thing, a distinction between “temporary” and “permanent” prohibitions is tenuous. The “temporary” prohibition in this case that the Court finds is not a taking lasted almost six years. The “permanent” prohibition that the Court held to be a taking in Lucas lasted less than two years. The “permanent” prohibition in Lucas lasted less than two years because the law, as it often does, changed. The South Carolina Legislature in 1990 decided to amend the 1988 Beachfront Management Act to allow the issuance of “‘special permits’ for the construction or reconstruction of habitable structures seaward of the baseline.” Land-use regulations are not irrevocable. And the government can even abandon condemned land. Under the Court’s decision today, the takings question turns entirely on the initial label given a regulation, a label that is often without much meaning. There is every incentive for government to simply label any prohibition on development “temporary,” or to fix a set number of years. As in this case, this initial designation does not preclude the government from repeatedly extending the “temporary” prohibition into a long-term ban on all development. The Court now holds that such a designation by the government is conclusive even though in fact the moratorium greatly exceeds the time initially specified. Apparently, the Court would not view even a 10-year moratorium as a taking under Lucas because the moratorium is not “permanent.”

. . . The Court worries that applying Lucas here compels finding that an array of traditional, short-term, land-use planning devices are takings. But since the beginning of our regulatory takings jurisprudence, we have recognized that property rights “are enjoyed under an implied limitation.” Thus, in Lucas, after holding that the regulation prohibiting all economically beneficial use of the coastal land came within our categorical takings rule, we nonetheless inquired into whether such a result “inhered in the title itself, in the restrictions that background principles of the State’s law of property and nuisance already place upon land ownership.”

. . . [A] moratorium prohibiting all economic use for a period of six years is not [a] longstanding, implied limitation of state property law. Moratoria are “interim controls on the use of land that seek to maintain the status quo with respect to land development in an area by either ‘freezing’ existing land uses or by allowing the issuance of building permits for only certain land uses that would not be inconsistent with a contemplated zoning plan or zoning change.” Typical moratoria thus prohibit only certain categories of development, such as fast-food restaurants, or adult businesses, or all commercial development. Such moratoria do not implicate Lucas because they do not deprive landowners of all economically beneficial use of their land. As for moratoria that prohibit all development, these do not have the lineage of permit and zoning requirements and thus it is less certain that property is acquired under the “implied limitation” of a moratorium prohibiting all development. Moreover, unlike a permit system in which it is expected that a project will be approved so long as certain conditions are satisfied, a moratorium that prohibits all uses is by definition contemplating a new land-use plan that would prohibit all uses.

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.

JUSTICE THOMAS, with whom JUSTICE SCALIA joins, dissenting.

. . . 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, “in the long run we are all dead.” John Maynard Keynes, Monetary Reform 88 (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.