Tahoe-Sierra Preservation Council, Inc., et al. v. Tahoe Regional Planning Agency, et al. (04/23/2002)

Questions presented: Whether the Court of Appeals properly determined that a temporary moratorium on land development does not constitute a taking of property requiring compensation under the Takings Clause of the U.S. Constitution?

BY CASEY JONES, MEDILL NEWS SERVICE

Dorothy Cook is 77 years old, and she rents a house with her sister and daughter in Big Bear City, Cal. She would like to own a house, but has no money to invest. What she does own is a vacant piece of residential land, about 60 feet x 100 feet in the Lake Tahoe Region for which she paid $5,500 in 1979.

Between costs for the property itself and taxes, Cook estimates that she has spent between $11,000 and $12,000 total on the property. But there is no beautiful, peaceful retirement home built on the property, which was the intended purpose for the purchase 22 years ago. That is because of a lawsuit, filed in 1984, over land-use regulations controlling the environmental preservation of Lake Tahoe.

Cook is one of more than 400 landowners in the Tahoe Region who allege (after several amended pleadings) that a moratorium on developing their properties effected a "taking," and they therefore deserve "just compensation under the 5th Amendment," which prohibits the government from taking private property for public use, without just compensation.

"I've kept the property," she says. "I don't want to give it up. But the moratorium took away any possibility that I would ever have a home of my own for my retirement." What Cook wants now is compensation.

For her, it all began after she purchased the lot in the Lake Tahoe Region in an area already developed with sewers and roads. She called some local builders who told her it would be no problem to start construction. "I knew I had to arrange for ditches and rocks to be built so that the water would go around the property," she says. "But we couldn't get a permit, and it never happened."

"TRPA [the Tahoe Regional Planning Authority] has held itself above the 5th Amendment," Larry Hoffman, attorney for the plaintiffs, has said. "They say you cant use your land and we wont pay you. Its a classic blunder for TRPA to do that."

Development in the Tahoe Region during the 1960s had disturbed the soil and the lake, causing the lake to lose its famous clarity and causing general damage to the pristine area. As a result, Congress formed the Tahoe Regional Planning Compact in 1969 to "halt increasing environmental damage to Lake Tahoe."

In effect, the TRPA was created to set goals for the preservation of Lake Tahoe. The Agency developed what they called the "Individual Parcel Evaluation System," which classified the land according to its "susceptibility to environmental damage,"" grading it a "district" number one through seven, with one being the most sensitive area and seven being the least. Districts 1-3 were designated "high hazard; districts 4-7 were "low hazard;" and places that were near streams or wetland areas were classified as Stream Environment Zones (SEZ).

After a 1980 Compact, which directed the TRPA to restrict development in the area (until a new regional plan was developed), an Ordinance (81-5) that prohibited construction on Class 1-3 and SEZ lands and a Resolution (83-21), which temporarily suspended development on the land, a new land-use plan was adopted by the TRPA on April 26, 1984.

That very day, the state of California sued the TRPA in federal court to prohibit the plan because it did not establish sufficient land-use controls to protect the Lake Tahoe Basin. On the same grounds, the League to Save Tahoe then sought an injunction against the plan. Property owners in Nevada and California also followed, by filing lawsuits. They wanted declaratory and injunctive relief, and damages for what they deemed to be violations of the Takings Clause.

The plaintiffs were divided into four distinct time periods: Period I, between 1981 and 1984, when the TRPA established the moratorium on development; Period II, between 1984 and 1987, when development was again restricted due to a court-ordered injunction; Period III, after 1987 when development was prohibited because of the 1987 Regional Plan; and Period IV, the time during which the Regional Plan has been in effect.

Most of the claims were dismissed by the district court on the ground that they were time-barred by a sixty-day statute of limitation provision contained in the 1980Compact.

The Agency's liability was finally tried in 1998 before U.S. District Judge Edward Reed of Reno. In January 1999, he ruled that the families who sued in 1984 are entitled to compensation for regulations set by the Agency that took away their ability to build on their land.

On June 15, 2000, the 9th Circuit Court of Appeals in San Francisco reversed, siding with the TRPA, and holding that the moratorium did not constitute a violation of the Takings Clause.

"Because the temporary development moratorium enacted by TRPA did not deprive the plaintiffs of all of the value or use of their property, we hold that it did not effect a categorical taking," wrote Judge Stephen Reinhardt for the unanimous panel. "In reaching this conclusion, we preserve the ability of local governments to do what they have done for many years -- to engage in orderly, reasonable land-use planning through a considered and deliberative process. To do otherwise would turn the Takings Clause into a weapon to be used indiscriminately to penalize local communities for attempting to protect the public interest."

On June 29, 2001, the day after the U.S. Supreme Court issued its final opinions for the 2000-01 term, the Court granted certiorari in the case, limiting review to the question stated above.

The land use controversy in Lake Tahoe has been a hornet's next of litigation. The IPES challenge, which was filed by the Tahoe-Sierra Preservation Council in January 2000 to contest the Individual Parcel Evaluation System that was established in 1969, is on appeal. TRPA v. Barbieri, which was filed by the TRPA in 1994 to enforce its own ordinances after a landowner built a house without permit in a sensitive Lake Tahoe area is also on appeal. Suitum v. TRPA, which was filed in 1991, claimed the plaintiff was robbed of her ability to build on her land. The U.S. Supreme Court reviewed the case in 1997, and the TRPA settled in 1999, paying Suitum $600,000.

On April 23, 2002, the Court affirmed, holding 6-3 that the moratoria were not per se takings of property requiring compensation under theConstitution's Takings Clause.

Both dimensions of a real property interest--the metes and bounds describing its geographic dimensions and the term of years describing itstemporal aspect--must be considered when viewing the interest in its entirety, reasoned Justice John Paul Stevens for the majority. A permanent deprivation of all use is a taking of the parcel as a whole, but a temporary restriction causing a diminution in value is not, for the property will recover value when the prohibition is lifted, the Court said.

The majority rejected a per se rule, concluding that moratoria are anessential tool of successful development. The interest ininformed decisionmaking counsels against adopting a per se rulethat would treat such interim measures as takings regardless ofthe planners' good faith, the landowners' reasonableexpectations, or the moratorium's actual impact on propertyvalues, Stevens wrote.

Chief Justice William Rehnquist and Justices Antonin Scalia and Clarence Thomas dissented.