Georgetown
Environmental Law & Policy Institute's
Takings-Net
John D. Echeverria
Environmental Policy Project
Georgetown University Law Center
April 25, 2002
* * *
On Tuesday, April 23, the U.S.
Supreme Court issued its decision in Tahoe Sierra Preservation Council v. Tahoe
Regional Planning Agency. The Court affirmed the judgment of the
U.S. Court of Appeals for the Ninth Circuit and rejected the claim that the
TRPA had effected a Lucas-type categorical taking by imposing a complete ban on
development for 32 months on a substantial portion of the property subject to
TRPA's jurisdiction.
This represents the first clear win
for environmentalists in a Supreme Court regulatory takings case in fifteen
years - reason enough to throw a major celebration! A few preliminary thoughts.
The Court has said several
important, positive things about takings law. First, and most
importantly, the Court has affirmed the so-called parcel as a whole rule, that
is, that a taking claim must be evaluated in relation to the claimant's entire
property, not just the restricted portion. The Court made clear that the
parcel rule applies in the temporal dimension (as in Tahoe), in the spatial
dimension (where use of one part of a property is prohibited, but not others),
and in the functional dimension (where the permitted intensity of use is restricted).
In one sense, the Court's holding simply reaffirms what many believed was
always the law. But many claims have been filed in recent years
challenging the parcel rule, and the Supreme Court itself seemed open to
reconsidering the rule. The Court has slammed the door on that idea,
cutting off one of takings claimants' favorite theories for expanding takings
doctrine.
In support of its conclusion on the
parcel issue, the Court reasoned that there is and should be a sharp
distinction between takings claims based on physical occupations of private
property and takings claims based on restrictions on the use of private
property. A taking claim based on a physical occupation focuses only on
the portion of the property subject to the occupation, the Court said, but that
has no bearing on the application of the parcel rule in the context of a
regulatory use restriction. By emphasizing the differences between these
two types of takings claims (and the narrow scope of the physical occupation theory
in general), the Court has provided helpful guidance in addressing arguments by
takings claimants that certain regulatory use restrictions (e.g., restrictions
on water diversions, wildlife protection regulations) should be regarded as
physical occupations.
Another important feature of the
decision is the Court's conclusion that the Lucas case is triggered, not simply
by a prohibition on use, but by elimination of value. Furthermore, the
Court said, to show a sufficient adverse impact on value, the claimant must
demonstrate a "permanent obliteration" of value. Even a 95%
reduction in the value of property, the Court made clear, is insufficient to
demonstrate a Lucas taking. Because essentially no regulation
reduces the value of property to zero (a point that almost certainly applied in
Lucas itself, as Justice Rehnquist points out in his dissent), one is left to wonder whether Tahoe effectively
overrules Lucas.
Yet another important feature of
the decision is the Court's recognition of the extent to which regulation can
enhance property values by conferring a reciprocity of advantage on all
property owners. The Court found no evidence that the Tahoe
moratorium had in fact reduced property values and concluded that property values
should generally increase during a moratorium. After all, the Court
reasoned, the purpose of a moratorium is to protect environmental quality,
which should logically make the community a more attractive place to live and
invest. The Court's discussion of the reciprocity issue should heighten
attention to this issue in all types of regulatory takings cases.
Finally, the Court's decision is
striking because of the Court's emphasis on the need to craft a law of takings
that protects the integrity of the local government land use decision-making
process. No fixed, outer limit should be placed on planning
moratoria under the Takings Clause, the Court emphasized, because otherwise
planners might be forced "to rush through the planning process."
Likewise, the Court said, the "strict ripeness requirement" in
takings law is designed to foster careful and informed decision making.
On the other hand, an unfortunate
feature of the Court's decision is the support it apparently offers for the
vague and unprincipled Penn Central test as an alternative to the Lucas
test. No Penn Central claim was before the Court in this case and,
therefore, the Court's comments are necessarily somewhat vague and, in a strict
sense, dictum. Nonetheless, the Court's descriptions of
the Penn Central test appear to make predictable application of the test an
enormous challenge. Obviously, the interests of landowners,
government, and the general public are not well served by a lawless law of
takings. The U.S. Supreme Court - and in the meantime the lower federal
and state courts - have a good deal of work ahead of them to make sense of the
Penn Central test and decide how it relates to (the now diminished) Lucas
categorical test.
The Court's decision also
highlights but certainly does not resolve several other questions. One
such issue is whether the claimant's lack of investment expectations
> may be a potentially relevant factor in a Lucas-type case, an issue which
has sharply divided the U.S. Court of Appeals for the Federal Circuit, for
example. The Supreme Court did not explicitly address expectations
because the case did not present the issue. On the one hand, the Court's
general descriptions of the Penn Central and Lucas tests could be read to
suggest that investment expectations are relevant under Penn
Central, but not under Lucas. On the other hand, the Court's opinion
pointedly footnoted Justice's Kennedy's concurring opinion in Lucas in which he
said expectations are relevant in a Lucas case, and Justice Rehnquist, in
dissent, also cited Kennedy's concurring opinion, apparently with approval.
Another outstanding issue is the
validity and content of the so-called substantially advance takings
test. The trial court in this case concluded (not surprisingly, the
issue was not really contested) that the moratorium substantially advanced the
goal of addressing the serious pollution problem facing Lake Tahoe. The
Ninth Circuit has firmly embraced this ostensible takings test; most courts
have not. The issue was not directly addressed on appeal, including in
the U.S. Supreme Court. The Court referred to the substantially
advance argument as a possible alternative "theory" of recovery, but
said the argument was barred by the trial court's uncontested factual findings.
The Tahoe decision leaves the validity of this test (isn't it really a due
process issue?) and the standard of review (ordinary due process rational
basis, or something else?) completely up in the air.
In sum, Tahoe is one step in a
process of legal evolution, the ultimate direction of which is not entirely
clear. The Court has clarified some issues and reaffirmed at least
one important principle, the parcel as a whole rule. In the process, the
Court has dealt the so- called property rights movement a serious setback.
For more information, contact Anita Padmanabhan or John Echeverria at Georgetown
Environmental Law and Policy Institute
Georgetown University Law Center
600 New Jersey Avenue, N.W.
Washington, D.C. 20001
202-662-9850
202-662-9005 (fax)
E-mail: gelpi@law.georgetown.edu
Website: www.gelpi.org
April 25, 2002