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

United States Supreme Court
535 U.S. 302 (2002)

ELI5:

Rule of Law:

A temporary moratorium on land development that deprives a property owner of all economically viable use does not constitute a per se taking requiring compensation under the Fifth Amendment. Such regulatory takings claims are to be analyzed under the ad hoc, fact-specific framework established in Penn Central Transp. Co. v. New York City.

Facts:

Lake Tahoe's unique water clarity was rapidly deteriorating due to pollution from land development, primarily runoff from impervious surfaces like asphalt and buildings.
In 1968, California and Nevada formed the Tahoe Regional Planning Agency (TRPA) via an interstate compact to oversee development and protect the lake.
A 1980 amendment to the compact required TRPA to establish environmental standards and adopt a new regional plan to maintain them.
Finding it could not meet the compact's deadlines, TRPA enacted Ordinance 81-5, a moratorium effective August 24, 1981, which prohibited most construction on environmentally sensitive land while it developed the plan.
When the planning process extended beyond the initial timeframe, TRPA adopted Resolution 83-21 in August 1983, imposing a more restrictive 8-month moratorium.
Combined, these two moratoria prevented virtually all development on the petitioners' properties for a total of 32 months.
Petitioners, including the Tahoe-Sierra Preservation Council and about 400 individuals, owned vacant lots in the regulated areas and had purchased them with the intent to build single-family homes.

Procedural Posture:

The Tahoe-Sierra Preservation Council and individual landowners (petitioners) filed lawsuits against TRPA in U.S. District Courts, which were consolidated in the District of Nevada.
The District Court, as the trial court, found that the 32-month moratoria constituted a categorical taking under Lucas v. South Carolina Coastal Council and ordered TRPA to pay damages.
TRPA (appellee) appealed the trial court's judgment to the U.S. Court of Appeals for the Ninth Circuit; the landowners (appellants on this issue) did not appeal the court's separate finding that there was no taking under the Penn Central test.
The Ninth Circuit, an intermediate appellate court, reversed the District Court's decision, holding that a temporary ban on development is not a categorical taking.
The landowners (petitioners) successfully petitioned the U.S. Supreme Court for a writ of certiorari to review the Ninth Circuit's decision.

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Issue:

Does a temporary development moratorium that denies a landowner all economically viable use of their property for a specific period of time constitute a per se taking under the Fifth Amendment's Takings Clause?

Opinions:

Majority - Justice Stevens

No. A temporary moratorium on development that denies an owner all economically viable use of property for a finite period is not a per se taking; instead, its constitutionality must be evaluated using the fact-specific balancing test from Penn Central. The Court's jurisprudence draws a clear distinction between physical takings, which are categorical, and regulatory takings, which require 'ad hoc, factual inquiries.' The categorical rule from Lucas v. South Carolina Coastal Council applies only to the 'extraordinary circumstance' where a regulation permanently eliminates all of a property's value. The Court rejected the petitioners' 'conceptual severance' argument, which would treat the 32-month period as a distinct temporal property interest that was taken in its entirety. Takings analysis requires consideration of the 'parcel as a whole,' which includes its temporal dimension; a temporary ban does not render a fee simple estate valueless because the property's use and value are restored when the moratorium ends. Adopting a per se rule would hinder essential, good-faith community planning and force governments to make hasty decisions or pay prohibitively high costs for normal regulatory delays.

Dissenting - Chief Justice Rehnquist

Yes. A moratorium that denies a landowner all economically viable use of their property constitutes a taking requiring compensation. The actual deprivation period was nearly six years, not 32 months, because TRPA's deficient 1984 plan was immediately enjoined by a court. The majority's distinction between 'temporary' and 'permanent' deprivations is tenuous and unsupported by precedent; the 'permanent' taking in Lucas lasted less than two years before the regulation was amended. The Court's decision contradicts First English, which held that temporary deprivations of all use are 'not different in kind from permanent takings.' From a landowner's perspective, a multi-year ban on all development is the 'practical equivalent' of the government condemning a leasehold interest, which is a compensable taking. A development ban of this length is not a 'normal delay' associated with zoning and cannot be considered a background principle of state property law that landowners should expect.

Dissenting - Justice Thomas

Yes. A regulation that effects a total deprivation of property use is a per se taking, regardless of whether the deprivation is labeled 'temporary.' The majority's reliance on the 'parcel as a whole' doctrine is misplaced in the context of temporal deprivations, as First English established that temporary and permanent takings are not different in kind when all beneficial use is denied. A total deprivation of use of a 'temporal slice' of property is the equivalent of a physical appropriation and is compensable. The theoretical future value that a property might recover after a moratorium is lifted is relevant only to the calculation of damages, not to the threshold question of whether a taking has occurred in the first place.

Analysis:

This decision significantly limited the scope of the categorical takings rule established in Lucas, confining it to permanent, total deprivations of economic value. By rejecting a per se rule for temporary moratoria, the Court affirmed the Penn Central ad hoc balancing test as the default standard for most regulatory takings claims. The ruling provides state and local governments with crucial flexibility to enact temporary development freezes for bona fide planning purposes without automatically triggering just compensation requirements, thereby protecting the deliberative land-use planning process from being crippled by financial burdens. However, the decision leaves open the possibility that an excessively long or bad-faith moratorium could still be deemed a taking under the Penn Central framework.

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