Daily Development for Monday, April 29, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

CONSTITUTIONAL LAW; TAKINGS; REGULATORY TAKINGS; TEMPORARY TAKINGS: Supreme Court rejects notion that moratoria can constitute per se takings, even when maintained for extended periods.

Tahoe-Sierra Regional Planning Council, Inc. v. Tahoe Regional Planning Agency, 2002 WL 654431 (U.S.S.Ct. 4/23/02) The trial court had found that a moratorium on development on plaintiffs' property for a 32 month period, in order to evaluate how best to maintain the clarity of the waters of Lake Tahoe, constituted a temporary regulatory taking of the property because government deprived the landowners of 100% of the value of the property during the period of the moratorium.  The lower court had relied upon the Lucas case for the proposition that a 100% elimination of value in the property represents a taking unless enacted in response to a common law nuisance. 

Holding - simply - a 32 month moratorium on construction cannot be viewed as a 100% taking of value and therefore is not a "temporary taking."  Justice Steven's rationale for this conclusion was that there the landowner retained substantial value in the property - the rest of the time continuum.  He rejected application of the Lucas case - which found a taking when 100% of value was taken through regulation that was indefinite in duration.  (The regulation in Lucas might have been intended to be permanent when imposed, but in fact the law was changed after only two years - less than the 32 month delay in Tahoe.) 

Judge Stevens' opinion, joined in by six members of the court, does not overrule Lucas.   But it does say that the concept that a partial taking of 100% of value will not constitute a per se taking in a regulatory takings.  Judge Stevens acknowleded that a partial physical taking is compensable, citing such cases as Causby and Loretto. 

Comment 1:  Many planners have viewed this as a major victory on two fronts:

1) It recognizes the value of moratoria in general as a planning tool.

2) It embraces the "whole parcel" theory put into question only last year in Palazollo  - the issue is known as the "denominator question."  The question is: if 100% of the value of some of the  property is regulated into nonuse, do we still credit the value of the rest of the property in determining whether a taking has occurred?  Since Stevens' opinion applied all the temporal use of the property as the "denominator," planners argue that we need only look to see whether a regulation leaves some significant value in some of the property.

As to the first point, the planners clearly are correct, to the extent that there was any doubt before.  Even Judge Rhenquist's dissent affirmed that moratoria are acceptable planning devices; he simply concluded that the period here was too long.  He argued that as a procedural matter the Court should have taken into account the fact that the whole moratorium, as renewed, lasted over five years.  But he did indicate that even the 32 months considered by the majority would have been too long.  On the other hand, Rhenquist agreed that a 24 months moratorium period would be.  So the argument really is only over eight months.

The editor disagrees with the planners' victory dance on the second point.  There is nothing to declare victory about.  Palazollo had found only four Justices willing to even suggest that temporary regulatory stoppage of development was a categorical taking (despite the editor's miscounting when he first reported the case).  This was only one alternative supporting reversal in that case, and the opinion was very vague on the significance of the issue. The swing votes on the issue - from O'Connor and Breyer - concluded that the fact that some of the land was rendered completely useless was a factor suggesting that there had been a taking of "investment based expectations," but did not lead to a categorical result.  Many thought that this was really the center of thinking on the Court. 

The same can be said here.  O'Connor and Breyer, and probably Kennedy, who wrote Palazollo, can be viewed as stating nothing more than that a 32 month moratorium is not, on balance, a destruction of all "investment based expectations" in the property.  Thus there is very little departure in outcome or analysis.  It can be said that the Court rejected the opportunity to find that a temporary partial moratorium could be treated as a categorical, or per se, taking.  But the fact that the Court is not willing to embrace absolute rules in regulatory takings cases certainly can come as no surprise either to liberals or conservatives.  In short, the opinion delivers very little that is new.

Comment 2: Property rights activists might draw some comfort by the Court's acknowledgement that some regulatory takings can amount to physical takings where they dictate to a landowner that the land should be put to a particular use of benefit to others.  The Court cites Loretto for the point (landlords required to accommodate rooftop cable television lines on their properties).  The concept probably is most useful in certain residential rent control cases, such as Cwynar v. City & County of San Francisco, 109 Cal. Rptr. 2d 233 (Cal. Ct. App. 2001) (ordinance prohibiting landlords from evicting residential tenants so that landlords or their families can occupy the premises constitutes a physical as well as regulatory taking).  Cwynar is discussed in the DIRT DD of 12/07/01, on the DIRT website: http://www.umkc.edu/dirt  It might also be a useful concept in the evaluation of certain aspects of federal laws compelling that private owners accommodate telecommunications systems providers.

Comment 3: In the Editor's view, any progress made by Tahoe in the development of a comprehensive approach to takings concepts is incremental and tiny.  It's nice, though when so many can take so much comfort from so little.

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