Case comment
Tahoe-Sierra
Preservation Council, Inc. v. Tahoe Regional Planning Agency, 122
Alexander Volokh
116 Harv. L. Rev. 200, 321
(2002)
Be sure and check the paper copy or
Lexis/Westlaw before citing or quoting!
Regulatory
Takings. — In
1922, Justice Holmes invented regulatory
takings jurisprudence by announcing that “if regulation
goes too far it will be recognized
as a taking,”[1] but he did not say how far is too far. Fifty-six years later, in Penn Central Transportation Co. v.
But what is “total”? Because every regulation can be characterized as a total taking of some right, the Court has struggled to prevent the “denominator question” from expanding Lucas and undermining Penn Central. Last Term, in Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency,[4] the Court held that to trigger the Lucas rule a total deprivation of all economically viable use must be permanent; a temporary deprivation is only partial and must be considered under Penn Central. The Court has saved the Penn Central edifice, though it is unclear that this structure is worth preserving.
To slow the erosion of the
The first ordinance at issue, adopted in 1981, temporarily prohibited
most development on environmentally sensitive
lands surrounding the lake until the Agency developed a regional plan.[7] When the Agency missed its 1983 deadline for adopting such a plan, it adopted a resolution
that suspended all project reviews and approvals
until the regional plan was finally ready in 1984.[8] The 1984 plan continued
the development restrictions as temporary measures.[9] The Agency could not revisit these measures because the state of
In 1984, landowners sued the Agency and other government parties, alleging that the development restrictions violated the Takings Clause and federal civil rights statutes.[14] In 1999, the district court found that there was no taking under Penn Central[15] but did find that the ordinances effected a total taking under Lucas.[16] The court rejected the Agency’s arguments that “reasonable temporary planning moratoria” are not takings[17] and that the prohibited uses were nuisances that the state could ban without compensation.[18] It also held that the 1984 plan did not take any property, since the injunction prevented the Agency from implementing the 1984 plan.[19]
The Agency appealed the district court’s Lucas determination, but the landowners did not appeal their loss under Penn Central. The Ninth Circuit reversed as to the 1981–1984 period.[20] Writing for a unanimous panel, Judge Reinhardt[21] declined to find a total taking under Lucas, since the moratorium was only temporary.[22] The court distinguished First English Evangelical Lutheran Church of Glendale v. County of Los Angeles,[23] which held that the government must compensate property owners even for temporary takings.[24] First English, the panel reasoned, was about remedies, not about the threshold takings question; the Supreme Court in that case assumed that a moratorium temporarily denied the landowners all use of their property and held that merely repealing the regulation was an inadequate remedy.[25]
The Supreme Court affirmed. Writing for a six-Justice majority, Justice Stevens[26] declared that temporary, complete moratoria are not per se takings and should be analyzed under Penn Central.[27] While physical takings always require compensation, regulations do not.[28] Justice Stevens agreed with the Ninth Circuit that the Lucas exception to Penn Central covers only total takings and not “the destruction of one ‘strand’ of the bundle” of property rights.[29] He also endorsed the Ninth Circuit’s view that First English was inapposite.[30] Thus, no Supreme Court precedent authorizes the “conceptual severance” of a two-year segment of a fee estate for the purpose of analyzing a takings claim.[31] The conceptual severance approach to the “denominator question” would allow Lucas to swallow the zoning process, voiding Penn Central’s concern with “the parcel as a whole.”[32]
The Court also declined to extend Lucas. Justice Stevens listed seven possible theories that the Court could endorse: (1) all moratoria that “temporarily deprive[] an owner of all economically viable use of her property” are per se takings; (2) all such moratoria are per se takings except for normal zoning delays; (3) all such moratoria are per se takings beyond a fixed length of time; (4) the Agency’s moratoria in this case were a “‘series of rolling moratoria’ that were the functional equivalent of a permanent taking”; (5) the Agency was stalling in bad faith; (6) the moratorium did not substantially advance a legitimate state interest; or (7) the moratorium was unconstitutional as applied to certain of the landowners’ parcels under a Penn Central analysis.[33] Justice Stevens dismissed the last four as precluded by the facts found in the lower courts, the procedural posture of the case, or the grant of certiorari.[34] He rejected the first three because “fairness and justice” require case-by-case balancing, not per se rules.[35] Moreover, Justice Stevens wrote, these per se rules would impose significant constraints on widely used land use planning tools[36] and hinder informed regulatory decisionmaking.[37]
Chief Justice Rehnquist dissented.[38] First, he argued that the injunction against the 1984 plan was a foreseeable result of the Agency’s own actions, so that the Agency was responsible for a moratorium lasting not thirty-two months, but six years.[39] Next, he rejected the majority’s distinction between temporary and permanent prohibitions — temporary moratoria, after all, can be extended, while permanent bans can be repealed.[40] If, as Lucas held, a total taking is, “from the landowner’s point of view,”[41] the “practical equivalen[t]” of a physical appropriation,[42] then a temporary deprivation of all productive use is the practical equivalent of a forced leasehold, for which the government should compensate.[43] Finally, the Chief Justice argued that applying Lucas to temporary moratoria would not call “traditional, short-term, land-use planning devices” into question: “normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like”[44] are exempt from the First English temporary takings rule.[45] The six-year total deprivation here, however, far exceeded the bounds of normal zoning delays.[46]
After Tahoe-Sierra, it is reasonable to predict that if takings law continues to evolve to protect property rights,[47] it will not do so through the expansion of per se rules. Future regulatory takings plaintiffs may have to challenge Penn Central directly — by seeking either to have the case overruled outright[48] or to tilt its three-factor balancing test in a direction more friendly to takings claimants.
The Court’s refusal to expand Lucas is understandable. If a principal theory behind Lucas was that deprivation of all use is like a physical appropriation,[49] it is a short step to say, as the Chief Justice did in Tahoe-Sierra, that a temporary deprivation of all use is like a forced leasehold.[50] But why stop there? A setback ordinance is like an appropriation of a portion of a parcel of land,[51] a requirement that a mining company leave coal in place is like a deprivation of mineral rights,[52] and a prohibition on building extra stories is like a condemnation of an easement.[53]
Yet to hold that such regulations fall under Lucas would be to abandon Penn Central’s focus on “the parcel as a whole.”[54] “To the extent that any portion of property is taken, that portion is always taken in its entirety,”[55] but the Court has “consistently rejected such an approach to the ‘denominator’ question.”[56] Even if First English does authorize temporal severance,[57] it is unclear why a Court that values Penn Central should endorse this result; a temporary development ban still takes only a few sticks out of the bundle. An expanded Lucas and Penn Central cannot comfortably coexist; at least one of them must give.
But why preserve Penn Central? The Penn Central test is unsatisfying, not so much because it is a vague balancing test as because its first two prongs — the effect on the landowner and the interference with investment-backed expectations — should not be constitutionally relevant. A jurisprudence centered on the third prong alone — the character of the government action — may well have yielded a result in Tahoe-Sierra that looked like Lucas.
To design a satisfying
test for identifying a taking, one must first ask what a regulatory takings doctrine is for. The case for a strong regulatory takings doctrine — which did not even exist until
One could treat regulatory takings doctrine as part of the penumbra of the Takings Clause: strong protections against regulatory takings may be necessary because, in this regulatory age, it is too easy for the government to regulate private parties to avoid having to exercise the power of eminent domain.
Or one could justify a regulatory takings doctrine by appealing to the text of the Fifth Amendment itself and asking: has “property” been “taken”? The three-year interest at issue in Tahoe-Sierra is not “property” in the “vulgar and untechnical sense of [a] physical thing,”[61] but the Supreme Court has long understood property “in a more accurate sense to denote the group of rights inhering in the citizen’s relation to the physical thing, [such] as the right to possess, use and dispose of it. . . . The [Takings Clause] is addressed to every sort of interest the citizen may possess.”[62] Especially today, when property rights are often unbundled, it makes no sense to consider property any other way.
By this standard, the first prong of Penn Central — the effect of the regulation on the landowner[63] — is misguided: a regulation that affects half the land, or precludes half its potential uses, or remains in place for a period of time representing half its value, is indeed a destruction of well-defined property rights. The effect of the regulation should be relevant to the calculation of damages but not to the threshold takings question, where the focus should be the rights that have been taken, not the rights retained.[64] If the proportion of rights lost is a proxy for whether “some people alone . . . bear public burdens which, in all fairness and justice, should be borne by the public as a whole,”[65] it is a crude one; surely, if a regulation is general enough, its facial neutrality should alleviate fairness concerns, regardless of the effect on any one landowner.[66] If the proportional inquiry is a proxy for a distributive justice inquiry, it is even cruder, since a landowner can have many properties[67] or a partial interest in a single piece of land.
Admittedly, the size of the taking as a proportion of a defined parcel is relevant to the “dollar value [of] outrage,”[68] which is part of what Frank Michelman calls the “demoralization costs”[69] of takings.[70] Arguably, losing an entire “thing” is more demoralizing than losing half of two “things.”[71] If one could rewrite the Fifth Amendment, one might conclude that deprivations that are not highly demoralizing do not demand compensation, especially since making landowners whole for every such deprivation may create incentives for overinvestment.[72] But with the Fifth Amendment as it is, and understanding “property” as “the group of rights inhering in the citizen’s relation to the physical thing,”[73] it seems more sensible that extraordinary demoralization should increase damages, not that relatively minor demoralization should undermine the takings claim.
What of Penn Central’s second prong, the landowner’s reasonable,[74] investment-backed expectations? One may want the law to conform to expectations, either on moral or on utilitarian grounds.[75] But as in private law, whether a loss is expected need not be relevant to whether it should be compensated.[76] Moreover, when reasonableness is added to the mix, the concept becomes circular, as reasonable expectations depend in part on the law. Without coherent, independent notions of which expectations are reasonable,[77] “property tends to become what courts say it is,”[78] which — because courts are often deferential — tends to be what the political process says it is (though an activist judiciary may expand takings doctrine by stoking citizens’ expectations of what is protected[79]). Thus, regulation begets an expectation of more regulation[80] — an awkward way to implement a countermajoritarian Bill of Rights provision.[81]
In short, the first and second prongs of Penn Central do not attempt to answer the constitutional question, “has property been taken?” Any such attempt must turn upon the third prong, which considers the character of the government action. The pre-1922 rule was simple: only a physical appropriation was a taking. Today, we have moved beyond the “vulgar and untechnical sense” of property and adopted new rules that recognize deprivations of specific rights in objects as “takings.” Physical occupations are per se takings.[82] Abrogations of other “fundamental” property rights, like the right to exclude[83] and the right to devise,[84] may be takings.[85] Regulations that replicate nuisance law[86] are not takings,[87] since individuals hold private property subject to certain “implied limitation[s],”[88] such as courts’ ability to adjudicate different property owners’ incompatible uses.[89]
One could imagine a takings jurisprudence entirely based on the character of challenged regulations. In deciding how to treat specific regulations or categories of regulations, courts could consider the likelihood of government abuse,[90] whether compensation would paralyze government,[91] whether government is responsive to compensation requirements, and how inefficient particular government actions or categories of actions are.[92] This new jurisprudence could rely on per se rules but could also employ different levels of scrutiny, or even alternative balancing tests, for different categories of regulation. The Court in Tahoe-Sierra could have ruled that building moratoria or “normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like”[93] would be permissible unless they exceeded a certain duration,[94] or the Court could have extended Lucas; either way would have been better than maintaining Penn Central.
Judges and commentators often talk as if a takings claim that fails the Lucas test automatically loses.[95] This is doctrinally wrong[96] but practically right, since Penn Central is unsympathetic to landowner claimants.[97] With the demise of per se rules in Tahoe-Sierra, tightening Penn Central seems like the best hope for landowners.
But what does Tahoe-Sierra reveal about takings doctrine as a whole? Lucas is easy to sidestep — stop just short of taking 100%[98] — and governments can easily take advantage of Tahoe-Sierra by extending temporary moratoria repeatedly.[99] Such ease is cause for uneasiness. If regulatory takings doctrine is required by a sophisticated textual reading of the Fifth Amendment, the Court should take it more seriously; if it is part of the penumbra of physical takings doctrine, the Court should police the regulatory loophole more aggressively.
[2] 438
[3] 505
[5] Tahoe-Sierra Pres. Council Inc. v. Tahoe Reg’l Planning
Agency, 34 F. Supp. 2d 1226, 1232 (D.
[7]
[8]
[11]
[12]
[14]
[20] Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 216 F.3d 764, 782, 785, 789 (9th Cir. 2000).
[25] Tahoe-Sierra, 216 F.3d at 777–78. The Ninth Circuit denied a rehearing
en banc. Tahoe-Sierra Pres. Council,
Inc. v. Tahoe Reg’l Planning
Agency, 228 F.3d 998 (9th Cir. 2000). Judge Kozinski,
joined by Judges O’Scannlain, Trott, T.G. Nelson,
and Kleinfeld, dissented, charging that the panel had misinterpreted First English.
[29]
[32]
[35]
[44]
[45] Tahoe-Sierra, 122
[46] Id. at 1495 (citing examples of state statutes limiting moratoria to six months, ten months, and two years).
Justice Thomas,
joined by Justice
Scalia, also dissented
to stress that the “parcel
as a whole” rule is not settled
doctrine, Tahoe-Sierra, 122 S. Ct. at 1496 & n.* (Thomas,
J., dissenting) (citing
Palazzolo, 121 S. Ct. at 2465; and Lucas, 505 U.S. at 1016 n.7), and was in fact specifically “rejected
in the context of temporal deprivations of property by First English,”
id. at 1496. He added that the majority’s assurance
that temporary prohibitions are, after all, merely temporary
“is cold comfort
to the property owners,” since “in the long run we are all dead.”
[47] See Palazzolo; Dolan v. City of
[48] See, e.g., Brief Amicus Curiae of the Institute for Justice in Support of Petitioners at 20, Tahoe-Sierra, 122 S. Ct. 1465 (2002) (No. 00-1167) [hereinafter Institute for Justice Brief].
[51] But see Keystone Bituminous Coal Ass’n v. DeBenedictis, 480
[52] But see id. (refusing to recognize “a separate segment of property” in 27 million tons of unmined coal).
[53] See Penn Cent. Transp. Co. v.
[55] Concrete Pipe & Prods. of
[57]
[58] Lucas v. S.C. Coastal
Council, 505
[59] See Louis Kaplow, An Economic Analysis of Legal Transitions, 99 Harv. L. Rev. 509, 520–21 (1986).
[62]
[63] Courts usually
express the value lost as a proportion of the preregulation property value. See Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 501 (1987) (referring to the “percentage” of the property
affected by government action); Penn Central, 438 U.S. at 131 (citing
Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) (upholding an uncompensated 75% reduction in value); and Hadacheck
v. Sebastian, 239 U.S. 394 (1915) (upholding an uncompensated 87½% reduction in value)). Because of the focus on the proportion of value lost instead of the absolute
amount, this prong cannot be read as a filter for de minimis harm — an inquiry that, in any case, does not exist for physical
takings. See Keystone, 480
[64] See Richard A. Epstein, Lucas v.
[66] See Lucas v. S.C. Coastal Council,
505
[67] See, e.g., Penn Central, 438
[68] Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law, 80 Harv. L. Rev. 1165, 1215 (1967).
[75] See William W. Fisher III, The Significance of Public Perceptions of the Takings Doctrine, 88 Colum. L. Rev. 1774, 1780 (1988) (arguing that “denying compensation in defiance of a popular perception that it should be forthcoming risks undermining people’s . . . sense of justice [and] reduc[ing] people’s willingness to make decisions . . . without taking the time to ‘look up’ the rules”).
[76] For instance,
in employment law, an employer
can fire an at-will employee
for any reason, even though the employee
“expects” to be dismissed only for good cause. Epstein, supra note 64, at 1381. In products liability, a consumer may receive compensation even though he expected a defective product. See, e.g., Barker v. Lull Eng’g Co., 573 P.2d 443, 451 (
[77] See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458
[78] Lucas v. S.C. Coastal
Council, 505
[79] See Fisher, supra note 75, at 1781–88 (discussing how Epsteinians and Kantians can use the rhetorical power of judicial decisions to mold popular beliefs about property).
[80] See Tahoe-Sierra, 122
[81] Criminal law commentators have raised the same circularity concerns about the “reasonable expectation of privacy” test proposed by Justice Harlan in Katz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring). See, e.g., Richard S. Julie, High-Tech Surveillance Tools and the Fourth Amendment: Reasonable Expectations of Privacy in the Technological Age, 37 Am. Crim. L. Rev. 127, 132–33 (2000).
[82] Loretto, 458
[85] But see Andrus v. Allard,
444
[86] The moratorium in Tahoe-Sierra was not such a regulation. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning
Agency, 34 F. Supp. 2d 1226, 1251–55
(D.
[87] Lucas v. S.C. Coastal
Council, 505
[89] Of course, nuisance law need not define the extent of permissible uncompensated regulation. See Palazzolo v. Rhode Island, 121 S. Ct. 2448, 2462 (2001) (including reasonable zoning and land-use restrictions in the implied limitations); Miller v. Schoene, 276 U.S. 272, 280 (1928) (suggesting that for some land uses, “weigh[ing] with nicety the question whether [the use is] a nuisance according to the common law” is not necessary); Mahon, 260 U.S. at 413 (broadly identifying these implied limitations with the “police power” but stressing that such power has its limits).
[90] For instance, one may fear that political markets fail in the zoning context because incumbent residents protect their interests against unrepresented potential newcomers. See William A. Fischel, Introduction: Utilitarian Balancing and Formalism in Takings, 88 Colum. L. Rev. 1581, 1582–83 (1988). One may not fear political failure so much in the environmental context, in which present voters seem to regulate themselves to benefit unrepresented future voters.
[91] Compare Tahoe-Sierra, 122 S. Ct. at 1479 (“Treating [all land-use regulations] as per se takings would transform government regulation into a luxury few governments could afford.”), with Ann E. Carlson & Daniel Pollak, Takings on the Ground: How the Supreme Court’s Takings Jurisprudence Affects Local Land Use Decisions, 35 U.C. Davis L. Rev. 103, 104–08 (2001) (noting that, “counterintuitive[ly],” land use regulation did not grind to a halt after Nollan and Dolan, and that, in fact, some development fees increased). Cf. John C. Jeffries, Jr., In Praise of the Eleventh Amendment and Section 1983, 84 Va. L. Rev. 47, 73–78 (1998) (arguing that strong damage remedies against government actors for constitutional violations would lead to overdeterrence).
[92] Compare Epstein, supra note 64, at 1391 (“[T]he Takings Clause . . . will serve as a welcome restraint on the appetite of government.”), with Kaplow, supra note 59, at 567–70 (disputing the claim that government overvalues benefits and undervalues costs and arguing that the effect of a compensation rule on the efficiency of government would be ambiguous).
[93]
[95] See, e.g., Tahoe-Sierra, 122
[96] See Tahoe-Sierra, 122