WASHINGTON, April 23 — The Supreme Court ruled today that a
government-imposed moratorium on property development, even one that
lasts for years, does not automatically amount to a "taking"
of private property for which taxpayers must compensate the landowners.
The 6-to-3 decision was a sharp setback for the property rights
movement, which has scored many recent successes in the Supreme Court.
The ruling came in a case that sought millions of dollars in
compensation for a prolonged restriction on development along the shores
of Lake Tahoe.
The plaintiffs, hundreds of people who had bought undeveloped lots in
the expectation of building houses on the scenic lake, argued that a
restriction that even temporarily deprives property owners of all
"economically viable" use of their land is a taking for which
the Constitution requires compensation.
Supreme Court decisions over the last 15 years had suggested that
this in fact might be the law, a prospect that galvanized a broad
coalition of government and planning groups to urge the justices to
reject such a categorical rule. The Bush administration entered the case
against the property owners.
Writing for the court today, Justice John Paul Stevens said, "A
rule that required compensation for every delay in the use of property
would render routine government processes prohibitively expensive or
encourage hasty decision making." He added: "Such an important
change in the law should be the product of legislative rule making
rather than adjudication."
The complex law of "takings" is based on the Fifth
Amendment's provision that private property shall not "be taken for
public use without just compensation."
Today's decision had the effect of limiting some of the court's
recent property rights rulings and left property rights advocates
scrambling to minimize the scope of their defeat, at least for public
consumption. One such group, the Pacific Legal Foundation, called the
decision "an unfortunate blip in the forward progress of property
On the other side, Community Rights Counsel, a public interest law
firm that filed a brief for government groups that included the Council
of State Governments, the National League of Cities and the National
Governors Association, called the decision "the best news from the
Supreme Court on takings law in more than 20 years."
The majority opinion was joined by Justices Sandra Day O'Connor,
Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G.
Breyer. Chief Justice William H. Rehnquist and Justice Clarence Thomas
both filed dissenting opinions, and Justice Antonin Scalia, usually the
court's most vocal advocate of increased protection for private property
rights, signed both of those opinions without writing one of his own.
For Justice Scalia, the decision today in Tahoe-Sierra Preservation
Council v. Tahoe Regional Planning Agency, No. 00-1167, must have been a
particularly bitter defeat in two respects.
First, the majority rejected an expansive ruling of one of his most
important opinions, a 10-year-old decision called Lucas v. South
Carolina Coastal Council in which the court announced for the first time
that a land-use regulation that, while leaving the property in the
owner's hands, permanently deprived it of all economic use was a
"categorical taking" that must be compensated.
The Lucas decision breached what had been a doctrinal wall between a
physical taking, in which the government actually takes possession of
private property and for which compensation has always been required,
and a "regulatory taking," in which the government restricts
the owner's use of the property.
Under the court's precedents, regulatory takings were subject to a
case-by-case balancing test that weighed the government's interests
against the owner's legitimate expectations. But the Lucas case involved
a regulatory taking, an environmental ban on coastal development, so the
decision raised the prospect that even temporary restrictions might be
subject to the categorical rule.
The court today made clear that the distinction between a physical
and a regulatory taking would remain a vital one. Justice Stevens
relegated the Lucas decision to "the extraordinary case in which a
regulation permanently deprives property of all value," a rule with
no application to a temporary even if prolonged moratorium.
As Justice Stevens explained the reason for treating the two
categories of takings differently: "Land-use regulations are
ubiquitous and most of them impact property values in some tangential
way — often in completely unanticipated ways. Treating them all as per
se takings would transform government regulation into a luxury few
governments could afford. By contrast, physical appropriations are
relatively rare, easily identified, and usually represent a greater
affront to individual property rights."
In a second defeat for Justice Scalia, the court revisited a property
rights case it had inconclusively decided last June. In that case,
Palazzolo v. Rhode Island, the court held by a 5-to-4 vote that
restrictions on a coastal landowner's use of his property might amount
to a taking and sent the case back to the Rhode Island courts to decide
whether a taking had actually occurred.
Two members of Justice Kennedy's majority in that case, Justices
O'Connor and Scalia, battled in separate opinions over what factors the
state courts should consider. Justice O'Connor argued that "all
relevant circumstances" should be weighed, cautioning that because
the restriction was already in place when the land owner acquired the
property, the courts should guard against a "windfall" takings
award. Justice Scalia advocated a flat rule: the pre-existing
restriction should have no bearing on the analysis.
The majority today firmly embraced Justice O'Connor's position over
Justice Scalia's. Courts should examine "a number of factors rather
than a simple mathematically precise formula," Justice Stevens
said, quoting from her concurring opinion.
Today's decision upheld a ruling by the United States Court of
Appeals for the Ninth Circuit in San Francisco that no categorical
taking had occurred in two sequential regulations issued by a regional
planning agency that blocked development around Lake Tahoe for 32 months
from 1981 to 1984.
The Tahoe Regional Planning Agency was set up under an interstate
compact between California and Nevada, which share the Lake Tahoe
coastline. Concerned that the lake's famously crystalline water was
being degraded by run-off from developed areas above the shore, the
agency used the moratorium to study the problem and develop a long-term
In his dissenting opinion, Chief Justice Rehnquist objected that the
court should have considered a longer period, beginning in 1981, in
which development was restricted. In any event, he said, "a
distinction between `temporary' and `permanent' prohibitions is
tenuous" and had been effectively erased by the Lucas decision.
"The rationale for the Lucas rule applies just as strongly in this
case," the chief justice said.
One important aspect of the decision was its reaffirmation of a
doctrine, disputed by property rights advocates, known as the
"parcel as a whole" rule. Under this rule, the analysis of
whether a regulation that affects only part of a piece of land,
typically a wetlands or wildlife habitat, must take into account the
impact on the property as a whole and not just on the regulated portion.
Professor Patrick A. Parenteau, a land use expert at Vermont Law School,
said in an interview today that without the protection of the
"parcel as a whole" rule, much environmental land use
regulation would be considered a taking and would be prohibitively