Supreme Court Rules Temporary Government Bans that Prohibit Development Do Not Require Compensation
By Larry Jones
April 29, 2002
In a 6-3 decision in Tahoe'Sierra Preservation Council, Inc., v. Tahoe Regional Planning Agency, the U.S. Supreme Court ruled April 23 that a temporary government ban prohibiting property owners from building on their land while a government agency develops a comprehensive land use plan does not constitute a taking of property which requires compensation. Under the Fifth Amendment of the U.S. Constitution, when there is a compelling governmental need to take control of private property, the federal, state or local government that seizes control of such property is required to provide just compensation. The ruling is considered a huge victory for state and local governments which are responsible for land use planning to protect the environment, provide for public safety and address traffic and other demands for public services.
The case involved several hundred families who purchased property in the 1970 in the Lake Tahoe Basin which covers 501 square miles, straddles California and Nevada, and involves five counties and several municipalities. In response to an upsurge of development in the area, the Tahoe Regional Planning Authority (TRPA), a bi'state agency responsible for protecting the environment around Lake Tahoe, ordered the first of two moratoriums on development on August 24, 1981. The second was ordered on August 27, 1983 and lasted until April 25, 1984. During this 32 month period virtually all development was prohibited in the area to allow TRPA time to study the impact of development on Lake Tahoe and design a strategy for environmentally sound growth. The agency was particularly concerned about the impact of building'related water runoffs that threatened the lake's transparent water.
In 1984, the Tahoe Sierra Preservation Council, a nonprofit membership corporation representing about 2000 of the property owners in the Lake Tahoe Basin and a class of some 400 other property owners filed actions against TRPA in federal court. They claimed that TRPA's moratoriums amounted to a takings and argued for a "categorical rule" announced in an earlier court decision, Lucas v. South Carolina Council. Under the Lucas' rule "whenever a government imposes a deprivation of all economically viable use of property, no matter how brief, it effects a takings."
The District Court ruled in favor of the property owners but the decision was over turned by the Ninth Circuit Court of Appeals, which ruled that the Lucas' rule only applies to rare cases in which a regulation permanently denies all productive use of an entire parcel, whereas TRPA's moratorium had only a temporary impact. The property owners appealed to the Supreme Court, where the case was argued on January 7, 2002.
In delivering the opinion of the Court, Justice Stevens said "Fairness and Justice will not be better served by a categorical rule that any deprivation of all economic use, no matter how brief, constitutes a compensable takings. That rule would apply to numerous delays in obtaining, e.g., building permits, and would require changes in practices that have long been considered permissible exercises of police power. Such an important change in the law should be the product of legislative rulemaking not adjudication."