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Supreme Court Hears Arguements in Tahoe Takings Case

WASHINGTON _ Lake Tahoe area property owners seeking compensation for a moratorium on development first enacted two decades ago received a mixed reaction on January 7 from the two Supreme Court justices who hold the critical votes for their claims. Justices Sandra Day O'Connor and Anthony M. Kennedy peppered veteran Santa Monica property rights litigator Michael Berger with critical questions about the potential impact of forcing governments to pay landowners for any delay in acting on land use applications. But O'Connor and Kennedy later indicated sympathy for the plight of hundreds of landowners unable to develop their land since the adoption in 1981 of what was depicted as a temporary planning measure to help protect Lake Tahoe from environmental degradation. "It's been 22 years for some of them," O'Connor said. "Is there any end in sight?" The two centrist-leaning conservatives are expected to hold the balance of power in the latest, ideologically drawn property rights dispute at the high court.

The court in the past decade has given property rights advocates a series of victories, sometimes on 5-4 votes pitting the court's conservatives � including O'Connor and Kennedy � against the four liberal justices. The new case pits a coalition that once had 700 Tahoe area landowners who adopted the environmentally attractive name Tahoe-Sierra Preservation Council against the two-state Tahoe Regional Planning Agency (TRPA), which Congress created in 1969. The agency has struggled since 1981 to devise and implement a plan to safeguard the crystal blue lake from what scientists say would be irreversible damage from sediment and runoff due to development. The landowners, now numbering about 400, have been in federal court since 1984 but have nothing to show for what Berger called the "Dickensian" litigation. The Ninth U.S. Circuit Court of Appeals has issued three rulings rejecting arguments that the initial moratorium on two plans adopted by TRPA in 1984 and 1987 amounted to an unconstitutional taking of the landowners' property without compensation (see CP&DR Legal Digest, July 2000).

In appealing the Ninth Circuit's most recent decision of June 2000, Berger asked the high court to rule on all three of the agency's edicts. But the justices narrowed the case to the initial, 32-month moratorium. Berger opened the hour-long argument by insisting that the moratorium amounted to a "per se" taking because the landowners were denied "all economic use" of the land. But O'Connor and Kennedy both challenged Berger on the implications of requiring compensation for any government delays, however brief, on land use decisions. "What about your basic zoning law?" O'Connor asked. "Is that an immediate taking?" Kennedy made the dispute current by asking Berger whether New York City would face a takings claim if it imposed a one-year moratorium at the World Trade Center site while trying to come up with the best plan for development. When Berger answered yes, Kennedy was evidently disturbed. Later, when Berger appeared to backtrack from that position, Kennedy jumped in and asked whether he was changing his previous answer. Berger, however, appeared certain of support from two of the court's conservatives: Chief Justice William H. Rehnquist and Justice Antonin Scalia. "It doesn't seem fair to me to say these people should bear the burden of preserving the lake," Scalia said. "This was a general social problem for which the entire society should pay."

Court watchers also assume that Justice Clarence Thomas will side with the landowners. Thomas, as usual, asked no questions during the argument. In an unusual twist, the two lawyers defending the regulatory agency before the high court were themselves both conservatives: John G. Roberts, a Washington attorney whom President Bush has nominated for the District of Columbia Circuit Court of Appeals, and Solicitor General Theodore Olson, supporting TRPA as a friend of the court. Both Roberts and Olson contended that recognizing the landowners' claim for the period of the moratorium could cripple orderly land use decision-making.

"This was government acting the way we want it to act," Olson said of the moratorium. "Before we destroy the lake, let's stop and solve the problem that every landowner wants to solve." Instead of viewing the moratorium as a per se taking, Roberts and Olson argued, the ordinance should be evaluated under a three-part test set out in a 1978 Supreme Court decision, Penn Central Transp. Co. v. City of New York, 438 U.S. 104. Under that test, a takings claim is evaluated on the purpose of the government action, the economic effect on the landowner, and the effect on "reasonable investment-backed expectations." When a court applies the Penn Central test, the government agency usually wins. In questioning Roberts, O'Connor and Kennedy both voiced concern that landowners could be subjected to extended or repeated "temporary" moratoria. What about a 10-year moratorium, O'Connor asked. Roberts insisted that the duration of any restriction should merely be one factor in a Penn Central analysis, but he eventually conceded that at some point a "temporary" moratorium might go on for too long. Liberal justices John Paul Stevens, David H. Souter, Ruth Bader Ginsburg, and Stephen G. Breyer all appeared to support the agency's argument that the stiff Penn Central test should apply. However, Breyer did ask at one point whether the landowners should not have "some remedy at law." In his brief rebuttal, Berger returned to the landowners' plight. "These people are being asked to make a sacrifice on behalf of the greater public good," Berger said. "It's part of a public project to have this freeze on use, and the public ought to be paying for it, not the owners who are frozen out." Lawyers from opposing interest groups had differing predictions after the arguments. Richard Samp, legal director for the conservative Washington Legal Foundation, which filed a friend of the court brief for the landowners, forecast a pro-property rights ruling. He said Kennedy appeared to be a "solid" vote for their position and O'Connor "clearly wants to vote [for the landowners], but she dislikes per se rules."

But Timothy Dowling, chief counsel of Community Rights Counsel, who authored a brief for state and local governments supporting TRPA, said he was "cautiously optimistic" about the case. He said "the swing justices" appeared to be drawn to O'Connor's position in an earlier case favoring a Penn Central approach in most takings cases. As for Kennedy, Dowling said that he was "harder to read," but that his World Trade Center hypothetical "recognized the broad implications of a ruling" in favor of the landowners. Both lawyers, however, predicted a narrow ruling. "It's going to be a narrow decision whatever they decide," Samp said. "That has been the practice of the court in these cases," Dowling said. "I'd welcome a narrow victory for the agency, something to break the record of defeats in recent cases."

The Case: Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, No. 00-1167. The Lawyers: For Tahoe-Sierra Preservation Council: Michael M. Berger, (310) 449-1000. For Tahoe Regional Planning Agency: John G. Roberts Jr., (202) 637-5810. Kenneth Jost, a former editor of The Los Angeles Daily Journal, is a staff writer for Congressional Quarterly and author of The Supreme Court Yearbook (CQ Press).