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Supreme Court Bolsters Land-Use Planning in Historic Property Rights Case

April 2002

In a sweeping decision yesterday, the Supreme Court strengthened the ability of local and regional governments to engage in reasonable land-use regulation aimed at protecting the environment. The decision represents a major blow to conservative property rights advocates, renouncing several of their most cherished legal theories.

The case, Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, raised the question of whether a temporary 32-month moratorium on development in the Lake Tahoe basin constituted a “taking” of private property for which the government must provide compensation under the Fifth Amendment. In holding that the moratorium did not require compensation, the Court returned to a pragmatic, fact-based style of reasoning and rejected the formalistic legal tests advocated by the Court’s most conservative justices.

This is a victory for local and regional planning, and the greatest defeat the property rights movement has suffered at the hands of the Rehnquist Court to date,” said Bradley Bobertz, a Senior Attorney at the Environmental Law Institute. Bobertz heads ELI’s Endangered Environmental Laws Program, a new initiative to defend and reinforce the constitutional foundations of environmental law. “While the case wasn’t their strongest to begin with, we’re all surprised by the ruling’s breadth and decisiveness.” In the course of its decision, the Court rejected alternative rulings that would have resolved the case on narrower grounds.

Writing for a six-justice majority, Justice John Paul Stevens said that regulatory takings, unlike physical appropriations of property, must be evaluated under a multi-factor balancing test that takes into account the reasonableness of the government action rather than the bright-line rules favored by the Court’s conservative wing.

Ten years ago, the Court held in Lucas v. South Carolina Coastal Council that regulations would automatically be considered takings if they deprived owners of all economic value in their land. Justice Scalia wrote the majority opinion in that controversial 5-4 decision, which in light of yesterday’s ruling may represent the high-water mark for the property rights movement. The Lucas “total takings” rule now will be limited to extraordinary situations in which a regulation renders property completely valueless. According to Bobertz, “Lucas has now become an aberration. In practical effect, it’s a dead letter.”

The Court also clarified its position on the “whole parcel” rule, rejecting an analytic approach that would treat regulated portions of property as conceptually severable from non-regulated portions. Conservative property rights advocates had long advocated this approach, which would have required courts to find all development bans, regardless of their reasonableness or duration, to be total takings during the period the bans were in effect.

Temporary development bans are commonly used to retain the status quo while land-use regulators develop new zoning rules. Requiring compensation for these bans, in all cases, would have crippled the ability of state and local governments to engage in rational planning. Calling such temporary bans “ubiquitous,” Justice Stevens said that “[t]reating them all as per se takings would transform government regulation into a luxury few governments could afford.”

Before yesterday, the Court had seemed to be moving away from the multi-factor balancing approach that characterized its pre-Rehnquist Court takings cases. In returning to a case-by-case analysis, the Court vindicated the late Justice William Brennan’s 1978 majority opinion in Penn Central Transportation Co. v. New York City, which made a strong case for fact-based decision-making. Some of the Court’s recent decisions had cast doubt on the continuing vitality of Penn Central, doubts that were decisively put to rest today.

The Tahoe decision might also signal a more general retreat from the kind of formalistic reasoning that has become a hallmark of the Rehnquist Court’s most conservative rulings. If Tahoe is the beginning of