Celebrating Tahoe-Sierra.

• Author: Lazarus, Richard J.
• Position: Regulatory takings

1. INTRODUCTION II. THE ESSENTIAL BACKGROUND FACTS A. Tahoe's Tragedy of the Commons B. The Tahoe Regional Planning Agency C. The Ninth Circuit Decision III. THE HIGHLIGHTS A. Severance of Physical from Regulatory Takings B. Reaffirmation of "Parcel as a Whole" C. Diminishment of Lucas D. Potentially Favorable Future Applications of the Penn Central Test IV. TWO CAVEATS A. The Takings Issue Remains Alive in the Supreme Court B. A Temporary Restriction on Land Use May Constitute a Partial Taking Requiring Just Compensation V. LESSONS FOR FUTURE LITIGATION A. The Opposition to the Petition for a Writ of Certiorari B. Audience C. Opinion Assignments VI. CONCLUSION I. INTRODUCTION

   For those who have been defending government agencies in takings challenges before the United States Supreme Court, the Court's ruling in Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency (1) ended a long mn of mostly adverse decisions. Agins v. City of Tiburon, (2) decided in June 1980, was the last sweeping win for government in a regulatory takings case, but even that unanimous opinion written by Justice Powell contained the seeds of future adversity, most notably the problematic "substantially advanced" and "economically viable use" tests. (3) Since Agins, government regulators lost First English Evangelical Lutheran Church of Glendale v. County of Los Angeles (First English), (4) Nollan v. California Coastal Commission, (5) Lucas v. South Carolina Coasted Council, (6) Dolan v. City of Tigard, (7) Suitum v. Tahoe Regional Planning Agency, (8) and, most recently Palazzolo v. Rhode Island (9) The government's victories were largely confined to cases such as San Diego Gas & Electric v. City of San Diego, (10) Williamson County Regional Planning Commission v. Hamilton Bank, (11) and Yee v. City of Escondido, (12) in which the "win" amounted to avoiding what might otherwise have been a far worse result. The only clear government victory in a takings case since Agins was Keystone Bituminous Coal Association v. DeBenedictis, (13) but even that ruling could hardly be meaningfully enjoyed because it was sandwiched between the Court's adverse rulings that same Term in First English and Nollan.

   Notwithstanding all these mostly adverse rulings, it always seemed there were hints that a favorable majority might still exist in a future case presenting the legal issues in a factual setting more sympathetic to government regulators. Snippets of language from the Court's opinions and those of individual Justices could invariably be pieced together to suggest that Justices Kennedy and O'Connor, in particular, would ultimately reject the more extreme implications of Justice Scalia's takings opinions for the Court. Indeed, my own scholarship was so notoriously replete with such Pollyanna-ish claims that I appeared akin to the optimistic child who, finding himself wholly immersed in manure, refuses to despair and instead enthusiastically exclaims: "This is great. With all this manure, there must be a pony here somewhere!" (14) But no matter how sincere--and persuasive (at least to me)--my forecasts of an imminent favorable Court opinion, such contentions were no doubt falling on increasingly (and understandably) deaf ears.

   The ruling in Tahoe-Sierra is a realization of the current Court's potential to reach a sensible result in a regulatory takings case. Tahoe-Sierra is a major victory for government regulators and environmentalists, but not because it eliminates the takings issue as a substantial concern. Tahoe-Sierra instead finds its significance in its restoration of balance to the Court's takings jurisprudence, signified by a new Court majority where Justice Scalia is relegated to a dissent.

   Moreover, it is especially fitting to celebrate the Court's ruling in Tahoe-Sierra in this symposium issue honoring the thirtieth anniversary of the Clean Water Act because of the Act's relevance to the land use regulations challenged in Tahoe-Sierra. Those land use regulations, including the temporary development moratorium directly at issue in Tahoe-Sierra, were products of the very kind of comprehensive basin-wide land use planning that section 208 of the Clean Water Act promotes for the effective control of nonpoint source water pollution (15)--the primary source of pollution degrading Lake Tahoe (16) The Tahoe Regional Planning Agency's (TRPA) section 208 planning process occurred in part when the development moratorium was in place and the information within TRPA's final seven-volume section 208 plan served as the basis for many of the land use restrictions ultimately promulgated by the TRPA in 1987. (17) Indeed, the TRPA 1987 final land use plan could, for that reason, be fairly considered among section 208's greater successes.

   The purpose of this Essay is threefold. First, it highlights what I perceive are some of the potentially more significant aspects of the Court's ruling, especially those worthy of celebration by government regulators. Second, it adds a few cautionary notes to the discussion, lest government counsel repeat the mistake of those who litigated in favor of the property owners in Tahoe-Sierra and who exaggerated in their own minds the willingness of the Court to match their own unbounded zeal for property rights protection. Finally, the Essay briefly describes a few practical lessons to be taken from Tahoe-Sierra for future Supreme Court government litigation on the takings issue.

2. THE ESSENTIAL BACKGROUND FACTS

   A full description of the relevant factual and procedural background of the Tahoe-Sierra litigation is well beyond the scope of this Essay, just as it was beyond the Court's purview in its decision. Indeed, as described below, the narrowness of the slice of that litigation and the background facts before the Court in Tahoe-Sierra may well have played a significant role in securing an outcome favorable to the government. In all events, for the purposes of this Essay, I set forth only the barebones background information relevant to the Court's ruling.

   1. Tahoe's Tragedy of the Commons

      First of all, no one disputes the seriousness and the imminency of Lake Tahoe's environmental problems. Here, at least, there is essentially common ground among landowners, environmentalists, and government planners. Lake Tahoe presents a classic environmental commons, all too reminiscent of Garret Hardin's famed essay, The Tragedy of the Commons. (18) Lake Tahoe is a mountain lake of extraordinary beauty because of its setting and its exceptional clarity. The latter results from many ecological factors, most significantly the relatively small amount of land surrounding the lake, coupled with the physical character of much of that land. The land, technically referred to as either "mountain wetlands" or "stream environment zones," has--virtually like a sponge--served as a physical buffer, preventing sediment, nitrogen, phosphorous, and other chemicals from rain runoff and snowmelt from entering the lake. (19)

      Lake Tahoe's own tragedy is that its exceptional beauty attracts commercial and residential development that in turn destroys those fragile physical features upon which that beauty depends. Not only does such development itself increase the amount of runoff contamination into the lake, but the development further threatens to replace those buffering lands with impervious land surfaces that filter out almost nothing. What makes Lake Tahoe's ecological plight especially portentous, however, is that what goes into the lake, stays in the lake. Many large water bodies naturally flush themselves out in just a few years: Existing water--including water-soluble and waterborne contaminants--goes out, and new, cleaner water comes in. Lake Tahoe does not possess that flushing ability. Because there are very few outlets from the lake, contaminants remain in the lake for hundreds of years. Increased discharges of sediments and chemicals that promote eutrophication in the lake, accordingly, are essentially irreversible. (20)

   2. The Tahoe Regional Planning Agency

      In the late 1960s, with congressional approval, California and Nevada by interstate compact created a bistate agency, the Tahoe Regional Planning Agency (TRPA), to address the pressing ecological problems threatening Lake Tahoe and its surrounding lands. (21) The border between the two states literally splits the lake in two. As much as no state easily transfers regulatory authority to an agency outside its exclusive control, by the 1960s both California and Nevada well understood the futility of the two states attempting, independently, to protect a lake they shared.

      At issue in Tahoe-Sierra was a 32-month development moratorium imposed from 1981-1984. The moratorium was the product of the TRPA's efforts to develop a comprehensive land use plan to regulate commercial and residential development in the Tahoe Basin. After earlier planning efforts failed to adequately limit development in the region, California and Nevada--again with congressional approval--amended their compact to instruct TRPA to produce a new plan that, based on a series of specifically determined "environmental thresholds," more effectively limited the timing and location of development as necessary to protect the lake. (22) Not surprisingly, because of the immense scientific and political complexity of that undertaking, such a comprehensive land use plan could not be created without several years of scientific research and public discussion and debate. The 32-month moratorium was simply TRPA's effort to call a temporary time-out on further destructive development of the most ecologically sensitive lands while that necessary planning process took place. Understandably, TRPA worried that, absent such a planning moratorium, the planning process itself could perversely trigger an accelerated and irreversibly destructive rush to develop that would completely undermine the final land use plan's ability to...