Amicus Curiae Brief — Suitum v. Tahoe Regional Planning Agency

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No. 96-243 : CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1996

BERNADINE SUITUM, PETITIONER

TAHOE REGIONAL PLANNING AGENCY

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

UNITED STATES AS AMICUS CURIAE

IN SUPPORT OF RESPONDENT

WALTER DELLINGER

Acting Solicitor General

Lois J. SCHIFFER

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

ALAN JENKINS

Assistant to the Solicitor

General

ANNE S. ALMY

JOHN A. BRYSON

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether, in the circumstances of this case, petitioner’s

Fifth Amendment “takings” challenge to certain land-use

restrictions is ripe for adjudication.

TABLE OF CONTENTS

Page

Interest of the United States . q 1

—

. —ʃ 12

Argument:

I. Petitioner's principal ripeness contention is

premised on a flawed reading of this Court’s

substantive takings jurispru dene 14

II. The court of appeals’ ripeness determination

was permissible in the circumstances of this case

in light of prudential ripeness considerations .... 21

TABLE OF AUTHORITIES

Cases:

Abbott Laboratories v. Gardner, 387 U.S. 136

1 13, 24, 25

Aetna Life Ins. Co. v. Haworth, 300 U.S. 227

» 27

Agins v. City of Tiburon, 447 U.S. 255 (1980) 18, 19,

20, 26

Allen v. Wright, 468 U.S. 737 (1984) . .. 24

Baker v. Carr, 369 U.S. 186 (1962) . . .... 24

California v. Tahoe Regional Planning Agency,

766 F.2d 1308 (th Cir. 1985) . .... . 4

Concrete Pipe & Prods. of California, Inc. v. Con-

struction Laborers Pension Trust, 508 U.S. 602

1 ——————————————— 17, 18, 19

Connolly v. Pension Benefit Guaranty Corp.,

I.. 2 19

Dolan v. City of Tigard, 512 U.S. 374 (1994) 17, 19

Goldblatt v. Town of Hempstead, 369 U.S. 590

— —— 15

Hodel v. Irving, 481 U.S. 704 (1987) . .. 18, 19

(III)

Cases—Continued: Page

Hodel v. Virginia Surface Mining & Reclamation

Ass'n, Inc., 452 U.S. 264 (1981) . 16, 17

Kaiser Aetna v. United States, 444 U.S. 164

. 17, 18, 19

Kelly v. Tahoe Regional Planning Agency, 855 P. 2d

1027 (Nev. 1993), cert. denied, 510 U.S. 1041

900. ———ðV—èñ — 3,4

Keystone Bituminous Coal Ass'n v. DeBenedictis,

ee 17, 18, 19, 26

Lake County Estates, Inc. v. Tahoe Regional

Planning Agency, 440 U.S. 391 (1979) . 3

Loretto v. Teleprompter Manhattan CATV Corp.,

GB GE GD Ge A “ 18, 19

Lucas v. South Carolina Coastal Council, 505 U.S.

— — — 12, 18, 19, 20, 21

MacDonald, Sommer & Frates v. Yolo County,

9106000... 11, 17, 22, 23

Nectow v. City of Cambridge, 277 U.S. 183 (1928) ... 26

Nollan v. California Coastal Comm'n, 483 U.S.

11. —. ˙ 18

Pacific Gas & Electric Co. v. State Energy Re-

sources Conservation & Dev. Comm'n, 461 U.S.

990 — —— 26

Penn Central Transp. Co. v. City of New York,

438 U.S. 104 (1978) 10, 12, 14, 15, 16, 17, 19, 23

Regional Rail Reorganization Act Cases, 419 U.S.

220 — — — 24

Williamson County Regional Planning Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985) 11, 22

Constitution, statutes and rule:

U.S. Const.:

.. 24

1 ͤ 1, 2, 7, 19, 20

TD GREED ——— — — 2, 12, 19

2 7

Statutes and rule Continued:

Act of Dec. 18, 1969, Pub. L. No. 91-148, § 1, 83 Stat.

——ůů——————

I I ö

AGE. BERD, GB GRR, 11!!!111!łç»04«%«auQQê

Ak EDs, Eh SE OU. & Be 96-551, § 1, 94 Stat.

“Art. Ica), 94 Stat. 3233 — —

ZIL .2..........ccccececcceereeceseseees

e 2,

Clean Water Act of 1977, 33 U.S.C. 1251 et seg. .........

c — 16 U.S.C. 1531

2 Act, Pub. L. No. 95-586, 94 Stat.

n 2

e .. 2

Surface Mining Control and Reclamation Act of 1977,

a ATER 1

e neon 2

r . ˙²: 7

— > > & & & PO

Miscellaneous:

1 E. Coke, Institutes (Ist Am. ed. 1812). . . 19

General Accounting Office, Report, Forest Service:

Land Acquisitions Within the Lake Tahoe Basin

911111 —— 2

L. Tribe, American Constitutional Law (2d ed.

— ——-„-— — —[——j 24, 25

13A C. Wright, A. Miller & E. Cooper, Federal

Practice and Procedure (1996 Supp.) ) ꝗ. 26

In the Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-243

BERNADINE SUITUM, PETITIONER

TAHOE REGIONAL PLANNING AGENCY

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

UNITED STATES AS AMICUS CURIAE

IN SUPPORT OF RESPONDENT

INTEREST OF THE UNITED STATES

This case involves a claim that the development restric-

tions imposed by the Tahoe Regional Planning Agency

(TRPA) on a particular parcel in a subdivision on the

Nevada shore of Lake Tahoe resulted in a “taking” of

property within the meaning of the Fifth Amendment.

Numerous federal statutes and regulations also involve

restrictions on the permissible uses of real property asso-

ciated with environmentally sensitive areas. See, e.g., 33

U.S.C. 1251 et seg. (Clean Water Act of 1977); 16 U.S.C.

1531 et seg. (Endangered Species Act of 1973); 30 U.S.C.

1201 et seg. (Surface Mining Control and Reclamation Act

of 1977 (SMCRA)). Many of those regulatory frameworks

include administrative procedures through which property

(1)

owners may seek exemption from, or modification of, appli-

cable restrictions, and some provide for the transfer of

development rights in order to mitigate the adverse effect

of land-use controls, see, e.g., 30 U.S.C. 1260(b)(5) (author-

izing Secretary of the Interior to exchange federal coal

deposits for deposits covered by SMCRA’s prohibition on

mining within or adjacent to alluvial valley floors). The

United States therefore has an interest in the proper

application of both the Takings Clause of the Fifth Amend-

ment and the ripeness doctrine.

In addition, respondent in this case, the TRPA, was

created by an interstate compact between California and

Nevada that was approved by Congress “in order to en-

courage the wise use and conservation of the waters of

Lake Tahoe and of the resources of the area around said

lake.” Act of Dec. 18, 1969, Pub. L. No. 91-148, § 1, 88 Stat.

360; Act of Dec. 19, 1980, Pub. L. No. 96-551, § 1, 94 Stat.

3233. Under the compact, the TRPA is empowered “to

establish environmental threshold carrying capacities and

to adopt and enforce a regional plan and implementing

ordinances which will achieve and maintain such capaci-

ties while providing opportunities for orderly growth and

development consistent with such capacities.” Pub. L. No.

96-551, § 1, Art. I(b), 94 Stat. 3234.

Under the Santini-Burton Act, Pub. L. No. 96-586, 94

Stat. 3381, the United States Forest Service is authorized

to acquire lands and interests in lands in the Lake Tahoe

Basin that are “environmentally sensitive.” § 3(a)(1), 94

Stat. 3383. As of February 10, 1994, the Forest Service

had acquired 3378 parcels (totalling approximately 11,000

acres) in the Basin, under the authority of the Santini-

Burton Act. See General Accounting Office, Report, For-

est Service: Land Acquisitions Within the Lake Tahoe

Basin 2 (Oct. 1994). The Forest Service has acquired par-

cels in the subdivision in which petitioner’s lot is located,

and in 1990 offered to purchase petitioner’s lot (an offer

which has lapsed).

STATEMENT

1. Lake Tahoe, which straddles the California-Nevada

border, is renowned for its scenic beauty and the extra-

ordinary clarity of its water. Those qualities are both

ecologically and economically important to the region, and

are threatened by development in the surrounding basin.

See Kelly v. Tahoe Regional Planning Agency, 855 P.2d

1027, 1028-1029 (Nev. 1993), cert. denied, 510 U.S. 1041

(1994). In 1969, California and Nevada entered into the

first Tahoe Regional Planning Compact in an effort to

direct development in the Basin in such a manner as to

protect and preserve the lake. See Lake Country Estates,

Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391,

393-394 (1979). The compact included findings that “the

waters of Lake Tahoe and other resources of the Lake

Tahoe region are threatened with deterioration or degen-

eration, which may endanger the natural beauty and

economic productivity of the region,” and that “the region

is experiencing problems of resource use and deficiencies

of environmental control.” Pub. L. No. 91-148, § 1, Art. Ia)

and (b), 83 Stat. 360. In order to address those problems,

the compact créated the Tahoe Regional Planning Agency

(TRPA), “an areawide planning agency with power to

adopt and enforce a regional plan of resource conservation

and orderly development.” Art. I(c), 88 Stat. 361. The

TRPA was empowered to “adopt all necessary ordinances,

rules, regulations and policies to effectuate” the Regional

Plan. Art. VI(a), 83 Stat. 366.

The protections established under the 1969 compact

proved insufficient to control the threat to the lake arid its

environs, and in 1980, a new compact was approved by

Congress. The 1980 compact included the findings that

t he region exhibits unique environmental and ecological

values which are irreplaceable,” and that “[iJncreasing ur-

banization is threatening the ecological values of the

region.” Pub. L. No. 96-551, § 1, Art. I(a)(3) and (5), 94 Stat.

3233. The compact vested the TRPA with new authority

to establish “environmental threshold carrying capaci-

ties“ and to adopt and enforce a regional plan and imple-

menting regulations to achieve and maintain such capaci-

ties. Arts. I(b), V(b), 94 Stat. 3234, 3239.

In 1987, the TRPA adopted a new, comprehensive Re-

gional Plan for implementing the 1980 compact. See Kelly,

855 P.2d at 1030-1031. The 1987 Regional Plan created the

Individual Parcel Evaluation System (IPES), under which

all undeveloped residential lots are evaluated and scored

for their suitability for development. For each county in

the Basin, the TRPA establishes annually a minimum

score for eligibility for building. In 1989, the TRPA estab-

lished an initial minimum IPES score of 725 to qualify for

development. Properties with lower scores could not be

developed. The minimum score is subject to revision,

based in part on the particular county’s efforts and suc-

cess in achieving improvements to water quality in the

Basin. See ibid.

The Regional Plan also identified Stream Environment

Zones (SEZs) in the Basin, which are areas surrounding

streams that carry run-off in the watershed into Lake

Tahoe. A SEZ performs the critical environmental func-

tion of absorbing nutrients and cleansing the run-off,

thereby maintaining the clarity of the lake. J.A. 22, 25.

1 An “environmental threshold carrying capacity” is an “environ-

mental standard necessary to maintain a significant scenic, recrea-

tional, educational, scientific or natural value of the region or to

maintain public health and safety within the region.” Art. II(i), 94

Stat. 3235. See California v. Tahoe Regional Planning Agency, 766

F.2d 1308, 1310 (9th Cir. 1985).

Because of the acute environmental sensitivity of such

areas, the 1987 Regional Plan does not permit development

in a SEZ that would result in permanent land disturbance

or in covering the land with an impermeable surface.

Parcels located in a SEZ therefore receive an IPES score

of zero; with certain exceptions not relevant here, no

construction can take place on such parcels. J.A. 26, 29,

62-68, 83, 87, 157-158.

The program imposed by the 1987 Regional Plan miti-

gates the effect of development restrictions on individual

property owners by vesting in those owners certain trans-

ferable development rights (TDRs) that may be conveyed

to owners of other eligible parcels. See J.A. 69-75. The

Regional Plan recognizes three independent types of

TDRs. A “residential development right” represents the

right to have a residential unit on an eligible parcel of

land. A “residential allocation” is necessary to construct

a residence in a specific calendar year. “Land coverage”

represents the right to utilize impervious coverage of land

surface on one’s parcel. J.A. 96-99. Each private owner of

a vacant residential parcel automatically receives one

residential development right, J.A. 97, whereas an owner’s

residential allocation and land coverage rights are

determined through the TRPA’s individual assessment of

the parcel’s suitability for development, J.A. 45, 70.

Owners of SEZ property receive both the standard

allotment of TDRs and additional transferable property

rights. In addition to the one residential development

right that all private owners of vacant residential property

possess, owners of SEZ property may earn and transfer up

to three additional residential development units. J.A. 98.

The owners of SEZ property also receive land coverage

rights equal to 1% of the surface area of their land. J.A.

45, 62, 65. Finally, SEZ owners may apply for a residential

allocation in any particular year and, if awarded an

allocation,” may transfer it for application to an eligible

property in the Basin. J.A. 98-99, 146-148. While owners of

SEZ property may not use their TDRs to develop the SEZ

parcel itself, they may transfer those rights for use on any

eligible property in the Lake Tahoe Region.’ All such

transfers must be approved by the TRPA, which reviews

the eligibility of the receiving parcel under the develop-

ment restrictions applicable to that parcel. J.A. 107-108.

2. In 1972, petitioner purchased a vacant lot in the Mill

Creek Estates subdivision of Incline Village, located in

Washoe County, Nevada. Her purchase occurred after the

first Tahoe Regional Planning Compact was approved in

1969. Petitioner did not attempt to develop the property

until 1989, after the adoption of the 1987 Regional Plan. At

that time, petitioner entered the Washoe County drawing

for a residential allocation and was awarded an allocation

for that year. She then submitted building plans to the

TRPA, seeking permission to construct a house on the lot.

The TRPA denied permission to build because the lot was

in a SEZ for Mill Creek, which flows into Lake Tahoe.

The TRPA verified the status of the property by a field

visit and confirmed that the property’s IPES score was

zero because of its location in a SEZ. Petitioner appealed

the permit denial to the governing board of the TRPA,

which denied the appeal on November 27, 1990. J.A. 14-15,

86-87, 158-159.

It is undisputed that, although petitioner could not build

a house on her parcel, she was entitled under the 1987

2 Residential allocations are awarded by local jurisdictions in ran-

dom drawings. J.A. 99.

3 Eligible property owners in the region who purchase such rights

may then develop their parcels beyond the parcels’ initial designations.

For example, an individual who wishes to build more than one resi-

dential unit on his or her property would have to acquire additional

residential development rights from other owners. J.A. 69-70, 158.

Regional Plan to transfer her residential development

right and the right to cover 1% of her land (183 square

feet) to other eligible properties. In addition, she was en-

titled to obtain and then transfer three bonus residential

rights. Finally, although her 1989 residential allocation

expired at the end of that year, she was entitled to enter

the drawing again and, if successful, transfer that allo-

cation. Petitioner did not again apply for a residential

allocation, nor did she attempt to locate a buyer for her

transferable development rights. J.A. 87, 158-159.

3. a. On January 28, 1991, petitioner initiated this action

in the United States District Court for the District of

Nevada against the TRPA, the States of California and

Nevada, and Washoe County under 42 U.S.C. 1983.‘ She

alleged that the restrictions enforced by the TRPA “de-

nlied] her] the right to construct a home on the Subject

Lot, thereby depriving her of all reasonable and economi-

cally viable use of the Subject Lot.” J.A. 15 6). She

contended, inter alia, that the TRPA’s actions consti-

tuted a taking of her property, in violation of the Fifth and

Fourteenth Amendments. J.A. 16 ( 14, 16).

In its answer, the TRPA specifically denied petitioner’s

allegation that the challenged regulatory framework had

deprived her property of all reasonable and economically

viable use. J.A. 8. As an affirmative defense, the TRPA

alleged, among other things, that I petitioner's] complaint

as to [the TRPA] is not ripe, and [the district court] thus

lacks jurisdiction, because of [petitioner’s] failure to

obtain a final decision by TRPA as to the amount of devel-

opment or other uses of [petitioner’s] property that may be

allowed by the Tahoe Regional Planning Compact and

TRPA’s Regional Plan and Ordinances.” J. A. 10 J 23).

The complaint was subsequently dismissed as to all defendants

except the TRPA. See District Court Docket Entry #24.

See also J.A. 11 (4 30) (“Each claim for relief of [peti-

tioner’s] complaint fails to present a concrete controversy

ripe for adjudication.”).

b. The parties filed cross-motions for summary judg-

ment. With respect to petitioner’s “takings” claim, the

TRPA contended in support of its motion that petitioner’s

claim was not ripe for adjudication because petitioner

hald] failed to pursue transfer of development, a remedy

geared precisely to those in her situation.“ TRPA’s

Memorandum of Points and Authorities in Support of

Motion for Summary Judgment 19. Petitioner opposed the

TRPA’s motion on the ground that, having unsuccessfully

appealed the TRPA’s denial of her request to build, she

“need do no more” in order to advance a ripe takings claim.

Suitum’s Opposition to Defendant’s Motion for Summary

Judgment 6. In her cross-motion, petitioner contended

that “the TRPA’s actions preventing [her] from building

amount to such a denial of economically viable use as to

constitute a taking.” Suitum’s Reply to Opposition to

Plaintiff’s Cross-Motion for Summary Judgment 1.

c. On November 23, 1993, the district court concluded

that it could not resolve the ripeness issue without more

information regarding the nature of petitioner's trans-

ferable development rights, the process for transferring

those rights, and the value of the rights. J.A. 88-89. The

court accordingly ordered the parties to file supplemental

briefs “explaining what development rights can be trans-

ferred in [petitioner’s] case and the procedures, prerequi-

sites and value of such transfer as applicable in this case.”

J.A. 89.

In response to the court’s order, the TRPA contended

that it he actual benefits of the [TDR] program for

[petitioner’s] property * * can only be known if she

pursues an appropriate application,” and that, als a

result, there is a measure of inevitable speculation in the

information” that it had submitted. J.A. 91. Nonetheless,

the TRPA’s submission included affidavits indicating that

petitioner’s TDRs were marketable and would have sig-

nificant financial value if she sought to transfer them.

JA. 96-132; see also J.A. 91-93 (summarizing affidavits sub-

mitted by the TRPA).

In her supplemental brief, petitioner contended that

pursuing the transfer of her development rights would

be an “idle and futile act” because, in her view, the TDR

program is “a sham.” Suitum’s Response to Defendant’s

Memorandum Concerning Its Transfer of Development

Program 1-2. In so contending, however, she appeared to

agree with the TRPA that the practical application of the

TDR program to her property was inevitablly] specu-

lati{ve].” Id. at 2. In light of that ambiguity, and the pro-

hibition of any physical development of her parcel, she

asserted that the challenged regulations had reduced the

value of her property “not to zero, but to a negative

number.” Ibid.

Petitioner included in her submission the affidavit of

Paul Kaleta, a former employee of the TRPA. Mr. Kaleta

agreed with the TRPA’s submission “as it concerns iden-

tifying the potential available development commodities on

the above referenced property,” but disagreed as to the

value of those rights. J. A. 135 ( 2). Mr. Kaleta expressed

the view that “there is little to no value to these rights at

the present time as there is either no market for them or

the procedure for transferring one particular right would

restrict the opportunity to transfer a remaining right.”

Ibid. (J 3).

d. Upon consideration of the parties’ submissions, the

district court dismissed petitioner’s claims for lack of

subject-matter jurisdiction, finding that they were not yet

ripe for adjudication. J.A. 150-153. The court held, as a

preliminary matter, that the affidavit of Paul Kaleta

submitted by petitioner was inadequate under Federal

Rule of Civil Procedure 56(e)° and would be disregarded.

J.A. 151 n.2. The court concluded that Mr. Kaleta demon-

strated no “knowledge, skill, experience, training or edu-

cation which would qualify him to testify as an expert

{under Federal Rule of Evidence 702] as to the valuation of

[petitioner’s] development rights.” Ibid.

The court next concluded that “transfer rights are sig-

nificant to the takings calculus,” J. A. 152 (citing, e..

Penn Central Transp. Co. v. City of New York, 438 U.S.

104, 137 (1978)), and that the TRi’A’s TDR program was

designed to mitigate the adverse effect of development

restrictions on owners of parcels within SEZs, ibid. The

court further found that “specific examples of sales of

rights in the past demonstrate[] [that] there is significant

value in the transfer of residential development rights and

transfer of residential allocations which [petitioner] may

be entitled to.” bid.

The court next observed that, “until values attributable

to the transfer program are known, the court cannot real-

istically assess whether and to what extent TRPA“s

regulations have frustrated [petitioner’s] reasonable ex-

pectations.” J. A. 153. Because it concluded that an appli-

cation to transfer development rights “is the only ‘mean-

ingful application’ that can be made once property is deter-

mined to be SEZ,” J.A. 152, the court held that petitioner

was required to apply to the TRPA for approval of the

transfer of her TDRs before her claim would become ripe,

ibid. The court found that prerequisite to be consis-

5 Rule 56(e) provides, in pertinent part:

Supporting and opposition affidavits shall be made on personal

knowledge, shall set forth such facts as would be admissible in

evidence, and shall show affirmatively that the affiant is com-

petent to testify to the matters stated therein.

tent with this Court's requirement that property owners

obtain a “final decision” as to the permissible uses of

their property before proceeding to court. Ibid. (citing

Williamson County Regional Planning Comm'n v.

Hamilton Bank, 473 U.S. 172, 190-191 (1985); MacDonald,

Sommer & Frates v. Yolo County, 477 U.S. 340, 348

(1986)).

4. The court of appeals affirmed. J. A. 154-164. Observ-

ing that petitioner's takings claim is an “as applied” chal-

lenge (J.A. 159), the court held that, under the “final

decision” requirement for ripeness set out in Williamson

County Regional Planning Commission v. Hamilton

Bank, supra, petitioner was required to show that, before

filing suit, she sought a “final decision from [the TRPA]

regarding the application of the (challenged) regulation to

the property at issue.” J. A. 160 (citation omitted). Only in

light of a final decision by the regulating authority, the

court explained, may the economic impact of the chal-

lenged restrictions, and the extent to which they interfere

with petitioner’s investment-backed expectations, be judi-

cially determined. J. A. 161.

The court rejected petitioner’s claim that attempting to

transfer her development rights would be futile because

the TRPA’s program was “a sham.” J.A. 161. It held that

the district court had not abused its discretion in re-

jecting Mr. Kaleta’s affidavit, and affirmed the district

court’s finding that petitioner’s “development rights pos-

sess some significant value.” J.A. 163.

Finally, the court rejected petitioner's assertion that

she need not pursue the transfer of her development rights

because the TDR program was not designed to provide

“Just compensation.” The court observed that regulatory

requirements do not necessarily constitute a “taking”

merely because their effect is to diminish the value of

property. It held that, because application for approval of

the transfer of development rights under the ixstant pro-

gram could “mitigate the regulations’ economic effect and

result in a diminution in value rather than a more severe

economic impact,” participation in that program was

necessary to the consideratica whether a taking had oc-

curred at all. J.A. 163.

SUMMARY OF ARGUMENT

I. Retitioner's central contention is that physical de-

velopment of her property is the only “use” of that prop-

erty that is relevant to the substantive “takings” analysis.

That contention misapprehends this Court’s takings ju-

risprudence, which, in turn, governs the proper application

of ripeness principles to petitioner’s claim. In Penn Cen-

tral Transportation Co. v. City of New York, 438 U.S. 104

(1978), the Court expressly held that transferable devel-

opment rights “undoubtedly mitigate whatever financial

burdens the law has imposed on [property owners] and, for

that reason, are to be taken into account in considering

the impact of regulation.” Id. at 137. Moreover, because

the rights protected by the Takings Clause are primarily

economic rights, petitioner’s narrow focus on the physical

development of her property is misplaced.

Contrary to petitioner’s contention, Lucas v. South

Carolina Coastal Council, 505 U.S. 1008 (1992), supports

the conclusion that the takings inquiry looks primarily to

the economic impact of land-use regulations on the subject

property. The outcome in Lucas turned on the lower

courts’ undisputed finding that the claimant’s property

had “been rendered valueless” by the challenged restric-

tion. Id. at 1020. By contrast, the only admissible evi-

dence in this case demonstrated that petitioner's property

rights retain “significant value.” J.A. 163.

IL Because transferable development rights (TDRs)

are highly relevant to the substantive determination

whether a taking has occurred, property owners must

obtain a final administrative determination as to the scope

of those rights from the pertinent regulatory body before

they can advance a ripe takings claim. Absent such a de-

termination, courts cannot properly measure the economic

impact of challenged land-use regulations, as this Court’s

takings decisions require. Petitioner appears to have

satisfied the “final decision” requirement in this case by

appealing the limitations on her parcel to the governing

board of the TRPA. The scope of petitioner’s TDRs was

discernible under the 1987 Regional Plan as soon as her

appeal of the TRPA’s permit decision was denied.

Nonetheless, we believe that the procedural history and

factual record in this case justified dismissal on pre-

maturity grounds. The district court was faced with a

circumstance in which both parties took the position that

the value—as distinguished from the legal dimensions and

permissible uses—of petitioner’s TDRs was highly specu-

lative in nature. Moreover, petitioner sought to challenge

the bona fides of the TDR program without proffering any

admissible proof and without taking any steps to market

her transferable rights. Because of petitioner’s total fail-

ure to substantiate her claim, the hardship of postponing

decision apparently fell on respondent, which was urging

lack of ripeness. In light of the unusual posture of the

case, a finding of prematurity was justified under the pru-

dential ripeness principles set out in Abbott Laboratories

v. Gardner, 387 U.S. 136 (1967).

ARGUMENT

I. PETITIONER’S PRINCIPAL RIPENESS CON-

TENTION IS PREMISED ON A FLAWED

READING OF THIS COURT’S SUBSTANTIVE

TAKINGS JURISPRUDENCE

Petitioner’s principal contention is that physical devel-

opment of her land is the only “use” of real property that

is relevant to the determination whether a “taking” has

occurred. In petitioner's view, the existence and value of

transferable development rights are immaterial to the

takings inquiry and, consequently, to the threshold ques-

tion of ripeness. See, ¢.g., Pet. Br. 13-15. That contention

is directly contrary to this Court’s decisions.

A. In Penn Central Transportation. Co. v. City of New

York, 438 U.S. 104 (1978), property owners claimed that

the New York City Landmarks Preservation Commis-

sion’s refusal to allow them to construct a 50-story office

tower over their existing structure (Grand Central Ter-

minal) effected an uncompensated taking of their property.

The regulatory framework at issue in that case imposed

stringent restrictions on the subsequent development of

properties designated as landmarks, but allowed affected

owners to transfer certain development rights to other

eligible parcels. Id. at 113-115.

The owners of the Terminal claimed, among other

things, that the regulatory scheme had extinguished their

“air rights” above the Terminal, and that that regulatory

consequence constituted a taking of those rights. 438 U.S.

at 136-137. In rejecting that contention, the Court made

clear that transferable development rights constitute a

“use” of property that is relevant to the takings analysis:

([T]o the extent [that the owners of the Terminal] have

been denied the right to build above the Terminal, it is

not literally accurate to say that they have been denied

all use of even those pre-existing air rights. Their

ability to use these rights has not been abrogated; they

are made transferable to at least eight parcels in the

vicinity of the Terminal, one or two of which have been

found suitable for the construction of new office build-

ings. Although appellants and others have argued that

New York City’s transferable development- rights pro-

gram is far from ideal, the New York courts here

supportably found that, at least in the case of the

Terminal, the rights afforded are valuable.

Id. at 137 (emphasis added in part; footnote omitted).

The Court in Penn Central also made clear that the

existence and value of TDRs are primarily relevant to the

question whether a taking has occurred at all, rather than

merely to the question whether “just compensation” has

been afforded. It explained that, “{(wJhile these [trans-

ferable development] rights may well not have constituted

just compensation’ if a ‘taking’ had occurred, the rights

nevertheless undoubtedly mitigate whatever financial bur-

dens the law has imposed on [the owners] and, for that rea-

son, are to be taken into account in considering the impact

of regulation.” 438 U.S. at 137 (citing Goldblatt v. Town of

Hempstead, 369 U.S. 590, 594 n.3 (1962)). The Court then

concluded that, on the record before it, “the application of

New York City’s Landmarks Law has not effected a ‘tak-

ing’ of [the Terminal owners’] property.” Id. at 138.

Penn Central thus forecloses petitioner’s argument

that her TDRs—which the undisputed evidence demon-

strated “possess some significant value“ (JA. 163)°—

® Petitioner did not seek review by this Court of the court of

appeals’ upholding of the district court’s ruling, pursuant to Federal

Rule of Civil Procedure 56(e), that the affidavit of Mr. Kaleta, peti-

tioner’s putative expert, would not be considered. Accordingly, for

should not be considered in the determination whether the

challenged regulatory restrictions effect a taking.’ It is

true that the overall impact of the challenged land-use

restrictions in Penn Central may well have differed from

that of the restrictions at issue here because more modest

construction above the Terminal might have been possible,

and because the landmark restrictions did not interfere

with what the Court “regarded as [the property owners’]

primary expectation concerning the use of the parcel”—

its continuing use as a railroad terminal. 438 U.S. at 136.

The possibility of such factual distinctions, however, sug-

gests merely that the ultimate substantive determination

whether the restrictions on petitioner’s parcel constitute

a taking would not squarely be controlled by Penn Cen-

tral. See Hodel v. Virginia Surface Mining & Reclama-

tion Ass n, Inc., 452 U.S. 264, 295 (1981) (takings inquiry

“must be conducted with respect to specific property, and

the particular estimates of economic impact and ultimate

valuation relevant in the unique circumstances”). Any

such differences would not, however, distinguish Penn

purposes of this Court's review, it is no longer contested that the

operation of the TRPA’s regulatory program leaves petitioner with

real and substantial value as part of her ownership of the parcel.

Indeed. the transferable rights at issue in this case are, in signifi-

cant respects, more expansive than were those available to the Termi-

nal owners in Penn Central. Compare Penn Central, 438 U.S. at 113-

115, with J.A. 90-99, 144-149, 157-158. For example, the TDRs recog-

nized in Penn Central could be transferred only to otherwise eligible

properties across the street from the landmark parcel, across a street

intersection, or “across a street and opposite to another lot or lots which

except for the intervention of streets or street intersections f[or)m a

series extending to the lot occupied by the landmark building,

provided that) all lots [are] in the same ownership.” 438 U.S. at 114.

By contrast, the TDR program at issue here allows a transfer of rights

to any otherwise eligible parcel within the Tahoe Basin and does not

require coinciding ownership. J.A. 69-73.

Central’s unequivocal holding that the existence and value

of transferable development rights “undoubtedly mitigate

whatever financial burdens the law has imposed on [a

property owner] and, for that reason, are to be taken into

ae in considering the impact of regulation.” 438 U.S.

B. Indeed, the conclusion that TDRs are relevant to

the takings analysis flows inevitably from the nature of

that analysis. The determination whether a taking has

occurred in a given case entails “ad hoe, factual inquiries

that have identified several factors—such as the economic

impact of the regulation, its interference with reasonable

— — expectations, and the character of the

governmental action that have particular significance.”

MacDonald, Sommer & Frates v. Yolo — 477 USS.

340, 349 (1986) (quoting Kaiser Aetna v. United States, 444

US. 164, 175 (1979)); see also Hodel v. Virginia Surface

Mining & Reclamation Ass’n, Inc., 452 U.S. at 295. The

value and nature of rights—including TDRs—that a prop-

erty owner retains (or, as in this case, obtains) notwith-

standing the regulation of his or her parcel are logically

relevant to each of those factors. See, e. g., Concrete Pipe

& Prods. of California, Inc. v. Construction Laborers

Pension Trust, 508 U.S. 602, 644 (1993) (“[Ojur test for

regulatory taking requires us to compare the value that

has been taken from the property with the value that

remains in the property.”) (quoting Keystone Bituminous

Coal Ass'n v. DeBenedictis, 480 U.S. 470, 497 (1987)).

The Court’s takings doctrine views an individual’s in-

terest in property as a “bundle of rights” that can be pos-

sessed, alienated, or regulated either as a whole or with

respect to its constituent parts. See Dolan v. City of

Tigard, 512 U.S. 374, 398 (1994) (characterizing right to

exclude others from one’s property as “one of the most

essential sticks in the bundle of rights that are commonly

characterized as property”) (quoting Kaiser Aetna, 444

U.S. at 176); see also Lucas v. South Carolina Coastal

Council, 505 U.S. 1008, 1027 (1992); Hodel v. Irving, 481

U.S. 704, 716 (1987); Keystone, 480 U.S. at. 497. The ability

physically to develop real property typically is within that

bundle and plainly is one important “use of an owner's

land. But the recognized bundle of rights associated with

ownership embraces many other “uses,” including the

right to exclude others from the property, the right to

exploit its resources, the right to lease it, and the right to

dispose of it (or aspects of it) through devise, gift, hes sale.

The question whether regulation of certain “sticks in the

bundle constitutes a taking of the whole requires a com-

prehensive, fact-intensive inquiry that rarely turns on the

treatment of a single attribute of ownership. Petitioner 8

contention (Br. 11, 19-22) that physical “development of a

8 The Court has identified only two categories of regulation that

constitute per se takings—ie., that are “compensable without case-

specific inquiry into the public interest advanced in support of the

restraint.” Lucas, 505 U.S. at 1015. The first occurs where government

action results in a permanent, physical occupation of property. /bid.;

see, e. g., Loretto v. Teleprompter Manhattan CATV Corp, 458 U.S. 419

(1982). The second arises “where regulation denies all economically

beneficial or productive use of land.” Lucas, 505 U.S. at 1015 (citing,

eg., Agins v. City of Tiburon, 447 U.S. 255, 260 (1980); Nollan v.

California Coastal Commission, 483 U.S. 825, 834 (1987)). Petitioner

Nor, under this Court’s takings jurisprudence, can she “shoehorn her

claim into the latter category by dividing her parcel of property “into

what was taken and what was left for the purpose of demonstrating the

taking of the former to be complete and hence compensable. Concrete

Pipe, 508 U.S. at 643-644. Yet that is precisely what petitioner's

principal contention seeks to do in this case.

parcel is the sole or determinative factor in the takings

inquiry is therefore erroneous.

Petitioner’s narrow focus on physical development is

unavailing for an additional reason. The right protect-

ed by the Fifth Amendment’s Takings Clause is fun-

damentally an economic right. See Lucas, 505 U.S. at

1017 (Flor what is the land but the profits thereof?!“

(quoting 1 E. Coke, Institutes, ch. 1, § 1 (Ist Am. ed. 1812)).

The Clause does not prohibit all takings of property, but,

rather, uncompensated takings. Thus, where there is no

physical occupation of the owner's property,’ the inquiry

into whether a taking has occurred looks primarily to the

challenged regulation’s “economic impact” on the subject

property, see, e.g., Kaiser Aetna, 444 U.S. at 175; Hodel v.

Irving, 481 U.S. at 714; Connolly v. Pension Benefit

Guaranty Corp., 475 U.S. 211, 224-225 (1986); Keystone,

480 U.S. at 495; Concrete Pipe, 508 U.S. at 645, not to

whether an owner’s preferred or most beneficial use has

been hampered. Penn Central, 438 U.S. at 130 ([The

submission that [property owners] may establish a ‘taking’

simply by showing that they have been denied the ability

to exploit a property interest that they heretofore had

believed was available for development is quite simply

untenable.”). Because the appropriate analysis turns on

whether governmental restrictions “den{y] an owner eco-

nomically viable use of his land,” Dolan, 512 U.S. at 385

(quoting Agins v. City of Tiburon, 447 U.S. 255, 260 (1980))

(emphasis added), courts must consider all financially pro-

ductive uses, including those that do not entail physical

development of the property.

The Court has held that “a permanent physical occupation is a

government action of such a unique character that it is a taking with-

out regard to other factors that a court might ordinarily examine.”

Loretto, 458 U.S. at 432.

Contrary to petitioner’s contention (Br. 30-34), the

Court’s decision in Lucas strongly supports that conclu-

sion. There, the Court found a per se taking to have

occurred, based on the undisputed factual finding that the

claimant’s property hald] been rendered valueless” by the

challenged land-use restriction. 505 U.S. at 1020. The

Court was therefore faced with “the relatively rare situa-

tion{] where the government has deprived a landowner of

all economically beneficial uses” of his or her property.

Id. at 1018 (emphasis added). The Court made clear, more-

over, that it was the economic impact of the challenged

restriction in that case that rendered it unconstitutional.

See, e.g., id. at 1019 (When the owner of real property

has been called upon to sacrifice all economically benefi-

cial uses in the name of the common good, that is, to leave

his property economically idle, he has suffered a taking.”)

(emphasis added in part); id. at 1016 (The Fifth

Amendment is violated when land-use regulation,

denies an owner economically viable use of his land.’”)

(quoting Agins, 447 U.S. at 260) (emphasis omitted in

part).

Lucas therefore reaffirms that the ability to construct a

building on one’s land is but one of several important

interests that are relevant to the takings inquiry. The

present case, moreover, stands in stark contrast to Lucas

because, here, the only admissible evidence established

that petitioner’s TDRs do possess meaningful value. Far

from being a contrivlance]! or evasion of the Fifth

Amendment, Pet. Br. 30, the TRPA’s TDR program seeks

reasonably to balance the strong public interest in ecologi-

cal preservation against the property rights of private

owners.”

10 Seen in this light, the district court’s grant of summary judgment

in this case, while expressed in ripeness terms, effectively rejected

II. THE COURT OF APPEALS’ RIPENESS DE.

TERMINATION WAS PERMISSIBLE IN THE

CIRCUMSTANCES OF THIS CASE IN LIGHT

- OF PRUDENTIAL RIPENESS CONSIDERA-

TIONS

In light of the foregoing, petitioner errs in contendin

, 8

that the TDR program, and the transferable development

petitioner’s contentions as without merit insofar as they rested on a

rationale of facial or per se invalidity of the TRPA’s TDR program. To

the extent that petitioner and her supporting amici argue that this

Indeed, on its face, the TRPA’s program seems a commendabie

effort to preserve both ecological and economic values in this peculiar

geographic area in a way that achieves both reciprocity of advantage

and a sharing of the economic burden. In light of the findings sup-

porting the 1980 compact that enabled the plan's adoption (see pp. 3-4

supra), it would be unrealistic to assume that property values in the

Basin would remain yndiminished if effective steps were not taken to

prevent serious environmental degradation. By imposing somewhat

greater restrictions on development of non-SEZ properties than might

otherwise be required for the parcels in isolation, the plan creates

valuable TDRs for owners of SEZ parcels whose own development

would threaten the community’s ecology and economy. And the plan’s

overall protection of the area’s interdependent ecological and economic

Hg a to preserve residual resale value in the SEZ parcels.

Moreover, this Court’s takings jurisprudence recognizes “that

‘harmful or noxious uses’ of property may be proscribed by government

regulation without the requirement of compensation.” Lucas, 505 U.S.

at 1022. The peculiar dangers that would be posed by further impervi-

ous coverage of SEZ parcels therefore is relevant to the takings calcu-

parcels would be permissible even in the absence of the countervaili

aili

enhancements of value created by the TDR program. =

rights that she possesses, are irrelevant to the determina-

tion whether her takings claim was ripe. Under the terms

of the 1987 Regional Plan, however, it appears that peti-

tioner satisfied the requirement of a final administrative

determination when she appealed administratively the

TRPA’s designation of her parcel and its denial of per-

mission to construct a house on her lot. See J.A. 158.

Nonetheless, we believe that the procedural history and

factual record in this case justified dismissal of peti-

tioner’s takings claim.

A. 1. In Williamson County Regional Planning Com-

mission v. Hamilton Bank, 473 U.S. 172 (1985), the Court

held that “a claim that the application of government

regulations effects a taking of a property interest is not

ripe until the government entity charged with implement-

ing the regulations has reached a final decision regarding

the application of the regulations to the property at issue.”

Id. at 186. In so holding, the Court applied traditional

rules of justiciability to the substantive claim at issue.

See id. at 190 (“Our reluctance to examine taking claims

until such a final decision has been made is compelled by

the very nature of the inquiry required by the Just

Compensation Clause.”). Reiterating that the crux of the

takings inquiry is the economic impact of the challenged

action and the extent to which it interferes with reason-

able investment «.cked expectations, the Court explained

in Williamson County that It hose factors simply cannot

be evaluated until the administrative agency has arrived at

a final, definitive position regarding how it will apply the

regulations at issue to the particular land in question.”

Id. at 191. The Court again applied the “final decision”

requirement in MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986), explaining that “[a] court can-

not determine whether a regulation has gone ‘too far’

unless it knows how far the regulation goes.” Id. at 348.

Because, as we have explained, the existence and value

of transferable development rights are highly relevant to

the substantive determination whether a taking has oc-

curred, it follows a fortiori from Williamson County and

MacDonald, Sommer & Frates that claimants must ob-

tain a “final decision” regarding the scope of such rights

from the pertinent regulatory body before a taking claim

will be ripe for adjudication. “[A]gencies charged with

administering regulations governing property develop-

ment are singularly flexible institutions; what they take

with the one hand they may give back with the other.”

MacDonald, Sommer & Frates, 477 U.S. at 350. Absent a

final determination with respect to the full “bundle of

rights” that a property owner possesses, courts cannot

properly apply the “careful assessment of the impact of the

regulation” on the claimant’s property rights, Penn

Central, 438 U.S. at 136, that this Court’s cases require.

2. The courts below reasoned that, Iwlithout an appli-

cation for the transfer of development rights, TRPA is

foreclosed from determining the extent of the use of

[petitioner’s] property.” J. A. 160-161. See also J. A. 152

Hoh. — —.— there is no final decision as to how

petitioner] wi allowed to use her property.“). Under

the 1987 Regional Plan, however, the —— and scope

of petitioner’s TDRs were readily discernible when her

property was designated as within an SEZ. It is undis-

puted that, at that point, she was entitled to transfer her

residential development right and 1% of her land coverage,

and was entitled to obtain and then transfer up to three

bonus residential rights. J.A. 158-159. Petitioner was fur-

ther entitled to enter the drawing for a residential alloca-

tion and, if successful, transfer that allocation to an eligi-

ble parcel. J.A. 159. By appealing the TRPA’s denial of

her construction request, petitioner seems to have satis-

fied the requirement that the pertinent regulatory body

rule on the full extent of her development rights. The fact

that petitioner has not yet realized the value of her

TDRs—and that both sides view that value as “specu-

lati{ve],” J.A. 91—does not mean that the legal scope of

those rights has not been finally determined by the TRPA.

Petitioner thus has satisfied the “final decision” re-

quirement, as applicable to the instant regulatory pro-

gram. For the reasons set out below, however, we believe

that the lower courts’ finding of prematurity in this case

is supported by prudential ripeness concerns.

B. This Court explained in Abbott Laboratories v.

Gardner, 387 U.S. 136 (1967), that the ripeness of a claim

turns on “the fitness of the issues for judicial decision”

and “the hardship to the parties of withholding court

consideration.” Id. at 149. The “fitness” inquiry serves

both constitutional and prudential concerns; it ensures

that Article III’s “Case or Controversy” requirement is

satisfied by the temporal posture of the case, see Regional

Rail Reorganization Act Cases, 419 U.S. 102, 138 (1974),

and effectuates prudential concerns pertaining to judicial

administration and resources, as well as the rule against

“unnecessary decision of constitutional issues,” ibid. The

“hardship” inquiry is wholly prudential in nature, looking

to the equitable factors weighing for and against adjudica-

tion of a claim at any given time. See L. Tribe, American

Constitutional Law § 3-10, at 78 (2d ed. 1988).

In this case, petitioner’s claim meets the requirements

of Article III. She has demonstrated a current, personal

injury that is “fairly traceable to [respondent's] allegedly

unlaw:.' conduct” and is “likely to be redressed by the

requestea lief.“ Allen v. Wright, 468 U.S. 787, 751

(1984). By obtaining a “final decision” as to the scope

of her TDRs, moreover, petitioner has ensured “that

concrete adverseness” on which Article III justiciability

depends. Baker v. Carr, 339 U.S. 186, 204 (1962).

It also appears, however, that “subsequent events may

sharpen the controversy or remove the need for decision of

at least some aspects of the matter.” Tribe, supra, § 3-10,

at 78. For example, if petitioner seeks and obtains a

potential buyer for her TDRs at a substantial price, and if

the TRPA approves the transfer of those rights to the

buyer, petitioner’s putative takings claim might abate

entirely. Conversely, if petitioner is unable to locate a

suitable buyer, or if the TRPA rejects petitioner’s applica-

tion to transfer her rights to a particular parcel, tho

courts may consider petitioner’s claim in a far more con-

crete context than the one that presently exists."

Ordinarily, the existence of such contingencies would

not justify dismissal on prudential ripeness grounds

where the “final decision” requirement is met.” The

proper course would be for the district court to adjudicate

the claim on the merits.” In this case, however, the

n We do not mean to suggest that the value of conferring TDR

rights under an overall system in which such rights are shown to have

substantial market value can be negated by a particular owner by a

showing that she experienced what may be aberrational marketing

difficulties.

@ The Court explained in Abbott Laboratories that the prudential

ripeness doctrine arises from the discretionary nature of injunctive and

declaratory judgment remedies. 387 U.S. at 148. Petitioner’s com-

plaint in this case seeks legal as well as equitable remedies. See J.A.

16-17. But because the courts below found that the regulatory regime

on its face preserved significant economic value for the categories of

TDRs petitioner possesses—and because her damages claim was

wholly unsubstantiated by admissible evidence in this case—the mere

assertion of the damages claim should not control the prudential ripe-

ness calculus.

* In light of the substantive taking principles that we have de-

scribed in point I, supra, petitioner necessarily would have lost on the

merits of her takings claim, in light of her complete failure of proof,

JA. 151 n.2, and the undisputed evidence that her TDRs have signifi-

district court was faced with an unusual circumstance in

which (1) both parties contended that the value of peti-

tioner’s property rights under the TDR program was

“jnevitabl[y] speculati[ve]”, J. A. 91; Suitum’s Response to

Defendant’s Memorandum Concerning Its Transfer of De-

velopment Program 2; (2) petitioner proffered no admis-

sible evidence with respect to the overall economic impact

of the challenged restriction on the value of her property

rights, J.A. 151 n.2; and (3) petitioner had made no attempt

to market her TDRs. In those circumstances—and in

light of petitioner’s litigating strategy of resting entirely

on a broad-based attack on the bona fides of the TDR pro-

gram that the courts below correctly rejected“—it was

not error for the district court to conclude that the con-

cant financial value, J. A. 91-93, 96-132. Thus, the “hardship” (see p. 24,

supra) of postponing adjudication in this case appears to have fallen

largely on respondent, which contended in the courts below that the

claim was not yet ripe for adjudication.

* “(Rjipeness decisions may be affected by the way in

which a litigant attempts to articulate a claimed right. An articula-

tion that seems conjectural and uncertain may defeat present decision

where a different articulation might persuade the court of the need to

decide.” 13A C. Wright, A. Miller & E. Cooper, Federal Practice and

Procedure § 3532.3, at 166 (1996 Supp.).

Despite the vituperative nature of petitioner's challenge, see, .

Suitum's Response to Defendant's Memorandum Concerning Its Trans-

fer of Development Program 1-2, she does not purport to pursue a

“facial” challenge to the “mere enactment,” Keystone, 480 U.S. at 494;

Agins, 447 U.S. at 260, of the 1987 Regional Plan. See Pet. Br. 4. But

see note 10, supra. Such a challenge would be ripe in the circumstances

of this case, see Pacific Gas & Electric Co. v. State Energy Resources

Conservation & Dev. Comm'n, 461 U.S. 190, 201 (1983), but would

necessarily fail on the merits because the Regional Plan substantially

advances legitimate state interests in environmental conservation and

does not, on its face, “den[y) an owner economically viable use of his

land.” Agins, 447 U.S. at 260; Nectow v. City of Cambridge, 277 U.S.

183, 188 (1928).

troversy was not yet “appropriate for judicial determina-

tion.” Cf. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227,

240-241 (1937) (per Hughes, C.J.).

tually applying for approval of the transfer of her TDRs,

see J.A. 153, 160-161, would, in our view, erect too rigid a

requirement. In the takings context, the ripeness inquiry

focuses on solidifying the economic uses toward which

be ripe (both constitutionally and prudentially), notwith-

standing her failure to apply to transfer her TDRs.™

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

JANUARY 1997