Amicus Curiae Brief — Suitum v. Tahoe Regional Planning Agency

OCTOBER TERM, 1996

BERNADINE SUITUM, PETITIONER

Vv.

TAHOE REGIONAL PLANNING AGENCY, RESPONDENT

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF AMICUS CURIAE OF THE

AMERICAN FARM BUREAU FEDERATION AND

THE NEVADA FARM BUREAU FEDERATION IN

SUPPORT OF PETITIONER

JOHN J. RADEMACHER Timothy S. BISHOP

General Counsel Counsel of Record

RICHARD L. KRAUSE MICHAEL F. ROSENBLUM

MICHAEL J. STIENTJES JEFFREY W. SARLES

Assistant Counsel MARC R. LISKER

American Farm Bureau Mayer, Brown & Platt

Federation 190 South LaSalle Street

225 Touhy Avenue ‘ Chicago, Illinois 60603

Park Ridge, Illinois 60068 (312) 782-0600

(847) 685-8600

Counsel for Amici Curiae

4\ vv

QUESTION PRESENTED

Amici address the following question:

Whether the first prong of Williamson County’s ripeness

test, properly interpreted, deprives a landowner of a federal

forum for her Fifth Amendment takings claim, where the

challenged regulation destroys all normal beneficial uses of

her property but grants transferable intangible rights, the

value of which may readily be determined.

TABLE OF CONTENTS

QUESTION PRESENTED ................. i

INTERESTS OF THE AMICI ............... 1

ABUFIMMEE wc cece evevet see sae ee 3

I. TOO RIGID APPLICATIONS OF WILLIAM-

SON COUNTY'S RIPENESS REQUIREMENTS

UNDERMINE THE GOALS OF THE JUST

COMPENSATION CLAUSE .......... 5

A. Current Ripeness Rules Unjustifiably Weak-

en Landowners’ Fifth Amendment Rights 6

B. This Court Should Establish More Flexible

And Pragmatic Tests For Finality In Tak-

fe Perrreren 10

II. UNDER A PROPERLY PRAGMATIC AP-

PROACH TO THE FUTILITY DOCTRINE,

PETITIONER’S TAKINGS CLAIM IS RIPE 16

III. BECAUSE IT IS IMMEDIATELY DETERMI-

NABLE THAT TRPA’S REGULATIONS DE-

PRIVED PETITIONER’S LAND OF MUCH

OF ITS VALUE, HER TAKINGS CLAIM IS

, Pewee for 19

TABLE OF AUTHORITIES

Cases: Page

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

As ars 5 Se 66 9 \0-0:%.¢ 6 6 0 « 6, 7, 14

Acierno v. Mitchell, 6 F.3d 970 (3d Cir. 1993) .... 11

Armstrong v. United States, 364 U.S. 40 (1960) .... 23

Beure-Co. vy. United States, 16 Ci. Ct. 42 (1988) ... 17

Corn v. City of Lauderdale Lakes, 95 F.3d 1066

EE )

Dolan v. City of Tigard, 114 S. Ct. 2309

PR eee 5, 8, 16

Duke Power Co. v. Carolina Environmental Study

Group, 438 U.S. 59 (1978) .............. 15

Eastern Minerals Int'l, Inc. vy. United States, 36

EE 17, 18

Florida Rock Indus., Inc. v. United States, 18 F.3d

1560 (Fed. Cir. 1994), cert. denied, 115 S. Ct.

ELD ESL 21

Franklin v. Massachusetts, 505 U.S. 788 (1992) .... 12

Gilbert v. City of Cambridge, 932 F.2d 51 (ist

Cir.), cert. denied, 502 U.S. 866 (1991) ...... 18

iv

Page

Herrington v. City of Pearl, 908 F. Supp. 418 (S.D.

A AE err eS ee eae eh 11

Kinzli v. City of Santa Cruz, 818 F.2d 1449 (9th

Cir. 1987), cert. denied, 484 U.S. 1043

PS ree Peery en sor ok ge 11

Landmark Land Co. v. Buchanan, 874 F.2d 717

CG GE vtec ep evencieeeuncs Vee% 10

Loveladies Harbor, Inc. vy. United States, 28 F.3d

op k &- BS a aoe 21

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

SGD 6-8 ce vs oot bb red 60 passim

MacDonald, Sommer & Frates v. County of Yolo,

A) & | re 7, 8, 16, 17

New Orleans Public Service, Inc. v. New Orleans,

Gb as EE 6 a we cca wh demas ees 15

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

ih Ss <6 ad pine ve eee eres 22

Shelter Creek Dev. Corp. v. City of Oxnard, 838

F.2d 375 (9th Cir.), cert. denied, 488 U.S. 851

ere ore ore re a ae ee 11

Southern Pac. Transp. Co. v. City of Los Angeles,

922 F.2d 498 (9th Cir. 1990), cert. denied, 502

5 se ea be he ea tie 17

v

Page

Traweek v. City & County of San Francisco, 920

F.2d 589, 594 (9th Cir. 1990) ............ 17

Unity Ventures v. Lake County, 841 F.2d 770 (7th

Cir.), cert. denied, 488 U.S. 891 (1988) .... 11, 17

Villas of Lake Jackson, Ltd. vy. Leon County, 796 F.

Supp. 1477 (N.D. Fla. 1992)............ 8,9

Williamson County Regional Planning Commission

v. Hamilton Bank, 473 U.S. 172 (1985) .. . . passim

Miscellaneous:

Blaesser, Closing the Federal Courthouse Door on

Property Owners, 2 Hofstra Prop. L.J. 73

i, Bd ee ed bee wae 66-4 0's 7

Charles Dickens, Bleak House (Alfred A. Knopf ed.,

iis ote aiid cclece wkiaems 6ed0 9 ¢ 15

Fee, Comment, Unearthing the Denominator in

Regulatory Taking Claims, 61 U. Chi. L. Rev.

Dt ais 6 chs de ) week's 6 ou 6 660 21

Kassouni, The Ripeness Doctrine and the Judicial

Relegation of Constitutionally Protected Property

Rights, 29 Cal. Western L. Rev. 1 (1992) ...... i)

Lisker, Regulatory Takings and the Denominator

Problem, 27 Rutgers L.J. 663 (1996) ........ 21

vi

Mixon, Compensation Claims Against Local Govern-

ments for Excessive Land-Use Regulations, 20

Urb. Law. 675 (1988) .......---+-+--

Roberts, Ripeness and Forum Selection in Land-Use

Litigation, in Takings: Land-Development Con-

ditions and Regulatory Takings after Dolan and

Lucas 46 (D. Callies ed., 1996) .........

Stein, Regulatory Takings and Ripeness in the Feder-

al Courts, 48 Vand. L. Rev. 1 (1995) .....

INTERESTS OF THE AMICI

The American Farm Bureau Federation (“AFBF”) is a

voluntary general farm organization established in 1920

under the General Not-For-Profit Corporation Act of the

State of Illinois. AFBF was founded to protect, promote, and

represent the business, economic, social, and educational

interests of American farmers and ranchers. AFBF has

member organizations in all 50 states and Puerto Rico,

representing more than 4.4 million member families. AFBF

has participated as an amicus in this Court in support of

property rights in cases such as Lucas v. South Carolina

Coastal Council, Dolan v. City of Tigard, Babbitt v. Sweet

Home Chapter of Communities for a Great Oregon, and

Bennett v. Spear. Amicus Nevada Farm Bureau Federation

is a constituent member of AFBF, representing the interests

of farmers and ranchers in the State of Nevada, where the

property at issue in this case is located.

The AFBF and Nevada Farm Bureau Federation have a

direct stake in the outcome of this case. Their farmer and

rancher members own or lease significant amounts of land,

on which they depend for their livelihoods and upon which

all Americans rely for food and other basic necessities. That

land is subject to increasingly onerous regulation by federal,

state, and local authorities. Amici are, therefore, vitally

interested in the procedural rules governing litigation under

the Just Compensation Clause, which requires compensation

for takings when such regulation goes “too far.”

In particular, amici believe it essential that the complex

and difficult-to-understand procedural rules that lower courts

have derived from Williamson County and its progeny—rules

that plant a minefield around the courthouse door for even

the best represented landowner—should be simplified and

The consents of the parties to the filing of this amicus brief

are on file with the Clerk.

2

made fairer. These rules evidence a ripeness doctrine spun

out of control. Before they may bring a claim for com-

pensation in federal court, landowners not permitted to make

the most productive use of their land must endure

@ applications and multiple reapplications for permis-

sion to engage in ever more restricted and less economi-

cally viable uses of their private property, in order to

obtain a “final” agency decision;

@ whole new bureaucratic avenues for “relief,” created

by regulatory agencies more with a view to avoiding a

takings judgment than to permitting reasonable uses of

land;

@ multiple levels of costly state court litigation to

determine if state law provides compensation for the

land-use restriction; and

@ the esoteric question whether to make an England

reservation of federal rights in state court proceedings,

which—in the unlikely event that res judicata, collateral

estoppel, or the sheer expense of a second round of

litigation do not prevent it—may conceivably allow the

landowner to bring a takings claim in federal court years

in the future, after all the steps just listed have been

completed.

The Ninth Circuit’s unduly rigid application of the “final

decision” prong of the ripeness rules and its pinched inter-

pretation of the “futility“ exception to ripeness requirements

have the practical effect not simply of delaying a landowner’s

federal takings claim but of barring access to a federal forum

altogether. Many farmers, ranchers, and other landowners,

even when they are able to untangle the rules to understand

exactly what must be done to ripen a Fifth Amendment

claim, cannot afford the substantial resources of time and

money fequired to endure the multiple applications to

3

government agencies (still less the lengthy state judicial

proceedings) that are currently the predicate for a federal

takings suit.

Amici are particularly concerned that, if this Court

endorses the Ninth Circuit's approach to ripeness, the

government delaying tactics currently rife in the development

field will spread to areas of primary concern to farmers and

ranchers. These include decisionmaking on Clean Water Act

Section 401 and 404 wetlands permits, grazing permits, and

Endangered Species Act incidental take permits.

The severe procedural limitations on landowner suits

constructed by the lower courts would be wholly unrecog-

nizable to the Framers of the simple and direct mandate of

the Just Compensation Clause. Amici have a strong interest

in seeing this Court rein in the excesses of the ripeness

doctrine to accord America’s farmers and ranchers a fair

opportunity to vindicate their federal rights to just compensa-

tion in a federal forum.

ARGUMENT

Amici fully agree with petitioner that, correctly analyzed,

this case presents a clear example of a “categorical” taking

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

1003 (1992), because the Tahoe Regional Planning Agency

(“TRPA”) has “denie[d] all economically beneficial or

productive use of [petitioner's] land.” Lucas at 1015.

TRPA’s creation of an abstract and inchoate set of transfer-

able development rights (“TDRs”) leaves Mrs. Suitum with

no economically meaningful use of her land at all. Just as in

Lucas, she has been told that her parcel must “be left

substantially in its natural state” —a restriction that this Court

said “typically” leaves an “owner of land without economi-

cally beneficial or productive options for its use.” 505 U.S.

at 1018. Lucas’s per se rule cannot be evaded by TRPA’s

invention of rights that, although they conceivably may have

4

some economic value, in no sense constitute a “use” of the

parcel to which they attach. Since petitioner's TDRs have no

impact on her ability to make productive use of her land—use

of which she has now been entirely deprived—she need not,

following Lucas, pursue any administrative procedures

associated with those TDRs to ripen her claim.

Petitioner’s arguments on this score are persuasive; amici

will not repeat them here. Rather, amici focus on how the

Court should approach this case if it concludes that the

takings analysis properly proceeds in terms not of “use” but

of “value.” There are three distinct and independent reasons

why, even if Mrs. Suitum’s TDRs provided her with some

value, and value is the correct locus of takings analysis, the

Ninth Circuit erred in refusing to address the merits of her

Fifth Amendment claim.

First, the ripeness doctrine established in Williamson

County Regional Planning Commission v. Hamilton Bank,

473 U.S. 172 (1985), now stands as a substantial obsta-

cle—often the most substantial obstacle—to a landowner’s

ability to obtain just compensation for Fifth Amendment

takings. Amici demonstrate in Part I that lower courts

interpret this doctrine in an unreasonably stringent manner.

Amici urge this Court to make clear that ripeness rules are

to be applied not rigidly but pragmatically and with due

regard to all the particular circumstances, including the harm

that the plaintiff landowner will suffer if consideration of her

takings claim is delayed.

Second, amici show in Part II that, even within the

existing Williamson County framework, the Ninth Circuit

reached the wrong result because it construed the “futility”

exception to the final-decision rule far too narrowly.

Finally, in Part III, amici demonstrate that the Ninth

Circuit’s erroneous refusal to recognize that “partial takings

are compensable led it to a mistaken belief that petitioner's

5

claim turns on whether her land has any remaining value.

This caused the court to attach undue importance to the

question whether transfer of Mrs. Suitum’s TDRs might be

permitted, thereby allowing her to recover a small part of her

investment. In fact, the transferability of Mrs. Suitum’s

TDRs impacts, at most, the amount of just compensation she

is entitled to and should have no effect on the ripeness of her

claims.

The value of Mrs. Suitum’s rights in her land is subject

to proof in the normal way. Both the minimum and maxi-

mum diminutions in value resulting from TRPA’s regulation

are readily determinable and certainly substantial. Since Mrs.

Suitum already incurred the minimum loss of value that could

result from TRPA’s regulatory scheme when TRPA deter-

mined that she could not make economic use of her land but

could only seek to sell her TDRs, and since the amount of

that loss is ascertainable without reference to any TRPA

decision about transfer of TDRs, petitioner should be able to

pursue her compensation claim immediately. Moreover, in

these circumstances we see no good reason why petitioner

should not also be able to obtain a declaratory judgment as

to the Fifth Amendment consequences if TRPA should deny

her the right to transfer her TDRs in the future.

I. TOO RIGID APPLICATIONS OF WILLIAMSON

COUNTY'S RIPENESS REQUIREMENTS UNDER-

MINE THE GOALS OF THE JUST COMPENSA-

TION CLAUSE

This Court has rejected the notion that “the Takings

Clause of the Fifth Amendment, as much a part of the Bill

of Rights as the First Amendment or Fourth Amendment,

should be relegated to the status of a poor relation.” Dolan

v. City of Tigard, 114 S. Ct. 2309, 2320 (1994). Yet the

imposition of uniquely burdensome ripeness rules on takings

claims has precisely that result. As a practical matter, takings

6

plaintiffs—unlike plaintiffs alleging violations of First or

Fourth Amendment rights—simply cannot get into court,

even when they clearly have suffered serious harm. If

property rights are to be afforded the same degree of

protection as other fundamental constitutional rights, the

ripeness limitations on takings suits must be applied in a

more commonsense and flexible manner. See Mixon,

Compensation Claims Against Local Governments for

Excessive Land-Use Regulations, 20 Urb. Law. 675, 687

(1988) (“One need not take sides in the dispute between city

hall and over-regulated landowners to recognize that the

delay inherent in obtaining review of land-use regulations is

as much a part of the costly problem as the substant:ve issue

~ sf-liability”).

A. Current Ripeness Rules Unjustifiably Weaken

Landowners’ Fifth Amendment Rights

Article III requires that a federal court claimant suffer

“injury in fact” and present a genuine “case or controversy.”

Beyond that basic minimum, however, procedural require-

ments designed to ensure that a case is “ripe” for judicial

review are “prudential” in nature. Lucas, 505 U.S. at 1012-

1013. The “basic rationale” of the ripeness doctrine “is to

prevent the courts, through avoidance of premature adjudica-

tion, from entangling themselves in abstract disagreements

over administrative policies, and also to protect the agencies

from judicial interference until an administrative decision has

been formalized and its effects felt in a concrete way by the

challenging parties.” Abbott Laboratories v. Gardner, 387

U.S. 136, 148-149 (1967). To that end, this Court has said,

outside the takings context, that the ripeness “problem is best

seen in a twofold aspect, requiring us to evaluate both the

fitness of the issues for judicial decision and the hardship to

the parties of withholding court consideration.” Jd. at 149.

7

Abbott Laboratories teaches that the goals of the ripeness

inquiry are ill served by using a set of rigid and invariable

rules and demand instead that courts take a “flexible view of

finality” and other ripeness considerations. 387 U.S. at 150.

Whether a dispute is ready for judicial determination often

depends on the specific facts and history of the case—on

details that cannot adequately be captured in a fixed ripeness

rule of general application.

Too often, the lower courts, including the Ninth Circuit

in this case, have lost sight of this need for flexibility when

applying the Williamson County ripeness guidelines for

takings cases. The Williamson County rule for determining

whether a federal takings claim is ripe for federal court

adjudication has two prongs. The first prong, on which

petitioner became impaled, requires that a would-be takings

Claimant obtain “a final, definitive [decision from the

government agency] regarding how it will apply the regula-

tions at issue to the particular land in question.” 473 U.S. at

191. The second requires the claimant to exhaust state court

possibilities of obtaining just compensation before filing a

takings claim in federal court. In applying these guidelines,

many lower courts have disregarded the Abbott Laboratories

admonition that they also take into account “the hardship to

the parties” when evaluating ripeness. Moreover, they have

failed to pay heed to this Court’s caution in MacDonald,

Sommer & Frates v. County of Yolo, 477 U.S. 340, 350 n.7

(1986), a decision on the ripeness of a takings claim subse-

quent to Williamson County, that the ripeness doctrine does

not require a property owner to resort to “unfair procedures”

in order to bring a takings claim to federal court. As a result,

all but a small fraction of federal constitutional land use

claims have been found unripe and thus not justiciable in

federal court. See Blaesser, Closing the Federal Courthouse

Door on Property Owners, 2 Hofstra Prop. L.J. 73, 91

8

(1988) (only 5.6% of land use cases were found to be ripe in

the period from 1983 to 1988).

The reasoning behind the “final decision” requirement is

that a takings claim depends on showing that a regulation

“goes too far,” and that “a final and authoritative determina-

tion of the type and intensity of development legally permit-

ted” on the property is therefore “essential,” because “[a]

court cannot determine whether a regulation has gone ‘too

far’ unless it knows how far the regulation goes.” MacDon-

ald, 477 U.S. at 348. TRPA’s requirement that a property

owner like Mrs. Suitum, who has been deprived of all

possible use of her property, sell TDRs and seek agency

approval of another property owner’s right to use them does

not serve that purpose. A court can determine “how far the

regulation goes” without that additional, surplus, and

ridiculously burdensome step. The fact is, as the district

court found, that Mrs. Suitum “may not develop or build on

the parcel of land she owns.” Pet. App. D3. That is enough

for a court to determine “how far the regulation goes.” And

even if the locus of the inquiry into whether regulation has

gone “too far” is the value of Mrs. Suitum’s TDRs, the

maximum value of those rights is determinable in the usual

way, so that there is no need to delay litigation of Mrs.

Suitum’s takings claim. See Part III, infra.

Ripeness rules that are too rigid invite government

agencies to concoct insurmountable and interminable condi-

tions to finality. This Court’s Takings Clause decisions

repudiate such “gimmickry.” Dolan v. City of Tigard, 114

S. Ct. 2309, 2317 (1994). TRPA’s intricate and unwieldy

TDR scheme certainly appears crafted as just such a tactical

ploy, and the decision of the court below can only encourage

the proliferation of similar devices. Other examples abound.

In Villas of Lake Jackson, Ltd. v. Leon County, 796 F. Supp.

1477 (N.D. Fla. 1992), for example, developers expended a

great deal of time, money, and resources building infrastruc-

9

ture for a multi-family home project, relying on the county’s

permission to do so. But when they applied for the permits

necessary to complete the project, and despite their having

satisfied existing requirements for such permits, the county

passed an ordinance changing the requirements. In a

Kafkaesque scenario lasting some seventeen years, the

developers would meet the new requirements and apply for

the necessary permits, only to have the county pass yet more

stringent ordinances and deny their applications. Finally, the

county abolished the existing multi-family designation,

changing it to single-family and leaving the developers high

and dry. The court, in a vivid display of inflexible adjudica-

tion, denied the developers’ takings claim as unripe because

they had not “requested approval of single family develop-

ment.” 796 F. Supp. at 1481.

Such game-playing by government agencies, seeking to

fend off takings claims, commonly extends the resolution of

land use disputes for years or even decades. See, e.g., Corn

v. City of Lauderdale Lakes, 95 F.3d 1066, 1067 (11th Cir.

1996) (addressing “for the fourth time a 20-year-old dispute”

over whether denial of zoning approval to build a mini-

warehouse constituted a taking). These lengthy delays—just

to obtain a “final decision” and thereby open the courthouse

door to a claim for just compensation—commonly result in

irreparable harm to property owners. After all, most land-

owners depend on financing arrangements that are highly

sensitive to delays in the permitting process. The stretching

of the ripeness time-frame, resulting from an unyieldingly

rigid ripeness doctrine, effectively creates a means test for

entry into federal court: only those with huge financial

resources and the stamina to outlast government bureaucra-

cies can hope to satisfy this test of endurance. See Kassouni,

The Ripeness Doctrine and the Judicial Relegation of

Constitutionally Protected Property Rights, 29 Cal. Western

L. Rev. 1, 11 (1992) (“The time and money required to

10

comply with myriad ripeness requirements will prevent most

middle-class property owners from pursuing their constitu-

tional right to just compensation [and] make substantive

review virtually impossible”). Long delays are now frequent-

ly and unthinkingly treated as the norm. E.g., Landmark

Land Co. v. Buchanan, 874 F.2d 717, 721-722 (10th Cir.

1989) (calling eight-month delay by agency “strikingly

short”).

In sum, the “final decision” requirement, as it was

applied to Mrs. Suitum and is being applied to many other

property owners like her, is no longer limited to its proper

justiciability function; rather, it is being wielded so as to

determine outcomes of land use disputes, always in favor of

the regulators. Many property owners have no choice but to

throw in the towel and relinquish rights supposedly guaran-

teed by the Constitution. See Stein, Regulatory Takings and

Ripeness in the Federal Courts, 48 Vand. L. Rev. 1, 43

(1995) (“Practically speaking, the universe of plaintiffs with

the financial ability to survive the lengthy ripening process

is small”). That is certainly not what this Court intended

when it developed the Williamson County ripeness test.

Otherwise, Mr. Lucas, who never sought a final agency

decision on whether he could build houses on his property,

could never have appeared before this Court. And it is

certainly not what the Framers intended when they inscribed

in the Nation’s founding charter an interdiction against the

taking of private property without just compensation.

Landowners’ experiences in the lower courts since this Court

decided Williamson County demonstrate an urgent need for

a more flexible approach to ripeness.

B. This Court Should Establish More Flexible And

Pragmatic Tests For Finality In Takings Cases

This Court should take the opportunity offered here to

remind the lower courts that, in takings cases no less than

ll

other suits, finality is to be given a flexible construction so

as to facilitate—not preclude—informed federal court review

of federal claims. At this point, neither litigants nor govern-

ment agencies have sufficient guidance as to what constitutes

a final decision for ripeness purposes in the land use area.

Thus, as one commentator notes, it is not “possible to

ascertain in advance exactly when a federal court will find a

given case to be ripe.” Stein, supra, 48 Vand. L. Rev. at

25.

' As further evidence of the mind-numbing complexities of current

ripeness doctrine, many very basic questions regarding the

meaning of the final decision requirement remain unresolved. For

example: From which decisionmaker must one obtain a final

decision? See Unity Ventures v. Lake County, 841 F.2d 770, 775

(7th Cir. 1988) (no final decision where denial of approval to

develop property came from state, rather than city, agency). What

is a “meaningful” application? Must a landowner seek a variance

even if none is available, for example, where a variance is barred

by ordinance? See Shelter Creek Dev. Corp. v. City of Oxnard,

838 F.2d 375, 379 (9th Cir. 1988) (requiring application for an

unavailable variance). How many reapplications and attempts to

obtain variances are necessary? See Unity Ventures, 841 F.2d at

775; Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1452 (9th Cir.

1987). Does only the application that is denied /ast constitute the

final decision? If so, does a property owner waive his or her claim

for compensation for what he or she lost due to the earlier denials?

How is the final decision requirement distinct from exhaustion of

agency remedies? In Williamson County, this Court stated that

exhaustion, in the form of agency review, is not necessary (473

U.S. at 192), yet lower courts continue to rule takings claims

unripe where the claimant did not pursue agency appeals. E.¢..

Acierno v. Mitchell, 6 F.3d 970, 976, 977 (3d Cir. 1993). One

court went so far as to find no final decision under prong one

where the property owner had not sought administrative review by

a state court. Herrington v. City of Pearl, 908 F. Supp. 418, 424

(S.D. Miss. 1995). Uncertainty as to such fundamental issues

12

Under current doctrine, there is inevitably uncertairty

about whether there has been “a final decision regarding ‘:ow

[a property owner] will be allowed to develop its property,”

hence about what value has been taken by regulatory action

and what value remains in the property Williamson County,

473 U.S. at 190. Planning agencies do not advise owners

what they can do with their property, but limit themselves to

making decisions on particular applications. When an

application for a particular use is denied, the owner is rarely

any the wiser about what use would be permitted by the

agency. The owner is instead required to amend his or her

application and try again. A ripeness rule requiring that a

final decision be obtained precisely determining how the

property may be used is unreasonable, because it forces the

owner to reapply to the agency multiple times, each time

seeking more restrictive and less economically viable uses.

It allows the agency, on the other hand, simply to sit back

and withhold any statement of what use it would permit,

knowing full well that this will derail any takings inquiry into

the loss of value that the landowner has incurred.

We suggest that the Court tailor the final decision

requirement to its proper purpose of ensuring that a case is,

in a practical sense, ready for judicial review. See Roberts,

Ripeness and Forum Selection in Land-Use Litigation, in

Takings: Land-Development Conditions and Regulatory

Takings after Dolan and Lucas 46, 56 (D. Callies ed., 1996)

(“the rule ought not force the developer to make repeated,

increasingly meager requests to make a claim ripe”). First,

a more flexible formulation for what constitutes a final

decision should be adopted. The Court’s formulation in

Franklin v. Massachusetts, 505 U.S. 788, 797 (1992)—

“[t}he core question is whether the agency has completed its

makes takings litigation a crapshoot, and the sort of gamble that

most property owners simply cannot afford.

13

decisionmaking process, and whether the result of that

process is one that will directly affect the parties” —gets to

the heart of the matter without imposing the counterproduc-

tive rigidity that courts have read into Williamson County's

statement that there must be a final determination about how

the land can be used. There are cases in which an agency's

elimination of some planned uses may affect the property to

such an extent that a taking has occurred, even if some other

use might possibly be allowed.

Second, a claim should be deemed ripe upon a showing

by the property owner that he or she has sought a final

decision with reasonable diligence. Depending on all the

circumstances, this standard could well be met without an

owner having to make all the reapplications necessary to pin

the agency down on the issue of precisely how it would

allow the property to be used.

As an example of how these standards ought to work,

suppose that a municipality hears that a farmer is planning to

develop for single-family residential use land that is currently

zoned single-family but that has previously been used only

for raising crops. The municipality precipitously changes the

zoning of that property from single-family to agricultural use

or open space. The farmer then applies for and is denied

approval of a single-family development. In those circum-

stances, the farmer’s takings claim should be considered ripe:

it would be unreasonable to require application for a variance

or reapplication for some other use when the actions of the

municipality leave its intentions quite clear.

In addition to adopting these more practically-oriented

general rules of finality in takings cases, this Court should

also recognize equitable exceptions to the final decision

requirement. As we discuss in Part II, infra, as one aspect of

this improvement the futility exception should be fleshed out

so that useless applications are no longer required. But this

14

Court should also adopt two additional equitable exceptions

to the usual ripeness requirements.

The first exception, which we believe is required by

Abbott Laboratories, should be for cases where significant

harm to claimants is demonstrated. Under this hardship

exception, for example, if a landowner who has taken

reasonable steps to obtain a permit can demonstrate that he

or she lacks the means to pursue further applications, the last

decision by the agency is necessarily a final one and should

be subject to constitutional challenge. And even where a

landowner has the means to pursue additional applications,

at some point courts must recognize that the owner's expen-

ditures already made on planners, architects, soil analysts,

engineers, lawyers, and others are enough, and that no more

applications will be required.

Particularly relevant in this case, a second equitable

exception should be recognized where there is evidence of

strategic behavior by regulators. Courts should not accept at

face value odd and elaborate schemes like TRPA’s program

of TDRs, which operate as barriers to a takings suit but

serve no further purpose. When a scheme of newly-created

rights looks like a strategic way to keep a takings claim

unripe rather than a genuine effort to bring relief to landown-

ers, it makes a mockery of the Constitution to require strict

compliance with that scheme to ripen a Fifth Amendment

claim. Here, the essential oddity and impracticability of the

TDR scheme, combined with Mrs. Suitum’s expert evidence

that no owner had been able to make use of the TDR

program, showed that it was merely a ruse and a sham.’

2 The courts below wrongly held that the affidavit of Mrs.

Suitum’s expert, Paul Kaleta, should be excluded because he was

not a qualified appraiser. Pet. App. Al0-All. This misses the

point. As a former TRPA staff member, Mr. Kaleta was well

15

Finally, amici suggest in addition that this Court should

make clear that a property owner may seek a federal court

declaratory judgment that a regulation or its application

constitutes a taking, as opposed to a judgment for compensa-

tion, whether or not the claimant has applied for all possible

variances and reapplications. See Duke Power Co. v.

Carolina Environmental Study Group, 438 U.S. 59, 71 n.15

(1978); New Orleans Public Service, Inc. v. New Orleans,

491 U.S. 350, 372 (1989). As a practical matter, the

possibility of an early judicial look at the merits of a takings

claim would likely encourage more realistic and open

behavior on the part of the land use agency and make

delaying tactics less attractive. It should cause agencies to be

more forthcoming about what uses they would allow on the

property, and more helpful to landowners in suggesting ways

in which plans could be modified to meet approval.

By such measures, the Court would restore balance to

ripeness analysis and thereby head off a deviant doctrine,

epitomized by the decision below, “which gives to monied

might, the means abundantly of wearying out the right;

which so exhausts finances, patience, courage, hope” as to

leave property owners “perennially hopeless.” Charles

Dickens, Bleak House 3, 4 (Alfred A. Knopf ed., 1991).

qualified to testify as to whether the TDR program was a sham.

He testified that the chance of Mrs. Suitum receiving a building

allocation was “minuscule,” that each of the six allocations issued

in Washoe County in 1993 “were returned back to Washoe County

because there was no market for the transferable allocations and

they could not be sold,” and that “[nJo market exists” for devel-

opment rights and associated bonus units. Kaleta Aff., ¢4 4-6. This

evidence was highly relevant to the issues of whether the TDR

scheme was a sham and whether an application pursuant to that

scheme would have been futile, and it should not have been

excluded.

16

Property rights are too important to “be relegated to the

status of a poor relation.” Dolan, 114 S. Ct. at 2320. There

is no valid reason why ripeness requirements should permit

the vindication of constitutional property rights only in the

most extraordinary circumstances. A right lacking a practical

means of vindication is but an empty shell. This Court

should ensure that Mrs. Suitum—and all reasonably diligent

property owners with a plausible takings claim—are not

capriciously barred from federal court.

Il. UNDER A PROPERLY PRAGMATIC APPROACH

TO THE FUTILITY DOCTRINE, PETITIONER’S

TAKINGS CLAIM IS RIPE

Although this Court has never addressed in any detail the

futility exception to Williamson County's finality require-

ment, there can be little doubt that such an exception exists.

Writing for four members of the Court in dissent in Mac-

Donald, Justice White stated that while “a landowner must

pursue reasonably available avenues that might allow relief,

it need not * * * take patently fruitless measures.” “Nothing

in [this Court’s cases],” Justice White observed, “suggests

that the decisionmaker’s definitive position may be deter-

mined only from explicit denials of property-owner applica-

tions for development. Nor do these cases suggest that

repeated applications and denials are necessary to pinpoint

that position.” 477 U.S. at 359. Subsequently, in Lucas, a

majority held that Mr. Lucas’ failure to submit a plan for

development was not a bar to reaching the merits of his

takings claim, because “such a submission would have been

pointless.” 505 U.S. at 1012 n.3.

The question whether the pursuit of agency approval for

a land-use project would be “patently fruitless” because the

agency has already indicated its “definitive position” is, we

suggest, a factual one, properly dependent on all the circum-

stances. There is no conceivable warrant for restricting the

17

breadth of that inquiry through arbitrary formulas about what

procedures a landowner must follow before he or she may

make a futility argument. Although the lower federal courts

have generally acknowledged that there is some sort of

futility exception to finality, and have even, on occasion,

found pleas to regulators to be futile, e.g., Eastern Minerals

Int’l, Inc. v. United States, 36 Fed. Cl. 541, 547 (1996);

Beure-Co. v. United States, 16 Cl. Ct. 42 (1988), they have

limited the scope of the exception for no discernable reason

other than to restrict landowners’ access to the federal courts.

See, e.g., Traweek v. City & County of San Francisco, 920

F.2d 589, 594 (9th Cir. 1990).

For example, most courts that have addressed the issue

have concluded that the futility exception cannot apply until

the landowner has made at least one application and that

application has been denied. E.g., Eastern Minerals, 36 Fed.

Cl. at 548 (“Each plaintiff must satisfy the threshold require-

ment of a single meaningful application to maintain the

futility exception”); Southern Pac. Transp. Co. v. City of

Los Angeles, 922 F.2d 498 (9th Cir. 1990) (same); Unity

Ventures v. Lake County, 841 F.2d 770 (7th Cir. 1988)

(same). Under this rule, petitioner arguably could not have

availed herself of the futility exception, because she had not

yet had an application to transfer useable TDRs denied.

This “one unsuccessful application” gloss on the futility

rule is insupportable—as is any arbitrary rule limiting a

court’s duty to inquire into all the facts relevant to the

question whether the agency has definitively made up its

mind. Justice White’s observation that “[a] decisionmaker’s

definitive position may sometimes be determined by factors

other than its actual decision on the issue in question”

(MacDonald, 477 U.S. at 359) is assuredly true, and it

cannot be limited to situations where one application (or

some other arbitrary number) has been denied.

18

Eastern Minerals provides an example of the capricious

results that flow from unduly restricting the futility inquiry.

There, the government’s statements made clear that no

application to mine a particular seam of coal would be

approved. The Court of Claims held ripe the takings claim of

one owner, whose first permit had been denied, because the

evidence showed that further applications would likewise be

denied. But it held unripe the claims of a second owner who

declined to make an application because he knew’, from the

experience of the first owner, that any application he made

would be rejected. That ruling. amici submit, was in error.

The test for futility should be a purely factual one: do the

circumstances show that an application—even a first applica-

tion—would be futile. The denial of another owner’s applica-

tion for reasons that edmit of no exceptions and that apply

equally to the plaintiff is enough, amici believe, to establish

futility; and there are countless other ways in which futility

might be shown in a particular case though no application

had yet been denied.

A better, more flexible statement of the futility exception

to finality, amici suggest, is that of the First Circuit in

Gilbert v. City of Cambridge, 932 F.2d 51, 61 n.12 (ist Cir.

1991): the exception applies “where the degree of hardship

that would be imposed by waiting for the permit process to

run its course is so substantial and severe, and the prospects

of obtaining the permit so unlikely, that the property may be

found to be meaningfully burdened and the controversy

concrete enough to warrant immediate judicial intervention.”

An important “hardship” factc. in applying that standard is

the plaintiff's current inability to make any use of the land.

Ibid.

In Mrs. Suitum’s case, the excluded evidence of her

expert that the TDR scheme was a sham and that no market

for TDRs actually existed was certainly relevant to the

question of futility. See supra, note 2. If that evidence had

19

been accepted—and as a former TRPA official the witness

was surely well qualified—the court would have been forced

to conclude that any effort by petitioner to sell her TDRs was

futile. The futility exception should have applied in this case.

More important for the development of the law in this area,

this Court should disapprove the baseless constraints that

lower courts have imposed on the futility inquiry and make

clear that futility is a purely factual issue, subject to proof in

innumerable ways and without arbitrary preconditions.

Il. BECAUSE IT IS IMMEDIATELY DETERMI-

NABLE THAT TRPA’S REGULATIONS DE-

PRIVED PETITIONER’S LAND OF MUCH OF

ITS VALUE, HER TAKINGS CLAIM IS RIPE

The Ninth Circuit accepted TRPA’s valuation of Mrs.

Suitum’s TDRs and excluded her expert’s evidence that the

whole TDR scheme was a sham and the TDRs had no market

value. Though amici believe that this was error, even on that

basis the court should have recognized that petitioner had a

ripe takings claim. TRPA’s evidence fixed the maximum

value of the TDRs, and, comb.ned with evidence of the value

of Mrs. Suitum’s lot with her right to build a single-family

home, allowed calculation of the minimum loss that petition-

er suffered as a result of the TDR scheme. The only remain-

ing uncertainty was whether petitioner would in future suffer

a greater loss if she were denied approval for the transfer of

useable TDRs.

In those circumstances, where the minimum loss of value

of property is fixed and the only issue is whether a greater

loss will be incurred through future regulatory action, amici

believe that a claim for a partial taking is ripe. Any other

rule would be grossly unfair to landowners: government

could prevent a takings claim simply by retaining the power

to take more of the property in the future!

20

The Ninth Circuit did not even consider this ripeness

question, for it made the fundamental mistake of denying that

there is such a thing as a constitutionally cognizable partial

taking. It held, inexplicably, that “[t]he imposition of

regulatory ordinances that merely diminish the value of

property does not constitute a taking.” Pet. App. A12. It is

important that this Court take the opportunity to correct this

misinterpretation of the Fifth Amendment.

In Lucas, this Court held that a regulation that deprives

the owner of a parcel of “all economically beneficial or

productive use of [the] land” constitutes a taking and is

“compensable without case-specific inquiry into the public

interest advanced in support of the restraint.” 505 U.S. at

1015 (emphasis added). Contrary to the Ninth Circuit,

however, this sort of “categorical” taking is not the sole

form of taking governed by the Fifth Amendment. Lucas’s

categorical rule does not operate to the exclusion of the

principle that a substantial diminution in value can also be a

compensable partial taking.

In fact, the Court in Lucas refuted the dissent’s conten-

tion that the categorical rule was arbitrary because “[a]

landowner whose property is diminished in value 95%

recovers nothing, while an owner whose property is dimin-

ished 100% recovers the land’s full value.” Lucas, 505 U.S.

at 1064 (Stevens, J., dissenting). The Court observed that

“[t}his analysis errs in its assumption that the landowner

whose deprivation is one step short of complete is not

entitled to compensation.” Jd. at 1019 n.8. The Court noted

that “[s]uch an owner might not be able to claim the benefit

of our categorical formulation,” but that “‘[t}he economic

impact of the regulation on the claimant and * * * the extent

to which the regulation has interfered with distinct invest-

ment-backed expectations’ are keenly relevant to takings

analysis generally.” /bid.

21

Although this Court has not yet had occasion to flesh out

the partial takings inquiry outlined in Lucas, the Federal

Circuit has squarely addressed it and has concluded, contrary

to the Ninth Circuit, that a substantial diminution in value

may amount to a compensable partial taking. See Florida

Rock Indus., Inc. v. United States, 18 F.3d 1560 (Fed. Cir.

1994) (finding that a taking may have occurred when the

value of land was reduced by approximately sixty percent).°

The Federal Circuit correctly noted that “[njothing in the

language of the Fifth Amendment compels a court to find a

taking only when the Government divests the total ownership

of the property; the Fifth Amendment prohibits the uncom-

pensated taking of private property without reference to the

owner's remaining property interests.” Jd. at 1568.

The Ninth Circuit’s unreasoned rejection of partial

takings should not go uncorrected, since it appears to have

infected the court’s ruling on ripeness. The Ninth Circuit’s

failure to recognize that partial takings can be compensable

led it to conclude that petitioner’s takings claim turns on

whether her land has some remaining value. Therefore, the

court focused on whether petitioner would be permitted to

> Far from being no such thing as a partial taking, there are two

different situations in which, the Federal Circuit has recognized,

compensation for a partial taking may be constitutionally required.

The first is where there has been a substantial diminution in the

value of the parcel as a whole, as occurred in this case and in

Florida Rock. The second is where circumstances suggest that the

dimunition-in-value inquiry is properly directed not at the entire

parcel but at a discrete sub-unit of the parcel. That issue was

addressed by the Federal Circuit in Loveladies Harbor, Inc. v.

United States, 28 F.3d 1171 (Fed. Cir. 1994). See, e.g., Lisker,

Regulatory Takings and the Denominator Problem, 27 Rutgers L.J.

663 (1996); Fee, Comment, Unearthing the Denominator in

Regulatory Taking Claims, 61 U. Chi. L. Rev. 1535 (1994).

22

transfer useable development rights and whether this transfer

would result in a “mere” diminution in the value of petition-

er’s “bundle of rights” in the parcel, rather than in a

compensable “total” taking. But if a less-than-complete

diminution in value can be a compensable taking, there was

no need for petitioner to go through the TDR process before

stating a ripe takings claim. The value of Mrs. Suitum’s

land, both free from and subject to TRPA’s regulatory

scheme, was readily ascertainable. The minimum diminution

in value was calculable by taking TRPA’s own figures for

the value of the TDRs, and the case presented the ripe

question whether that diminution was substantial enough to

amount to a compensable partial taking.‘

Moreover, the maximum diminution in the value of

petitioner’s parcel is readily determinable as well, merely by

4 Mrs. Suitum and her late husband acquired the parcel at issue in

1972. On three sides of the parcel are lots with residences, and the

fourth borders on a paved street. When petitioner submitted to

TRPA in 1989 a plan to build a residence on the property, she was

told that the parcel was in a Stream Environmental Zone (“SEZ”),

and that no new land coverage was permitted there. The idea of an

SEZ was created by the 1987 TRPA Plan, which was drafted

pursuant to the 1980 Tahoe Regional Planning Compact. Pet. App.

A4-A6. Thus, as in Lucc> Mrs. Suitum owned the parcel at issue

prior to the imposition 0. che regulatory scheme that required her

to leave her land in its natural state. Under the ad hoc test of Penn

Central, it is important to consider both the “economic impact of

the regulation” on petitioner and “the extent to whict. the regula-

tion has interfered with [her] distinct investment-backed expec-

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

104, 124 (1978). The economic impact of TRPA’s regulatory

scheme on petitioner appears to be substantial; and, given her

reasonable expectation, at the time of the purchase of the parcel,

that she would be able to build a residence, there also has been an

23

assuming that TRPA in the future denies approval of the

transfer of Mrs. Suitum’s TDRs. It would be extremely

wasteful of judicial and litigant resources if petitioner were

not allowed to proceed with a declaratory judgment action,

seeking a declaration that if TRPA were to disallow the

transfer of useable TDRs, a compensable taking would then

have occurred. Since petitioner’s minimum and maximum

losses are ascertainable now, it makes sense to allow a single

action to go forward claiming compensation for a partial

taking and a declaration that a complete taking will occur

upon denial of the right to transfer petitioner's TDRs. A

declaratory judgment will assist TRPA as well as petitioner,

by enabling the agency to make a decision on her application

to transfer TDRs with full information about the takings

consequences of denying her application.

This case perfectly illustrates the incredibly burdensome

procedural rules and substantive uncertainties that mar the

law of takings, making a day in federal court an unlikely

prospect for even the most overregulated landowner. Amici

urge this Court to infuse this area with a healthy dose of

reality, tying the rules of ripeness to the actual experience of

landowners once they enter the regulatory maze. Change is

essential to restore the promise of the Fifth Amendment that

government may not “forc{e] some people alone to bear

public burdens which, in all fairness and justice, should be

borne by the public as a whole.” Armstrong v. United States,

364 U.S. 40, 49 (1960).

24

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted.

JOHN J. RADEMACHER

General Counsel

RICHARD L. KRAUSE

MICHAEL J. STIENTJES

Assistant Counsel

American Farm Bureau

Federation

225 Touhy Avenue

Park Ridge, Illinois 60068

(847) 685-8600

NOVEMBER 1996

Timothy S. BISHOP

Counsel of Record

MICHAEL F. ROSENBLUM

JEFFREY W. SARLES

MARC R. LISKER

Mayer, Brown & Platt

190 South LaSalle Street

Chicago, Illinois 60603

(312) 782-0600

Counsel for Amici Curiae