Amicus Curiae Brief — Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency

No. 00-1167

= osw

IN THE

Supreme Court of the Anited States

TAHOE SIERRA PRESERVATION COUNCIL, INC., ef a/..

Petitioners,

Vv.

TAHOE REGIONAL PLANNING AGENCY, ef ai...

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE COUNCIL OF STATE GOVERNMENTS,

NATIONAL LEAGUE OF CITIES, NATIONAL

CONFERENCE OF STATE LEGISLATURES,

NATIONAL ASSOCIATION OF COUNTIES,

NATIONAL GOVERNORS ASSOCIATION,

INTERNATIONAL CITY-COUNTY MANAGEMENT

ASSOCIATION, INTERNATIONAL MUNICIPAL

LAWYERS ASSOCIATION, AND U.S. CONFERENCE

OF MAYORS AS AMICI CURIAE

IN SUPPORT OF RESPONDENTS

TIMOTHY J. DOWLING RICHARD RUDA *

DOUGLAS T. KENDALL Chief Counsel

COMMUNITY RIGHTS COUNSEL STATE AND LOCAL LEGAL CENTER

1726 M Street, N.W. 444 North Capitol Street, N.W.

Suite 703 Suite 345

Washington, D.C. 20036 Washington, D.C. 20001

(202) 296-6889 (202) 434-4850

* Counsel of Record tor the

Amici Curiae

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

|BEST AVAILABLE COPY

nr een a

sea aaii aaammammmmanta

QUESTION PRESENTED

Whether the Court of Appeals properly determined that a

temporary moratorium on land development does not

constitute a taking of property requiring compensation under

the Takings Clause of the United States Constitution.

(i)

TABLE OF CONTENTS

Page

QUESTION PRESENTED ..0...ccsscsscccsssssscssssssssssscssssseees

TABLE OF AUTHORITIES ..........ccccsccsccesscssesssssvecessee iv

INTEREST OF THE AMICI CURIAE ...ccccecscccvessssvvesoe

SUMMARY OF ARGUMENT .......ccccssccssssvcssssvesssseeen

a 2

I. MORATORIA ARE AN ESSENTIAL AND

WELL-ACCEPTED PART OF LAND-USE

Il. THE TAHOE MORATORIUM DID NOT

EFFECT A PER SE TAKING UNDER

EE 10

A. Lucas Does Not Create A “Right -To

EC 10

B. Petitioners’ Land Retained Both Use and

Reasonable Economic Value, Thereby

Foreclosing A Per Se Taking Under

Ii iacltticecnncrarenenneuemsecsestnenetessenscecssusscecessese 13

C. Longstanding Precedent Governing Just

Compensation Supports Consideration Of

Petitioners’ Remaining Uses And Value In

Evaluating Their Lucas Claim. ...............0+++ 17

D. Petitioners’ Per Se Ruie Would Create

Doctrinal Chaos Under The Takings

EE EEE 19

Ill. PETITIONERS’ ATTEMPT TO BLUR THE

DISTINCTION BETWEEN PHYSICAL

INVASIONS AND LAND-USE REGU-

LATION CONTRAVENES THE ENTIRE

CORPUS OF REGULATORY TAKINGS

FURTBPRUDEINTE occccecsccsccscssccscoscssccsecsscscscesvees 21

CE AO crcctsseccccesorccessceccssccccsccsscscsseseccsccccsocsocceces 25

iv

TABLE OF AUTHORITIES

Cases Page

Agins v. City of Tiburon, 447 U.S. 255 (198V)..... 12

Almquist v. Town of Marshan, 245 N.W.2d 819

a Ce Oe ccerttanndinttbinciaciontindaiiamatedeititinniitsias 8

Andrus v. Allard, 444 U.S. 51 (1979) ....ccccccccceceoee 21

Arizona v. Maricopa County Medical Soc'’y,

Se ns SN rerreentertincetenscnniitiniiaiateiadass 20

Assateague Island Condemnation Cases, 356 F.

Supp. 357 (D. Md.), aff'd, 487 F.2d 1397-99

RIE a ae Oe 18

Boom Co. v. Patterson, 98 U.S. 403 (1878).......... 17

Cappture Realty Corp. v. Board of Adjustment,

313 A.2d 624 (N.J. Super. Ct. 1973)...ccccceccceeoes 6

City of Lafayette v. Richard, 549 So.2d 909 (La.

ETERS TE 18

Claridge v. New Hampshire Wetlands Board,

485 A.2d 287 (N.H. 1984) .00......ccccccccccecceccecceeee 18

Collura v. Town of Arlington, 329 N.E.2d 733

I, Cire ehiatntineritntitcirateintiinintinteihiiaineiiies 5,7

Dolan v. City of Tigard, 512 U.S. 374 (1994)...... 1,4

Downham v. City Council of Alexandria, 58

Pe fF fk SG ee 5,8

Eastern Enterprises v. Apfel, 524 U.S. 498

Sa hearciparctnintiinianiieanitciaiiciaaiciedaisiiateitentti tines 8

First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304

CEIIUP cainrssinhinemenapstintenbstiptmntatesinatenitieesitats 1, 2,21, 22

First English Evangelical Lutheran Church v.

County of Los Angeles, 258 Cal. Rptr.

893 (Ct. App. 1989), cert. denied, 493 U.S.

Florida Rock Indus., Inc. v. United States, 791

F.2d 893 (Fed. Cir. 1986), cert. denied, 479

SA FEED COMIG Pencerrsnsrcineysnecnipantiontidinesicetviiaians 12

\

TABLE OF AUTHORITIES—Continued

Page

Front Royal & Warren County Indus. Park

Corp. v. Town of Front Royal, 135 F.3d 275

le 3 12

Hadacheck v. Sebastian, 239 U.S. 394 (1915)...... il

Hodel vv. Virginia Surface Mining &

Reclamation Ass'n, 452 U.S. 264 (1981).......... 13

Keystone Bituminous Coal Co. v. DeBenedictis,

GBD UB. SFO (1987) nccccccccsscescrscesccsccessssscescese 12, 13, 24

Lake Illyria Corp. v. Town of Gardiner, 352

N.Y.S.2d 54 (App. Div. 1974) .........cecceceereeneees 8

Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982)........ccceceeseeneeeenennnes passim

Louisiana v. Nassar, 512 So.2d 1221 (La. Ct.

App. 1987) .......cecccsoscscecsercscserersesesrenesenenscsesseess 18

Lucas v. South Carolina Coastal Council, 505

CIB. BBBB (IGT nnceccccscccccscccsccssncssssssessnsssscssssece passim

Mayhew v. Town of Sunnyvale, 964 S.W.2d

922 (Tex. 1998), cert. denied, 526 U.S.

9066 COG cenccoccccsascsresccscsscecsesscssscrssssnsssssessscess 12

Olson v. United States, 292 U.S. 246 (1934)........ 17

Palazzolo v. Rhode Island, 121 S. Ct. 2448

CBB 1) nccccevcccsccscccsesscescesesseccsnsssssnsesnsessoscsscssosssees passim

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

43B UB. 106 (1DTE) n.ecrccccccescesccscssescssceccsccsscssees passim

Pennsylvania Coal Co. v. Mahon, 260 U.S.

|: ee 13, 21, 22, 23

Pompa Constr. Corp. v. City of Saratoga

Springs, 706 F.2d 418 (2d Cir. 1983) ...........+-+- 12

Rith Energy, Inc. v. United States, 2001 WL

1380899 (Fed. Cir. Nov. 5, 2001) ............cc-e00e0 12

San Diego Gas & Elec. Co. v. City of San

Diego, 450 U.S. 621 (1981) .......-.ccecereeeereneeenees 21

nS i ee ee

vi

TABLE OF AUTHORITIES—Continued

Page

Schafer v. City of New Orleans, 743 F.2d 1086

EL ae See 5

State ex rel. SCA Chemical Waste Services, Inc.

v. Konigsberg, 636 S.W.2d 430 (Tenn. 1982) .. x

Suitum v. Tahoe Reg'l Planning Agency, 520

ey Se ectrsrniinnncttdtlitiiniiiatetinaiinil 1, 13

United States v. Central Eureka Mining Co.,

of ESS eee 23-24, 24

United States v. Fuller, 409 U.S. 488 (1973)........ 17

United States v. Pewee Coal Co., 341 U.S. 114

| SE ERS REL IAEA 23, 24

United States v. Powelson, 319 U.S. 266 (1943).. 14

United States v. Virginia Elec. & Power Co.,

a er ee 18

Village of Euclid v. Ambler Realty Co., 272

ES 4

Washington Legal Found. v. Texas Equal

Access to Justice Found., 2001 WL 1222105

ee 9

Williams v. City of Central, 907 P.2d 701 (Colo.

FS ee 7

Williamson County Reg’! Planning Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985)............00. 22-23

Woodbury Place Partners v. City of Woodbury,

492 N.W.2d 258 (Minn. Ct. App. 1992), cert.

denied, 508 U.S. 960 (1993) .....cccccccccccssssssseesee 7

Yee v. City of Escondido, 503 U.S. 519 (1992)..... 23

Zilber v. Town of Moraga, 692 F. Supp. 1195

vii

TABLE OF AUTHORITIES—Continued

— | |

Office of the Attorney General, Opinion No.

JC-0142, 1999 WL 1028693 (Tex. A.G.

Nov. 10, 1999) ........ccccccssssesesseessennsensesennsnreseneeens

Portland, OR, Ordinance 175298 (Jan. 31, 2001)..

Patrick J. Rohan, ZONING AND LAND USE

Page

on

INTEREST OF THE AMICI CURIAE

Amici’s members include state and local governments and

officials throughout the United States. These officials “have

long engaged in the commendable task of land use planning.”

Dolan v. City of Tigard, 512 U.S. 374, 396 (1994). They

bring a vital perspective to regulatory takings issues, and they

have submitted amicus briefs in many takings cases. See,

e.g., Palazzolo v. Rhode Island, 121 S. Ct. 2448 (2001);

Suitum v. Tahoe Reg'l Planning Agency, 520 U.S. 725

(1997); Lucas v. South Carolina Coastal Council, 505 U.S.

1003 (1992); First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987). Amici have a

compelling interest in preserving their ability to adopt reason-

able development moratoria and demonstrating that these

moratoria do not constitute per se takings. Because of the

importance of these issues to amici and their members, amici

submit this brief to assist the Court in its resolution of

this case.

SUMMARY OF ARGUMENT

1. Reasonable, temporary development moratoria are an

essential and widely used tool of land-use planning. They

temporarily preserve historic land-use patterns so that new

development does not undermine planning efforts. They also

allow state and local officials to address threats to public

safety from floods, fires, and the like. Courts regularly uphold

reasonable moratoria against takings challenges, and they use

the multifactor inquiry under Penn Central Transp. Co. v.

City of New York, 438 U.S. 104 (1978), the Due Process

Clause, and state-law doctrines to strike down moratoria that

' Counsel for the parties did not author this brief in whole or in part.

No person or entity other than the amici, their members, and their counsel

made a monetary contribution to the preparation or submission of this

brief. The parties have consented to the filing of amicus briefs, and on

September 6, 2001, they filed a blanket consent.

2

are imposed in bad faith, unrelated to a legitimate purpose, or

otherwise unreasonable. No court has adopted the sweeping

per se rule proposed by petitioners.

2. The Tahoe moratorium is not a per se taking under

Lucas. To prevail under Lucas, a landowner must show that

regulation deprives the land of “all economically beneficial or

productive use.” 505 U.S. at 1015. Lucas and other prece-

dents make clear that where existing or future uses allow land

to be sold for more than nominal value, no Lucas taking has

occurred. Petitioners, however, deliberately declined to intro-

duce value evidence. In contrast, respondents provided

expert appraisal evidence showing that the land covered by

the Tahoe moratorium retained “reasonable economic value,”

Tr. 1408, with lots selling for as much as $110,000 in private

sales at that time. J.A. 134. Petitioners’ failure of proof

defeats their Lucas claim.

Petitioners argue that a per se taking occurs where regula-

tion denies a landowner the immediate ability to use land.

But there is no “right of immediate use” whose temporary

deprivation automatically gives rise to takings liability.

Precedent governing the award of compensation in takings

cases also counsels strongly in favor of ruling that there was

no Lucas taking. Moreover, the relationship between the

Lucas per se rule and the Penn Central multifactor inquiry

reinforces the conclusion that no per se taking occurred.

3. Petitioners improperly conflate the clear distinction

between physical occupations and land-use regulation that

runs throughout takings jurisprudence. Nothing in First

English obliterates this long-recognized distinction, which the

Court reaffirmed as recently as last Term in Palazzolo.

ARGUMENT

Petitioners advance a radical position. They argue that a

temporary ban on all land use—‘for whatever period of

time”— is a per se taking under Lucas. Pet. Br. 47. No court

has ever adopted such a sweeping per se rule.

3

The posture of this case leaves them no choice but to

rely on this extreme theory. The trial court ruled (Pet. App.

88-92) that the Tahoe moratorium is not a taking under the

multifactor inquiry set forth in Penn Central Transp. Co. v.

City of New York, 438 U.S. 104, 124 (1978), a ruling that

petitioners did not appeal. Pet. App. at 18-19. Nor did they

appeal the trial court’s finding that the Tahoe moratorium was

a good-faith (id. at 68-69) and “proportional” response (id.

at 86) to threats posed by unplanned development. See also

id. at 115 (“we do not see how TRPA could have reached

agreement on a regional plan any sooner”). To prevail,

petitioners must contend that Lucas’s per se rule applies to

every temporary moratorium on land development, regardless

of its duration or reasonableness.

Due to petitioners’ radical argument, the stakes in this case

extend far beyond Lake Tahoe, the precious natural resource

at issue. Petitioners’ per se rule would require compensation

not only for temporary development moratoria, but also

government-compelled temporary facility closures and many

other regulatory actions that temporarily prohibit the use of

land. Under petitioners’ per se theory, these temporary

restrictions would require compensation no matter how

narrow in scope and duration, no matter how slight the

economic impact on the landowner, and no matter how

weighty the government justification.

In contrast, respondents take a moderate position. They

acknowledge that moratoria may constitute a taking under

Penn Central’s multifactor inquiry, but contend that

moratoria do not constitute a per se taking in every case. As

shown below, respondents’ approach is the only one

consistent with Lucas and other regulatory takings cases.

This longstanding precedent preserves the ability of state and

local officials to implement reasonable moratoria, but

provides for compensation where a moratorium truly rises to

the level of confiscatory government action.

4

Section I of this brief shows that petitioners’ proposed

se rule would severely undermine to seme amine

that protect public health, safety, and welfare. Section II

demonstrates that petitioners cannot prevail under Lucas

because they failed to show that the Tahoe moratorium left

their land with little or no value. Section III shows that

petitioners improperly ignore the long-recognized distinction

re oo invasions and land-use restrictions that

applies w etermining whether a taki

under the Fifth paso , Big: “eatiarnate

I. MORATORIA ARE AN ESSENTIAL AND

WELL-ACCEPTED PART OF LAND-USE

PLANNING.

1. State and local officials “have long en in

commendable task of land use shales sap thte

by increasing urbanization.” Dolan v. City of Tigard

$12 U.S. 374, 396 (1994). Since the landmark ruling in

Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926),

the Court has upheld planning efforts used to enhance

property values and protect communities. See id. at 394.

Moratoria are essential to sound planning. Comprehensiv

plans are not detailed blueprints for all re pment

but instead a set of flexible policies that must be revised to

meet changing conditions. Moreover, good land-use planning

takes time. Absent a temporary delay in issuing new permits,

planning could be undermined by new development. Courts

? In addition to arguing that all temporary denials of use are

takings, petitioners assert that the Tahoe moratorium is permanent. This

assertion goes beyond both the question presented and the record, which

contains no evidence regarding whether the 1987 Regional Plan deprived

petitioners’ land of beneficial use. The record is silent on this issue

precisely because the trial court dismissed the claims against the 1987

Plan as time-barred, see Pet. App. 128-55, a ruling affirmed on appeal, see

id. at 47-56, and not included within the question presented.

5

long have recognized that planning efforts often trigger a rush

to the permit office by developers hoping to obtain vested

rights before new controls are implemented. See, e.g.,

Downham v. City Council of Alexandria, 58 F.2d 784, 788

(E.D. Va. 1932) (planning “frequently precipitate[s] a race of

diligence”; absent a moratorium, planning would be “like

locking the stable after the horse is stolen”). Without

moratoria, new construction could undercut planning

measures before they see the light of day. See Schafer v. City

of New Orleans, 743 F.2d 1086, 1090 (Sth Cir. 1984) (“a

moratorium may be necessary to prevent a plan’s defeat

before it is formulated”).

Development moratoria also promote public participation

in~ planning. Where moratoria authority is lacking,

municipalities sometimes adopt hastily prepared, permanent

controls insensitive to the needs of certain landowners.

“{W]ith the adoption of an interim provision [the landowner]

is made aware that a new plan is in the offing and is thus able

to participate in the debate over what that new plan should

contain.” Collura v. Town of Arlington, 329 N.E.2d 733, 737

(Mass. 1975). The Tahoe moratorium, for example, allowed

respondents to attend the many public meetings preceding the

adoption of the permanent controls set forth in the Regional

Plans. See, e.g., Exhibit D-320, at p. 7 (observing that

respondents “actively participated in the entire TRPA

regional planning process leading to the adoption of the

amended Regional Plan” and submitted comments at each

public hearing on the Plan).

2. Development moratoria are used in a wide variety of

contexts. They assist municipalities in addressing overbur-

dened public services such as schools, roads, and sewers. To

cite but one example, the town of Flower Mound, Texas—

one of the fastest growing areas in the country—recently used

a moratorium to assist in development of a comprehensive

plan where uncontrolled growth threatened to overwhelm the

6

town’s water, wastewater, and transportation systems. See

Office of the Attorney General, Opinion No. JC-0142, 1999

WL 1028693 (Tex. A.G. Nov. 10, 1999). Moratoria facilitate

historic preservation, floodplain manage-ment, protection of

ecologically sensitive land, redevelop-ment of blighted urban

areas, and revision of subdivision regulations. See 3 Patrick

J. Rohan, ZONING AND LAND USE CONTROLS § 22.01 (1998).

Development moratoria also are used to address imminent

threats to public health and safety. In Cappture Realty Corp.

v. Board of Adjustment, 313 A.2d 624 (N.J. Super. Ct. 1973),

the court upheld a three-year moratorium in flood-prone areas

so that local officials could complete flood-control projects.

Likewise, in Zilber v. Town of Moraga, 692 F. Supp. 1195

(N.D. Cal. 1988), the court upheld an 18-month moratorium

on unstable slopes pending the adoption of appropriate

construction guidelines. In First English, on remand from

this Court, the state court upheld the challenged moratorium

largely because it was imposed in response to floods that had

drowned ten people and caused millions of dollars in property

damage. See First English Evangelical Lutheran Church v.

County of Los Angeles, 258 Cal. Rptr. 893, 895, 898-901 (Ct.

App. 1989), cert. denied, 493 U.S. 1056 (1990).

The 21st century is bringing unforeseen challenges

requiring the use of moratoria. The City of Portland, Oregon

recently used a moratorium to protect its investment in

central-city streetcar infrastructure against unforeseen threats

posed by “telco hotels.” See Portland Ordinance 175298

(Jan. 31, 2001). Telco hotels are large buildings occupied by

equipment for internet and telecommunication service

providers. Because these facilities employ very few people,

their proliferation threatened to undermine Portland’s

streetcar service by precluding higher-density uses in the

streetcar corridor. /d. The moratorium allowed planners to

achieve the higher density necessary to support streetcar

7

service and thereby help absorb the 500,000 new city

residents expected over the next 20 years. /d.

Although some moratoria prohibit only certain kinds of

development, municipalities sometimes find it necessary to

prohibit all development to advance comprehensive planning

efforts. Moreover, even a moratorium that is limited to

particular uses is subject to claims that the remaining uses are

not economically viable. Courts routinely uphold these

temporary bans where they are reasonable in view of all

relevant circumstances. See, e.g., Woodbury Place Partners

v. City of Woodbury, 492 N.W.2d 258 (Minn. Ct. App. 1992)

(rejecting a takings challenge to a two-year moratorium on all

development pending completion of a traffic-congestion

study), cert. denied, 508 U.S. 960 (1993); Williams v. City of

Central, 907 P.2d 701, 704-06 (Colo. Ct. App. 1995)

(upholding a moratorium despite an allegation that it

temporarily denied all use).

More than a dozen States have statutes that expressly

authorize temporary development moratoria. 3 Rohan, supra,

§ 22.02[3]}[a], p. 22-17. Most other States have found that

authority implicit in existing code provisions or home-rule

authority. See Collura, 329 N.E.2d at 737 (upholding a two-

year moratorium; “The weight of authority is that reasonable

interim zoning provisions may be enacted within the scope of

a general zoning enabling act... .”).

Because moratoria are a traditional and necessary

component of land-use planning, landowners cannot claim a

“reasonable expectation[],” Penn Central, 438 U.S. at 125, to

build at any specific time. Rather, it is reasonable to expect

that state and local officials occasionally will adopt temporary

moratoria where necessary to protect the public interest.

Cf. Lucas, 505 U.S. at 1027 (“the property owner necessarily

expects the uses of his property to be restricted, from time to

time, by various measures newly enacted by the State in

legitimate exercise of its police powers”). This is especially

true in an ecologically fragile region that, in petitioners’

words, contains “a unique treasure.” Pet. Br. 3.

3. Because moratoria vary greatly in form and purpose,

they are especially well-suited to takings analysis under Penn

Central’s multifactor inquiry. In fact, courts long have used

the Penn Central test, as well as the Due Process Clause and

various state-law requirements, to ensure that moratoria are

reasonable, related to legitimate goals, and imposed in good

faith.’ No court has embraced the sweeping per se rule

proposed by petitioners.

Petitioners’ proposed per se rule would severely limit, if

not totally eliminate, the use of temporary bans on

development and precipitate the very “race of diligence”

(Downham, 58 F.2d at 788) between developers and planning

authorities that courts have avoided through the application of

existing precedent. The proposed per se rule would have

particularly harsh impacts on small cities and towns that can

ill-afford to defend takings claims brought by developers

under unduly expansive theories of liability. As Justice

Kennedy has explained, inappropriately broad theories of

takings liability unfairly subject “States and municipalities to

the potential of new and unforeseen claims in vast amounts.”

Eastern Enterprises v. Apfel, 524 U.S. 498, 542 (1998)

(Kennedy, J., concurring in the judgment and dissenting in

part). Municipalities would be forced to choose between

* Compare State ex rel. SCA Chemical Waste Services, Inc. v.

Konigsberg, 636 S.W.2d 430, 435 (Tenn. 1982) (upholding moratorium),

and Almquist v. Town of Marshan, 245 N.W.2d 819, 825 (Minn. 1976)

(same) with Lake Illyria Corp. v. Town of Gardiner, 352 N.Y.S.2d 54

(App. Div. 1974) (invalidating moratorium under state law due to its

unreasonable length and other facts that showed lack of good faith).

* See S. Rep. No. 105-242, at 45 (1998) (minority views) (although the

top four U.S. residential developers have annual revenues that exceed

$1 billion, 90% of American cities and towns have less than 10,000

people and cannot afford even one full-time lawyer).

9

paying untold amounts in compensation under proposed

per se rule or abandoning legitimate planning efforts needed

to protect neighboring landowners and the general public.

Petitioners’ proposed per se rule also would lead to bizarre

results wholly at odds with the standard of fairness that

informs takings analysis. For example, it could generate

claims where a moratorium causes no economic harm. A

landowner could seek fair rental value for the duration of the

ban even if the owner was unaware of the ban until after its

expiration. The proposed per se rule also might lead to

invalidation of needed moratoria notwithstanding the absence

of economic harm.°

A per se rule also could require compensation where a

moratorium does not interfere with a landowner’s expecta-

tions. Petitioners seek compensation even though the trial

court concluded that the 32-month Tahoe moratorium did not

thwart reasonable expectations because Tahoe Basin

landowners voluntarily held land and refrained from

development for an average of 25 years after purchase. Pet.

App. 88-89. Nor is there any principled basis for

distinguishing moratoria from the normal delays that attend

the development application process. The Constitution

should not be read to require windfall compensation to

landowners whose interests are unaffected by reasonable

moratoria or other expected delays. See Lucas, 505 U.S. at

1033-34 (Kennedy, J., concurring in the judgment) (courts

must consider whether takings claimants “had the intent and

capacity to develop” during a development ban because “the

test must be whether the deprivation is contrary to reasonable,

investment-backed expectations”).

°C Washington Legal Found v. Texas Equal Access to Justice

me. 4 2001 WL 1222105 (Sth Cir. Oct. 15, 2001) (granting injunctive

relief in a regulatory takings case despite the lack of economic harm to

the claimants).

10

il. THE TAHOE MORATORIUM DID NOT

EFFECT A PER SE TAKING UNDER

LUCAS.

Petitioners come to this Court burdened with a striking

evidentiary failure. They ask the Court to conclude that the

Tahoe moratorium worked a per se taking under Lucas even

though they deliberately declined to introduce evidence

showing that the moratorium diminished the value of their

land, much less rendered it valueless or nearly so. See Pet.

App. 90. This section of the brief demonstrates that

petitioners’ evidentiary failure defeats their Lucas claim.

A. Lucas Does Not Create A “Right To

Immediate Use.”

The Lucas Court held that a per se taking may occur where

regulation deprives a landowner of “all economically

beneficial or productive use of land.” 505 U.S. at 1015. The

Court made clear, however, that no Lucas taking occurs

where existing or future uses allow the land to be sold to a

private party for value. /d. at 1027-28. Indeed, the Court

noted that in some situations, “the property’s only

economically productive use is sale.” /d. at 1028. The Court

stressed that a landowner with a 95% value loss may not

“claim the benefit of our categorical formulation.” /d. at

1019 n.8. In other words, the ability to sell land for

seas vee & 6 lanes we Get tee 6 Lame

claim, even where the value is relati small as compared to

Qn wae of Gb tak he eae In his opinion

concurring in the judgment, Justice Kennedy agreed that per

se treatment is appropriate only where land is left with “no

significant market value or resale potential.” Jd. at 1033-34.°

* The record and posture of Lucas starkly presented the Court with the

issue of whether a complete obliteration of value works a taking. In the

first paragraph, the Court recited the trial court's finding that the

development ban at issue rendered Lucas’s land “valueless.” 505 U.S.

In last Term’s Palazzolo ruling, the Court reaffirmed that

the Lucas per se rule is inapplicable where land retains more

than nominal value. Palazzolo, 121 S. Ct. at 2465 (rejecting

Palazzolo’s Lucas claim because “petitioner failed to

establish a deprivation of all economic value”); see also id.

at 2476 (Ginsburg, J., joined by Souter & Breyer, JJ.,

dissenting) (“a floor value was all the State needed to defeat

Palazzolo’s simple Lucas claim”). To be sure, Palazzolo

clarified that the government may not defeat a Lucas claim by

showing that the landowner retains only “a few crumbs of

value,” id. at 2464 (quoting Brief for Petitioner), or what the

Court called “token” value, id., but the ruling reaffirmed that

a Lucas claim lies only where regulation leaves land with

nominal or no value.’

at 1007. The Court then articulated the question presented as whether the

development ban effected a taking due to its “dramatic effect on the

economic value of Lucas’s lots.” /d. In delineating the per se rule, the

Court again emphasized the key factual predicate that underlies the per se

rule: the trial court’s finding that the lots had been “rendered valueless.”

Id. at 1020. The pivotal nature of this finding is evidenced both by the

skepticism regarding its accuracy expressed by each of the four separate

opinions, as well as the Majority’s specific response to those concerns.

Compare id. at 1020 n.9 (Majority) with id. at 1034 (Kennedy, J.,

concurring in the judgment); id. at 1043-44 (Blackmun, J., dissenting), id.

at 1065 n3 (Stevens, J., dissenting); and id. at 1076 (Souter, J.,

statement). The Lucas Court also distinguished earlier cases that found no

taking because “{njone of them . . . involved an allegation that the

regulation wholly eliminated the value of the claimant's land.” /a. at 1026

& n.13. One of the cases so distinguished—Hadacheck v. Sebastian, 239

U.S. 394 (1915)—involved a value loss of 92.5% (from $800,000 to

$60,000), further showing that Lucas’s per se rule applies exclusively

where land is left valueless or with only nominal value.

” Palazzolo alleged that he retained only 6% of his land’s $3,150,000

value, but this assertion was not enough to support a Lucas

claim. See 121 S. Ct. at 2456, 2464-65. This result is not surprising in

view of the Lucas Court’s observation that a 95% value loss does not

trigger the Lucas per se rule. See 505 U.S. at 1019 n.8.

12

Other cases confirm this bedrock principle. In Agins v.

City of Tiburon, 447 U.S. 255 (1980), the Court stressed that

the beneficial-use inquiry requires examination of the

“diminution in market value” caused by the challenged

regulation. /d. at 262, 263 n.9. In Keystone Bituminous Coal

Ass'n v. DeBenedictis, 480 U.S. 470 (1987), the Court could

not determine whether the claimants were denied beneficial

use of their property because “[t]here is no record as to what

value” the property had. /d. at 502 n.29. Federal appeals

courts and state supreme courts properly adhere to this

Court’s rulings that land has no economically beneficial use

only where it is left with nominal or no value.

Petitioners understandably sidestep this adverse precedent

and attempt to shift the focus from value to immediate use.

Their suggested dichotomy between use and value is a false

choice because, as shown above, there is no Lucas per se

taking where existing and future uses allow the owner to

recoup value through sale to a private party. Nevertheless,

petitioners argue that Lucas establishes an absolute right to

* See, e.g., Rith Energy, Inc. v. United States, 2001 WL 1380899 at |

(Fed. Cir. Nov. 5, 2001) (On Petition for Rehearing) (“The [Palazzolo]

occurred”), cert. denied, 479 U.S. 1053 (1987); Pompa Constr. Corp. v.

City of Saratoga Springs, 706 F.2d 418, 424 (2d Cir. 1983) (“the key

question” in a takings case is whether others “might be interested in

purchasing all or part of the land”); Mayhew v. Town of Sunnyvale, 964

S.W.2d 922, 935 (Tex. 1998) (“Determining whether all economically

viable use of a property has been denied entails a relatively simple

analysis of whether value remains in the property after the governmental

action.”), cert. denied, 526 U.S. 1144 (1999).

13

use land immediately, and that a per se taking occurs

whenever regulation temporarily prohibits land use,

regardless of the regulation’s effect on value.

No court has ever recognized such an absolute

constitutional “right to build immediately” whose temporary

deprivation works a per se taking. Lucas describes its per se

rule as applying where regulation denies all beneficial use of

land, 505 U.S. at 1015, not where it denies only the

immediate ability to use the property. Petitioners’ proposed

per se rule would lead to per se treatment run amok in

contravention of this Court’s recognition that per se rules

have a very limited role in takings jurisprudence. See Lucas,

505 U.S. at 1017-18 (Lucas’s per se rule applies only in

“extraordinary” and “relatively rare” circumstances);

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416 (1922)

(whether a regulation effects a taking “is a question of

degree—and therefore cannot be disposed of by general

propositions”); see also Palazzolo, 121 S. Ct. 2467

(O’Connor, J., concurring) (“The temptation to adopt what

amount to per se rules in either direction must be resisted.”).

B. Petitioners’ Land Retained Both Use And

Reasonable Economic Value, Thereby Fore-

closing A Per Se Taking Under Lucas.

1. This case involves only a facial challenge. See Pet. App.

19 (“Our focus is . . . narrowed by the fact that the plaintiffs

bring only a facial challenge to Ordinance 81-5.”).

Petitioners therefore “face an uphill battle . . . since it is

difficult to demonstrate that mere enactment of a piece of

legislation deprived [the owner] of economically viable use of

his property.” Suitum, 520 U.S. at 736 n.10 (quoting

Keystone, 480 U.S. at 495 and Hodel v. Virginia Surface

Mining & Reclamation Ass'n, 452 U.S. 264, 297 (1981)

(internal quotation marks omitted)).

14

Despite their heavy burden, petitioners pursued a risky

legal strategy. Believing that they could prevail under Lucas

simply by showing that they were deprived of the right to

develop immediately, petitioners declined to offer evidence as

to the moratorium’s impact on property value. Unlike Mr.

Lucas, who proved that his property had been rendered

“valueless,” Lucas, 505 U.S. at 1007, 1020, petitioners moved

to exclude all value evidence. Pet. App. 92. After the trial

court denied that motion, petitioners failed to meet their

burden of showing that the moratorium left their land with

little or no value. They offered no evidence at all regardin

the effect of the Tahoe moratorium on the value of their land?

In the words of the trial court, petitioners made a

“calculated choice” to introduce “no evidence regarding the

specific diminution in value of any of the [petitioners’]

individual properties.” Pet. App. 90. In ruling on the Penn

Central claim, the trial court concluded that “[s]ince the

burden is on the plaintiffs to show that a taking occurred (and

since that burden is especially heavy in a facial challenge

such as this), the fact that they agreed not to introduce this

type of evidence works against them.” /d.

With respect to petitioners’ Lucas claim, this calculated

choice not only “works against them,” it was a fatal error.

Their strategy leaves them in the untenable position of

* Petitioners’ appraiser conceded that he

estimate of value.” Tr. 1555. While he testi

;

required a “return to the buyer in terms of the cost of acquisition of the

property, any holding costs, and any anticipated profits.” Tr. 1562. Mr.

Palazzolo similarly argued for a rate-of-return definition of economic

viability (Palazzolo, Pet. Br. on the Merits, at 36-44), a definition that this

Court rejected. See Palazzolo, 121 S. Ct. at 2464-65; see also United

States v. Powelson, 319 U.S. 266, 285 (1943) (the Fifth Amendment does

not guarantee a return on investment).

15

arguing, without a scintilla of supporting evidence in the

record, that a moratorium that preserves historic land-use

patterns for less than three years left their property with little

or no value. Their effort fails ab initio and respondents

would have been entitled to a directed verdict on the Lucas

per se claim at the close of petitioners’ case, had they

so moved.'°

2. Petitioners’ trial strategy is readily explained by the

appraisal evidence they sought to exclude. Petitioners simply

had no good alternative. Respondents showed at trial that

land covered by the moratorium retained both use and

“reasonable economic value.” Tr. 1408.

Respondents’ evidence of remaining use and value was

provided by Steven Johnson, an experienced appraiser who

has appraised thousands of lots in the Tahoe Basin. /d.

at 1380. Johnson first noted that the average holding time of

a vacant lot in the Tahoe area between lot purchase and home

construction is twenty-five years. /d. at 1394; 1435-41.

Thus, the moratorium had no impact on most landowners in

the Basin.

More importantly, Johnson testified that buyers were

willing to pay substantial prices for restricted lots during the

moratorium for several reasons. Some buyers purchased lots

simply to own land in the Tahoe Basin. /d. at 1465. Others

purchased with the hope that development ultimately would

'© Remarkably, petitioners assert (Br. 48) that the trial court “found”

and the Ninth Circuit “affirmed” that the moratorium precluded all

economically productive use. There was no such finding or affirmation.

The purported “finding” (Pet. App. 99) is in a section of the trial court

opinion entitled “Conclusions of Law.” /d. at 82. More importantly, the

Ninth Circuit ruled that the trial court’s assertion was based on an

erroneous “legal conclusion” (id. at 40 n.30) that “misread[s precedent] in

at least two ways.” /d. at 37 n.25. In other words, the court of appeals

expressly repudiated on legal grounds the very determination that

petitioners claim was affirmed.

16

be permitted. /d. at 1395, 1464. Sophisticated developers

bought lots that had the potential to be reclassified and

permitted for development. /d. at 1395. Adjacent property

owners purchased lots to protect their open space and view

corridors (id. at 1395), to secure the privacy, seclusion, and

control that ownership conveys (id. at 1470), and to increase

the land coverage for development that would be permitted

on the adjacent parcel. /d. at 1395-96, 1401-05.

Johnson identified many private sales of restricted parcels

throughout the Tahoe Basin. The record shows that

properties comparable to petitioners’ sold to private parties

for as much as $110,000 from 1981 to 1987. J.A. 134; Tr.

1409. Prices for class 1-3 lots in Nevada ranged from $6,000

to $95,000. J.A. 131; Tr. 1396-1400. Prices for class 1-3 lots

in California ranged from $10,000 to $18,415. J.A. 132; Tr.

1400-03. Prices for Stream Environment Zone lots ranged

from $5,000 to $110,000. J.A. 134, Tr. 1408-11. Based on

this and other evidence, Johnson concluded that lands

covered by the moratorium had “reasonable economic value”

in the open market during the moratorium. Tr. 1408; see also

id. at 1410-15.

Petitioners’ failure to offer value evidence defeats their

Lucas claim. Johnson’s testimony showing that their lots

retained “reasonable economic value,” Tr. 1408, confirms

that this result was inevitable.''

'" All land in the Tahoe Basin retains value in large measure due to the

protections for Lake Tahoe. A major component of the value of property

in the Basin comes from its proximity to the Lake, a precious natural

resource which is world-renowned for its clarity and serves as the engine

of the Basin’s economy. See Pet. App. 84 (“[T]he beauty of Lake Tahoe

is largely responsible for driving the economy of the region, which is

based almost entirely on tourism.”). Without the protections challenged

in this case, the Lake would turn green (id. at 4-6, 61-65) and land values

in the region would plummet.

17

C. Longstanding Precedent Governing Just

Compensation Supports Consideration Of

Petitioners’ Remaining Uses And Value In

Evaluating Their Lucas Claim.

Petitioners assume that the available uses of their land

during the moratorium—for example, future uses and use for

sale to neighboring property owners—are irrelevant to Fifth

Amendment analysis. But for more than a century, this Court

has taken these same uses into account in assessing value and

just compensation in direct condemnation cases. These

rulings leave no doubt that the uses of petitioners’ land

available during the moratorium are “highest and best uses”

that must be considered in determining value in takings cases.

For example, in Olson v. United States, 292 US. 246

(1934) (cited with approval in Palazzolo, 121 S. Ct. at 2461),

this Court held that just compensation is determined by

reference to the “highest and most profitable use for which

the property is adaptable and needed or likely to be needed in

the reasonably near future.” 292 U.S. at 255. The uses

valued for compensation purposes in Olson were future,

potential uses for farming and as a fishing station. /d. at 254.

Fifty years earlier, in Boom Co. v. Patterson, 98 U.S. 403

(1878), the Court determined that takings analysis must

consider the potential uses of a parcel in conjunction with

adjacent parcels. Patterson addressed the compensation due

the owner of three unused islands in the Mississippi River.

The Court awarded compensation based on the islands’

potential use by timber companies along the riverbanks to

form (in conjunction with riverfront lots) a natural boom to

store harvested trees. Jd. at 408. In United States v. Fuller,

409 U.S. 488 (1973), then-Justice Rehnquist, writing for the

Court, summarized the law by stating: “This Court has held

that generally the highest and best use of a parcel may be

found to be a use in conjunction with other parcels, and that

any increment of value resulting from such combination may

18

be taken into consideration in valuing the parcel taken.” /d.

at 490 (citing Olson, 292 U.S. at 256).

Under these precedents, landowners are routinely awarded

compensation for the unique value of their lots for sale to

abutting property owners. Louisiana v. Nassar, 512 So.2d

1221, 1224 (La. Ct. App. 1987) (compensation awarded

based on potential sale of land to an abutting landowner); City

of Lafayette v. Richard, 549 So.2d 909, 911-12 (La. Ct. App.

1989) (same); see also Claridge v. New Hampshire Wetlands

‘Board, 485 A.2d 287, 289 (N.H. 1984) (denying a takings

claim due to “evidence in the record that tends to show that

the land could be sold to abutters”). Courts award such

compensation even where the land must be preserved in its

natural state. See Assateague Island Condemnation Cases,

356 F. Supp. 357, 360-62 (D. Md.) (compensation awarded

for non-developable, marshland tract based on its value for

use in assembly with sdjacent property), aff'd, 487 F.2d

1397-99 (4th Cir. 1973) (unpublished table decisions).

There are a host of reasons for this Court to look to direct

condemnation cases in determining the uses that can be

considered in assessing a Lucas claim. These cases address a

similar legal question under the same constitutional provision.

They render a fair and nuanced answer that will not please

landowners or government agencies in every case. For

example, these cases would support the rule that a

government purchase offer does not establish market value

and thereby defeat a Lucas claim. See United States v.

Virginia Elec. & Power Co., 365 U.S. 624, 636 (1961)

(compensation due for a taking is actual value lost, and that

value “must be neither enhanced nor diminished by the

special need which the government had for it”).

Finally, using the principles established by direct

condemnation cases in evaluating an inverse condemnation

claim promotes fairness. In direct condemnation disputes,

landowners argue for consideration of potential uses that

19

would result in a larger compensation award, whereas in

Lucas claims landowners seek to show that no beneficial use

remains. It would be unfair to require the taxpayers to

compensate landowners based on value derived from these

uses in direct condemnation cases, but then prohibit the

government from relying on such value in defeating an

inverse condemnation claim. Simple fairness requires a

ruling that the beneficial uses available to petitioners during

the moratorium defeat their Lucas claim.

D. Petitioners’ Per Se Rule Would Create

Doctrinal Chaos Under The Takings Clause.

This case comes to the Court with the unchallenged ruling

that the Tahoe moratorium is not a taking under the Penn

Central multifactor inquiry. See Pet. App. 18-19. The trial

court concluded that every factor in the Penn Central inquiry

cuts in favor of petitioners and against respondents. /d. at 88-

92. To amici’s knowledge, no other court has held that a

regulation survived the Penn Central inquiry and yet worked

a per se taking. This section shows that due to the integrated

relationship between the Penn Central inquiry and the

per se takings rules, the unchallenged Penn Central determin-

ation reinforces the conclusion that no per se taking occurred

under Lucas.

Properly understood, the per se rules recognized in Lucas

and Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419 (1982), are simply dispositive applications of the

Penn Central multifactor inquiry. Under Penn Central, a

court considers three factors: (1) “the economic impact of the

regulation;” (2) “the extent to which the regulation has

interfered with distinct investment-backed expectations;” and

(3) “the character of the governmental action.” Penn Central,

438 U.S. at 124. The per se rules are specific applications of

the first (Lucas) and third (Loretto) factors. They apply

where one of those factors weighs so heavily in favor of a

taking that the other factors become academic. These rules

20

are deemed “categorical” because they make it unnecessary to

examine the other factors that inform takings analysis under

Penn Central.

The integration of the per se rules and the multifactor

inquiry is evident from both Loretto and Lucas. In Loretto,

after noting that Penn Central looks to the character of the

government action, the Court explained that “when the

physical intrusion reaches the extreme form of a permanent

physical occupation . . . . ‘the character of the government

action’ not only is an important factor in resolving whether

the action works a taking but also is determinative.” 458 U.S.

at 426. The Lucas Court also articulated its per se rule within

the general context of Penn Central. See 505 U.S. at 1015.

Loretto and Lucas are not independent tracks of analysis, but

instead dispositive applications of the multifactor inquiry that

generally drives takings analysis.

The Supreme Court’s use of per se takings rules follows its

use of per se rules in other areas of the law. In antitrust law,

for instance, the Court employs a multifactor “rule of reason” -

to evaluate business practices. But it derives rules of per se

liability “[o]nce experience with a particular kind of restraint

enables the Court to predict with confidence that the

[multifactor] rule of reason will condemn it.” Arizona v.

Maricopa County Medical Soc’y, 457 U.S. 332, 344 (1982).

It would be unthinkable to conclude that a trade practice

meets the rule of reason but nonetheless constitutes a per se

violation of the antitrust laws. In the same way, it turns logic

on its head to argue that a regulation constitutes a per se

taking even though it is not a taking under Penn Central. See

Loretto, 458 U.S. at 435 n.12 (comparing the per se rules for

takings with the per se rules in antitrust law).

In short, petitioners’ position presents a stark doctrinal

anomaly. Just as a business practice cannot survive the rule

of reason and yet constitute a per se antitrust violation, a

land-use regulation cannot survive Penn Central and yet

21

constitute a per se taking. Because it is now undisputed that

petitioners’ Penn Central claim fails, their Lucas claim

necessarily fails as well.'?

Ill. PETITIONERS’ ATTEMPT TO BLUR THE

DISTINCTION BETWEEN PHYSICAL INVA-

SIONS AND LAND-USE REGULATION

CONTRAVENES THE ENTIRE CORPUS OF

REGULATORY TAKINGS JURISPRUDENCE.

1. Respondents establish that the First English ruling is

limited to remedies and does not reach the question of when a

regulation works a taking. Indeed, the moratorium

challenged in First English ultimately was held not to

constitute a taking. First English, 258 Cal. Rptr. at 901-07.

There is no need to repeat respondents’ demonstration here.

'2 Petitioners rely heavily on Justice Brennan’s dissent in San Diego

Gas & Elec. Co. v. City of San Diego, 450 U.S. 621 (1981), but it is

incongruous to suggest that Justice Brennan would have embraced their

extreme per se rule. As the author of Penn Central, Justice Brennan was

keenly aware of the need to avoid sweeping rules of liability in takings

cases. See Penn Central, 438 U.S. at 124 (regulatory takings analysis

entails “ad hoc, factual inquiries” that depend “largely ‘upon the particular

circumstances” of the case) (citation omitted). The San Diego Gas

dissent itself recites the Mahon admonition that the takings inquiry is “a

question of degree—and therefore cannot be disposed of by general

propositions.” 450 U.S. at 649 (quoting Mahon, 260 U.S. at 415).

Moreover, Justice Brennan wrote several opinions that reject conceptual

severance, see, e.g., Penn Central, 438 U.S. at 130-31; Andrus v. Allard,

444 US. 51, 65-66 (1979), a result directly at odds with petitioners

position. See Pet. App. 20-28.

Petitioners argue that First English goes beyond remedial issues, but

* counsel, who also represented the landowners in First

English, had a much narrower view of First English when that case was

argued. See First English, Brief for Appellant at 5 (“B. The Only Issue In

The Case At Bench Is The Proper Remedy For A Regulatory Taking”), id.

(“this case contains no issue of whether a taking occurred”).

22

It is worth noting, however, that petitioners would treat

regulatory protections even more severely than physical

invasions. Under their reading of First English, a temporary

restriction on beneficial use is a per se taking, even though

under Loretto a temporary physical invasion is subject to

Penn Central’s multifactor inquiry. Loretto, 458 U.S. at 435

n.12. Petitioners make little effort to justify this odd result.

2. In addition to mischaracterizing the First English

holding, petitioners argue that First English worked a sea

change by merging the liability standards for physical

invasions and land-use regulations. To be sure, once a taking

is established, there is no difference between physical

occupations and land-use restrictions, for in either case the

Fifth Amendment requires compensation. See First English,

482 U.S. at 314-22. But with respect to the question of

whether a taking has occurred, petitioners could not be more

wrong in suggesting that there is no difference between

physical occupations and land-use regulation.

Takings law always has distinguished physical invasions

from land-use restrictions. For the first 150 years of our

nation’s history, the Takings Clause applied only to the direct

condemnation or physical appropriation of property. Lucas

505 U.S. at 1014 (“Prior to Justice Holmes’s exposition in

[Mahon] it was generally thought that the Takings Clause

reached only a ‘direct appropriation’ of property, or the

functional equivalent of a ‘practical ouster of [the owner’s]

possession.’”) (citations omitted).

In Mahon, Justice Holmes explained that a regulation

works a taking only where it “goes too far.” 260 U.S. at 415.

Land-use regulations that simply “adjust[] the benefits and

burdens of economic life to promote the common good” are

far less likely to work a taking than a physical invasion. Penn

Central, 438 U.S. at 124. In fact, a land-use control effects a

taking only where the regulation approximates a physical

appropriation. See Williamson County Reg’! Planning

23

Comm'n v. Hamilton Bank, 473 U.S. 172, 199 (1985) (in a

regulatory takings case, the Court’s task is “to distinguish the

point at which regulation becomes so onerous that it has the

same effect as an appropriation of the property”).

In contrast to the deferential standard for land-use

regulation, a government-compelled permanent physical

occupation constitutes a per se taking without regard to its

economic impact. Loretto, 458 U.S. at 434-35. In requiring

per se treatment, the Loretto Court reaffirmed “the distinction

between a permanent physical occupation . . . and a

regulation that merely restricts the use of property.” Id. at

430. Loretto explains that the special treatment given to a

physical invasion derives from the right to exclude,

“traditionally . . . considered one of the most treasured strands

in an owner’s bundle of property rights.” /d. at 435.

The Court has reaffirmed the distinction between physical

invasions and land-use regulations time and again. Earlier

this year, the Palazzolo Court observed that physical takings

are “(t}he clearest sort of taking” that require compensation

even for a “minimal” intrusion, while a regulation requires

ion only where it “goes too far” under Mahon.

Palazzolo, 121 S. Ct. at 2457. The distinction between

invasions and regulation is so clear that the Court

unanimously has held .hat a regulatory taking issue is not

fairly included within a question presented concerning a

physical taking. Yee v. City of Escondido, 503 U.S. 519, 537

(1992) (“Consideration of whether a regulatory taking

occurred would not assist in resolving whether a physical

taking occurred as well. . . . [The tw. issues] exist side by

side, neither encompassing the other.”).

In arguing that regulatory takings should be treated like

physical takings, petitioners rely on wartime takings cases,

but they entirely disregard Loretto’s careful treatment of two

key wartime cases: United States v. Pewee Coal Co., 341

U.S. 114 (1951), and United States v. Central Eureka Mining

24

Co., 357 U.S. 155 (1958). The Loretto Court explained that

in Pewee Coal, the Court found a taking where the

government took possession of a coal mine te prevent a strike

of coal miners. Loretto, 458 U.S. at 431. In Central Eureka,

however, the Court found no taking where the government

required gold mines to cease operating for almost three years.

Loretto, 458 U.S. at 431-32 (citing Central Eureka, 357 U.S.

at 165-66). The Loretto Court emphasized that the temporary

denial of all use in Central Eureka stood in sharp contrast

to the physical invasion in Pewee Coal. Loretto, 458 U.S.

at 431-32.

In short, petitioners’ blurring of physical invasions and

regulatory restrictions is inconsistent with the entire body of

takings juri , that the distincti

3. Petitioners’ proposed merger of physical and regulatory

takings also could lead to per se treatment of other workaday

land-use restrictions. For example, amicus Institute for

Justice (Br. 17-20) argues that the Court should overrule Penn

Central insofar as it holds that in evaluating the economic

impact of a regulation, courts should look to the regulation’s

' effect on the claimant’s entire parcel, not just the affected

portion. As this Court recognizes, however, Penn Central’s

parcel-as-a-whole rule is critical to a fair and measured

application of the Takings Clause. Without it, setback

requirements and other reasonable land-use practices would

be compensable and thus financially ruinous to impose. See,

e.g., Keystone, 480 U.S. at 498 (without the parcel-as-a-whole

rule, “one could always argue that a setback ordinance

requiring that no structure be built within a certain distance

from the property line constitutes a taking because the

footage represents a distinct segment of property for takings

law purposes”).

Amicus Institute for Justice’s extraordinary proposal to

overrule the parcel-as-a-whole rule is the logical conclusion

of petitioners’ illicit merging of liability standards for

25

physical invasions and land-use controls. Because a

government-compelled, permanent physical occupation Is a

taking no matter how small the intrusion, a merging of

liability standards would require compensation for any denial

of use on any portion of a parcel, no matter how small.

Nothing in the Takings Clause warrants this extreme result.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

TIMOTHY J. DOWLING RICHARD RUDA *

DOUGLAS T. KENDALL Chief Counsel

COMMUNITY RIGHTS COUNSEL STATE AND LOCAL LEGAL CENTER

1726 M Street, N.W. 444 North Capitol Street, N.W.

Suite 703 Suite 345

Washington, D.C. 20036 Washington, D.C. 20001

(202) 296-6889 (202) 434-4850

* Counsel of Record for the

Amici Curiae

November 13, 2001