(360) 594-4321
Fax (360) 733-5785
July 2002
Re: SPECIAL REPORT:
(1) The Supreme Court’s Tahoe-Sierra[1]
Decision Opens the Way to Regulatory Abuse of Property Rights; and (2) Revision of National
Environmental Policy Act (“NEPA”) Rules Presents an Opportunity to Influence
Federal Land Policy
Dear
Friend of the Teichert Law Office:
This Special Report takes up two
separate and unrelated issues. First, a
recent Supreme Court case has dramatically altered the landscape of private
property rights in the context of government planning. Second, a pending revision of National
Environmental Policy Act (“NEPA”) regulations presents an opportunity to
influence the direction of America’s most widely applicable environmental
planning statute.
I. The Tahoe-Sierra Decision Undermines the
Security of Property Rights
BACKGROUND LAW
In 1922, Justice Oliver Wendell
Holmes, Jr. said that “while property may be regulated to a certain extent, if
a regulation goes too far it will be recognized as a taking” of private
property that must be compensated under the Fifth Amendment to the United
States Constitution.[2] Justice Holmes famous statement begs the
question: how far is too far?
As I said in January, concrete answers to this
question have been elusive during the eighty years since Justice Holmes
unwittingly raised it. Nonetheless, a
tradition has emerged wherein: (1) a regulation which denies the property owner
“all economically beneficial or productive use of the land” will be recognized
as a taking;[3] and (2)
regulation which forces “some people alone to bear the burdens which, in all
fairness and justice, should be borne by the public as a whole” will also
constitute a taking.[4] Courts may also consider a litany of other
factors to find that a taking has occurred, even where regulations do not
deprive an owner of all economically productive use. These factors include interference with the owner’s reasonable
investment-backed expectations.[5] Perhaps most important, the Supreme Court’s
precedent prior to the Tahoe-Sierra decision recognized that
“‘temporary’ takings which . .
. deny a landowner all use of
his property, are not different in kind from permanent takings, for which the
Constitution clearly requires compensation.”[6]
BACKGROUND FACTS
The Supreme Court considered
whether a temporary moratorium on development, lasting thirty-two months,[7]
should always be considered a taking of private property for which compensation
is required under the Fifth Amendment to the United States Constitution. The
moratoria had been imposed to prevent land development prior to the formulation
of a comprehensive regional development plan.
LEGAL ISSUES AND RULINGS
A. Temporary Moratoria Are Not
Always Takings
In January’s Special Report, I explained that the
United States Supreme Court had held in Palazzolo v. Rhode Island[8]
that “[g]overnmental authorities, of course, may not burden property by
imposition of repetitive or unfair land-use procedures in order to avoid a
final decision.” This was an important
ruling because it was meant to prevent local governments from escaping
responsibility for thwarting land use by unduly prolonging authorization
processes. The force of that ruling is now in question because of the more
recent Tahoe-Sierra decision, where the Supreme Court found that no taking
had occurred, despite the fact that moratoria lasting nearly three years had
been imposed on all development of private property--far exceeding deadlines
imposed by law for completion of planning.
In arriving at this ruling, the court rejected the following
theories: (1) that all temporary
deprivations of all economically viable use of private property effect
compensable takings; (2) that all such temporary deprivations beyond a certain
fixed time limit are compensable takings; and (3) that all such temporary
deprivations--with the exception of normal delays in obtaining building
permits, zoning variances, and other traditional requirements--effect
compensable takings.
Chief Justice Rehnquist advocated the third of these
rejected approaches in his dissenting opinion, arguing that such normal delays
are traditional limitations on private property rights, whereas blanket
moratoria to facilitate comprehensive planning are not. However, the majority steadfastly refused to
apply any fixed principle for finding that a taking has occurred when the
deprivation of all economically viable use is temporary. The Court, instead, preferred to apply the
“essentially ad hoc, factual inquiries,” articulated in Penn Central
Transportation v. New York City,[9]
“designed to allow careful examination and weighing of all the relevant
circumstances.”[10] This flexible approach was originally
intended to apply where there was not a complete deprivation of land use.
The Penn Central approach is singularly
unsatisfying where a more principled theory is available. The essence of private property is security
of tenure. An approach that relies
heavily on subjective judicial discretion is inherently unpredictable and
insecure. The third alternative
articulated above would have provided sufficient security, while permitting
government agencies to exercise their traditional police powers. The Court’s failure to take a firm position
on moratoria during lengthy planning processes renders property rights
insecure. Furthermore, the fact that
the property owner may get his/her property back in the long run is of little
comfort, given the inherently finite duration of ownership. As Justice Thomas wrote in dissent, quoting
the Economist John Maynard Keynes, “[i]n the long run we are all dead.”[11]
B. A land use decision
denying all use of a distinct portion of a tract is not considered a taking if
a significant use is permitted on the remainder of the tract
In the Palazzolo case, the Supreme Court
pointed out that some of its earlier cases had held that any decrease in the
value of land occasioned by a regulation should be measured against the value
of the entire tract to determine if the loss is sufficient to result in a
taking of the parcel. The Court also
said, however, that it had “at times expressed discomfort with the logic of
this rule.” In January, I expressed
hope that, in a future case, the Supreme Court might hold that a regulation
depriving an owner of all economically productive use of a distinct segment of
property affects a taking of that segment.
The Tahoe-Sierra decision diminishes my optimism that any such
ruling is likely. The Tahoe-Sierra
Court held that, “[a]n interest in property is defined by the metes and bounds
that describe its geographic dimensions and the term of years that describes
the temporal aspect of the owners interest.
Both dimensions must be considered if the interest is to be viewed in
its entirety.” In other words, the
Court considered a partial deprivation in time to be similar to a partial deprivation
of space and held that “[t]he starting point for the courts [sic] analysis
should have been to ask whether there was a total taking of the entire
parcel[.]” If there is not a permanent
taking of the entire tract, the Court will apply the flexible Penn Central
balancing test.
While the Tahoe-Sierra case is certainly not
a victory for private property rights, it has some positive language. Notwithstanding that the Court has chosen to
apply a flexible balancing test rather than a more determinate legal standard,
it has stated that “extraordinary delay” may create an unconstitutional
taking. Additionally, the opinion
hinted that, perhaps, its primary analysis could be limited to the
comprehensive planning scenario. The
Court points to a “reciprocity of advantage” to all property owners in
comprehensive planning where “each of us is burdened somewhat by such
restrictions, [but] we, in turn, benefit greatly from the restrictions that are
placed on others.” Long delays in
processing an individual permit application fit better within the principle
that it is a taking for the government to force “some people alone to bear
public burdens which, in all fairness and justice, should be borne by the
public as a whole.”[12] Indeed, the Tahoe-Sierra Court found
that “the interest in protecting the decisional process is even stronger when
an agency is developing a regional plan than when it is considering a permit
for a single parcel.” While these
rulings are not all that I had hoped for, they provide some broad rules upon
which I can argue that an unreasonably long deprivation of the use of property,
particularly in an individual permit application, is a taking--even if the
deprivation is not permanent.
II. Recommendation
to Participate in NEPA Policy Changes
NEPA requires that federal
agencies prepare an Environmental Impact Statement when a proposed federal
action is likely to significantly affect the human environment.[13] NEPA applies to broad range of federal
actions from renewing a federal livestock grazing permit to harvesting timber
or authorizing recreational uses of public lands. While NEPA does not require that environmental concerns prevail
in policy decisions, it requires that such issues be considered and disclosed
to the public.
The President’s Council on
Environmental Quality has formed a NEPA task force to improve and modernize the
NEPA process through better information management, increased coordination
between agencies, and the use of technology.
Members of the public may comment, in writing, on the scope of the Task
Force’s mission until August 23, 2002.
During his 2000 campaign,
President Bush criticized President Clinton’s surprise designation of the
Grand-Staircase Escalante National Monument; and campaigned on the principle
that federal environmental policy should not be made without consulting the
affected states and local communities.
While NEPA permits state and local governments to participate in NEPA
planning processes in an advisory capacity,[14]
you should write to the NEPA Task Force and suggest that the Administration
give interested state and local governments a stronger and more meaningful
role. Involvement by state and
local governments provides those most deeply affected by federal policy with a
greater voice; and ensures that the needs of local communities will be taken
into consideration when crafting solutions to environmental problems. Furthermore, strengthening the hand of
states in relationship to the federal government serves the important
federalism value of decentralizing government power for the safeguarding of
liberty.
While it should be clear that
NEPA already requires federal agencies to consider economic and cultural
concerns[15] as well as
ecological factors when making policy decisions affecting the environment, some
courts have ruled that NEPA is concerned only with environmental impacts and
that economic impacts need not be considered.[16] I recommend that you write to the NEPA
Task Force and ask that Environmental Assessments and Environmental Impact Statements
be required to disclose the economic and cultural impacts of agency decisions. Furthermore, please recommend that such
disclosure must be supported by sound social science research and economic
analysis. If the NEPA process fails to
require the same scientific standards for economic and cultural analysis as it
requires for environmental disclosure, commercial interests will always be at a
disadvantage when attempting to challenge the conclusions of an Environmental
Impact Statement; and federal agencies will not appreciate the importance of
carrying out their environmental stewardships with sensitivity to unique human
communities, livelihoods and private property rights.
Please send your comments in one
of the following ways:
(1) Follow the NEPA
Task Force Link on the CEQ website at http://www.whitehouse.gov.ceq and
enter your comments in the form provided there.
(2) Fax written comments to the NEPA Task Force at (801)
517-1021.
(3) Submit written
comments to the NEPA Task Force at:
NEPA Task Force
P.O. Box 221150
Salt Lake City, UT 84122
Please
note that the comment period ends on August 23, 2002, so be sure your comments
arrive before that date. This is an
important opportunity for people, communities and industries affected by
federal environmental policy to have their say in the direction of an
increasingly pervasive federal statute.
INTEREST IN THIS NEWSLETTER
I sent you this newsletter because you, or someone you know, believed
that you would benefit from occasionally receiving information about
developments in the field of land use planning, public lands, or environmental
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I hope that this newsletter was helpful to you. If you have an idea for a future article,
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Sincere Regards,
Jeffrey B. Teichert
Attorney at Law