Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997)

JUSTICE SCALIA, with whom JUSTICE O’CONNOR and JUSTICE THOMAS join, concurring in part and concurring in the judgment.

I concur in the judgment of the Court, and join its opinion except for Parts II-B and II-C. Those sections consider whether the Tahoe Regional Planning Agency (TRPA) must have reached a final decision regarding Suitum’s ability to sell her Transferable Development Rights (TDRs), and whether the value of Suitum’s TDRs must be known. That discussion presumes that the answers to those questions may be relevant to the issue presented at this preliminary stage of the present case: whether Suitum’s takings claim is ripe for judicial review under the "final decision" requirement. In my view, they are not relevant to that issue, and the Court’s discussion is beside the point.

To describe the nature of the "final decision" inquiry, the Court’s opinion quotes only the vague language of Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), that there must be a "final decision regarding the application of the [challenged] regulations to the property at issue," id. at 186, quoted ante at 734, and of MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340 (1986), that "[a] court cannot determine whether a regulation has gone `too far’ unless it knows how far the regulation goes," id. at 348, quoted ante at 734. Unmentioned in the opinion are other, more specific, statements in those very cases (and elsewhere) which display quite clearly that the quoted generalizations (and the "final decision" inquiry) have nothing to do with TDRs. Later in Williamson County, for example, we explained that the purpose of the final decision requirement was to ensure that the Court can ascertain "how [the takings plaintiff] will be allowed to develop its property," Williamson County, supra, at 190. And on the very same page from which the Court extracted the vague statement, MacDonald says quite precisely that the essential function of the "final decision" requirement is to ensure that there has been a "determination of the type and intensity of development legally permitted on the subject property," MacDonald, supra, at 348; and says later that

[o]ur cases uniformly reflect an insistence on knowing the nature and extent of permitted development before adjudicating the constitutionality of the regulations that purport to limit it,

477 U.S. at 351. The Court fails even to mention, in its otherwise encyclopedic description of the development of the "final decision" requirement, the most recent of our opinions addressing the subject, Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), in which we relied exclusively on these more precise formulations, and did not mention the vague language quoted by the Court today, see id. at 1011.

The focus of the "final decision" inquiry is on ascertaining the extent of the governmental restriction on land use, not what the government has given the landowner in exchange for that restriction. When our cases say, as the Court explains ante at 734, that, without a "final decision," it is impossible to know whether the regulation "goes too far," Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922), they mean "goes too far in restricting the profitable use of the land," not "goes not far enough in providing compensation for restricting the profitable use of the land." The latter pertains not to whether there has been a taking, but to the subsequent question of whether, if so, there has been just compensation.

In all of the cases discussed in Part II-A of the Court’s opinion bearing on the question whether a "final decision" requisite to a takings claim had been made, the point at issue was whether the government had finally determined the permissible use of the land. In Agins v. City of Tiburon, 447 U.S. 255 (1980), discussed ante at 735-736, the government had not yet determined how many houses the challenged zoning ordinance would permit on the plaintiff’s property. In Hodel v. Virginia Surface Mining & Reclamation Assn.,Inc., 452 U.S. 264 (1981) discussed ante at 736-737, the government had not yet determined whether a variance from the land use restrictions of the Surface Mining Control and Reclamation Act would be allowed. In Williamson County, supra, discussed ante at 737, the government had not yet determined whether it would approve the developer’s plan to build a residential complex. And in MacDonald, supra, discussed ante at 737-738, the government had again not yet determined whether the developer’s subdivision plan would be approved.

TDRs, of course, have nothing to do with the use or development of the land to which they are (by regulatory decree) "attached." The right to use and develop one’s own land is quite distinct from the right to confer upon someone else an increased power to use and develop his land. The latter is valuable, to be sure, but it is a new right conferred upon the landowner in exchange for the taking, rather than a reduction of the taking. In essence, the TDR permits the landowner whose right to use and develop his property has been restricted or extinguished to extract money from others. Just as a cash payment from the government would not relate to whether the regulation "goes too far" (i.e., restricts use of the land so severely as to constitute a taking), but rather to whether there has been adequate compensation for the taking; and just as a chit or coupon from the government, redeemable by, and hence marketable to, third parties, would relate not to the question of taking, but to the question of compensation; so also, the marketable TDR, a peculiar type of chit which enables a third party not to get cash from the government, but to use his land in ways the government would otherwise not permit, relates not to taking, but to compensation. It has no bearing upon whether there has been a "final decision" concerning the extent to which the plaintiff’s land use has been constrained.

Putting TDRs on the taking, rather than the just compensation, side of the equation (as the Ninth Circuit did below) is a clever, albeit transparent, device that seeks to take advantage of a peculiarity of our takings clause jurisprudence: whereas, once there is a taking, the Constitution requires just (i.e., full) compensation, see, e.g., United States v. 564.54 Acres of Monroe and Pike County Land, 441 U.S. 506, 510 (1979) (owner must be put "`in as good a position pecuniarily as if his property had not been taken’"); Monongahela Nav. Co. v. United States, 148 U.S. 312, 326 (1893) ("the compensation must be a full and perfect equivalent for the property taken"), a regulatory taking generally does not occur so long as the land retains substantial (albeit not its full) value, see, e.g., Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978). If money that the government regulator gives to the landowner can be counted on the question of whether there is a taking (causing the courts to say that the land retains substantial value, and has thus not been taken), rather than on the question of whether the compensation for the taking is adequate, the government can get away with paying much less. That is all that is going on here. It would be too obvious, of course, for the government simply to say "although your land is regulated, our land use scheme entitles you to a government payment of $1,000." That is patently compensation, and not retention of land value. It would be a little better to say,

under our land use scheme, TDRs are attached to every parcel, and, if the parcel is regulated, its TDR can be cashed in with the government for $1,000.

But that still looks too much like compensation. The cleverness of the scheme before us here is that it causes the payment to come not from the government but from third parties -- whom the government reimburses for their outlay by granting them (as the TDRs promise) a variance from otherwise applicable land use restrictions.

Respondent maintains that Penn Central supports the conclusion that TDRs are relevant to the question whether there has been a taking. In Penn Central, we remarked that, because the rights to develop the airspace above Grand Central Terminal had been made transferable to other parcels in the vicinity (some of which the owners of the terminal themselves owned), it was "not literally accurate to say that [the owners] have been denied all use of [their] preexisting air rights," and that, even if the TDRs were inadequate to constitute "just compensation" if a taking had occurred, they could nonetheless "be taken into account in considering the impact of regulation." Penn Central, supra, at 137 (emphasis in original). This analysis can be distinguished from the case before us on the ground that it was applied to landowners who owned at least eight nearby parcels, some immediately adjacent to the Terminal, that could be benefitted by the TDRs. See 438 U.S. at 115. The relevant land, it could be said, was the aggregation of the owners’ parcels subject to the regulation (or at least the contiguous parcels); and the use of that land, as a whole, had not been diminished. It is for that reason that the TDRs affected "the impact of the regulation." This analysis is supported by the concluding clause of the opinion, which says that the restrictions

not only permit reasonable beneficial use of the landmark site, but also afford appellants opportunities further to enhance not only the Terminal site proper, but also other properties.

Id. at 138. If Penn Central’s one-paragraph expedition into the realm of TDRs were not distinguishable in this fashion, it would deserve to be overruled. Considering in the takings calculus the market value of TDRs is contrary to the import of a whole series of cases, before and since, which make clear that the relevant issue is the extent to which use or development of the land has been restricted. Indeed, it is contrary to the whole principle that land use regulation, if severe enough, can constitute a taking which must be fully compensated.

I do not mean to suggest that there is anything undesirable or devious about TDRs themselves. To the contrary, TDRs can serve a commendable purpose in mitigating the economic loss suffered by an individual whose property use is restricted, and property value diminished, but not so substantially as to produce a compensable taking. They may also form a proper part, or indeed the entirety, of the full compensation accorded a landowner when his property is taken. Accord, Penn Central, supra, at 152 (REHNQUIST, J., dissenting) (noting that Penn Central had been "offered substantial amounts" for its TDRs and suggesting the appropriateness of a remand for a determination of whether the TDRs are valuable enough to constitute full compensation). I suggest only that the relevance of TDRs is limited to the compensation side of the takings analysis, and that taking them into account in determining whether a taking has occurred will render much of our regulatory takings jurisprudence a nullity, see Comment, Environmental Interest Groups and Land Regulation: Avoiding the Clutches of Lucas v. South Carolina Coastal Council, 48 U. Miami L.Rev. 1179, 1212 (1994).

In sum, I would resolve the question of whether there has been a "final decision" in this case by looking only to the fixing of petitioner’s rights to use and develop her land. There has never been any dispute over whether that has occurred. Before bringing the present suit, petitioner applied for permission to build a house on her lot, and was denied permission to do so on the basis of TRPA’s determination that her property is located within a "Stream Environment Zone" -- a designation that carries the consequence that "[n]o additional land coverage or other permanent land disturbance shall be permitted," TRPA Code § 20.4. Respondent in fact concedes that "[w]e know the full extent of the regulation’s impact in restricting petitioner’s development of her own land," Brief for Respondent 21. That is all we need to know to conclude that the final decision requirement has been met.