Transcript

CHIEF JUSTICE REHNQUIST: We'll hear argument next in Number 00-1167, Tahoe-Sierra Preservation Council v. The Tahoe Regional Planning Agency.

Mr. Berger.

MR. MICHAEL M. BERGER: Mr. Chief Justice, and may it please the Court:

There are three important things that should be kept in mind while we're addressing the issue this morning. First, the Tahoe Regional Planning Agency totally prohibited a select group of individual landowners scattered around Lake Tahoe from making any use whatever of their land.

These prohibitions were never designed as the kind of planning time-out touted by TRPA and its amici. Rather, they were amendments --

JUSTICE SANDRA DAY O'CONNOR: Well, what about a temporary order that says, gee, we're required by State law to develop a plan and it's going to take us a few months and, pending that, you can't develop? Now, does that invoke immediately some per se taking rule?

MR. BERGER: It does if it's a flat prohibition of use, Your Honor, and if there is --

JUSTICE O'CONNOR: A flat prohibition that says, while we're developing this plan, which we think won't take long, you can't go ahead with your development?

MR. BERGER: Justice O'Connor, I do believe that if it is a total prohibition on use, and there is no use being made of the property at the time, that it's part of the public project to have this freeze on use, and it's the public that ought to be paying for that project, not the individual landowners who are frozen out.

JUSTICE ANTHONY KENNEDY: Suppose that -- we'll have to play with the facts a little bit, it's a hypothetical case, but that within a month from now the World Trade Center is ready to be constructed and New York says -- and the owner wants to rebuild highrises for office only, and the city says, wait a minute, this is so important to the whole city, we need a year to think about it, a year in addition to the usual zoning process. A taking?

MR. BERGER: I think if they forbid the entire use of the property and don't allow any applications for use to be made, don't allow the owner to do anything --

JUSTICE KENNEDY: Well, they could use it for a parking lot.

MR. BERGER: If there is some reasonable, economically viable, productive use that can be made of the property at the time, then I don't believe we have a per se taking.

JUSTICE KENNEDY: Well, I guess my question -- and I know you had a more general introduction before I interrupted you, is the use of a moratorium a standard instrument of zoning policy, or is it very rare? I couldn't find anything in the briefs on this.

MR. BERGER: It has, I believe, become much more rare these days. There's an awful lot more planning going on. Agencies are doing a better job of planning, and they find the need for this kind of a total prohibition on development to be made.

JUSTICE ANTONIN SCALIA: My impression is that most of these moratoriums, or moratoria, whatever they're called, would not be total. I mean, if you're considering altering a rural zoning scheme that now doesn't have any limit on number of residencies per acre, and you're thinking of, say, no more than one house on every 3 acres, the only -- and that's what you're thinking about, the only moratorium you would have to impose would be no more -- until we make up our mind, no more than one house on every 3 acres.

It wouldn't say, nobody does anything while we're sucking our thumb on this question, right?

MR. BERGER: That's correct, Justice Scalia --

JUSTICE SCALIA: And --

MR. BERGER: -- and I think that's the more typical kind of moratorium, and the kind that most of the amici on the agency's side have been talking about.

CHIEF JUSTICE REHNQUIST: There was one Minnesota moratorium that was -- seemed somewhat like this that had been sustained by, I think the Minnesota appellate court.

MR. BERGER: There was one, Your Honor, and I would submit that that court erred. It happens. Lower courts do that sometimes. And we believe that --

CHIEF JUSTICE REHNQUIST: So we notice.

(Laughter.)

MR. BERGER: And we believe that that simply is not an appropriate precedent for this Court to follow.

JUSTICE STEPHEN G. BREYER: Why, why is it -- I guess this is going to be your basic point. Why is it the case -- let's take not this moratorium, but let's take a moratorium that lasts for a year, and after that time everyone believes the board will allow certain kinds of development.

Other things being equal, that year of no use would probably have reduced the value of the land by 5, 10 percent. Now, so why, since that's the effect of the moratorium I'm imagining, should the public have to give compensation for that small diminution in value?

MR. BERGER: Because it's not the diminution in value we're talking about here, Your Honor. It's the total elimination of the ability to make use of the property, and in all of this Court's cases you have talked about denial of economically productive use of land, and what we're doing here, and what you're talking about in your hypothetical, Justice Breyer, is taking away the right to use that land.

It's as if I took away your car for a year and I parked it in the garage and I kept good care of it, and I returned it to you at the end of the year with no diminution in value whatsoever, or perhaps the 5 percent that Your Honor hypothesized.

You still would have been without the use of that car for a year, and I think that you would be entitled to compensation for the fact that I deprived you of the use of that car.

CHIEF JUSTICE REHNQUIST: Well, certainly if the respondent here had simply said, we're going to need your property for 3 years, and so we're going to take a leasehold interest for 3 years, the respondent would have had to compensate for that.

MR. BERGER: Chief Justice, I couldn't agree with that more, and I believe that that is in fact what we're dealing with here.

JUSTICE DAVID H. SOUTER: No, but you're -- it seems to me you're not dealing with that here, because in that hypothetical the person, the third party in fact takes the property in the sense of using it for that party's own benefit.

Here, no one, the Tahoe Regional Planning Authority isn't using the property for its benefit. It's saying that during this period of time there are some things that you can't do.

MR. BERGER: That's true, Justice Souter, but frankly I don't see the difference between them, because the Government --

JUSTICE SOUTER: Well, one difference is that the person taking in the one hypothetical gets a considerable personal value, i.e., the use of a car, or the use of property for a period of time. There's no such fact in evidence here.

MR. BERGER: Absolutely true, but this Court's jurisprudence has always examined cases like this from the impact on the property owner, not from what the Government gains by the taking. Justice Holmes said that in the Boston Chamber of Commerce case a century ago.

JUSTICE SOUTER: Isn't your argument, and wasn't your answer to Justice Breyer's question in effect to invoke the kind of standard language which has come out of the Lucas case?

In other words, it is preventing all use of the property, or all economically productive use of the property, and yet Lucas derived that phrase in the circumstance in which the denial of economic use was assumed to be permanent.

Here, we're dealing with a situation -- Justice Breyer's question dealt with a situation in which the deprivation is assumed to be temporary, so that it does make sense in his hypothetical to say, well, it reduces the value of the property during the interim period maybe by 10 percent. That is a very different economic fact from an indefinite, permanent deprivation which would reduce the economic value of the property down to something close to zero, and doesn't that distinction have to be recognized, and isn't that the reason why the Lucas formula simply cannot be used uncritically in this circumstance?

MR. BERGER: Justice Souter, I believe that that distinction gets recognized at the valuation phase, not at the liability phase.

In other words, taking for a small period of time, or for less than the full life of the property, would be compensated less than taking the full fee interest.

JUSTICE SOUTER: Yes, but what you're really saying is, if the -- I think, that if in Justice Breyer's hypothetical there is a diminution in the value for this period of 10 percent, that you've got to compensate for the full 10 percent, and it seems to me that our cases are pretty clear in saying, that's not how you measure the compensation obligation.

That's the -- that's an example of taking, you know, the one stick out of the bundle and saying because you can't use that one, you've got to compensate 100 percent for that one, but I think our cases rule that out, don't they?

MR. BERGER: Actually, your cases in quite a number of different circumstances say that if you do take one important stick out of the bundle, you may well have taken the property --

JUSTICE SOUTER: Permanently. Permanently.

MR. BERGER: Well, except in First English, Your Honor, where this Court expressly said, and examined all the cases, that temporary takings are constitutionally no different than permanent takings.

JUSTICE SOUTER: Well, except that that gets to the argument that the other side makes throughout here, that the assumption of that statement was that we had a taking in the first place, whereas the issue in this case is whether we do have a taking in the first place.

MR. BERGER: Well, that's correct, and what we're talking about here is a deprivation of all use. That's why we have a pretty clean case for the Court to deal with here.

JUSTICE SOUTER: It's a deprivation of all use if you fit it into Lucas.

Lucas was a case that did not involve a permanent taking, so that it seems to me your first argument has got to be not that the Lucas formula can apply here, but that the Lucas formula should apply here as opposed to this Penn Central formula.

You've got to do that in order to get into First English.

MR. BERGER: I agree with that completely, but I think that what we're dealing with, if you examine the facts of the case, is that from the time that these ordinances were enacted in 1981 until whatever end point you want to look at, there was a total deprivation of use.

JUSTICE O'CONNOR: Well, Mr. Berger, you may well have been able to prevail under the Penn Central approach, I assume, viewed in its entirety over this period of time, but that was waived. Am I correct in that?

MR. BERGER: We did not present a Penn Central case, that's correct.

JUSTICE O'CONNOR: And all you want is this pure and simple per se taking, as applied to, as it comes to us, what is it, a 3-year period?

MR. BERGER: Well, there was this 3-year period chopped out at the beginning of the time.

JUSTICE O'CONNOR: And that's what we're focused on here as the case actually comes to us?

MR. BERGER: That appears to be what the Court is interested in, as the Court reframed the question.

JUSTICE JOHN PAUL STEVENS: May I ask you this question, Mr. Berger? Just looking at temporary takings, and just looking at the liability stage as opposed to the valuation stage, is there a distinction in your view between a regulatory taking and a physical taking?

MR. BERGER: I don't believe so, Justice Stevens. I think that this Court did deal with that in the First English case, and it explained that physical takings and regulatory takings are judged by the same constitutional standards.

JUSTICE STEVENS: So that in your view -- of course, the physical taking, even for 10 minutes, would be a taking. There's no doubt about that.

But your view is, even if the regulation prohibits all use of a piece of property, an automobile, whatever it may be, for 10 or 15 minutes, there is a taking. The damages may be infinitesimal, but there's always -- past the liability stage.

MR. BERGER: If there is a total prohibition of use --

JUSTICE STEVENS: For 10 minutes.

MR. BERGER: -- there is liability. Now --

JUSTICE O'CONNOR: So --

JUSTICE RUTH BADER GINSBURG: Mr. Berger, can you reconcile the different approach that this Court has said goes for spatial separation, like the air space in Penn Central, and time segregation?

It seems to me that if the one -- if Penn Central is the regime for splitting off the air rights, it should also be the regime for splitting off a discrete period of time.

MR. BERGER: Your Honor, this Court and other courts have always dealt with the time value of property, if I may, differently than they have in these spatial terms.

The fact is, leasehold interests, future interests have always been recognized as independent items of property that are independently protected by the Constitution.

If you had a piece of property that had a landlord and a tenant and a lender and some remainder person --

JUSTICE STEVENS: But these are all physical takings.

MR. BERGER: -- with all interests, and it was condemned, all of them would be entitled to compensation.

JUSTICE GINSBURG: But that's --

JUSTICE STEVENS: These are all physical takings cases.

MR. BERGER: And this Court has said in First English that there is no difference constitutionally, Justice Stevens, between the physical takings and the regulatory takings.

JUSTICE BREYER: Suppose I --

JUSTICE SCALIA: What do you do about the fact that there is a regulatory taking of sorts whenever you have a permit system, let's say the normal zoning regime in which you cannot construct any building on your acreage without first applying and getting the approval of the zoning agency?

MR. BERGER: Justice Scalia --

JUSTICE SCALIA: During that period, there's been a total taking. You cannot do anything with that property until you get the building approved.

MR. BERGER: Clearly you cannot do anything until you've gotten the property approved, but it seems to me that there is a fundamental difference between a landowner working through a system whose end product is, at least theoretically and probably very likely, the issuance of a permit to go ahead and develop something that is economically productive on that land as opposed to being stuck in a system where you're forbidden --

JUSTICE O'CONNOR: But that would have been during that interval of time it meets your test. Nothing can be done until the permit issues, so a fortiori, under your theory, compensation due.

MR. BERGER: I don't believe so, Justice O'Connor, because --

JUSTICE O'CONNOR: Well, that's what it sounds like.

Now, what about your basic zoning law? I'm going to, as a city, limit the use of this property to one house per acre. You can't have unlimited apartments or commercial property owner. Now, for the enactment of that, is there a taking immediately?

MR. BERGER: No, Your Honor.

JUSTICE O'CONNOR: Well, you're permanently deprived of the use of it for commercial purposes.

MR. BERGER: Yes, Your Honor, but you are not totally deprived of the use of it.

JUSTICE KENNEDY: But can we get back to the basic question that Justice Scalia asked, and Justice O'Connor asked it as well. I want your answer.

Why is it that a delay for purposes of ordinary zoning, which, let's assume, prohibits you from any use of the property, is not a taking?

MR. BERGER: Because you are there in a process working toward the actual development of the process, of the property, pardon me, in contrast to being in a situation like these people are, where there is no process for development. There is instead the desire --

JUSTICE KENNEDY: Let's assume that the Tahoe Regional Planning Agency thought, in good faith, that there would be some development allowed, but they needed a year to think about it. My -- that's the same as the World Trade Center hypothetical.

We know something very valuable is going to be built, but you say it's a taking, and I don't understand the difference between that and the regular zoning procedure.

MR. BERGER: The difference is that in the second situation there is a conscious and total prohibition on use, and that's the purpose of the regulation, is to prohibit the use.

In the former situation, where you're applying for a permit, the purpose of the regulation is not to prohibit use but, in fact, to enable use.

JUSTICE KENNEDY: Well then, it seems to me you have to change your answer about the World Trade Center hypothetical, where you say there's going to be a very valuable use, we just don't know what it is, but we need a year to think about it, in addition to the normal -- and you told me that was taking, but now your rationale seems to me to back away from that.

MR. BERGER: If they are in a process where there will be development at the end, then I believe that there is not an automatic per se taking, but it seems to me that what we're dealing with, if we've got a total use prohibition, we do have a taking. It's a question of time.

JUSTICE STEVENS: But Mr. Berger, your -- it seems to me your deciding whether the temporary taking is -- whether the temporary interference is a taking or not depends on what's going to happen after the temporary period expires, because in one situation you think, well, they know they're going to get something valuable out of it, in the other they don't, but that means that the test for the temporary period turns entirely on an evaluation of the future.

MR. BERGER: Well, if I made it sound that way, Justice Stevens, I apologize. I -- what I'm saying is that you have two different schemes set up. One is a process leading toward development.

The other is a process of total blockage, and where the intent of the Government is simply to block the use of property. We're not looking at the future --

JUSTICE STEVENS: Well, you're not suggesting they're doing it just for the sole purpose of blocking the use. Don't they have some ultimate goal in sight here?

MR. BERGER: Sometimes they may. Sometimes they don't.

JUSTICE STEVENS: But your -- you rest on the hypothesis that they are just interested in a total blockage for a temporary period of time, and they don't care what happens later.

MR. BERGER: But that is the fact that we're dealing with. We're dealing with --

JUSTICE STEVENS: They don't have any interest in protecting the lake?

MR. BERGER: We have no question about their ability to protect the lake. The question is how they do that, and what they've decided to do in order to protect the lake is to prohibit these people from making any use of their land.

JUSTICE SOUTER: But it seems to me in effect -- maybe this is a variant on Justice Stevens' question -- that you're saying, what's really wrong here is that this is not done in good faith, that this is not done, let's say, in the case of the period of time necessary to get permits, with an actual development in mind.

This is called a moratorium, but they mean something more than just moratorium, they just mean stop, period, and it sounds to me as though you're making it turn on whether it's good faith or bad faith.

MR. BERGER: Oh, I don't think it needs to. I think, in fact, in this case, when they put this moratorium in the context not of -- they don't even call it a moratorium. They did this as amendments to their Water Quality Act.

What they said was, these properties need to be kept frozen in order to protect the clarity of Lake Tahoe.

CHIEF JUSTICE REHNQUIST: And your argument in effect contrasts that with an existing permit system whereby if you comply with certain requirements you will ultimately end up with a permit, the purpose of which is to make sure you do comply with the requirements.

MR. BERGER: Exactly, Chief Justice.

JUSTICE SCALIA: But you still have -- I mean, in the one case the regulating agency has said, you can't do anything with your land while we're thinking about the scheme we're going to adopt, and in the other case the agency has said, just as categorically, you can't do anything with your land while we consider your application. In both cases they're, for a later regulatory purpose they're both saying, you can't do anything with your land.

MR. BERGER: Justice Scalia, in a sense that is certainly true, but in the case of the processing of a permit application, we know that there is permitted use. It's there. It's in the books.

JUSTICE SCALIA: Not during the pendency. Not while the application is pending.

MR. BERGER: The regulations of the agency say that for this property there is permitted use. The question is how you make that use, and under what conditions and circumstances, not whether there will be use at all, where you have in the second situation a total prohibition on use and we don't know what's going to happen at the end of that total prohibition on use.

The key to it may be this case itself, where the light at the end of the tunnel that they keep touting as the saving grace of this kind of a regulatory regime turned out to be no light at all.

There was a complete continuation of the use prohibition when this temporary so-called period ended.

JUSTICE O'CONNOR: Well, under your theory it would seem that -- suppose that a building catches fire and is substantially destroyed by fire, and the fire department comes, and the police department, and they block it off for a period of time, no use while this is investigated, none, property owner can do nothing, can't enter it, you're out of there. I guess the city or the governing jurisdiction would have to pay the property owner.

MR. BERGER: I don't think at that point, Your Honor, that that would be a taking.

JUSTICE O'CONNOR: But it fits squarely within your argument.

MR. BERGER: No, I think that in that case, Your Honor, you would at least be entitled to perhaps some nuisance examination.

You've got a wrecked building that is a hazard, and at least the Government would have the ability to order the property cleaned up before anything else could be done with it, and I think in those circumstances --

JUSTICE STEVENS: But that seems to make the question whether there's a taking turn on the nature of the motive of the -- underlying the regulation or the prohibition, and I thought your position was, regardless of the good faith and the great public interest in doing it, the State has to pay when it does this.

MR. BERGER: Your Honor, I think we all have to live with what this Court called the nuisance exception when it decided the Lucas case, and that there are some things that the Government can do that prohibit all use that are not compensatory.

JUSTICE BREYER: Are you satisfied with the standard that says, every Government regulation is a candidate for a taking, just as every speech act is a First Amendment candidate, but it's actually a taking in this area only when the impact of the Government regulation is not part of a reasonable process looking towards a reasonable form of regulated development?

MR. BERGER: I think I could accept that, Justice Breyer.

JUSTICE BREYER: Well, if that's so, they're going to say they win, because they're going to say, of course, this was an effort, reasonably, to regulate Lake Tahoe over a period of time. It's very complicated, it didn't last -- it lasted a long time, but no more than necessary.

MR. BERGER: Oh, I would disagree with that characterization. This was not an effort to regulate Lake Tahoe. This was an effort to prevent the use of these properties. Certainly they --

JUSTICE KENNEDY: But that's a reasonableness calculation, and that's the Penn Central aspect rather than the more categorical approach that you're urging upon us, I should think.

MR. BERGER: Your Honor, if they had come up with a nuanced, subtle regulation that had something to it other than the meat ax approach that the agency took in this case, I think you would have a Penn Central-type analysis, but what we've got in this case is not anything subtle at all. We've got a complete, easy, quick prohibition, and --

JUSTICE O'CONNOR: What is the status today? What is it, 22 years later?

MR. BERGER: We're 22 years later.

JUSTICE O'CONNOR: What's the status today of the properties affected by this suit?

MR. BERGER: The clients that I represent are still, for the most part, unable to do anything. There is the new plan put in in 1987, which this Court looked at in the Suitum case, and some of the people, those in the position of Mrs. Suitum, in the stream environment zones, are still totally prohibited from using their land. Most of the people are still totally prohibited from using their land.

A large number of them have sold their land to Government agencies that were buying them up at bargain basement prices, at nothing approaching what would, an appraiser would call fair market value, but the value of land that couldn't be developed, in order to mitigate their losses, and as the court approved in the Del Monte Dunes case, what they'd like to do is to make themselves whole.

JUSTICE O'CONNOR: Well, is it your position that all of the properties involved in this petition are, today, still totally deprived of any use whatever?

MR. BERGER: I believe, Justice O'Connor, there may be a handful of them that under the 1987 plan, and the regulations that came under that in 1989, were finally released and allowed to do something, but it's only a small number, and for the most part these properties are still unused and unusable.

JUSTICE O'CONNOR: Is it your position that the application of the Penn Central approach would not result in appropriate compensation determinations at the end of the day?

MR. BERGER: I don't know that, Your Honor. As a pragmatic matter, doing a Penn Central approach on a case that involves hundreds and hundreds of individual properties would have been a nightmarish litigation that only the wealthiest of landowners would be able to afford and, particularly in light of the clear prohibition of use that they decided that they needed, we thought that it made more sense to do a Lucas-type approach than a Penn Central approach in this case.

JUSTICE STEVENS: May I just ask this one question? With regard to those who have subsequently been permitted to develop their land, it's your view that you're nevertheless entitled to a takings compensation for the period which the moratorium was in effect?

MR. BERGER: Yes Justice Stevens, that's true.

I'd like to reserve the rest of my time, Mr. Chief Justice, if I may.

CHIEF JUSTICE REHNQUIST: Very well, Mr. Berger.

Mr. Roberts.

MR. JOHN G. ROBERTS: Thank you, Mr. Chief Justice, and may it please the Court:

Petitioners' only takings claim before the court of appeals and his only -- their only takings claim before this Court is a facial per se claim.

That means that their contention is that the mere enactment of the temporary moratorium in this case effected a taking with respect to every parcel to which it applied -- that's the facial aspect -- without any consideration of the reasons for the moratorium.

That's the per se aspect. And what is more, that bold claim is limited at this point to the temporary moratorium in effect from August '81 until April 1984.

CHIEF JUSTIE REHNQUIST: Mr. Roberts, you described it as a bold claim. Supposing it had gone on for 10 years.

MR. ROBERTS: In 10 --

CHIEF JUSTICE REHNQUIST: Would it be still bold?

MR. ROBERTS: On the facial aspect I think so, Your Honor. I think doing the Penn Central analysis and not the Lucas analysis, so long as it's not a permanent deprivation abuse.

Now, certainly a 10-year claim would have a much harder row to hoe against a takings challenge, but I would like to know the impact on the property's value, why the 10 years was necessary, if it was, the sorts of things that are factored under Penn Central.

JUSTICE SCALIA: Well, you could do a Penn Central -- you could have done Penn Central in Lucas. I mean, Penn Central is wonderful. We could apply it to everything, but as Mr. Berger pointed out, that's a terribly complicated analysis, enormously expensive for property owners to have to go through, which is why you have cases like Lucas.

MR. ROBERTS: This Court said Lucas applied only in the rare circumstance, a total ban on economicaly productive use.

JUSTICE SCALIA: Suppose I take a 3-year leasehold, right. The Government comes in and says, we're taking this property for 3 years, not a permanent taking, just a 3-year taking.

MR. ROBERTS: That --

JUSTICE SCALIA: We do a Penn Central analysis of that?

MR. ROBERTS: Oh, no. If the Government condemns a leasehold, that's a taking, and compensation is due.

JUSTICE KENNEDY: All right, suppose in this case that one of these barred owners leased the property to someone who's going to put a mobile home on it for a year, the moratorium comes in effect, assume the mobile home can't be -- is that a taking of the leasehold, of the lessee's --

MR. ROBERTS: No.

JUSTICE KENNEDY: -- interest?

MR. ROBERTS: No. You don't sever up the property interest and -- so that it corresponds to the extent of the regulation and then say --

JUSTICE KENNEDY: Even when you're taking from the lessee? That's all he's got.

MR. ROBERTS: Well, the right at issue here is the right to build residences, to develop the property.

JUSTICE KENNEDY: No. My hypothetical is that it applies to a mobile home and the guy who leases for -- the lot for a year, and then TRPA says you can't put the mobile home on there for a year. They take this entire leasehold. Compensable?

MR. ROBERTS: It would first of all be under the Penn Central analysis, and the economic impact --

JUSTICE KENNEDY: Why, if it's a total taking?

CHIEF JUSTICE REHNQUIST: General Motors certainly didn't do Penn Central.

MR. ROBERTS: No, but the other -- the distinction is the one this Court talked about in Loretto, between -- you mentioned the World War II condemnation cases. The Pee Wee Coal case, the Government came in and occupied the coal mine to prevent a strike.

That was a taking. In Central Eureka they said, you cannot use the gold mine, and this Court said, that's different, that's not a taking.

That's the type of distinction that we're talking about here between physical appropriation or, extended to Lucas, a ban on total economic use, and the temporary regulation that's at issue here. Because the regulation is temporary, the land retains economic value.

JUSTICE KENNEDY: I'm still not sure of your answer. Your answer is that in my hypothetical about the 1-year lease that's taken from the lessee, it has to be a Penn Central analysis because?

MR. ROBERTS: Because you're starting out with a property -- presumably the regulation applies to the property generally, and it just so happens that this one parcel has been severed out into a leasehold, and in doing that, that is a question that has to be addressed before you get to the analysis, should you sever out the affected property interest to a leasehold.

CHIEF JUSTICE REHNQUIST: But you could have made that same argument in General Motors, and I think the Government did, that you shouldn't just treat it as a leasehold, you've got to value the whole property.

The court says no, there was a leasehold in effect, that's what the Government took, that's what the Government has to pay for.

MR. ROBERTS: But if -- if this Court is -- in its past takings cases, when it's been presented with a regulation that applies to a discrete property interest, it hasn't said, well, let's redefine the effective property interests to that.

It didn't do it in Penn Central, it didn't do it in Keystone Bituminous, and it didn't do it in the construction laborers case.

The way the property was held by the petitioners in this case is fee simple. This regulation applied to fee simple property. It did not affect the value anywhere near the extent that the regulation in Lucas did.

JUSTICE KENNEDY: No, but just to make it clear, in my hypothetical -- I know it didn't happen, but in my hypothetical, no recovery because?

MR. ROBERTS: No, I'm not sure it's no recovery, but I am sure that it's still evaluated under Penn Central, because --

JUSTICE SOUTER: But Mr. Roberts, if you evaluate it under Penn Central, would it be legitimate to evaluate it this way. I've assumed it would be, but maybe I'm wrong.

Assume that the leasehold is not physically taken, so that the Government doesn't substitute itself for the trailer owner and use the property. It's strictly a prohibition of use.

I assumed that under Penn Central the lessee would have his claim against the lessor because the lessor was not delivering. The lessor would not have a claim for a permanent deprivation here because there, with respect to the lessor there would only be the temporary taking.

MR. ROBERTS: Well --

JUSTICE SOUTER: So that the lessee would probably come out okay against a different party. The lessor would be in the same position that the lessor would be in if there had never been a lease. Is that the way it would work?

MR. ROBERTS: Well, presumably the impact of regulation would be something that would be addressed in the lease agreement itself.

JUSTICE SOUTER: Yes.

MR. ROBERTS: I mean, if they were leasing it to build a mobile home and it turns out they can't, who bears the responsibility for that, again a matter between the lessor and the lessee.

But the important point is that the, what the petitioners are arguing for is an extension of the Lucas rule which applied in a, as the Court said, the rare circumstance in which all economic use is prohibited, and the Court emphasized in Lucas that that had the consequence of rendering the property valueless. This is how the Court phrased the question presented in Lucas, whether the act's dramatic effect on the economic value of Lucas' lot accomplished a taking.

Well, here, there is no dramatic effect on the economic value of the affected lots, because we're talking about temporary regulation for a limited time.

JUSTICE BREYER: Well, but does --

JUSTICE O'CONNOR: Well, in light of what's happened, we know it's been 22 years, and presumably many of these properties will never be allowed to be developed. Is there no end in sight? Can we not look at that as a taking?

MR. ROBERTS: First, Your Honor, my understanding of the record is quite different from my brother's. If you look at the pretrial order, Exhibit A, pretrial order filed July 17, 1998, it describes the situations with respect to each of the properties.

Most of them have been sold long ago. Of those that are not sold, two-thirds have a score that makes them buildable under the '87 plan, so two-thirds of the petitioners who still own property can build on those lots according to the record in this case, and that is just petitioners' allegations.

JUSTICE GINSBURG: When you say sold, do you mean at the bargain price that Mr. Berger referred to, sold to --

MR. ROBERTS: Sold typically to the Government buy-out agencies, I wouldn't say at a bargain price.

JUSTICE SCALIA: Sold to the Government agencies who will do with it just exactly what is achieved by the Government's not taking position of it, that is, nothing.

I find this distinction between whether the Government takes possession of the land versus whether the Government doesn't take possession of the land quite unrealistic --

MR. ROBERTS: Well --

JUSTICE SCALIA: -- where you're talking about a Government that wants to assure that the land lies fallow. The Government achieves entirely what it wants by simply saying, nobody shall do anything with the land. That -- why should the Government condemn the land? It doesn't have to.

MR. ROBERTS: That's not, of course, what we're talking about here. What we're talking about here is a time-out for a limited period while the agency carries out its responsibility to determine what can be done with the land.

JUSTICE BREYER: All right, so how does he prove that? What about the one-third who could never build?

MR. ROBERTS: Well --

JUSTICE BREYER: What happens to them? What is your view of the correct thing he should have done? Is a person who never is allowed to build, and never can use the property at all, simply out of luck, if what they say is we're having a 10-year, a 30-year procedure of 3-year moratoriums, 10 at a time or something like that? How is it supposed to work, in your opinion?

MR. ROBERTS: Well, the first thing I'd say is, you bring an as-applied claim and not a facial claim. The facial claim is the mere enactment of this temporary moratorium effective taking.

Well then, don't talk to me about what happened 15 years later, if the mere enactment of the temporary moratorium is your complaint. That's a different case, and he brought that case, and it was thrown out because it was too late.

There were challenges brought to the '84 plan, there were challenges brought to the '87 plan. Those challenges failed, and now the effort is to link those challenges up to what's left, the little tail on the dog of this temporary moratorium that started the process.

JUSTICE SCALIA: How does an as-applied challenge go? What if you make an as-applied challenge. What would you have to prove? Would you have to prove that any intelligent agency could make up its mind and, you know, either fish or cut bait within a year? Suppose --

MR. ROBERTS: If the as-applied challenge is to the temporary moratorium?

JUSTICE SCALIA: Yes.

MR. ROBERTS: Well, you go through the Penn Central factors, and if it's taking too long, that's certainly something pertinent on the character of the Government action. That's what other courts have looked to.

JUSTICE SCALIA: No, no, but it goes beyond Penn Central if you're no -- if it is no longer an honest moratorium to decide what you're going to do with the land, then you're out of Penn Central. Then it's just a taking. You're kidding us.

You only need a year to decide what you want to do. You've imposed a moratorium for 5 years. Why should I have to go through Penn Central? Four of those years is just prohibiting me from using my land with no other governmental purpose in mind except the prohibition.

MR. ROBERTS: And that's one of those things that they would have to show. Here, of course, the district court found that the planning effort was undertaken as speedily as possible.

JUSTICE SCALIA: But you acknowledge that if, in an as-applied challenge, there's a showing that the agency does not need 3 years or 5 years or whatever, that the thing could reasonably have been done in 1 year, everything beyond the 1 year is then a taking?

MR. ROBERTS: No. You have to go through the other factors. This is not a per se analysis.

JUSTICE SCALIA: Why?

MR. ROBERTS: The other factors include the impact on the property. You're claiming a taking. What was the effect on your property?

CHIEF JUSTICE REHNQUIST: Well, what if -- let's take a hypothesis where the moratorium is 10 years. Now, you still go through this thing that you're talking about? It cannot be long enough ever to be a per se taking?

MR. ROBERTS: Well, even the court of appeals recognized that the moratorium is long enough so that the present value of the uses that might be allowed is de minimis, then perhaps the categorical rule would apply, and 10 years seems like it's going to be too long for the Government to figure out and carry out its responsibilities and planning, but I wouldn't say that we try to find a point in time at which suddenly we shift from the accepted Penn Central analysis to the Lucas per se analysis.

CHIEF JUSTICE REHNQUIST: Well, but yet you agree that shift has to take place somewhere along the continuum of time.

MR. ROBERTS: I guess what I'm saying is at some point calling something a temporary moratorium is a misuse of the label. If it's 30 years, that's too long.

Now, the best that Justice Holmes could do was say that when it goes too far it becomes a taking, and I may not be able to do much better, but the Penn Central factors allow consideration of things like, what is the need for it?

The need may not be sufficiently compelling to justify a moratorium of 2 years, or the need may be sufficiently compelling to justify a longer moratorium. What was the impact on your -- the property? Keep in mind, the petitioners submitted no evidence of impact on value.

We have no idea from the record what the impact of the temporary moratorium was, other than the evidence that we submitted which shows that properties were sold for significant amounts of value during the period of the temporary moratorium, which makes sense.

A temporary ban on development doesn't render property valueless. If you have two parcels of property, one subject to a permanent ban on use, and the other subject to a temporary ban, it is true, as some of the amici say, the permanent ban could be made temporary and the temporary ban could be made permanent, but you're not going to pay the same price for both of those parcels of property.

The one that's subject to the temporary ban is going to have a higher market value, reflecting the fact that future uses are available, or will be available or not, depending on the plan that's ultimately adopted.

JUSTICE SCALIA: I suppose that depends on how much any prospective buyer would believe that the temporary ban is really temporary, or how much they believe that it's going to be strung out and extended, and if worst comes to worse, and the Government can't pick it up at bargain prices it will pay compensation to get rid of the land. I --

MR. ROBERTS: And that's like the petitioners' effort to link their lost challenges to the permanent land use plan to their challenge to the temporary moratorium.

JUSTICE STEVENS: Mr. --

MR. ROBERTS: The district court --

JUSTICE STEVENS: Excuse me. Had you finished your answer?

MR. ROBERTS: I was just going to say that the district court in this case specifically found that the agency acted in good faith throughout, so the idea that the temporary moratorium to allow planning to take place was some kind of a sham for a permanent --

JUSTICE O'CONNOR: Well, but it also found there was a total deprivation of use for X amount of time.

MR. ROBERTS: Only looked at from that period. Only looked at for the 32-month period, and our submission is that that's the improper way to carve up the property interest and say, oh, it's a total taking, because we're going to only look at the property that was taken.

JUSTICE KENNEDY: Mr. Roberts, in answer to one of Justice O'Connor's questions about a hypothetical fire damage case Mr. Berger referred to the nuisance exception as possibly taking the case out of the whole takings area.

At what point in what procedure would the possible availability of the nuisance defense arise or be considered with respect to polluting Lake Tahoe?

MR. ROBERTS: Well, we raised the claim before the court of appeals that one reason there was no taking, even if Lucas applied, was because of the nuisance exceptionn. The Court didn't find it necessary to reach that issue.

JUSTICE KENNEDY: I see.

JUSTICE GINSBURG: And so the district court said there wasn't -- that a nuisance hadn't been made out. The district court said that, didn't it?

MR. ROBERTS: That's right, and we appealed that, and the court of appeals didn't find --

CHIEF JUSTICE REHNQUIST: And what was your argument to the court of appeals, that this was a nuisance exception?

MR. ROBERTS: That given the impact on the lake of development, that it fell within the California and Nevada nuisance requirements.

CHIEF JUSTICE REHNQUIST: That it all should be a park.

MR. ROBERTS: Not that it should all be a park, but that further development would threaten the serious and, in fact, irreparable harm to the lake. That's the basis for the Government action in this case that the petitioners have never challenged.

But I want to emphasize in concluding that it's important to remember that the issue is not whether a total ban on use for this period effects a taking.

The issue is whether a temporary moratorium from August of '81 to April of '84 for the purpose of carrying out the responsibility of undertaking planning with respect to these lots is on its face with respect to every lot that it applied to a per se taking without regard to the reason.

JUSTICE BREYER: Phrased that way, it's quite clearly in your favor, but I think they're seeing this as a group of landowners thinking from the beginning, whatever the justification for this, and the justification is excellent, saving Lake Tahoe, it's going to end up that we won't be able to use our land for anything, and we've been able to tell you that from day one, so we brought a case right off the bat that we knew that was going to happen, and then year after year went by when people told us, maybe you'll be able to build, maybe you won't, which really wasn't so, we knew we wouldn't, and then it ended up that we couldn't, all right.

Now, what are we supposed to say to them? Aren't they supposed to have some remedy at law? And that's I think why he wanted to hear all his questions, not just one, and there is that lurking in this case, and I'm not totally sure how to deal with it.

MR. ROBERTS: Well, first of all they waited until the '84 plan took effect to file their lawsuit. That suggests to me the gripe was with the permanent ban, not so much the temporary moratorium.

Second of all, the supposition in your question makes this not a facial challenge. In other words, it's not the mere enactment. It's because we know what's really going on here.

That's an as-applied challenge, that's not a facial challenge, so the landowners in your case said, as, in fact, some have, bring an as-applied challenge saying, as applied to me this is a taking.

JUSTICE SCALIA: So do you agree that a temporary moratorium that ripens into a permanent ban is a taking?

I mean, you know, let's assume that I sold the property during the temporary moratorium which later ripens into a total ban, and I claim that I should have been compensated for those 3 years that I owned the property without any ability to do -- does that constitute a taking?

MR. ROBERTS: I think the period in which the agency's justification is, we need a time-out to undertake planning so that we're not locking the barn door after the horse escapes, should be evaluated separately from the period in which the agency says, this is the land use plan, and if you've got a gripe with us you can challenge that. Those are two separate periods. The character of the Government action is different in those two periods.

JUSTICE SOUTER: Okay, let's assume that they are analyzed separately, and it is found that for the period Justice Scalia is talking about the Government really was not acting in good faith.

Its plan, its intent right from that moment on, from the first day on, was to ban all development whatsoever. In that case, does he have a claim for a complete taking during the 3-year period?

MR. ROBERTS: Oh, certainly, yes.

JUSTICE SOUTER: Okay.

MR. ROBERTS: Yes. I don't think it's a facial claim, because it depends on more than looking specifically at the face of the ordinance.

JUSTICE SOUTER: So it's a question basically of good faith and intent --

MR. ROBERTS: And here the --

JUSTICE SOUTER: -- and understanding what they're doing.

MR. ROBERTS: The district court at petition appendix at page 69 said the agency acted in complete good faith, and completed its responsibilities as quickly as could be expected.

Thank you, Your Honor.

JUSTICE STEVENS: If the court of appeals opinion is just simply affirmed just as is, weren't we wasting our time in First English?

MR. ROBERTS: Oh, no. First English didn't address the question of when a temporary regulation can become a taking.

It said that if you have a temporary taking, and it assumed arguendo that there was a taking for a temporary period, compensation is required, and we don't dispute that at all.

JUSTICE STEVENS: Yes, but as -- assume the court of appeals opinion is the law. First English wasn't a taking. That's your whole point.

MR. ROBERTS: Well, that's what the California State courts determined on remand when they were addressed with the question.

JUSTICE STEVENS: No, no, just talk about Federal law. You're saying that First English could not have been a taking, so we were just waiting our time up here.

MR. ROBERTS: Oh, no, no, not at all. First English could have been a taking. It would have required an evaluation under, again, Penn Central, not Lucas, to determine whether the regulation at issue there, both the temporary and permanent, and both were at issue at different points in First English, constituted a taking.

But once you assume that that was a taking, and you assume the results of that analysis, then it is a taking. Compensation is required.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Roberts.

MR. ROBERTS: Thank you, Your Honor.

CHIEF JUSTICE REHNQUIST: General Olson, we'll hear from you.

GENERAL THEODORE B. OLSON: Mr. Chief Justice, and may it please the Court:

The colloquy so far today seems to me to illustrate the wisdom of Justice O'Connor's comment in her concurring opinion in the Palazzolo case last June that the Court should avoid per se rules in the area of regulatory taking.

Petitioners knew per se rule of takings jurisprudence, taken to its logical end, would make every freeze in the status quo, however brief, during a permitting, planning, or rezoning process equivalent to a condemnation, to use their words --

CHIEF JUSTICE REHNQUIST: I don't understand it that way, General Olson. I thought Mr. Berger separated out, or at least certainly tried to separate out the normal zoning process where you're working towards a permit and a permit is realistically possible at the end of the road.

GENERAL OLSON: It seems to me that's a very difficult distinction for him to make, because it requires an analysis of the nature of the Government's interest in each particular permitting process.

We know that they can be short, we know that they can be long, we know that they can be comprehensive.

CHIEF JUSTICE REHNQUIST: I don't think that's necessarily true. I think you can segregate, at least to my satisfaction, the idea of a zoning requirement in existence -- you have to file for a permit -- and basically to show that you comply with the zoning requirements.

In other words, if you're going to have zoning at all, a permit process is almost necessary as opposed to a moratorium which doesn't say, you know, look, we're going to look over your application and decide whether you can build. It simply says no, you can't build.

GENERAL OLSON: Well, what we would submit is that that zoning permitting process is part of the background principles of land use, land regulation, just as temporary moratoria have always been, that when there's rezoning process, a process referred to by this court in the First English case, that process may have to come to a halt.

The purpose for the temporary moratoria here was to allow the agency to develop a sensible plan and, as Mr. Roberts has already noted by reference to the record, there's no indication that it was not in good faith.

The length of the period, 32 months, was held by the district court to be a reasonable time to accomplish the objectives.

The purpose of the plan, as acknowledged by the petitioners themselves, is that the purpose for the plan was to prevent the degradation of the lake and they indicated that a slowdown -- in their brief, they mentioned in their brief that a slowdown in building permits was an appropriate governmental response to that measure.

Now, in each instance the question is going to be, how long did it take, was it in good faith, what was the Government up to? Here, the Government was attempting to preserve the value that Mr. Berger's clients wanted.

They themselves purchased their property and planned to build a home on it because of the pristine quality of the lake. They make the argument in their brief that it was being degraded, that something had to be done about it.

A limit on development they say -- I think it's on page 3 of their brief -- was the logical objective to solve, approach to solve that particular problem.

So what Lake Tahoe, the regional board that we're dealing with here today, was doing was saying, wait a minute, before we destroy the lake let's stop, let's have a process in which we evaluate how to solve the problem that every landowner around the lake, including the petitioners, want to have solved.

JUSTICE SCALIA: Well, that's extraordinary. You refer to it, General Olson, as just a traditional moratorium. I don't think this is a traditional moratorium at all. I think it's quite extraordinary to just say, you know, a time out, nobody does anything with this land.

I just don't think that that's the normal kind of moratorium. Nobody does anything beyond the limited use that we anticipate we will ultimately impose. It's very rare that you impose a complete prohibition of use, because that's a condemnation.

GENERAL OLSON: It may be unusual, but it is not so rare. In fact, page 5 of the petitioners' brief refers to the two --

JUSTICE SCALIA: Two cases, as I recall, that involve -- total, right, yes.

GENERAL OLSON: Two instances, and the first one that they refer to is to aid the preparation of a comprehensive plan by precluding developers from obtaining permits that conflict with the plan being drafted.

That is precisely almost the same words that were used by the legislator in connection with the compact that suggested that there ought to be a moratorium. This is the compact itself in the 1980 amendments.

It specifically said that it was necessary temporarily to halt works of development in the region which might otherwise absorb the entire capability of the region for further development or direct it out of harmony with the ultimate plan.

Now, if there is some challenge to the good faith of what was going on here, that is not this case.

If there's some challenge to what happened afterwards -- I think the questions Justice Stevens asked point out that, well, if there was something that was done improperly to take these people's property with respect to what happened afterwards, or how far it went, or how it affected a particular property owner, that is the Penn Central test.

Now, for tactical reasons, the property owners in this case decided not to pursue a Penn Central case. We heard here today that because it would be too expensive and too complicated for any individual property owner to bring that case.

Well, that is going to be the case every time anybody challenges Government action as a taking of a piece of property.

These property owners decided to pool their interest and decide not to show what the Government's interest was, the degree of invasion in individual property rights, how much it hurt, whether or not it was in good faith and so forth, so they eschewed tactically all of those considerations.

Now, instead --

JUSTICE SCALIA: With some reason, because they couldn't use their property at all -- at all.

GENERAL OLSON: They couldn't use their property at all as far as this case was concerned, and the question presented in this case, for a limited period of time while a Government agency was acting to address the problem that they acknowledge, because they acknowledge that continued development along the lines that was occurring at the time this moratorium was adopted was degrading the lake and destroying their property.

JUSTICE SCALIA: That's fine, and that's a general social problem for which the entire society should pay.

GENERAL OLSON: Well --

JUSTICE SCALIA: If, indeed, you do need that time to figure out what to do with the lake, why should some individuals bear the burden of that necessary pause to consider what to do?

GENERAL OLSON: I submit it's the teaching of this Court that not every delay, not every intrusion on the use of property, not every incursion on property rights constitutes a taking under the Fifth Amendment.

JUSTICE SCALIA: I understand that, but these aren't the only people who are using Lake Tahoe. They're preserving Lake Tahoe for all of the citizens of that State and for citizens of other States, for that matter.

GENERAL OLSON: Well, Justice --

JUSTICE SCALIA: And yet they're saying, since we need time to think about this, we are preventing total, total, all the use of your land for 3 years.

GENERAL OLSON: Well --

JUSTICE SCALIA: I don't see that it seems to me fair that these people should bear the whole brunt of the moratorium.

GENERAL OLSON: They haven't established that they have bore the whole brunt. They haven't established the degree to which their individual property rights were violated, or the extent of their intrusion. They haven't done all of the things that this Court --

CHIEF JUSTICE REHNQUIST: They've certainly established a common situation. That is, every one of them, presumably, was prevented from using the property for 3 years.

GENERAL OLSON: Because the use of that property, as they acknowledge, would have destroyed the very property rights that they're here seeking to vindicate, and what we're saying is that in many different situations the Government might have lots of reasons, local governments, State governments, Federal Governments, to cause a pause in the development.

Now, what --

JUSTICE SCALIA: I agree with that, and that's what worries me.

GENERAL OLSON: That's right, and --

JUSTICE SCALIA: That's exactly what worries me.

GENERAL OLSON: And that's why this Court in the Penn Central case gave an opportunity to use a reasoned decisionmaking to solve the problem, to find out how far is too far. To ask that very question that Justice Holmes did is to entertain the answer.

We need to know how -- in order to determine how far is too far, this Court has said repeatedly we need to look at the circumstances.

What -- the rule that petitioners are proposing interdicts that judicial fact-finding, reasoned decisionmaking process.

What it also does is cause the permitting agency, the Lake Tahoe Regional Planning Board, to try to do this on a permit-by-permit, quasi-adjudicative process, as opposed to what they did do, as instructed by Congress, a legislative process in which things would stop, reasoned decisionmaking would take place --

CHIEF JUSTICE REHNQUIST: Well, no one is challenging their authority in the sense of acting for the Government, but the fact that they were instructed to do it by Congress doesn't make it any more or any less of a taking.

GENERAL OLSON: Well, I understand that, Mr. Chief Justice, but what I'm saying is that the Government agencies that looked at this problem decided that it had to be solved in a global way.

This was Government acting in a way we want it to act, in a legislative process with transparency to look at the whole problem and, if there had been a taking because it was too long, or too much of an intrusion, there is a remedy under the Fifth Amendment and it's described, how you get to that remedy is described in this Court's jurisprudence in the Penn Central case. The petitioners here sought not to pursue that remedy.

JUSTICE STEVENS: May I ask, do you understand your opponent to be arguing that a curfew would be a taking?

GENERAL OLSON: A taking -- well, a curfew --

JUSTICE STEVENS: I remember in Honolulu during the war you couldn't go out after certain hours of the night, and so the property was totally useless when the curfew -- would that be a taking under --

GENERAL OLSON: Well, I think that they're arguing that any momentary suspension of the use of property would be a taking.

JUSTICE STEVENS: So it would be.

CHIEF JUSTICE REHNQUIST: Thirteenth Amendment.

Mr. Berger, you have 4 minutes remaining.

MR. BERGER: Thank you, Your Honor. Let me touch briefly on a couple of things, if I might.

First, General Olson talked about this Court's cases that generally have built on the question of, we can't tell how far the regulation goes until we know how far they went. Well, that's true, and in this case we know precisely how far they went.

They totally prohibited the use of all of the property owners who are here in front of this Court, and it's that question that we're here to answer. When we know how far they went, we don't need to get into any detailed, factual investigation of other circumstances.

Justice Kennedy asked about the First English case, and whether the Court wasted its time there if the Ninth Circuit's opinion in this case is simply affirmed, and I would have to conclude that that is indeed what happened.

The clear message of merely affirming what the Ninth Circuit did in this case would be to tell all the lower courts that they need to pay no attention to First English, because this Court laid out a lot of clear messages in the First English decision that the Ninth Circuit paid no attention to, and --

JUSTICE GINSBURG: But it also said we merely hold -- this is from First English, stating the holding. We merely hold that where the Government's activities have already worked a taking of all use of property, no subsequent action by the Government can relieve it of the duty to provide compensation for the period during which the taking was effective.

MR. BERGER: Absolutely, Justice Ginsburg, that is true, and -- but what the Court said in First English was that we're limiting, you were limiting the case to what you called the facts presented in that case, and the facts presented in that case were a temporary moratorium for about the same length of time as the one that we're dealing with here, which froze all use of that property and, in fact, in my belief had a better justification for it, because it had a health and safety justification, which this one doesn't.

As you, justice Ginsburg, pointed out, the trial court examined at great length the question of whether these people were creating a nuisance and concluded that there was no nuisance created here.

As much as he was concerned about the fact that continued development around Lake Tahoe might change the color of the lake, there was no health problem with changing the color of the lake. There was no safety problem with changing the color of the lake.

We would all be the poorer, I think --

JUSTICE GINSBURG: But that question was not resolved on appeal.

MR. BERGER: That's correct, the court of appeals did not deal with that question, only the district court did, and its analysis is there for you to look at.

The 1980 compact amendments that the two legislatures and Congress went through are interesting in this case, because while they, in fact, said there was a need for a moratorium, but the moratorium that the legislators and Congress agreed to was not the one that TRPA enacted here.

They said, what we need is a cap on the number of building permits that are issued, and that's in the record here, too, and they said we're going to limit the number of building permits that each city and county can issue to the number that they issued in 1978.

The first thing that TRPA did after that was enacted was to say, we need to rearrange that, and we're going to say, you can issue those permits, but you can't issue any of them to these people.

These people are totally frozen out, and they're being frozen out as part of a major public project so that we can clarify the waters in Lake Tahoe, and it just seems to us that where you have these people who are being asked to make this sacrifice on behalf of the greater public good, either of the people who already own homes around Lake Tahoe, and whose lands therefore gets more valuable, or on behalf of the rest of us who don't own homes up there but who might like to vacation there so that we can also enjoy the beauties of Lake Tahoe, that those people shouldn't be left flapping in the breeze with no compensation for the fact that they're the ones that have been asked to pay for this project.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Berger. The case is submitted.