Transcript

CHIEF JUSTICE WILLIAM REHNQUIST: We'll hear argument now in Number 96-243, Bernadine Suitum v. Tahoe Regional Planning Agency. {Now,} Mr. Radford.

ORAL ARGUMENT OF R. S. RADFORD ON BEHALF OF THE PETITIONER

MR. RADFORD: Mr. Chief Justice, and may it please the Court:

This case is about an ordinary property owner who's been denied all beneficial use of her land and then, in addition, has been denied access to the courts to seek relief for that categorical taking of her property.

JUSTICE ANTHONY KENNEDY: Well, at the outset, I -- and maybe you can answer this question very easily. I don't know why you didn't bring an inverse suit here, number 1, as a matter of choice.

I don't know why you're not required to do so under Williamson as a matter of law, unless it's peculiar to TRPA. There's no inverse action available to you against the bi-State agency?

MR. RADFORD: Well, the Tahoe Regional Planning Agency, of course, is a bi-State body operating under an act of Congress, and the type of proceeding that was initiated here in district court would appear to be specifically authorized under the TRPA compact.

JUSTICE KENNEDY: Can you bring an inverse suit against the Tahoe Regional Planning Agency?

MR. RADFORD: Well, I'm afraid that I can't answer that question, Justice Kennedy.

JUSTICE KENNEDY: But don't you have to answer it under Williamson? Williamson says that that's what you must do. Maybe -- is it because the agency has no treasury, I guess, to pay the judgment, or --

MR. RADFORD: Does your -- is the thrust of your question going to the second prong of Williamson County regarding the need to pursue State remedies?

JUSTICE KENNEDY: Yes, and these aren't State remedies because it's a bi-State agency, but it still seems to me that to put the case into focus you should go to inverse condemnation first and then 1983 if there's no inverse available.

MR. RADFORD: Well, the position of the Tahoe Regional Planning Agency is that they do not have the power of eminent domain, they do not have provisions for paying just compensation, and this entered into the decision that was made at the initial level of this litigation to proceed by way of Federal --

JUSTICE KENNEDY: Thank you. And so we might say that generally we do not know that there are routinely inverse suits filed against the agency and defendant against the agency as they would be against, say, the State of California or the State of Nevada?

MR. RADFORD: I'm not aware of such a practice, certainly not routinely, Justice Kennedy.

JUSTICE KENNEDY: Thank you.

JUSTICE ANTONIN SCALIA: Does the charter of the agency give them eminent domain power?

MR. RADFORD: No, it does not, Justice Scalia.

I'd like to make two points here this morning, if I could. First, the opportunity to sell development credits for the Tahoe Regional Planning Agency is not a remaining use of Mrs. Suitum's land that could constitute a ripeness bar to her regulatory takings claim.

Second, the monetary value of those credits, which was the sole issue in dispute in the proceedings below, has no relevance to the ripeness of her claim, and in any case is eminently fit for adjudication using ordinary appraisal methods.

JUSTICE SANDRA DAY O'CONNOR: But it might have relevance as to whether there's a taking, conceivably.

MR. RADFORD: I don't believe that would be true, Justice O'Connor. The monetary value --

JUSTICE O'CONNOR: Well, but it was true in Penn Central, I guess.

MR. RADFORD: Justice O'Connor, I think that the Solicitor General made a -- an extremely important distinction in the brief that was filed with this Court.

I believe on page 17 the distinction was between value and rights that were retained in Mrs. Suitum's property following the application of these regulations and value or rights that were obtained from the agency after the complete deprivation of her ownership rights.

The value of the TDR's -- and we're going to use shorthand here. When we talk about TDR's, transferable development rights, we're talking about these credits that the agency has created.

Their value, if any, is something that has been injected from the outside after all of Mrs. Suitum's development rights have been destroyed.

Those are values that she has obtained from the agency, not values that were retained by her property and, of course, when you look at it that way, and the reason that distinction I think is valuable is it illustrates that what TRPA is really doing here --

JUSTICE O'CONNOR: Well, how were the TDR's obtained in Penn Central? I mean, we at least dealt in that case with transferable development rights.

MR. RADFORD: The TDR's at issue in Penn Central, Justice O'Connor, of course were not considered relevant to the ripeness issue. The Court went directly to the merits.

JUSTICE O'CONNOR: But apparently they were considered of relevance in deciding whether there was a taking.

MR. RADFORD: That -- that would appear to be correct. The direct answer to your prior question is, the TDR's that were at issue in Penn Central were preexisting.

They were not created by the landmarks law that was being challenged in Penn Central.

JUSTICE O'CONNOR: They existed when the owner bought the property in question and later sued on it?

MR. RADFORD: I could not tell you exactly when Penn Central purchased the property involved and when the New York City zoning ordinance went into effect, but the TDR's were part of the general zoning ordinance.

JUSTICE O'CONNOR: But in any event, when Mrs. Suitum bought her property the Tahoe Regional Planning Agency was not yet in existence and hadn't developed the TDR?

MR. RADFORD: The agency was in existence at the time Mrs. Suitum acquired this property in 1972.

However, the credits that are at issue here were only created under the 1987 plan that came along, of course, considerably after Mrs. Suitum and her husband had acquired this lot with the expectation of being able to build a home.

JUSTICE O'CONNOR: Now, there is some residual value to the extent the property might want to be acquired by a neighbor or someone else to have a larger yard or additional property, I assume. MR. RADFORD: Justice --

JUSTICE O'CONNOR: There is some value, apparently, remaining for that purpose. We don't know how much.

MR. RADFORD: I would disagree with that, respectfully, Justice --

JUSTICE KENNEDY: Volleyball and things like that?

MR. RADFORD: Well, I know --

JUSTICE O'CONNOR: A picnic table?

MR. RADFORD: The situation that we have here is an ordinary street with ordinary homes and one vacant lot in the middle of it. It might be a suburb of Milwaukee or Sacramento. It happens to be Incline Village.

Now, you have two houses, obviously, on each side of that vacant lot, and the Ninth Circuit actually says this.

That consists -- that comprises a market for her property, because either of those two neighbors might want to buy that as an extension of their own land.

JUSTICE RUTH BADER GINSBURG: But there was an affidavit backing that up, wasn't there, the Johnson affidavit that said this property has some residual value?

MR. RADFORD: That's true, Justice Ginsburg.

JUSTICE GINSBURG: So the Ninth Circuit had something to go on.

MR. RADFORD: Well -- however, if you look at the evidentiary basis for that affidavit, there were no comparable sales.

There has never been a sale of SEZ property -- that is, property that the agency has designated a stream environment zone -- to an adjacent landowner.

Mr. Johnson's affidavit cited to six sales which were an attachment to that affidavit, every one of which was a sale by the State of Nevada.

There has never been an arm's length private transaction between the owner of SEZ property and an adjacent property owner, and there's no reason to believe there ever would be one.

JUSTICE O'CONNOR: Well, suppose we think in fact there is some residual value in what's left for sale for some purpose, obviously less than it would be if a house could be built upon it.

If there is such a value, does it go to the determination of whether there's a taking in the first instance, and then possibly later, if there is a taking, to the amount of money that should be paid?

MR. RADFORD: It would presumably go to the issue of viability for a taking, Justice O'Connor. It certainly would not go to the ripeness question.

CHIEF JUSTICE REHNQUIST: The Ninth Circuit didn't reach any takings question, did they? MR. RADFORD: No.

CHIEF JUSTICE REHNQUIST: They said that under Hamilton County this was simply -- you had to pursue further remedies before they would even confront the question.

MR. RADFORD: That's correct, Mr. Chief Justice.

JUSTICE SCALIA: I thought it was your position that it doesn't go to the taking either. MR. RADFORD: Well --

JUSTICE SCALIA: That the criterion is not residual value, but whether there is any economically beneficial use of the land.

MR. RADFORD: That, indeed, is our position, Justice Scalia.

In response to Justice O'Connor's hypothetical, what I was saying is, if this Court decides that there's residual value in the property and decides that that has some relevance to the takings question --

JUSTICE O'CONNOR: Or decides that there may be. We don't need to make the factual determination.

MR. RADFORD: That's correct. I'm sorry if I misrepresented your question, Justice O'Connor, but the thrust of my answer was, if the Court winds up in the position of saying this is not a complete wipe-out, this isn't a Lucas-type deprivation of all beneficial use but in fact is a Penn Central type analysis where we look at the economic impact and balance various factors, then that would become relevant.

I think this is a Lucas case. I think if we were to get to the merits -- and, of course, all the Ninth Circuit actually arrived at was the ripeness issue -- if we were to get to the merits, I think this is a Lucas case.

JUSTICE KENNEDY: Do we have to say whether it's a Lucas case or a Penn Central case in order for you to prevail on the ripeness claim?

MR. RADFORD: No. That's not necessary, Justice Kennedy. What we need to prevail in this case to reverse the decision of the Ninth Circuit is simply a ruling that Mrs. Suitum has, in fact, received a final decision within the meaning of Williamson County, and --

CHIEF JUSTICE REHNQUIST: Is the TRPA subject to the Administrative Procedure Act? Has any court ever decided that question?

MR. RADFORD: I know of no ruling to that effect, Your -- Mr. Chief Justice, and my assumption would be they are not subject to the Administrative Procedure Act which, of course, applied in the Abbott Laboratories case that TRPA now seems to rest its ripeness claims on.

JUSTICE DAVID SOUTER: Do I understand the reasoning of the courts below that the lack of ripeness depended not only on the fact that there had not been a final ruling from the county in this -- with respect to one of these rights that -- the lottery issue, I guess -- but that in fact with respect to all of the TDR's collectively there was simply too little known about their actual functioning to assign a market value, and because a market value could not be supplied, that was one of the reasons for saying that the claim was not ripe. Is that correct?

MR. RADFORD: Justice Souter, that is the interpretation that TRPA places on the decisions below. I don't read that myself.

In the proceedings below we had, of course, a request -- or, actually an order from the district court for a supplementary briefing on how the TDR process worked.

The supplemental briefs and affidavits were submitted, and among the material that was submitted in that process were affidavits valuing these very credits that are at issue.

Mrs. Suitum presented valuation evidence. The TRPA presented valuation evidence. This was a factual issue that was presented to the trial court to determine in response to its order for supplemental briefing, and yet presented with this evidence that both sides were prepared to testify and present experts as to the valuation of the credits, the court simultaneously held that the credits have value, but there's no way of knowing what that value is.

JUSTICE SOUTER: I take it it's your position that even if the value of the credits cannot be determined, you are prepared to proceed in this suit and take whatever consequences that fact might produce for you.

MR. RADFORD: Justice Souter, the answer to that would be yes. Mrs. Suitum wants to build her house.

She believes that she's entitled to realize her reasonable expectations to proceed with the development of her subdivision lot just as everyone else in the subdivision has.

JUSTICE KENNEDY: And I take it you would say -- or maybe you don't say. I take it you would say that if these credits have no market value, or have no value that can be established, that that in a sense aggravates the taking that has occurred in your view.

MR. RADFORD: That would be correct, Justice Kennedy.

Now, there seems to be a strange dilemma that's presented by the rulings below, and that is clearly either there is a market for the TDR's as the agency has contended and many of its amici contend in their briefs to this Court -- either there is a market for the TDR's in which they are commonly bought and sold, in which case the court could easily determine the value by appraisal, or there is not a market for them, as the agency has contended in other cases, and nobody knows what they're worth.

It's a total mystery. In which case, it would obviously be completely unfair to force Mrs. Suitum to go out and try to test a market that doesn't exist.

Significantly, I think, if we look at footnote 18 in the respondent's brief, the bottom line to all of this is, regardless of whether Mrs. Suitum goes out and goes through this process, tests the market, gets an offer, comes back to the agency and applies for a sale of these credits, it's the agency's position that the court should still make up its own determination of what the credits are worth.

So there's clear -- more than an implication. The TRPA has clearly expressed its position that the courts can determine the valuation issue completely independently of anything Mrs. Suitum is required to do.

JUSTICE STEPHEN BREYER: If you're right, you have a very strong argument that's final and definite. So then we'd say it's ripe, go decide the merits.

But when they get to the merits, what is the situation? That is, my impression is that they've been through the merits in the court, that there's one affidavit in there that says that these things are worth something

-- I don't know if it's $30,000 -- several thousand dollars, and then there's another affidavit that says no, they're not worth anything. That was struck out of the case, and the Ninth Circuit affirmed.

So if we send it back, what is there left to do?

MR. RADFORD: Our basic position, Justice Breyer, is that although the value of the credits can easily be determined by the trial court, that in fact is irrelevant to the taking issue, because what these regulations have done --

JUSTICE BREYER: So in other words you're going to send it back and make a legal argument. MR. RADFORD: That's --

JUSTICE BREYER: And the legal argument will be on the basis of the record this constitutes a taking, and the other side will say on the basis of the record it doesn't.

MR. RADFORD: That's correct --

JUSTICE BREYER: Okay. MR. RADFORD: -- Your Honor.

JUSTICE SOUTER: But so far as this particular proceeding this morning is concerned, I take it your position is, even if you lose on the question whether the TDR's are relevant to the taking, you are ready to litigate them for whatever they are worth, and you just want to proceed.

MR. RADFORD: That's correct, Justice Souter. Now, I would have to add that this is an extremely unusual case in that the substantive issue of whether there has been a Lucas-type taking seems almost to be contained within the procedural issue of whether the case is ripe for adjudication.

This came up on ripeness. The question presented was ripeness, and by the normal procedures of this Court, a ruling would be limited to ripeness.

JUSTICE SCALIA: Well, the one is included in the other only if the way that you resolve the first is by resolving that these things have no value.

If you resolve it that way, then indeed the Lucas question is answered, but if you resolve it the other way, that they have some value, then it's not the same question, is it?

MR. RADFORD: Well, there's another way of looking at it, Justice Scalia, and that is, the Ninth Circuit held the case was not ripe because the opportunity to sell these TDR's was a use of Mrs. Suitum's property.

If we're going to reverse the Ninth Circuit's decision, then the conclusion could only be that the opportunity to sell the TDR's is not a use of her property --

JUSTICE BREYER: Why? Why? It is what it is. I mean, that is to say, they have said this is the situation. You have these three things, the 180 feet, the allocation, the 5-4 residential rights -- that's it. You got it.

Okay. Now we go back and decide whether taking a person's property is at issue, or it is a taking under those circumstances or it isn't. What is there any need for us to go beyond that?

That is, why should we overrule a holding, what looks like a holding in the Penn Central case in order to decide a ripeness issue?

MR. RADFORD: Oh, no, Justice Breyer. I want to make it perfectly clear that we are not suggesting this Court should overrule Penn Central or, indeed, should overrule any previous precedent.

Our position is the existing precedents of this Court in Williamson County and the MacDonald case are clearly consistent with a ruling that this case is ripe.

There's been a final adjudication not just regarding the ability to utilize her land which was involved in Williamson County and MacDonald, there's also been a final determination, as you just said, regarding what credits are available -- indeed, what credits she is required to go out and market.

So there's been a final decision, the case is ripe, that's as far as this case needs to go -- the Court needs to go.

However, the Court could, without in any way overruling Penn Central or any other case, take the additional step of saying, since the ability to sell these credits is not a use of her property, she has no beneficial use of her property. The regulations have deprived her of all beneficial use. Because everyone agrees -- the parties, and the courts below -- everyone agrees that she has no remaining use of her property except the ability to sell the TDR's.

JUSTICE KENNEDY: Suppose an agency said that you can't use this lot, but we will give you your choice of one of four other residential lots which appraisers would testify are comparable.

Would that be a taking in your view?

MR. RADFORD: I think that would be a taking, Justice Kennedy, under the basic standard that all land is unique, and to say we're going to take away the land that you own in which your expectations are wrapped up and give you another piece of land would in fact be a taking with an offer of compensation.

Now, the property owner might accept that offer, but they might also claim no, that doesn't comply with the just compensation requirement.

JUSTICE GINSBURG: Mr. Radford, do I understand you correctly that you recognize that the only thing before us is that threshold ripeness? I think at least the United States has said you have a final order, you have a final decision, and the only question is this prudential ripeness coming out of Abbott Laboratories. That was the United States' position.

MR. RADFORD: Well, I would agree, Justice Ginsburg, that actually in my opinion both the Solicitor General and the agency in their briefs to this Court have conceded that there's been a final decision within the meaning of Williamson County.

Now, the fallback to Abbott Laboratories I think is completely inappropriate and something this Court should avoid.

Abbott Laboratories was not a land use case. It wasn't a takings case. It wasn't even a constitutional law issue.

However, if we were to look at the Abbott Laboratories standards we'd see that the basic issue in Abbott Laboratories, determining the ripeness of a preenforcement challenge to Federal regulations, is whether there had been a final agency action that imposed a distinct injury upon the plaintiff. There clearly has been in this case.

In fact, that would seem to be virtually the same as the final decision requirement in the specific land use context of Williamson County.

What the agency is trying to do with Abbott Laboratories is shoe-horn its argument in through the second subsidiary issue of hardship on the parties and yet, of course, the hardship inquiry in Abbott Laboratories was not a balancing test, where we looked at the hardship on the plaintiffs of having adjudication delayed versus the hardship on the Government, whatever that would mean, of having a prompt determination of the legality of its regulations.

The hardship inquiry applied only to the petitioners. What the Court looked at is, will there be an injury, a further injury to the petitioner of having adjudication delayed, and clearly that also holds in this case.

Mrs. Suitum stands to suffer not only the additional losses of time and expense of continually litigating her basic constitutional rights, but her constitutional claims could, in fact, be mooted out if she complies with the procedural requirements that the Ninth Circuit has set forth.

So frankly we think that this Court should simply reject TRPA's proposal to proceed with an Abbott Labs type analysis, look at Williamson County, look at MacDonald -- those are land use cases involving regulatory takings challenges.

The point of the Takings Clause is fairness. The point of requiring just compensation when there has been a complete wipe-out of all beneficial use of land is fairness.

The point of the ripeness doctrine is certainty. We want to know that we have a certain claim.

We want to know that the regulations have been applied with certainty so that we can proceed with the adjudication. We have certainty.

JUSTICE SCALIA: Mr. Radford, could I take you back to the line of questioning that Justice O'Connor began with? You said that none of these TDR's preexisted the asserted taking here. That is, the denial of the building authorization.

Is that so? I thought that -- is it not the case that any lot owner in this area could, if he or she wished, sell that lot-owner's right to build to somebody else?

MR. RADFORD: Within the many restrictions that are placed on the transactions that's correct, Justice Scalia.

JUSTICE SCALIA: Right. Well, so then some of these TDR's did preexist the asserted taking here.

MR. RADFORD: Perhaps my answer to Justice O'Connor was misspoken. My point was that the TDR's were created at the same time as this regulatory scheme that TRPA has placed.

JUSTICE SCALIA: Well, the regulatory scheme is not the taking. I -- MR. RADFORD: No. No.

JUSTICE SCALIA: I thought your point was that if something is given to you at the same time as the taking, it can be regarded as compensation, but it in no way reduces the amount of the taking, and their response is, yes, but you had more than just your ability to use the land at the time of the taking. You also had your ability to trade off your land rights to somebody else.

MR. RADFORD: Well, we have, of course --

JUSTICE SCALIA: And for some of them that's true. I'm not sure all of them. I think some of them you only acquire after you've been designated a --

MR. RADFORD: That's -- that's true. Of course, you have to go through the lottery to obtain the allocation.

You get the bonus residential development rights but only if you sell your initial right and greenbelt your property and so forth.

But the sole point I was making was that the TDR's at issue in Penn Central existed prior to the whole regulatory scheme of the landmarks regulation.

It was part of the comprehensive zoning plan of the entire City of New York. Here, by contrast, the TDR's were created at the same time as the regulatory plan under which it was finally applied to Mrs. Suitum, giving rise to this taking.

The point being, the TDR's at issue here were created specifically for situations where these regulations will deprive an owner of all beneficial use of their land and then go through an ersatz compensation procedure of saying, in effect, here, you have some paper.

We've taken away all of your property rights but you have some paper. We haven't taken that away, so you not only have no taking, but your claim isn't even ripe.

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

CHIEF JUSTICE REHNQUIST: Very well, Mr. Radford. Mr. Lazarus, we'll hear from you.

I hope sometime during your argument you will comment on the observation I am about to make, that the Ninth Circuit seemed to rely very heavily on the Williamson v. Hamilton County.

Your brief here kind of shifts and goes to Abbott Laboratories. Is that really a shift in your position, or a chance in emphasis?

ORAL ARGUMENT OF RICHARD J. LAZARUS ON BEHALF OF THE RESPONDENT MR. LAZARUS: It's exactly that, Your Honor.

It is a change in emphasis. It's not a change in the bottom line reasoning or the ultimate result.

We -- as this case has progressed our thinking has evolved somewhat on that issue, and we don't think that the best way to view the ripeness issue, which is a prudential ripeness issue here, the best way to view it is in strict terms of finality in Williamson County but instead in terms of more of a flexible approach a prudential ripeness as reflected in this Court's decision in Abbott Labs. Williamson County --

CHIEF JUSTICE REHNQUIST: Do you think the Administrative Procedure Act applies to the TRPA?

MR. LAZARUS: No. The Administrative Procedure Act does not apply, and our basic position is that the Abbott Labs principles, the prudential ripeness principles announced in Abbott Labs, which, of course, was a case involving the Administrative Procedure Act, should apply more broadly than just cases, and there's no reason --

CHIEF JUSTICE REHNQUIST: So you would apply, say, Abbott Laboratories to an entirely uni-State proceeding if this were just California?

MR. LAZARUS: Yes, Your Honor. I mean, basically our position is that prudential ripeness is described in very flexible terms in Abbott Labs, and at those --

CHIEF JUSTICE REHNQUIST: What if the State of California were to take a different position in its administrative procedure rulings?

MR. LAZARUS: Well, we're just claiming in terms of Federal jurisdiction, and --

CHIEF JUSTICE REHNQUIST: So you say the Tahoe Regional Planning Agency is governed by Federal law in this respect?

MR. LAZARUS: No. It's just a question of, it's a jurisdictional issue to the extent a case is brought in Federal court, and cases to be brought against the Tahoe Regional Planning Agency under the compact either in State court or in Federal court.

To the extent that they're brought in Federal court, though, standing requirements would apply, both prudential and constitutional, and ripeness considerations would apply, both prudential and constitutional.

Petitioner's position in this litigation is decidedly at odds in our view with the interests of property owners concerned about governmental regulation.

They are challenging a ripeness ruling that will likely help them, and they attack a TDR program that furthers rather than undermines private property rights.

Petitioner offers two reasons why the lower courts were wrong in concluding that her takings claim lacks ripeness, a very narrow reason and a broad reason.

I would like to begin my argument by addressing first petitioner's narrow argument, because I believe at least that argument presents a close question.

Petitioner's narrow argument is that her takings claim is ripe because the value of her TDR's can be determined by a court based on appraisals without any effort necessary by her to market them or to seek any possible approval of the transfer.

JUSTICE O'CONNOR: Well, and that sounds eminently reasonable in light of the evidence that we do have in front of us. Experts have given their opinion of the value.

MR. LAZARUS: And {and we} do agree, Your Honor, that the appraisals that are in evidence are very good evidence and they're weighty evidence, but the value of an actual marketing effort for a TDR remains great, and let me explain why.

JUSTICE O'CONNOR: Well, but I don't see why that's a requirement for ripeness. MR. LAZARUS: Well --

JUSTICE O'CONNOR: Maybe the best value of a property is if it's sold, but we have many claims for takings where the property isn't sold, and no court requires it to be sold in order to determine the value.

MR. LAZARUS: That's right.

JUSTICE O'CONNOR: So it's a strange argument.

MR. LAZARUS: Well, Your Honor, this is a unique case, because TDR's -- most real property, the value can be readily determined based on appraisals.

TDR's are fairly unique in this regard, which is what makes the value for the fitness of the issue so important to actually have a marketing effort. Let me try to explain just for a moment.

The single most dispositive factor in valuing real property, as we all know, is location. Well, TDR's arise in the first instance out of ownership at one location, but their efficiency and their effectiveness is that they can ultimately be applied to many locations. Until one starts to begin to identify where the market exists for the TDR, it's very hard to know its value.

A TDR, for instance in Placer County if ultimately applied there is worth far less than in Washoe County.

But the irony here is if you look back to the old TDR cases in the 1960's, the early litigation in Penn Central, it was the property owners who made this complaint about TDR's, that until you --

CHIEF JUSTICE REHNQUIST: Well, but the TDR's in Penn Central were different in that they went to property already owned by the claimant.

MR. LAZARUS: They didn't have to. These could go to properties that were owned by Mrs. Suitum if she owned them.

These TDR's are actually far more flexible than the TDR's in Penn Central because they can go to adjacent property, property she owns, or they can go to lots of people in the --

CHIEF JUSTICE REHNQUIST: Well, you say they're more flexible, but they also strike me as less usable, since at least the person who owned the property that the TDR applied to could make the judgment do I want to use it, rather than just having to sell it to somebody.

It seems to me your argument is -- if the TRPA says you can't use your lot but here's some scrip, you go over to Harrah's and you can play roulette with it. (Laughter.)

Then you say no, we don't value the scrip. We have -- we require the owner to stand outside the door of Harrah's and see what she can get for it, though.

MR. LAZARUS: The fact that the Court considers the TDR's in the Penn Central case relevant both to the economic impact and considered to be use of the property did not turn on the happenstance that they actually owned some other property nearby.

If Mrs. Suitum owned some other property nearby, the TDR's could be applied there. The TDR's here, though, are far more flexible.

JUSTICE KENNEDY: What -- there's a 60-day claims period against TRPA?

MR. LAZARUS: The 60-day claims period would not apply in this case. This is a section 1983 case, and under section 1983 the general limitations period applicable in Nevada for personal injuries pursuant to this Court's decisions in Wilson --

JUSTICE KENNEDY: How does Mrs. Suitum know when the -- even under 1983 the statute runs?

MR. LAZARUS: The statute would run in our view, the way we approach the case, that if she identified an interested and eligible buyer, and they had obtained TRPA approval of the transfer, at that point limitations would run.

If, instead, she found out that it was futile -- it was -- with a good faith effort there was no market, and we don't think that's going to happen, then it would begin running at the date of the reasonable discovery of the cause of action.

JUSTICE SCALIA: Your rules adopted by the association say that you have to bring suit within 60 days, don't they?

MR. LAZARUS: Yes, but those rules -- and this has actually been litigated and settled, at least in the Ninth Circuit, that for a 1983 action it's quite consistent, and mandated by this Court's decision in Wilson v. Garcia, that there is a uniform limitations period for all 1983 actions, and you look to the applicable State law, and in this case it would be Nevada. It would be 2 years.

So it's not as though some 1983 actions are governed by the 60-day in Article VI and others are governed by Nevada law. Instead, 1983 actions would all be governed --

JUSTICE BREYER: But I didn't see anywhere in these -- I haven't read yet everything, but I didn't see in most of these things any ground that the authority would have to deny approval, assuming that she transferred the rights to a person who was qualified, which any other -- so what's left to do? I mean, why isn't it ripe under any theory? MR. LAZARUS: Well --

JUSTICE BREYER: That she's been told at a certain date at that moment you cannot build on this property, and instead, here are some pieces of paper, and they have definite rights in them, and there's nothing more for the agency to do. There's nothing for the agency to do. The legal issue's clear.

What remains under Abbott Laboratories to happen?

MR. LAZARUS: Well, one of the factors that would apply in a case like this is the Penn Central factor and the economic impact of the regulation, and until the court has the record fleshed out to make the proper determination of the economic impact, which includes the value of the TDR's, the court -- it's just a matter of prudential ripeness considering on the one hand the relative fitness of the issue, and the issue simply is not fit.

As counsel themselves said, they viewed this whole thing as a mystery, how much these things were worth.

JUSTICE SCALIA: Mr. Lazarus, suppose there's a regular inverse condemnation case, and the plaintiff is saying, you took my land, and I want just compensation.

Do you think that the State that took the land, or the State agency, would be able to come in and say, you know, this land is way off in the mountains. There hasn't been a sale in that area in 50 years.

Figuring out the value of that land for just compensation purposes is very difficult. This suit is not ripe. The owner of the land has to go out and find a potential buyer at some cost.

Why is that any different from -- you know the answer to that is, of course, the suit is ripe. Why is that any different from the present case? (Laughter.)

MR. LAZARUS: It's different from the present case because of the uniqueness of TDR's. In a case like that --

JUSTICE SOUTER: No, but you are creating the uniqueness. I mean, you are supplying the ingredient which Justice Scalia referred to as being up in the mountains without any comparable sales, and the only thing that is unique is that, in creating the TDR scheme, you have created the problem. Why should the landowner have to wait because you created something which is difficult to value?

MR. LAZARUS: Well, the landowner shouldn't have to wait if there would be any undue hardship, but what you have here is a question for the court.

JUSTICE SCALIA: We don't inquire into hardship in that case. I've never heard of a court inquiring into hardship.

The court might say to the plaintiff, look, if you can't prove the value, you're the one who's going to be the loser, but if you want to go ahead, go ahead. They don't look into hardship.

MR. LAZARUS: There are other things at stake here. One of the most important things of prudential ripeness is the fitness of the issue for the court to decide, and the court here simply wanted to decide this very important as-applied takings case based on the better evidence possible. The court --

JUSTICE BREYER: I can't think of any ripeness case I've ever read, and maybe you can cite one, but I can't think of any ripeness case I've ever read in which a factor like this made a difference. I mean, because of what Justice Scalia said.

The agency isn't likely to change. They're not going to change anything, and of course it would be a little easier if we had better evidence about what these TDR's are worth, but is there any case which said because you can get better valuation evidence later this matter isn't ripe?

MR. LAZARUS: There are not cases involving valuation.

JUSTICE BREYER: No, but anything like that.

MR. LAZARUS: There are --

JUSTICE BREYER: Which case?

MR. LAZARUS: Well, there are cases involving the fact the court wants better facts before it to decide, like the Whren v. Geary case, the First Amendment case I believe written by Justice Kennedy involving a First Amendment challenge, and one of the questions -- it was a California constitutional provision which made it unlawful for a political party to endorse any candidate for non -- a nonpartisan office.

And if one reads the Court's opinion there, one of the things the Court is concerned about there is that until they have an actual application -- they can see what the pamphlets are.

They can see what the actual hardship would be on the political party in that case -- it simply really wasn't ripe for --

JUSTICE GINSBURG: Mr. Lazarus, on a question of evidence, what these TDR's are worth, it's something that you created.

The landowner really wants nothing to do with it, and one of the considerations when we're dealing with evidence is which side is better equipped to present the information.

Now, as I understand it, Ms. Suitum had somebody testify and that person was rejected as not a proper expert.

You had someone who did qualify as an expert, so even if the record needs fleshing out, why should it be Suitum rather than the agency that does the fleshing out?

MR. LAZARUS: Well, because she is the plaintiff in this case, and she in effect created the factual uncertainty about these TDR's which prompted the lower court to decide that it needed a better record to decide the case than it had before.

JUSTICE SOUTER: Why should we characterize her as creating the uncertainty when it was your agency that created the rights?

MR. LAZARUS: Well, we created the --

JUSTICE SOUTER: Why blame her rather than your client?

MR. LAZARUS: Well, the rights that we created, though, were rights which were very consistent with fairness and justice, and that is in this case we were striving --

JUSTICE SOUTER: Well, that's kind of the issue here, isn't it? (Laughter.)

May I -- let me make a proposal, and you tell me if I'm wrong, and why.

It seems to me that the agency's interest here in raising the ripeness claim and in defending what has happened below is simply this, that if the valuation does proceed right now, without the development of a market and without the -- any further action by the petitioner, an appraiser is likely to come in and say, there is so little reason for me to ascribe value to these rights that I'm going to ascribe a very low value to them. I'm going to say, perhaps not that they're worth less -- worth nothing, but that they are worth very little.

And it seems to me that that's the only interest which the agency has in delaying this. They don't want a low valuation. Is there something more involved in that?

MR. LAZARUS: Well, certainly the agency has an interest in a ruling which promotes the creation of this market, but the real, more concrete interest of the agency in this case

-- because, of course, the only record evidence in this case, the only appraisals are all on our side. Our interest is a far broader interest, and that is to have these applied takings challenges based on the best record possible.

JUSTICE SOUTER: But it seems to me quite manipulative for you to say we want to use the courts to create our market. You want the ruling to create a market?

MR. LAZARUS: It would have -- it could have that incidental effect.

JUSTICE SOUTER: If your position is that these are worth something, then that ought to be a market that you've created when you gave her the coupons.

MR. LAZARUS: Well, Your Honor, that is an incidental, I think positive effect of our position, but I think the main impetus of our position remains the fact that it is in the Government's interest always to have the constitutionality determined based on a fully fleshed-out record.

Now, in this case, perhaps the trial court, contrary to our recommendation, should have, relying on our appraisals, ruled against the petitioner on the merits.

The irony is what she is challenging is a ruling that is far more generous than that which is in effect.

JUSTICE SCALIA: But then she could have been able to appeal here on the merits question, which your opposing counsel is urging us to reach but acknowledges we need not reach, and this 6 years of litigation would have been ended that much sooner.

MR. LAZARUS: Well --

JUSTICE SCALIA: This just adds another layer of litigation. How elderly is this plaintiff, if we're talking about hardship? Do we know how old the lady is?

MR. LAZARUS: I believe she's 82 years old.

JUSTICE SCALIA: And she's been litigating this for 6 years already.

MR. LAZARUS: Well, Your Honor --

JUSTICE SCALIA: Do you want to talk about hardship?

MR. LAZARUS: Well --(Laughter.)

MR. LAZARUS: To the extent, Your Honor, that there's been hardship here, under our view she could have very easily made this case ripe consistent with the district court's opinion in a very short time.

The delay that has resulted over the years is a result of the litigation.

Now, she is of course well within her rights to appeal, but having chosen to appeal, you can't claim hardship on the valuation based on the time that it took for the appeal when the case could have been very easily made ripe for other times.

I can't speculate as to why, given the age of the petitioner, one chose one technique rather than another technique, but in terms of hardship, I don't think one could put the litigation, particularly the lengthy appeal, as evidence of the hardship --

JUSTICE SCALIA: How could she -- does she have to wait till she wins the lottery? What if she doesn't win the lottery? How is that one to be evaluated?

MR. LAZARUS: Under our view, she basically would have to make a good faith effort.

JUSTICE SCALIA: To win the lottery?

MR. LAZARUS: Well, it's a lottery that we'd all like to apply to, Your Honor. Based on the record evidence --

JUSTICE SCALIA: She can only sell that particular right if she wins the lottery, so I guess she would have to keep applying until she wins, and then try to sell it and see how much it's worth, and then maybe you discount it by the chances of winning. MR. LAZARUS: Well -- JUSTICE SCALIA: I don't know.

MR. LAZARUS: Yes, well, the record evidence is in 1993 there is --

JUSTICE SCALIA: The point is, it's certainly not an easy thing for her to come up with the kind of evaluation -- that you're talking about, and she had no reason to believe you were going to be generous in --

MR. LAZARUS: Your Honor --

JUSTICE SCALIA: -- saying never mind the lottery.

MR. LAZARUS: Because everything is outside the record, there were fewer applicants than allocations.

JUSTICE BREYER: Yes, but it's the case that everybody wins this lottery after 4 or 5 years. I got that impression from reading --

MR. LAZARUS: Well, at this point there were few -- in Washoe County there were fewer applicants than there are allocations, so at this point it's really not --

JUSTICE BREYER: There's 100 percent chance of winning the lottery?

MR. LAZARUS: Yes, and even if there wasn't, Your Honor, because obviously this could vary depending on the county, all we're asking -- all we're basically urging the Court to adopt here is a prudential approach which would be looking at --

JUSTICE GINSBURG: Mr. Lazarus, I understand the Ninth Circuit didn't, and the Abbott Laboratories is a new creation, and you're talking about balance of hardships.

That's -- the Ninth Circuit thought it was dealing with a Williamson-type case. It was just like, could I get a variance.

MR. LAZARUS: We think the better way to view the case is in more flexible terms. Williamson County and Yolo County are, after all, really just case-specific applications of the broader principles of Abbott Labs, basically concerns with --

JUSTICE SOUTER: But there's also one -- I'm sorry. I think there's one difference between the Williamson situation and this, and that is, if I understand it correctly, in the Williamson situation the rights which the property owner wanted to exercise were rights which came to the property owner with the purchase of the property, but they were simply subject to a Government limitation. You can't do this unless you get a variance.

The rights that we're concerned with here, however, are at least in part new rights. She, for example, did not when she purchased her lot get a right to have somebody else build so many square feet on somebody else's lot.

That's a brand new creation, and so that, it seems to me, is why the -- even if we were to say well, this is a Williamson case, you might still be in trouble under Williamson.

MR. LAZARUS: Well, and that's maybe one reason why we think the better way to view the case is in more flexible terms.

If I've got a little time, I'd like to spend just a moment, though, on petitioner's broader ripeness argument, which is simultaneously less persuasive and far more troublesome, and that's petitioner's argument that the value of her TDR's is irrelevant as a matter of law as to the question whether this property has been taken.

We really think that that argument is directly contrary to this Court's holding in the Penn Central case, where the Court directly faced

-- the only case in which this Court has directly faced the question of the relevance of TDR's to the question whether the property has been taken, and the Court squarely held that the value of TDR's is relevant to the economic impact. Thank you.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Lazarus. Mr. Wallace, we'll hear from you.

ORAL ARGUMENT OF LAWRENCE G. WALLACE ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE RESPONDENT

MR. WALLACE: Thank you, Mr. Chief Justice, and may it please the Court:

It's important to bear in mind that the TDR's under this plan become part of the owner's {bundle} of rights that are connected with the property. The market --

JUSTICE BREYER: But they're new sticks in the bundle, at least some of them.

MR. WALLACE: They're new sticks in the bundle which --

JUSTICE SOUTER: Is an easement part of the bundle of rights?

MR. WALLACE: It could be if it were transferable. The point I'm trying to make is that if she were to sell her lot to a new purchaser and had not used the TDR's, the purchaser would get the right to use the TDR's and market them, and therefore the market value of the lot that she owns reflects the value of the TDR's.

This is not some separate compensation that's been given to her personally. It's a part of the bundle of rights that goes with ownership of this parcel. This was an effort made --

JUSTICE SOUTER: If you had two parcels, one with this restriction and one without, which person has the bigger bundle of rights? It seems to me very strange to call this part of the bundle of rights.

MR. WALLACE: Well, it is part -- in takings analysis, in regulatory takings cases we look to see what economic value has been retained and what economic value has been taken, as well as the purpose of the regulation, interference with reasonable investment-back expectations and the rest of it.

What she retains under this plan, which was designed to mitigate, in accordance with this Court's analysis in Penn Central, the economic burden that would be placed on these environmentally sensitive properties where no further development on the property itself, no further impermeable surfacing could be permitted, what she has been given is something that this record says is of value and is marketable along with the land if she wants to sell the lot.

CHIEF JUSTICE REHNQUIST: Well, Mr. Wallace, what if the Government had imposed this same restriction on her, and instead of giving her TDR's had said, we have another piece of property over here that we think is equal to the value we're taking away from you, so here it is.

Now, that may or may not be ripe, but surely there's not a ripeness problem there, is there?

MR. WALLACE: Well, ripeness is not what I was speaking of at the moment. There would not be --

CHIEF JUSTICE REHNQUIST: Well, I thought that's what this case involved.

MR. WALLACE: Of course it does, and I wanted to get to that, but first we are quite concerned with the per se takings theory under which they are arguing that it's ripe, because it seems to us contrary to this Court's jurisprudence, not only directly contrary to the holding in Penn Central that TDR's count in the takings calculus and are not just to be considered part of compensation, but there's a reason for that holding that has to do with the fact that the TDR's are part of the bundle of rights that an owner of this parcel would get.

CHIEF JUSTICE REHNQUIST: But the Court didn't treat Penn Central as a ripeness case at all. It treated it as a takings case --

MR. WALLACE: Of course.

CHIEF JUSTICE REHNQUIST: -- and said there was no taking.

MR. WALLACE: Of course, and that is my point, that the Court held there was no taking, and part of the calculus was that the value of the TDR's was retained by the owner, and was something that contributed to market value remaining in that parcel of property.

Now, in approaching the ripeness question itself, we have no enthusiasm generally for the proposition that a plaintiff in a takings case who fails to prove her case should get a second bite of the apple and be able to bring a case later making essentially the same claim if better evidence can be produced, so it was with some hesitancy that we supported the ripeness argument here on the respondent's side, and I think that --

JUSTICE GINSBURG: Mr. Wallace, let me understand what you're just saying. I don't know that any judge in this case said that she didn't have a claim on the merits. I thought it was ripeness at both stages.

MR. WALLACE: That is true. The courts below did not reach the merits, but the only evidence of value that she offered was excluded, and so it seems to us that the likely outcome if this case is held to be ripe is that the respondent has introduced sufficient evidence of value that it can't be said that she has shown that there's a taking. The model --

JUSTICE O'CONNOR: Goodness, no court decided that. Even taking the evidence introduced by the respondent --

MR. WALLACE: No court has decided --

JUSTICE O'CONNOR: -- her land was worth more than $100,000 many years ago as a location to build a house, and the evidence introduced by respondent shows that the rights given by the TDR's and the other rights attaching to the property at most would amount to what, $30,000 or something?

MR. WALLACE: $35,000, but --

JUSTICE O'CONNOR: So we're not going to decide here that that couldn't be a taking. My goodness.

MR. WALLACE: Well, there's --

JUSTICE O'CONNOR: I mean, why not give this poor, elderly woman the right to go to court and have her takings claim heard?

MR. WALLACE: That could be done. What --

JUSTICE SCALIA: You rely on Abbott Labs. (Laughter.) Abbott Labs is your answer, right?

MR. WALLACE: Well, what --

JUSTICE SCALIA: Abbott Labs is an APA case. It's also, being an APA case it's a case -- and a case seeking an injunction.

It's a case bringing one of the prerogative writs so that the court is sitting with all sorts of equitable powers, and can, indeed, decide to weigh the equities and so forth. This is not an equitable case here, is it?

MR. WALLACE: She is seeking very similar relief in some of her claims. JUSTICE SCALIA: 198 -- MR. WALLACE: She's seeking a permit to build on this lot. She is seeking equitable relief.

JUSTICE BREYER: But you -- could you answer Justice O'Connor's question, because I have a distinct feeling perhaps the answer is neither the Government nor the respondent mind if this Court were to say, it's ripe.

We're not expressing any view on the merits -- none -- and all she is arguing is that in fact under these circumstances she gets definite rights of TDR's and her property can't be built on.

She says that constitutes a taking. The other side says it doesn't. Now, suppose the opinion said just that, would the Government object?

MR. WALLACE: This would not be harmful to our interests in any way.

JUSTICE SCALIA: Maybe this case is moot. I don't know why all these people have come up here, then. MR. WALLACE: What I -- (Laughter.)

JUSTICE SCALIA: I thought that's what the whole dispute was about, Mr. Wallace.

MR. WALLACE: Well, we have said that we think there has been a final decision in this case within the meaning of Williamson, and perhaps the role that we see for Abbott Laboratories can best be hypothesized if at the outset of this plan, when the TDR's were brand new and no one had marketed any of them, every owner of one of these properties went directly to court and there would be nothing in the way of comparable sales, nothing but speculation about what the value of the TDR's would be.

JUSTICE SOUTER: But that's because of the nature of the right the agency itself created. You're saying that agencies can diminish ownership rights and diminish value and then claim as a defense the fact that this can't be appraised in court. This is a very strange doctrine.

MR. WALLACE: Well, this was an effort to transform part of the bundle of rights in a way that would retain a substantial measure of value in it.

Those responsible for governing at three levels here, the States that entered into the compact, Congress, and the planning agency, recognized that because of the basin's peculiar ecological fragilities, further development on these parcels located in these sensitive areas could not be permitted, that this would threaten the interrelated environmental and economic well-being of the entire basin.

And so they tried to create a program that would retain a substantial measure of value for the owners of these parcels, and mitigate any loss that they would suffer as a result of what was not an extraneous restriction being placed on them but something very much related to the danger that their development would pose within Dolan v. Tigard.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Wallace. Mr. Radford, you have 5 minutes remaining.

MR. RADFORD: Mr. Chief Justice, unless there are further questions from the Court I have nothing to add.

CHIEF JUSTICE REHNQUIST: Very well. The case is submitted. (Whereupon, at 10:59 a.m., the case in the above-entitled matter was submitted.)