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Benardine Suitum owns land near the shore of Lake Tahoe. The Tahoe Regional Planning Agency regulates land use around the lake, and determined that her property was within a "Stream Environment Zone." That determination meant that she was prohibited from developing her property because of adverse environmental implications which might result.
The development regulations provided that she was eligible for certain "Transferable Development Rights" (TDRs), which could be sold or otherwise transferred to other property owners to allow them to develop their property. She sued the Agency claiming that its action prohibiting her from developing her property constituted a regulatory taking of her property for which the Taking Clause of the Fifth Amendment required that she be compensated. The trial court held that her claim was not "ripe" because she had not sold or attempted to sell or transfer the TDR's to which she was entitled. The court concluded that it could not assess the extent to which she had been economically impacted or frustrated in her expectations concerning use of the property because of her failure to pursue use of the TDR's, and therefore could not determine if her property had been taken within the meaning of the Fifth Amendment. The Court of Appeals affirmed on the same basis.
The United States Supreme Court accepted the case for review to consider whether her regulatory taking claim was premature. The Court reversed and ruled Mrs. Suitum could maintain her claim.
The Court noted prior cases that hold regulatory takings claims to be premature and ineligible for consideration by a court if the property owner has not obtained a "final decision regarding the application of the...regulation to the property at issue...from the government entity charged with implementing the regulations." The Court also noted that a takings claim may not be maintained "if a State provides an adequate procedure for seeking just compensation, (until) the property owner...has used the procedure and been denied just compensation."
In Mrs. Suitum's case, the Supreme Court found it necessary to address only the first of these requirements, and concluded that the lower courts had incorrectly applied it to her. The Court concluded that there had been, in fact, a "final decision" concerning how the Agency's regulations applied to Mrs. Suitum's property: she was prohibited absolutely from developing. She had no further opportunity to contest the Agency’s determination and, in fact, because her property was located in a Stream Environment Zone, the Agency had no discretion to permit any development of her property.
The Agency's determination and the corresponding prohibition of development of the property was a sufficient "final determination" to allow Mrs. Suitum to proceed with her takings claim, the Supreme Court held, notwithstanding the TDR's to which she was entitled. It was not necessary for her to transfer or attempt to transfer or sell the TDR's, nor to evaluate their economic worth. Whether those rights have value and the extent of that value could be considered in determining whether she had received adequate compensation, but those questions are not relevant to the question of whether she had suffered a taking at all. The "final decision" requirement focuses on the "finality" of the application of the regulations at issue regarding the extent to which the property may be used. It does not require a determination of the value of any rights received as a consequence of regulatory limitations imposed on (or, as in this case, complete deprivation of) use of the property.
On remand to the Ninth Circuit, that court in turn remanded the case to the District Court for a determination of whether the "second prong" of the Williamson County decision, 473 U.S. 172 (1985) had been satisfied. That requirement permits a claim for a "taking" to proceed only if the property owner has followed any applicable state law-provided procedures but nevertheless failed to receive just compensation.
Suitum v. Tahoe Regional Planning Agency, 519 U.S. 926, 117 S. Ct. 1659 (1997).