In a significant decision, the United State Supreme Court issued a potentially far reaching decision on May 27, 1997 affecting the rights of persons whose property has been over-regulated by a government agency. The decision was issued in a case entitled Suitum v. Tahoe Regional Planning Agency.

The case involved an application by Suitum to develop her property. Her property was located near Lake Tahoe and was regulated by the Tahoe Regional Planning Agency. Several years ago, the Agency tightened development eligibility requirements to slow development in the region to enhance environmental preservation.

Properties were scored by the Ageny using a variety of factors. To be developable, a property had to receive a minimum score. Properties that scored under this level could not be developed.

Suitum's property did not score well and her application was denied. Under the Planning Agency's regulations, non-developable properties were eligible to receive development credits. Apparently, these credits have some economic value insofar as they could be traded and accumulated. Suitum did not petition the Agency for development credits and never inquired as to the possible value of these credits. Instead, she filed a lawsuit against the Agency, claiming that the development denial eliminated all economic benefit from the property. This is referred to as a takings claim.

In response to the lawsuit, the Agency took a position that many agencies take. The Agency asserted that the case had to be dismissed because Suitum failed to exhaust administrative remedies. In this case, the Agency asserted that Suitum had to determine how many credits she could receive and what their value would be before she could file suit. The trial Court agreed with the Agency and dismissed the suit. The appeals court concurred.

However, the Supreme Court reversed. The Court held that since the Agency's regulations required that the development application be denied, no further exhaustion was required before suit could be filed. While previous decisions have required exhaustion, in those cases the extent of diminished development potential was not clear and thus exhaustion was required. In the Suitum case, the regulations were clear, and their application had to result in a development denial. Thus, further exhaustion would be futile.

RAMIFICATIONS
This is an important decision because it introduces logic and reason to the takings process. No longer may State Agencies simply insist that a property owner dot every single i, no matter how remote, before filing suit. This decision means that the exhaustion process is not endless and that everyone is entitled to his/her day in Court without first having been bankrupted through an endless administrative process.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.