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TAHOE-SIERRA PRESERVATION
COUNCIL, INC.; RICHARD A.
ALLISON; ALPINE INVESTMENT
COMPANY, LTD.; AMCO, INC.;
JEFFREY B. ANDERSEN; BETH C.
ANDERSEN; PETER J. ANDERSEN;
JANET I. ANDERSEN; DONALD F.
ARCHIBALD; JEAN L. ATHERTON;
DAVID E. BAKER; MAXINE A.
BAKER; JOHN H. BAKER; PIERINO C.
BARENGO, et al.,
Plaintiff-Appellee-                                   Nos. 99-15641
Cross-Appellant,                                           99-15771

v.                                                    D.C. No.
CV-84-00257-ECR
TAHOE REGIONAL PLANNING
AGENCY, a separate legal entity                       OPINION
created pursuant to an interstate
compact between the States of
California and Nevada; the voting
members of the governing body of
the Tahoe Regional Planning
Agency including TONY CLARK,
CHESTER A. GIBBS, ALEXANDER
HAAGEN, III, STAN HANSEN,
THOMAS HSIEH, JAMES KING,
ROBERT PRUETT, JAMES S. REED,
LARRY SEVINSON, THOMAS STEWART,

6313


WILLIAM D. SWACKHAMER, PEGGY
TWEDT, RONALD D. WESTERGARD
and NORMAN C. WOODS; STATE OF 
CALIFORNIA; STATE OF NEVADA,
Defendant-Appellant-
Cross-Appellee.

Appeals from the United States District Court
for the District of Nevada
Edward C. Reed, Jr., District Judge, Presiding

Argued and Submitted
March 16, 2000--San Francisco, California

Filed June 15, 2000

Before: Henry A. Politz,* Stephen Reinhardt, and
Michael Daly Hawkins, Circuit Judges.

Opinion by Judge Reinhardt

was rapidly developed, soil disturbed by the development was
washed into the lake. The nitrogen from the soil caused the
lake to lose clarity and depleted the oxygen content of the
water. In an effort to halt increasing environmental damage to
Lake Tahoe, the Tahoe Regional Planning Compact (TRPC)
was approved in 1969. TRCP created the Tahoe Regional
Planning Agency (TRPA) and set preservation goals. TRPA
adopted land-use Ordinance No. 4, which classified the land
according to susceptibility to environmental damage into
seven land capability districts with one being the most sensi-
tive and seven being the least. Districts 1 through 3 were
denominated "high hazard." Certain areas near streams or
wetlands, Stream Environment Zones (SEZ), were classified
specially as "1b" lands; Districts 4 through 7 were referred to
as low hazard lands. Ordinance 4 adopted recommendations
as to what artificial disturbance the land could sustain.

The 1980 Compact amended the TRPC, directing the
TRPA to adopt environmental threshold carrying capacities,
to adopt a new regional plan within twelve months of the
adoption of the carrying capacities, and to review all projects
and establish temporary restrictions on development in the
basin pending the enactment of a new regional plan.

To comply with the Compact's requirements, TRPA
enacted Ordinance 81-5, which became effective on August
24, 1981. The ordinance temporarily prohibited construction
on both Class 1-3 and SEZ lands. The ordinance stated that
the provisions setting forth the moratorium expired when the
agency adopted amendments to the regional plan.

On August 26, 1982, TRPA adopted environmental thresh-
old carrying capacities. It soon became clear, however, that a
new regional plan would not be adopted within twelve months
of the adoption of the carrying capacities. TRPA adopted Res-
olution 83-21, which suspended all permitting activities pend-
ing adoption of the new regional plan. This suspension
temporarily prohibited the development of all of the covered
land. Although the Resolution was drafted to expire after a
ninety-day period that ended on November 26, 1983, it was
extended, in accordance with its design, until the new regional
plan was adopted.

On April 26, 1984, TRPA adopted a new land-use plan, the
1984 Regional Plan. On the day of its adoption, the State of
California sued TRPA to block the implementation of the plan
on the ground that it failed to establish land-use controls suffi-
ciently stringent to protect the Lake Tahoe Basin. The League
to Save Lake Tahoe followed suit and sought an injunction
against the plan on the same grounds. The district court issued
a temporary restraining order prohibiting TRPA from taking
any action to approve building projects, and ordered TRPA to
show cause why a preliminary injunction should not issue. On
June 15, 1984, the court granted a preliminary injunction. The
Ninth Circuit upheld the preliminary injunction on appeal,
and it remained in force until a completely revised land-use
plan was adopted in 1987.

After TRPA adopted the 1984 Plan, property owners in
Nevada and California filed lawsuits in the United States Dis-
trict Court for the District of Nevada, and the United States
District Court for the Eastern District of California. All of the
plaintiffs sought declaratory and injunctive relief, as well as
damages, for various violations of the Takings Clause, the
Due Process Clause, the Equal Protection Clause, and the
Contracts Clause.

The plaintiffs were divided into two groups: those who
owned land in SEZs, and those who owned land in Class 1-3
areas. Additionally, the plaintiffs' claims were divided into
four time periods: Period I, the time during which Ordinance
81-5 was in effect; Period II, the time during which Resolu-
tion 83-21 was in operation; Period III, the period from the
enactment of the 1984 Plan to the enactment of the 1987 Plan;
and Period IV, the time during which the 1987 Plan has been
in effect.

On appeal, the only claims of the plaintiffs that remained
were some of the S 1983 takings claims. The remainder of the
claims were dismissed in one of three previous Ninth Circuit
opinions (TSPC I, TSPC II, and TSPC III).

The district court dismissed all of plaintiff's claims for
Periods I, II and IV, including the S 1983 claims, on the
ground that they were time-barred by a sixty-day statute of
limitation provision in the 1980 Compact. The Ninth Circuit
reversed in part. The TSPC III court upheld the dismissal of
some of the plaintiff's claims on statute of limitations
grounds, but held that the 1980 Compact's sixty-day statute
of limitations period did not apply to the S 1983 claims.

The district court resolved the plaintiffs' remaining claims
in two published orders. The first order held that, despite this
court's holding in TSPC III, the plaintiffs' claims for Period
IV were in fact time-barred by the relevant statute of limita-
tions for S 1983 actions in Nevada and California. The second
order held, among other things, that: (1) Ordinance 81-5 and
Resolution 83-21 were facially invalid because they consti-
tuted a categorical taking of the plaintiffs' property, and that
TRPA is therefore liable under S 1983 for violating the plain-
tiffs' Fifth Amendment rights during Period I and Period II;
and (2) TRPA is not liable under S 1983 for any taking that
may have occurred during Period III, because it was the court
injunction prohibiting the implementation of the 1984 Plan
that barred further development during that period and
TRPA's conduct was not the actionable cause of the injunc-
tion.

TRPA appealed the district court's holding that it was lia-
ble under S 1983 for a categorical taking during Period I and
Period II. TSPC cross-appealed the district court's holding
that TRPA was not liable under S 1983 for any taking that
occurred during Period III, and the court's holding that the
plaintiffs' S 1983 claims for Period IV were time-barred.

[1] The Takings Clause of the Fifth Amendment prohibits
the government from taking private property for public use,
without just compensation. The Supreme Court and lower
courts have indicated that most regulatory takings cases
should be resolved by balancing the public and private inter-
ests at stake, with three primary factors weighing in the bal-
ance: (1) the economic impact of the regulation on the
claimant, (2) the extent to which the regulation has interfered
with distinct investment-backed expectations, and (3) the
character of the governmental action.

[2] The Court has identified two specific circumstances in
which it will find a government regulation to constitute a cate-
gorical taking without performing an ad hoc balancing. The
first situation involves regulations that compel a property
owner to suffer a permanent physical invasion or occupation
of his property. [3] The second situation is where regulation
denies all economically beneficial or productive use of land.
The economic impact of the regulation becomes determina-
tive: the regulation constitutes a categorical taking when it
deprives the claimant of all economically beneficial and pro-
ductive use of his land.

[4] With respect to Periods I and II, the question was
whether a categorical taking occurred because Ordinance 81-
5 and Resolution 83-21 denied the plaintiffs all economically
beneficial or productive use of land. [5]  The plaintiffs brought
only a facial challenge to Ordinance 81-5 and Resolution 83-
21. In facial takings claims, the inquiry is limited to whether
the mere enactment of the regulation constitutes a taking.

[6] For purposes of determining whether a taking of the
plaintiffs' property has occurred, the proper inquiry is what
constitutes the relevant property?
[7] Most modern case law rejects conceptual severance,
except in cases of physical invasion or occupation.

[8] The widespread invalidation of temporary planning
moratoria would deprive state and local governments of an
important land-use planning tool with a well-established tradi-
tion. Courts should be exceedingly reluctant to adopt rulings
that would threaten the survival of this crucial planning mech-
anism.

[9] The relevant property interests were the whole parcels
of property that the plaintiffs owned.

[10] Two features of Ordinance 81-5 and Resolution 83-21
were relevant to the analysis of whether the provisions
effected a categorical taking of each plaintiff's property: (1)
the provisions effectively placed a moratorium on the devel-
opment of the plaintiffs' property; and (2) the moratorium
they effected was intended to be temporary--the regulations
were designed to institute a temporary moratorium that would
remain in effect only until a new regional land-use plan could
be adopted.

[11] It was clear from the general scope and dominant fea-
tures of Ordinance 81-5 and Resolution 83-21 that the tempo-
rary moratorium imposed by these regulations did not deprive
the plaintiffs' land of either all of its value or all of its use.
[12] Given that the ordinance and resolution banned develop-
ment for only a limited period, these regulations preserved the
bulk of the future developmental use of the property. This
future use had a substantial present value.

[13] The moratorium was in effect for only thirty-two
months. [14] While it had a negative impact on property val-
ues in the basin, the interim suspension of development did
not wipe out the value of the plaintiffs' properties.

[15] The temporary moratorium did not deprive the plain-
tiffs of all use of their property. By instituting a temporary
development moratorium, TRPA denied the plaintiffs only a
small fraction of the useful life of the Tahoe properties. [16]
The temporary moratorium did not effect a categorical taking.

[17] In a S 1983 action, the plaintiff must demonstrate that
the defendant's conduct was the actionable cause of the
claimed injury.

[18] The injunction issued by the district court prohibited
the implementation of the 1984 Plan. It prohibited TRPA
from taking any action to approve any project, and even pro-
hibited it from accepting permit applications. As the Plan
never went into effect, it could not have constituted a taking.

[19] The lack of causal connection between the alleged
wrongdoing and the purported harm compelled the conclusion
that TRPA could not be held liable for the effects of the
injunction. [20] TRPA's actions were not the actionable cause
of any taking that may have occurred during Period III.

[21] Because the time bar holding in TSPC III was clearly
erroneous and would be manifestly unjust if enforced, the
court of appeals declined to follow it. On the merits, the dis-
trict court held the plaintiffs' claims time-barred, and the
plaintiffs affirmatively declined to argue on appeal that the
district court's resolution of that question was incorrect.
Because the plaintiffs offered no argument on the merits of
the timeliness of their Period IV claims, the district court's
dismissal of those claims was affirmed.

_________________________________________________________________
COUNSEL

E. Clement Shute, Jr. & Ellison Folk, Shute, Mihaly & Wein-
berger, San Francisco, California, for the defendant-appellant-
cross-appellee.

Lawrence L. Hoffman, Hoffman Law Offices, Tahoe City,
California, for the plaintiff-appellee-cross-appellant.

Rochelle Nason, League to Save Lake Tahoe, South Lake
Tahoe, California, for amici curiae American Planning Asso-
ciation and League to Save Lake Tahoe.

Karl Manheim, Loyola Law School, Los Angeles, California,
and Stephen Shane Stark & Alan L. Seltzer, County of Santa
Barbara, California, for amici curiae California Cities and
California State Association of Counties.

Timothy J. Dowling, Community Rights Counsel, Washing-
ton, D.C., for amici curiae International Municipal Lawyers
Association.

Daniel P. Selmi, Los Angeles, California, for amici curiae
Scientists.

Hardy Myers, Attorney General of Oregon, Michael D. Reyn-
olds, Solicitor General of Oregon, and David F. Coursen,
Assistant Attorney General of Oregon, Salem, Oregon, for
amici curiae States of Oregon, Washington, Arizona, and
Montana.

Lois J. Schiffer, Assistant Attorney General, and William
Lazarus, David C. Shilton, and Peter H. Oppenheimer, United
States Department of Justice, Washington, D.C., for amici
curiae United States.

_________________________________________________________________
OPINION

REINHARDT, Circuit Judge:

This case involves approximately 450 plaintiffs who own
property in the Lake Tahoe Basin. The lead plaintiff, Tahoe-
Sierra Preservation Council, Inc. (TSPC), is an association of
Tahoe-area property owners. Each individual property owner
has alleged, inter alia, that each of several land-use regula-
tions enacted in the 1980's by the Tahoe Regional Planning
Agency (TRPA) constituted a "taking" of his property under
the Fifth and Fourteenth Amendments. The principal question
on this appeal is whether a temporary planning moratorium,
enacted by TRPA to halt development while a new regional
land-use plan was being devised, effected a taking of each
plaintiff's property under the standard set forth in Lucas v.
South Carolina Coastal Council, 505 U.S. 1003 (1992). In
addition, we must determine whether any taking that may
have occurred following TRPA's adoption of a regional land-
use plan in 1984 was attributable to the promulgation of that
plan, in light of the fact that the plan was enjoined immedi-
ately after it was enacted and was never implemented. Finally,
we must decide whether the plaintiffs' claims regarding the
successor regional land-use plan enacted by TRPA in 1987 --
which did become effective -- are time-barred.

FACTUAL BACKGROUND

Lake Tahoe is a large alpine lake located in the northern
Sierra Nevada mountains. The lake is unique, both aestheti-
cally and ecologically, because of its size, depth, and the
astounding clarity of its water. Indeed, it is one of the clearest
large lakes in the world. The unusual clarity of Lake Tahoe
results from the fact that it historically was "oligotrophic" --
that is, very low in nutrients and lacking a steep temperature
gradient that would prevent deep circulation and mixing.
Since mid-century, however, the lake has been undergoing
"eutrophication," a process by which the nutrient loading in
the lake increases dramatically, due to nitrogen and phospho-
rus (contained in soil) being washed into the lake. The exces-
sive enrichment of the lake by these nutrients encourages the
growth of algae. As algal growth in the lake increases, the
lake loses its clarity and color, becoming green and opaque.
In addition to destroying the water's visual perfection, the
algae also depletes its oxygen content, thereby jeopardizing
the survival of fish and other lake-dwelling animal life. In
short, the eutrophication of the lake is causing serious, and
effectively permanent, environmental damage.

The dramatic increase in Lake Tahoe's nutrient levels has
been caused by the rapid development of environmentally
sensitive land in the Lake Tahoe Basin. The land in the basin
drains into the lake, and artificial disturbances of the land --
the destruction of vegetation, the creation of impervious
objects such as roads and houses, etc. -- greatly increase the
flow of nutrients into the lake.1 Of course, the degree to which
the development of a particular parcel of land in the basin
increases the nutrient flow into the lake depends on the partic-
ular characteristics of that property. In general, the develop-
ment of steeper land leads to more environmental damage,
because steeper land is susceptible to more rapid soil erosion.
Along with steepness, other land characteristics also affect the
amount of damage caused to the lake by development. For
example, certain areas near streams and other wetlands,
known as Stream Environment Zones (SEZs), act as filters for
much of the nutrient loading that runoff carries. Disturbance
of SEZ lands can lead to the rapid release of these stored
nutrients into the lake. In addition, disturbance of SEZ lands
may prevent them from performing their natural filtering
function, thereby permitting more of the nutrients contained
in runoff from higher elevations to reach the lake. Accord-
ingly, SEZ lands are considered especially sensitive to the
impact of development.

In an effort to halt the increasing rate of environmental
damage to Lake Tahoe, the bi-state Tahoe Regional Planning
Compact was approved in 1969 by the United States Congress
after being passed by the legislatures of both Nevada and Cal-
ifornia. The Compact created the Tahoe Regional Planning
Agency and set goals for the preservation of the lake and the
surrounding basin. Pursuant to the Compact, TRPA adopted
land-use Ordinance No. 4, which, among other things, classi-
fied the land in the basin according to its susceptibility to
environmental damage. Land in the Lake Tahoe Basin was
divided into seven "land capability districts, " numbered 1
through 7, with 1 being the most environmentally sensitive
and 7 the least. Land capability districts 1 through 3 -- con-
sisting of the steepest land in the basin -- were denominated
"high hazard" or "sensitive" lands. SEZ lands were classified
as a special subcategory of high hazard lands and were
labeled "1b" lands. Land capability districts 4 through 7 were
referred to as "low hazard" or "non-sensitive" lands.

For each land classification, Ordinance No. 4 adopted rec-
ommendations as to what degree of artificial disturbance the
land could safely sustain. There were numerous exceptions to
the recommendations, however, and these exceptions caused
significant dissatisfaction with TRPA's regulatory scheme.
This dissatisfaction, combined with evidence that the 1969
Compact was not strong enough to remedy the problems caus-
ing the decline in the basin environment, led to the amend-
ment of the Tahoe Regional Planning Compact in 1980. 2 In
addition to restructuring TRPA and its voting procedures, the
1980 Compact directed TRPA (1) to adopt "environmental
threshold carrying capacities" within eighteen months of the
date on which the Compact became effective;3 (2) to adopt a
new regional plan within twelve months of the adoption of the
carrying capacities; and (3) to review all projects and estab-
lish temporary restrictions on development in the basin pend-
ing the enactment of a new regional plan.

To comply with the Compact's requirement that it tempo-
rarily restrict development pending the enactment of a new
regional plan, TRPA enacted Ordinance 81-5, which became
effective on August 24, 1981. Among other things, the ordi-
nance temporarily prohibited most residential and all com-
mercial construction on both Class 1-3 and SEZ lands. The
ordinance did contain some exceptions to the development
moratorium, however, which permitted TRPA to approve
construction of some single family homes on Class 1, 2, and
3 lots on the Nevada side of the basin. The ordinance stated
that that the provisions setting forth the moratorium "shall
expire upon the adoption by the agency of Amendments to the
Regional Plan."

On August 26, 1982, TRPA adopted environmental thresh-
old carrying capacities. The agency then proceeded with the
development of a new regional plan. Due to the tremendous
complexity of the task, however, it soon became clear that
TRPA would be unable to adopt a new regional plan within
twelve months of the adoption of the carrying capacities, as
required by the Compact. Concerned that it lacked the author-
ity to issue any building permits after this date without a new
regional plan in place, TRPA adopted Resolution 83-21. The
Resolution suspended all permitting activities "pending adop-
tion of the new regional plan." This suspension temporarily
prohibited the development of all of the covered land.
Although the Resolution was drafted to expire after a ninety-
day period that ended on November 26, 1983, it was
extended, in accordance with its design, until the new regional
plan was adopted.

On April 26, 1984, thirty-two months after it had initially
suspended development, TRPA adopted a new land-use plan,
the 1984 Regional Plan. See Ordinance 84-1. On the day of
its adoption, the State of California sued TRPA to block the
implementation of the plan on the ground that it failed to
establish land-use controls sufficiently stringent to protect the
Lake Tahoe Basin. The next day, the League to Save Lake
Tahoe followed suit and sought an injunction against the plan
on the same grounds. The United States District Court for the
Eastern District of California, Judge Edward J. Garcia presid-
ing, immediately issued a temporary restraining order prohib-
iting TRPA from taking any action to approve building
projects, and ordered TRPA to show cause why a preliminary
injunction should not issue. On June 15, 1984, Judge Garcia
granted a preliminary injunction. We upheld the preliminary
injunction on appeal, see California ex rel. Van de Kamp v.
Tahoe Reg'l Planning Agency, 766 F.2d 1308 (9th Cir. 1985),
and the injunction remained in force until a completely
revised land-use plan -- the 1987 Regional Plan -- was
adopted.

PROCEDURAL HISTORY

After TRPA adopted the 1984 Plan, property owners in
Nevada and California filed separate lawsuits. Plaintiffs own-
ing property on the Nevada side of the Tahoe Basin filed an
action in the United States District Court for the District of
Nevada, and plaintiffs owning property on the California side
of the basin filed one in the United States District Court for
the Eastern District of California. All of the plaintiffs sought
declaratory and injunctive relief, as well as damages, for vari-
ous violations of the Takings Clause, the Due Process Clause,
the Equal Protection Clause, and the Contracts Clause. See
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg'l Plan-
ning Agency, 911 F.2d 1331, 1333-34 (9th Cir. 1990) ("TSPC
I") (Nevada-side suit) (describing the claims in detail); Tahoe-
Sierra Preservation Council, Inc. v. Tahoe Reg'l Planning
Agency, 938 F.2d 153, 154 n.1 (9th Cir. 1991) ("TSPC II")
(California-side suit) (same).

For purposes of litigation, the plaintiffs were divided into
two groups: the first was composed of those who own land in
areas classified as SEZs, and the second of those who own
land in Class 1, 2, and 3 areas. In addition to the land-
classification division, the plaintiffs' claims were divided into
four time periods: Period I covers August 24, 1981, to August
26, 1983, the time during which Ordinance 81-5 was in effect;
Period II covers August 27, 1983, to April 25, 1984, the time
during which Resolution 83-21 was in operation; Period III
covers April 26, 1984, to July 1, 1987, the period that ran
from the enactment of the 1984 Plan to the enactment of the
1987 Plan; and Period IV covers July 2, 1987, to the present,
the time during which the 1987 Plan has been in effect.4

The procedural history of the California and Nevada
actions, which involves three previous Ninth Circuit opinions,
see TSPC I, 911 F.2d at 1331; TSPC II , 938 F.2d at 153;
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg'l Plan-
ning Agency, 34 F.3d 753 (9th Cir. 1994) (" TSPC III"), and
several district court opinions, need not be repeated in full.
We review here only the three pieces of information regarding
the procedural history that are necessary for our resolution of
the present appeal.
First, it is important to point out that, at this stage in the liti-
gation, the only claims of the plaintiffs that remain at issue are
some of the S 1983 takings claims. The remainder of the
claims were dismissed at one point or another. The following
table shows the S 1983 takings claims that are before us (the
claims are represented by X's):
                                    Period I Period II Period III Period IV

Nevada       Class 1-3 plaintiffs            X                    X
plaintiffs
             SEZ plaintiffs         X5       X                    X

California   Class 1-3 plaintiffs   X6       X          X7        X
plaintiffs
             SEZ plaintiffs         X        X          X         X
The TSPC III court's treatment of the plaintiffs' Period IV
claims is the second relevant element of procedural history.
Following remand from TSPC I and TSPC II , the Nevada and
California cases were consolidated for further proceedings in
the United States District Court for the District of Nevada,
Judge Edward C. Reed presiding. The plaintiffs were permit-
ted to amend their complaints and, in doing so, they added the
Period IV claims -- the claims regarding the 1987 Regional
Plan which had been adopted while the litigation was pend-
ing. Shortly thereafter, the district court dismissed all of plain-
tiffs' claims for Periods I, II, and IV, including the S 1983
claims, on the ground that they were all time-barred by a
sixty-day statute of limitation provision contained in the 1980
Compact. See Tahoe-Sierra Preservation Council, Inc. v.
Tahoe Reg'l Planning Agency, 808 F. Supp. 1474 (D. Nev.
1992) (Nevada case); Tahoe-Sierra Preservation Council, Inc.
v. Tahoe Reg'l Planning Agency, 808 F. Supp. 1484 (D. Nev.
1992) (California case). On appeal, this court reversed in part.
See TSPC III, 34 F.3d 753 (9th Cir. 1994). The TSPC III court
upheld the dismissal of some of the plaintiffs' claims on stat-
ute of limitations grounds. See 34 F.3d at 755. The court held,
however, that the sixty-day statute of limitations period con-
tained in the 1980 Compact did not apply to the plaintiffs'
S 1983 claims. See id. at 756. Finding that the plaintiffs had
"fail[ed] to plead affirmatively any other statute of limita-
tions," the court held that the defendants had forfeited all
other statute of limitations defenses. Id.

The events of the most recent remand constitute the final
element of the procedural history relevant to the present
appeal. Following remand from TSPC III in 1995, the parties
conducted a year-long settlement effort. Those efforts col-
lapsed in early 1997. The district court then resolved the
plaintiffs' remaining claims in two published orders. The first
order, issued in early 1998, resolved the plaintiffs' Period IV
claims (the claims regarding the 1987 Plan). In it, the district
court held that, despite this court's holding in TSPC III, the
plaintiffs' claims for Period IV were in fact time-barred by the
relevant statute of limitations for S 1983 actions in Nevada
and California. See Tahoe-Sierra Preservation Council, Inc.
v. Tahoe Reg'l Planning Agency, 992 F. Supp. 1218 (D. Nev.
1998). The second order, published in early 1999 following
an eleven-day bench trial, resolved on the merits the issue of
liability for the remaining claims.8 See Tahoe-Sierra Preser-
vation Council, Inc. v. Tahoe Reg'l Planning Agency , 34 F.
Supp. 2d 1226 (D. Nev. 1999). In the order, the district court
held, among other things, that: (1) Ordinance 81-5 and Reso-
lution 83-21 were facially invalid because they constituted a
categorical taking of the plaintiffs' property, and that TRPA
is therefore liable under S 1983 for violating the plaintiffs'
Fifth Amendment rights during Period I and Period II; and (2)
TRPA is not liable under S 1983 for any taking that may have
occurred during Period III, because it was the court injunction
prohibiting the implementation of the 1984 Plan that barred
further development during that period and TRPA's conduct
was not the actionable cause of the injunction.

ISSUES ON APPEAL

The defendants appeal the district court's holding that they
are liable under S 1983 for a categorical taking during Period
I and Period II. The plaintiffs cross-appeal the district court's
holding that the defendants are not liable underS 1983 for any
taking that occurred during Period III, and the court's holding
that the plaintiffs' S 1983 claims for Period IV are time-barred.9

DISCUSSION

I. TIME PERIODS I & II

The defendants contend that the district court erred in hold-
ing that Ordinance 81-5, which was in effect during Period I,
and Resolution 83-21, which was in effect during Period II,
constituted categorical takings of each plaintiff's property
under the standard set forth in Lucas v. South Carolina
Coastal Council, 505 U.S. 1003 (1992). As discussed above,
these laws were enacted to suspend development in the Lake
Tahoe Basin pending the adoption of a new regional land-use
plan.
A.

[1] The Takings Clause of the Fifth Amendment prohibits
the government from taking "private property . . . for public
use, without just compensation." U.S. Const. amend. V.
Courts have had little success in devising any set formula for
determining when government regulation of private property
amounts to a regulatory taking.10 Thus, the Supreme Court has
repeatedly recognized that "whether a particular restriction
[amounts to a taking] depends largely `upon the particular cir-
cumstances [of each] case' " -- that is, on "essentially ad hoc,
factual inquiries." Penn Central Transportation Co. v. City of
New York, 438 U.S. 104, 124  (1979); see also Lucas, 505 U.S.
at 1015. In this regard, the Supreme Court and lower courts
have indicated that most regulatory takings cases should be
resolved by balancing the public and private interests at stake,
with three primary factors weighing in the balance: (1) the
economic impact of the regulation on the claimant, (2) the
extent to which the regulation has interfered with distinct
investment-backed expectations, and (3) the character of the
governmental action. See, e.g., Penn Central, 438 U.S. at 124;
Dodd v. Hood River County, 136 F.3d 1219, 1228 (9th Cir.
1998); District Intown Properties Ltd. v. District of Columbia,
198 F.3d 874, 879 (D.C. Cir. 1999).11
The Court's evaluation in various cases of the three factors
identified in Penn Central illustrates that the content of these
factors is not amenable to pat description. For example, it is
clear that a regulation's "economic effect upon the claimant"
may be measured in several different ways. See Hodel v.
Irving, 481 U.S. 704, 714  (1987) (looking to the market value
of the property); Keystone Bituminous Coal Ass'n v. DeBene-
dictis, 480 U.S. 470, 493 -96 (1987) (looking to whether the
regulation makes the property owner's business operation
"commercially impracticable"); Andrus v. Allard, 444 U.S.
51, 66 (1979) (looking to the possibility of other economic
uses besides sale, which was prohibited by the challenged reg-
ulation). Similarly, the "character of the governmental action"
depends on several things, including whether the action is
properly characterized as a physical occupation of the prop-
erty, see Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419, 434 -35 (1982), and whether the regulation
advances a legitimate public purpose, see Keystone Bitumi-
nous Coal Ass'n, 480 U.S. at 485-6; Agins v. Tiburon, 447
U.S. 255, 260 (1980).

[2] The Supreme Court has identified two specific circum-
stances in which it will find a government regulation to con-
stitute a "categorical" taking without performing an ad hoc
balancing under Penn Central. The first situation involves
regulations that compel a property owner to suffer a perma-
nent physical "invasion" or "occupation " of his property. See,
e.g., Loretto v. Teleprompter Manhattan CATV Corp. , 458
U.S. 419, 426 (1982). In that circumstance, the "character of
the governmental action" -- ordinarily one of the factors bal-
anced under Penn Central -- itself becomes sufficient to
effect a taking. As the Court held in Loretto :

       [A] "taking" may more readily be found when the
       interference with property can be characterized as a
       physical invasion by government . . . . [w]hen the
       physical intrusion reaches the extreme form of a per-
       manent physical occupation, a taking has occurred.

       In such a case, "the character of the government
       action" not only is an important factor in resolving
       whether the action works a taking but also is deter-
       minative.

Loretto, 458 U.S. at 426. The categorical rule applicable to
physical invasion cases is clearly not applicable to the present
case.

[3] "The second situation in which[the Court] ha[s] found
categorical treatment appropriate is where regulation denies
all economically beneficial or productive use of land." Lucas,
505 U.S. at 1015; see also Agins, 447 U.S. at 260. Here, too,
ad hoc balancing is not required because one factor of the
Penn Central test becomes dispositive. In this instance, it is
the "economic impact of the regulation" that becomes deter-
minative: the regulation constitutes a "categorical" taking
when it deprives the claimant of "all economically beneficial
and productive use of [his] land." Lucas, 505 U.S. at 1015. Cf.
Dodd, 136 F.3d at 1228.12

[4] With respect to Periods I and II, the only question
before us is whether the rule set forth in Lucas  applies -- that
is, whether a categorical taking occurred because Ordinance
81-5 and Resolution 83-21 denied the plaintiffs "all economi-
cally beneficial or productive use of land." Lucas, 505 U.S. at
1015. Below, the district court ruled that the regulations did
not constitute a taking under Penn Central's ad hoc approach,
but that they did constitute a categorical taking under Lucas.
See Tahoe-Sierra Preservation Council, 34 F. Supp. 2d at
1238-45. The defendants appealed the district court's latter
holding, but the plaintiffs did not appeal the former. And even
if arguments regarding the Penn Central test were fairly
encompassed by the defendants' appeal, the plaintiffs have
stated explicitly on this appeal that they do not argue that the
regulations constitute a taking under the ad hoc balancing
approach described in Penn Central. More generally, the
plaintiffs do not contest that California's and Nevada's objec-
tive of preserving the environmental health and aesthetic
beauty of Lake Tahoe is an entirely permissible governmental
goal. Nor do they dispute that the restrictions imposed on
their properties are appropriate means of securing the purpose
set forth in the Compact. In view of the limited nature of the
plaintiffs' arguments on appeal, we address our specific
inquiry to whether the facts of this case present one of the
"relatively rare situations" where "regulation denies all eco-
nomically beneficial or productive use of land." Lucas, 505
U.S. at 1018.

[5] Our focus is also narrowed by the fact that the plaintiffs
bring only a facial challenge to Ordinance 81-5 and Resolu-
tion 83-21. In facial takings claims, our inquiry is limited to
"whether the mere enactment of the [regulation ] constitutes a
taking." Agins, 447 U.S. at 260; see also Keystone Bituminous
Coal Ass'n, 480 U.S. at 493; Hodel v. Virginia Surface Min-
ing & Reclamation Ass'n, 452 U.S. 264, 295  (1981); Garneau
v. City of Seattle, 147 F.3d 802, 807 (9th Cir. 1998). For that
reason, we look only to the regulation's " `general scope and
dominant features,' " rather than to the effect of the applica-
tion of the regulation in specific circumstances. Garuneau,
147 F.3d at 807 (quoting Village of Euclid v. Ambler Realty
Co., 272 U.S. 365, 397  (1926)); see also Agins, 447 U.S. at
260; Keystone Bituminous Coal Ass'n, 480 U.S. at 493, 494;
Virginia Surface Mining & Reclamation Ass'n, 452 U.S. at
297. In this connection, "since it is difficult to demonstrate
that [the] `mere enactment' of a piece of legislation" amounts
to a taking, the Court has recognized that facial takings chal-
lenges "face an uphill battle." Suitam v. Tahoe Reg'l Planning
Agency, 520 U.S. 725, 736 n.10 (1997); see also Keystone
Bituminous Coal Ass'n, 480 U.S. at 495; Garuneau, 147 F.3d
at 807.

B.

The plaintiffs contend that, for purposes of determining
whether the regulations constitute a categorical taking under
Lucas, we should not treat the plaintiffs' properties as the fee
interests that they are. Instead, they argue, we should define
narrowly, as a separate property interest, the temporal "slice"
of each fee that covers the time span during which Ordinance
81-5 and Resolution 83-21 were in effect. It is this carved-out
piece of each plaintiff's property interest, the plaintiffs assert,
that has been "taken" by the regulations.

[6] "Because our test for regulatory taking requires us to
compare the value that has been taken from the property with
the value that remains in the property, one of the critical ques-
tions is determining how to define the unit of property `whose
value is to furnish the denominator of the fraction.' "13 Key-
stone Bituminous Coal Ass'n, 480 U.S. at 497 (quoting Frank
I. Michelman, Property, Utility, and Fairness: Comments on
the Ethical Foundations of "Just Compensation " Law, 80
Harv. L. Rev. 1165, 1192 (1967)). In other words, for pur-
poses of determining whether a "taking" of the plaintiffs'
"property" has occurred, the proper inquiry is what constitutes
the relevant "property"? Is it the fee interest that must be
"taken," or is it some lesser unit of property? Property inter-
ests may have many different dimensions. For example, the
dimensions of a property interest may include a physical
dimension (which describes the size and shape of the property
in question), a functional dimension (which describes the
extent to which an owner may use or dispose of the property
in question), and a temporal dimension (which describes the
duration of the property interest). At base, the plaintiffs' argu-
ment is that we should conceptually sever each plaintiff's fee
interest into discrete segments in at least one of these dimen-
sions -- the temporal one -- and treat each of those segments
as separate and distinct property interests for purposes of tak-
ings analysis. Under this theory, they argue that there was a
categorical taking of one of those temporal segments.

[7] While Supreme Court precedent has not over the years
been entirely uniform in its treatment of the conceptual sever-
ance question, compare Pennsylvania Coal Co. v. Mahon, 260
U.S. 393 (1922) (employing conceptual severance) with Key-
stone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470
(1987) (rejecting conceptual severance in the identical con-
text), most modern case law rejects the invitation of property
holders to engage in conceptual severance, except in cases of
physical invasion or occupation. Several cases illustrate the
Court's refusal to employ this concept in other types of cir-
cumstances. In Penn Central Transportation Company v. City
of New York, the Penn Central Transportation Company
entered into a contract for the construction and lease of an
office building above its Grand Central Terminal in New
York City. 438 U.S. at 116. When the City denied two alter-
nate building plans on the ground that they would destroy the
architectural appeal of the historic landmark, Penn Central
filed suit, claiming that the rejection of the building plans
constituted a taking. Id. at 117-18. In affirming the denial of
its takings claim, the Court explicitly rejected Penn Central's
proposal to consider the airspace above the Terminal as a
property interest separate from the rest of the Terminal site.
The Court explained:

       "Taking" jurisprudence does not divide a single par-
       cel into discrete segments and attempt to determine
       whether rights in a particular segment have been
       entirely abrogated. In deciding whether a particular
       governmental action has effected a taking, this Court
       focuses rather both on the character of the action and
       on the nature and extent of the interference with
       rights in the parcel as a whole--here, the city tax
       block designated as the "landmark site."

Id. (emphasis added); see also MacLeod v. County of Santa
Clara, 749 F.2d 541, 547 (9th Cir. 1984).

The Court also refused to employ conceptual severance in
Keystone Bituminous Coal Association v. DeBenedictis,
which considered the effect of Pennsylvania's Bituminous
Mine Subsidence and Land Conservation Act on the property
rights of mining companies. As implemented, the Act gener-
ally required 50% of the coal beneath certain protected struc-
tures to be kept in place as a means of providing surface
support. Id. at 476-77. The petitioners, who had purchased
both mining rights and waivers for any surface damage
caused by mining, argued that the Act constituted a taking. Id.
at 478-79. In particular, the petitioners argued that the Act
appropriated the portion of coal that they were required to
leave in the ground. Id. at 497. They also argued that the Act
entirely destroyed the value of each petitioner's "support
estate," which is recognized under Pennsylvania law as a sep-
arate interest in land. Id. In essence, the petitioners argued
that there had been a categorical taking of these two distinct
property interests.

In holding that the regulation of the petitioners' mining
rights did not amount to a taking, the Supreme Court refused
to consider the coal that the Act required the petitioners to
leave in place as a separate property interest; rather, the Court
emphasized, takings jurisprudence must consider the "parcel
as a whole." Id. at 497-99. In addition, the Court described
Pennsylvania's recognition of a support estate as a "legalistic
distinction[ ]" that could not convert the support estate into a
separate property interest for takings law purposes. Id. at 500-
02.

The Court's general rule against conceptual severance is
not limited to the spatial dimension of property rights. In
Andrus v. Allard, the Court applied its general rule in a more
functional dimension, to the "bundle" of rights that make up
what we think of as "property." In that case, federal regulation
prohibited the sale of eagle feathers. Id. at 53-54. The plain-
tiffs argued that the denial of the right to sell their feathers
constituted a taking. Id. at 64 & n.21. The Court rejected the
takings claim, and, in so doing, rejected the conceptual disag-
gregation of property rights: "[W]here an owner possesses a
full `bundle' of property rights, the destruction of one `strand'
of the bundle is not a taking because the aggregate must be
viewed in its entirety." Andrus, 444 U.S. at 65-66 (citing Penn
Central, 438 U.S. at 130-31).14

In fact, the Supreme Court has already once rejected con-
ceptual severance in the temporal dimension of property
rights. In Agins v. Tiburon, the city of Tiburon had instituted
condemnation proceedings against the plaintiffs' property, but
abandoned the proceedings a year later. The plaintiffs brought
suit, contending, inter alia, "that the city's aborted attempt to
acquire the land through eminent domain had destroyed the
use of the land during the pendency of the condemnation pro-
ceedings." Agins, 447 U.S. at 258 n.3. The Supreme Court
rejected the plaintiffs' claim, holding:

       The State Supreme Court correctly rejected the con-
       tention that the municipality's good faith planning
       activities, which did not result in the successful pros-
       ecution of an eminent domain claim, so burdened the
       appellants' enjoyment of their property so as to con-
       stitute a taking. Even if the appellants' ability to sell
       their property was limited during the pendency of the
       condemnation proceeding, the appellants were free
       to sell or develop their property when the proceed-
       ings ended. Mere fluctuations in value during the
       process of governmental decisionmaking, absent
       extraordinary delay, are "incidents of ownership.
       They cannot be considered as a `taking' in the con-
       stitutional sense."

447 U.S. at 263 n.9 (citations omitted) (emphasis added)
(quoting Danforth v. United States, 308 U.S. 271, 285
(1939)). In rejecting the takings claim, the Court relied only
on the fact that the plaintiffs were able to sell or develop their
property after the city abandoned its condemnation claim. By
relying on the temporary nature of the restriction, the Court
rejected the invitation to carve out, as a separate property
interest, a temporal "slice" of the parcel that existed for the
time period during which the condemnation proceedings were
in progress. For, had the Court considered the plaintiffs'
rights in their property during that time period as a separate
interest, the plaintiffs' ability to sell or develop their property
after the time period ended would have been irrelevant to the
Court's takings analysis. Only the ability to sell or develop
the property during the condemnation period would have mat-
tered.

Agins's rejection of conceptual severance in the temporal
dimension is consistent with the Court's rejection of other
forms of conceptual severance in Penn Central  and Andrus.
It would make little sense to accept temporal severance and
reject spatial or functional severance. A planning regulation
that prevents the development of a parcel for a temporary
period of time is conceptually no different than a land-use
restriction that permanently denies all use on a discrete por-
tion of property, or that permanently restricts a type of use
across all of the parcel. See Margaret Jane Radin, The Liberal
Conception of Property: Cross Currents in the Jurisprudence
of Takings, 88 Colum. L. Rev. 1667, 1674-78 (1988). Each of
these three types of regulation will have an impact on the par-
cel's value, because each will affect an aspect of the owner's
"use" of the property -- by restricting when the "use" may
occur, where the "use" may occur, or how the "use" may
occur. Prior to Agins, the Court had already rejected takings
challenges to regulations eliminating all "use " on a portion of
the property, and to regulations restricting the type of "use"
across the breadth of the property. See Penn Central, 438 U.S.
at 130-31; Keystone Bituminous Coal Ass'n, 480 U.S. at 498-
99; Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 384,
397 (1926) (75% diminution in value caused by zoning law);
see also William C. Haas & Co. v. City & County of San
Francisco, 605 F.2d 1117, 1120 (9th Cir. 1979) (value
reduced from $2,000,000 to $100,000). In those cases, the
Court "uniformly reject[ed] the proposition that diminution in
property value, standing alone, can establish a`taking.' "
Penn Central, 438 U.S. at 131; see also Concrete Pipe and
Products, Inc. v. Construction Laborers Pension Trust, 508
U.S. 602, 645 (1993). There is no plausible basis on which to
distinguish a similar diminution in value that results from a
temporary suspension of development.

To not reject the concept of temporal severance, we would
risk converting every temporary planning moratorium into a
categorical taking. See Penn Central, 438 U.S. at 130; Stern
v. Halligan, 158 F.3d 729, 734 (3rd Cir. 1998); Michelman,
supra, at 1193. Such a result would run contrary to the
Court's explanation that it is "relatively rare " that government
"regulation denies all economically beneficial or productive
use of land." Lucas, 505 U.S. at 1015.

[8] More important, the widespread invalidation of tempo-
rary planning moratoria would deprive state and local govern-
ments of an important land-use planning tool with a well-
established tradition. Land-use planning is necessarily a com-
plex, time-consuming undertaking for a community, espe-
cially in a situation as unique as this. In several ways,
temporary development moratoria promote effective planning.
First, by preserving the status quo during the planning pro-
cess, temporary moratoria ensure that a community's prob-
lems are not exacerbated during the time it takes to formulate
a regulatory scheme. See Elizabeth A. Garvin & Martin L.
Leitner, Drafting Interim Development Ordinances: Creating
Time to Plan, Land Use Law and Zoning Digest, June 1996,
at 3, 3; Schafer v. City of New Orleans, 743 F.2d 1086, 1090
(5th Cir. 1984). Relatedly, temporary development moratoria
prevent developers and landowners from racing to carry out
development that is destructive of the community's interests
before a new plan goes into effect. Such a race-to-
development would permit property owners to evade the land-
use plan and undermine its goals. See id.; Miller v. Board of
Public Works, 234 P. 381, 388 (Cal. 1925).15 Finally, the
breathing room provided by temporary moratoria helps ensure
that the planning process is responsive to the property owners
and citizens who will be affected by the resulting land-use
regulations. See Robert H. Freilich, Interim Development
Controls: Essential Tools for Implementing Flexible Planning
and Zoning, 49 J. Urb. Law 65, 79 (1971). Absent the pres-
sure of trying to out-speed developers who are attempting to
circumvent the planning goals, the "planning and implementa-
tion process may be permitted to run its full and natural
course with widespread citizen input and involvement, public
debate, and full consideration of all issues and points of
view." Garvin and Leitner, supra, at 3. Given the importance
and long-standing use temporary moratoria, courts should be
exceedingly reluctant to adopt rulings that would threaten the
survival of this crucial planning mechanism.

In opposition to the overwhelming legal and logical support
for not conceptually severing fee interests into small temporal
pieces, the plaintiffs argue (and the district court below
decided) that the Court's decision in First English Evangeli-
cal Lutheran Church v. County of Los Angeles, 482 U.S. 304
(1987), compels such conceptual severance of the property
rights in this case. The plaintiffs contend that First English
holds that conceptual severance of the temporal dimension of
property interests is generally required. This argument is
flatly incorrect. 

First English is not even a case about what constitutes a
taking. In First English, property owners challenged an ordi-
nance that prevented the development of property located on
a flood plain; they sought "damages for the uncompensated
taking of all use" of the property. See id.  at 309. The Califor-
nia Court of Appeal rejected their claims on the ground that,
regardless of whether a taking occurred, the claimants could
not recover damages during the period running from the time
of enactment of the ordinance to the time when it was finally
declared unconstitutional. See id. Because the question pres-
ented to the Supreme Court related only to the remedy avail-
able once a taking had been proven, the Court stated
explicitly that it was not addressing whether the ordinance
constituted a taking. See id. at 313 ("We accordingly have no
occasion to decide whether the ordinance at issue actually
denied appellant all use of its property . . . ."). According to
the Court, it was resolving only the question whether, once a
taking is established, "abandonment [of that taking] by the
government requires payment of compensation for the period
of time during which regulations" that constitute a taking are
in effect. Id. at 318; see also id. at 311 (noting that the "dispo-
sition of the case [by the California court on the assumption
that a taking occurred] isolates the remedial question for our
consideration"); Michelman, supra, at 1617 & n.81.

It is true that First English holds that, when a taking has
occurred, the government must compensate property owners,
even if the taking is "temporary." Contrary to the plaintiffs'
suggestion, however, the Court's holding in First English was
not that temporary moratoria are "temporary takings." In fact,
the opposite is true. The First English Court very carefully
defined " `temporary' regulatory takings[as] those regulatory
takings which are ultimately invalidated by the courts."16 482
U.S. at 310. What is "temporary," according to the Court's
definition, is not the regulation; rather, what is "temporary" is
the taking, which is rendered temporary only when an ordi-
nance that effects a taking is struck down by a court. In other
words, a permanent regulation leads to a "temporary" taking
when a court invalidates the ordinance after the taking. See id.
at 319 ("Invalidation of the ordinance or its successor ordi-
nance after this period of time, though converting the taking
into a `temporary' one, is not a sufficient remedy to meet the
demands of the Just Compensation Clause."); id. at 317 (dis-
cussing the fact "that the government may elect to abandon its
intrusion or discontinue regulations," and thereby turn what
would otherwise be a "permanent taking" into a" `temporary'
taking"). The Court's definition, therefore, does not compre-
hend temporary moratoria, which from the outset are designed
to last for only a limited period of time. In short, we reject the
plaintiffs' contentions that First English applies to temporary
moratoria and that it works a radical change to takings law by
requiring that property interests be carved up into finite tem-
poral segments.17
In addition to misinterpreting First English, the district
court erred in concluding that United States v. General
Motors Corp., 323 U.S. 373 (1945), and United States v. Petty
Motor Co., 327 U.S. 372 (1946), support conceptual sever-
ance in the present case. In these cases, the federal govern-
ment used its power of eminent domain to condemn
leaseholds during World War II. Both cases were concerned
with the level of compensation owed to the ousted lessees.
The fact that just compensation was required in these cases,
however, has no bearing on the question before us. Both cases
involved the physical occupation by the federal government
of the property at issue and thus fall within the categorical
rule established by the Court for cases involving physical
invasions. As we have explained, physical occupations and
appropriations have always received markedly different ana-
lytic treatment than other regulatory takings. The Supreme
Court has clearly held that the physical invasion or possession
by the government of a fragment of a larger parcel constitutes
a per se taking -- in other words, conceptual severance is the
norm. See, e.g., Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419, 426  (1982). Just as General Motors and
Petty Motors require compensation for the government's con-
demnation of a leasehold, Loretto requires compensation for
the permanent physical appropriation of a tiny fragment of an
apartment building. See Loretto, 458 U.S. at 426. The concep-
tual severance that is the norm in these physical appropriation
cases, however, does not extend to other regulatory takings
claims.18

[9] In short, we reject the plaintiffs' suggestion that we
engage in conceptual severance. The relevant property inter-
ests in the present case are the whole parcels of property that
the plaintiffs own.

C.

[10] Having determined that the property interest at stake
is just what one would expect it to be -- the plaintiffs' fee
interests -- we must evaluate whether Ordinance 81-5 and
Resolution 83-21 effected a categorical taking of each plain-
tiff's property.19 For purposes of this analysis, two features of
these provisions are relevant. First, the provisions effectively
placed a moratorium on the development of the plaintiffs' prop-
erty.20 The second relevant feature of the provisions is that the
moratorium they effected was intended to be temporary -- the
regulations were designed to institute a temporary moratorium
that would remain in effect only until a new regional land-use
plan could be adopted.21 See Union Oil Co. v. Morton, 512,
F.2d 743, 751 (9th Cir. 1975) (describing a regulation as tem-
porary if its "termination is conditioned [on ] the occurrence
of certain future events").

[11] To determine whether the temporary moratorium insti-
tuted by TRPA's regulations denies "all economically benefi-
cial or productive use" of the plaintiffs' land, we must first
consider the meaning of the phrase "economically beneficial
or productive use." The phrase's precise meaning is elusive,
and has not been clarified by the Supreme Court. See, e.g.,
Lake Nacimiento Ranch Co. v. County of San Luis Obispo,
841 F.2d 872, 877 (9th Cir. 1988). The central confusion over
its meaning centers on the relationship between the "use" of
property and its "value."22 Clearly, the economic value of
property provides strong evidence of the availability of "eco-
nomically beneficial or productive uses" of that property.23
Nevertheless, there are instances in which certain kinds of
"value" may be poor measures of the existence of such uses.
In any event, we need not resolve the sticky issues surround-
ing the meaning and proof of the existence of "economically
beneficial or productive uses," because it is clear from the
"general scope and dominant features" of Ordinance 81-5 and
Resolution 83-21 that the temporary moratorium imposed by
these regulations did not deprive the plaintiffs' land in the
Lake Tahoe Basin of either all of its "value" or all of its "use."24
Garuneau, 147 F.3d at 807.
[12] First, as amici Cities and Counties of California note,
basic principles of economics show that the moratorium did
not render the plaintiffs' property valueless.25 See generally
Lucas, 505 U.S. at 1020 (assuming, as the basis for its deci-
sion, that the regulation at issue rendered Lucas's two beach-
front lots "valueless"). The moratorium was temporary -- it
was designed to and did dissolve upon the adoption of a new
regional plan. Given that the ordinance and resolution banned
development for only a limited period, these regulations pre-
served the bulk of the future developmental use of the prop-
erty. This future use had a substantial present value.26

[13] Of course, were a temporary moratorium designed to
be in force so long as to eliminate all present value of a prop-
erty's future use, we might be compelled to conclude that a
categorical taking had occurred. We doubt, however, that a
true temporary moratorium would ever be designed to last for
so long a period. Certainly, the moratorium at issue here was
not. The temporary moratorium was designed to suspend
development only until a new regional land-use plan could be
formulated -- a process that the 1980 Compact intended
would take thirty months. While the completion of the
regional plan actually took forty months (which led to the
temporary moratorium remaining in effect for eight months
longer than expected), the moratorium still was in effect for
only thirty-two months.27

[14] Moreover, there is no evidence that owners or purchas-
ers of property in the basin anticipated that the temporary
moratorium would continue indefinitely. Nor would they have
had reason to: the district court found that TRPA worked dili-
gently to complete the regional plan as quickly as possible.
See Tahoe-Sierra Preservation Council, 34 F. Supp. 2d at
1250-51. Thus, while the temporary moratorium surely had a
negative impact on property values in the basin, we cannot
conclude that the interim suspension of development wiped
out the value of the plaintiffs' properties.

[15] Furthermore, the temporary moratorium did not
deprive the plaintiffs of all "use" of their property. The "use"
of the plaintiffs' property runs from the present to the future.
(This is a simple corollary of our earlier conclusion that the
plaintiffs' property interests may not be temporally severed.)28
By instituting a temporary development moratorium, TRPA
denied the plaintiffs only a small portion of this future stream;
the thirty-two months during which the moratorium was in
effect represents a small fraction of the useful life of the
Tahoe properties.29

[16] Because the temporary development moratorium
enacted by TRPA did not deprive the plaintiffs of all of the
value or use of their property, we hold that it did not effect
a categorical taking.30 Indeed, given the above analysis, it is
equally clear that the district court was correct to conclude
that the moratorium did not constitute a taking under the Penn
Central test. See Tahoe-Sierra Preservation Council, 34 F.
Supp. 2d at 1240-42. Thus, while the district court was correct
as to this latter point, we reverse its holding that a categorical
taking occurred. In reaching this conclusion, we preserve the
ability of local governments to do what they have done for
many years -- to engage in orderly, reasonable land-use plan-
ning through a considered and deliberative process. To do
otherwise would turn the Takings Clause into a weapon to be
used indiscriminately to penalize local communities for
attempting to protect the public interest.

II. TIME PERIOD III

The plaintiffs raise two issues on cross-appeal, the first of
which concerns the district court's holding regarding Period
III -- the period after the passage of the 1984 Plan and before
the passage of the 1987 Plan.31 The district court held that
TRPA's adoption of the 1984 Plan was not the actionable
cause of any deprivation of the plaintiffs' Fifth and Four-
teenth Amendment rights that occurred during this period.
According to the court, the injunction issued by Judge Garcia
against TRPA, in a separate suit brought by the state of Cali-
fornia and the League to Save Lake Tahoe, prevented the
adoption of the 1984 Plan from being either the "but for" or
the proximate cause of any taking that may have occurred
during Period III. For this reason, the court held that, as to
that period, TRPA could not be held liable underS 1983.32 On
cross-appeal, the plaintiffs argue that the district court erred
in concluding that TRPA's actions were not the legal cause of
any taking during the period in question.

[17] In a section 1983 action, the plaintiff must demonstrate
that the defendant's conduct was the actionable cause of the
claimed injury. See, e.g., Arnold v. IBM Corp. , 637 F.2d 1350,
1355 (9th Cir. 1981). To meet this causation requirement, the
plaintiff must establish both causation-in-fact and proximate
causation. See Van Ort v. Estate of Stanewich , 92 F.3d 831,
837 (9th Cir. 1996); Arnold, 637 F.2d at 837; Hoffman v. Hal-
den, 268 F.2d 280, 295 (9th Cir. 1959), overruled in part on
other grounds by Cohen v. Norris, 300 F.2d 24 (9th Cir.
1962). The parties agree that this requirement applies to the
plaintiffs' S 1983 claims, which allege a violation of the Tak-
ings Clause, as much as it would to any other S 1983 claim.33
Like other factual determinations, causation-in-fact is
reviewed for clear error. In addition, we review findings of
proximate cause for clear error, even though they present
mixed questions of law and fact. See Exxon Co. v. Sofec, Inc.,
54 F.3d 570, 576 (9th Cir. 1995) (holding that, although it "is
an exception to the general rule that mixed questions of law
and fact are reviewed de novo," issues of proximate cause are
reviewed under the clearly erroneous standard); George v.
City of Long Beach, 973 F.2d 706, 709 (9th Cir. 1992); Brit-
ton v. Price, 950 F.2d 602, 604 (9th Cir. 1991). 34
[18] The plaintiffs argue on two grounds that the district
court clearly erred when it concluded that TRPA's conduct
was not the actionable cause of the claimed taking of the
plaintiffs' property from 1984 to 1987. First, they argue that
the injunction is irrelevant to any consideration of "cause,"
because the 1984 Plan was actually implemented and itself
constituted a regulatory taking.35 We disagree. Contrary to the
plaintiffs' contention, the injunction issued by Judge Garcia
effectively prohibited the implementation of the 1984 Plan.36
The order that granted the injunction read in pertinent part:

       That, until conclusion of trial of this matter, the
       defendant TRPA, its agents, servants, employees,
       and all other persons acting under the authority of
       and in concert with TRPA, hereby are enjoined and
       restrained from taking any action to approve any
       project, as defined in to Tahoe Regional Planning
       Compact, Public Law 96-551, 94 Stat. 3233 (1980),
       or to approve the construction of any man-made
       development within the agency's jurisdiction,
       including the any of the 2,343 developments referred
       to in the Court's June 15, 1984 opinion, and includ-
       ing the acceptance of applications for such agency
       approval . . . .

As the district court's order makes clear, the injunction pro-
hibited TRPA from taking "any action" to approve any proj-
ect, and even prohibited it from accepting permit applications.
Without the ability to accept, process, or grant applications,
it is impossible to see how TRPA could have implemented the
1984 Plan, the purpose of which was to regulate the granting
of new permits.37 Consequently, as this court pointed out in
TSPC II, "th[e] plan never went into effect."38 938 F.2d at
155. Thus, the 1984 Plan itself could not have constituted a
taking.

In the alternative, the plaintiffs argue that, even if the 1984
Plan was not itself implemented, TRPA's adoption of the plan
effectuated a taking by causing the injunction to issue. Specif-
ically, they contend that (1) the adoption of the 1984 Plan was
both a "but for" and the proximate cause of the issuance of the
injunction, and (2) the injunction constituted a taking of the
plaintiffs' property.39 For at least two reasons, we reject the
plaintiffs' alternative argument.
First, the district court did not clearly err in holding that
TRPA reasonably did not foresee that the 1984 Plan would be
enjoined. It is well-established that foreseeability analysis is
an appropriate part of proximate cause determinations in
S 1983 actions. See, e.g., Arnold, 637 F.2d at 1355; Johnson,
588 F.2d at 743-44. Cf. Van Ort, 92 F.3d at 837 (noting that
unforeseen, intervening causes break the chain of proximate
causation in S 1983 actions). See generally Palsgraf v. Long
Island R. Co., 162 N.E. 99 (N.Y. 1928). Employing such an
analysis, the plaintiffs argue that TRPA is legally responsible
for the effects of the injunction because TRPA should have
reasonably foreseen that it would be sued as a result of its
adopting the 1984 Plan. Even if a lawsuit was foreseeable,
however, it is the foreseeability of the injunction, not the fore-
seeability of a lawsuit, that is relevant to proximate causation
here. The district court concluded that TRPA reasonably did
not foresee that an injunction would issue. See Tahoe-Sierra
Preservation Council, 34 F. Supp. 2d at 1248. The record sup-
ports this determination: TRPA sought to adopt a plan that
would comply with the Compact, and it had been advised by
counsel that its legislative discretion to adopt a plan would be
given great deference by the courts; accordingly, it had no
reason to believe that it would lose a lawsuit or that the 1984
Plan would be enjoined. Rather than contest this fact, the
plaintiffs make the bald assertion that TRPA secretly wanted
an injunction against all construction in the basin. However,
they point to no evidence in the record to support this conten-
tion.
[19] Although TRPA could not have foreseen, prior to
adopting the 1984 Plan, that an injunction would issue, the
fact that the district court did issue an injunction reveals a sec-
ond reason why TRPA may not be held legally responsible for
any injury that occurred during Period III: in retrospect, there
was little TRPA could have done to prevent the injunction.
The reason is that "the `wrongdoing' plaintiffs claim [that
TRPA committed] was not the `wrongdoing' that triggered
the injunction." TSPC I, 911 F.2d at 1434 (B. Fletcher, J.,
concurring). The wrongdoing about which the plaintiffs com-
plain was TRPA's adoption, in 1984, of a regional plan that
was overly restrictive of development. As Judge Fletcher
noted in TSPC I, however, "the court granted the injunction
based on California's and the League's claim that the Plan
was not strict enough: it would permit construction of single-
family residence in excess of compact limits and inflict envi-
ronmental damage, and the Plan also did not abide by the
Compact's stricter procedural requirements for project
approval." Id. (emphasis added). Thus, had TRPA avoided its
alleged wrongdoing -- by adopting a more lenient plan that
met with the plaintiffs' approval -- it is even more certain
that an injunction would have issued. In short, the lack of a
causal connection between the alleged wrongdoing and the
purported harm compels the conclusion that TRPA may not
be held liable for the effects of the injunction.

[20] For the foregoing reasons, we affirm the district
court's holding that TRPA's actions were not the actionable
cause of any taking that may have occurred during Period III,
and that the defendants therefore may not be held liable as to
that period under S 1983.

III. TIME PERIOD IV

The second issue that the plaintiffs raise on cross-appeal
concerns the district court's resolution of the claims regarding
the 1987 Plan (the Period IV claims). The plaintiffs first
added these claims when they amended their complaints in
1991. At that time, the defendants moved to dismiss the plain-
tiffs' claims for all four time periods on the ground that the
claims were barred by the sixty-day statute of limitations
included in the 1980 Compact.40 The district court agreed as
to the claims regarding Periods I, II, and IV, and dismissed
those claims.41 On appeal, we reversed as to the S 1983
claims. We held:

       TSPC . . . brought one claim under 42 U.S.C. S 1983
       for the violation of its civil rights by the actions of
       TRPA in adopting the 1981 Ordinance, the 1983
       Resolution, the 1984 Plan and the 1987 Plan. . . . As
       to S 1983 it is established law that there is a single
       statute of limitation to be applied. . . . Obviously, the
       single state statute of limitations to be applied in all
       S 1983 actions cannot be the special 60-day period
       provided by the Compact. The defendants did not
       plead any other statute of limitations except the 60-
       day one. Failing to plead affirmatively any other
       statute of limitations, they cannot now rely on any
       other. No part of TSPC's S 1983 claim is time-
       barred.

TSPC III, 34 F.3d at 756, as amended by  42 F.3d 1306 (cita-
tions omitted).

On remand, the defendants asserted in their answers that
the plaintiffs' S 1983 claims regarding Period IV, while not
barred by the sixty-day statute of limitations, were barred by
the applicable statutes of limitations -- a one-year limit for
S 1983 actions in California, and a two-year limit for S 1983
actions in Nevada.42 See Tahoe Sierra Preservation Council,
992 F. Supp. at 1221. The district court agreed on the merits.
In addition, the court held that the law of the case doctrine did
not preclude it from holding the plaintiffs' Period IV claims
time-barred, even though the TSPC III court had concluded
otherwise. The district court concluded that it was not com-
pelled to follow TSPC III because we had clearly erred in that
case when we held that the plaintiffs had forfeited the right to
rely on the correct statute of limitations period by failing to
"plead" that statute "affirmatively." Accordingly, it dismissed
the Period IV S 1983 claims. On cross-appeal, the plaintiffs
argue that the district court had no authority to deviate from
the law of the case set forth in TSPC III. Rather, they contend,
only another panel of this court may decline to follow the law
of the case established in a disposition of this court.

As an initial matter, we note that the plaintiffs' argument
is largely academic. Even were the district court bound abso-
lutely by the holding in TSPC III, we  would still have discre-
tion, under the circumstances present here, to decline to
follow the law of that case. In addition to being academic,
however, the plaintiffs' argument may well be incorrect. In
United States v. Cuddy, 147 F.3d 1111 (9th Cir. 1998), we
held that the district court did not abuse its discretion when
it declined to follow, on remand, a holding we had issued on
appeal. See id. at 1114-15. We concluded that the district
court had acted within its discretion because it was correct in
determining that our holding was clearly erroneous. See id. In
addition to our holding in Cuddy, we have suggested in dicta
on several occasions that district courts may, in certain cir-
cumstances, decline to follow law of the case set forth by this
court. In fact, one of our standard formulations of the law of
the case doctrine includes subordinate, as well as coordinate,
courts: "Under the doctrine of law of the case,`a court is gen-
erally precluded from reconsidering an issue that has already
been decided by the same court, or a higher court in the iden-
tical case.' [However,] a court may have discretion to depart
from the law of the case where [certain features are present.]"
Rebel Oil Co. v. Atlantic Richfield Co., 146 F.3d 1088, 1093
(9th Cir. 1998) (emphasis added) (quoting United States v.
Alexander, 106 F.3d 874, 876 (9th Cir. 1997)); see also
Moore v. Jas. H. Matthews & Co., 682 F.2d 830, 833 (9th Cir.
1982). But cf. Thomas v. Bible, 983 F.2d 152, 155 (9th Cir.
1993) (suggesting, in dicta, that the "level or levels of the
court or courts involved" has some bearing on a court's dis-
cretion to deviate from law of the case).

While our case law appears to support the authority of a
district court to deviate from the law of the case in appropriate
circumstances, we do not decide whether such circumstances
existed in this case. Instead, we reach the same decision as the
district court on the alternate ground that, regardless of the
district court's authority to decline to follow the law of the
case established by this court in TSPC III, we have the discre-
tion to do so and we exercise that discretion here. The law of
the case doctrine provides that a panel of this court has discre-
tion to depart from the law of the case established by the same
panel, or another, where: "(1) the decision is clearly erroneous
and its enforcement would work a manifest injustice, (2)
intervening controlling authority makes reconsideration
appropriate, or (3) substantially different evidence was
adduced at a subsequent trial." Jeffries v. Wood, 114 F.3d
1484, 1489 (9th Cir. 1997) (en banc) (footnote and internal
quotes omitted).43 The holding in TSPC III falls squarely into
the first category: the decision was "clearly erroneous and its
enforcement would work a manifest injustice." Id.

In order to understand why the holding in TSPC III is
clearly erroneous, one must first understand what it is that
TSPC III held. In concluding that the defendants had forfeited
their right to argue at any point in the litigation that the plain-
tiffs' S 1983 claims were time-barred, the TSPC III court
stated: "The defendants did not plead any other statute of lim-
itations except the 60-day one. Failing to plead affirmatively
any other statute of limitations, they cannot now rely on any
other." TSPC III, 34 F.3d at 756 (emphasis added). On appeal,
the plaintiffs argue that the court used the term "plead" in its
non-technical sense, to mean simply "argue" or "contend."
We think it evident, however, that the court used the term in
its conventional legal sense, to mean "assert in a pleading."
Both courts and lawyers know that the term "plead," when
used in a legal context, has that meaning. When a court uses
the term in an opinion, therefore, we presume, in the absence
of evidence to the contrary, that the court meant to employ the
standard legal meaning. Here, there is no indication to the
contrary. Quite the opposite: the adverb that the TSPC III
court used in conjunction with the term "plead " bolsters our
reading. In rejecting the affirmative defense, the court did not
merely state that the defendants had failed to "plead" the
proper limitation period; instead, it stated that the defendants
had failed to "plead affirmatively" the proper period. This
more specific term -- "plead affirmatively" -- makes it even
clearer to us that the TSPC III court used the term "plead" in
its legal rather than popular sense. After all, the statute of lim-
itations defense at issue in TSPC III is an affirmative defense
-- a type of defense that, in legal parlance, must be "plead
affirmatively." For these reasons, we conclude that TSPC III
held that the defendants forfeited their right to argue another
limitations period by failing to assert that period in a respon-
sive pleading.

Given our conclusion about what TSPC III held, it follows
that TSPC III's holding was clearly erroneous. At the time
that we heard the appeal in TSPC III, none of the defendants
had ever filed an answer, or any other type of responsive
pleading. See TSPC, 992 F. Supp. 1218, 1223 (D. Nev. 1998).
Instead, in response to both the original complaints and the
amended complaints, the defendants had filed motions to dis-
miss. A motion to dismiss is not a pleading. See Fed. R. Civ.
P. 7(a) (designating "pleadings"); Miles v. Department of
Army, 881 F.2d 777, 781 (9th Cir. 1989) ("[A] motion to dis-
miss the complaint is not a responsive pleading."). Thus, it
was not until the remand following TSPC III, when the defen-
dants filed answers to the plaintiffs' complaints, that the
defendants finally "pled."44 And in those first responsive
pleadings, the defendants pled the pertinent statutes of limita-
tions for the S 1983 claims. Accordingly, TSPC III clearly
erred in holding that the defendants failed to "plead affirma-
tively" those statutes.

In addition to the clear factual error, TSPC III 's bare legal
holding -- that the defendants forfeited the correct statute of
limitations defense -- is clearly wrong. The defendants raised
the correct limitations periods in their answers. The inclusion
of the defense in an answer is sufficient to preserve the
defense. See Magana v. Northern Mariana Islands , 107 F.3d
1436, 1446 (9th Cir. 1997); Fed. R. Civ. Pro. 8(c). In fact, we
have permitted defendants to raise affirmative defenses for the
first time well after filing an answer, see Magana, 107 F.3d
at 1446, and have also permitted district courts to raise an
affirmative defense sua sponte, so long as the defense has not
been affirmatively waived, see Levald, 998 F.2d 680, 686-87
(9th Cir. 1993).

Although it is true that, prior to filing their answers, the
defendants had asserted, by way of a motion to dismiss, a stat-
ute of limitations defense premised on a mistaken choice of
law, the defendants' mistake does not in any way constitute
a waiver of all other limitations periods. See Zotos v. Lind-
bergh Sch. Dist., 121 F.3d 356, 361 (8th Cir. 1997) (rejecting
argument that defendant waived application of 90-day limita-
tion period by relying only on a two-year limitation period in
its summary judgment motion); Yoder v. Honeywell Inc., 104
F.3d 1215, 1224 n.3 (10th Cir. 1997) ("We hold that [the
defendant] did not waive the statute of limitations defense
simply by pleading the defense based on the wrong choice of
law.") Cf. Dangerfield Island Protective Soc'y v. Babbitt, 40
F.3d 442, 444-45 (D.C. Cir. 1994).45
In addition to being clearly erroneous, TSPC III 's holding
would result in a manifest injustice were we to follow it. Jef-
fries held that a court may find that an erroneous decision
works a manifest injustice if "the challenged decision . . .
involve[s] a significant inequity or the extinguishment of a
right . . . ." Jeffries, 114 F.3d at 1492. In the present case, the
clear error in TSPC III would lead to a significant inequity.
Were we to follow TSPC III's erroneous holding, the defen-
dants would lose their opportunity to present this dispositive
defense -- a defense that fully vindicates their right to be free
from a trial and an adverse damage award. Of course, depriv-
ing a defendant of a statute of limitations defense might not
always be significantly inequitable. Here, however, the defen-
dants did nothing that would have misled the plaintiffs or con-
stituted a forfeiture of that defense. In marked contrast, the
plaintiffs failed to bring their claims regarding the 1987 Plan
until more than four years after the plan became effective,
which is more than two years after Nevada's statute of limita-
tions had run, and more than three years after California's.
These circumstances, combined with the fact that the defense
is both timely and dispositive, convince us that the requisite
inequity exists in the present case.

[21] Because the time bar holding in TSPC III is clearly
erroneous and would be manifestly unjust if enforced, we
decline to follow it. On the merits, the district court held the
plaintiffs' claims time-barred, and the plaintiffs affirmatively
decline to argue on appeal that the district court's resolution
of that question is incorrect. Even when asked by this court
at oral argument, the plaintiffs stressed that they disputed only
the district court's authority to deviate from the law of the
case set forth in a disposition of this court. Their decision not
to argue the merits of the time-bar issue is not surprising,
given that they filed the Period IV claims years after the rele-
vant statutes of limitations had run. Because the plaintiffs
offer no argument on the merits of the timeliness of their
Period IV claims, we affirm the district court's dismissal of
those claims.

AFFIRMED in part and REVERSED in part. REMANDED
for entry of judgment in favor of defendants in accordance
with this disposition.
_______________________________________________________________

FOOTNOTES

*The Honorable Henry A. Politz, Senior United States Circuit Judge for
the Fifth Circuit Court of Appeals, sitting by designation.
1 The destruction of vegetation increases the transport of nutrients to the
lake in part because vegetation prevents soil erosion. Similarly, the con-
struction of impervious surfaces increases the flow of nutrients to the lake
in part because such surfaces prevent rain and snowmelt from seeping into
the ground. This increases the surface flow of water, which hastens ero-
sion.
2 The amended Compact took effect on December 19, 1980.
3 The 1980 Compact defines "environmental threshold carrying capaci-
ty" as "an environmental standard necessary to maintain a significant sce-
nic, recreational, educational, scientific or natural value of the region or
to maintain public health and safety in the region. Such standards shall
include but not be limited to standards for air quality, water quality, soil
quality, soil conservation, vegetation preservation and noise." Art. II(i), 94
Stat. 3235.
4 Obviously, the plaintiffs' initial complaints, filed in 1984, did not
include claims regarding the 1987 Regional Plan. Following remand from
TSPC I and TSPC II, however, the plaintiffs in both actions were permit-
ted to amend their complaints. In their amended complaints, the plaintiffs
added claims regarding the 1987 Regional Plan.
5 In TSPC I, a panel of this court affirmed the dismissal of the Nevada-
side, Class 1-3 plaintiffs' Period I claims, concluding that the claims were
unripe because the plaintiffs could have applied to TRPA for construction
permits under the limited exception contained in Ordinance 81-5. See
TSPC I, 911 F.2d at 1339; see also Tahoe-Sierra Preservation Council,
Inc. v. Tahoe Reg'l Planning Agency, 638 F. Supp. 126 (D. Nev. 1986).
Because this exception was not available for SEZ-classified lands, how-
ever, the panel held that the Nevada-side, SEZ plaintiffs' Period I claims
were ripe. See id. at 1339. In their 1991 amended complaint, the Nevada
plaintiffs attempted to reinstate the Class 1-3, Period I claims on the
ground that it would have been "futile" for them to seek permits under the
limited exception to Ordinance 81-5. The district court rejected this argu-
ment, holding that TSPC I controlled, and that the plaintiffs should have
made their futility argument to the Ninth Circuit in TSPC I. See Tahoe-
Sierra Preservation Council, Inc. v. TRPA, 808 F. Supp. 1474, 1478 (D.
Nev. 1992). It therefore dismissed those claims once again. See id. It
appears from TSPC III that the plaintiffs did not appeal the district court's
ruling. See TSPC III, 34 F.3d at 755 (appeal only of statute of limitations
and Period III causation issues).
6 The TSPC III court did not dismiss the California-side, Class 1-3 plain-
tiffs' Period I claims as unripe, because the exception contained in Ordi-
nance 81-5 for case-by-case approval of development, which was
available to the Nevada-side Class 1-3 plaintiffs, was not available to the
California plaintiffs. See TSPC II, 938 F.2d at 156; supra note 5.
7 In TSPC I, a panel of this court affirmed the dismissal of the Nevada-
side plaintiffs' claims for Period III. There was no majority rationale,
however, for the affirmance of the dismissal. See TSPC I, 911 F.2d 1336-
39 (per curiam) (affirming the dismissal on the ground that the claims
were unripe); id. at 1343-44 (B. Fletcher, J., concurring) (arguing that the
dismissal should be affirmed on the ground that the claims were merit-
less); id. at 1344-47 (Kozinski, J., dissenting in part) (arguing that the
claims were ripe); see also Tahoe-Sierra Preservation Council, 638 F.
Supp. at 131-33 (dismissing the claims as unripe). In TSPC II, when con-
fronted with the indistinguishable Period III claims of the California-side
plaintiffs, this court reversed the district court's dismissal of those claims
as unripe. See TSPC II, 938 F.2d at 157 (holding that the claims were ripe,
but remanding rather than reaching the merits). While TSPC II reached the
opposite result from TSPC I, the Nevada-side claims were not before
TSPC II. Consequently, TSPC II did not affect the TSPC I court's judg-
ment against these claims.

Following remand from TSPC I and TSPC II , the California and Nevada
cases were consolidated, and the plaintiffs were permitted to file amended
complaints. In their amended complaint, the Nevada plaintiffs attempted
to reinstate their Period III claims on the ground that TSPC II was the law
of the case. The district court rejected this argument, and dismissed those
claims once again. The district court held that TSPC I's ruling that the
claims be dismissed was also law of the case, and that the district court
would follow TSPC I's judgment in spite of the inconsistency with TSPC
II's reasoning. See Tahoe-Sierra Preservation Council, Inc. v. TRPA, 808
F. Supp. 1474, 1478 (D. Nev. 1992). It appears from TSPC III that the
plaintiffs did not appeal the district court's ruling. See TSPC III, 34 F.3d
at 755.

To the extent that any of the rulings in TSPC I  and TSPC II are incon-
sistent, our decision herein renders that fact inconsequential. Even had the
Nevada plaintiffs' Period III claims not been dismissed, the plaintiffs
would have lost as to those claims on this appeal for the same reasons
applicable to the California plaintiffs.
8 In accord with the above chart of claims, the district court stated that
only the following claims remained to be addressed at the trial: the Period
I S 1983 claims of all the California plaintiffs and the Nevada SEZ plain-
tiffs; the Period II S 1983 claims of all the plaintiffs; and the Period III
claims of the California plaintiffs.
9 The District Court certified all of these issues for interlocutory appeal
pursuant to 28 U.S.C. S 1292(b), and we granted the petition for permis-
sion to appeal.
10 For much of the nation's history, it was generally thought that the
Takings Clause reached only the direct appropriation, or the functional
equivalent of a "practical ouster of [the owner's] possession." Transporta-
tion Co. v. Chicago, 99 U.S. 635,642 (1879). In Pennsylvania Coal Co.
v. Mahon, 260 U.S. 393 (1922), however, the Supreme Court recognized
that government regulation of property could "go[ ] too far" and amount
to a taking of that property. See id. at 415.
11 In the special context of exactions -- land-use decisions conditioning
approval of development on the dedication of property to public use -- the
Supreme Court has developed a different test to determine whether a regu-
latory taking has occurred. See Dolan v. City of Tigard, 512 U.S. 374
(1994); Nollan v. California Coastal Comm'n, 43 U.S. 825 (1987). The
Court has held that the Nollan/Dolan test is inapposite to regulatory tak-
ings cases outside the context of excessive exactions. See City of Monterey
v. Del Monte Dunes at Monterey, Ltd., 524 U.S. 687, 703  (1999) (overrul-
ing in part Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95
F.3d 1422 (9th Cir. 1996)).
12 As do other courts, we use the term "categorical taking" throughout
this opinion as a shorthand reference to government action that is deter-
mined to be a "taking" under the categorical approach set forth in Lucas
(where the "economic impact of the regulation " is determinative). See,
e.g., District Intown Properties, 198 F.3d at 882-83; Dodd, 136 F.3d at
1228. In other words, as with the categorical approach set forth in Loretto,
it is the approach that is categorical, not the "taking."13 The problem of defining the relevant property interest at stake is com-
monly referred to as either the "denominator problem" or the problem of
"conceptual severance."14 Although Andrus demonstrates that individual strands of the property-
rights bundle should generally not be treated as separate property interests,
the Supreme Court has held that the total abrogation of the "right to
exclude" may in certain circumstances constitute a taking because it "will
result in an actual physical invasion of the privately owned [property]."
Kaiser Aetna v. United States, 444 U.S. at 179-80. Cf. Irving, 481 U.S. at
716 (holding, under the special circumstances of that case, that the com-
plete abrogation of the plaintiffs' rights of descent and devise was "simi-
lar[ ]" to the denial of the right to exclude invalidated in Kaiser Aetna, and
thus resulted in a taking).
15 In fact, there is evidence that such a race-to-develop occurred in the

16 The Court was careful to include quotation marks around the word
"temporary" whenever it referred to a "temporary" taking, in order to
make clear that it was using the concept in the specific sense in which it
had defined it.
17 In concluding that First English created a categorical rule in favor of
temporal severance, the district court relied heavily on the Court's state-
ment in First English that it "do[es ] not deal with the quite different ques-
tions that would arise in the case of normal delays in obtaining building
permits, changes in zoning ordinances, variances, and the like which are
not before us." 482 U.S. at 321. The district court held that the statement
amounted to an enumeration of the acceptable forms of planning-related
temporary development prohibitions, and that this statement implied theexistence of a categorical rule prohibiting temporary development delays
caused by regulatory actions other than those listed in the Court's state-
ment. We do not think, however, that the Court intended to create a new
categorical rule concerning what constitutes a taking (one that would
directly conflict with the principles applied in previous cases) in a passing
remark about what the Court "do[es] not deal with." This is especially so
in light of the fact that, in First English, the Court repeatedly stated that
the question whether a taking occurred was not before it.

Even were we to accord the Court's dictum some weight, it appears to
support, rather than undermine, our position. The list suggests that plan-
ning activities that temporarily prohibit development do not constitute tak-
ings. There is no suggestion that the list is exclusive. In fact, reading it to
be exclusive would require us to draw a constitutional distinction between
different conventional planning tools that result in similar development
delays. We think such a distinction is untenable. Moreover, even were we
to treat the list as exclusive, it appears to encompass temporary planning
moratoria. The list allows for "normal delays in obtaining . . . changes in
zoning ordinances." 482 U.S. at 321. The reason that changes in zoning
ordinances generally lead to delays and development, however, is that
local governments often enact temporary development moratoria during
the period in which the new ordinance is being formulated. See supra at
6341-42. Thus, even the list itself appears to contemplate temporary devel-
opment moratoria.
18 In fact, in a World War II era case involving a regulation that prohib-
ited the owners of gold mines from using those mines, rather than permit-
ting the government to take possession of the property, the Court found
that no taking occurred. See United States v. Central Eureka Mining Co.,
357 U.S. 155, 168 -69 (1958).
19 Although TRPA first passed Ordinance 81-5 and later adopted Reso-
lution 83-21, each regulation was designed to terminate upon the occur-
rence of the same event -- TRPA's adoption of an amended regional plan.
Accordingly, we treat the regulations as creating a single temporary mora-
torium that was designed to and did run from the date on which Ordinance
81-5 became effective to the date on which TRPA adopted the 1984 Plan.
20 This is actually an overstatement. As the district court noted, both reg-
ulations may have permitted certain limited development, particularly on
the Class 1-3 land. See Tahoe-Sierra Preservation Council, 34 F. Supp. 2d
at 1243-44. The district court concluded that these development possibili-
ties were negligible, and did not affect the "takings" calculus. While we
have some doubts about the district court's conclusion, the correctness of
that conclusion is irrelevant to our analysis. Accordingly, we will assume
arguendo that the moratorium prevented all development in the period
during which it was in effect.
21 We acknowledge that, given that moratoria are, by definition, tempo-
rary, it is redundant to refer to a moratorium as a "temporary moratorium."
See Webster's Third New International Dictionary 1469 (1976) (defining
"moratorium" as a "waiting period set by some authority: a delay offi-
cially required or granted"). Nevertheless, because the parties, the district
court, and this court have all repeatedly referred to the moratorium at issue
in the present case as a "temporary moratorium, " and because it empha-
sizes the temporary nature of the development ban, we use that designa-
tion here. See, e.g., TSPC I, 911 F.2d at 1339; TSPC II, 938 F.2d at 155;
Tahoe-Sierra Preservation Council, 34 F. Supp. 2d at 1248.
22 See William C. Haas & Co., 605 F.2d at 1120-21 (noting the close
relationship between a land-use regulation's effect on the available "use"
of a property and the effect on its "value"); MacLeod, 749 F.2d at 546
(implicitly noting the same).
23 Many cases treat the "use " and "value" interchangeably, or speak only
of the effect of a regulation on the property's value. See, e.g., TSPC I, 911
F.2d at 1335 (suggesting that a "taking" is measured by "diminution of the
value of plaintiffs' land"); Lucas, 505 U.S. at 1017 ("What is land but the
profits thereof?"); Virginia Surface Mining & Reclamation Ass'n, 452
U.S. at 295 (the "ad hoc, factual inquiries" required under Agins's "viable
used" prong "must be conducted with respect to. . . particular estimates
of economic impact and ultimate valuation relevant in the unique circum-
stances"); MacLeod, 749 F.2d at 549 ("The determination of whether or
not an economically viable use of property remains .. . turns upon the eco-
nomic impact of the regulation and, particularly, the extent to which the
regulations or prohibition has interfered with the distinct investment-
backed expectations of the claimant."(citation omitted)); Carson Harbor
Village Ltd. v. City of Carson, 37 F.3d 468, 476 (9th Cir. 1994), overruled
on other grounds by WMX Technologies v. Miller, 104 F.3d 1133, 1136
(9th Cir. 1997) (en banc) ("In the takings context, the basis of a facial
challenge is that the very enactment of the statute has reduced the value
of the property or has effected a transfer of a property interest."); Keystone
Bituminous Coal Ass'n, 480 U.S. at 493, 500-501; Suitam, 520 U.S. at 748
(O'Connor, J., concurring); Lucas, 505 U.S. at 1009, 1010, 1017-18 & n.8,
1020 n.9, 1026 & n.13; Agins, 447 U.S. at 262; Penn Coal, 260 U.S. at
413; Concrete Pipe, 508 U.S. 602, 644  (1993).
24 The parties disagree over what kind of evidence either party may
introduce about the effect of the land-use regulations on specific pieces of
property. Before trial, the parties stipulated that, because the action con-
sists only of a facial challenge, "the parties will not introduce evidence
regarding the specific factual situations of individual plaintiffs." In spite
of this stipulation, the defendants argue on appeal that, even though the
plaintiffs brought only a facial challenge, the plaintiffs cannot succeed inproving that a taking occurred without introducing evidence regarding the
specific economic impact of the regulations on their individual properties.
The defendants' argument that individualized evidence is required is in
tension with the pre-trial stipulation. It is also in tension with the state-
ment, made in several cases, that a facial taking challenge "present[s] no
concrete controversy concerning . . . [the legal provision's] effect on spe-
cific parcels of land." Virginia Surface Mining & Reclamation Ass'n, 452
U.S. at 295. This tension need not be resolved, however, because reference
to the general features of the land-use regulations at issue is sufficient to
demonstrate that those regulations do not deprive the plaintiffs' property
of all use or value.
25 In resolving the question of the remaining value of the plaintiffs'
property, the district court relied heavily on Del Monte Dunes at Monte-
rey, Ltd. v. City of Monterey, 95 F.3d 1422 (9th Cir. 1996). Because the
general features of the regulation at issue in the present case make clear
that the plaintiffs' property retains value, Del Monte Dunes's discussion
of proof of value is irrelevant to our determination. We should note, how-
ever, that the district court misread Del Monte Dunes in at least two ways.
First, the district court ignored the fact that the Del Monte Dunes court
was reviewing a jury's finding that a taking occurred, and that the Del
Monte Dunes court thus considered only whether there was sufficient evi-
dence to support the jury's finding. See 95 F.3d at 1433. Second, the dis-
trict court interpreted Del Monte Dunes to hold that a "competitive
market" is necessary to preclude a finding that a taking occurred. How-
ever, Del Monte Dunes does not stand for so strong a proposition: the Del
Monte Dunes court held only that, as a matter of law, the presence of a
single buyer was not sufficient to require the court to upset the jury's find-
ing that a taking had occurred. See id. at 1432-33. The only mention Del
Monte Dunes makes of a "competitive market " is its suggestion that the
absence of such a market is a piece of evidence  that may tend to support
a finding of an absence of value. See id. at 1433.
26 This economic reality is precisely what differentiates a permanent ban
on development, even if subsequently invalidated, from a temporary one.
Basic economic theory demonstrates that the present value of land
depends on the potential for future use. Accordingly, when a permanent
development ban (like the one at issue in Lucas ) is enacted, the value of
the affected land plummets, on account of the fact that the ban bars all
future development of the property. In contrast, when a temporary ban is
enacted, both the owner of the affected land and any prospective purchas-
ers know that, at a specific point in the future, the moratorium will no lon-
ger prohibit the development of the land at issue.
27 We note that the average time between land purchase and develop-
ment may be as long as 25 years. See Tahoe-Sierra Preservation Council,
34 F. Supp. 2d at 1240.
28 This corollary also demonstrates that, had we engaged in conceptual
severance, we would have read into the Takings Clause a requirement that
the government never interfere with a property owner's wish to put his
property to immediate use.
29 Although we need not rely on it, we note that, even during the period
of time during which the moratorium was in effect, there were cognizable
"uses" to which the basin property could have been put. Although we
assume for purposes of our disposition that no development of the prop-
erty was permitted, see supra note 19, "use" includes much more than
development. For example, Lucas treats the sale of property as an "eco-
nomically productive use." See Lucas, 505 U.S. at 1028. In addition, we
have held that "[h]olding property for investment purposes can be a `use'
of property." MacLeod, 749 F.2d at 546 n.7.
30 Note that, in so holding, we do not overturn any factual findings made
by the district court, only its legal conclusions. Although the district court
found that the plaintiffs were denied "all economically beneficial or pro-
ductive use" of their property, it did so on the basis of its legal conclusion
that only substantial developmental uses available during the moratorium
period were relevant.
31 This portion of the appeal concerns only the California-side plaintiffs.
See supra note 7.
32 Because the district court concluded that TRPA could not be held lia-
ble for any taking that occurred during the 1984-87 period, it did not deter-
mine (1) whether the developmental moratorium effected by the injunction
actually amounted to a taking, or (2) whether the 1984 Plan, had it been
implemented, would have amounted to a taking. We, too, do not decide
these questions.
33 It is true that there is little discussion of a "causation" requirement in
any of the case law involving regulatory takings. But cf. Penn Central, 438
U.S. at 124 (noting, in passing, the proximate cause requirement). How-
ever, this is due to nothing more than the fact that, in most regulatory tak-
ings cases, there is no doubt whatsoever about whether the government's
action was the cause of the alleged taking.
34 The plaintiffs suggest that, in the absence of sufficient guidance from
S 1983 cases or other federal constitutional case law, we should look to
state tort law for guidance as to the meaning of proximate cause. The
Supreme Court "ha[s] repeatedly noted that 42 U.S.C. S 1983 creates a
species of tort liability, and ha[s] interpreted the statute in light of the
background of tort liability." City of Monterey v. Del Monte Dunes at
Monterey, Ltd., 526 U.S. 687, 709  (1999) (citations and internal quotationmarks omitted). Nevertheless, there are meaningful differences between
S 1983 liability and state tort liability, and these differences may in certain
circumstances diminish the relevance of, or warrant departure from, the
principles of tort liability. See Monell v. Department of Social Servs., 436
U.S. 658, 693-94 (1978) (holding that the tort law doctrine of respondent
superior does not apply to S 1983 suits brought against local govern-
ments). In the present case, we need not rely on any specific state tort case
law, because it is clear that under forseeability analysis -- which is widely
accepted by both federal and state case law as a conventional method of
assessing proximate cause -- TRPA is not legally responsible for any tak-
ing that occurred during Period III.
35 Although the plaintiffs did not raise this argument until their cross-
appeal reply brief, we exercise our discretion to address it on the merits.
36 Because we conclude that the injunction prohibited the implementa-
tion of the 1984 Plan, we need not decide whether the plan, had it been
implemented, would have constituted a taking of the plaintiffs' property.
See supra note 32.
37 The plaintiffs suggest that the 1984 Plan somehow effected a taking
in the few days that passed between the time of the plan's adoption and
the adoption of the TRO. As Judge B. Fletcher noted in TSPC I, however,
it would have been impossible for TRPA to implement the plan during
these few days, or for the plaintiffs to "complete[ ] all the necessary pre-
requisites to building, including getting a TRPA permit." TSPC I, 911
F.2d at 1344 (B. Fletcher, J., concurring).
38 The plaintiffs also argue that, even if the plan did not go into effect,
the injunction did not "prevent TRPA from providing the Plaintiffs with
Just Compensation." The failure to provide such compensation, they
assert, is itself an actionable wrong. The plaintiffs' argument skips over
the question of liability. If TRPA is not legally responsible for any taking
that occurred during Period III, then TRPA has no obligation to provide
just compensation to the plaintiffs.
39 Although it is a logically necessary component of their argument, the
plaintiffs do not directly support their implicit assertion that the courtinjunction resulted in a taking of the plaintiffs' property. Their general
argument that a taking occurs when a legislative or executive body imple-
ments a temporary building moratorium provides indirect support for this
position, but the plaintiffs never explain why a temporary moratorium
ordered by a court should be treated in the same fashion. In fact, there are
good reasons to believe that a government action that would otherwise
constitute a taking should be treated differently when it is ordered by a
court. Moreover, even if a court order could qualify as a taking, it is not
clear who, if anyone, would be held liable for that taking under S 1983.
Obviously, however, it would ordinarily not be the party that has no
choice but to follow the court order.
40 Article VI(j)(4) of the 1980 Compact reads as follows:

       A legal action arising out of the adoption or amendment of the
       regional plan or of any ordinance or regulation of the agency . . .
       shall be commenced within 60 days after final action by the
       agency.
41 The district court dismissed the Period III claims on the ground that
the 1984 Plan caused no harm because it had been enjoined. See TSPC III,
34 F.3d at 755; see also supra text accompanying notes 30-38 (affirming
the district court's holding regarding the Period III claims).
42 Because S 1983 does not contain a statute of limitations, federal courts
apply the forum state's statute of limitations for personal injury claims.
See Wilson v. Garcia, 471 U.S. 261, 276  (1985). In California, the applica-
ble statute of limitations is one year. See Johnson v. California, 207 F.3d
650, 653 (9th Cir. 2000). In Nevada, the applicable statute of limitations
is two years. See Perez v. Seevers, 869 F.2d 425, 426 (9th Cir. 1989).
43 For some time, there have existed in the Ninth Circuit two different
formulations of the set of circumstances in which a court may decline tofollow the law of the case. The first formulation, set forth in a line of cases
that includes Jeffries, states that a court may depart from the law of the
case if "the [previous] decision is clearly erroneous and its enforcement
would work a manifest injustice." Jeffries , 114 F.3d at 1489 (emphasis
added); see also Leslie Salt Co. v. United States, 55 F.3d 1388, 1392 (9th
Cir. 1995). In contrast, the second formulation states that a court may
decline to follow the law of the case if "the first decision was clearly erro-
neous" or "a manifest injustice would otherwise result." Cuddy, 147 F.3d
at 1114; see also United States v. Alexander, 106 F.3d 874, 876 (9th Cir.
1997); Russell v. Commissioner of Internal Revenue, 678 F.2d 782, 785
(9th Cir. 1982). While one might have expected that Jeffries, being an en
banc decision, would control all future cases, at least three post-Jeffries
cases cite the disjunctive formulation, which is inconsistent with Jeffries.
See United States v. Scrivner, 189 F.3d 825, 827 (9th Cir. 1999); Cuddy,
147 F.3d at 1114; Disimone v. Browner, 121 F.3d 1262, 1266 (9th Cir.
1997).

Recently, we noted this conflict -- which appears to have gone unrec-
ognized in previous case law -- but did not resolve it. Mendenhall v.
NTSB, (No. 98-70211). As in Mendenhall, we need not resolve the conflict
in the present case. For, as the following discussion demonstrates, there
are grounds here to depart from the law of the case set forth in TSPC III
under the more stringent Jeffries standard as well as under the more popu-
lar disjunctive standard. (Of course, any case that meets the Jeffries stan-
dard a fortiori meets the disjunctive standard.)44 Of course, it is understandable that the panel in TSPC III might not
have realized that, ten years into the litigation, the defendants had not yet
actually answered the complaints.
45 The plaintiffs suggest that if a defendant raises a particular time bar
in a motion to dismiss, it must raise all potential time bars in that motion.
This argument is clearly incorrect. Some time bars may be resolved on
such a motion and others may not. For example, a time bar that turns onthe resolution of factual disputes may only be resolved at a later stage of
the litigation. It would make little sense to require defendants with multi-
ple potential time bar defenses, some of which may be subject to resolu-
tion on a motion to dismiss and some of which may not, to raise all of
those defenses at the very outset of the proceeding.