The City of Tahoe created the Tahoe Regional Planning Agency (defendant) to develop a comprehensive land-use plan to regulate the economic impact of development on the Tahoe environment. While the plan was being developed, the Agency enacted two moratoria on development so it could study the impact of this activity on the Tahoe Basin. The combined effect of these two moratoria was to prohibit all development on sensitive areas of land on the California side of the Tahoe Basin for thirty-two months, and to prohibit development of sensitive lands on the Nevada side of the Basin for eight months. The Tahoe-Sierra Preservation Council, Inc. (plaintiff) filed suit against the Agency in federal district court on behalf of over 2,400 landowners in the Tahoe Basin and other sensitive areas on the grounds that the moratoria constituted an unconstitutional taking without just compensation of the landowner’s property while they were imposed. The district court held that the moratoria constituted a taking, but the court of appeals reversed on the grounds that because the moratoria had only a temporary impact on the landowners’ economic interest in the properties, no categorical taking occurred. The United States Supreme Court granted certiorari.