MEMORANDUM
.SUBJECT- Wetlands “Taking ” Decision: ForestProperties v. U S , No. 97-5 145
(Federal Circuit, May 19, 1999)
FROM: James C Nelson
Associate General Counsel
Cross-Cutting Issues Law Office (2322)
Susan G. Lepow
Associate General Counsel -
Water Law Office (2355)
TO J Charles Fox
Assistant Administrator for Water
This is to iiffbrm you that the.U.S. Court of App alsforthe Federal Circuit recently issued
a favorable opinion (copy attached) upholding the trial court’s decision in Forest Properties v
LL& In this case, a real- estate devç!oper asserted that the government’s denial of a permit to
dredge and fill certain underwater lake-bottom property had worked a compensable “taking” of
private property under the Fifth Amendment The opinion affirms the ruling by the Court of
Federal Claims (the trial Court) that the denial of the permit did not constitute a taking and that no
compensatioQis owed to the landowner. The appellate court agreed with the trial court’s
treatment of the case as a regulatc y taking action and with jts conclusion that denial of a permit
for 9 4 acres pf the 62 acre tract “did not prevent all or substantially all of the economically viable
- use of the property; and, thus, thé e ono, iic imp ctof the regulation is not sufficiently severe to
constitute a taking.”

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If you have any questions about this opinion or would like further information, please
contact either of us directly or have your staff contact Dana Ott (260-5466) or Cathy Winer
(260-7719)
Attachment
cc Associate General Counsels
Regional Counsels
EPA Takings Workgroup
Bob Wayland
John Meagher
Greg Peck
Steve Neugeboren

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Subject: Decision in Forest Properties takings case
Attached (I hope) is the Federal Circuit’s opinion (issued today) in
WordPerfect format.
This case involved a developer’s claim that the denial of a dredge and
fill permit worked a taking because he was unable to develop 9.4 acres
of lakebottom to build homes.
The Circuit Court upheld the finding of the Court of Claims that there had
been no taking. The opinion agreed that there had not been a physical
taking and treated the case as a regulatory takings claim. The court also
agreed that the relevant parcel for the takings analysis was the entire 62
acres, not the 9.4 acres for which the Corps had denied a dredge and fill
permit. The court agreed that plaintiff had not demonstrated that it had a
reasonable, investment-backed expectation of being able to develop the
lake bottom, and that there was substantial economic value remaining in
the parcel as a whole.
The opinion appears to be a solid victory for the government.

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United States Court of Appeals for the Federal Circuit
97-5145
FOREST PROPERTIES, INC.(now known as
RCK Properties, Inc.),
Plaintiff-Appellant.
V.
UNITED STATES,
Defendant-Appellee,
and
BIG BEAR MUNICIPAL WATER DISTRICT,
Defendant-Appellee.
John H. Findley , of Sacramento, California, argued for plaintiff-appellant With
him on the brief were Ronald A. Zumbrun and Meriem L Hubbard.
Andrew C. Mergen , Attorney, Environmental and Natural Resources Division,
U.S. Department of Justice, of Washington, DC, argued for defendant-appellee, United
States. With him on the brief were James F. Simon , Acting Assistant Attorney
General, Edward J Passarelli, Alan Brenner , and John A. Bryson , Attorneys
W. Keith Lemieux , Lemieux & O’Neill, of Westlake Village, California, for
defendant-appellee, Big Bear Municipal Water District.
Appealed from United States Court of Federal Claims
Judge Robert J. Yock

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United States Court of Appeals for the Federal Circuit
97-5145
FOREST PROPERTIES, INC. (now known as
RCK Properties, Inc.),
Plaintiff-Appellant,
V.
UNITED STATES,
Defendant-Appellee,
and
BIG BEAR MUNICIPAL WATER DISTRICT,
Defendant-Appellee.
DECIDED. MAY 19, 1999
Before LOURIE, Circuit Judge , FRIEDMAN, Senior Circuit Judge , and RADER, Circuit
Judge .
FRIEDMAN, Senior Circuit Judge
This appeal challenges the Court of Federal Claims’ decision that the United
States did not take the appellant’s real property when it denied the appellant a permit
to dredge and fill certain underwater lake-bottom property. We agree that there was
no taking and therefore affirm the judgment dismissing this suit for just compensation.

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This case grows out of the planned residential development of two segments of
property. The first segment is a 53 acre tract of upland contiguous to Big Bear Lake
(the Lake) in Southern California. The second is 9.4 acres of lake-bottom contiguous
to the aforementioned upland. The appellant Forest Properties, Inc. (Forest) and Big
Bear Properties, Inc. (Big Bear) are, respectively, commonly-owned real estate
development and real estate holding companies.
In 1969, Big Bear purchased 2500 acres of land adjoining the Lake for about $4
million. As part of the same contract, it also received a 20-year irrevocable option
from a local water company to purchase up to 200 acres of lake-bottom land at $1,000
per acre. The option could be exercised only by an entity (Big Bear or a successor)
that owned the land adjacent to the optioned lake-bottom land. As the lake was quite
shallow, any use of it would require filling and/or dredging, and the water company had
the right to approve any plans for doing so
In the early 1980’s, the number of acres subject to the option was reduced in
the settlement of a dispute between Big Bear and the successor water district (the
appellee Big Bear Municipal Water District) over the validity of the option. As part of
the settlement, the water district approved Big Bear’s tentative plan to fill and create
housing sites on 9 4 acres of lake-bottom off of Eagle Point, a particularly scenic spot
The settlement also provided that “ [ t]he deed of the Distnct conveying the Lake Bottom
Land . . . shall contain a reversionary clause under which title to (the lake-bottomj shall
revert to the Distnct if the proposed excavation and filling . shall not be completed
within three years after the date of said deed.”
The 9 4 acres of lake-bottom were wetlands The Federal Water Pollution
Control Act Amendments of 1972 prohibited dredging and/or filling “navigable waters”
without a permit obtained under Section 404 of those amendments. See Pub. L. No.
92-500, § 404, 86 Stat. 816 (1972) (codified at 33 U.S.C. § 1344). In the mid-1970’s,

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the Army Corps of Engineers promulgated regulations defining “navigable waters” to
include wetlands United States v. Riverside Bayview Homes. Inc. , 474 U.S 121,
139 (1985) (validating the Corps’ interpretation)
The Corps administers the Section 404 permit program, see 33 U S.C §
1344(a), (d) (1988), in accordance with guidelines developed in conjunction with the
Environmental Protection Agency, see id. § 1344(b) - the Corps must make a “public
interest review” of all permit applications, see 33 C.F.R. § 320.4(a)(1) (1988) In
relevant part, these guidelines provide that “no discharge of dredged or fill material
shall be permitted if there is a practicable alternative to the proposed discharge which
would have less adverse impact on the aquatic ecosystem.” 40 C.F.R. § 230.10(a)
(1988). A housing development is considered a non-water dependent project - one
that “does not require access or proximity to or siting within the special aquatic site in
question to fulfill its basic purpose” Id. § 230.10(a)(3). For such projects, the
guidelines create two presumptions: (1) that “practicable alternatives that do not
involve [ wetlands] are presumed to be available, unless clearly demonstrated
otherwise,” and (2) that “all practicable alternatives . . . which do not involve a
discharge into (protected wetlands] are presumed to have less adverse impact on the
aquatic ecosystem, unless clearly demonstrated otherwise.” Id As a practical matter,
this means that few, if any, dredge or fill permits will be granted for the construction of
housing
In March 1988, Big Bear applied to the local Corps office for a Section 404
permit for “a dredge and fill of approximately nine acres . . . at Big Bear Lake in
conjunction with a residential subdivision that will contain waterfront lots and a small
marina * * * A total of 62 acres (9 acres of filled area) will be developed with
approximately 100 lots” The proposed fill would have created three peninsulas jutting
out into the lake, and would have added numerous prime, lakefront lots to the
development

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After filing the permit application, Big Bear, .in May 1988, sold 53 acres of the
uplands to Forest for $3.6 million. Five months later, in October 1988, Big Bear
assigned to Forest the option to the 9.4 acres of lake-bottom, without additional
payment. The owner of Forest and Big Bear stated that the $3.6 million was
consideration for both the uplands and the option. Forest also took over the Section
404 permit application.
Forest exercised the option by entering into a contract to purchase from the
water district the lake-bottom land. It also agreed with the water district to postpone
the closing under the contract, thereby delaying the execution of the deed and
avoiding the three year dredge-and-fill period established by the settlement
agreement By entering into the contract, Forest obtained equitable title to the lake-
bottom land under the doctrine of equitable conversion County of Santa Clara v
Curtner , 54 Cal. Rptr. 257, 261 (Cal Ct App. 1966).
In February 1989, however, the Corps told Forest that ‘ [ i]f we were asked for a
final decision at this time with the information we currently possess, our
recommendation to the District Engineer would be that the projects do not meet [ the]
criteria for permit issuance.” Forest then modified its development to provide a
“ [ r]evised [ p]roject [ that] involve [ d] the creation of 123 lots on 57.6 acres of land
including the planned 4.4 acres of net fill.” These 4.4 acres had only one peninsula
instead of three and the change apparently lessened the adverse effect of the
development on the wetlands environment
By 1991, this new, smaller development had secured the necessary state
permits for the lake-bottom land In February 1992, however, the Corps denied the
permit The Corps concluded that Forest’s project could satisfy neither the Section
404 guidelines — mainly because Forest had not rebutted the presumption that there
were available, less adverse “practicable alternatives to the proposed discharge’ - nor
the Corps’ public interest review. As an alternative, the Corps suggested “a revised

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development proposal that would allow other possible uses of the Eagle Point
property, such as higher-density lots on the available upland portions of the property.”
Forest did not seek administrative or judicial review of the Corps’ denial of the
permit. It revised its development plan, however, to eliminate the filled peninsula and
proceeded to develop the upland. Forest created 106 lots with a market price of about
$12 million, at a cost of $7.1 million (the $3.6 million purchase price plus development
costs). Forest has sold a number, but not all of the lots. Forest estimates that the
additional lots on the proposed peninsula would have provided an additional profit of
$2.36 million and claims that its equitable title to the lake-bottom now is worthless.
Forest filed the present suit in the Court of Federal Claims, seeking just
compensation for the government’s alleged taking of its property. It argued that the
denial of the permit was a taking because it both deprived Forest of productive use of
the lake-bottom land and would result in title to the lake-bottom land reverting to the
water district After a trial, the court held that there had been no taking and dismissed
the complaint In a 55-page opinion that discussed the issues in detail, the court held
that because the regulation deprived Forest of only a small portion of the entire
development and because the development as a whole was still profitable, “the
economic impact of the regulation is not sufficiently severe to constitute a taking.”
Forest Properties. Inc. v. United States , 39 Fed. CI. 56, 80 (1997)
The determination whether the government’s denial of a permit constituted a
taking of Forest’s real property, for which the Fifth Amendment mandates the payment
of just compensation, involves three inquiries (A) whether the taking alleged was
physical or regulatory, (B) if the alleged taking was regulatory, what was the relevant
parcel for determining the economic impact of the regulation, see Loveladies Harbor.
Inc. v. United States , 28 F.3d 1171, 1180 (Fed. Cir. 1994), and (C) did the regulatory
action actually constitute a taking, see Id. at 1181-82.

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A. A physical taking of land occurs when .the government itself occupies the
property or ‘requires the landowner to submit to physical occupation of its land,” Yee
v. City of Escondido , 503 U.S. 519, 527 (1992), whether by the government or a third
party, see Preseault v. united States , 100 F.3d 1525, 1551 (Fed. Cir. 1996) (en banc)
In a regulatory taking the government prevents the landowner from making a particular
use of the property that otherwise would be permissible. See Lucas v. South Carolina
Coastal Council , 505 U.S 1003, 1014 (1992). Such a taking may ‘ den [ y] all
economically beneficial or productive use of land” (a “categorical” taking), id. at 1015,
or have “crossed the line from a noncompensable ‘mere diminution’ to a compensable
‘partial taking,” Florida Rock Indus. v. United States , 18 F.3d 1560, 1570 (Fed. Cir.
1994)
Here, as the Court of Federal Claims pointed out, ‘ [ t]here was neither a
physical taking nor invasion of this property.” The Corps’ denial of the permit merely
prevented Forest from making a particular use of the lake-bottom, namely, dredging
and filling it and then developing building lots on the new dry land. That is a classic
example of a regulatory taking claim
This court without discussion twice has treated the same government action -
denial of a permit under Section 404 of the Clean Water Act - as involving a claim for
a regulatory taking See Loveladies Harbor , 28 F 3d at 1173; Florida Rock , 18 F 3d at
1562
Forest, however, contends that this case involves a physical taking because the
effect of the denial of the permit will be the reversion to the water district of Forest’s
interest in the lake-bottom property, since the lake-bottom would not be excavated and
filled within three years after execution of the deed to the property This, however,
would be attributable not to the government’s action, but to the prior contractual
arrangement between Forest and the water district for such a reversion. The
government itself has not required Forest to give up or to submit to the physical

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occupation of the submerged land. See Yee, 503 U.S. at 527-28.
Indeed, Forest’s argument is abstract and conjectural. The reversionary period
is triggered by the execution of the deed. As far as it appears from the record, the
deed has not been executed and Forest continues to retain its equitable title to the
submerged land. Unless and until Forest obtains the deed, the three-year period for
dredging and filling the lake-bottom will not begin to run, and it cannot be said whether
or when that will ever occur.
B. We also agree with the Court of Federal Claims that the relevant parcel for
takings analysis is the entire 62 acre project. This relevant parcel inquiry is critical
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.” Keystone
Bituminous Coal Ass’n v DeBenedictis , 480 U.S. 470, 497 (1987) See also Penn
Central Transp Co v. New York City , 438 U S. 104, 130-31 (1978) (“In deciding
whether a particular governmental action has effected a taking, this Court focuses
on the nature and extent of the interference with rights in the parcel as a whole “)
With regard to the relevant parcel, “ [ ojur precedent displays a flexible
approach, designed to account for factual nuances.” Loveladies Harbor , 28 F 3d at
1181. It requires courts to focus on the economic expectations of the claimant with
regard to the property. See Keystone , 480 U.S. at 500-01. Where the developer
treats legally separate parcels as a single economic unit, together they may constitute
the relevant parcel See id.; Nae ele Outdoor Adver. v City of Durham , 844 F.2d 172,
176 (4th Cir 1988), K & K Constr., Inc. v. Department of Natural Resources , 575
N.W2d 531, 535-37 (Mich.), cert denied , --- U.S ---, 119 S.Ct. 60, 142 LEd 47
(1998)
The Court of Federal Claims found that the relevant parcel was the entire 62-
acre project In so finding, the court properly “ocus [ ed] on how the economic
expectations of the claimant, with respect to the parcel at issue, have shaped the

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owners actual and projected use of the property.”
The record shows that from the outset, the development was treated as a single
integrated project (called Eagle Point Estates) comprising the two tracts. At the time
Forest acquired its interest in the properties, it was understood that the two portions
would be developed as a single project. As the trial court found, “from the time of the
purchase of the upland property, (Forest’s] economic intentions were to utilize the
lakebottom acreage and the upland parcel in conjunction with each other as one
income-producing unit.” In fact, only the owner of the adjacent upland property could
exercise the option on the lake-bottom land. The 1988 application for the Section 404
permit described a single project of “ [ a) total of 62 acres (9 acres of filled area) *
developed with approximately 100 lots.” After that application was filed, Forest
purchased the 53 upland acres for $3.6 million and obtained the option on the
submerged land without additional payment; the record indicates that the $3.6 million
was the consideration for both parcels.
Forest points to other evidence in the record which, it contends, supports the
use of the 9.4 acres of submerged land as the relevant parcel for the taking analysis.
It notes that it had different kinds of title to the lake-bottom (equitable ownership) and
the dry land (fee), that it acquired its interest in the two entities in different transactions
at different times, that different local government authorities had regulatory jurisdiction
over the two locations, and that the two segments were capable of separate
development. In holding that the entire 62 acre project was the relevant parcel,
however, the Court of Federal Claims properly looked to the economic reality of the
arrangements, which transcended these legalistic bright lines, and it did not commit
clear error in so doing Cf Loveladies Harbor , 28 F.3d at 1181 (reviewing the relevant
parcel determination for clear error)
C. The ultimate issue fri this case us whether the Corps’ denial of a permit to
dredge and fill the 9.4 acres of lake bottom was a regulatory taking of the entire 62

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acre parcel. “Several factors . . . have particular significance” in the “essentially ad
hoc, factual inquiries” that determine whether a government regulation constitutes a
regulatory taking: (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.” Penn Central , 438
U.S. at 124. See also Florida Rock , 18 F.3d at 1564. In 1992, however, the Court in
Lucas “dramatically change [ d] the third criterion, from one in which courts, including
federal courts, were called upon to make hoc balancing decisions, balancing
private property rights against state regulatory policy, to one in which state property
law, incorporating common law nuisance doctrine, controls.” Loveladies Harbor , 28
F.3d at 1179. See also Creppel v. United States , 41 F 3d 627, 631 (Fed. Cir. 1994)
Applying these factors, the Court of Federal Claims concluded.
Under the regulatory/partial taking analysis, the plaintiff is unable to
demonstrate that there was any deficiency in the character of the
Government’s action, nor is the plaintiff able to demonstrate that it had
reasonable, investment-backed expectations in the development of the
lakebottom property in the manner in which it had proposed. Finally,
there is substantial economic value remaining in the parcel as a whole,
which supports the conclusion that the Government’s denial of the
plaintiff’s permit only caused a noncompensable, mere diminution in the
value of its property, which is not substantial enough to protect as a
taking
We discuss these factors in reverse order.
1. The character of the government action does not have an impact on this
case The Court of Federal Claims correctly found that the dredging and filling of the
submerged area to permit its use for building would not constitute a nuisance under
California law.
The trial court correctly held that the denial of the permit has not
significantly “interfered with distinct investment-backed expectations” We have

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recognized that such expectations must be reasonable. See 767 Third Ave.
Assoc’s v. United States , 48 F.3d 1575, 1581 (Fed. Cir. 1995).
In 1988, when Forest purchased the 53 acres of upland and the option to
acquire the 9.4 acres of lake-bottom from Big Bear, the Corps’ guidelines governing
the issuance of Section 404 permits under the Clean Water Act had been in effect for
a number of years. As explained above, those guidelines made it clear that filling
wetlands to construct housing on the reclaimed land was disfavored and that it was
most unlikely that such a project would be approved Indeed, three years before the
Corps denied the permit, it told Forest that on the basis of the information it then had,
it would recommend denial. The investment-based expectation criterion “limits
recovery to owners who can demonstrate that they bought their property in reliance on
the non-existence of the challenged regulation. One who buys with knowledge of a
restraint assumes the risk of economic loss.” Creppel , 41 F 3d at 632 Although
Forest unquestionably hoped to obtain the permit and realize its development goals,
that hope is not enough to show a reasonable investment-backed expectation that
might be protected by the Takings Clause.
3 The “economic impact of the regulation upon the claimant” is “measured by
the change, if any, in the fair market value caused by the regulatory imposition”
Florida Rock , 18 F.3d at 1567. Forest, however, failed to introduce convincing
evidence to show the amount, if any, by which the value of the relevant property — the
62 acres - was reduced by the denial of the permit.
Forest’s evidence showed the listed selling prices for the developed upland
lots, and the company’s ultimate owner, Mr. Colburn, indicated that those prices were
the fair market value of the land There was also evidence showing the anticipated
selling price of the lots that would be created by the draining and filling of the 9.4
underwater acres, and the profit on their sale that Forest allegedly lost through the
denial of the permit.

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Those prices, however, reflect the development of the lots following the denial
of the permit, and do not necessarily reflect their value immediately after the permit
was denied. This was not evidence of the amount by which the fair market value of
the 62 acres was reduced by the denial of the permit. Loveladies Harbor ,
28 F 3d at 1178 The profit that Forest allegedly lost does not necessarily reflect the
reduction in market value the denial of the permit caused.
This case stands in sharp contrast to Loveladies Harbor , where the evidence
led the Court of Federal Claims to find that the fair market value of the relevant parcel
(there the submerged land) was $2,658,000 before the denial of the fill permit and only
$12,500 after the denial — a diminution in value of 99%. See id. We held that ‘The
trial court’s conclusion that the permit denial was effectively a total taking of the
property owner’s interest in these acres is fully supported in the record. there is no
clear error in that conclusion.” Id at 1182 (footnote omitted)
There are no comparable findings regarding the amount of the reduction in the
fair market value of the relevant parcel here that resulted from the denial of the permit,
and insufficient evidence in the record upon which such finding could be made. Forest
had the burden of proof to establish a regulatory taking, and it failed to carry that
burden. Indeed, the record shows that, despite the denial of the permit, the value of
the 62 acres increased from the $3.6 million Forest paid in 1988 in what it asserts was
an arms length transaction with Big Bear, to more than $12 million today That result
itself undermines Forest’s contention that its property was taken.
In sum, we have no reason to disagree with the Court of Federal Claims’
conclusion, grounded on the record, that the denial of the permit “did not prevent all or
substantially all of the economically viable use of the property, and, thus, the
economic impact of the regulation is not sufficiently severe to constitute a taking.”
CONCLUSION
The judgment of the Court of Federal Claims is

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NATIONAL WILDLIFE FEDERATION®
People and Nature: Our Future Is in the Balance
Office of Federal and International Affairs
FOR IMMEDIATE RELEASE:CONTACT:
April 27, I999Glenn Sugameli (202) 797-6865
email sugameli nwf org
Court Upholds Coalfield Homeowners’ Property Rights
Rejects “Takings” Claim by Coal Industry
WASI-IINGTON, D.C The federal D.C. Circuit Court of Appeals upheld nationwide Interior Department rules that
protect millions of homes and dnnlung water supplies from the devastating effects of underground coal mining
subsidence in a decision issued today
The Court agreed with written and oral arguments by the National Wildlife Federation and the Interior Department in
rejecting industry challenges to two major safeguards for the property nghts, safety, and environment of Americans who
own the over 1 8 million homes that are at risk of subsidence damage
First, the Court upheld the requirement that underground coal mining operations must minimize material damage to
homes when planmng subsidence
The National Mining Association claimed that its members could ignore or even maximize subsidence damage that can
collapse homes above an underground coal mine
“The Court properly rejected this outrageous industry lawsuit that literally would have undermined homeowners’
property, safety and environment to protect corporate interests,” said Glenn Sugameli, National Wildlife Federation
Senior Counsel
Second, the Court upheld the 1992 Energy Policy Act’s requirement that mine operators must repair or fully
compensate homeowners for lost property value caused by subsidence This includes cases where the operator obtained
a pre-Act damage waiver, typically 75 to 100 years ago, for a payment that subsequently fell far short of the damage
The Court also rejected the related industry argument that the Interior Department regulations had to provide a blanket
emption’from the duty to “repair or compensate” An exemption was not required to avoid what the Court termed the
“rather implausible” argument that requiring full compensation “could expose” the government to liability for a Fifth
Amendment taking of a mining company’s property rights
“The National Wildlife Federation is pleased that the Court agreed with our argument that fanciful industry “talungs”
claims are not a reason to gut critical statutory protections for the true property rights involved -- those of
homeowners,” Sugameli said
The nation’s largest member-supported conservation group, the National Wildlife Federation unites people from all
1400 Sixteenth St ,NW Washington, D C 20036 Tel 202-797-6800 Websiie http //w’wv nwforg/

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walks of life to protect nature, wildlife, and the world we all share The Federation has educated and inspired families to
uphold America’s conservation tradition since 1936
1400 Sixteenth St , NW Washington, DC 20036 Tel 202-797-6800 Website http //www nwforg/

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United States Court of Appeals for the Federal Circuit
97-5 145
FOREST PROPERTIES, INC (now known as
RCK Properties, Inc.),
Plaintiff-Appellant,
V
UNITED STATES,
Defendant-Appellee,
and
BIG BEAR MUNICIPAL WATER DISTRICT,
Defendant-Appellee.
John H. Findley , of Sacramento, California, argued for plaintiff-appellant. With
him on the brief were Ronald A. Zumbrun and Meriem L. Hubbard
Andrew C Merqen , Attorney, Environmental and Natural Resources Division,
U S Department of Justice, of Washington, DC, argued for defendant-appellee, United
States With him on the bnef were James F. Simon , Acting Assistant Attorney
General, Edward J. Passarelli, Alan Brenner , and John A. Bryson , Attorneys.
W. Keith Lemieux , Lemieux & O’Neill, of Westlake Village, California, for
defendant-appellee, Big Bear Municipal Water District.
Appealed from: United States Court of Federal Claims
Judge Robert J Yock

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United States Court of Appeals for the Federal Circuit
97-5145
FOREST PROPERTIES, INC (now known as
RCK Properties, Inc.),
Plaintiff-Appellant,
V.
UNITED STATES,
Def en d a n t-Ap pe lie e
and
BIG BEAR MUNICIPAL WATER DISTRICT,
Defendant-Appellee.
DECIDED: MAY 19, 1999
Before LOURIE, Circuit JudQe , FRIEDMAN, Senior Circuit JudQe , and RADER, Circuit
JudQe .
FRIEDMAN, Senior Circuit JudQe .
This appeal challenges the Court of Federal Claims’ decision that the United
States did not take the appellant’s real property when it denied the appellant a permit
to dredge and fill certain underwater lake-bottom property We agree that there was
no taking and therefore affirm the judgment dismissing this suit for just compensation.

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After filing the permit application, Big Bear, in May 1988, sold 53 acres of the
uplands to Forest for $3.6 million. Five months later, in October 1988, Big Bear
assigned to Forest the option to the 9.4 acres of lake-bottom, without additional
payment. The owner of Forest and Big Bear stated that the $3.6 million was
consideration for both the uplands and the option. Forest also took over the Section
404 permit application.
Forest exercised the option by entering into a contract to purchase from the
water district the lake-bottom land. It also agreed with the water district to postpone
the closing under the contract, thereby delaying the execution of the deed and

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This case grows out of the planned residential development of two segments of
property. The first segment is a 53 acre tract of upland contiguous to Big Bear Lake
(the Lake) in Southern California. The second is 9.4 acres of lake-bottom contiguous
to the aforementioned upland. The appellant Forest Properties, Inc. (Forest) and Big
Bear Properties, Inc. (Big Bear) are, respectively, commonly-owned real estate
development and real estate holding companies.
In 1969, Big Bear purchased 2500 acres of land adjoining the Lake for about $4
million As part of the same contract, it also received a 20-year irrevocable option
from a local water company to purchase up to 200 acres of lake-bottom land at $1 000
per acre. The option could be exercised only by an entity (Big Bear or a successor)
that owned the land adjacent to the optioned lake-bottom land. As the lake was quite
shallow, any use of it would require filling and/or dredging, and the water company had
the right to approve any plans for doing so.
In the early 1980’s, the number of acres subject to the option was reduced in
the settlement of a dispute between Big Bear and the successor water district (the
appellee Big Bear Municipal Water District) over the validity of the option. As part of
the settlement, the water district approved Big Bears tentative plan to fill and create
housing sites on 9.4 acres of lake-bottom off of Eagle Point, a particularly scenic spot
The settlement also provided that “ [ t]he deed of the District conveying the Lake Bottom
Land . . shall contain a reversionary clause under which title to [ the lake-bottom] shall
revert to the District if the proposed excavation and filling . . . shall not be completed
within three years after the date of said deed.”
The 9 4 acres of lake-bottom were wetlands The Federal Water Pollution
Control Act Amendments of 1972 prohibited dredging and/or filling “navigable waters”
without a permit obtained under Section 404 of those amendments. Pub. L No
92-500, § 404, 86 Stat. 816 (1972) (codified at 33 U.S C. § 1344). In the mid-1970’s,

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the Army Corps of Engineers promulgated regulations defining “navigable waters” to
include wetlands. United States v. Riverside Bayview Homes, Inc. , 474 U.S. 121,
139 (1985) (validating the Corps’ interpretation).
The Corps administers the Section 404 permit program, see 33 U.S.C §
1344(a), (d) (1988), in accordance with guidelines developed in conjunction with the
Environmental Protection Agency, see Id § 1344(b) - the Corps must make a ‘public
interest review ’ of all permit applications, see 33 C.F R § 320.4(a)(1) (1988). In
relevant part, these guidelines provide that “no discharge of dredged or fill material
shall be permitted if there is a practicable alternative to the proposed discharge which
would have less adverse impact on the aquatic ecosystem.” 40 C.F.R. § 230.10(a)
(1988). A housing development is considered a non-water dependent project — one
that “does not require access or proximity to or siting within the special aquatic site in
question to fulfill its basic purpose.” jç . § 230.10(a)(3). For such projects, the
guidelines create two presumptions: (1) that “practicable alternatives that do not
involve [ wetlands] are presumed to be available, unless clearly demonstrated
otherwise,” and (2) that “all practicable alternatives . . which do not involve a
discharge into [ protected wetlands] are presumed to have less adverse impact on the
aquatic ecosystem, unless clearly demonstrated otherwise” Id As a practical matter,
this means that few, if any, dredge or fill permits will be granted for the construction of
housing.
In March 1988, Big Bear applied to the local Corps office for a Section 404
permit for “a dredge and fill of approximately nine acres . . . at Big Bear Lake in
conjunction with a residential subdivision that will contain waterfront lots and a small
marina. * * * A total of 62 acres (9 acres of filled area) will be developed with
approximately 100 lots.” The proposed fill would have created three peninsulas jutting
out into the lake, and would have added numerous prime, lakefront lots to the
development.

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Author: KimA Jones at REGION4
Date: 5/21/99 10:55 AM
Priority: Normal
Subject: Victory in Hendler appeal
Attached is the opinion of the Federal Circuit, issued yesterday,
affirming the lower court decision that
(1) the partial physical taking was offset by benefits from EPA’s actions
and therefore not compensable,
(2) there was no regulatory taking because plaintiff’s use of the property
was not sufficiently interfered with (it was not shown to have a
negative economic impact).
The appellate court found it unnecessary to rule on the nuisance
exception, which the trial court had relied upon as an alternative basis
for rejection the regulatory taking claim.

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HENRY HENDLER, PAUL GARRETT and TILLIE GOLDRNG as Trustees
for Henry Hendler and Irving Gronsky, Plaintiffs-Appellants,
v UNITED STATES, Defendant-Appellee
97-5143
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
1999US App LEXIS 8805
May 11, 1999, Decided
PRIOR HISTORY L*l J Appealed from United States Court of Federal Claims Senior Judge Wilkes C
Robinson
DISPOSITION AFFIRMED
COUNSEL John D Hoffman, Eliman, Burke, Hoffman & Johnson, A P C , of San Francisco, California,
argued for plaintiffs-appellants. With him on the bnef were Howard N Ellman and David H Blackwell Of
counsel on the brief was Paul Hamilton, Jef’fer, Mangels, Butler & Marmaro, LLP, of Los Angeles, California
Of counsel was Kenneth N Bums, Ellman, Burke, Hoffman & Johnson, A P.C ,of San Francisco, California
David C Shilton, Environmental and Natural Resources Division, U S Department of Justicc, of Washington,
DC, argued for defendant-appellee With him on the brief were Lois J Schiffer, Assistant Attorney General,
Robert L Klarquist, David F Shucy, and Eric S Gould, Attorneys, General Litigation Section Of counsel on
the brief were David Coursen, Attorney, Office of Gencral Counsel, U S Environmental Protection Agency, of
Washington, DC and Laurie Williams, Attorney, U S Environmental Protection Agency, of San Francisco,
California
JUDGES Before PLAGER, Circuit Judge, ARCHER, Senior Circuit Judge, and CLEVENGER, Circuit Judge.
OPfNIONBY PLAGER
OPINION.
PLAGER, Circuit [ 2J Judge
In this takings case, we approach the final chapter in a decade-long dispute between the landowners and the
Government The dispute was initiated when the Government entered upon the land of the plaintiffs, without
their consent and over their objection, for the purpose of sinking wells for monitoring of ground water migration
from adjacent properties Over time the Government continued to establish additional wells and to service them,
all without payment to the landowners for the use of their property The landowners sued, claiming inverse
condemnation
After several false starts at the trial level, see Hendler v. United Slates, 11 Cl C i 91(1986) (“Hendler lu),
Hendler v United States, 19 Cl Ci 27 (1989) (“Hendler II ”), this court determined that plaintiffs had a good
cause of action We held that the Government, however well motivated and however important its cause, must
adhere to fundamental Constitutional principles if private property is taken for public use, just compensation
must be paid See Hendler v United States, 952 F 2d 1364 (Fed Cir 199l ) (“Hendler III ”) The cause was
remanded to the trial court for further proceedings [ *3]

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Subsequently, the Court of Federal Claims undertook to determine, on the facts of the case, what was the just
compensation mandated by the Constitution After trials on liability theories and damages issues, the Court of
Federal Claims determined that plaintiffs ultimately were due no compensation See Hendler v United States,
36 Fed Cl 574 (/996) (“Hendler IV”); Ilendler v. United Slates, 38 Fed Cl 611 (1997) (“Hendlcr V ”)
Plaintiffs appeal thatjudgment, and the findings that underlay it
BACKGROUND
The detailed background of the case is described in the prior opinions, Hendler I-V We provide here a brief
overview The subject property is an approximately 100-acre tract of land in southern California, near the city of
Riverside Plaintiffs first acquired the property for investment purposes in 960, at which time the area was
largely agncultural They planned to hold the property until economic conditions favored commercial
development, at which time they expected to sell the land to a developer. See Hendler IV, 36 Fed CL at 576-77
The property is located near and ‘downstream’ of a seventeen-acre former rock quarry that, under the auspices
of I 4] the State of California, was converted in 1952 to a toxic-waste disposal site serving many
manufacturing companies associated with the aerospace industry This site became known, infamously, as the
Stringfellow Acid Pits (“Stringfellow”) Sec id a! 577 In 1969, Stnngfcllow became a source of public concern
when heavy rains caused the acid pits to overflow, releasing toxic chemicals to lower-lying areas, including
plaintiffs’ property See id In 1972 waste disposal at Stnngfellow was stopped, not long afterward it was
discovered that toxic chemicals had seeped into the groundwater aquifer below Stringfellow The site was
declared a public nuisance in 1975, but large-scale cleanup efforts did not begin until 1980 See id
The State of California and the United States, acting through the U S Environmental Protection Agency
(“Government”), undertook cleanup efforts pursuant to federal authority under CERCLA, n I commonly known
as Superfund As part of its efforts, the Government decided to locate wells and associated equipment on
plaintiffs’ property to monitor the movement of the contaminated groundwater from Stringfellow When the
Government approached plaintiffs with [ *5] this proposal, plaintiffs resisted See id at 5 77-78 Shortly
thereafter, in 1983, the Government issued an order (herein “access order”) mandating that government officials,
including both state and federal officials and their agents, were to have access to plaintiffs’ land for purposes of
installing wells and related equipment, and conducting tests and other related activities The access order further
ordered that plaintiffs were not to interfere in any manner See id a! 5 78-79
Footnotes
n I The Comprehensive Environmental Response, Compensation, and Liability Act, 42 USC § 9601 Ct seq.
End Footnotes

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Well-drilling then began on plaintiffs’ property Over the course of the following three years, twenty wells
were installed on the property During this period and well beyond, Government officials and agents periodically
entered the property to monitor the groundwater, using the installed wells See id at 579 Based on information
derived from the wells, a plume of contaminated water from Stringfellow was located 1*61 flowing directly
under portions of plaintiffs’ land, and on down to lower-lying communities See id
The Government undertook extensive cleanup and remediation activities at Stringfellow Groundwater samples
since taken from the wells on plaintiffs’ property have shown these efforts to have been successful The
groundwater contamination under plaintiffs’ property has been greatly reduced, to the extent that, it is reported,
the groundwater as of May 1995 has been restored almost to its pre-polluted condition, nearly meeting drinking
water standards See id at 579-80
In 1994 the Government formally terminated the 1983 access order See id at 580 As noted, the litigation
triggered by the order had started some ten years earlier when plaintiffs filed suit against the Government in the
Claims Court (now the Court of Federal Claims). This was shortly after the Government began installing the
wells on their property In their suit, plaintiffs claimed that their property suffered a regulatory and physical
taking by way of the access order and the associated activities taken thereunder on their land, the)’ sought just
compensation for the alleged takings
In Hendler II [ “7] , 19 Cl. Ci 27, the trial court dismissed plaintiffs’ suit on procedural grounds, and entered
a final judgment In Hendler III, 952 F 2d /364, we reviewed the dismissal, as veIl as prior rulings on the
merits by the trial court in Hendler 1, 11 Cl Ct 91, which we determined to be properly before us We reversed
the dismissal and concluded that the trial court should have entered summary judgment for plaintiffs on their
physical taking claim, opining that “the Government behaved as if it had acquired an easement “ Hendler
III, 952 F 2d at 1378. We also noted with respect to the physical taking that plaintiffs would have “the
opportunity to establish their severance damages, the damages accruing to their retained land as a result of the
taking “ Id at 1383-84 With respect to plaintiffs’ regulatory taking claim, we indicated concurrence in the trial
court’s view that the access order did not, alone, effect a regulatory taking See id at 1375 However, we noted
that “subsequent events might have had sufficient economic impact on the plaintiffs to constitute a regulatory
taking” Id
On remand, the trial court bifurcated the trial between the liability [ *8] issues and damages The liability
issues were reviewed and resolved in Hendler IV, 36 Fed Cl. 574, and damages in Hendler V, 38 Fed Cl 611,
though evidence relevant to damages was heard in both trial phases In Hendler IV, the trial court determined
that the physical taking was in the form of well-site and access-corridor easements 36 Fed Cl at 584
Specifically, the court found that each well-site easement “comprises a 50 by 50 foot square area for activities
related to the well(s) contained therein,” and that each access-corridor easement compnses a “16 foot wide

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access corridor [ from a well-site] to a public nght of way” Id With regard to the regulatory taking issue, the
court determined that there had been no regulatory taking because, among other reasons, in its view the nuisance
doctrine defeated the claim and there was insufficient adverse economic impact on plaintiffs See id at 586-88
In the damages trial, the court heard evidence on the valuation of the well-site and access-corridor easements,
as well as evidence as to whether and to what extent plaintiffs’ remaining property was harmed or benefited from
the Government’s activity on their [ *9] land. The court found that neither the easements nor the access order
damaged the remaining part of plaintiffs’ property, and hence determined that the remaining part suffered no
compensable severance damage See Hendler V, 38 Fed Cl at 622. The court further determined that plaintiffs’
remaining property received substantial “special benefits” and that those benefits outweighed the value of the
easements taken As a consequence, the court concluded that plaintiffs are due no compensation for the value of
the easements, and plaintiffs were awarded no compensation for the access order and the Government’s activities
thereunder See id at 626-2 7
Plaintiffs appeal, asserting that the trial court erred in denying them compensation for the partial physical
taking of their land, both for the value of the part taken and severance damages to the remainder Plaintiffs also
assert that the trial court erred in determining that there has not been a regulatory taking of their land We
consider these issues in turn
DISCUSSION
We review the judgment of the Court of Federal Claims to determine whether it is premised on errors of law or
clearly erroneous factual findings See [ * 10] Whitney Benefits, Inc v. United States, 926 F 2d 1169, 1171
(Fed Cir 1991) The trial court’s findings regarding the property’s value, nature, and alternative uses, as well as
the extent to which the property’s use is limited by the Government’s actions, are all reviewed for clear error See
id a! 1172-73, 1177-78 Also reviewed for clear error are the court’s findings on causation See Loesch v
United Stales, 227 Ct Cl 34, 645 F 2d 905, 913 (Ct Cl 1981).
Under the clear error standard of review, a finding is clearly erroneous, even though there is some supporting
evidence in the record, when the reviewing court, based on the entire record, “is left with the definite and firm
conviction that a mistake has been committed” United States v United States Gypsum Co, 333 US 364, 395,
92 L Ed 746, 68 S Ct 525 (1948) This standard gives considerable deference to the trial court’s factual
findings Conclusions of law, however, are “subject to full and independent review,” without deference to the
trial court Gardner v TEC Sys, mc, 725 F 2d 1338, 1344, 220 USPQ 777, 782 (Fed Cir 1984) (en bane)
II

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COMPENSATION FOR THE PART TAKEN
With regard to 1*111 the partial physical taking of plaintiffs’ land in the form of the well-site and
access-corridor easements, plaintiffs argue that the trial court erred in rejecting their expert’s valuation of the
easements as of 1983 at $67,364 (which with interest to 1996 totaled $185,000) Plaintiffs’ valuation was based
on the scope of use permitted under the access order, rather than on the Government’s actual use See Hendler V.
38 Fed CI at 6/9 They additionally assert that the trial court erroneously determined that their retained land
(the part not taken) received special benefits as a result of the taking
The trial court’s conclusion that plaintiffs are not entitled to compensation for the value of the part of Lhcir
property taken hinged on this latter determination, that the retained property received special benefits In
particular, the court determined that the special benefits conferred on the property as a result of the taking more
than offset the value of the easements--even under plaintiffs’ valuation--and hence no compensation therefor is
due See id at 626-2 7 Accordingly, we first consider plaintiffs’ arguments that the trial court erred in its special
benefits determination [ * 121
An initial question is whether special benefits to retained land can offset the value of the part actually taken
(here, the well-site and access-corridor easements) Such a setolT against the value of the part taken is prohibited
under the law of most states See 3 Julius L Sackman et al , Nichols on Eminent Domain § 8A 03 (rev 3d ed.
1998) (hereinafter “Nichols”) Rather, most states permit a setoff of special benefits only against the losses,
caused by the partial taking, to the property remaining in the owner’s hands, i e, against so-called “severance
damages” Ed The rationale is that, with regard to the property actually taken, the landowner is entitled to its full
value, but with regard to severance damages, the damages to the property remaining in the owner’s hands, these
are measured by the net of the damages, i e, losses less benefits In this way the land owner is fully compensated
for what is taken, and is left no better or worse off as a result of the taking
Before the trial court, plaintiffs contended that under California law special benefits cannot offset the value of
the easements taken, but rather can only offset severance damages [ * 131 See Hendler V, 38 Fed CI at 617
The trial court rejected this argument, concluding as a matter of law that federal law governs, and implicitly
concluding that federal law permits such an offset See id As the authority for these conclusions, the court cited
Bartz v United States, 224 C i CI 583, 633 F 2d 571 (Ci Cl 1980), a decision of this court’s predecessor Sec
Hendler V, 38 Fed CI at 617
The trial court’s conclusions find support in the law. In Bartz, the Court of Claims observed that the issue of
what constitutes a taking by the federal government is a federal question The court held that federal law rather
than state law governed whether benefits conferred by the construction and operation of a dam could be
considered in deciding what compensation is due for an alleged taking of farmland by recurring flooding

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allegedly caused by the dam See Bartz, 633 F 2d at 576-77 In concluding that the landowners were due no
compensation, the Bartz court reasoned that the damages caused by the flooding “were heavily countervailed by
the benefits to the farmlands as a whole “Ed at 577-78
In Bauman v Ross, 167 US. 548, 42 L Ed [ *14] 270, 17S Ct 966 (1897), the Supreme Court held
constitutional a federal statute that called for considering special benefits when deciding what compensation is
due for the taking of part of a tract of land for a highway The Court observed that the statute was in accord with
pnor views of the matter as stated in Kennedy v Indianapolis, /03 US 599, 605, 26 L. Ed 550 (1881), and
further stated
When part only of a parcel of land is taken for a highway, the value of that part is not the sole measure of the
compensation or damages to be paid to the owner, but the incidental injury or benefit to the part not taken is also
to be considered If, for example, by widening of a street the part which lies next to the street, being the most
valuable part of the land, is taken for the public use, and what was before in the rear becomes the front part, and
upon a wider street, and thereby of greater value than the whole was before, it is neither just in itself, nor
required by the constitution, that the owner should be entitled both to receive the full value of the part taken,
considered as front land, and to retain the tncrease in value of the back land, which has been * 151 made front
land by the same taking
Bauman, 167 US at574-75
The Bauman decision has led at least one commentator to conclude that “the federal rule regarding setoff of
benefits allosvs benefits to set off the value of the property taken “ Nichols, supra, § 8A 07 [ l] Other circuits
have reached the same conclusion See, e g, United States v Trout, 386 F2d 216, 221 (5th Cir 1967),
Aaronson v United Slates, 65 App DC /4, 79 F2d 139, 139-40 (DC Cir 1935) PlaintifTs have not asserted
that the law is to the contrary At oral argument plaintiffs agreed that the matter is controlled by federal law and
that federal law permits offsetting the value of the part taken by any special benefits conferred
Plaintiffs point out, however, that it is further the law that only “special” benefits can be deducted from any
compensation due, “general” benefits cannot be deducted See City of Van Buren v United States, 697 F 2d
1058, 1062 (Fed Cir 1983), Trout, 386 F2dat 221-22, Nichols, supra, § SA 07L1] It is the distinction
between special and general benefits that plaintiffs offer as the difference between their position [ *16] and that
of the trial court They assert that any benefit received as a result of the taking is general rather than special, and
that therefore setoff is not permitted.
Distinguishing between special and general benefits is not always an easy task See Nichols, supra, §
8A 04 [ 2] This court has suggested that, as a general matter, special benefits are those which inure specifically
to the landowner who suffered the partial taking and are associated with the ownership of the remaining land

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See Van Buren, 697 F 2d at 1062 In contrast, benefits that inure to the community at large are considered
general See id A similar distinction can be derived from other cases and commentary special benefits are those
which arise directly and proximately to the remaining land as a result of the public work on the part taken, due to
the peculiar relation of the land in question to the public work In contrast, resulting benefits that are more or less
common to all lands in the vicinity of the land taken are general See Uniled Stales v River Rouge Improvement
Co, 269 US 411, 415-16, 70 L. Ed 339, 46 S C i 144 (/926), United Slates v 2,477 79 Acres of Land, 259
[ *17] F 2d 23, 28 (5th Cir 1958), Uniled Stales v 901 89 Acres of Land, 436 F 2d 395, 398-99 (6th Cir.
/9 70), Nichols, supra, § 8A 04 [ 2]
The Supreme Court’s analysis in River Rouge of benefits arising by way of a river improvement, which
required partial taking of numerous parcels of ripanan land, is instructive
We are of opinion that an increase in the value of the remaining portion of any parcel of land caused by its
frontage on the widened river, carrying a right of immediate access to and use of the improved stream, would
constitute a special and direct benefit within the meaning of the statute, as distinguished from a benefit common
to all the lands in the vicinity, although the remaining portions of other riparian parcels would be similarly
benefited
RiverRouge, 269 US at 415-16
In the case before us, the tnal court, based on the testimony of the Government’s experts, found three types of
special benefits arising from the taking of the easements (1) the investigation, (2) the characterization, and (3)
the remediation of the contaminated groundwater. See Hendler V, 38 Fed Cl a! 617, 626-2 7 The trial court
found that, with regard [ * 181 to the “investigation” benefit, it would have been necessary for the plaintiffs to
investigate, by way of testing and sampling, the contamination underneath the subject property prior to its
commercial development The trial court noted that both parties’ experts explained that property suspected of
containing contamination is investigated in two phases when a property owner is preparing a plan of
development Phase One is an assessment of the likelihood of contamination based on available public records
and historical data Phase Two is scientific analysis involving actual testing and sampling See Hendler IV, 36
Fed Cl at 587 n 15 The court further noted that governmental permitting agencies as well as lending
institutions would routinely require Phase One/Phase Two investigations for property that might be
contaminated See Hendler V, 38 Fed Cl at 622
The court considered that the installation of the wells and attendant testing by the Government provided the
necessary information and is the equivalent of a completed Phase Two investigation. The court found that a
private undertaking of the investigation would have cost at least $100,000 (with interest, $195,000) I * 19] See
id ,HendlerlV, 36Fed Cl a1587&n 15

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With regard to the “characterization” benefit, the trial court found that the Government, by way of its activities
on plaintiffs’ land, characterized the nature and extcnt of the contamination, thereby eliminating uncertainty as to
the land and as a result restoring its otherwise depressed value due to uncertainty See Hendler V, 38 Fed Cl at
617, 626-2 7 Similarly, the court found that the Government’s remediation of the contamination in conjunction
with the activities on plaintiffs’ land conferred a “remediation” benefit to plaintiffs See id
The Government’s expert valued the characterization benefit at $280,000 and the remediation benefit at
$244,000 See id at 626 The trial court appears to have credited the Government’s characterization and
remediation valuations, but it did not expressly find them to be correct See id at 626-2 7 Rather, the court
stated that even if it “limits the special benefits to the $100,000 cost avoided for a required Phase Two study, the
special benefits would outweigh any damage from the physical taking Therefore, no compensation is due to
plaintiffs for the physical 1*20] taking.” Id at 627 In particular, the court noted that even if plaintiffs’
valuation of the easements is adopted (with interest, $185,000), the investigation benefit (with interest,
$195,000) outweighs the value of the easements See id a! 622, 626-27
Plaintiffs do not challenge the valuation of this benefit To the contrary, the trial court noted that plaintiffs
concurred that privately-undertaken equivalent tests and analyses, as part of a proposed commercial
development, would have cost at least $100,000, totaling with mtcrest $195,000 See 1-lendler IV, 36 Fed Cl a!
587, Hendler V, 38 Fed CI a! 622 We have no basis for concluding that this finding is clearly erroneous
Rather, plaintiffs assert that any benefit provided by the investigation is “general,” not “special,” and is
therefore immaterial They argue that the only properties specially benefited by the Government’s actions are the
“intended beneficiarics”--those downstream properties whose owners either used, or intended to use, the
groundwater Plaintiffs claimed no use for the groundwater, given the contemplated commercial development of
their property They argue that therefore their property [ *21] received only general benefits, benefits common
to all lands in the vicinity In this vein, they assert that the Government’s investigation merely provided public
information available to “every other property in the vicinity [ ,1 . for that matter, Ito] every citizen of this
country” Finally, they assert that if anyone is specially benefited, “it is the State of California and the other
parties liable for characterizing and remediating the Stringfel low contamination”
Though the distinction between “special” and “general” benefits is clearer in the abstract than in the
application, on the facts of the case the Government has the better argument, and the trial court was not wrong in
viewing these particular benefits as “special” with regard to the particular land As the above discussion bears
out, the fact that others benefited from the Government’s activities does not make the benefits to plaintiffs’ land
general. And, that other landowners may have been the “intended beneficiaries” of the Government’s actions is
similarly inapposite
What is relevant is the trial court’s finding that the Government’s investigation on plaintiffs’ land avoided an

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otherwise required Phase [ *22] Two study for development of the property See Hendler V, 38 Fed Cl at 627
Plaintiffs have not shown this finding to be clearly erroneous In view of the finding, the “investigation” benefit
to plaintiffs--i e, avoidance of a Phase Two study--inured specifically to them and is associated with their
ownership of their remaining property See Van Buren, 697 F. 2dat 1062 It inures to plaintiffs because of its
peculiar relation to their land While others may have benefited generally from the information provided by the
investigation, the benefit to others was not the same The benefit to others was not in the form of an equivalent of
a Phase Two study of plaintiffs’ property That benefit is unique to plaintiffs’ land, obviating an otherwise
necessary requirement for developing the land. In sum, we conclude that the trial court did not err in determining
that the plaintiffs’ remaining property received an “investigation” special benefit
Furthermore, given the record in this case, we conclude that the trial court did not err in ofl’sctting this special
benefit against the value of the easements taken However harsh by modern day standards the federal offset rule
may seem, [ *23] which allows the Government to escape any payment for private property actually taken for
public use, we accept it as the governing rule for purposes of this case If the rule is to be changed, and to make it
more consistent with the rule followed in the states, it is for Congress to make that change
This court’s predecessor, in the Bartz case, applied the rule to deny a group of farm owners along the Iowa
River compensation for lands repeatedly flooded by a Government dam, on the ground that their remaining land
was greatly benefited by the flood and drought control project, such that the benefits far exceeded the value of
the land taken 633 F 2d at 577-78. The court stated that, “if governmental activities inflict slight damage upon
land in one respect and actually confer great benefits when measured in the whole, to compensate the landowner
further would be to grant him a special bounty” Id at 578 (quoting United Slates v Sponenbarger, 308 US
256, 266-67, 84 L Ed 230, 60 S C i 225 (1939))
As the quote indicates, the rule takes its force from the underlying equitable principle that the Government’s
obligation is, to the extent possible following the Government’s [ *24] intrusion, to restore the landowner to the
position he was in absent any government action In a case in which the problem was not created by the
Government, and the Government’s intrusion was necessary to correct the problem for the benefit of the general
public, it can be argued that it is not inequitable to balance against the harm caused the landowner by the
Government’s remedial action any special benefits that happen as a result to accrue to the land Thus, in the
flooding cases such as Bartz, in which dams are built to control natural flooding, the result, even though it denies
recovery for property actually taken, is seen as not being ultimately inequitable
Applying that principle to the case at hand, if this were a case in which the Government’s remedial efforts were
shown to be related to Government causes, the setoff rule would be inapplicable Here, however, there is no
indication that the United States Government contributed in a direct way to the creation of the problems at
Stringfellow See United Slates v. Siringfellow, No CV-83-2501, 1995 WL 450856, at * 5-6 (C D Cal Jan. 24,
1995) (unreported order) (holding the owners of the Stnngfellow site, the State [ *25] of California, and users

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of the site liable for costs associated with the site) Plaintiffs seem to concede that, asserting that “it is the State
of California and [ I other parties [ that arel liable for the Stringfellow contamination”
Accordingly, the only indication we have iii this case is that the Government’s role as remediator is free of
Government responsibility as a causal agent If that were not the case, the rule of setoff would have no
application, because the Government would merely be remediating its own mistakes Just as the person who
causes injury to his neighbor’s land cannot be heard to say that the required restoration is a gift, the Government
cannot claim that restoring a landowner’s land to its natural state by cleaning up a Government-created pollution
problem is a “special benefit” for which the landowner can be charged
Given that that is not the case here, and given the established precedents that govern compensation for a
federal taking, the tnal court did not err in setting off the value of the easements taken by the found
“investigation” special benefit Because the unchallenged trial court’s valuation of that benefit completely offsets
even [ *261 plaintiffs’ valuation of the easements taken, we need not address the correctness of the other special
benefits found by the trial court Simply put, because the court did not err in determining that the value, however
measured, of the easements taken is outweighed by the special benefits conferred to the remainder, we affirm the
denial of compensation for the value of those easements
Ill
SEVERANCE DAMAGES
Next we consider plaintiffs’ contention that the trial court erred in finding that their retained property suffered
no severance damage In cases of a partial physical taking as that here, Just compensation under the takings
clause of the Constitution mcludes “not only the market value of that part of the tract appropriated, but the
damage to the remainder resulting from that taking, embracing injury due to the usc to which the part
appropriated is to be devoted” United Slates v Grizzard, 219 US 180, 183, 55 L Ed 165, 31 S C i 162
(19/1), sec also Hendler III, 952 F 2d at 1383-84 However, plaintiffs bear the burden of proving severance
damages See Miller v United Stales, 223 Ci l 352, 620 F 2d 812, 828 ‘Ci I 1980,)
Plaintiffs’ severance damage [ *27] theory begins with the proposition that the scope of the taking, and thus
the extent of the damage to the retained land, is defined by the broad scope of the access order, and not by the
actual activities undertaken by the Government This theory, if accepted, would have opened up a large measure
of potential damages to the retained land, since the access order could be read to authorize virtually unlimited
governmental activity The trial court rejected that theory, as do we As we explain below, the trial court
correctly concluded that the economic consequences flowing from the access order itself did not rise to the level
of a regulatory taking Though plaintiffs devoted considerable effort in their brief to bolstenng the theory, and
the damages that would flow from it, the conclusion that there was no regulatory taking cuts the ground Out from
under it If there is no regulatory taking, what remains is a physical taking of the easements, and the severance

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damages, if any, caused by the taking of those easements
Building on their theory, plaintiffs presented through their expert the proposition in essence that the access
order and the Government’s activities thereunder made their [ *281 retained property unniarketabic, or at least
greatly depreciated This damage, they contend, was caused by the access order and attendant activities
significantly interfering with development of their property and creating the false impression that the property
was a source of contamination Plaintiffs’ expert valued the alleged severance damage at over one million dollars
(with interest, $3 1 million)
The trial court rejected this aspect of plaintiffs’ theory The court found unconvincing their assertion that the
access order and associated activities created the false impression that their property was contaminated, thereby
decreasing its value See Hendler V, 38 Fed Cl at 621 Instead, the court “found that the ‘evidence shows that
the value of plaintiffs’ property was reduced by the contamination [ from Stnngfcllow], rather than by the actions
pursuant to the access order “ Id (quoting Hendler IV, 36 Fed Cl at 588) The court went on to state that “it
defies logic that the monitoring wells, rather than the actual existence of groundwater contamination, would
devalue plaintiffs’ property “id at 622 Thus, the trial court’s rejection of plaintiffs’ “false [ *291 impression”
theory turned on causation, a question of fact Sec Loesch, 645 F 2d at 913
With regard to plaintiffs’ assertion that the access order and attendant activities inhibited development of their
property, the court found that “the easements could be incorporated into any planned development as parking lots
or landscaped areas, without any significant loss of building area” Hendler V, 38 Fed Cl at 622 This finding
is not inconsistcnt with plaintiffs’ contemplated use of the property they maintained that “their property would
have been an ideal location for commercial development [ such as] suburban strip-malls and retail centers
Hendler IV, 36 Fed Cl at 586-87 In the end, the court found that “the easements and the [ access] order
did not materially interfere with the subject property’s daily use and did not result in severance damages”
Hendler V, 38 Fed Cl at 622
In challenging these findings, plaintiffs assert that the trial court erred by rejecting the opinion of their expert,
and by basing its analysis on the Government’s actual activities on their land rather than the scope of activities
permitted under the access order 1*30] The difficulty with plamtiffs’ position on appeal is that they have to
overcome the express findings of the trial court. The trial court’s findings are supported by the record, though we
might as an initial matter have found otherwise, we cannot say that these findings are clearly erroneous The
Government’s experts explained that the consequence of the discovery of actual groundwater contamination on
plaintiffs property was to stigmatize the property for any type of development, and thereby reduced its value by
eighty percent n2 Sec id at 624 They further testified that the well-site and access-corridor easements were not
in themselves an impediment to development of the property See id at 626 On this point, the trial court noted
that “plaintiffs’ expert conceded that the monitoring wells could have been incorporated into a commercial
development without significant difficulty “ Hendler IV, 36 Fed Cl at 588 The Govermnent’s experts

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additionally opined that the Government’s activities pursuant to the access order actually restored value to
plaintiffs’ property by characterizing and remediating the contamination See Hendler V 38 Fed Cl at 626 In
view of 1*311 this evidence, we cannot say that the trial court clearly erred in rejecting the contrary opinion of
plaintiffs’ expert
Footnotes
n2 Generally, fines imposed pursuant to a civil-contempt order are remedial, designed pnmarily to coerce an
offending party into prompt compliance with a judicial mandate Once the contemnor comes into compliance, the
contempt is purged and no further fines are mcurred See United States v Marquardo, 149 F 3d 36, 39 (1st Cir
1998) By contrast, a monetary fine imposed in connection with a criminal contempt adjudication is essentially
punitive and deterrent in purpose, rather than remedial That is, it vindicates judicial authority by assessing a
one-time penalty for past disobedience of a court order See id at 39-40 Since criminal contempt proceedings
address a completed crime, and the fine imposed is a cnminal “sentence,” see In re Kave, 760 F 2d 343, 351 (1st
Cir 1985), the contemnor lacks the unilateral option to avoid the fine by future compliance with the court order
Further, since the fine is punitive rather than compensatory, its amount need not be exclusively commensurate
with victim loss Sec Marquardo, 149 F 3d at 40
End Footnotes [ *3 2]
With regard to the access order itself, the court noted that the “order was never invoked to bar any sale or
development of plaintiffs’ property “ Hendler IV, 36 Fed Cl at 588 In fact, “plaintiffs failed to disclose the
existence of the [ access] order to any of the prospective purchasers, and none of the proposals for purchase of the
subject property were made with knowledge of it.” Id Furthermore, the court noted that “plaintiffs’ expert
admitted that someone interested in developing the property would attempt to find Out the naturc of the
monitoring activities and what accommodations could be made” Hendler V, 38 Fed Cl at 619 Accordingly,
we cannot say that the trial court clearly erred in finding that the access order did not itself result in measurable
severance damages
Again, while we might have reached contrary findings had we sat as the trier of fact, that does not entitle us to
reverse the trial court’s findings See Anderson v City of Bessemer City, 470 US 564, 573-74, 84 L Ed 2d
518, 105 S C i 1504 (1985) We are limited to the clearly erroneous standard of review, and plaintiffs’ have
failed to convince us that the findings fail that [ *33] standard In view of these findings, we must affirm the
judgment with respect to severance damages
lv
REGULATORY TAKING

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Lastly, we consider plaintiffs’ assertion that the trial court erred in determining that there has been no
regulatory taking of their property In Hendler I, the trial court held that the access order, standing alone, did not
work a regulatory taking 11 Cl C i at 96 In Hendler III, we concurred, stating that “On the facts then before
the court we do not disagree with that ruling.” 952 F2dai 1375 We went on to note that “subsequent
events, in light of the character of the Government’s action and plaintifis’ distinct investment-backed
expectations, might have had sufficient economic impact on the plaintiffs to constitute a regulatory taking” Id
We remanded for “the fact-specific findings required for determining” whether a regulatory taking has occurred
Id at 1375, 1384 That is what the trial court set out to do, see Fiend/er IV, 36 Fed Cl at 585-89, but plaintiffs
claim that it erred
A pivotal criterion governing whether a regulatory taking has occurred is the impact the regulatory imposition
has had on the economic use, [ *341 and hence value, of the property See Florida Rock Indus , Inc v United
Stales, 18 F 3d /560, 1564-65 (Fed Cir. /994); Love/aches Harbor, inc v United Stales, 28 F 3d 1171, 1179
(Fed Cir 1994) If a regulation categorically prohibits all economically beneficial use of land there is, without
more, a compensable taking See Florida Rock, 18 F 3d at 1564-65 On the other hand, though it is not
necessary to have a total wipeout before the Constitution compels compensation, if the regulatory action is not
shown to have had a negative economic impact on the property, there is no regulatory taking See generally id at
/569- 71, Loveladies, 28 F 3d at 1180 The question of the economic impact of a particular regulatory action is
of course fact-specific to the case See Florida Rock, 18 F.3d at 1570
Plaintiffs’ economic impact theory for their regulatory taking claim is quite similar to their severance damage
theory They contend that the access order and attendant activities falsely stigmatized their property as a source
of contamination, and significantly interfered with its development As a result, they contend, the property was
unmarketable for a period [ 351 of up to twelve years, yielding a loss in the range of $16- 18 million
The trial court’s rejection of this claimed economic impact parallels its analysis and findings with respect to
plaintiffs’ severance damage claim The court found that their property was stigmatized by the actual
contamination from Stringfellow, rather than the Government’s actions pursuant to the access order Sec Hendler
IV, 36 Fed. Cl at 588 Furthermore, the court found that the access order and Government actions thereunder
did not interfere with the development or marketing of the property See id
We have already concluded (with respect to the question of severance damages) that these factual findings by
the trial court are not clearly erroneous, and thus cannot be disturbed In light of these findings, we cannot say
that the court erred in determining that plaintiffs have not suffered a regulatory taking. In sum, as found by the
trial court, plaintiffs failed to prove that their “use” was sufficiently interfered with to constitute a regulatory
taking See Florida Rock, /8 F3dai 1568-71

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The trial court alternatively based its rejection of plaintiffs’ regulatory taking claim on the theory [ *361 that
“the nuisance exception described in Loveladies, Lucas, and other cases” is applicable and defeats the claim
Hendler IV, 36 Fed Cl at 585-86 However, having concluded that the trial court did not err in determining that
there was insufficient economic impact to give rise to a regulatory taking, it is unnecessary for us to consider this
further theory, under the circumstances, we choose not to Thus, while in appropriate cases the nuisance doctrine
is an available defense (see Florida Rock, 18 F 3d at 1565 n 10, Loveladies, 28 F 3d at 1182-83), we do not
decide whether it has any applicability to this case
CONCLUSION
The judgment of the Court of Federal Claims is
AFFIRMED
COSTS
The parties shall bear their own costs

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SEND TO: OTT, DANA
US ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF GENERAL COUNSEL
401 N ST SW RN 631 WT
WASHINGTON, DISTRICT OF COLUMBIA 20460

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THE TAKINGS JURISPRUDENCE OF THE COURT OF FEDERAL CLAIMS AND
THE FEDERAL CIRCUIT
by
David F. Coursen
I. Introduction
Through nearly a century and a half of constitutional jurisprudence, the Supreme
Court read the straightforward language of the takings claus& literally, 2 and assumed that
it “reached only a ‘direct appropriation’ of property or the functional equivalent of a ‘practical
ouster of... possession “s In 1922, however, the Court concluded that the takings clause might
also apply when property is regulated without a transfer of ownership, cryptically observing that,
“while property may be regulated to a certain extent, if the regulation goes too far it will be
recognized as a taking
The Court has struggled ever since to explain this Delphic aphorism and identify the point
at which regulation has gone “too far” and become a taking Thus far, however, the Court has
provided little practical elucidation beyond vague nostrums to the effect that the Fifth Amendment
is “designed to bar Government from forcing some people alone to bear public burdens which, in
all fairness and justice, should be borne by the public as a whole “ The vagueness of the Court’s
generalizations may reflect the practical reality that it is “difficult, if not impossible, to discern on
“ [ N]or shall private property be taken for public use without just compensation.” U S Const
Fifth Amendment
2 A “typical taking occurs when the government acts to condemn property in the exercise of its
power of eminent domain” First English Evangelical Lutheran Church of Glendale v. County of Los Angeles.
California , 482 U.S. 304, 316 (1987)
Lucas v South Carolina Coastal Council , 505 U.S 1003, 1014 (1992).
Pennsylvania Coal Co. v. Mahon , 260 U.s. 393, 415 (1922).
Armstrongv.US.,364US 40,49(1960)
6 Lucas,505US at 1026.

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an objective, value-free basis,” when property that remains in its owner’s possession and retains
some value has nevertheless been converted by some form of constitutional alchemy from private
to public ownership.
Not surprisingly, the takings jurisprudence that has evolved in the lower courts has
reflected, and in some cases magnified the Supreme Court’s uncertainty about the application of
regulatory takings doctrine. Among lower courts, the Court of Federal Claims (with appeals to
the U.S. Court of Appeals for the Federal Circuit) (CFC/FC), as the sole forum that can award
just compensation exceeding $10,000 against the United States, 7 has the most active and
expansive takings docket within the federal court system. As such, it provides a useful prism
through which to view the practical effects of the Supreme Court’s assorted pronouncements on
takings. Moreover, upon examination, despite some rather idiosyncratic results in individual
cases, many of the takings decisions of the CFCIFC implicitly recognize several significant general
principles as useful in reaching fair results in takings cases Accordingly, after a brief review of
recent Supreme Court takings decisions, this article will turn its focus to the decisions of the
CFCIFC. Finding little doctrinal coherence, it will then attempt to infer practical rules and
principles that the court has followed, often implicitly, in analyzing takings cases
U. Supreme Court Takings Jurisprudence
A. General Principles
Consistent with its fondness for rather amorphous generalities regarding takings, the Court
has concluded that the regulatory takings inquiry generally requires a balancing of the relative
weights of the public and private interests implicated by a regulatory decision. The Court has
been unable to develop a set formula for conducting this balancing, engaging instead in a series of
6 Lucas , 505 U.s. at 1026
28 U.S.C. Sethons 1346, 1491

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“essentially ad hoc, factual inquiries” The “economic impact” of a particular action on a property
owner, the extent to which the government action “has interfered with distinct, investment-backed
expectations [ and] the character of the government action,” are factors to which the Court has
given particular emphasis
An ad hoc approach emphasizes fairness but, by its very nature, does not foster
consistency or predictability, since it can produce different results in cases where the same factors
are present but their relative weights differ, either in fact or in the subjective opinion of a court
Moreover, at least in its application, the balancing approach reflects a deferential view of
government regulation, consistent with the underlying assumption that a properly fi.inctioning
representative democracy is unlikely to go “too far” in imposing regulation. In any event, the
balancing approach has demonstrably produced a perverse clarity: when the Court has used a
balancing test, it has generally rejected the taking claim °
Accordingly, until recently, findings of regulatory takings were quite rare, and, indeed, it
was unsettled whether the owner of property taken by regulation was constitutionally entitled to
just compensation, or might properly be confined to the sole remedy of having the regulatory
action invalidated. Thus it was something of a watershed when, in 1987, the Court found that
regulatory takings had occurred in two cases, ‘ and, in a third, recognized that a temporary
regulation could work a taking, and that, if it did, invalidation alone might not be an adequate
Penn Central Transportation Co. v New York City 438 U.S. 104, 124 (1978). The Court has
rejected a taking claim solely on the basis of the absence of expectations. See. e g. Ruckeishaus v. Monsanto
., 467 U.S 986, 1005 (1984).
Compare Andrus v. Allard , 444 U.S 51 (1979)(no taking from prohibition of commercial sale
of eagle feathers), with Hodel v. Irving , 481 U.S 704 (1987)(talung from prohibition against inheritance of
fractionated interests in land), See. enerallv id, at 718-19 (concurring justices disagreeing as to Impact of this
decision on Andrus) .
10 The Supreme Court has never found a taking of land where it has applied Penn Central
balancing analysis Indeed, it has never found a taking of land that has not been appropriated or occupied and
has retained “economically viable use” But see Hodel v. Irving , 481 U.S. 704 (using balancing analysis to find
taking from limitation on right to pass certain land to heirs)
Nollan v. California Coastal Commission , 483 U.S. 825 (1987); Hodel v. Irving , 481 U S. 704.

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remedy, and the owner might be entitled to compensation for a “temporary taking” 12
Subsequently, the Court held that a challenged regulation was not, in fact, invalid, even if it
worked a taking, so long as a just compensation remedy was available, as is the case under the
Tucker Act’ 3 for many federal regulatory actions ‘
The primary effect of the 1987 decisions was to underscore the Constitutional importance
of property rights, without doing much to clarify their nature or scope The decisions generated
an inordinate amount of rumination and rhetoric’ 5 concerning the meaning of the Takings Clause,
and created a perception that regulatory actions might produce takings more frequently than had
previously been assumed. 16 Indeed, as discussed below, the 1987 takings decisions immediately
preceded, temporally, and, no doubt, causally, some surprising lower court taking findings.
B. Lucas v. South Carolina Coastal Council and its Aftermath
Accordingly, the Court’s next major takings case generated enormous anticipation, not
least because it implicated an apparent collision of two “absolutes” of takings law regulation to
protect public health and safety (generally exempt from takings liability),’ 7 but which renders
property utterly valueless (generally recognized as the type of impact likely to work a taking).
In a broad, wide-ranging but only intermittently coherent or illuminating discussion, Lucas held
12 First English Evangelical Lutheran Church of Glendale v. County of Los Angeles. California ,
482 U.S. 304 (1987)
28 U S C. Section 1491(a)(1)
Preseault v. ICC , 494 U.s. 1 (1990).
See, Florida Rock Industries . Inc v U S. , 18 F.3d 1560, 1574-75, notes 3.5 and
accompanying text (‘ 1 No legal subject has received the attention of scholars more than ‘takings’ jurisprudence in
recent years “)
16 See, e g . Executive Order 12630 Governmental Actions and Interference with
Constitutionally Protected Property Rights, March 16, 1988 (directing agencies to “review their actions carefluly
to prevent inadvertent takings.”).
U Keystone Bituminous Coal Ass’n v. DeBenedictis , 480 U S. 470 , 488-92 (1987).
See Agins v Tiburon , 447 U.S. 255, 260 (1980)(application of zoning regulation to a parcel”
effects a taking if [ iti .. denies an owner economically viable use of his land.”)

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that regulation that makes land valueless works a “categorical” taking The Court, however, felt
impelled to quali this “absolute” principle by recognizing that, in any event, no taking can occur
where the government acts to regulate use that constitutes a nuisance under state law or is
otherwise inconsistent with “background principles” of state property law. The Court further
pointed out that owners’ expectations concerning use of property are limited by the rules and
understandings concerning the property in place at the time it is acquired Finally, the Court
suggested, somewhat cryptically, that land is given greater protection than other forms of
property ‘
Lucas highlights the Court’s growing interest in “categorical” taking rules, an interest
perhaps not unrelated to the practical reality noted above that claims usually fail when analyzed
under traditional “balancing” analysis In any event, in Lucas the Court discovered that it had
identified “at least two discrete categories of regulatory action as compensable without
case-specific inquiry into the public interest” supporting the action 20 First, the Court had
previously recognized a permanent physical occupation of property as a “governmental action of
such a unique character that it is a taking without regard to other factors that a court might
ordinarily examine.” 2 ’ Lucas itself recognized a second type of categorical taking, regulation that
renders property worthless 22 In an attempt to systematize “categorical” analysis, the Court
further provided that both types of categorical claim should receive “similar treatment” in a
takings analysis, explicitly recognizing that a relevant “background principle” sufficient to defeat a
taking claim could have its roots in federal, as well as state law. 23
The intellectual calisthenics--not to say contortions-- categorical analysis may demand are
‘ Lucas v South Carolina Coastal Council , 505 U S. 1003.
20 I ..at 1015.
21 Loretto v Teleprompter Manhattan CATV Corp. , 458 U.S. 419, 432 (1982). Courts have
generally been more willmg to fmd a taking from government action that can be characterized as a physical
mvasion of property than from regulation
22 Lucas , 505 U.S. at 1029.
23 Id at 1029.

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suggested by the blatant implausibility of the lower court factual conclusion on which Lucas is
predicated. that a parcel of beachfront property in a resort area is rendered valueless by a
prohibition on the construction of a permanent dwelling. Outside the hothouse environment of
takings disputation, common sense would strongly suggest that, at a minimum, owners of
property adjacent to either of Lucas’ beachfront properties would have happily paid a substantial
sum to increase their lot size and area of beach frontage and ensure that the adjacent parcel would
remain undeveloped, by acquiring one of the Lucas lots. This would hardly obviate the fact of a
very severe economic burden, but it defies common sense, and constitutes an Orwellian abuse of
language to suggest that it renders the property “valueless.” Not surprisingly, four justices
specifically adverted to the implausibility of the lower court’s factual determination 24 This raises
the question of the utility of a categorical rule--based on land being rendered utterly
valueless--which may apply in a null set of cases
Categorical analysis purports to introduce formal clarity, precision, and predictability to
takings law, while admittedly paying less overt attention to fairness However, in their
application, categorical rules seem to obscure more than they illuminate The clarity they provide
is largely illusory, even in announcing the rules, the Court has had to quali them 25 Almost from
the moment the older of the two “categorical” rules was announced, in Loretto , the Court has
been compelled to narrow the rule to avoid its application to demonstrably unsuitable
circumstances 26
24 . at 1034 (Kennedy, J., concurring).
25 Lucas at 1027-31 (attaching qualifications to purportedly absolute rule)
The Court has repeatedly been forced to explain why the rule either did not apply or was not
controlling in various situations Yee v City of Escondido , 112 S Ct 1522 (1992)(rent control), U.S. v
Sperry , 493 U.S. 52 (1989)(mandatory fee for processing of claim); FCC v Florida Power Corp , 480 U.S. 245
(1987)((rate regulation). See, also Nollan v. California Coastal Comm’n , 483 U.S. 825 (1987), Dolan v. City of
Tigard (fmding permanent physical occupation, nevertheless conducting further analysis before finding taking)
Indeed, in the term following Lucas , the Court was forced to explain why neither the Loretto nor the Lucas
categorical rules applied to a claim based on economic regulation. Concrete Pine & Products, Inc v
Construction Laborers Pension Trust , 508 U S. 602 (1993)

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In addition, categorical rules have had the perverse effect of fostering a mechanistic and
formulaic approach to takings analysis. While the Court has been developing and refining
categorical rules, applicable in admittedly limited circumstances, it has done little to elucidate
standards for balancing analysis, which is still necessary in most cases 27 Lower courts have
recognized, somewhat plaintively, that “ [ sjtanding alone [ the Penn Central ] factors are so general
that they provide little guidance” to courts analyzing takings claims. For example, when courts
address “the nature of the government action,” potentially the broadest of the three factors, they
often consider only the very narrow question of whether the regulation constitutes a physical
invasion of property--which arguably is at least as relevant to the impact of the regulation as to its
nature or purpose 29 Similarly, courts sometimes have seemed mystified as to how to apply the
“expectations” factor in a balancing analysis 30
C. Subsequent Supreme Court Decisions
More recently, the Court has reaffirmed the appropriateness of deferential review of
government economic regulation. 3 ’ The Court has also elaborated on the rule announced in
Nollan , finding that when government requires a property owner to donate an interest in property
to the public in exchange for a development permit, the burdens to the public from the
development must be “roughly proportional” to the burden to the owner from the loss of the
property interest. 32 The Court has also reiterated that a taking claim is ripe when the government
has made a final decision as to what use can be made of the property. 33
27 Lucas . 505 U.S. at 1019n 8.
Branch v U S. , 69 F.3d 1571 (Fed. Cir. 1995).
29 Indeed, the Cowl has emphasized that an occupation is a serious incursion on property rights
precisely because of its effect on the owner’s right to exclude others from entering property See e g Dolan v.
City of T,gard , 512 US 374,114 SCt 2309, 2320 (1994)
30 See. e g. Hodel v Irving , 481 U S at 714
31 Concrete Pipe , 508 U.S. 602 (pension benefits)
32 Dolanv CitvofTigard,512US 374.
Suitum v. Tahoe Regional Planning Agency , 117 S Ct 1659 (1997)

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In its most recent term, the Court defined “property” expansively, without addressing
whether there had been a taking The Court also--in a decision at some tension with much of
modern Supreme Court jurisprudence--invalidated retroactive economic regulation; a plurality
would have found a taking, while a fifth justice would have found a due process violation ‘
Further adding to the muddle, a majority of the Court concluded that the challenged regulation
could not properly be analyzed under takings theory The relationship between takings and due
process is an issue in a land use case on the Court’s current docket City of Monterey v Del
Monte Dunes at Monterey. Ltd •36
A largely unarticulated question that pervades the takings debate is the normative one of
the extent to which regulatory takings are relatively rare occurrences arising from aberrant
governmental action Historically, both the inftequency of taking findings and the language the
Court has used in describing the circumstances that give rise to such findings suggest that
regulatory takings are aberrations. The Court has found takings arising from an
“extraordinary” restriction, 37 an “extraordinary circumstance,” 38 or, even more dramatically,
action tantamount to “an out and out plan of extortion “ More recently, whether by
coincidence or not, the Court did not use comparable language to characterize government action
which it concluded likely worked a taking. 4 °
Although Lucas was written in the emphatic language of categorical analysis, and ruled in
favor of a taking plaintiff; its effect has been relatively mixed The Court’s decision, its reasoning,
the rule articulated, and some footnoted ruminations, have provoked substantial debate regarding
Phillips v. Washington Legal Foundation , 118 S Ct 1925 (1998) (gross interest “property” of
owner of principal, even if principal incapable of generating net interest).
Eastern Enterprises v. Apfel , 118 U.S 2131 (1998) f. Lochner v New York , 198 U.S. 45
(1905).
36 No 97-1235 (cert granted 66 USLW 3639 (March 30, 1998), argued October 7, 1998.
Hodel,481US at718
38 Lucas , 505 U.S. 1017.
Nollan , 483 U.S. at 837.
40 Dolan,114S.Ct at2316-17

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a number of issues fundamental to takings jurisprudence but, to date, has hardly produced a
groundswell of rulings favoring plaintiffs. Among the issues that Lucas has made more salient
are the roles of nuisance and related doctrines of expectations in takings law, the relevant parcel
to consider in analyzing a taking claim, and the extent of reduction in value needed to demonstrate
a taking. In addition, it has implicitly raised questions regarding limitations on the utility of
categorical analysis in addressing taking claims
H. The Distinctive Takings Jurisprudence of the Court of Federal Claims and Federal
Circuit Court of Appeals
A. Overview
The Court of Federal Claims and the Federal Circuit Court of Appeals (CFC(FC) has
addressed, in one form or another, most of the major unresolved issues in takings jurisprudence.
Significantly, the CFCIFC docket has reflected a practical, if somewhat unexpected consequence
of Lucas Immediately following the 1987 decisions, the CFCIFC viewed government regulation
with considerably less deference, and found takings with correspondingly greater frequency.
Most strikingly, nearly half of the reported federal court decisions resolving the merits of a taking
claim in 1990 ruled against the government ‘ Moreover, in a number of cases, courts found
takings from environmental regulation 42 Interestingly, since Lucas the U S has been far more
successful in takings litigation, for example winning nearly 90% of reported decisions from 1993
Meltz, Robert, “Court Rulings During 1990 on Constitutional Taking Claims Against the
United States” Congressional Research Service Report for Congress , February 14, 1991
42 Hendler v. U.S , 952 F.2d 1364 (Fed. Cir 1991) (physical taking from monitoring wells
installed as part of Superfund cleanup); Whitney Benefits. Inc v U.S. , 926 F 2d 1169 (Fed Cir
1991 )(enactment of SMCRA); United Nuclear Corp v U.S , 912 F.2d 1432 (Fed Cir. 1 990)(restriction on
uranium mining). Formanek v. U.S. , 26 Cl.Ct. 332 (1992); Loveladies Harbor. Inc . v. U S , 21 Cl.Ct 153
(1990), affd 28 F.3d 1171 (Fed Cir. 1994); Florida Rock Indus v. U.S , 21 Cl.Ct. 161 (1990), vacated 18 F.3d
1560 (Fed Cir 1994)(all three wetlands regulation under Clean Water Act § 404) See also Yancey v. U S. ,
915 F 2d 1534 (Fed Cir 1990)(turkey quarantine)
Meltz, Robert, “Court Rulings During 1993 on Constitutional Taking Claims Against the
United States “ Congressional Research Service Report for Congress , September 16, 1994; 1994 Report, July

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through 1 996. However, many of the favorable rulings have been relatively narrow, and most
rejected claims have been based on commercial, rather than environmental regulation. 44
Despite the government’s relative success in recent taking decisions, the CFCfFederaI
Circuit has been criticized as unusually conservative and ideological Perhaps illustrating the
role ideological predilections can play in takings decisions, in the CFC the identity of the judge
seems to be an unusually good indicator of the likely outcome of a case. While fourteen wetland
11, 1995; 1995 Report, September 17, 1996; 1996 Report, December 8, 1997
Significant taking decisions against the go’ ernment have included Preseault v. U S 100 F.3d
1525 (Fed. Cir. 1996)(conversion of railroad right of way to public trail), Loveladies affirmance, 28 F.3d 1171,
Bowles v. US , 31 Fed. Cl 37 (1994)( 404). Florida Rock , 18 F.3d 1560 (vacating taking ruling,
remanding on terms likely to lead to finding of a taking) The vast majority of recent decisions have been
adverse to plaintiffs: Heck v. U.S. , 134 F.3d 1468 (Fed Cir 1998)( 404 claim not npe), Bayou des Fanulles
Development Corp. v U.S . 130 F 3d 1034 (Fed Cir 1997)( 404, statute of limitations), Kunkes v U S. , 78
F.3d 1549 (Fed. Cir.1996)(public lands management); M&J Coal Co v U S , 47 F.3d 1148 (Fed.
Cir. 1995)(coal mining restrictions), Tabb Lakes. Ltd v U S 10 F.3d 796 (Fed. Cir 1993) ( 404); Cristina
Investment Corp. v U.S. , 40 Fed. Cl. 571(1998), ( 404, statute of limitations), Robbins v. U S ,40 Fed Cl.
381 (1998), ( 404)(appeal pending); Good v U S , 39 Fed Cl 81 (1997)( 404, Endangered Species Act),
appeal pending; Forest Properties Inc v. U.S ,39 Fed. Cl 56 (1997)( 404), appeal pending; Hendler v. U S ,
38 Fed. Cl. 611(1997), 36 Fed Cl 574 (1996)(Superfund, on remand, awarding no compensation for physical
taking, finding no regulatory taking from actions under order in aid of access, respectively) appeal pending.
See e.g Kendall, Douglas 1., and Lord, Charles P , The Takings Proiect A Critical Analysis
and Assessment of the Progress So Far , 25 Envtl Affairs 509 (1998) g , Slind-Flor, Victoria, Federal
Circuit Judged Flawed,” National Law Journal , 1 (Aug 3, 1998)(cnticizing Federal Circuit’s patent law
jurisprudence).
46 Tabb Lakes. Inc v. U.S , 10 F 3d 796 (Fed. Cir. 1993), affirming trial court decision
by Miller, J.; Palm Beach Isles Associates v. U S , 42 Fed. Cl. 340 (1998), Horn, J., appeal pending; Good v .
U.S., 39 Fed. Cl. 81(1997), Merow, J., appeal pending; Forest Properties Inc. v U.S. , 39 Fed. Cl. 56 (1997),
Yock, J., appeal pending, Marks v. U S. , 34 Fed Cl. 387 (1995), Horn, J , affirmed without opinion, 116 F.3d
1496 (Fed. Cir. 1997)(tabie). Plantation Landing Resort v. U.S , 30 Fed. Cl. 63 (1993), Tidwell, J, affirmed
without opinion, 39 F.3d 197 (Fed Cu. 1994)(table); City National Bank of Miami v. U S. , 33 Fed. Cl. 759
(1995), Miller. J.; Ciampitti v US ,22 Cl Ct. 310 (1991), Bruggink, J. 1902 Atlantic. Ltd. v U S ,26 Cl Ct.
575 (1992) (temporary taking), Robinson, J.; Dufau v. U.S , 22 Cl Ct 156 (1990), Lydon, Sr. J (temporary
taking);
Procedural Rulings: Heck v. U.S. , 134 F.3d 1468 (Fed Cir 1998), on appeal from 37 Fed. Cl. 245
(1997) Wiese, J. (ripeness); Bayou des Families Development Corp v U S. , 130 F.3d 1034 (1997), affirming
unpublished decision by Merow, J (statute of limitations); Cristina Investment Corn v U.S. , 40 Fed. Cl. 571
(1998), Merow, J (statute of limitations) In this case, the court’s reasomng defeated an untimely claim; the

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takings decisions, from a wide range of judges, have rejected taking claims 46 , four have found
takings; 47 three of these decisions were from a single judge, who, in turn, has never decided an
environmental taking case in favor of the government. The Federal Circuit has reversed findings
of no taking and entered judgment for plaintiffs in at least haifa dozen instances, but has yet to
reverse a takings judgment and enter judgment for the government Moreover, the sole Federal
Circuit taking decision to reach the Supreme Court inspired what has become something of a
same reasoning could also be used by plaintiffs with timely claims to establish ripeness Robbins v. U.S , 40
Fed. Cl 381(1998), Miller, J. (rejecting part of claim on merits, remainder for lack of npeness), Cf
Broadwater Farms Joint Venture v. U.S , 35 Fed. CI 232 (1996), Hodges, J., vacated and remanded by Federal
Circuit in unpublished opinion, 121 F.3d 727 (Fed. Cir. 1997), (table).
Loveladies Harbor, Inc. v U.s., 38 F.3d 1171 (Fed Cir 1994), from trial decision by Smith,
C.J ; Bowles v U S ,31 Fed Cl 37 (1994), Smith, C.J.; Formanek v U S , 26 CI Ct 332 (1992), Robinson,
J.; See also Florida Rock v. U S,21 Cl. Ct. 161 (1990), Smith, C 3 ,vacated and remanded, 18 F.3d 1560
(Fed. Cir. 1994).
Decisions setting aside lower court decisions for the government and entering judgment
for plaintiffs: Preseault v. U.S , 100 F.3d 1525 (Fed Cir 1996); Shelden v. U S , 7 F.3d 1022 (Fed. Cir.
1993), (reversing finding of no taking from acquisition of mortgaged property through criminal forfeiture
statute); Skip Kirchdorfer. Inc . v U S. , 6 F.3d 1573 (Fed Cir. 1993) (reversing finding of no taking from
occupation of warehouse to allow owners of goods therein to retrieve their property);Hendler v U S ; (reversing
lower court rejection of physical taking claim), United Nuclear Corn v U S , 912 F 2d 1432 (Fed Cu 1990)
(setting aside factual finding that purpose of government action was to protect public health and safety; reversing
finding of no taking from actions to implement Indian tribe’s restrictions on uranium mining on reservation under
lease for which tribe had been paid); Sperry v. U.S. , 853 F.2d 904 (Fed. Cu 1988)(reversmg denial of taking
from fee for processing claim under Iran-United States Claim Tribunal at 12 Cl.Ct. 736 (1987); reversed, U.S v.
Sperry , 493 U.S. 52 (1989).
Decisions setting aside judgment for US, remanding for further proceedings. Creppel v U S. , 41 F.3d
627 (Fed. Cir 1994)(reversing statute of limitations dismissal of claim); Broadwater Farms Joint Venture v
U.S, 121 F.3d 727 (Fed. Cir. 1997)(table)(unpublished opinion vacating dismissal of taking claim at 35 Fed. Cl.
232 (1996), remanding for further consideration); Brown v U S. , 73 F.3d 1100 (Fed. Cir 1996) (reversing
judgment of no taking from government overflights, remanding for further evidence).
Decisions reversing trial court findings of takings: None. But see Bass Enterprises Production Co v. U S. ,
133 F.3d 893 (Fed. Cir. 1 998)(reversing finding of permanent taking, remanding to consider possible temporary
taking); Branch v. U.S. , 69 F.3d 1571 (Fed Cir. 1995)(reversing ruling characterized as taking; however, trial
court had not actually found taking, although it had issued ruling which would probably have led to taking
award. Branch v. U.S. , 31 Fed Cl 626 (1994)); Florida Rock v US , 18 F.3d 1560 (Fed Cir.1994) (vacating
finding of taking; remanding with instructions likely to result in taking award).
Snerrv v U.S. , 853 F 2d 904 (Fed Cu. 1988), unanimously reversed, u S v. Sperry , 493 U S
52 (1989).

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rarity, a unanimously adopted Supreme Court decision reversing a taking 49
In addition, perhaps encouraged by the Supreme Court’s apparent eagerness to develop
and articulate takings principles on arguably unsuitable factual records, 5 ° the CFCIFC has felt little
need for circumspection when engaging in jurisprudential, if not metaphysical speculation that can
be charitably characterized as dicta. 5 ’ Moreover, the practical consequences of the FC’s
announced principles have yet to emerge with much clarity. Finally, the Circuit’s sole en banc
takings decision, Preseault , was seriously fragmented and only a plurality of the court focused on
the critical distinction between expectations regarding use and those regarding title and
ownership Moreover, the court has not yet had a suitable opportunity to elucidate the
ramifications of this distinction
All this has occurred in the midst of a furious political debate over the meaning of the Fifth
Amendment takings clause, including repeated efforts to legislate standards for compensation and
to re-define the proper role of the CFCIFC in addressing government regulatory actions. 52 Thus,
it should hardly be surprising that the court has struggled to grasp and apply relevant principles of
takings law. Perhaps nowhere has this struggle been more evident than in the court’s halting
efforts to assess the scope and limitations of the “categorical” rules announced by the Supreme
Court
A. The Struggle with Categorical Analysis
The Circuit has had periodic difficulties integrating “categorical analysis” into its takings
Sperry v U.S. , 853 F.2d 904 (Fed. Cu 1988), unanimously reversed, U S. v. S errv , 493 U.S
52 (1989)
50 ‘The right case for the enunciation of takings doctrine seems hard to spot.” Dolan v City of
Tigarcj , 114 S.Ct. 2309, 2331, Souter, J. dissenting; Lucas v. South Carolina Coastal Council , 505 U.S.
1003, 1076-77 (statement of Souter, J.).
Florida Rock Industries. Inc v. U.S. , 18 F 3d 1560, 1573-74 (Nies, C.J., dissenting).
52 For a summary of legislative proposals prior to 1996, Coursen, D., ‘Property Rights
Legislation A Survey of Federal and State Assessment and Compensation Measures, 25 ELR 10239 (1996).

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jurisprudence, most obviously in Sperry. 53 The court again returned to categorical analysis in
Hendler v. U S Plaintiffs alleged a taking from the 1983 installation of groundwater
monitoring wells on their property in order to determine whether the plume of contamination
from the Stringfellow Acid Pits was threatening a nearby source of drinking water On appeal,
the panel concluded as a factual and legal matter that the installation of monitoring wells was
more than “a momentary excursion shortly to be withdrawn,” and therefore, in the Court’s view,
constituted a per se taking under Loretto . Thus, the panel concluded, without seriously
considering whether the purpose of the government action was entitled to any deference, that
plaintiffs had established a valid taking claim based on a physical invasion, and entered judgment
for plaintiff on the taking question, and remanded to the trial court to determine the amount of
compensation due plaintiff
This decision is seriously flawed It is a travesty of appellate process, and its approach, if
applied widely, would make it nearly impossible for trial courts to manage their dockets. 55 It is
also problematic substantively, in part, at least, for the mechanistic way it extends categorical
analysis to conclude that a permanent physical occupation, and therefore a taking, had occurred,
Sperry v. U.S. , 853 F.2d 904, reversed U.S. v. Sperry , 493 U.S. 52.
952 F.2d 1364 (Fed. Cir. 1991)
The panel opinion ignored the procedural posture of the case Plaintiffs, who had not sought
to appeal a denial of summary judgment by the Court of Federal Claims (then the Claims Court), had
subsequently refused to comply with reasonable discovery requests, and ignored the court’s orders to respond
The action was then dismissed, not on the merits, but because of a refusal to comply with the court’s directions.
On appeal, a panel of the Federal Circuit largely ignored the applicable standards for determining whether
plaintifFs failure to obey the court merited dismissal, and addressed the merits, which were not properly under
appeal and had not been fully briefed by the United States The panel then concluded that, because plaintiffs
had a meritorious claim, they should not be penalized for failing to comply with the court’s directives, but
instead should be rewarded by a summary entry of judgment in their favor. This approach, if followed widely,
would seriously undercut the ability of trial courts to manage their dockets, since it provides an appellant whose
action has been dismissed as a sanction, an opportunity to have the merits of the claim reviewed on appeal.
This hardly qualifies as a sanction, particularly where a litigant senses that a trial judge is unsympathetic and
wishes to proceed to appeal without the bother of a trial.
56 “In this context, ‘permanent’ does not mean forever, or anything like it... If the term ‘temporary
‘has any real world reference in takings jurisprudence, it logically refers to those governmental activities which
involve an occupancy that is transient and relatively inconsequential, and thus can be viewed as no more than a

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without really requiring that the taking be permanent 56
The court subsequently fl.irther extended categorical reasoning in Skip Kirchdorfer. Inc
v. U.S., ” an almost paradigmatic elevation of form over substance In the process, the court
completed the evisceration of the Loretto permanence requirement begun in Hendler Both of
these decisions reflect a willingness to extend categorical rules beyond the limitations imposed by
the Supreme Court when doing so would serve to benefit taking claimants
The circuit has also had difficulty apprehending and applying the categorical rule of
Lucas.’° For example, the Circuit, in rather puzzling dicta has expressed enthusiasm for
common law trespass [ lastmg longer than it would take to eat lunch]” 952 F 2d at 1376-77 This is, of course,
a fundamental misreading of Loretto , which is veiy explicitly predicated on ‘the constitutional distinction
between a permanent occupation and a temporary physical invasion,” Loretto , 458 U.S at 434. See generally .
j at 426-39 and n. 17. Other courts have severely criticized Hendler’s reasoning See Juliano v.
Montgomery-Otsego-Schoharie Solid Waste , 983 F Supp 319, 327 n 7 (ND N Y. 1997)(observing that cited
language “calls to mind Lewis Carroll’s [ Throu2.h the Looking Glassi” )
6F3d 1573 (Fed Cir 1993)
Plaintiff built a warehouse on a military base Following a dispute over matenal belonging to
third parties stored in the warehouse and plaintiffs apparent abandonment of the warehouse, Navy security
personnel forcibly entered and permitted other parties to remove their own property, but without denying
plaintiff access. The Circuit found the government’s entry to be permanent for purposes of the Loretto rule, and
thus a taking
“In Hendler , this court concluded that the distinction between “permanent” and “temporary”
takings refers to the nature of the intrusion, not its temporal duration” 6 F.3d at 1582.
60 g.. Shelden v U S. , 7 F.3d 1022 (Fed. Cir 1993). Plaintiffs were mortgagees of
property forfeited to the government under a criminal forfeiture statute. Plaintiffs continued to receive
mortgage payments, the loan secured by the mortgage was repaid in full, and plaintiffs were never actually
prevented from foreclosing on their property. Nevertheless the circuit found a taking because plaintiffs could
not have successfully foreclosed on the property had they sought to do so, due to the sovereign immunity of the
United States. Thus the court
concluded that plaintiffs had been reduced from secured to unsecured creditors, in the process suffering a
compensable “total taking” of their “right to foreclose.”
61 See Loveladies , 28 F 3d at 1179 (inexplicably suggesting that Lucas “removed from
regulatory takings the vagaries of the balancing analysis,”). Nothing in Lucas or Loretto supports the
suggestion that their rules apply to most, or even a significant number of cases. To the contrary, in both cases
the Court explicitly states that the respective rules of the two cases apply only in “extraordinary” circumstances.
Lucas , 505 U S. at 1017 (categorical rule applies in “extraordinary circumstances) Loretto , 458 U S. at 441 (“

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application of categorical rules to wetland cases. 6 ’ However, in other, generally more recent
decisions, the Federal Circuit has recognized circumstances where categorical rules could not
properly support a taking finding, even if their “technical” requirements are implicated 62
In some respects, it appears that the CFCIFC’s enthusiasm for following the letter of
categorical rules to support a taking finding, even where the equities might point in a different
direction, has been a logical outgrowth of the Supreme Court’s emerging enthusiasm for such
rules. However, it has not always been mirrored by a willingness to apply black-letter principles
of takings law to reject claims where the equities appear to favor plaintiffs. Instead, in several
cases where plaintiffs had apparently been treated harshly or singled out by the government, but
the technical requirements of a taking claim had arguably not been met, the court nevertheless
found a taking For example, in Whitney Benefits v U.S . the fact that plaintiffs retained
property of some value was evidently outweighed by evidence suggesting that the challenged
legislation was to some extent “aimed” at plaintiffs 63 Similarly, in United Nuclear Corp v .
US, plaintiffs who, having entered a lease with an Indian tribe, should have expected the
government to act to protect tribal interests, nevertheless were awarded compensation by the
Federal Circuit when the government changed the rules for approving mining under the lease to
Our holding today is very narrow.”)
62 See 767 Tlurd Avenue Associates v U.S , 48 F.3d 1575, 1583 (Fed Cir. 1995)(physical
posting of sign prohibiting entry onto premises of embassy not a physical taking). Abrahim-Youn v. U.s. , 139
F 3d 1462 (Fed. Cir. 1997)(rejecting physical taking allegation based on U.S. espousing plaintiff’s monetary
claim against Iran, even though this had effect of preventing plaintiff from receiving past interest on claim), see
j .. at 1468, Clevenger, J., concurring (“the familiar per se taking and regulatory taking categories are not rigid,
and .. certain ‘per Se” takings ... do not automatically result in compensation under the Fifth Amendment “).
63 926 F.2d at 1173 (citing legislative history indicating that SMCRA was altered “to ensure
against even the possibility that the Whitney property would escape” regulation)
United Nuclear , 912 F 2d 1432. The United States has a duty to act as a fiduciary to protect
the interests of Indian tribes See. Id at 143 8-43, Nies, C.J., dissenting This would arguably prevent a party
entering a lease with a tribe from having a vested interest in federal approval of a plan for mining under the
lease, particularly where the tribe objected to that plan. Nevertheless, the court found that a federal policy
giving a tribe the right to veto a mining plan, adopted after plaintiff had entered a lease with the tribe,
constituted a taking when the tribe effectively exercised that veto to prevent mining. Plaintiff had submitted a

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give the tribes greater control over mining activities Perhaps the most egregious example,
discussed in more detail elsewhere, is Yancey , where the court evidently viewed a taking finding
as the only way to provide relief to plaintiffs, who had demonstrably suffered harsh treatment at
the hands of the government, awarding compensation despite the fact that the property retained
some significant value after the purported taking 65
Finally, in Creppel v U S. . the Circuit used dubious logic to circumvent a compelling
statute of limitations defense for plaintiffs who had evidently suffered the requisite injury to
support a taking. In subsequent decisions, the CFC/FC has apparently limited Creppel to its
facts, however, possibly recognizing that allowing plaintiffs to evade the statute of limitations
might also make it easier for the government to invoke a ripeness defense to fend off a taking
claim 67
B. Economic Regulation
Two Federal Circuit rulings regarding economic regulation have reached the Supreme
mining plan that the Circuit believed complied with the rules in place at the time the lease was entered, and the
circuit rejected the tribe’s argument, apparently credited by the trial court, that it objected to the environmental
impacts of the planned mining “ [ tjhe record leaves no doubt that the real reason for the Tribe’s refusal to
approve United’s mining plan was an attempt to obtain substantial additional money from United.” Id. at 1437
65 Yancev v. U S , 915 F.2d 1534 (55% loss in value) At the risk of belaboring the obvious,
the Takings Clause makes no reference to limitations on government’s ability to treat property owners harshly,
but addresses only the uncompensated taking of private property for public use.
66 41 F.3d 627 (Fed Cir. 1994)(finding that, although origmal taking claim accrued well beyond
the linutations period, a subsequent court ruling which temporarily reopened the possibility of development, but
was later vacated, nevertheless reopened the limitations period, thereby enabling plaintiffs to maintain their
action).
67 Bayou des FamilIes Development Corp v U S , 130 F 3d 1034 (1997), affirming
unpublished decision by Merow, J. (statute of limitations); Cristina Investment Coru. v. U.s. , 40 Fed. Cl. 571
(1998), Merow, J (statute of limitations)(Plaintiffs attempted to overcome the six year statute of limitations
applicable to taking claims by arguing that their taking claim did not accrue so long as there was some
possibility that a levee might be constructed with an alignment that would allow development of their land The
court held that the limitations period commenced when plaintiffs’ taking claim became ripe, that is, when the
government made a final decision as to the application of the regulation to the property (i e when it denied the
permit). Exhaustion of all possible avenues for relief, such as efforts to overturn a regulatory decision or seek
to have a levee project reconfigured, is apparently not necessary to ripen a taking claim

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Court. In Sperry , the Circuit, purporting to apply Loretto physical takings doctrine to economic
regulation, held that 1.5% deducted by the Iran Claims Tribunal from a judgment remitted to
plaintif was “money which the government has permanently appropriated for its own use,” and
thus worked a taking. 68 As noted above, the Supreme Court unanimously reversed, finding,
instead, that the charge was a permissible “user fee.” 69 Subsequently, the Circuit declined to
consider a taking claim based on a change in banking regulations that dramatically increased the
financial burdens on a bank from its takeover of another failed bank Instead, the Circuit
accepted the conclusion of the trial court that the government’s takeover approval agreement
with the bank comprised a contract, and found a breach. 7 ° The Supreme Court affirmed. 7 ’
C. Natural Resource and Environmental
The Federal Circuit also has a large and diverse natural resource docket beyond the
wetlands area. However, at least to date, the Circuit’s takings decisions in this area appear to
have significance limited to their facts 72 Obviously, Preseault , even if largely limited to its facts,
is significant by any measure, as the Circuit’s only en banc takings decision, with potentially
broad significance for the entire Federal Rails to Trails program Nevertheless, it contains
limited practical guidance, due to the fact that there were three different opinions, and the
principal focus of the decision was the effect of Vermont state law on the taking claim
Sperry v. U.S , 853 F.2d at 907.
69 U S v. Sperry , 493 U.S. 52.
Winstar Corp. V. U.S , 64 F.3d 1531 (Fed. Cir. 1995).
U S v. Winstar Corp. , 116 S.Ct. 2432 (1996).
72 Compare: Whitney Benefits , 926 F.2d 1169 (taking from coal mining regulation) with M&J
Coal, 47 F 3d 1148 (no taking from coal mining regulation); Umted Nuclear , 912 F.2d 1432 (taking from
restriction on uranium mining) with Atlas Co v U S , 895 F.2d 745 (Fed Cir 1990) (no taking from
requirement to stabilize uranium mill tailings), Hendler v. U.S , 952 F.2d 1364 (physical taking from Superfund
waste cleanup activities) with Hendler v. U S. , 38 Fed. Cl 611(1997); 36 Fed CI 574 (1996)(on remand; no
compensation owed for Superfund cleanup activities)
Preseault , 100 F.3d 1525

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D. Recent Wetlands Decisions
A significant portion of this court system’s takings doctrine has developed from litigation
focused on a single federal program, § 404 of the Clean Water Act, which governs dredge and
fill activities in wetlands. Probably not coincidentally, § 404 has also been one of the two federal
programs most consistently serving as a lightning rod in the debate over property rights
legislation (along with the Endangered Species Act, which has generated political controversy
but virtually no takings litigation) Moreover, nearly all the most difficult legal and equitable
issues relating to takings doctrine are raised, often in conspicuous form, with this program
Consequently, it provides a useftil focus for analyzing how the Federal Circuit has addressed
certain significant issues discussed in Lucas
1. Public Health and SafetyfNuisance
The wetlands program raises, with particular force, questions regarding nuisance
doctrine, existing restrictions on property use, and reasonable expectations concerning property
use. With nuisance, the traditional rule is that no taking occurs where government acts to
protect public health and safety, or abate nuisance-like activity; there is no “right” to cause a
nuisance. 75 Lucas precludes a taking where “background principles of nuisance and property
law .. prohibit the [ proposed] uses ... in the circumstances in which the property is presently
found.” 76 In other cases, the purpose of the government action remains a relevant factor in
“balancing” analysis. Ironically, prior to Lucas , several Federal Circuit decisions had found
For a thorough analysis of potential takings issues arising under the ESA and a thoughtful
explanation of why that program has generated so few taking claims, , Meltz, R., “Where the Wild Things
Are: The Endangered Species Act and Private Property,” 24 Enviromnental Law 369 (1994).
Keystone Bituminous Coal Assoc v. DeBenedictis , 480 U.S. 470.
76 Lucas , 505 U.S at 1031.
Hendler v. U.S , 952 F.2d at 1367 (finding taking from government effort “to combat
groundwater pollution from a major hazardous waste site); 1375 (taking “without regard to whether the action
achieves an important public benefit), Whitney Benefits , 926 F.2d at 1176 (government action not msulated
from takings exposure by “nuisance exception.”), Yancev v U.S , 915 F.2d 1534 (Fed. Cir

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takings in the face of an explicit or implicit nuisance defense. 77 Conversely, in a significant
post-Lucas natural resource case in which the government raised a “classic” nuisance defense, the
court found no taking 78
Lucas itself illustrates one way wetlands regulation could be insulated from takings
liability by a nuisance rationale “On this analysis, the owner of a lake-bed [ one could readily
substitute “wetland” here], for example, would not be entitled to compensation when he is denied
the requisite permit to engage in a land filling operation that would have the effect of flooding
others’ land” Moreover, where wetlands regulation implements the navigational servitude,
there can be no takings liability ° Finally, fill activity that would seriously threaten a source of
public (or private) drinking water, whether or not it would cause flooding, would likely
constitute a “classic” nuisance that could be abated without compensation 81 Lucas type
defenses have had mixed success in defense of wetland taking cases
It seems to be important how the nuisance question is formulated. Lucas posed the issue
of whether the construction of an additional dwelling in a heavily developed residential area
could be characterized as a nuisance, and observed that residential dwellings are not generally
considered nuisances 82 However, in a typical wetland taking case, the relevant issue may be
the impact of the fill activity occurring during construction, or the direct or cumulative impacts
of additional fill activity in an area, irrespective of the general desirability of constructing
residential dwellings. Arguably, therefore, it is improper, in a wetland taking case, to dismiss a
199 l)(compensation to owners of turkey farm for damages resulting from quarantine of turkeys); United
Nuclear , 912 F.2d at 1437 (finding taking by rejecting trial court conclusion that reason for regulatory
restriction was concern for safety of drinlung water and dangers from proliferation of uranium mines).
M&J Coal , 47 F.3d 1148.
Lucas , 505 U.S. at 1029.
J.j at 1028-29. Marks v U S ,34 Fed Cl. 387 (1995), (relying on navigational servitude
to reject claim), affirmed without opinion, 116 F.3d 1496 (Fed Cir. 1997)(table) Moreover, the Supreme
Court has quite recently reaffirmed the principle that ‘where it applies, the navigational easement generally
obviates the obligation to pay compensation at all.” U.S v Winstar , 116 S Ct. 2432, 2457 n. 23
81 Lucas , 505 U.S. at 1030-31 (discussing factors relevant to nuisance determination).
82 See Lucas , 505 U.S. at 1031

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nuisance claim by generalizing that “the development of a residential lot does not constitute a
nuisance “ “ [ T]he question whether a particular thing is a nuisance is to be determined, not by
an abstract consideration of the building ... but by considering it in connection with the
circumstances and the locality ... A nuisance may be merely a right thing in the wrong place, like
a pig in the parlor instead of the barnyard.” 34
In one particularly troubling discussion, the government had argued that dredge and fill
activity could affect the safety of an aquifer that serves as the source of drinking water for a large
metropolitan area. In strikingly cavalier language, with no discussion of hydrological or other
evidence, and seemingly no recognition of potential cumulative impacts, the court dismissed this
claim with the following explanation. “ [ lIt is clear from this court’s aerial visit of the site that the
proposed use of plaintifFs property would not have created any significant increase in the risk of
contamination posed to the. aquifer. The extensive quarries in the area of plaintiff’s property
belie any claim that a nuisance is involved here The court completely failed to recognize the
possibility that “changed circumstances or new knowledge may make what was previously
permissible no longer 50.fl86
One potential source of difficulty with developing a nuisance defense to wetlands
regulation is the need to show with the precision and specificity required for nuisance law,
precisely what the consequences of a given instance of fill activity will be This, in turn, may be
related to the relative atrophy of nuisance doctrine since the advent of environmental regulation
Statutory restrictions on certain types of nuisance-like activities have obviated the need for
neighbors affected by such activities to maintain a nuisance action, and demonstrate that the
activity meets all the prerequisites for a nuisance, since the action at issue is statutorily prohibited
Bowles v U S , 31 Fed. Cl. 37, 52 (1994)
84 Village of Euclid. Ohio v. Ambler Realty Co , 272 U S 365, 388 (1926)
Florida Rock Indus v. U.s. , 21 Ct.Cl.161, 167 (1990)
86 Lucas . 505 US. at 1031.

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in any event Further, the common law of nuisance has not always recognized that the type of
harms caused by wetlands development rise to the level of an actionable nuisance
2. Expectations
It is at least arguable that the “nuisanc&’ discussion in Lucas has had its most pervasive
influence on the way courts analyze the more general question of how expectations limit rights in
property. Lucas recognized that a “property owner necessarily expects the uses of his property
to be restricted, from time to time, by various measures newly enacted by the State in the
legitimate exercise of its police powers,” so long as the restriction does not render the property
valueless. 8 Moreover, even with newly imposed development restrictions that do render
property valueless, a taking cannot occur if the restriction “inhere [ s] in the title itself, in the
restrictions the background principles of the State’s law of property and nuisance already place
upon land ownership “
The Federal Circuit has stated the general rule that a taking cannot occur unless owners”
demonstrate that they bought their property in reliance on a state of affairs that did not include
the challenged regulatory regime “ ° Other courts have adopted the same reasoning 9° This
follows from the more general premise that “no one has a property right to violate otherwise
valid laws controlling social conduct “92 Thus rules and understandings governing property can
be memorialized in regulatory programs, as well as inhering in the nature and definition of
See Johnson v Whitten , 384 A.2d 698 (Me 1978)(under Maine law, obstructing flow of
water not a nuisance, even if it leads to flooding on neighboring property)
Lucas , 505 U.S. at 1027.
Id at 1029
9 ° Loveladies Harbor. Inc v. U.s 28 F.3d 1171, 1177.
91 Hunziker v State , 519 N.W.2d 367, 370 (Iowa 1994) (no taking arises from enforcement of
statutory prohibition on the disturbance of Indian burial grounds, in place at the tune of acquisition) cert.
denied 115 S.Ct. 113 (1995)
Preseault v. U.S. , 100 F.3d 1525, 1539 (Fed Cir. 1996)(plurality of court, sitting en banc) .

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property or in nuisance law.
As noted above, reasonable expectations may extend beyond legal restrictions already in
place, to encompass the creation of a regulatory program, or, more often, the expansion of an
existing program. Moreover, “those who do business in [ a] regulated field cannot object if the
legislative scheme is buttressed by subsequent amendments to achieve the legislative end It is
unclear how forcefully this principle would extend to regulation that constitutes a dramatic,
essentially unforeseeable change in regulation
However, expectations regarding wetlands regulation may be particularly elusive because
of historic and fundamental changes in governmental policy Thus the Federal Circuit has
recalled a time “when wetlands were called swamps, when their draining or filling was deemed
progress, and when their main environmental impact was [ seen as] the production of noxious
disease-bearing mosquitos “ At such a time, as a practical matter, property owners could
scarcely have foreseen the establishment of a comprehensive regulatory program to protect
wetlands from fill activity. Moreover, even after 1972 amendments to the Clean Water Act
authorized the federal government to protect non-tidal wetlands, 97 the scope and extent of that
protection was unclear. Finally, it is not always immediately apparent whether or not a particular
parcel in fact constitutes a wetland. 98
Lucas , 505 U S. at 1027.
Concrete Pipe , 508 U.s. at 645; Branch v. U.S . 69 F.3d at 1579(same); See also Kunkes , 78
F.3d 1549 (no taking from change in rules governing what owner must do to retain property obtained from
government)
Branch v US. , 31 Fed. Cl 626, reversed 69 F.3d 1571
96 Florida Rock Industnes v U.S. , 791 F.2d 893, 902 (Fed. Cir. 1986).
SeeU S v Riverside Bayview Homes. Inc ,474 U.S 121 (1985). Prior to 1968, wetlands
were regulated under Rivers and Harbors Act, which was administered solely to protect navigability, in 1968,
regulatory criteria were expanded to consider the public interest, including pollution and ecology. In 1972,
Congress amended the Water Pollution Control Act to authorize regulation of non-tidal wetlands, with an
expanded scope for public interest review of permits to fill wetlands. Deltona v U S , 657 F.2d 1184, 1186-87
(1981).
98 See, g Norman v. U S , 38 Fed Cl 417, 421 (1997)(1988 delineation of wetlands on
property identified 28 acres of wetlands; delineation of same property in 1991 identified 230 acres).

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Thus it was undoubtedly helpful to plaintiffs that the property at issue in Formanek,
Loveladies and Florida Rock was acquired prior to the enactment of Clean Water Act § 404 in
its current form. Although the property in Bowles was acquired well after the establishment of
the current 404 program, the trial court made the specific, if somewhat implausible factual
finding that plaintiff acquired the property with an expectation of freedom from 404 development
restrictions? In all four cases, the courts found takings
Conversely, when it has been unmistakably clear that property is subject to wetland
regulation, and when the price for the has reflected that fact, courts have rejected taking
claims.’ 00 The equities are less clear when property is purchased after the establishment of a
regulatory program, but where the owner is partially or completely unaware of the impact of the
program (particularly where potential development restrictions are not fully reflected in the
market price of the property) In these circumstances, it may not be easy to identify “the rules
and understandings” that were in place when the property was acquired. The political values and
predilections of a judge or panel may prove particularly likely to determine the outcome of such a
case
Although expectations analysis is often used to defend against a taking claim, it has
sometimes formed an implicit basis for establishing a claim This is particularly true where
government action creates a reasonable expectation of a “right” to engage in an action or
property use that might ordinarily not be tolerated, and that certainly would not be compensable.
An obvious example is Pennsylvania Coal , where state law recognized a support estate as a
property interest giving its owner the right to cause subsidence of surface property, which would
ordinarily constitute a common law nuisance.’°’ The Court found that a law effectively
Bowles , 31 Fed. Cl. 37,44
‘°° Forest Properties. Inc v U.s. , 39 Fed. Cl.56 (1997), appeal pending(no money paid for
takebed property allegedly taken); Ciampitti v. U.S , 22 Cl Ct 156 (1990) (plaintiff paid nothing for wetland
portions of property).
See Restatement (2d) of Torts, § 820.

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abrogating that right violated the takings clause 102 Note also that in Lucas construction had
been permitted on 88 of 92 lots in an area, before the state implemented a development
restriction premised on the assumption that construction in that area was unsafe The owner of
two of the remaining undeveloped lots successfully asserted that a development prohibition
worked a taking under the circumstances
3. Good v. U.S.
Good v. U.S.,’° 3 highlights a number of key expectations issues. In April 1973, as part of
a $2 million transaction, plaintiff acquired a parcel containing 32 acres of wetlands and 8 acres of
uplands near Key West, Florida at an effective cost of some $90,000. The purchase contract
acknowledged that portions of the parcel were below the mean high water mark (which would
make them subject to the navigational servitude) and further stated that “as of today there are
certain problems in connection with the obtaining of State and Federal permission for dredging
and filling operations” on the property By 1984, plaintiff had obtained two Clean Water Act §
404 permits from the Corps of Engineers to proceed with development; federal permits remained
in effect for approximately seven years, although the property owners were unable to proceed
with development because of failure to obtain needed state and local regulatory approvals. By
May 1991, however, the federal permits were no longer valid, and new permits were denied, due
to the presence, on the property, of two species listed as endangered under the federal
Endangered Species Act
Plaintiff purchased the property before the enactment of the Endangered Species Act and
before the Clean Water Act was implemented to protect non-tidal wetlands Nevertheless, the
102 Pennsylvania Coal , 260 U S 393. Keystone Bituminous Coal Ass’n v. DeBenedictis ,
480 U.S. 470 (finding no taking from similar restriction, but with the Court divided very closely despite the
evident harm from the prohibited action).
103 39 Fed. Cl 81

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court noted that, at the time of the initial purchase, federal legislation did address species
preservation, and land in ecologically sensitive areas was subject to regulation Further, persons
acquiring such land could reasonably have expected that the regulation might be expanded;
indeed, the language in the 1973 purchase contract acknowledging regulatory restrictions on the
property suggests that plaintiff should have had such an expectation. Moreover, plaintiff
expended considerable sums on attempts to develop the property after 1980, by which time the
regulatory climate had become more rigorous, with the enactment of the ESA, the expansion of
the scope of the § 404 program, and increased state regulation. The court granted the
government summary judgment dismissing the taking claim This case is currently on appeal to
the Federal Circuit and a key issue is likely to be whether the demonstrable (and expressly
acknowledged) existence of some regulation makes the likelihood of future, related regulation
foreseeable, i.e. whether, in 1973, development in environmentally sensitive areas constituted
doing business in a heavily regulated enterprise,” which would undercut the force of a taking
claim
Further complicating the case are the investments plaintiffs made in the property after the
regulatory changes At the time of the additional investments, plaintiff entered a formal
agreement reciting that the property was worth $300,000 even subject to regulatory restrictions.
This raises the question whether to attribute the ultimate loss in value suffered by the property
owner to government regulation, or to the owner’s decision not to take an opportunity to realize
a substantial gain on the property when it was apparently available but instead to seek even
greater returns by holding onto the property with knowledge that the regulatory climate was
becoming increasingly uncertain. Yet another issue is whether, having obtained two federal
permits for development of the property, reflecting the absence, for some seven years, of any
federal restrictions on the desired use of the property, plaintiff has suffered a federal interference
with property ownership and expectations of constitutional magnitude when federal limitations
are finally imposed ‘°

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D. Expectations as to Use and Ownership: Preseault v. U.S .
Two related facets of expectations analysis are currently in some confusion within the
CFCfFederal Circuit. The first is the extent to which federal law, particularly statutory law, in
place at the time of property acquisition, constitutes a “background principle” subject to which
the property is acquired. The second, closely related, is how and when to analyze expectations.
An early, accurate formulation of the proper rule is in M& J Coal , which speaks of a two-tiered
approach to takings analysis
First, a court should inquire into the nature of the land owner’s estate to determine
whether the use interest proscribed by the government action was part of the owner’s title
to begin with . Second, if the claimant can establish the existence of such an interest, the
court must ... consider such factors as ... the extent to which the action has interfered
with the claimant’s distinct investment-backed expectations ‘°
The Federal Circuit initially accepted this as an appropriate framework for addressing
government regulation as to of property, such as wetland regulation However, the Circuit
declined to follow this approach with regulatory action with the effect of transferring (or
preventing the transfer of) actual title to the ownership of property, presumably because such a
transfer of title more closely resembles a direct appropriation than a regulatory action While a
property owner’s reasonable expectations include periodic use restrictions ,106 it is arguable that
a property owner does expect that the government will periodically use its police powers to
redefine, limit, or otherwise alter title and ownership in property. The Supreme Court implicitly
recognized this distinction when it stated that “a unilateral claim of entitlement by the
government [ to an easement of access] can [ not] alter” the rights in the property of the owner at
104 hi.. This case also raises an interestmg question as to the governmental body to which any
taking should be attributed. During the time the federal permits were in place, state and local regulation
apparently prevented development; plaintiff filed a taking claim against the state and eventually settled that
claim. These circumstances would appear to suggest that a taking award against the United States may be
inappropriate
‘° 47 F.3d at 1153-54.
106 Lucas , 505 U.S at 1027.

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the time of the assertion of the claim or subsequent owners 107
This distinction between restricting use and altering title has created some conilision in
the Federal Circuit, based on the facts and arguments presented in Preseault v U S ‘° In 1899,
a railroad had acquired rights of way across land that now belongs to plaintiffs, with the
condition that title would revert to the owners of the underlying fee if the rights of way were
abandoned. Since 1920, federal law addressed right of way abandonment. Without following
federal requirements, the railroad ceased to operate on the rights of way in 1970 and removed its
tracks in 1975. Subsequently, the state, which had previously acquired the rights of way from
the railroad, converted them to public trails under the federal Rails to Trails Act The property
owners argued that the rights of way had been abandoned, and thus title should have reverted,
and claimed a taking.
The trial court dismissed the claim, ruling that when plaintiffs acquired their property they
had no compensable expectation that the rights of way would revert to them under the
circumstances.’° 9 In a divided en banc ruling, the Federal Circuit rejected this reasoning A
plurality explicitly noted that “title and ownership expectations must be distinguished from the
question that arises when the Government restrains an owner’s of property, through zoning
or other land use controls, without disturbing the owner’s possession.” ° In short, government
regulation in place at the time property is acquired can limit what an owner can reasonably
anticipate doing with property; it generally cannot--outside of the enforcement context-- be used
to divest an owner of title without compensation -
In fact, this appears to reflect a seminal distinction in takings jurisprudence When the
107 Nollan v. California Coastal Commission . 483 U.S. at 833 n 2.
100 F.3d 1525 (Fed Cu. 1996).
‘° Preseault v. U.S. , 27 Fed. Cl. 69 (1992)
1 j4.. at 1540 (emphasis m original) j. Kunkes v U S , 78 F.3d 1549, 1554 (Fed Cir.
1996), Plager, J (“Even the Government’s physical occupation of property as an incident to enforcement of the
law does not ordinarily convert a regulatory taking into one of physical occupation.”)

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government regulates property use, but there is no actual or practical transfer of title to a
recognized, marketable property interest, outside of the “extraordinary” factual circumstance in
Lucas , the Supreme Court has never found it appropriate to award compensation for a taking.
Conversely, when the Court has confronted a legal or practical transfer of title to a recognized
interest in property, resulting in a formal change of ownership, it has frequently found a taking;
indeed, since Pennsylvania Coal , with the exception of Lucas every Supreme Court taking
finding can arguably be characterized as involving a forced transfer of title or ownership “
Since Preseault , however, rather than continuing to emphasize the qualitative difference
between expectations regarding ownership and use, and following separate analytical rules for
the two approaches, the CFCIFC appears to have moved toward applying the same rule in both
circumstances In the process, based on its analysis of a physical taking claim, the co urt has
suggested generally that Lucas “background principles” are defined very narrowly, and are
confined principally to state nuisance principles 112 Thus the court has stated that federal laws in
Babbittv Youpee , 117 S.Ct 727 (1997), Hodel v. Irving , 481 U.s 704 (1987)(t itle to share
of land), Dolan v. City of Tigard , 512 U.S. 374 (1994) ( possible taking from transfer of easement), Nollan v
California Coastal Comm’n , 483 U S. 825 (1987)(taking from transfer of easement), Ruckeishaus v Monsanto
Co., 467 U 5. 986 (1984)(disclosure (1 e. transfer) of trade secrets); Loretto v Teleprompter Manhattan CATV
Corp. , 458 U.s. 419 (1982)(easement); Webb’s Fabulous Pharmacies. Inc v. Beckwith , 449 U.S. 155
(1980)(interest appropriated by government), Kaiser Aetna v. U S. . 444 U S 164 (1979)(easement), Gnggs v.
Allegheny County , 369 U.S. 84 (1962)(air easement); Armstrong v. U.S ,364 U.S (1960)(transfer of title to
boat); U.S v. Peewee Coal Co. , 341 U.S. 114 (1951 (physical seizure of mines); U.S v. Dickinson , 331 U.S.
745 (1947)(flooding); U S. v Causby , 328 U.S. 256 (1946)(air easement); Chippewa Indians v. U.S. , 305 U.S.
479 (1939) (conversion of tribal trust land to national forest); Shoshone Tribe v U S , 299 U.S. 476
(1937)(physical occupation); Louisville Joint Stock Land Bank v. Radford , 295 U.S. 555 (1935(transfer of
security interest from bank to mortgagor); U.S. v. Creek Nation , 295 U.S. 103 (1935)(appropriation of land);
International Paper Co. V. U S. , 282 U S. 399 (1931)(water right), Pennsylvania Coal Co v. Mahon , 260 U.S.
393 (1922)(appropriation of “support estate”). See also Eastern Enterprises v. Apfel , No. 97-42 (June 25,
1998)(takings, due process violation from forced transfer of funds), Phillips v. Washington Legal Foundation ,
118 S.Ct. 1925 (1998) (possible taking from transfer of rights to interest earned by plaintiffs’ money); Railroad
Retirement Board v. Alton Railroad Co , 295 U.S. 330 (1935)(forced payment of funds violates due process).
But see Nectow v. City of Cambridge , 277 U S 183 (192 8)(due process violation invalidates zoning
regulation, no consideration of compensation).
112 Sec e g. Preseault v U.S , 100 F 3d at 1538, Plager, J., concurring (“The background
principles referred to by the Court in Lucas were state-defined nuisance rules”)

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place at the time property is acquired cannot limit an owner’s expectations concerning the
property if the owner advances a “categorical” taking claim. 113
Treating expectations as relevant only in a balancing analysis, and completely irrelevant
to a categorical claim, seems to be at tension with Ruckeishaus v Monsanto . under which federal
law established a sufficient lack of expectations to defeat a taking,” 4 without reference to other
balancing factors, including economic impact. Indeed, confining “background principles” to
state law seems an unduly narrow reading of Lucas itself.” 5 More generally, there is no
principled reason why it is proper to give great weight to an owner’s expectations concerning use
restrictions with most types of economic impact, but to ignore those expectations entirely when
the owner claims complete elimination of value Indeed, it is arguable that expectations which
are essentially qualitative, cannot be meaningfully analyzed without addressing economic impact
It would appear that frustration of expectations measures qualitatively the same thing “economic
impact” measures quantitatively, namely the gravity of the owner’s burden from the regulation.
In practice, the CFC/FC rule could prove unworkable in a wetlands or related context,
where speculators acquire property at a substantial discount reflecting a full understanding that a
federal regulation could or would render it worthless. Such an owner could than claim a
categorical taking if the regulation had the anticipated effect, which would prevent the court
from considering the owner’s expectations at all 116 It is unlikely the CFC/Federal Circuit would
actually permit such a claim to succeed; if unable to use an expectations rationale to reject such a
claim, a court would likely deny the claim or limit compensation on the basis of the limited
“ Forest Properties. Inc v U.S , 39 Fed. Cl. at 71 (citing Preseault as demonstrating that
background principles cannot include federal law).
“ Ruckeishaus v. Monsanto , 467 U.S. at 1006.
‘ 505 U.S. at 1028-29 (federal law can be the basis of “a pre-existing limitation upon the
landowner’s title); 1030 (“the Takings Clause does not require compensation when an owner is barred from
putting land to a use that is proscribed by” rules or understandings in place at the time property is acquired)
116 Except for the “total taking” claim, this was essentially the fact pattern underlying the claim in
Ciampitti v U S , 22 Cl. Ct. 310 (1991), which the court rejected.

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economic impact of the restriction
2. Relevant Parcel
The traditional approach in takings jurisprudence is to focus on the impact of regulation
on the affected parcel ‘as a whole “v Thus open space and setback requirements are not
treated as takings.” 8 Footnote 7 in Lucas seems to raise the question whether to consider impact
to part of property or to the entire property, but in subsequent decisions, the Court has reiterated
that it is proper to focus on “whether the property taken is all, or only a portion of the parcel in
question “s Possibly the Court has retreated from this issue in recognition of the risk that a new
rule could have profoundly destabilizing impacts on American land use regulation. Zoning and
set-back and open space requirements are integral to our system of regulation and exemplify the
type of generally applicable restriction on use that confers “an average reciprocity of
advantage “120 That is, while such restrictions limit what can be done with each individual
property, they also provide all property owners with a measure of certainty about what can and
cannot be done with neighboring properties, creating an order and stability that ultimately
benefits all property owners in a community
The relevant parcel analysis is particularly important in a wetland taking case, since § 404
of the Clean Water Act can limit uses of wetland property, but has no direct regulatory effect on,
or application to, upland property. In many cases, wetlands are interspersed with uplands; in
addition, even with wetland property it may be possible to obtain a permit for some areas but not
others Thus potential wetland taking plaintiffs generally own some property whose use is
“ Penn Central , 438 U.S. at 130-31.
itS See. e.g. Keystone . 480 U S. at 498 (“Many zoning ordinances place linuts on the property
owner’s right to make profitable use of some segments of his property “).
“ Concrete Pipe , 508 U.S at 644. See, also Dolan 114 S Ct. at 2316 n. 6 (analyzing impact on
entire parcel, not regulated portion); Suituin , 117 S Ct at 1672), Scalia J , concuning, (focus at least on all
contiguous property subject to regulation)
120 See Keystone Bituminous , 480 U.S. at 488, 491

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restricted by wetlands regulation, and some which is not If the “relevant” parcel is Q jy the
portion subject to regulation, in many if not most instances, wetland regulation will constitute a
taking of the regulated portion 121
Potentially, the relevant parcel is an issue of almost infinite complexity, since properties
can be configured and divided in so many combinations A single owner may sell off different
portions of a large parcel at different times, such that a once-contiguous unit is divided into
several units, none of them physically contiguous to each other. Similarly, the zoning may vary,
or a former single owner may retain a share of the ownership of a property with new partners.’ 22
Loveladies Harbor focused only on the regulated portion of the owner’s development
project; Tabb Lakes considered other contiguous holdings as well The Federal Circuit
reconciled these two approaches by deciding that the “relevant parcel” issue is purely factual.’
At the same time, while expressing concerns about manipulation of the relevant parcel by ‘
strategic behavior,” the court noted that it could be proper to ignore property sold or developed
before the establishment of the regulatory regime (generally the earliest time when property
owners would have enough information to engage in strategic behavior) 124
In a later decision, the CFC allowed the exclusion of property sold gft the establishment
of the regulatory regime, in the absence of evidence the sale was made “in anticipation of a
121 See Tabb Lakes. Ltd v. U S . 10 F 3d at 802 (“Clearly the quantum of land to be considered is
not the ... area of wetlands. If that were true, the [ 404 program] . . would, ipso facto, constitute a taking in
every case.”).
122 See, e.g K&K Construction. Inc. v. DNR , 1998 WL 130936 (Mich. S.Ct. Mar 24, 1998)
(finding that the relevant parcel included all the property included in a development proposal, regardless of how
it was zoned).
123 Loveladies , 28 F.3d at 1180-81. Incongruously, the trial court had actually treated the parcel
issue as being purely legal. Loveladies Harbor. Inc v. U S. , 15 Cl.Ct.381, 393 (1988)(’physically
non-adjacent or non-contiguous property cannot be considered as part of the smgle parcel as a whole just
because it was formerly owned by plaintiff at one time. Am Savings and Loan Assoc v. County of Mann , 653
F.2d 364,369 (9th Cir. 1981).”). Thus, in affirming that ruling due to the absence of clear error, the Federal
Circuit applied an incorrect standard of review
124 Loveladies , 28 F.3d at 1181.
125 Broadwater Farms Joint Venture v. U S ,35 Fed. Cl 232, 240 (1996), vacated on other
grounds in an unpublished opinion, 121 F.3d 727 (Fed. Cir. 1997)(table)

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takings claim “125 This permitted a plaintiff who purchased 51 lots in a single transaction in 1988
for $592,000 to ignore the 1989 sale of 24 of the lots for $900,000 in a taking action concerning
the remaining 27 lots.’ 26
The courts have generally evaded defining the limits of the “relevant parcel,” being
content to focus on identifying the smallest parcel whose consideration will allow resolution of a
particular case 127 Recently, the CFC essentially followed the traditional approach in Good v
uS’ 28 when plaintiff alleged a taking of a 40 acre parcel as part of a much larger transaction
The court did not consider whether the proper measure for a taking claim would be the return
realized on the entire transaction Nevertheless, regardless of contiguity, which is manipulable,
evidence on the subject of total return on total investment would seem critical to a just
determination as to frustration of “reasonable, investment-backed expectations” Plaintiff could,
at least in theory, have realized a sufficiently generous return on the bulk of the transaction that
any claim of a taking based on a limited return from the 40 acres at issue in this case would be
moot. This implicit issue was also present in Loveladies Harbor,’ 29 where plaintiff alleged a
taking based on restrictions on the development of approximately 50 acres as “the final stage of
an ongoing real estate development project “130 To arrive at a result consistent with fairness and
justice, the court should have considered the economic return from the entire project
125 Broadwater Farms Joint Venture v U S , 35 Fed Cl. 232, 240 (1996), vacated on other
grounds m an unpublished opinion, 121 F.3d 727 (Fed Cir. 1997)(table).
126 Broadwater Farms , 35 Fed Cl. at 241
127 See g Tabb Lakes , 10 F 3d 796, 802 (Fed. Cir. 1993)(declining to specify whether entire
development project should be considered, when consideration of portion of development allows for rejection of
taking claim) Deltona Corp. v. U.S,657 F.2d 1184 (Ct. Cl 1981). But see Jentgenv Us , 657 F 2d 1210
(Ct. Cl. 198 1)(imphcitly focusing on entire property)
39 Fed. Cl 81 (1 997)(appeal pending)
129 28 F.3d 1171 Plaintiffs purchased 250 acres for $300,000 in 1959. By 1972, they had
successfully developed 199 acres, of which they had sold some 192, while retaining title to 6 4 acres. The coust
refused to consider evidence concerning the 192 acres because plaintiff no longer owned it, and decimed to
consider the 64 acres, (worth some $2 4 million) because it was no longer contiguous to the remaining
property.
‘3° 28F.3d 1171, 1173.

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Another recent decision, involving a different factual background, focused more
expansively on the entire development project. In Forest Properties Inc v plaintiff
acquired property contiguous to a lake, along with an option to acquire 9 4 acres of adjacent
lakebottom. The court ruled that the uplands and lakebottom parcels should be treated as a
single unit, relying in part on their contiguity and noting that “from the time of the purchase of
the upland property, FPI’s economic intentions were to utilize the lakebottom acreage and the
upland parcel in conjunction with each other. . as one ... unit.”’ 32 Since FF1 would likely make a
considerable profit on the project, even without the lakebottom property, the court concluded
that there was no categorical taking of the relevant parcel Similarly, in Ciampitti v U.S.,’ 33 an
active developer acquired several properties, some of which included wetlands. Because of the
previous owner’s desire to sell all his holdings, plaintiff was required to purchase all the parcels
The court found that plaintiff had been aware that § 404 restricted wetlands development, and
that, in effect, he had paid virtually nothing for the wetlands The court rejected his claim that it
was proper to consider the wetland parcels in isolation from the remaining parcels and found no
taking
Bowles v. U S , somewhat puzzlingly, does not address what appears to be a potentially
significant parcel as a whole question Plaintiff obtained ten undeveloped lots in a subdivision
with streets separated by canals He alleged a taking from the 1984 denial of a permit to build a
home on one of those lots The court found a taking of that one lot, but without explaining what
happened to the other lots or otherwise addressing the “parcel as a whole” question ‘ ‘
3. Diminution in value needed to support taking; the “salvage rule.”
‘ 39 Fed Cl. 56.
132 39 Fed. Cl. at 74. jj (“a court should focus on how the economic expectations of the
claimant, with respect to the parcel at issue, have shaped the owner’s actual and projected uses of the
property.”).
22 Cl.Ct. 310.
31 Fed Cl 37.

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Courts have historically been reluctant to focus exclusively on diminution in value, since
“ [ g]overnment could hardly go on if to some extent values incident to property could not be
diminished without paying for every such change in the general law The clearest articulation
of the circumscribed role of economic impact is in the often repeated formulation, recently
re-endorsed by a unanimous Court, that “mere diminution in the value of property, however
serious, is insufficient to demonstrate a taking,” citing cases finding no taking from diminutions
in value of 75 and 92.5% ‘36 Conversely, of course, Lucas provides that denial of all use of land
4 work a taking However, even in Lucas the Court recognized that “in at least some cases a
landowner with 95% loss,.., whose deprivation is one step short of complete is not entitled to..
claim ... [ a] categorical” taking Such an owner’s claim is analyzed under conventional balancing
analysis, where “ [ t]he economic impact of the regulation on the claimant and the extent to which
the regulation has interfered with distinct, investment-backed expectations’ are keenly
relevant.” 37
Courts have pointed out the potential difficulty of distinguishing a compensable taking
from a “mere diminution” in value “ [ T]here simply is no bright line dividing compensable from
non-compensable exercises of the Government’s power when a regulatory imposition causes a
partial loss to the property owner.” 38 Indeed, courts have found takings where land has some
remaining value In wetland cases, courts seem to have evolved a de facto takings threshold
‘“ Pennsylvania Coal v. Mahon , 260 U.s at 413.
136 Concrete Pii,e , 508 U.S. at 645.
‘“ Lucas , 505 U S 1019 n 8 (emphasis in original)
138 Florida Rock Industries v. U S 18 F.3d at 1570.
Whitney Benefits 926 F.2d 1169 (Fed. Cir. 1991 )(enactment of SMCRA works taking of all
value of “coal rights,” regardless of whether surface estate retains value) Yancey v U S. , 915 F 2d 1534 (Fed
Cir. 1990)(quarantine of breeder turkeys leads to loss of 75% of pre-taking value of turkeys; personal, not real
property).
‘ ° Loveladies Harbor. Inc . v U S , 28 F 3d 1171 (property purchased in 1959 for $1200 per
acre worth $1000 per acre in 1982, which court concludes is roughly 1% of current development value, for a
loss of 99%); Florida Rock , 21 Cl Ct 161 (1990), vacated 18 F 3d 1560 (95% loss in value); Bowles v U S ,
31 Fed. Cl. 37 (92%; alternate holding); Formanek v. US , 26 Cl.Ct. 332 (1991)(88%).

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of roughly a 90% loss in value 140
In the controversial Florida Rock’ 4 ’ decision, the Federal Circuit speculated at length that
a reduction in value of 60% or less might support a compensable “partial taking “142 Inexplicably,
despite the clear language of Concrete Pipe (equally inexplicably never cited),’ 43 the court
indicates that there is “little direct case law guidance” on this issue “ ‘ At one point in its
metaphysical musings, the court seems to suggest that any regulation that causes a loss in value
can constitute a partial taking unless there is a clearly demonstrable reciprocity of advantage
from the regulation.’ 45 At another point, the Court seems to recognize, consistent with Lucas ,
that where there is less than a total loss, it is necessary to do traditional balancing analysis, rather
than categorical analysis.
The Florida Rock analysis relies’ 47 on the finding of a taking in Yancey v. U S ‘ That
case, however, appears to have turned more on the bizarre facts, which created compelling
equities for the plaintiffs, than on any jurisprudential principle likely to be applicable in a
significant number of cases Plaintiffs owned a flock of breeding turkeys that, although healthy,
were within the area of a federal quarantine of contaminated turkeys Plaintiffs were thus
prohibited from selling their turkey eggs, and eventually forced to sell their breeder turkeys for
slaughter, for roughly 25% of their value as breeders Because the turkeys were
‘ ° Loveladies Harbor. Inc.. v U S , 28 F.3d 1171 (property purchased in 1959 for $1200 per
acre worth $1000 per acre in 1982, which court concludes is roughly 1% of current development value, for a
loss of 99%); Florida Rock , 21 Cl Ct 161 (1990), vacated 18 F.3d 1560 (95% loss in value), Bowles v. U S ,
31 Fed. Cl 37(92%; alternate holding), Formanek v. U.S ,26 Cl Ct 332 (1991)(88%).
18 F.3d at 1567.
142 j . at 1560.
143 The absence of citation to a major, recent, directly relevant Supreme Court decision is
particularly anomalous given the abundance of citations in the decision g, 18 F.3d at 1564 n. 7, 1566 n.
13, 1568 n. 20, 1569 n. 23.
Id.at 1570.
Id at 1570-71.
146 Id..at 1571
i at 1570 n. 26, 1572 n. 31.
‘ 915 F.2d 1534 (Fed. Cir. 1990)

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uncontaminated, the Yanceys were ineligible for federal payments to owners of contaminated
turkeys within the quarantine area. Under those circumstances, more probably to extricate
plaintiffs from a “Catch-22” situation than as a result of any principle of takings law, the Federal
Circuit affirmed a trial court finding of a taking
In any event, no court appears to have accepted Florida Rock’s invitation to find a taking
from a moderate loss in value Instead, courts have adopted the new term “compensable partial
taking” while continuing to analyze claims involving reduction in, but not elimination of, value,
using traditional balancing analysis.’ 49 This is, of course, precisely the approach the Supreme
Court has identified as appropriate ‘ °
It appears that courts do follow some implicit standards in deciding whether the
economic impact of a partial loss in value is sufficient to establish a taking Arguably, to
establish a taking, an owner has been required to show that government regulation seriously
interferes with property use, causing a very significant drop in value (the 90% threshold) In
addition, typically there has also been a qualitative change in use from what the owner should
reasonably have expected, leaving remaining value that can be realized only by converting the
property from its intended use to something different and inherently less desirable, substantially
frustrating the owner’s investment-backed expectations and, in effect, allowing the owner to
realize only the property’s “salvage value.”
The regulations found to work takings in several cases would have triggered a salvage
rule. For example, the trial courts found that land that was intended for development in a
competitive marketplace in Loveladies and Formanek , could be used only as a conservation area
or nature preserve, and therefore that the only likely purchasers would be those interested in
perpetuating the use; the fact that regulation would already be in place limiting the use in this
See. e g Forest Properties , 39 Fed. Cl. at 75.
‘ ° Lucas , 505 U.S. at 1016 n. 7.

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way, the courts found, somewhat implausibly,’ 5 ’ would preclude a competitive market.’ 52
Similarly, in Whitney Benefits , plaintiffs’ coal could not be mined because of a regulatory
restriction, the mine owner also acquired surface property but only in order to facilitate mining,
not to use the surface property directly In that context the court concluded, perhaps
inappropriately, that the surface value was merely incidental to the intended use and thus
irrelevant to the taking claim. ‘ 53 1n Yancey , where plaintiffs acquired the turkey flock to raise
breeding turkeys and sell turkey eggs, being forced to slaughter the breeding flock and sell the
turkey meat would arguably qualiFy as being forced to sell the property for salvage The
reasoning of the courts in some of these decisions may be subject to criticism, but the decisions
In both cases, the courts assumed that potential buyers would assume the immutability of the
current regulatory regime. However, this seems unrealistic, since property owners seriously interested in
preserving nearby open space and wetlands might conclude that government wetlands policy is variable and that
the best way to ensure the preservation of the current uses would be through formal acquisition of a property
interest such as a conservation easement, or even fee title to the property
152 Loveladies , 21 Ct.Cl. at 159 (highest and best use would be conservation and recreation, with
value of $1000 per acre); Formanek , 26 Ct CI. at 340 (no competIti re market for property, so its value for
conservation use would be “perhaps $1000 per acre “) Note, however, that the appellate court rejected an
analogous finding in Florida Rock , 18 F.3d at 1567, ruling that speculative investors would also be interested in
the property for a different use than plaintiffs originally intended for the property, but a traditionally-recognized
use, holding for appreciation and commercial development, which likely would not constitute reduction to
salvage.
Whitney , 926 F 2d at 1172. (‘The QIth property here involved is the right to surface mine a
particular deposit of coal.”) The court’s narrow focus on mining rights seems at some tension with its earlier
repudiation of the value of a property for a particular use in Florida Rock Industries, Inc v U.s. , 791 F.2d 893,
902-03 (Fed Cir 1986)(proper focus is on fair market value, not immediate suitability for a particular use).
Courts have sometimes focused on specific interests in property. Nollan, Dolan (right to exclude); Babbitt v.
Youpee , 117 S Ct 727 (1997), Hodel v Irving , 481 U.S. 704 (1987) (right to devise). But see Andrus v.
Allard , 444 U.s 51 (1979)(no taking from loss of nght to sell), Claion Production Co v. Petera , 70 F.3d 1566
(10th Cir. 1995) (refusmg to consider “right to hunt” on property as separate from fee title). It is certainly
arguable that where property is really only suited to one use, loss of that use may work a taking. It does not
follow, however, as a general matter, that each use of the property which has separable value constitutes a
separate right in the property Lucas , 505 U.S. at 1065-66 (Stevens, J. dissenting) (“developers and
investors may market specialized estates to take advantage of the [ Lucas “total taking”] rule... Thus, an investor
may, for example, purchase the right to build a multifamily home on a specific lot, with the result that a zoning
regulation that allows only single-family homes would render the investor’s property interest ‘valueless.”)
154 Yancev v U S. , 915 F.2d 1534. As noted above, given the facts of the case, the court may
have been more interested in doing equity than in strict adherence to black letter takings, under which there was
likely an insufficient loss to establish a taking.

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all share in common a dramatic loss in the actual value of the property at issue, and a forced
conversion from the intended use of the property to an unanticipated, less desirable use, often
without a relevant competitive marketplace to establish a value for that use. It is unclear how
useful this standard will be in predicting the outcomes of future taking cases.
CONCLUSION
The takings jurisprudence of the CFC/FC seems to be gravitating to varying degrees,
toward the adoption of certain general principles, only some of which the courts have
successfully articulated and begun to systematize. One unarticulated principle, from which the
court seems to be retreating, is that formal application of categorical principles can support a
taking in the face of compelling equities to the contrary, but that a taking claim with compelling
equities cannot be rejected because of “black letter” principles of takings law
A second principle, whose logic seems compelling, is that the relevant parcel in a takings
analysis should be defined in light of the facts of each case. Typically, this would mean looking
at the expectations with which the owner had acquired the property However, the court has not
yet embraced a logical corollary of this principle, that a parcel treated as a single development
project, even one to be developed over time, should also be treated as a single unit in a takings
assessment
A third principle, that there is a qualitative difference between expectations regarding
regulation of uses that can be made of a property and regulation that alters ownership of, or title
to property, has been recognized, but not fully developed Thus, for the moment, the court
follows the rather incongruous rule that expectations can be used in ad hoc balancing analysis,
but cannot be invoked when plaintiff advances a categorical taking claim, even one based on a
use restriction.
A fourth, nascent principle is that the standard for determining when economic impact is
sufficient to support a taking is both qualitative and quantitative. That is, to establish a taking,
an owner must demonstrate both a dramatic quantitative loss in value and a qualitative change in

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use, which seriously diverges from what the owner might reasonably have expected and which
produces only a narrow, specialized, essentially non-competitive market for the property (I e
reduces it to “salvage value “).
The takings jurisprudence of the CFCIFC is still developing That court system’s ultimate
success in reaching results that are principled, equitable, consistent with precedent, and
ultimately coalesce into a coherent body ofjurisprudence may depend heavily on the extent to
which it appropriately recognizes, addresses, and develops these principles or the issues they
raise.

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4/99DEVELOPMENTS IN TAKINGS LAW
I. General Principles
The Fifth Amendment prohibits taking private property for public
use without just compensation. This “bar [ s] Government from
forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole.”
Armstrong v. U.S. , 364 U.S. 40, 49 (1960).
This had been applied only to physical invasions or
appropriations until 1922, when the Court first recognized that
regulation would work a taking if it went “too far.” Pennsylvania
Coal Co. v. Mahon , 260 U.S. 393 (1922). Analyzing a regulatory
taking claim ordinarily requires balancing relevant factors
including the nature and economic impact of the government
action, and its effect on the owner’s reasonable,
investment-backed expectations. Penn Central Trans . Co. v. New
York City , 438 U.S. 104 (1978)
Land use regulation does not work a taking if it substantially
advances a legitimate state interest and does not deny an owner
economically viable use of land. Agins v. Tiburon , 447 U.S. 255,
260 (1980). Regulation that causes “permanent physical
occupation” of property is generally treated as a “per-se”
taking. Loretto v. Teleprompter Manhattan CATV Corp. , 458 U.S.
419 (1982)
A taking claim is not ripe for adjudication until there has been
a “final decision” as to the quality and extent of development
permitted on the property. Williamson County Regional Planning
Comm’n v. Hamilton Bank of Johnson City , 473 U.S. 182, 186
(1985)
II. Takings Law in Flux: 1987-92
A. 1987 Supreme Court Decisions
Courts showed great deference to government actions challenged as
regulatory takings, found few takings until 1987, when the
Supreme Court issued significant decisions favoring taking
plaintiffs:
Nollan v. California Coastal Commission , 483 U.S. 825 (1987)
(taking where government action does not substantially advance
legitimate state interest).
First English Evangelical Lutheran Church v. County of Los
Angeles , 482 U.S. 304 (1987) (temporary regulation can work a
taking; action that works a taking is not invalid, if
compensation is available).
B. Increase in Federal Court Taking Judgments

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Federal courts found takings more frequently after 1987, e.g.
ruling for plaintiffs in nearly half of reported decisions in
1990, finding takings from some forms of environmental
regulation:
Hendler v. U.s. , 952 F.2d 1364 (Fed. Cir. 1991) (physical taking
from monitoring wells installed as part of Superfund cleanup);
Whitney Benefits. Inc. v. U.S. , 926 F.2d 1169 (Fed. Cir. 1991)
(enactment of SMCRA); United Nuclear Corp. v. U.S. , 912 F.2d 1432
(Fed. Cir. 1990) (restriction on uranium mining), see also Yancey
v. U.S. , 915 F.2d 1534 (Fed Cir.1990) (turkey quarantine).
Formanek v. U.S. , 26 Cl.Ct. 332 (1992); Loveladies Harbor, Inc.,
v. U.S. , 21 Cl.Ct. 153 (1990), aff’d 28 F.3d 1171 (Fed. Cir.
1994); Florida Rock Indus v. U.S. , 21 C1.Ct. 161 (1990), vacated
18 F.3d 1560 (Fed. Cir. 1994) (all three wetlands regulation under
Clean Water Act § 404).
III. Lucas v. South Carolina Coastal Council , 505 U.S. 1003
(1992)
Regulation that makes land valueless works a “categorical”
taking; no taking where regulated use constitutes a nuisance
under state law: owner’s expectations concerning use of property
limited by rules and understandings concerning the property at
time it was acquired. Land given greater protection than other
forms of property. Decision reflects Court’s interest in
“bright-line” taking rules. (In practice, claims usually succeed
under categorical rules, fail under “balancing” analysis).
A. Subsequent Supreme Court Decisions
Concrete Pipe & Prods. of Cal.. Inc. v. Construction Laborers
Pension Trust for S. Cal. , 508 U.S. 602 (1993) (finding no taking
from commercial regulation, using deferential standard)
Dolan v. City of Tigard , 512 U.S. 374, 114 S.Ct. 2309 (1994)
(where government requires owner to allow public to enter
property in exchange for a development permit, the burdens to the
property from the public entry must be “roughly proportional” to
the burdens to the public from the development).
Suitum v. Tahoe Regional Planning Agency , 117 S.Ct. 1659 (1997)
(finding taking claim ripe for adjudication).
Phillips v. Washington Legal Foundation , 118 S.Ct. 1925 (1998)
(defining property expansively).
Eastern Enterprises v. Apfel , 118 S.Ct. 2131 (1998) (finding
retroactive liability unconstitutional; plurality would find that
it works a taking, majority explicitly rejects use of takings
analysis).

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B. Lower Court Decisions
After Lucas , the U.S. won nearly 90% of reported decisions
through 1995. Most federal taking claims arise from commercial,
rather than environmental regulation.
Takings Found: Preseault v. U.s . 100 F.3d 1525 (Fed. Cir. 1996),
en banc (conversion of railroad right of way to public trail);
Loveladies affirmance; Bowles v. U.s. , 31 Fed. Cl. 37 (1994) (
404)
No Taking: merits: Kunkes v. U.S. , 78 F.3d 1549 (Fed.
Cir.1996) (public lands management); Clalon Production Co. v.
Petera , 70 F.3d 1566 (10th Cir. 1995) (hunting license
restrictions); Branch v. U.s. , 69 F.3d 1571 (Fed. Cir. 1995)
(banking regulation); M&J Coal Co. v. U.s. , 47 F.3d 1148 (Fed.
Cir. 1995) (coal mining restrictions); Tabb.Lakes, Ltd. v. U.S . 10
F.3d 796 (Fed. Cir. 1993); Palm Beach Isles, Assoc. v. U.S. , 42
Fed. Cl. 340 (1998) ( 404), appeal pending; Good v. U.S. , 39 Fed.
Cl. 81 (1997) ( 404, Endangered Species Act), appeal pending;
Forest Properties Inc. v. U.S. , 39 Fed. Cl. 56 (1997) ( 404),
appeal pending; Hendler v. U.s. , 38 Fed. Cl. 611 (1997), 36 Fed.
Cl. 574 (1996) (Superfund, on remand, respectively awarding no
compensation for physical taking, finding no regulatory taking
from actions under order in aid of access) appeal pending.
Procedural rulings: Heck v. U.S. , 134 F.3d 1468 (Fed. Cir.
1998) ( 404 claim not ripe) Bayou des Familles Development Corp.
v. U.s. , 130 F.3d 1034 (Fed. Cir. l997)( 404; statute of
limitations); ( 404); Cristina Investment Corp. v. U.S. , 40
Fed. Cl. 571 (1998), ( 404 statute of limitations); Robbins v.
U.S. , 40 Fed. Cl. 381 (1998), ( 404); affirmed (table).
Mixed Signals: Bass Enterprises Production Co. v. U.S. , 133 F.3d
893 (Fed. Cir. 1998) (reversing finding of permanent taking from
denial of oil drilling permit near radioactive waste storage
facility, remanding for findings on possible temporary taking);
Florida Rock v. U.S. , 18 F.3d 360 (vacating taking based on one
rationale, remanding with instructions likely to lead to taking
finding on another)
A. Public Health and Safety/Nuisance
Traditional rule that no taking occurs where government acts to
protect public health and safety, abate nuisance-like activity;
no “right” to cause a nuisance. Keystone Bituminous Coal Assoc.
v. DeBenedictis , 480 U.S. 470 (1987)
Lucas precludes even a categorical taking claim where “background
principles of nuisance and property law ... prohibit the
[ proposed] uses ... in the circumstances in which the property is
presently found.” at 1031.

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With non-categorical claims, the purpose of the government action
remains a relevant factor in “balancing” analysis.
B. Relevant parcel
Traditional rule: focus on impact of regulation on the affected
parcel “as a whole.” Penn Central , 438 U.S. at 130-31. Thus
open space and setback requirements are not treated as takings.
See, e.g. Keystone , 480 U.S. at 498 (“Many zoning ordinances
place limits on the property owner’s right to make profitable use
of some segments of his property.”)
Footnote 7 in Lucas raises question whether to consider impact to
part of property or to the entire property. Subsequently, Court
reiterated focus on “whether the property taken is all, or only a
portion of the parcel in question.” Concrete Pipe , 508 U.S. at
644. See, also Dolan 114 S.Ct. at 2316 n. 6. (analyzing impact
of government action on entire parcel, not regulated portion);
Suitum , 117 S.Ct. at 1672), Scalia J., concurring, (focus on all
contiguous property subject to regulation).
Some courts treat this as a factual issue. Compare Loveladies
(considering only the property subject to regulation) with Tabb
Lakes , (considering unregulated as well as regulated portions)
Some decisions find that particular interests in property have
been taken: Nollan, Dolan (right to exclude); Babbitt v. Youpee ,
117 S.Ct.727 (1997), Hodel v. Irving , 481 U.S. 704 (1987) (right
to devise) . But see Andrus v. Allard , 444 U.S. 51 (1979) (no
taking from loss of right to sell).
Finding a taking of a specific interest in a property may have
same effect as focusing on a physical portion that is less than
the entire property. See Clalon , 70 F.3d at 1577 (refusing to
consider “right to hunt” on property as separate from fee title).
Where property only suited to one use, loss of that use may work
a taking. Compare Whitney Benefits (taking of “right to mine”)
with Florida Rock Industries v. U.S. , 791 F.2d 893, 902 (Fed.
Cir. 1986) (no taking from prohibition on mining if property
retains substantial value for non-mining uses).
C. Diminution in value needed to support taking
Traditional rule: “mere diminution” in value alone is not enough
to establish a taking. Penn Central , 438 U.S. at 131.
Lucas , n.8, suggests a taking may arise from less than total
denial of all use; such a claim should be analyzed under
traditional balancing analysis. Concrete Pipe reaffirmed “mere
diminution” rule. 508 U.S. 645. Lower courts have found takings
where land has some remaining value, but with de facto taking
threshold of roughly 901 loss in value. See e.g. Formanek. But

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see Florida Rock , (suggesting 6O’& reduction may support taking
claim).
D. Expectations
Traditional rule: reasonable investment-backed expectations a key
factor in taking analysis; absence of expectations can preclude a
taking. Ruckeishaus v. Monsanto Co. , 467 U.S. 1001, 1005 (1984).
Lucas finds expectations relevant to whether a property right
exists at all. 505 U.S. at 1030 (owner’s rights to use property
defined by “rules and understandings” existing when property
acquired). Courts have found that owners have expectation of
broader freedom from government interference with “title and
ownership” rights than from regulation limiting uses of property.
Preseault , 100 F.3d at 1540. See also Nollan 483 U.S. at 833 n.
2.
Expectations are critical to many taking claims: 767 Third Avenue
Associates v. U.S. , 48 F.3d 1575 (Fed. Cir. 1995); M & J Coal ,
(no taking where no expectation of freedom from regulation at
issue); Loveladies , 28 F.3d at 1177 (no taking unless owners
demonstrate that they bought their property in reliance on a
state of affairs that did not include the challenged regulatory
regime”)
Reasonable expectations may include possibility of creation, or
expansion of regulatory program: “ [ T]he property owner
necessarily expects the uses of his property to be restricted,
from time to time, by various measures newly enacted by the
State” without compensation. Lucas , 505 U.S. at 1027. Moreover,
those who do business in [ a] regulated field cannot object if the
legislative scheme is buttressed by subsequent amendments to
achieve the legislative end.” Concrete Pipe , 508 U.S. at 645;
Branch v. U.S . (same); Kunkes (no taking from change in rules
governing what owner must do to retain property obtained from
government)
City of Monterey v. Del Monte Dunes , cert. granted 66 USLW 3639
3/30/98) (lower court found taking from denial of development
permit)).

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February 5, 1999
Bill Lann Lee
Acting Assistant Attorney General
Civil Rights Division
U.S. Department of Justice
P.O. Box 65808
Washington, D.C. 20035-5808
Lois J. Schiffer
Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
950 Pennsylvania Avenue N.W.
Room 2718
Washington, D.C. 20530
Re: Thomas v. Anchorage Equal Rights Comm’n, Nos. 97-35220,
97-35221 ( 9 th Circuit, January 14, 1999)
Dear Mr. Lee and Ms. Schiffer:
I am writing to request that the U.S. Department of Justice consider
amicus participation in Thomas v. Anchorage Equal Rights Comm’n (9”
Cir., Jan. 14, 1999) (enclosed). The case concerns the constitutionality of
fair housing laws enacted by the Municipality of Anchorage and State of
Alaska that prohibit discrimination on the basis of marital status, including
discrimination against unmarried couples. The plaintiffs are landlords who
claim that renting to unmarried couples violates their religious beliefs. A
divided panel of the Ninth Circuit invalidated the laws as applied to plaintiffs
and all similarly situated landlords under the Free Exercise Clause of the
First Amendment. As explained below, the panel’s ruling threatens federal

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civil rights laws and environmental protections across the board.

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Page 2 of 4
February 5, 1999
On January 28, 1999, Anchorage and Alaska filed rehearing petitions
(enclosed). Community Rights Counsel assisted Anchorage with the
preparation of its petition. If the Ninth Circuit grants rehearing, or if the
parties seek certiorari, we request that the United States file an amicus brief
supporting the challenged nondiscrimination laws.
The Panel’s Ruling
Expressly departing from rulings by the First, Sixth, and D.C. Circuits,
the panel held that claimants may bolster an otherwise unviable free exercise
challenge by asserting a “colorable” -- though not necessarily viable -- claim
under another constitutional provision (in this case, the Takings and Free
Speech Clauses). This so-called “hybrid rights” theory is quite remarkable,
for it allows claimants to merge two unviable claims and mount a successful
challenge to nondiscrimination laws. This novel theory is not limited to state
and local nondiscrimination laws, but could be used to challenge federal civil
rights protections as well.
The panel’s takings ruling is equally disturbing. Applying the non-
categorical takings analysis articulated in Penn Central Transportation Co.
v. New York City, 438 U.S. 104 (1978), the panel found a colorable
regulatory takings claim -- one with a “fair probability” of success -- despite
recognizing that the challenged laws are fully consistent with plaintiffs’
expectations and cause them no economic harm. (Indeed, the panel stated
that the laws might well increase the landlords’ property value) To our
knowledge, no court has ever found a non-categorical taking in the absence
of interference with expectations and economic harm.
The panel’s free speech analysis is likewise misguided and threatens
federal protections. The challenged laws prohibit landlords from asking
about a prospective tenant’s marital status or stating a preference for tenants
based on marital status. The panel ruled that such laws raise a colorable
claim under the Free Speech Clause, thereby calling into question
comparable provisions in federal statutes that prohibit communications
designed to circumvent federal nondiscrimination laws. E.g., 42 U.S.C. §
3604(c).

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Page 3 of 4
Februaiy 5, 1999
Having “hybridized” the landlords’ free exercise claim with dubious
takings and free speech claims, the panel concluded that there is no
compelling state interest to support the challenged laws. This ruling ignores
the national commitment to fair housing reflected in the Fair Housing Act, 42
U.S.C. § 3601 et seq., which prohibits marital status discrimination where it
has a disparate impact on racial minorities or other protected groups It also
ignores the specific federal prohibitions of discnmination against unmarried
couples. E.g., Markham v. Colonial Mortgage Service Co., 605 F.2d 566,
596 (DC. Cir. 1979) (federal law prohibits discrimination against unmamed
couples in housing credit transactions); Hann v. Housing Authority, 709 F.
Supp. 605, 609-610 (E.D. Pa. 1989) (same as to public housing). The panel
further ignored a contrary decision by the Alaska Supreme Court holding that
the state has a compelling interest in eliminating discrimination against
unmarried couples. Swanner v. Anchorage Equal Rights Comm’n, 874 P.2d
274 (Alaska 1994), cc i i. denied, 513 U.S. 979 (1994).
The Implications
As noted by Judge Hawkins in dissent, the panel’s ruling threatens
more than just marital status protections. Landlords, restaurateurs, shop
owners, and other operators of public accommodations could use Thomas to
justif ’ discrimination against divorced persons, interracial couples, unwed
mothers, and anyone else who does not meet the property owner’s personal
religious criteria.
Because the panel’s takings analysis does not depend on the free
exercise issues, its implications are even broader. For example, the court’s
aggressive reading of the Takings Clause plainly threatens federal
environmental protections. Its unprecedented finding of a colorable takings
claim under Penn Central -- even though the challenged laws do not interfere
with the landlords’ expectations or cause them economic harm -- could fuel
an already growing wave of takings claims against environmental laws and
other community protections. The panel’s takings ruling is especially
troubling because the landlords failed to establish that they acquired their
rental property before the enactment of the Alaska nondiscrimination law.
1•

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Although such pre-existing statutes are generally
Page 4 of 4
February 5, 1999
immune from challenge under the Takings Clause,’ the panel’s novel analysis
could be used to launch compensation suits against a host of pre-existing
environmental programs and other federal protections.
In short, this deeply flawed ruling threatens a wide range of civil rights
and environmental protections. The case has attracted significant amicus
participation, including brief on behalf of many state and local governments,
the National Fair Housing Alliance, and other national organizations. If the
Ninth Circuit grants rehearing or if the parties seek certiorari, a brief from
the United States explaining the implications of the case for federal programs
would be most useful.
Thank you for your consideration of this request. I would be happy to
keep your offices apprised of developments in the case. Do not hesitate to
have your staff call me (296-6889) if you would like a full set of brieft or
additional information regarding the case.
Sincerely,
Timothy J. Dowling
Chief Counsel
Community Rights Counsel
Enclosures
cc: CliffJohnGroh
‘Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027-29 (1992) (pre-existing
“background principles” inhere in title and preclude takings challenges to restrictions
justified under those principles); Outdoor Graphics, Inc. v. City of Burlington, 103 F.3d
690, 694 (gth Cir. 1996) (pre-existing billboard statute inhered in claimant’s title and
precluded takings challenge); M & J Coal Co v. United States, 47 F.3d 1148, 1153-54
(Fed. Cir. 1995) (same as to federal mining statute), cert. denied, 516 U.S. 808 (1995).

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Assistant Municipal Attorney
Municipality of Anchorage

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Author: COtJRSEN.DAVID at IN
Date: 9/29/98 9:20 AM
Priority: Normal
BCC: kima jones at REGION4
“O: R1CANAL. R1ORC1 .WILLIAMS-ANN®rt-mail2 . rtp. epa.gov at IN, WINER. CATHY at IN,
WILL ,IAMS.LAtJRIE at IN, TORRES.HEATHERGRAY at IN, SEIDENBERG.MI4RC at IN,
RANKIN.PATRICK at IN, ORDINE.CHARLES at IN, MOORES.STEVEN at IN,
MICINSKI.CHERYLE at IN, MANCUSI-tJNGARO.PHILIP at IN, KAWAKAMI.CYNTHIA at IN,
KAHN.JONATHP N at IN, JONES.KIMA at IN, HIL SMAN.DEBORAH at IN, HESS.STEPHEN at IN,
FEINMARK.PHYLLIS at IN, FEATHERSON.CLARENCE at IN, BOTTS.STEPHEN at IN
CC: SALO.EARL at IN, NEL 1 SON.JAMES at IN, LEPOW.SUSAN at IN, LAMEL.MARCIA at IN,
GUADAGNO.TONY at IN, DREHER.ROBERT at IN, CAPON.VIRGINIA at IN, BOYDSTON.MICHAEL at IN
Subject: Takings-net: Iowa Blockbuster -Forwarded
Environmental Policy Project’s
Takings -Net
* * * * *
On September 23, 1998, in a blockbuster decision, the
Iowa Supreme Court ruled the Iowa right to farm law
effected an unconstitutional taking in violation of the
Fifth Amendment and the Iowa Constitution. Bormann
v. Board of Supervisors, 1998 WL 650904. Iowa is
apparently the first state supreme court to reach this
result.
Like similar laws in virtually every other state in the
country, the Iowa law immunizes farmers from liability
in nuisance actions brought by neighbors complaining
that farm operations produce offensive odors,
nreasonab1e noise, etc. The Court held that the law
esulted in a per se physical taking of the neighbors’
property, and effected what it called a condemnation by
nuisance. Although not explicitly discussed in the
opinion, the case was fought out against the background
of widespread public controversy in Iowa over
corporate hog farm operations. (According to press
reports, one of the Iowa Supreme Court justices who
recused himself from the case has openly opposed a
proposed hog operation near his home.)
The case presents a delicious irony. The American
Farm Bureau Federation and many of its state affiliates
have vigorously supported the takings agenda, confident
that it would serve farmers’ self interest. The Bormann
case suggests that the agricultural community may need
to rethink its position on takings.
For more information, please contact John Echeverria
or Jon Zeidler at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly@law.georgetown.edu
.PP website: http://www.envpoly.org

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Summary of Oral Argument from Del Monte Dunes
This was one of the more confused, and confusing oral arguments. A few points emerged clearly
Most significantly, the Court seems uninterested in the 9 th Circuit’s hypothesis that the verdict
could have been affirmed on the basis of a failure of the regulatory action to meet the
Nollan/Dolan “proportionality” standard [ Note that Dolan was decided after the trial in this case
was over]. There was no discussion of whether this standard, which had previously been applied
in exaction cases [ i.e where the government compels a property owner to donate an interest in
property to the public in exchange for a regulatory approval] could properly be applied in a run of
the mill regulatory decision where there is no exaction Since this question was raised in the cert
petition, it will probably get a passing mention in one or more of the three or four opinions this
—case is likely to generate, but not much real attention - -
The Court did not focus closely on the jury question (or, to state it as some property rights
advocates have, the Court did not seem deeply troubled by the fact that liability was tried to a
jury). Clearly, liability in a takings case presents mixed questions of law and fact, but some
Justices seemed to assume that good jury instructions could ensure that the jury did only
fact-finding and stayed away from legal questions This really asks whether it is practical to allow
a jury to assess liability without addressing whether there is a legal right to have a jury do so
This case, though it is likely to lead to a narrow and fragmented decision, reaches a kind of
equitable watershed In previous cases, the Court has identified government overreaching, of
which the particular litigant was clearly the victim Thus it did not face a question of whether the
Fifth Amendment was designed to deter government abuses generally, or to protect individual
property owners from specific abuses. Here, however, there is an anomaly, the government’s
course of conduct began long before the plaintiff acquired the property (and, in fact, to be blunt,
the plaintiff acquired with knowledge that development on the cite was controversial and had
previously inspired government “runarounds”) Thus, in this case, protecting this particular
plaintiffs property rights may not be fully equivalent to “punishing” government “abuses “Thus
the question. is the 5 th Amendment to protect individuals or to rein in the government?
More generally, the case represents an extension of the question presented in Eastern Enterprises
as to the relationship between takings and due process analyses. The Justices’ questions
concerning whether action that was not arbitrary (for due process purposes) might still be
unreasonable (for takings purposes) seemed to reflect genuine uncertainty However, this is
really central to the takings debate: under the takings clause, is government regulation of property
given closer scrutiny than other forms of governmental regulation or other types of government
action? The Court is not likely to answer this question in this case, but it continues to lurk
within the Court’s takings jurisprudence
A narrower reading of the Court’s agenda is that it has been sending a series of signals that there
are limits on government’s ability to regulate property without paying compensation but is neither
prepared nor inclined to grapple with the more metaphysical dimensions of takings law
Note also that this case involves regulatory actions undertaken prior to the 1987 “breakthroughs”

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in regulatory takings doctrine, and thus does not implicate the question of whether the message of
1987 has been absorbed by regulators, and whether the message needs to be clarified (as in
Dolan).
In any event, what follows is a relatively unedited reproduction of the notes I made during the
oral argument.
Petitioner
Kennedy: Is the history of the previous decisions made about the property [ i e the various
requests to come back with scaled-down projects, followed by the submission of scaled down
projects, followed by their rejection and suggestions for yet more scaling down] relevant to the
reasonableness of the government action 9
Rehnquist. Was the jury entitled to consider the length of time the process took?
Ginsberg. Doesn’t the fact that this case was filed before we decided First English limit the
significance of this case, if the situation arose now, the claim would not be ripe until plaintiffs had
sought just compensation in state court (which they could not do, under the California approach
we overturned in First English)?
O’Connor. This is an inverse condemnation case, and the jury was instructed under the Agins
standard, with two possible grounds for finding a taking, and gave a general verdict, some issues
relating to liability, like viable use, are clearly appropriate for a jury
Rehnquist A jury can be given charges regarding how to address more complex factual questions,
such as expectations, and can readily decide questions of land value.
A: The issue may be broader than just money For example, what if the regulated activity
constitutes a nuisance?
Kennedy: You cast the case as one involving a jury deciding the reasonableness of the city’s
decision; don’t juries decide reasonableness all the time?
A. We don’t want juries to deny local governmental decisions the deference they are due
Kennedy: The jury can be instructed on the need for deference
Breyer: We’re rvieweing ajudgment for a temporary taking? If that’s so, and a jury can decide if
the property was denied all value, could anyone doubt that the property lost all value temporarily?
A Yes, that was heavily disputed Plaintiff conceded that value remained, alleged a 55%

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diminution in value.
Breyer: Any value other than selling to the state?
A Yes, if a developer presented a suitable development plan
Scalia: Five times they tried to come up with one
A: The adequacy of the habitat plan was placed at issue for the first time in the last application.
Scalia: The landowner thinks the city is jerking the landowner around, normally we defer, each
rejection individually might seem reasonable, but with a consistent policy of turning down each
-- one, isn’t there a point where we start to smell a rat, and need to look beyond deference and say
‘this is unreasonable ‘7
Rehnquist: What if the commission denies for 100 units, but says 10 would be OK; there is some
value in the property in that case, but at some point don’t we look at bad faith7
Kennedy: Assume, for a moment, that the city is unreasonable, but the property still has value, is
the city still liable [ for a taking]?
A: Not for just compensation under the Fifth Amendment
Scalia. Why not look at the purpose of the action and see if there was bad faith?
A: There was no finding of bad faith. The jury was instructed to disregard motivation
Solicitor General’s Argument
Kennedy: if the verdict can be sustained on another basis [ besides Nollan Dolan proportionality,
what difference does it make if the Circuit analyzed this issue incorrectly?
A: The Circuit relied on its analysis, in sustaining the verdict, and this was improper, since Nollan
and Dolan only apply to physical access
O’Connor: Suppose we agree with you on Nollan and Dolan, how would our decision affect that?
Rehnquist: Was the Agins rule challenged by petitioner?
A: The Court will lay down a rule for the lower court, to decide if there was a rational basis for
the action, there is an antecedent inquiry [ whether it is proper to assess whether it advances a
legitimate state interest].
O’Connor: Is the government taking the position that there is no taking if the action fails to

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advance a legitimate interest
Souter. The nature of the governmental action is a factor to be analyzed under Penn Central.
A: The just compensation clause applies to lawful government action, it presupposes a valid
public purpose and then asks who must pay for the action
Breyer: What is the standard for a temporary taking? Must all value be destroyed?
A: All use must be destroyed, the property always had some value.
Scalia: Assume good faith is not ordinarily a factor Isn’t it a factor in a temporary taking case.
What else produces a temporary taking except an unfair decision?
A: Under First English, the clause presupposes legitimacy
Souter Was this a temporary taking?
A Most of the delay was for a prior owner before the property was sold
Berger for the property owner
This is a temporary taking case
Ginsberg. Why are we facing the jury trial question? Under present law, inverse condemnation
will be tried in state court; liability is for the judge
A This case is ripe because California, at the time the case arose, did not provide compensation
for a taking.
Kennedy: in pre-condemnation delay cases, juries decide reasonableness
A We have found no reported decisions on these delay cases, but it is clear that valuation issues
are decided by a jury
Ginsberg. future cases are not likely to come up as this did
A The question is one of the reasonableness of the government action.
O’Connor: Does this arise from due process concerns?
A: Yes, but those concerns can’t be raised in this way outside of the context of a taking claim.
Kennedy. The judge here found the regulatory decision reasonable, then submitted essentially the
same issue to the jury; this seems inconsistent

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A: For a due process violation, there is a very low threshold, the action is OK if the court
concludes it is not arbitrary.
Kennedy: So you’re saying it could be found not to be arbitrary and still found to be
unreasonable?
Breyer: If the point of temporary taking doctrine is to prevent government from giving people the
extreme runaround, how would we reach the question of proportionality [ based on Nollan/Dolan];
how would these questions be relevant once we decide this is a “runaround” case
•-—-——-A: It appears the jury concluded there was a total taking - .
Scalia: So takings claimants really have a choice of two theories arbitrary action or no use of the
property 9
Ginsberg: What about the equal protection claim, how do we know what the jury found
concerning equal protection?
A The jury entered a general verdict for the plaintiffs
Ginsberg. So we don’t know if the jury found an equal protection violation?
Scalia. No equal protection question has been presented to us
Ginsberg. We are assuming the jury just went on a taking theory
Rehnquist Petitioner shaped the questions presented to us
Stevens: So we’re saying a decision might not be arbitrary, but might still fail to advance a
legitimate state interest I’m not sure we were thinking of that possibility when we decided Agins,
at least as I now recall the decision
A: Yes, there are such cases, where the government action is not arbitrary, but is unreasonable.
Kennedy: We could also sustain the judgment by concluding the judge was wrong [ on due
process] and the jury was right? In this case, the case was tried to a jury, which means the
judge had the discretion to submit these issues to the jury What is the strongest authority you
can cite for the proposition that there is a right to a jury trial under Section 1983?
A [ after citing cases] There are no cases from this Court that directly resolve the jury issue.
O’Connor. I thought the question was whether the 7 th Amendment, not 1983, gave a right to a
jury trial; there is no suggestion that Section 1983 was meant to change the standard for when a
jury trial would be available. Look at the temporary taking claim and see if it carries with it a

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right to a jury trial.
Rehnquist. Does Section 1983 require a jury trial?
Breyer: Was there a factual or legal issue regarding bad faith?
A: Bad faith was not raised in the trial, but the jury had before it the whole history of the
regulatory decision
Ginsberg: Motive was not an issue presented to the jury
A: Evidence supports a finding of a taking under either prong of the Agins test [ denial of all use
- or failure to advance a legitimate interest] - - -- -
O’Connor: How is it supported [ on the interest prong] if there was no arbitrariness, are the
inquiries different for [ the interest prong of] a taking claim than for a due process violation?
A: Due process review is very deferential, the substantial advancement test is different. Under
that, it is proper to look at what the city was trying to do and see if it used an appropriate means
to accomplish it.
Souter: If the Agins text is irrationality, then we have a conflict [ between the judge’s finding and
the jury’s [ ?]]
Stevens: There really was no denial of all use The jury found the property had no value, but
there is always a period while a regulatory decision is pending, when no construction is possible.
A: Focus on the period from 1986, when the permit at issue was denied, until the time of trial, let
jury decide the question of loss of use The city did not object to the particular jury instruction
given, in fact, the city practically wrote the instruction However, the city did raise an across the
board objection to the submission of the case to the jury on both the equal protection and taking
claims ... In evaluating this case, it is important to note that there was a pattern of abuse
beginning in 1981

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LUTHER M. TAYLOR , Palm Beach Gardens, Florida, attorney of record for plaintiffs, with
whom was MICHAEL M. RYAN , of counsel.
JOEL D. ARMSTRONG , Environmental & Natural Resources Division, Department of Justice,
Washington, D C, with whom was LOIS J. SCHIFFER , the Assistant Attorney General,
attorneys of record for the defendant DOROTHY L. BOARDMAN , U S. Army Corps of
Engineers, of counsel
OPINION
HORNS Judge .
The above-captioned case comes before this court on the parties cross-motions for summary
judgment pursuant to Rule 56 of the Rules of the United States Court of Federal Claims (RCFC).
The plaintiffs are the alleged equitable and legal title holders of 50 7 acres of real property
primarily (with the exception of 1.4 acres) existing as submerged land below the mean high water
mark (49.3 acres) located in the City of Riviera Beach, Palm Beach County, Florida The plaintiffs
filed a complaintW against the United States seeking compensation in excess of $10,000,000.00
for an alleged taking Plaintiffs claim that when the United States Army Corps of Engineers (the
Corps) denied a dredge and fill permit for the property the defendant took plaintiffs’ property
without just compensation in violation of the Fifth Amendment to the United States Constitution.
FACTS
The property in dispute consists of a 50 7 acre parcel of land located in the City of Riviera Beach,
Palm Beach County, Florida On April 20, 1956, Frank Smith, Martin Slifka, and Joseph Slifica
acquired a 311 7 acre parcel of property, including the 50 7 acres at issue in this action, from the
West India Fruit & Steamship Company for a total purchase price of $380,190 00. Shortly
thereafter, the plaintiffs purchased fill material from the Trustees of the Internal Improvement
Trust Fund of the State of Florida to be used in the development of the property Frank Smith,
Martin Slifica, and Joseph Slilka subsequently transferred a one-quarter interest in the 311 7 acre
parcel to Morris Brown on June 18, 1957.
The deed for the original, complete 311 7 acre parcel purchased by the plaintiffs in 1956 indicates
that the tract straddled the A-i -A, a road also known as State Road No. 703, with the property
bordered on the “east by the waters of the Atlantic Ocean [ and] on the west by the waters of Lake
Worth” inclusive of “submerged lands in Lake Worth.” The plaintiffs later sold the bulk of upland
property located on the oceanfront or eastern side of A-i-A, while retaining ownership of the
50 7 acres currently in dispute, which are predominantly “submerged lands” abutting a narrow
strip of wetlands shoreline on the eastern shore of Lake Worth.
Lake Worth is a long, narrow lake lying in a north to south configuration A narrow upland ridge

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separates Lake Worth from the Atlantic Ocean. In the 1860’s, an opening was cut in the upland
ridge connecting Lake Worth to the Atlantic Ocean, consequently, the lake changed from
freshwater to a marine water basin Lake Worth now supports a healthy and diverse population of
marine and estuarine flora and fauna. In addition, Lake Worth serves as a segment of the Atlantic
Intracoastal Waterway. The dredged Intracoastal Waterway channel lies to the west of the
plaintiffs land further into the waters of Lake Worth.
On July 26, 1957, the Corps granted Frank Smith a permit to construct a bulkhead and to dredge
and fill the property, located within Lake Worth and the focus of the instant action The permit
was set to expire on December 31, 1960, but prior to expiration was extended through December
31, 1963. The plaintiffs had intended to fill the submerged property at the time of the permit
application to develop single-family residential lots; however, no work was undertaken pursuant
to the 1957 permit
On September 19, 1968, the plaintiffs sold the 261-acre upland oceanfront portion of the 311.7
acre parcel of property eastward of the A-I-A to Shell Oil Company for approximately
$1,000,000.00 The plaintiffs, thus, retained ownership of 50.7 acres, consisting of 49.3 acres of
lake bottom that is below the mean high water mark, and 1.4 acres of adjoining shoreline of red
mangrove/saltmarsh cordgrass wetlands, bordering along the A-i-A for some 2000 feet, that is
above the mean high water mark On November 18, 1988, Palm Beach Isles filed a permit
application with the State of Florida Department of Environmental Regulation PER) to dredge
and fill the 50 7 acres of lake bottom and adjoining red mangrove/salt marsh cordgrass wetlands
shoreline
The DER, upon reviewing Palm Beach Isles’ proposed development, found that the development
would eliminate 50.7 acres of healthy and productive estuarine wetland and submerged habitat in
Lake Worth; degrade water quality; impact hydrologic flow conditions in the area adversely
affecting navigation, and set a precedent for similar development further eliminating the natural
resources of Lake Worth Therefore, the DER denied Palm Beach Isles’ permit application on
April 13, 1990, with a caveat in the denial notice that “a design incorporating features resulting in
minimal environmental impact such as docks and boardwalks, could be pursued”
Specifically, the DER noted in its background discussion on the proposed development project
that
The field appraisal of the project was conducted by the Department on November 27, 1989.
The proposed project is to be constructed on a 50 7 ac. parcel, the majority of which is
submerged land in Lake Worth immediately west of Al A between Singer Island on the east and
the Village of North Palm Beach on the west. The section of Lake Worth in which the project is
located is immediately southeast of Big Munyon Island and shares a common border with the
John D MacArthur Beach State Park along the northern property boundary.
The area surrounding the project site is highly urbanized with much of the shoreline of Lake

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Worth being developed and seawalled with the exception of the state park and a few additional
parcels south of the project area.
The property itself is comprised of 1.4 ac. of land above the mean high water line which consists
of an approximately 2,000 linear ft. fringe of shoreline along the eastern property line between
Al A and Lake Worth. The remaining 49.3 ac. are below the mean high water line, the boundaries
of which form an irregularly shaped polygon within Lake Worth.
The shoreline fringe currently supports all three species of mangroves, Rhizophora mangle (red
mangrove), Leguncularia racemosa (white mangrove), and Avicennia germinans (black mangrove)
as well as Sesuvium sp. (sea purslane), Bomchia frutescens (sea-oxeye) and Spartina sp.
(cordgrass). Upland of these are Coccoloba uvifera (sea grape) and Schinus terebinthifolius
(Brazilian pepper).
The remaining acreage consists of shallow gradually sloping mud-fiat, varying in depth from 0 to -
4 ft. MLW [ mean low water]. A biological study of the submerged area supplied by the applicant
noted that approximately 38 61 ac. currently support seagrasses Dense shoal grass, Halodule
wrightii , occurs in the intertidal zone and beyond, while the deeper zones support mixed beds of
Halophila spp., Thalassia testudinum (turtle-grass), Svringodium filiforme (manatee-grass) as well
as a variety of algal species.
A number of animal species were also noted utilizing the area on the date of the site inspection. At
low tide extensive areas of exposed and submerged mudflat were covered with grazing mollusks
Additionally, Florida grass shrimp ( Palaemon floridana) , blue crab, ( Callinectes sapidus) ,
horseshoe crabs ( Limulus polyphemus) , hermit crabs and other invertebrates were noted in this
area. Invertebrate egg masses and burrows, blue crabs, stone crabs ( Menippe mercenaria) , large
schools of small fish, checkered puffers ( Sphoeroides testudineus ) and spider crabs ( Libina sp.) all
occur in the extensive seagrass beds in the deeper portions of the project area
The DER articulated the following reasons for the denial of the plaintiffs’ request to dredge and
fill the land submerged in Lake Worth along with the abutting shoreline.
The proposed project is expected to result in the elimination of 50 7 ac. of healthy and productive
estuarine wetland and submerged habitat in Lake Worth. Seagrass and algae beds as currently
exist in the project area have been well documented as important resources which provide a
variety of important ftinctions in the estuarine community including providing refuge and nursery
areas for small invertebrates and numerous fish species, providing substrate for epiphytic algae on
which these species graze, providing foraging areas for larger fish, invertebrates and wading birds,
stabilizing sediments which benefits water quality, and recycling nutrients bound in the sediments.
In addition, the seagrasses themselves are an important food for the endangered manatee
( Trichechus manatus ) which are known to occur in Lake Worth
The shoreline fringe of mangroves and nonvegetated mud flats are also extremely important and
productive components of this system, providing detrital export, and habitat and foraging areas

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for numerous species of wildlife, including a considerable number of species of wading birds. Loss
of this habitat is expected to have a severe impact on local populations of wildlife.
The Department has also reviewed the hydrographic characteristics in the area and the expected
effects of the project on water quality and flow conditions As proposed, the project is expected
to interrupt littoral transport in the general project area and as a result, downdrift erosion is
expected to occur south of the project area and could be a serious problem in time In addition,
changing of the horizontal flow field in the near shore area is expected to occur resulting in
backwater dead zones on the north and south sides of the project due to the blocking/shadow
effect of the proposed land mass This interruption of flow patterns and blocking effects are
expected to cause a degradation of water quality in the project area due to increased residence
times and material accumulation in the dead zones noted above.
Finally, the Department has considered the cumulative impacts that could be expected to result
from permit issuance, pursuant to Section 403 919, Florida Statutes The previous dredging and
filling activities and associated seawalling which have taken place in Lake Worth have eliminated
a majority of the productive salt marsh wetland and shallow submerged communities which
historically occurred in this area. Issuance of a permit for this project would not only eliminate a
considerable acreage of wetland and submerged land but would set a precedent for similar
development on other privately owned submerged property known to occur south of the project,
further eliminating what remains of the natural resources of Lake Worth
As a result of the above cited factors, degradation of water quality in Lake Worth is expected.
The applicant has not provided reasonable assurance that the immediate and long-term impacts of
the project will not result in the violation of water quality standards pursuant to Florida
Administrative Code Rules 17-312.150(3) and 17-312.070. Specific State Water Quality
Standards in Florida Administrative Code Rules 17-3 051, 17-3 061 and 17-3 121 . . will be
affected by the completion of the project
This project will also result in the following matters which are contrary to the public interest
pursuant to Section 403 918(2), Florida Statutes.
a adversely affect the conservation of fish and wildlife, including endangered or threatened
species, or their habitats,
b adversely affect navigation or the flow of water or cause harmful erosion or shoaling,
c. adversely affect the fishing or recreational values or marine productivity in the vicinity of the
project,
d. is permanent in nature;
e diminish the current condition and relative value of functions being performed by areas affected

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by the proposed activity.
Therefore, the applicant has not provided reasonable assurance that the project is not contrary to
the public interest pursuant to Section 403.918(2), Florida Statutes
In denying the permit, the Department notes that the applicants deed from the Trustees of the
Internal Improvement Trust Fund may confer an independent right to fill the property. The
Department offers no opinion concerning the validity or extent of any such right, but waives the
water quality certification required by Public Law 92-500 as a prerequisite for federal dredge and
fill permits.
Thirty-two years after the first permit application, on May 31, 1989, the Corps received a permit
application from Palm Beach Isles pursuant to section 10 of the Rivers and Harbors Act of 1899,
33 U.S C. § 401-467 (1988), and section 404 of the Clean Water Act, 33 U S.C. § 1251-1387
(1988) The application sought permission to fill the 49.3 acres of lake bottom and 1.4 acres of
adjoining red mangrove/saltmarsh cordgrass wetlands shoreline, for the purpose of constructing a
residential development. At the time of the 1989 application to the Corps, these 49.3 acres of lake
bottom were below the mean high water mark, and would have to be filled to a height of five feet
above the mean low water level to accommodate development.
In processing Palm Beach Isles’ permit application, the Corps completed an environmental
assessment, issued a public notice for comment, and received comments from a number of other
governmental agencies The Environmental Protection Agency, the Fish and Wildlife Service, and
the National Marine Fisheries Service recommended that the permit be denied. The DER
expressly waived, as required by state law, the water quality certification required as a
prerequisite for a permit by the Corps to dredge and fill A permit application was not submitted
to the City of Riviera Beach, Florida, yet, the city in a letter to the Corps stated that it “strongly
oppos [ es] such a request to fill approximately 50 acres of submerged lake bottom in Lake
Worth.” An application for the proposed development was submitted to the Palm Beach County
Department of Environmental Resources Management, but the application was withdrawn before
the Department rendered a decision. Notwithstanding the withdrawal of the application, the
Board of County Commissioners, Palm Beach County, passed a resolution declaring that the
filling of 50 acres of seagrass habitat would be contrary to the public interest. The Corps
transmitted the comments it had received to Palm Beach Isles on January 12, 1990, and invited its
response to the concerns identified.
The plaintiffs responded to the comments and concerns on February 8, 1990. As to the concerns
raised by Palm Beach County Department of Environmental Resources Management, the City of
Riviera Beach, Department of Community Development and Environmental Control, and other
groups and federal agencies, the plaintiffs recognized that “the construction of the proposed
project will result in the loss of a natural resource from which the public currently benefits.” Palm
Beach Isles also stated that the “ [ c]ompensating public benefit however is derived from an
increase in the tax base.” In addition, Palm Beach Isles replied to the numerous public interest
concerns by emphasizing that zoning for the property only permits “single family residential” land
use and not “water dependant uses such as marinas “ The plaintiffs also emphasized that “the

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subject property comprises the extent of the applicant’s holdings. No other site is available to the
applicant for the proposed use or alternative uses.” In closing, Palm Beach Isles informed the
Corps that “ [ t]he site plan finally selected represented the most favorable balance of impacts on
the environment vs. economic return to the applicant”
The Corps denied Palm Beach’s permit application on May 16, 1 990. The cover letter
accompanying the denial by the Corps stated:
The evaluation of your proposal has been completed and it has been determined that the issuance
of the permit is contrary to the 404(b)( I) guidelines and contrary to the public interest. The
project would result in the elimination of 50.7 acres of important Lake Worth shallow water
habitat.
Based on the evaluation of all pertinent facts in the file, the permit to fill 50.7 acres of Lake Worth
shallow water habitat is hereby denied.
The Corps found that the proposed development would adversely effect, but not likely jeopardize
the continued existence of the endangered West Indian (Florida) manatee The permit denial,
however, was based on a number of factors including conservation, economics, environmental,
wetlands, fish and wildlife, flood hazards, floodplain values, land use, navigation, shore erosion
and accretion, recreation, water supply and conservation, water quality, safety, and others. In
addition, the Corps found that Palm Beach Isles had failed to demonstrate that no other
alternatives were available because other areasin Palm Beach County could have been used for
this proposed development. Notably, the Corps addressed the direct impact upon navigation:
(11) Navigation: Shallow water depths that already exist in the proposed project area have limited
boating activities to shallow draft vessels. Therefore, other than the elimination of 48 4 acresllli.)]
of navigable waters, the project should not have a significant adverse impact on navigation, in
general.
Donald Borda, a Corps Regulatory Specialist and the Senior Project Manager who prepared the
Corps permit denial, ftirther explained, in a signed declaration dated December 21, 1994, which is
part of the record, the impact of the plaintiffs’ proposed project upon navigation
On pages 12 and 13, Item (11), Navigation, I state, “Shallow water depths that already exist in the
proposed project area have limited boating activities to shallow draft vessels. Therefore, other
than the elimination of [ 49.3] acres of navigable waters, the project should not have a significant
adverse impact on navigation, in general.” It is important to clari! i that I was referring, there,
solely to navigation in the broad sense of the commercial or recreational vessels that utilize the
adjacent federal navigation channel (Intracoastal Waterway) and that travel in deeper waters.
While the proposed fill might not have a significant adverse effect upon the ability of such vessels
to move in the federal channel (although it could cause some shoaling of the channel and/or
changes in quantity, quality, and direction of flow of the waters), the proposed fill would certainly
have an adverse effect on shallow draft vessels that utilize the shallower areas by eliminating over

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49 acres of these shallows and by altering the course, location, condition, and capacity of [ the]
entire waterbody
The aforementioned statement at pages 12 and 13, Item (11), Navigation, should not be
interpreted to mean that the proposed filling would not have a significant adverse impact on
“navigable waters of the United States” under § 10 of the Rivers and Harbors Act of 1899
(“RHA”), 33 U.S.C. § 403, as defined in 33 C.F.R. Part 329. The fill would, without doubt, have
a significant adverse affect [ sic] upon the entire waterbody by altering or modifying the course,
location, condition, or capacity of the lake and the navigation channel, in violation [ of the] RFIA §
10 This is one of the principal reasons the permit was denied
Subsequently, the plaintiffs filed a declaratory judgment action in the Circuit Court of the
Fifteenth Judicial Circuit, Palm Beach County, Florida against the DER and the Trustees of the
Internal Improvement Trust Fund of the State of Florida. On October 9, 1991, Palm Beach Isles
and the DER signed a proposed stipulation for the purpose of settling that declaratory judgment
action, which was approved by Judge James T Carlisle of the Florida Circuit Court on November
18, 1991. Palm Beach Isles Associates. et al v. State of Florida Dept of Envtl. Regulation and
Trustees of the Internal Improvement Trust Fund of the State of Florida , Case No. 90-7742 AJ,
(Fla. Cir Ct, Palm Beach County, November 18, 1991) (Carlisle, J, final judgment) The final
judgment stipulated that the Trustees of the Internal Improvement Trust Fund of the State of
Florida deed upon which Palm Beach Isles derives title was valid and the plaintiffs’ right to
bulkhead and fill the 50.7 acres of property was not subject to regulation by the State of Florida.
This stipulation also dictated that Trustees of the Internal Improvement Trust Fund of the State of
Florida, the State of Florida Department of Natural Resources, and DER “will not interfere with
[ Palm Beach Isles’] attempts to procure a permit to dredge and fill the subject lands from the U.S.
Army Corps of Engineers.”
The parties have stipulated that the Corps’ denial of the plaintiffs’ request for a permit, to dredge
and fill the property at issue in this case, constituted final agency action. At oral argument, the
plaintiffs’ counsel conceded that, at the time of the application for the Corps dredge and fill
permit, they were aware of the navigational servitude rights of the United States over the property
at issue. The United States has not purchased or otherwise acquired an interest in the 50.7
acres of land submerged in the water of Lake Worth.
DISCUSSION
The parties have filed cross-motions for summary judgment pursuant to RCFC 56 on plaintiffs
claim that the actions by the Corps constituted a taking in violation of the Fifth Amendment to the
United States Constitution Summary judgment in this court should be granted only when there is
no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of
law. Rule 56 of the Rules of the Court of Federal Claims (RCFC) is patterned on Rule 56 of the
Federal Rules of Civil Procedure (Fed. R. Civ. P) and is similar in language and effect. Both
rules provide that summary judgment “shall be rendered forthwith if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that

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there is no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.”
RCFC 5 6(c) provides that in order for a motion for summary judgment to be granted, the moving
party bears the burden of demonstrating that there are no genuine issues of material fact and that
the moving party is entitled to judgment as a matter of law. Adickes v. S. H. Kress & Co. , 398
US 144, 157 (1970); Creppel v. United States , 41 F 3d 627, 630-31 (Fed. Cir 1994); Meyers v
Asics Corp. , 974 F.2d 1304, 1306 (Fed. Cir 1992); Lima Surgical Assocs.. Inc Voluntary
Employees’ Beneficiary Ass’n Plan Trust v United States , 20 Cl. Ct. 674, 679 (1990), affd, 944
F 2d 885 (Fed. Cir. 1991); Rust Communications Group. Inc. v. United States , 20 Cl. Ct. 392,
394 (1990). Disputes over facts which are not outcome determinative under the governing law
will not preclude the entry of summary judgment. Anderson v. Liberty Lobby. Inc. , 477 U.S. 242,
248 (1986) Summary judgment, however, will not be granted if “the dispute about a material fact
is ‘genuine,’ that is, if the evidence is such that a reasonable jury [ trier of fact] could return a
verdict for the nonmoving party.” Id..; see also Unig Computer Corp. v United States , 20 Cl. Ct.
222, 228-29 (1990).
When reaching a summary judgment determination, the judge’s function is not to weigh the
evidence, but to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby .
477 U.S at 249; cc. ç..g ,, Cloutier v United States , 19 Cl Ct. 326, 328 (1990), 937
F 2d 622 (Fed. Cir 1991) The judge must determine whether the evidence presents a
disagreement sufficient to require submission to fact finding, or whether the issues presented are
so one-sided that one party must prevail as a matter of law Anderson v. Liberty Lobby. mc , 477
U S at 250-52. When the record could not lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial, and the motion must be granted. Matsushita Elec. Indus.
Co . Ltd v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986) Stated otherwise, if the nonmoving
party cannot present evidence to support its case under any scenario, then there should be no need
for the parties to undertake the time and expense of a trial, and the moving party should prevail
without further proceedings
If, however, the nonmoving party produces sufficient evidence to raise a question as to the
outcome of the case, then the motion for summary judgment should be denied Any doubt over
factual issues must be resolved in favor of the party opposing summary judgment, to whom the
benefit of all presumptions and inferences runs ,; see also Litton Indus. Prods. Inc. v. Solid
State Sys. Corp. , 755 F.2d 158, 163 (Fed. Cir. 1985); H. F. Allen Orchards v. United States . 749
F.2d 1571, 1574 (Fed. Cir. 1984), cert. denied , 474 U S 818 (1985).
The initial burden on the party moving for summary judgment, to produce evidence showing the
absence of a genuine issue of material fact, may be discharged if the moving party can
demonstrate that there is an absence of evidence to support the nonmoving party’s case. Celotex
Corp. v. Catrett , 477 U.S 317, 325 (1986); see also Lima Surgical Assocs. , 20 Cl. Ct. at 679. If
the moving party makes such a showing, the burden then shifts to the nonmoving party to
demonstrate that a genuine factual dispute exists by presenting evidence which establishes the
existence of an element of its case upon which it bears the burden of proof. Celotex Corp. v .

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Catrett , 477 U.S. at 322, Lima Surgical Assocs. , 20 Cl. Ct. at 679.
Pursuant to RCFC 56, the motion for summary judgment may succeed, whether or not
accompanied by affidavits and/or other documentary evidence in addition to the pleadings already
on file. Celotex Corp. v. Catrett , 477 U.S. at 324. Generally, however, in order to prevail by
demonstrating that a genuine issue for trial exists, the nonmoving party will need to go beyond the
pleadings, by use of evidence such as affidavits, depositions, answers to interrogatories, and
admissions j
The fact that both parties argue in favor of summary judgment and allege an absence of genuine
issues of material fact, however, does not relieve the court of its responsibility to determine the
appropriateness of summary disposition in the particular case. Prineville Sawmill Co. v. United
States , 859 F.2d 905, 911 (Fed Cir 1988) (citing Mingus Constructors. Inc v. United States ,
812 F.2d 1387, 1391 (Fed. Cir. 1987)). “ [ S]imply because both parties moved for summary
judgment, it does not follow that summary judgment should be granted one or the other.”
LewRon Television. Inc v. D.H. Overmyer Leasing Ca , 401 F 2d 689, 692 (4th Cir. 1968), cert
denied , 393 U.S. 1083 (1969); see also Levine v Fairleigh Dickinson Univ. , 646 F 2d 825, 833
(3d Cir. 1981); Home Ins. Co v. Aetna Casualty & Sur Co. , 528 F.2d 1388, 1390 (2d Cir
1976) Cross-motions are no more than a claim by each party that it alone is entitled to summary
judgment. The making of such inherently contradictory claims, however, does not establish that if
one is rejected the other is necessarily justified Rains v Cascade Indus.. mc , 402 F.2d 241, 245
(3d Cir. 1968), Bataco Indus.. Inc. v. United States , 29 Fed. Cl. 318, 322 (1993), affd, 31 F.3d
1176 (Fed Cir. 1994). The court must evaluate each party’s motion on its own merit, taking care
to draw all reasonable inferences against the party whose motion is under consideration. Mingus
Constructors. Inc. , 812 F.2d at 1391
In the above-captioned case, the parties have provided the court with a number of stipulations of
fact along with extensive documentation attached to the pleadings, and agree that summary
judgment disposition is appropriate. No issues have been identified by the parties or the court
which raise material issues of disputed fact, therefore, this case is ripe for summary judgment
Plaintiffs’ motion for summary judgment claims that the Corps’ final decision prevents any
economically viable use of the submerged lands at issue The plaintiffs state that the denial of the
dredge and fill permit effectively prohibits Palm Beach Isles from making any use of the property.
Moreover, the plaintiffs contend that the parcel at issue is solely the 50 7 acres of submerged land
retained by the plaintiffs, after the sale of 261 acres of upland to Shell Oil Company in 1968, and
not the 311 7 acre parcel composed of both submerged and upland as originally purchased by the
plaintiffs in 1956.
Defendant moved for summary judgment arguing that the plaintiffs have no compensable
expectancy in 49 3 acres of submerged land existing below the mean high water mark due to the
navigational servitude rights of the United States In addition, the defendant contends that the
plaintiffs who acquired their interest after the enactment of the Clean Water Act have no
compensable expectancy to be free of governmental regulation. The defendant also contends that

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the plaintiffs cannot establish a taking claim under the traditional legal framework enunciated by
the United States Supreme Court. 0 - Defendant asserts that for the purposes of assessing the
economic impact of regulation upon the plaintiffs’ property, the 311.7 acre parcel in its entirety, as
originally invested and purchased by the plaintiffs, must be considered
The Takings Clause of the Fifth Amendment to the United States Constitution provides in
pertinent part: “nor shall private property be taken for public use without just compensation.”
U. S Const. amend. V. The purpose of the Fifth Amendment is “designed to bar Government
from forcing some people alone to bear public burdens which, in all fairness and justice, should be
borne by the public as a whole.” Armstrong v United States , 364 U.S. 40, 49 (1960). There is a
“clear principle of natural equity that the individual whose property is thus sacrificed [ for the
public good] must be indemnified.” Pumpelly v. Green Bay & Mississippi Canal Co. . 80 U.S. 166,
179 (1871)
There exists, however, no precise analytical framework or set formula for ascertaining exactly
when the impact of a government regulation requires compensation by the government. Penn
Central Transp. Co. v. New York City , 438 U.S. 104, 124 (1977) Determining whether a taking
has occurred is an ad hoc factual inquiry that incorporates several factors identified by the
Supreme Court as being particularly relevant and significant: (i) the character of the government
action, (ii) the economic impact of the regulation, and (iii) the extent that the regulation interferes
with reasonable investment-backed expectations j at 124; Connolly v. Pension Guarantee Corp.
v Pension Benefit Guaranty Corp . 475 U S 211, 224, 225 (1986). $. ai  Concrete Pipe &
Products. Inc v. Construction Laborers Pension Trust , 508 U.S 602, 643-47 (1993); United
States v. Central Eureka Mining Co. , 357 U.S. 155, 168 (1958)
The Supreme Court announced a rule in Lucas v. South Carolina Coastal Council , finding
that a regulation depriving real property of all economic value would give rise to a taking without
considering the other Penn Central factors delineated above. 505 U.S. 1003, 1029 (1992). The
Supreme Court qualified this rule, however, with the exception that a total loss of value would
not trigger a taking if “the nature of the owner’s estate shows that the proscribed use interests
were not part of his title to begin with . .“ Id.. at 1027. This “antecedent inquiry” into limitations
that inhere in the owner’s title is made by reference to state property or nuisance law. See j at
1029 The Supreme Court also emphasized that it is proper to “permit the government to assert a
permanent easement that was a pre-existing limitation upon the landowner’s title “ . .. (comparing
Scranton v. Wheeler , 179 U.S. 141, 163 (1900) with Kaiser Aetna v United States , 444 U S.
164, 178-80 (1979)).
Subsequently, in Ruckeishaus v Monsanto Co , 467 U.S. 986 (1984), the Supreme Court
addressed a takings claim and focused on the reasonable investment-backed expectations prong of
the Penn Central factors to deny a takings claim. Iç .. at 1005. In that case, the Supreme Court
relied upon the specific regulatory process that was in use by the government for evaluating data
submitted to the government and found that the claimant could not validly expect that the data
would be protected and not disclosed Id.. at 1013. The Supreme Court, therefore, denied
plaintiffs takings claim. 14, see also Concrete Pipe & Products. Inc. v. Construction Laborers
Pension Trust , 508 U S. at 645-46.

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The navigable waters of the United States have long been considered “public property” and have
thus been under the exclusive control of the federal government pursuant to the Commerce
Clause of the United States Constitution. U.S. Const. art. I, § 8, cI. 3; United States v. Rands ,
389 U.S. 121, 122-23 (1967), Gilman v. Philadelphia , 70 U.S. (3 Wall) 713, 724-25 (1866);
Gibbons v. Ogden , 22 U.S. (9 Wheat.) 1 (1824), Owen v. United States , 851 F.2d 1404, 1408
(Fed. Cir. 1988). The power to regulate the navigable waters of the United States has been
interpreted as bestowing upon the federal government a dominant estate in navigable waters
below the mean high water mark and the lands underlying them. United States v. Rands , 389 U.S.
at 122-23 (quoting Gilman v. Philadelphia , 70 U.S. (3 Wall) at 724-25); United States v. Chicago.
Milwaukee. St. Paul & Pac. R.R. , 312 U.S. 592, 596-97 (1941); Scranton v. Wheeler , 179 U.S
141, 162-63(1900), Confederated Tribes of Colville Reservation v United States , 964 F.2d
1102, 1108 (Fed. Cir. 1992); Owen v United States , 851 F.2d at 1408 A navigational servitude
may be asserted by the government to protect the public interest in navigable waters $ . Good v.
United States , 39 Fed. Cl. 81, 96 (1997) (noting that in United States v Ashland Oil and Transp
ç , 504 F.2d 1317 (6th Cir. 1974), the “interests protected by servitude include protecting
quality of navigable waters”).
This federal “navigational servitude” inheres in a private landowner’s title, and subordinates a
property owner’s interests to those of the federal government. $ Lucas v. South Carolina
Coastal Council , 505 U.S at 1029; M & J Coal Co v United States , 47 F 3d 1148, 1153 (Fed
Cir.), denied , 516 U.S. 808 (1995); Owen v. United States , 851 F.2d at 1407-08. The
Supreme Court in United States v Winstar Corporation , 518 U.S. 839 (1996), recently examined,
in dicta, the navigational servitude doctrine in terms of the Takings Clause.
the navigational easement generally obviates the obligation to pay compensation at all. $ , g,,
United States v. Kansas City Life Ins. Co , 339 U S. 799, 808 (1950) (“When the Government
exercises [ the navigational] servitude, it is exercising its paramount power in the interest of
navigation, rather than taking the private property of anyone”), Scranton v Wheeler , 179 U S.
141, 163 (1900) (“Whatever the nature of the interest of a riparian owner in the submerged lands
in front of his upland bordering on a public navigable water, his title is not as full and complete as
his title to fast land which has no direct connection with the navigation of such water. It is a
qualified title. . . to be held at all times subordinate to such use of the submerged lands and of the
waters flowing over them as may be consistent with or demanded by the public right of
condemnation”). Because an order to pay compensation would have placed the Government in the
same position as if the navigational easement had been surrendered altogether,...
518 U.S at 879 n.23 (alterations in original).
These principles regarding the superior power of the government’s navigational servitude have
been applied in the United States Court of Federal Claims to wetlands and submerged land takings
case, as noted in Good v. United States , 39 Fed. Cl. 81(1997)
This limitation imposed by the servitude has been applied to deny a regulatory takings claim

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where the federal government proscribes the dredging and filling of submerged lands below the
[ mean high water mark], Marks v United States , 34 Fed Cl 387, 403 (1995), affd, 116 F 3d
1496 (Fed. Cir. 1997), [ reh’g denied ji b c suggestion declined (1997), ç i denied , --- U.S. ---,
118 S Ct. 852 (1998),] and deprives a private landowner of land values derived from access to
navigable waters. U.S. v Rands , 389 U.S. 121, 123-27, 88 S. Ct. 265, 266-69, 19 L. Ed. 2d 329
(1967), Owen , 851 F.2d at 1410.
39 Fed. Cl. at 96-97 (footnote omitted). As the Court of Appeals for the Federal Circuit explicitly
stated in Owen v. United States , “the government’s navigational servitude can also serve to
restrict certain uses of riparian land within the bed of a navigable stream that could affect
navigation.” 851 F.2d at 1409 n.5 (citing Lambert Gravel Co v J A Jones Constr. Co. , 835 F.2d
1105 (5th Cir. 1988); United States v DeFelice . 641 F 2d 1169 (5th Cir. 1981)). It bears
repeating that the Supreme Court has announced that it is permissible for “the government to
assert a permanent easement that was a pre-existing limitation upon the landowner’s title.” Lucas
v. South Carolina Coastal Council , 505 U.S. at 1029 As the United States Court of Appeals for
the Federal Circuit noted:
Thus, even when a governmental land use regulation deprives a claimant of all economically
beneficial use of his property, the government may avoid compensation if “the logically antecedent
inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part
of his title to begin with “ Lucas , 505 U S at [ 1027], 112 S Ct at 2899, f. Penn Central , 438
U S at 124-25, 98 S. Ct. at 2659-60. (“ [ T]he Court has dismissed ‘taking’ challenges on the
ground that, while the challenged government action caused economic harm, it did not interfere
with interests that were sufficiently bound up with the reasonable expectations of the claimant to
constitute ‘property’ for Fifth Amendment purposes “) (listing cases)
M & J Coal Co v. United States , 47 F.3d at 1153
Despite the fact that plaintiffs have not argued that section 111 of the Rivers and Harbors Act
abrogates the government’s supreme navigational servitude, it has been suggested that section 111
allows a compensation claim even in the wake of the application of the navigational servitude
doctrine. However, section 111 provides
In all cases where real property shall be taken by the United States for the public use in
connection with any improvement of rivers, harbors, canals, or waterways of the United States
and in all condemnation proceedings by the United States to acquire lands or easements for such
improvements, the compensation to be paid for real property taken by the United States above the
normal high water mark of navigable waters of the United States shall be the fair market value of
such real property based upon all uses to which such real property may reasonably be put,
including its highest and best use, any of which uses may be dependent upon access to or
utilization of such navigable waters In cases of partial takings of real property, no depreciation in
the value of any remaining real property shall be recognized and no compensation shall be paid for
any damages to such remaining real property which result from the loss of or reduction of access
from such remaining real property to such navigable waters because of the taking of real property

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or the purposes for which such real property is taken.
33 U.s c § 595a (1994) (emphasis added).
While section 111 modifies the doctrine articulated in United States v Rands , to provide some
compensation to a private landowner deprived of the value of land above the high water mark, the
provision does not abrogate the navigational servitude generally, nor provide compensation for
economic impacts attributable to the regulation of navigable waters, nor provide compensation for
loss or reduction of access to navigable waters. $ .. 33 U.S.C. § 595a; United States v. Rands ,
389 U.S. at 123-27, United States v. 30.54 Acres of Land , 90 F.3d 790, 796 (3d Cir.
1996) (dismissing regulatory taking counterclaim in condemnation case on ground that prohibition
on existing use below the mean high water mark falls within navigational servitude and was not a
taking pursuant to section 111 of the Rivers and Harbors Act) The legislative history of section
111 provides that it “makes no change in existing law” concerning the application of the
navigational servitude. H.R. Rep. No. 1665, 91st Cong 2d Sess. 31(1970) Section 111 provides
that in cases of partial takings, no depreciation in the value of remaining real property shall be
paid the landowner. 33 U.S.C. § 595a The Supreme Court has addressed the parameters of the
navigational servitude as follows:
This power to regulate confers upon the United States a “dominant servitude,” FPC v. Niagara
Mohawk Power Corp. , 347 U.S. 239, 249 (1954), which extends to the entire stream and the
stream bed below ordinary high-water mark The proper exercise of this power is not an invasion
of any private property rights in the stream or the lands underlying it, for the damage sustained
does not result from taking property from riparian owners within the meaning of the Fifth
Amendment but from the lawful exercise of a power to which the interests of riparian owners
have always been subject.
United States v. Rands . 389 U.S. at 123 (citing United States v. Chicago. Milwaukee. St. Paul &
Pac. R.R , 312 U.S. at 596; Gibson v. United States , 166 U.S. 269, 275-76 (1897)); Owen v.
United States , 851 F.2d at 1408; Coastal Petroleum Co. v. United States , 207 Ct. Cl.
701, 707-08, 524 F.2d 1206, 1210 (1975), cert. denied , 456 U.S. 915 (1982).
The United States Court of Appeals for the Federal Circuit has repeatedly held that, in light of the
dominant interest in preserving the public right of navigation, the authority of the United States
over navigable waters is “supreme” Confederated Tribes of Colville Reservation v. United States ,
964 F 2d 1102, 1108 (Fed. Cir 1992) (citing Gordon v United States , 211 Ct Cl. 310, 311, 546
F 2d 430 (1976), i. denied , 430 U.S 930 (1977)); Goose Creek Hunting Club. Inc v United
States , 207 Ct. Cl. 323, 331, 518 F.2d 579, 583 (1975); Sherrill v. United States , 180 Ct. Cl. 914,
917, 381 F.2d 744, 745-46 (1967), Marret v. United States . 82 Ct. Cl 1, 12, i. denied , 299
U.S. 545 (1936)). Furthermore, “the determination of the necessity for a given improvement of
navigable capacity, and the character and extent of it, is for Congress alone.” United States v
Chicago. M.. SF. & P.R.R. . 312 U.S. 592, 596 (1941); Owen v. United States , 851 F.2d
at 1408. “Land or property within the bed are always subject to (or burdened with) the potential
exercise of the navigational servitude; thus, no compensation is owed when the government takes

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such land or property as the result of aiding the navigability of the stream” Owen v. United
States , 851 F.2d at 1409 (footnote omitted) (citing Tn-State Materials Corp. v. United States ,
550 F.2d 1, 6, 213 Ct. Cl. 1 (1977); Goose Creek Hunting Club. Inc. v United States , 518 F.2d
at 583, 207 Ct. Cl at 331)
The Corps’ permit for dredging and filling the property at issue was denied on May 16, 1990 The
cover letter issued to the plaintiffs stated:
The evaluation of your proposal has been completed and it has been determined that the issuance
of the permit is contrary to the 404(b)( 1) guidelines and contrary to the public interest. The
project would result in the elimination of 50.7 acres of important Lake Worth shallow water
habitat.
Based on the evaluation of all pertinent facts in the file, the permit to fill 50.7 acres of Lake Worth
shallow water habitat is hereby denied.
The Corps’ Memorandum for the Record, date stamped May 16, 1990, regarding the
Environmental Assessment and Statement of Finding for the Palm Beach Isles Associates
Application was signed by Donald Borda, Senior Project Manager, and was reviewed and
approved by two additional Corps officials. In responding to the dredge permit application of
Palm Beach Isles Associates on the issue of the elimination of navigable waters, the memorandum
stated
(11) Navigation: Shallow water depths that already exist in the proposed project area have limited
boating activities to shallow draft vessels Therefore, other than the elimination of [ 49.3] acres of
navigable waters, the project should not have a significant adverse impact on navigation, in
general.
Subsequently, on December 21, 1994, after the above-captioned case was filed, Donald Borda,
signed a written declaration that elaborated on these statements after reviewing the Environmental
Assessment and Statement of Finding. After quoting the language on navigation noted above, Mr.
Borda emphasized:
It is important to clarify that I was referring, there, solely to navigation in the broad sense of the
commercial or recreational vessels that utilize the adjacent federal navigation channel (Intracoastal
Waterway) and that travel in deeper waters. While the proposed fill might not have a significant
adverse effect upon the ability of such vessels to move in the federal channel (although it could
cause some shoaling of the channel and/or changes in quantity, quality, and direction of flow of
the waters), the proposed fill would certainly have an adverse effect on shallow draft vessels that
utilize the shallower areas by eliminating over 49 acres of these shallows and by altering the
course, location, condition, and capacity of [ the] entire waterbody.
The aforementioned statement. . should not be interpreted to mean that the proposed filling

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would not have a significant adverse impact on “navigable waters of the United States” under § 10
of the Rivers and Harbors Act of 1899 (“RHA”), 33 U.S C. § 403, as defined in 33 C.F.R. Part
329. The fill would, without doubt, have a significant adverse affect [ sic l upon the entire
waterbody by altering or modif ’ing the course, location, condition, or capacity of the lake and the
navigation channel, in violation [ of the] RHA 10. This is one of the principal reasons the permit
was denied
(emphasis added)
It is clear to this court that the original denial referred to the “elimination of [ 49.3] acres of
navigable waters.” The subsequent affidavit affirms and clarifies the original statement by noting
that, although the proposed fill would not have a “significant impact” directly upon the
Intracoastal Waterway, it would certainly have a “significant adverse [ e]ffect” on navigability of
shallow draft vessels within the navigational servitude waters and upon the “course, location, and
capacity of [ the] entire waterbody” that is within the navigational servitude.
Therefore, the portion of plaintiffs’ claim before this court that is below the mean high water line,
which is located within the navigational servitude, and which was the subject of the dredge and fill
permit application to the Corps, as authorized, under section 10 of the River and Harbor Act of
1899, 33 U.S.C. § 403, and section 404 of the Clean Water Act, 33 U.S.C. § 1344, creates no
obligation on the part of the government to compensate plaintiffs pursuant to the Takings Clause
of the Fifth Amendment to the United States Constitution The portion of the defendant’s motion
for summary judgment arguing that there has been no taking of the plaintiffs’ 49.3 acres of
property below the mean high water mark within the navigational servitude, is, therefore,
GRANTED.
The court, therefore, turns to an examination of the plaintiffs’ takings claim for the remaining 1 4
acres of property that exist above the mean high water mark. However, prior to examining the
takings claims on the 1.4 acres, the court will address ownership issues that are critical to the
complete disposition of the remaining summary judgment issues currently before the court.
It has long been held that proof of undisputed ownership of the property in question is a
prerequisite to the prosecution of a Fifth Amendment taking claim $. g Cavin v. United States ,
956 F.2d 1131, 1134 (Fed. Cir. 1992) (citing United States v Dow , 357 U.S. 17, 20-21 (1958);
Lacey v. United States , 595 F 2d 614, 619 (1979)), Yachts America. Inc. v. United States , 779
F 2d 656, 662 (Fed Cir. 1985), ç denied , 479 U.S 839 (1986). Only the person or entity
owning the property at the time of the taking is entitled to compensation. ç Lacey v. United
States , 595 F.2d at 619.
Although the history of the permitting process in the instant case appears straightforward, the
factual record of transfers in the property interests is much more complex and murky. For a
number of years after the case was filed, despite the court’s urging, the plaintiffs were unable to
produce documentation of the ownership interests Finally, after submitting confusing records of
ownership, the plaintiffs were able to produce information to allow the parties to stipulate as to
the ownership interests at various milestone dates. As indicated in the Facts section of this

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opinion, on April 20, 1956, Frank Smith, Martin Slifka, and Joseph Slifka acquired a 311.70 acre
parcel of property from the West India Fruit & Steamship Company for a total purchase price of
$380,190.00 “-s
Subsequently, on June 18, 1957, Frank Smith, Martin Slifka, and Joseph Slifica, transferred a one-
quarter interest in the 311.70 acre parcel of property to Morris Brown.
On September 19, 1968, the four owners sold 261 acres of the original 311 7 acre parcel of
property, excluding 49.3 acres of lake bottom and 1.4 acres of adjoining red mangrove/slat marsh
cordgrass wetlands shoreline, to Shell Oil Company for approximately $1,000,000.00. Of the 50.7
acres retained by the owners, 49.3 acres are lake bottom below the mean high water mark and the
remaining 1.4 acres of property are above the mean high water mark. In 1986, a partnership
agreement was partially executed for Palm Beach Isles Associates
In the filings for summary judgment and at oral argument, defendant raised the issue of whether
Palm Beach Isles Associates was an appropriate plaintiff, since it lacked ownership on the date of
the alleged taking, May 16, 1 990. This court, at oral argument, ordered both parties to attempt
to enter into joint stipulations and to produce documentation regarding the ownership interests of
the individual plaintiffs at the relevant times in this case The parties filed a joint submission a
month later which failed to resolve the issue. Over a year later, the parties finally filed a stipulation
of facts setting forth the “ownership interests in the subject property” at various times relevant to
the instant action. According to the joint stipulation of the parties, as of the date of the permit
denial by the Corps, May 16, 1990, the ownership interests in the property were: one-quarter
interest held by Thelma Smith; one-quarter interest held by Martin Slifica, one-quarter interest
held by Joseph Slifka, and one-quarter interest held by Pearl Brown, Ely Margolis and Gerald
Franklin, as Trustees of Last Will and Testament of Morris Brown 2) These later stipulations by
the parties to this action as to the ownership interests in the property at issue render moot the
government’s argument that the plaintiffs failed to establish proper title and ownership
Having addressed ownership issues, the court next addresses the takings claim that applies to the
remaining 1.4 acres existing above the mean high water mark. The record reflects activity by the
Corps which prevented plaintiffs from filling, not only those areas of the plaintiffs’ property below
the mean high water line subject to the exclusive servitude of the United States and for which the
court finds no taking, but also the 1.4 acres above the mean high water line. A permit denial,
however, does not necessarily mean that an unconstitutional taking has occurred under the facts
and circumstances of a particular case. In order to assert a Fifth Amendment taking claim
pursuant to the Tucker Act, 28 U S.C § 1491, a “claimant must concede the validity of the
government action which is the basis of the taking claim to bring suit under the Tucker Act, 28
U.S.C § 1491 “ Tabb Lakes. Ltd. v United States , 10 F 3d 796, 802 (Fed. Cir. 1993) In other
words, to assert a taking claim, the government must have had the authority to regulate the
proposed activity. The rationale is that:
a “Tucker Act suit does not lie for an executive taking not authorized by Congress, expressly or
by implication.” NBH Land Co. v. United States , 576 F 2d 317, 319, 217 Ct. Cl. 41(1978); see

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Southern Cal. Fin. Corp. v United States , 634 F.2d 521, 523, 225 Ct Cl 104 (1980), cert
denied , 451 U.S. 937, 101 S. Ct. 2016, 68 L Ed.2d 324 (1981)(” [ B]efore a compensable taking
can be found by the court, there must be some congressional authorization, express or implied, for
the particular taking claimed.”).
Tabb Lakes. Ltd. v. United States . 10 F. 3d at 802.
There is sufficient uncontested evidence in the record of the instant case to demonstrate that there
was a legitimate state interest in preserving the quality of water for both ecological and
navigational reasons within the area impacted by plaintiffs’ development pian The evidence in the
record establishes that the land at issue is an integral part of the immediate ecological and
navigable environment and that the activity proposed by the plaintiffs in their permit application
could adversely effect Lake Worth and the Intracoastal Waterway Such evidence is
demonstrative of a legitimate state interest. Deltona Corp. v. United States , 657 F.2d 1184,
1187 (Ct. Cl. 1981), denied , 455 U S. 1017 (1982).
Plaintiffs claim that the basis of defendant’s denial of the dredge permit was solely the Clean
Water Act. Plaintiffs claim that although landowners are on notice that all property is subject to
regulation, when the regulation so restricts the potential use of the property so as to deny the
owner of all economically viable use, a taking has occurred. Defendant responds that the dredge
and fill permit application denial is authorized upon both the Rivers and Harbors Act of 1899, 33
U S.C. § 403, and the Clean Water Act, 33 U.S C § 1344
A takings claim is assessed under guidelines established by the United States Supreme Court that
have evolved, as discussed above, into an ad hoc factual inquiry premised upon Penn Central
factors and the c rule announced in Lucas . Lucas v. South Carolina Coastal Council , 505
U S at 1029 (finding that regulation depriving property of all economic value is a taking unless
proscribed property interests were not inhered in the property’s title), Penn Central Transp. Co. v.
New York City , 438 U.S. at 124 (delineating factors of character of government action, economic
impact of regulation, and extent to which regulation interferes with reasonable investment-backed
expectations).
In cases such as the one at bar, the reasonable investment-backed expectations factor of the Penn
Central test limits recovery to property owners who can demonstrate that their investment was
made in reliance upon the non-existence of the challenged regulatory regime In part, the rationale
for this rule is that “one who buys with the knowledge of a restraint assumes the risk of economic
loss.” Creppel v. United States , 41 F.3d at 632 (citing Concrete Pipe & Products. Inc. v.
Construction Laborers Pension Trust , 508 U S. at 645-46), Loveladies Harbor v United States ,
28 F.3d 1171, 1177 (Fed. Cir. 1994)) This inquiry is informed not only by whether the specific
regulatory restrictions at issue were in place at the time of purchase, but also by the regulatory
climate at that time, and whether plaintiffs’ investment expectations in purchase and development
can be considered objectively reasonable in light of the regulatory climate
The owner who buys with knowledge of a restraint can be said to have no reliance interest, or to

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have assumed the risk of any economic loss. Loveladies Harbor. Inc. v. United States , 28 F.3d at
1177; çç Ciampitti v United States , 22 Cl. Ct. 310, 321-22 (1991) (landowner who purchased
wetland with knowledge of the regulatory structure and with warning that the requisite permit
was “virtually impossible to get” had no reasonable investment-backed expectations)
This issue of knowledge of a regulatory restraint was specifically addressed by Deltona Corp. v
United States , 657 F.2d 1184. In Deltona Corp. v. United States , our predecessor court, the
United States Court of Claims, gave background on the Corps’ implementing regulations pursuant
to statutory authority, specifically under the Clean Water Act and the Rivers and Harbors Act,
and stated:
The implementing regulations adopted by the Corps of Engineers pursuant to its statutory
authority have grown increasingly complex and rigorous since the late 1960’s. This, for us, is the
key legal event in the case at bar
Until 1968, the Corps administered the Rivers and Harbors Act solely in the interest of navigation
and the navigable capacity of the nation’s waters. However, on December 18, 1968, in response to
a growing national concern for environmental values and related federal legislation, the Corps
revised its regulations to implement a new type of review termed “public interest review.” Besides
navigation, the Corps would consider the following additional factors in reviewing permit
applications fish and wildlife, conservation, pollution, aesthetics, ecology, and the general public
interest.
On April 4, 1974, the Corps published further revised regulations so as to
a) incorporate new permit programs under Section 404 of the FWPCA;
b) incorporate the requirements of new federal legislation by adding to the factors to be weighted
in the public interest review, including: economics; historic values; flood damage prevention; land-
use classification; recreation; water supply and water quality;
c) adopt further criteria to be considered in the evaluation of each permit application, including
the desirability of using appropriate alternatives; the extent and permanence of the beneficial
and/or detrimental effects of the proposed activity; and the cumulative effect of the activity when
considered in relation to other activities in the same general area;
d) institute a full-fledged wetlands policy to protect wetlands subject to the Corps’ jurisdiction
from unnecessary destruction.
Deltona Corp. v. United States , 657 F 2d at 1187-88 (emphasis original). Deltona v. United
States is a case of particular interest to the instant action because it involves a takings claim
brought by a Florida developer prohibited from completing a multi-phase development intended to
be built upon land to dredged and filled out of wetlands.

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The court in Deltona Corp. v. United States found that at the time the plaintiff in Deltona
acquired its property in 1964, it knew that its development was contingent upon obtaining the
necessary permits from the Corps of Engineers. Ii The court found that although there was an
expectation that the permits would issue, a taking is not established by simply showing “that they
have been denied the ability to exploit a property interest that they heretofore had believed was
available for development.” Deltona Corp v. United States , 657 F.2d at 1193 (quoting Penn
Central Transp. Co. v. United States . 438 U.S. at 130). The court recognized that “ [ t]he
implementing regulations adopted by the Corps of Engineers pursuant to its statutory authority
have grown increasingly complex and rigorous since the late 1960’s.” Deltona Corp. v United
States . 657 F.2d at 1187 (emphasis original) The denial of the permit based on the regulations
subsequent to the purchase of the property, however, was found not to be sufficient to find a
taking I ..at 1193.
Dredging and filling operations have, in fact, been subject to federal oversight since the Rivers and
Harbor Act was enacted in 1899 in which such activities are prohibited without a permit issued
from the federal government 33 U.S.C § 403 By the late 1960s, the Corps’ review of
permits, applied for pursuant to the Rivers and Harbor Act, took into consideration not only
navigation, but also other environmental concerns such as fish and wildlife, conservation,
pollution, aesthetics, ecology and the general public interest. 33 C F R § 209.120(d) (1968).
Prior to the purchase by the plaintiff in the instant action of the subject property, the Corps was
implementing these broad review standards to evaluate Rivers and Harbor Act permits for
activities such as those proposed by plaintiffs, including the filling of wetlands and the connection
of canals inland of the mean high water mark to navigable waters. Deltona Corp. v. United
States , 657 F.2d at 1187. In Zabel v Tabb , 430 F 2d 199 (5th Cir. 1970), i. denied , 401 U.S.
910 (1971), for example, the Fifth Circuit rejected a developer’s challenge to the Corps denial in
1967 of a Rivers and Harbor Act permit to fill tidal wetlands in Boca Ciega Bay, Florida, based
upon ecological concerns Ia . .. at 202; United States v. Sexton Cove Estates. Inc. . 526
F.2d 1293, 1298 (5th Cir. 1976) and Weiszmann v. U.S. Army Corps of Engineers , 526 F.2d
1302, 1303-05 (5th Cir. 1976) (both holding that no taking occurs when the Corps required
permitting of dredging for canals landward of the mean high water mark).
The enactment of the Clean Water Act in 1972 broadened the federal government’s authority over
the nation’s waters, making it unlawfiul to discharge pollutants into those waters except by permit.
33 U S C. § 1311(a). The Clean Water Act placed the authority to regulate discharges of dredged
or fill material in the Corps, 33 U.S.C. § 1344(a), and provided the Environmental Protection
Agency with review authority over ecological and environmental issues related to permitting
decisions. 33 U.S.C. § 1344(c). Shortly after the passage of the Clean Water Act, the
Environmental Protection Agency implemented regulations to protect wetland ecosystems, which
are impacted by dredging and filling practices 38 Fed. Reg 10,834 (May 2, 1973).
Plaintiffs’ claim that the denial of the 1989 permit application prevented their “ability to exploit a
property interest that they heretofore had believed was available for development.” Deltona Corp.
v United States , 657 F.2d at 1193 (quoting Penn Central Transp Co. v. New York City , 438

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U.S at 130). The original purchasers bought the property at issue in 1956. Although the Corps
granted a permit to fill the land in 1957, and subsequently extended it through December 31,
1963, the plaintiffs elected not to utilize the time-limited permit at that time and, thus, allowed
their rights, to dredge and fill the property, to expire, just as the Corps and the federal
government started to change the scope of dredge and fill permitting requirements. Moreover, in
1968, the plaintiffs sold off that portion of the property not subject to increased regulatory
activity, including most of the lands that were above the mean high water mark other than a 2000
foot strip of 1.4 acres along the highway. In 1989, and after decades of regulatory change, the
plaintiffs submitted another permit application, which the Corps denied on May 16, 1990, and
which is at issue in this case. Plaintiffs argue they have been denied all economically beneficial use
of their land despite the fact that in 1968, the parties had a reasonable return on their investment,
from their purchase price of $380,190.00 to the sale price of approximately $1,000,000.00, and
they still retained acreage. In addition, the plaintiffs cannot avoid the fact that they knew any
future dredging and filling of wetlands was contingent upon the appli ation of a permit and
approval of the same, and knew that the act of applying for permitting does not create an
assumption that a permit will be granted. United States v Riverside Bayview Homes. mc ,
474 U.S. 121, 126-27 (1985)
Defendant notes that all the Palm Beach Isles partners, with the exception of Martin Slifka in his
individual capacity, acquired their interests after enactment of the Clean Water Act (as well as the
Rivers and Harbors Act) and after the broadening of the regulatory requirements. Because the 1.4
acres of land at issue is an integral part of the ecological and navigational environment, and the
activity at issue could have a negative impact on the area, plaintiffs should have had no
compensable expectancy to be free from its regulatory scheme.
The United States Supreme Court has written that “ [ j]ust as everyone is charged with knowledge
of the United States Statutes at Large, Congress has provided that the appearance of rules and
regulations in the Federal Register gives legal notice of their contents. 49 Stat 502, 44 U. S.C. §
307 “ Federal Crop Insur Corp. v. Merrill , 332 U.S. 380, 384-85 (1947). Similarly, this court’s
predecessor, the United States Court of Claims, noted that “ [ p ublication of rulings and
regulations in the Federal Register is notice to all of the world “ Lynsky v. United States , 130 Ct.
Cl. 149, 153, 126 F. Supp 453, 455 (1954).
The reasonable investment-backed expectations factor of the Penn Central test limits recovery to
property owners who can demonstrate that their investment was made in reliance upon the non-
existence of the challenged regulatory regime. In part, the rationale for this rule is that one who
invests in property with the knowledge of a restraint assumes the risk of economic loss. Creppel
v. United States , 41 F.3d at 632; Loveladies Harbor. Inc v United States , 28 F.3d at 1177.
Critical to this analysis is whether the specific regulatory restrictions at issue were in place at the
time of purchase, but also relevant is the regulatory climate at the time of purchase, and whether
plaintiffs’ investment expectation in purchasing and developing the property can be considered
objectively reasonable in light of the regulations and that climate
When claimants purchase property, with knowledge of, or are deemed to know of, statutory and

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regulatory restraints, they do not have a reliance interest and they assume the risk of loss.
Loveladies Harbor. Inc. v United States , 28 F.3d at 1177; Ciampitti v. United States , 22 Cl.
Ct at 321-22 (landowner who purchased wetland with knowledge of the regulatory structure and
with warning that the requisite permit was “virtually impossible to get” had no reasonable
investment-backed expectations).
“If a regulation categorically prohibits all economically beneficial use of land -- destroying its
economic value for private ownership -- the regulation has an effect equivalent to a permanent
physical occupation,” and without more is a compensable taking Florida Rock Indus.. Inc. v
United States , 18 F.3d at 1564-65 (emphasis original). Therefore, the economic impact factor
alone may be determinative in some circumstances, and no balancing of factors would be required.
4. at 1564 (citing Lucas v. South Carolina Coastal Council . 505 U.S. at 1028-3 1). “If, however,
a regulation prohibits less than all economically beneficial use of the land and causes at most a
partial destruction of its value, the case does not come within the Supreme Court’s ‘categorical’
taking rule “ Florida Rock Indus. Inc v. United States , 18 F 3d at 1565 Determination of
whether there has been a partial or total loss of economic use, a categorical or p taking,
depends on what specific property was affected by the permit denial. Loveladies Harbor. Inc. v
United States , 28 F.3d at 1180-81.
In Florida Rock Indus.. Inc v United States , the United States Court of Appeals for the Federal
Circuit remanded the case to the trial level court “since loss of economic use and value is the issue
in this regulatory talcing case, it is not possible, absent a valid determination in the record of the
‘after imposition’ value of the land, to know if a taking occurred, much less what the Government
must pay for it.” Florida Rock Indus.. Inc v United States , 18 F 3d at 1573 Whether a partial
taking occurred depends on “the legal import of the final fair market value before and after the
regulatory imposition on the particular property involved “ Loveladies Harbor. Inc v. United
States , 28 F.3d at 1180.
If the tract of land that is the measure of the economic value after the regulatory imposition is
defined as only that land for which the use permit is desired, that is the easiest case for those
arguing that a categorical taking occurred. On the other hand, if the tract of land is defined as
some larger piece, one with substantial residuary value independent of the wetlands regulation,
then either a partial or no taking occurred, depending on the test as described in Florida Rock , 18
F.3d at 1567 çq. This is the denominator problem.
Loveladies Harbor. Inc. v. United States , 28 F.3d at 1180.
Therefore, the instant case presents issues for discussion under the economic impact factor,
namely the denominator determination, discussed in Penn Central Transp Corp v New York
which concerns the size and severability of the parcel in juxtaposition to the evolution of a
regulatory environment that impacted upon the property. The defendant argues that a “parcel
cannot be regarded as functionally divisible into discrete segments.” The Supreme Court in Penn
Central Transp. Corp. v. New York City , in often cited language, states that.
“Taking” jurisprudence does not divide a simple parcel into discrete segments and attempt to

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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 the nature and extent of the interference with rights in the parcel as
a whole.
I ..at 130-31
In the instant case, the defendant correctly argues that the parcel to be considered is not the 50.7
acres in dispute, but rather the original 311.7 acres. The Court of Appeals for the Federal Circuit
stated in Loveladies Harbor. Inc. v. United States that, “precedent displays a flexible approach,
designed to account for factual nuances when evaluating a particular fact pattern to determine
parcel size and severability” 28 F.3d at 1181 (discussing Deltona Corp. v. United States , 657
F.2d 1184; Whitney Benefits. Inc. v. United States , 926 F 2d 1169 (Fed Cir 1991), denied ,
502 U.S 952 (1991)). The court in Loveladies Harbor. Inc. v. United States held that the factual
nuances include consideration of the timing of transfers in light of the developing regulatory
environment, and upheld the trial court conclusion, based on facts in the record, that land
developed or sold before the regulatory environment existed should not be included in the
denominator. Loveladies Harbor. Inc. v. United States , 28 F. 3d at 1181. This court concludes
that, in the case at bar, the logical converse of this analysis is that the property sold after the
regulatory structure was imposed, the 261 acres, should be included in the denominator for the
purposes of assessing the critical property at issue
On April 20, 1956, Frank Smith, Martin Slifica, and Joseph Slifica acquired a 311.7 acre parcel of
property, including the 50.7 acres at issue in this action, from the West India Fruit & Steamship
Company for a total purchase price of $380,190 00 On September 19, 1968, the four owners
sold 261 acres of the 311.7 acre parcel of property, excluding 49.3 acres of lake bottom and 1.4
acres of adjoining red mangrove/salt marsh cordgrass wetlands shoreline, to Shell Oil Company
for approximately $1,000,000 00 As discussed above, at the time of the sale, the plaintiffs knew
that their permit for dredging and filling had expired and they were aware of the permit process
and the need for a permit Moreover, plaintiffs sold off the portion of the parcel not subject to
permitting after the Corps started to enforce a broader regulatory scheme in accord with the River
and Harbors Act of 1899. While plaintiffs attempt to argue that the denial of the dredge and fill
permit was premised solely on the Clean Water Act, which was not passed until 1972, the record
reflects that the denial of the plaintiffs permit was authorized by both navigational and
environmental concerns under both the Rivers and Harbors Act and the Clean Water Act In
addition the parties have stipulated that on May 31, 1989, the Army Corps of Engineers received
the permit application pursuant to section 10 of the Rivers and Harbors Act of 1899, 33 U. S.C. §
401-467, and section 404 of the Clean Water Act, 33 § U.S C 1251-1387. The record is clear
that the Corps denied Palm Beach’s permit application on May 16, 1990, pursuant to both acts
Regarding the character of the government action, the United States Supreme Court summarized
the current judicial approach and its origin, as follows:
“Harmful or noxious use” analysis was, in other words, simply the progenitor of our more

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contemporary statements that “land-use regulation does not effect a taking if it ‘substantially
advance [ s] legitimate state interests’. . “ Nollan, supra , at 834 (quoting Agins v. Tiburon , 447
U S., at 260; Penn Central Transportation Co. , 438 U.s , at 127, Euclid v. Ambler Realty
Cc, 272 U.S 365, 387-388 (1926).
Lucas v. South Carolina Coastal Council , 505 U S. 1003, 1023-24 (citations omitted). “That the
purpose and fUnction of the regulatory imposition is relevant to drawing the line between mere
diminution and partial taking should not be read to suggest that when Government acts in pursuit
of an important public purpose, its actions are excused from liability.” Florida Rock Indus . Inc v.
United States , 18 F.3d at 1571. After Lucas v. South Carolina Coastal Council , “the question” is
“whether, under controlling law, the regulatory imposition goes beyond the Government’s powers
under common law nuisance doctrine, and thus constitutes a taking “ Loveladies Harbor. Inc v
United States , 28 F 3d at 1179, 1182 Subsequently, the United States Court of Appeals for the
Federal Circuit wrote
the character of the government action -- examines the challenged restraint under the lens of state
nuisance law If the regulation prevents what would or legally could have been a nuisance, then no
taking occurred. The state merely acted to protect the public under its inherent police powers
Lucas v South Carolina Coastal Council , [ 505] U.S [ 1003], [ 1028-30] 112 S. Ct 2886, 2900,
120 L Ed.2d 798 (1992). Here the courts must inquire into the degree of harm created by the
claimant’s prohibited activity, its social value and location, and the ease with which any harm
stemming from it could be prevented. .. If state nuisance law does not justify the restraint, the
court must proceed to the remaining criteria
Creppel v. United States , 41 F.3d at 631.
Based on the facts presented in Loveladies Harbor. Inc. v United States , the landfill project in a
permit denial case was found not to constitute a nuisance under state law 28 F.3d at 1182 In
particular, the court in Loveladies Harbor. Inc. v. United States found that where the state had
already “agreed as a result of negotiations conducted in the shadow of the state law suit” that the
plaintiff could fill the property at issue, “ [ i]t would be inequitable to allow the state, through the
medium of the federal permit process, to now exercise authority to prevent the fill, an authority
which it publicly acknowledged it either did not have or was unwilling to exercise.” Loveladies
Harbor. Inc v. United States , 28 F.3d at 1182 In addition, in Bowles , the court held that, where
the government had not argued that the proposed lot use constituted a nuisance under state law, it
was “unnecessary for the Court to extensively address the nuisance issue as in prior cases.”
Bowles , 31 Fed Cl. at 51 (citing Florida Rock Industries. Inc v. United States , 21 Cl. Ct. 161,
167 (1990), vacated and remanded on other grounds , 18 F 3d 1560 (Fed. Cir 1994), Loveladies
Harbor. Inc. v. United States , 15 Cl. Ct. 381, 389 (1990)).
An examination of the character of the government action in the above-captioned case
demonstrates that the permit denial by the government did impact on the plaintiffs’ stated intention
to develop the land. However, the regulatory permit requirements do not, p , amount to a
regulatory taking, unless the regulatory action goes “too far.” Tabb Lakes. Ltd. v. United States ,

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10 F.3d at 800. “ [ W]hile property may be regulated to a certain extent, if regulation goes too far
it will be recognized as a taking.” 767 Third Ave. Assoc. v. United States , 48 F.3d 1575, 1580
(Fed Cir. 1995) (citing Pennsylvania Coal Co. v. Mahon , 260 U S 393 (1922)). As stated by the
Supreme Court in United States v. Riverside Bayview Homes. mc , 474 U.S. 121, 126-27 (1985).
Moreover, we have made it quite clear that the mere assertion of regulatory jurisdiction by a
governmental body does not constitute a regulatory taking. . . . A requirement that a person
obtain a permit before engaging in a certain use of his or her property does not itself “take” the
property in any sense: after all, the very existence of a permit system implies that permission may
be granted, leaving the landowner free to use the property as desired. Moreover, even if the
permit is denied, there may be other viable uses available to the owner. Only when a permit is
denied and the effect of the denial is to prevent “economically viable” use of the land in question
can it be said that a taking has occurred
Id
In 767 Third Avenue Associates v United States , 48 F 3d at 1580, the court noted that:
To analyze whether a regulation goes so far as to constitute a taking, the Supreme Court has
indicated that there is no set formula, the determination depends upon the particular
circumstances of the case. Penn Central , 438 U S at 124, 98 5. Ct. at 2659. “Ordinarily, the
Court must engage in ‘essentially ad hoc, factual inquiries.” Loretto v. Teleprompter Manhattan
CATV Corp. , 458 U.S. 419, 426, 102 S. Ct. 3164, 3171, 73 L Ed.2d 868 (1982) (quoting Penn
Central , 438 U.S. at 124, 98 S. Ct at 2659).
As discussed immediately above, the record in the instant case does not establish a taking
and demonstrates that plaintiffs, despite their takings claim, still profited significantly from their
investment as a result of the sale of the 261 acre piece of the property. The takings clause in the
Constitution should not be construed to provide a windfall to claimants in light of the known
regulatory permitting requirements or the selling off of valuable portions of a parcel by the
plaintiffs and their retention of only those acres subject to regulation.
The following discussion in Ciampitti v United States regarding a definition of the parcel to be
considered in the type of case currently at issue is particularly relevant:
before it can be determined whether the permit denial had the effect of taking all economically
viable use of the property, the property has to be defined In Keystone Bituminous Coal Ass’n v
DeBenedictis , 480 U.S. 470, 497, 107 S Ct. 1232, 1248, 94 L. Ed 2d 472 (1987), and Penn
Central Transp. Co. , 438 U S. at 130-3 1, 98 S Ct at 2662, the Court focuses the inquiry on the
“parcel as a whole.” Admittedly, in those cases the Court was not directly dealing with a
governmental contention that additional land ought to be included in the calculus. Instead, the
question was whether certain rights within a “bundle” of rights could be segregated and viewed
separately. That same analysis may not always be appropriate in weighing the Government’s
contention that the analysis should be broadened to include other property held by the plaintiff

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but in the court’s view, it fits here.
In the case of a landowner who owns both wetlands and adjacent uplands, it would clearly be
unrealistic to focus exclusively on the wetlands, and ignore whatever rights might remain in the
uplands. If a governmental entity required a buffer, for example, around a housing development, a
court would not entertain a separate claim for the land dedicated to buffer. It would no doubt take
into consideration the extent to which the whole parcel could be developed. Factors such as the
degree of contiguity, the dates of acquisition, the extent to which the parcel has been treated as a
single unit, the extent to which the protected lands enhance the value of remaining lands, and no
doubt many others would enter the calculus The effect of a taking can obviously be disguised if
the property at issue is too broadly defined. Conversely, a taking can appear to emerge if the
property is viewed too narrowly. The effort should be to identi1 the parcel as realistically and
fairly as possible, given the entire factual and regulatory environment
22Cl Ct at 318-319
In discussing Deltona Corp. v United States , the court in Ciampitti v United States noted that
the parcel to be considered consisted of “not only those areas as to which dredge and fill permits
were denied, but also those areas that had been successftilly developed earlier “ Ciampitti v.
United States , 22 Cl. Ct. at 320. The instant action presents a similar picture. Perhaps most telling
is the discussion in Ciampitti v United States regarding the implications of severing the parcel
into discrete segments despite prior gains on some portions
It would be inappropriate to allow [ the developer, Ciampitti,] now to sever the connection he
forged when it assists in making a legal argument. Ciampitti is, in effect, asking to isolate the least
valuable portion of the purchase when he himself saw the parcels as inextricably linked in
September 1983 The court concludes that “the parcel as a whole” must, in this case, include
those uplands purchased.
Ciampitti v. United States , 22 Cl. Ct. at 320
In the above-captioned case, it is a fact that the plaintiffs garnered approximately $1,000,000 00
for the sale of 261 acres of the parcel in 1968, on an original investment of approximately
$380,000.00 in 1956 for a parcel of3 11.7 acres Given that the original investors recouped on
their investment, coupled with the property owners realistic, minimal expectations regarding “the
absorption rate” of the submerged acreage upon development, the Court is concerned that
plaintiffs would gain a windfall where they have already profited In addition, the Corps
specifically did not suggest that the plaintiffs could not develop the property at all and the original
permit application to the State of Florida upon denial also emphasized that a “design
incorporating features resulting in minimal environmental impact such as docks and boardwalks,
could be pursued “In keeping with the cases in this circuit, it is apparent that the parcel to be
considered in the instant action should be the original purchase acreage of 311 7 acres, and that
the plaintiffs have already achieved a significant return on their investment The plaintiff asks the
court to examine this alleged taking in a microcosm, and not as a 311.7 acre parcel, although it is

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apparent that the sale of 261 acres of beachfront upland in 1968, in the midst of well-publicized
regulatory changes, significantly impacted the value of the remaining submeEged acreage parcel
and the plaintiffs’ intent to develop those acres for another twenty years. Plaintiffs realistic
expectations also should have been impacted by the fact that they allowed the dredge and fill
permit for the lands at issue to expire, when they knew or should have known that they would be
required to reapply for a permit. A permit, by its very nature, is never guaranteed, since the act of
applying indicates the possibility of denial.
Once the property below the mean high water mark is disposed of as legally outside the realm of
the takings clause, there remains a parcel of some 1 4 acres of wetlands, extending over 2000
linear feet alongside a highway and Lake Worth. This 1.4 acres is not a discrete segment, but must
be assessed as part of an entire parcel, that consists of either 311.7 acres, as originally purchased
by related investors, or as part of the 50.7 acres that the plaintiffs retain at this date Even if the
court were to consider only the 50.7 acre parcel retained at present by the plaintiffs, the remaining
1.4 acres at issue are not subject to a government taking.
It is apparent from the record that the 1.4 acres of wetland shoreline, independent of the 49.3
acres subject to the navigational servitude, could not support a housing development project, let
alone a single house, and, thus, would be of minimal value, either pre- or post-government
regulation, for the stated purposes of Palm Beach Isles This conclusion, that the property has
minimal pre-government regulation value also is supported by documentation that in August of
1986, prior to the denial of the dredge and fill application by the Corps, Martin Slifka paid
$1500.00 to Thelma Smith for her one-quarter interest in the entire 50 7 acre parcel (This
payment stands in contrast to the $10,000,000 00 claimed by the plaintiffs as damages for their
taking claim for the entire 50.7 acre parcel.) Plaintiffs’ posture, given the facts presented, is akin
to those presented to the court in Ciampitti v. United States , 22 Cl Ct at 322, which noted how
the plaintiff in Ciampitti perhaps had gone beyond the concept of reasonable investment-backed
expectations into the realm of “unreasonable.”
The plaintiffs have not been denied access to navigable waters, nor has the government taken the
plaintiffs’ upland property for public use under the authority of the Rivers and Harbors Act, 33
U.S.C. § 595a In addition, the plaintiffs still have the right to apply for a permit from the Corps
and a zoning variance from the state and local authorities that would allow for water dependent
uses for the 50.7 acre parcel The court also notes that any valuation of the economic impact of
the regulation upon the plaintiffs’ property must consider whether other viable development
options have not been explored by the plaintiffs The court, therefore, finds that the regulations at
issue do not in and of themselves categorically deny the plaintiffs all beneficial use of their land,
nor did the Corps’ permit denial undermine reasonable investment-backed expectations on the part
of the plaintiffs.
CONCLUSION
The plaintiffs’ claim for a taking under the Fifth Amendment of the United States Constitution is
not viable in that the navigational servitude removes from the takings inquiry some 49.3 acres of

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the plaintiffs’ property within the navigational servitude waters below the mean high water mark.
In addition, the plaintiffs’ claim for the remaining 1 4 acres is not a p taking of land when the
entire parcel of either 311.7 acres or 50.7 acres is considered. Moreover, the plaintiffs did not and
do not have a reasonable investment-backed expectation of the value of this 1.4 acres when
assessed in the context of the expectation for the entire parcel, of which 49 3 acres are subject to
the navigational servitude, and of which 261 acres were sold for a substantial gain. Therefore, the
court, hereby, DENIES plaintiffs’ motion for summary judgment, and GRANTS defendant’s
cross-motion for summary judgment.
IT IS SO ORDERED
- MARIAN BLANK HORN
Judge
1. Initially, the plaintiffs filed a complaint solely in the name of Palm Beach Isles Associates, a
Florida partnership (Palm Beach Isles). The defendant challenged Palm Beach Isles’ ownership of
the property at issue, in pleadings submitted and at oral argument, arguing that Palm Beach Isles
did not “own the property at the time of the permit denial.” Subsequently, the complaint was
amended to indicate that Palm Beach Isles maintained equitable title to the property at issue and
to include the parties with legal title to the property Those parties pleaded to have legal title are
Martin Slifka, individually and as trustee, Marjorie Margolis and Roberta Franklin, individuals as
tenants in common; and the Estate of Joseph Slifka, represented by Alan Slifica and Barbara J.
Slifka, co-executors. Since the initiation of this litigation, this court attempted in numerous orders
and at status conferences to elicit verified information, that could be stipulated to, from the parties
as to legal ownership of Palm Beach Isles. It was not until July 9, 1996, that the parties submitted
stipulations of fact defining the legal title ownership interests of the plaintiffs in the subject
property This submission, along with the amendment to the complaint defining the parties at
interest, resolved the questions of ownership interests to which the defendant had devoted
extensive attention in its arguments
2. In making its findings of fact, this court relies, in part, upon the agreed upon facts derived from
the plaintiffs’ “Proposed Findings of Fact;” the defendant’s “Proposed Findings of Uncontroverted
Fact,” and the plaintiffs’ “Amended Proposed Findings of Uncontroverted Fact.” This reliance is
based on the oral stipulation of both parties at oral argument following a detailed discussion in an
effort to unscramble the confusing submissions In addition, over a year, later the parties filed a
joint submission defining the ownership interests of the subject property The filings in the case
consistently have been submitted by plaintiffs’ counsel in the improper format and it has been
difficult to resolve outstanding issues of fact, despite the plaintiffs’ consistent contention that this
case should be resolved on summary judgment.
3. In 1956, Frank Smith, Martin Slifka, and Joseph Slifka purchased a parcel approximately one
mile south of the 311.7 acre parcel of property. This southern parcel was developed into 191 lots,
which were sold over a period of approximately ten years This action has no direct connection to
that development.
4 The parties stipulated that the plaintiff purchased fill from the Trustees of the Internal
Improvement Trust Fund of the State of Florida in 1956, however, it appears from the exhibits

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attached to the plaintiffs’ motion for summary judgment that the transaction for 390,000 yards of
fill occurred on July 16, 1957.
5. The Atlantic Intracoastal Waterway is defined in 33 U.S.C. § 1804 (1994) as “ [ t]wo inland
water routes approximately paralleling the Atlantic coast between Norfolk, Virginia and Miami,
Florida for 1,192 miles via both the Albermarle and Chesapeake Canal and Great Dismal Swamp
Canal routes”
6 At a deposition of Mr. Martin Slifka on September 12, 1994, upon questioning by government
counsel, Mr. Slifka stated the reason for the plaintiffs’ decision to not develop the submerged land
at issue in the instant case:
Q. Why wasn’t it developed when you had the permit in ‘57?
A Well, we can only develop one piece at a time and we did the southern piece. We had intention
of developing the northern piece after the southern piece was finished and sold. It took
approximately ten years to sell that property on the — to sell 191 lots on the southern piece called
Palm Beach Isles, and by that time the partners decided that the absorption rate for that kind of
property on the water was very poor, so we decided not to develop the northern piece.
Q. When was that that you decided not to develop the northern piece?
A. About — the northern piece, ‘67.
7. As of 1968, the ownership interests in the property were: one-quarter interest held by Frank
Smith, one-quarter interest held by Martin Slilka, one-quarter interest held by Joseph Slifka; and
one-quarter interest held by Pearl Brown, Ely Margolis and Gerald Franklin, as Trustees of Last
Will and Testament of Morris Brown
8. Plaintiffs’ February 8, 1990 response to the Corps’ public notice process, concerning the
project Palm Beach Isles intended to develop, discusses the nature of the property the plaintiffs
retained “The proposed site consists almost entirely of submerged lands.. . The only transitional
and upland areas of the site consist of a thin strip along the eastern property line adjacent to State
Road 703.”
9. Notably, despite the repeated references by plaintiffs that no alternative uses are available,
there is no indication in the record that the plaintiffs attempted to seek a zoning change or land
use exemption from the city, county or state for a marina or any other purpose. Nor is there any
evidence in the numerous permit and application documents attached to the summary judgment
pleadings indicating any attempt by the plaintiffs to seek a zoning variance Moreover, the DER
specifically stated that “a design incorporating features resulting in minimal environmental impact,
such as docks and boardwalks, could be pursued”
10. According to the joint stipulation of the parties, as of the date of the permit denial by the
Corps, May 16, 1990, the ownership interests in the property were one-quarter interest held by
Thelma Smith; one-quarter interest held by Martin Slifka, one-quarter interest held by Joseph
Slifka, and one-quarter interest held by Pearl Brown, Ely Margolis and Gerald Franklin, as
Trustees of Last Will and Testament of Morris Brown. It appears from documents attached to
defendant’s motion to dismiss that, in August 1986, Martin Slifica acquired Thelma Smith’s one-
quarter interest in the property for $1,500.00
11 While the Corps delineated 48.4 acres as navigable waters, the parties stipulated that 49.3
acres of the property at issue exist below the mean high water mark At oral argument before this
court plaintiffs’ counsel stated that “ [ a]bout 49.3 acres” were submerged lands below the mean

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high water mark.
12. The following colloquy occurred between the court and plaintiffs’ counsel regarding the
plaintiffs’ knowledge of the government’s navigational servitude over the submerged lands
THE COURT: . . . But much more serious to the liability issues seems to me the question of the
navigability of the water is at issue here And I’m not sure I understand from the briefings that I’ve
read and looked at, whether or not the plaintiff knew that the lake bottom portion of the parcel
was considered navigable water.
At the time that the permit application was actually submitted, did the relevant plaintiffs know of
that at the time of the application submission or not?
MR TAYLOR Yes. . . Now [ the plaintiffs halve always filed for permits and gone through the
permit process. And they’ve always known and they’ve always known in dealing in South Florida
that the United States government up and down the int [ ra]coastal [ waterway] has all these
servitude rights. All these rights
THE COURT:. Do you dispute that this was considered navigable water?
MR TAYLOR: My answer is yes, this is navigable water.
13 In general, the rules of this court are patterned on the Federal Rules of Civil Procedure
Therefore, precedent under the Federal Rules of Civil Procedure is relevant to interpreting the
rules of this court, including RCFC 56 Jay v Sec’y DHHS , 998 F.2d 979, 982 (Fed Cir
1993), Imperial Van Lines Int’l. Inc. v. United States , 821 F 2d 634, 637 (Fed. Cir. 1987),
Lichtefeld-Massaro. Inc v. United States , 17 Cl. Ct. 67, 70 (1989).
14 The defendant’s papers also argue that Palm Beach Isles failed to establish ownership of the
property on the date of the alleged taking. Initially, the plaintiffs filed a complaint solely in the
name of Palm Beach Isles. The defendant challenged Palm Beach Isles’ ownership of the property
at issue, in pleadings submitted and at oral argument, arguing that Palm Beach Isles did not “own
the property at the time of the permit denial.” Subsequently, the complaint was amended to
indicate that Palm Beach Isles maintained equitable title to the property at issue and to include
parties with legal title to the property Those parties pleaded to have legal title are Martin Slifka,
individually and as trustee; Marjorie Margolis and Roberta Franklin, individuals as tenants in
common; and the Estate of Joseph Slifka, represented by Alan Slifka and Barbara J. Slifka, co-
executors. After repeated oral and written orders from the court, subsequent to the amended
complaint, the parties submitted stipulations of fact defining the legal title ownership interests of
the plaintiffs in the subject property since 1899. This submission, along with the amendment to the
complaint defining the parties at interest, negates the bulk of defendant’s argument that focused
upon questions of established ownership; however, as discussed below, the questions of title are
significant for the discussion regarding those individuals presumed to have knowledge of a
regulatory scheme employed by the government.
15 It is interesting to note that Mr Martin Slifka, upon questioning by government counsel, Mr.
Joel Armstrong at a deposition on September 12, 1994, stated that a group of corporations had
made the purchase
Q. How did you first become familiar with Palm Beach Isles Associates?
A Well, when we first purchased the property, we had a very different set-up It was a group of

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corporations. And subsequently, we sold a piece of property, a piece of waterfront property to the
south of the property in question. We then decided to form a partnership for the property in
question.
Q. You said originally it was a corporation?
A. It was many corporations.
Q. Who owned those corporations?
A. The same partners.
Q. The same partners as who?
A. The same partners who own the property today.
Q. You said a part of the property was sold, the waterfront --
A. All of it, all of this -- all of the property owned by the corporations was sold completely.
Q. When did that occur?
A. In the neighborhood of 1969, plus or minus.
Q Who purchased the property?
A. Myself and three other partners, myself and two other -- correction, myself and two other
partners purchased the property
* **
Q. Mr. Slifica, can you describe for me when you first acquired the property at issue in this
lawsuit 9
A Repeat the question.
Q. Can you tell me when you first acquired the property in this lawsuit and the circumstances
surrounding that?
A. Yes, we acquired this property in 1956 from the West India Fruit & Steamship Co.
Q. You acquired it as a corporation? Was that when the group of corporations purchased the
property, you said it was originally owned by a group of corporations earlier?
A Yeah, but -- yeah, yes, but the property was purchased in the name of three partners at that
time.
Q Who are those people?
A. Martin Slifka, Frank M. Smith and Joseph Slitka
Q. Who were the owners when you acquired the permit in 1957?
A. The four partners; Martin Slifka, Joseph Slitka, Morris Brown and Frank M. Smith.
Q. And they held the property as a corporation, or as a group of corporations at that time?
A Yes.
Q. What were the names of the different corporations that they held?
A. The Pelican Corporation, the Heron Corporation, the Gulfstream Corporation. We had quite a
few corporations, probably eight or nine, and each corporation owned a certain number of lots in
that southern piece that I spoke about before we were called Palm Beach Isles.
Q. What about the northern piece that’s in litigation now, did the corporations hold that property
too, the corporations you just named?
A. Yes

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16 The deed recording this transfer does not specifj a purchase price.
17. Although plaintiffs claim that a partnership agreement was fully completed, this court has not
yet seen any evidence of one. At Mr. Martin Slifka’s September 12, 1994, deposition he stated the
following, upon questioning by defendant’s counsel, Mr. Joel Armstrong, concerning the Palm
Beach Isles Associates partnership agreement
Q. Can you give me an estimation now of the date of the formation?
A. I believe it was ‘89, something like that, ‘89, in that neighborhood that it was formed.
Q. Can I take a look at that document? . This is labeled partnership agreement, is this the
partnership agreement for Palm Beach Isles Associates?
A. Yes.
Q. Can I direct your attention to the signature page of the agreement 7 This copy has been signed
by three people, is there a frilly executed copy of this agreement?
A. Yes.
Q Do you have a fully executed copy of the agreement with you 7
ANo
Q. Can you provide me with a copy, a frilly executed copy?
AYes
MR. TAYLOR: You’ll get it in my office and I’ll forward it up to the Government.
THE WITNESS You want to make a note?
MR. TAYLOR: Yes, I’ve got it right up here in my head
BY MR. ARMSTRONG:
Q. Mr. Slifka, do you recall the date on which the agreement was fully executed?
A The day I signed it, it was not done on one single day because the partners were in -- lived in
different areas, so I signed it on a certain day and they signed it a little before and a little after.
MR. TAYLOR: Whatever date appears on the instrument, that will be the date it was signed by
the individuals. Sometime in 1986.
18. Defendant notes that the partnership agreement for Palm Beach Isles Associates identifies a
group of owners that differs from both the complaint and the executed deeds Defendant points to
a 1986 partially executed Palm Beach Isles partnership agreement, that lists the Palm Beach Isles
Associates partners as the following people: Martin Slifka (32.5 percent), Marjorie Margolis (12.5
percent), Roberta Franklin (12.5 percent), Joseph Slifka (25 percent), Martin Greller (7.5
percent), J. Allen Yaeger, M.D. (5 percent), Jack Schiffman (2 5 percent), Estate of Charles E.
Goldberg (2 5 percent).
Moreover, the precise nature of this partnership is somewhat questionable in that Mr. Slifka in his
September 12, 1994 deposition stated that the partnership consisted of seven or eight partners. In
addition, the plaintiffs alleged through a document attached to the original complaint that Palm
Beach Isles Associates allegedly has thirteen members, comprised of the following Marjorie
Margolis, Martin M. Greller, Roberta Franklin, Richard Slifica, Robert Slifka, Joan Slifica, Joseph
Slifka, Martin Slifica, Henry Slifica, Henry Yager, Paul Yager, Jack SchiiThian, and Roy A.
Hammer, all of whom do not correspond to those individuals to whom Martin Slifica apparently
transferred a property interest in October of 1990.

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19. It appears from documents attached to the defendant’s motion for summary judgment that, in
August 1986, Martin Slifka acquired Thelma Smith’s one-quarter interest in the property for
$1,500.00. However, for the purposes of this action, whether Martin Slifica or Thelma Smith
owned the one-quarter interest that was originally owned by Frank Smith would not impact the
result in this case because, as discussed below, either individual would have acquired their interest
in the property after the Corps changed dredge and fill permit application regulations in the I 960s
and early 1970s. In addition, Thelma Smith was not included as a party to this action

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Pa9e21
Property Rights Legislation: Process Bills
David F. Coursen
Background
Prior to the 105th Congress, proposals for property rights legislation, at both the state and federal levels,
had generally taken two forms. The assessment approach, typified by and in large part originating with federal
Executive Order 12630 is to require governmental entities to assess the impacts of their regulatory actions on
private property. This was the approach generally taken in federal proposals prior to the 104th Congress and in
most state legislation. The second approach, reflected most clearly in assorted proposals in the last Congress, and
legislation enacted in Texas and Florida, is to require that in certain instances the government pay compensation to
the owners of property adversely affected by regulation. These approaches are discussed more fully in the attached
article, and will be a subject of NanciB Marzulla’s presentation.
In the 105th Congress, despite the introduction of an omnibus Senate bill (S. 781), with both
compensation and assessment provisions, the main emphasis has been on a third, process approach which seeks to
increase access to federal courts for taking plaintiffs. Two significant process bills are currently pending in the
105th Congress. The first, which had predecessors in proposals in previous Congresses, focuses on claims against
the United States. The second, which appears to represent a new approach to federal property rights legislation,
would make it easier to pursue taking claims against state and local governments in federal court. At this writing,
H.R. 992, which takes the first approach, has been reported out of the House Judiciary Committee, while H.R.
1534. which takes the second, has passed the House.
HR. 992
H.R. 992 (with the colorful, if arcane title The Tucker Act Shuffle Relief Act ) has its genesis in an
anomaly in federal law. Under the Tucker Act, the Court of Federal Claims (CFC) has exclusive jurisdiction to
address taking claims against the United States in excess of $10,000. However, direct challenges to the validity of
the action giving rise to a purported taking must be brought in U.S. District Court, which, by statute, lacks
jurisdiction over taking claims exceeding $10,000. This means that landowners unhappy with the effect of
government regulations on their property can either challenge the regulatory action in district court or seek
compensation in the CFC. H.R. 992 would simplify this process by expanding the jurisdiction of both courts, so that
a single judge in either the district court or the CFC (whichever plaintiff chooses) could resolve all the issues
concerning the regulatory action.
Despite its obvious appeal, this approach may raise constitutional issues. The CFC was created under
Article I of the Constitution for the limited purpose of awarding monetary compensation against the United States,
and its judges do not have life tenure or the other protections of Article Ill. Broad authority to construe, interpret,
and, ultimately, invalidate Acts of Congress and regulatory actions, the argument goes, should be confined to Article
Ill judges. One way to overcome this objectioN would be by leaving the CFC’s jurisdiction as it is, but eliminating the
compensation limits for district courts, which could then provide a complete remedy.
H.R. 992 also repeals 28 U.S.C. § 1500, which precludes CFC jurisdiction over any claim where, at the
time of filing, the plaintiff had another action regarding the same claim against the U.S. pending in any other court.
Read literally, this provision could apply to a taking claim regarding a regulatory action filed while plaintiff had an

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ra e 3 1
invalidation action pending. However, the Federal Circuit, sitting en banc . has held that § 1500 does not apply to
jurisdiction over a taking claim filed while an invalidation action is pending. Loveladies Harbor. Inc. v. U.S. , 27 F.3d
1545 (Fed. Cir. 1994).
H.R. 1534
H.R. 1534 is broader and more ambitious. It is addressed at two purported problems, separate but related.
The bill would address the first, the reluctance of federal courts to hear taking claims against state and local
governments, by limiting the ability of federal courts to abstain from hearing such claims. The second, the difficulty
of obtaining the type of final, definitive regulatory decision needed to ripen a taking claim, is addressed by
establishing a statutory 1 ripeness standard for takings actions in federal court.
1. Abstention
The bill would prohibit federal courts from abstaining from resolving taking cases where there is no claimed
violation of State law and no parallel state court proceeding underway. This would likely give the federal courts a
greater role in overseeing state and local regulatory decisions. It could mean that even where the state law issues
presented by a local land use decision are numerous and difficult, and the factual record supporting the decision is
complex and uniquely local, a federal court could not abstain from hearing the case. The bill provides for limited
certification of unsettled state law questions to state courts, but in all such cases the taking claim must ultimately
be resolved in federal court. This could substantially increase the caseloads--as well as the powers-.of the federal
courts.
2. Ripeness
Under existing law, a taking claim is not ripe until there is a final decision as to how the challenged
regulations will affect the developer’s property. Williamson County v. Hamilton Bank . 473 U.S. 172, 199.200
(1985). This ensures that a court can accurately and definitively assess the economic impact of the government
action. Where a claim is dismissed as unripe, the property owner can return to the regulatory process, and ripen the
claim. The rejection of one proposal does not necessarily dose the door on other, less ambitious proposals. Ideally
the approval process can Jead to a cooperative effort to find solutions that satisfy the needs of both the community
and the developer. At worst, however, it may let regulators evade takings liability indefinitely, rejecting each
individual proposal, without ever foreclosing approval of some other, less ambitious proposal.
Under the bill, a claim is ripe where there has been a final decision.. by any person ... that causes actual
and concrete damage to the party seeking redress. A decision is final where one meaningful application as defined
by the local government2 to use the property has been submitted but not approved,3 and there has been one appeal
or waiver. However, a claim is not ripe if a written disapproval specifies the use, density, or intensity of
development of the property that would be approved , with any conditions therefor. [ emphasis added]. In such a
case, the developer can accept the pre-approved proposal or ripen the claim by filing a new application taking into
account the terms and conditions of the preapproval.4 In some cases, preparing a pre-approval could require
devoting substantial public resources to facilitate a private, for-profit development.
The bill also allows a property owner to bring a taking claim in federal court without exhausting the judicial

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Page 4
remedies the state has established. This would apparently allow an owner to proceed with a taking claim without
pursuing avenues the state provides for obtaining compensation. This may be at tension with the Fifth Amendment
principle that there is no constitutional violation if a plaintiff has a legal avenue for obtaining just compensation.
See Preseault v. I.C.C. , 494 U.S. 1, 11(1990).
Thus a claim is ripe as soon as a particular proposal is rejected. This significantly departs from current
ripeness law, allowing taking litigation much earlier. However, a taking plaintiff must still establish the economic
impact of the challenged regulation. Thus a taking claim could be ripe, under the bill, but unsupported by sufficient
evidence of economic impact to support a taking and therefore subject to dismissal on the merits.
3. Further Discussion
The bill could threaten community control over land use regulation in two ways. First, by limiting
abstention, it will necessarily expand the role of the federal courts in overseeing state and local land use decisions
challenged as takings. Second, the bill’s ripeness standard will make it easier for developers to avoid modifying or
altering their initial proposals, by submitting ambitious proposals on a take it or leave it basis and then, when a
proposal is rejected, pursuing a single appeal before proceeding to federal court. This effectively short•circuits the
existing process, which depends on a meaningful discussion of an initial proposal to determine how and whether it
can be modified to address the needs of the developer and the community to achieve balanced solutions that
accommodate both. Moreover, permitting an action against a state or local government to proceed in federal court
(the bill does not apply to state court proceedings) where the litigant has not complied with state procedural
provisions, undercuts developers’ obligation to comply fully with regulatory approval procedures.
Takings litigation is costly and expensive. As a result, the bill may allow large developers to use the threat
of federal litigation for leverage in negotiations. This could create a serious risk that local communities might
accept large projects that impose significant long.term burdens or disruption on the community in order to avoid the
short•term but immediate costs of litigation.
Many of the bill’s proponents are not ordinarily inclined to use federal legislation or the federal courts to
resolve disputes between citizens and state and local governments. This would be particularly true with zoning and
land use decisions, which are generally viewed as quintessentially local matters, with disputes best resolved in state
courts, or through the political process. However, it seems to be a working premise of H.R. 1534 that state and
local governments have not shown sufficient respect for property rights and that the best way to guarantee such
respect is to invoke the federal courts, Indeed, the reasoning continues, a central function of the federal courts is
to protect constitutional rights, including the Fifth Amendment right to just compensation.

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IN THE COURTS
We will likely never know how
close the Supreme Court
came to granting certiorari
last fall in City of Albuquerque v.
Browner. But there is good reason to
believe that there was keen interest in
plenary review, which should itself be
of interest to lawyers litigating cases
raising similar legal issues.
In City of Albuquerque, the Tenth
Circuit rejected the city’s challenge to
EPA approval of tribal water quality
standards. The court held that the
Clean Water Act authorizes tribes,
like states, to establish water quality
standards more stringent than federal
standards. And the court further held
that the act authorizes EPA to ensure
those tribal standards are met when
the agency is permitting upstream
dischargers located outside tribal res-
ervation boundaries. The ruling,
therefore, bears on two important
trends in environmental law: the as-
sertion of tribal authority over envi-
ronmental protection and the rise in
transboundary disputes.
The Court’s denial of cert is the
standard single sentence without any
dissent. What is nonetheless reveal-
ing for those of us obsessive enough
to pay attention to such matters was
the timing of the denial. The city filed
its petition on April 7, 1997. EPA filed
its opposition on June 5. Under nor-
mal circumstances, the Court would
have acted on the petition by the end
of June, before summer adjournment,
or, at the very latest, on the first Mon-
day of October.
The Court, however, did not deny
certiorari until November 10. A delay
of that magnitude under these cir-
cumstances suggests unusually high
interest in the case. Less clear is which
aspect of the case was the primary
draw: the tribal or the transboundary
issue.
Because the former was an issue of
first impression for a federal appel-
late court in City of Albuquerque, it
seems likely that the transboundary
controversy generated the justices’
interest. The Court certainly has un-
resolved issues regarding transboun-
dary water pollution under the Clean
Water Act. The Court’s reasoning in
Arkansas v. Oklahoma, upholding
EPA’s authority to insist on upstream
state compliance with downstream
state water quality standards, is diffi-
cult to square with the Court’s ration-
ale in International Paper Co. v.
Ouellette, finding a downstream
state’s common law remedies
preempted in application to up-
stream state sources. But, in all
events, those litigating issues of tribal
sovereignty and transboundary
water pollution should now be on no-
tice of the Court’s possible interest in
future cases.
Unfortunately for government
regulators, no similarly speculative
undertaking is needed to discern why
the Supreme Court decided not to
deny certiorari this fall in Eastern En-
terprises v. Chater. This is one of those
Supreme Court cases the immediate
relevance of which is not immedi-
ately apparent to environmental law-
yers. Once apparent, however, heart-
beats become palpably more rapid —
either with excitement or in dread.
The petitioner in Eastern Enterprises
is challenging the constitutionality of
the federal Coal Industry Retiree
Health Benefit Act, which retroac-
tively assigns to companies the re-
sponsibility for paying the life-time
retiree health benefits of coal workers
once in their employ. Petitioner’s
claim is that the act violates the due
process and takings clauses.
What makes the Court’s grant of
review so significant is that the peti-
tion possessed virtually none of the
standard indicia of a case warranting
review. The First Circuit had rejected
the constitutional claims, as had five
other federal circuits beforehand.
There was not even a single dissent-
ing judge in any of the federal court
of appeals rulings. The Supreme
Court had, moreover, declined to re-
view the same issues on each of the
four prior opportunities presented.
The most plausible reason for a grant
of review in such unusual circum-
stances is that there is considerable
interest (or at least a persuasive poo 1
memo written by a single law derk)
in favor of holding the federal law
unconstitutional.
What makes the Court’s case po-
tentially so significant to environ-
mental lawyers is the relationship of
the constitutional claims being raised
to environmental law. Any Supreme
Court ruling that a federal regulatory
law constitutes a Fifth Amendment
taking has obvious implications for
federal environmental regulatory
programs that are routinely the sub-
ject of takings challenges. But, per-
haps even more portentous, is peti-
tioner’s focus in Eastern Enterprises on
the Coal Act’s retroactive imposition
of liability. In uniformly rejecting due
process and takings challenges, the
courts of appeals had naturally relied
on the Supreme Court’s 1976 decision
in Lisery v. Turner Elkhorn Mining Co.,
where the Court rejected a due proc-
ess challenge to a federal law’s retro-
active imposition on coal mine opera-
tors of liability for black lung benefits
of former employee miners.
Any questioning or cutting back on
the precedential force of Usery could
have implications for the federal Su-
perfund law. Relying on Usery, lower
courts in the 1980s consistently re-
jected due process and taking chal-
lenges to that law’s retroactive impo-
sition of liability. Any undermining of
Usery would likely resurrect those
now-largely dormant constitutional
claims.
For the Court’s view on tribal sov-
ereignty and transboundary pollu-
tion, we will have to await a future
case. But, for better or for worse, we
will know this term whether environ-
mental laws are likely to be the object
of a new wave of due process and
takings challenges.
Richard Lazarus is on the law faculty
at Georgetown University. He can be
reached at lazarusr@law.georgetown.edu.
Transboundary Fails,
Takings Taken
8 + THE ENVIRONMENTAL FORUM

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Pane 1
From: ENVPOLY 
To: DCWICOI .lN(”takings-netc igc.org”)
Date: Thursday, March 12, 1998 3:00 pm
Subject: H.R. 992 Passed by U.S. House of Representatives
Environmental Policy Project’s
Takings-Net
* * * * *
Today. March 12, the U.S. House of Representatives, by
a vote of 23010 180, passed H.R. 992, the Tucker Act
Shuffle Relief Act. The bill would expand the jurisdiction
of the federal District Court (a little) and the Court of
Federal Claims (a lot) by granting each court concurrent
jurisdiction to hear all claims arising from agency action
alleged to be a taking under the Takings Clause of the Fifth
Amendment. The bill provides that all appeals in cases
brought under the bill, whether initiated in the District
Court or the Court of Federal Claims, would go to the U.S.
Court of Appeals for the Federal Circuit. The bill also
would repeal 28 USC 1500, which bars the simultaneous
prosecution of the same claim seeking the same relief in
both the District Court and the Federal Court of Claims.
Before passing the bill, the House narrowly rejected, by a
tie vote of 206 to 206, an amendment offered by
Congressman Mel Watt (D-NC), which would have granted
the District Court new jurisdiction to hear takings claims
and allowed the District Court to exercise comprehensive
jurisdiction over takings, Administrative Procedure Act,
and other challenges to regulations affecting property.
Under this proposal, the existing Court of Claims
jurIsdiction would have been left Intact but not expanded,
and appeals from decisions by the District Court would
have gone to the regional Courts of Appeal.
Prior to the vote, the House adopted by voice vote an
amendment offered by the bill’s chief sponsor, Lamar
Smith (R-TX), which makes clear that the bill is not
intended to override preclusive review provisions granting
jurisdiction over particular agency actions to specific
federal Courts of Appeal or District Courts.
The Statement of Administration Policy on the bill
indicated that the Attorney General, the Administrator of
the Environmental Protection Agency, the Secretary of the
Interior, and the Chair of the Council on Environmental
Quality would recommend a veto of the bill as reported by
the House Judiciary Committee.
H.R. 992 is similar to provisions contained in H.R. 1534
as reported by the Senate Judiciary Committee on February
26, 1998. Last Fall, the House, by a vote of 248 to 178,
passed H.R. 1534, the provisions of which are incorporated
into the Senate bill of the same number. While the earlier

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Page 2
House bill sought to remove procedural hurdles to suing
cities, towns, and counties for an alleged taking in federal
court, H.R. 992 focuses on removing procedural hurdles to
takings suits against the federal government.
The proponents of H.R. 992 argued the legislation was
necessaly to address the unfair requirement that litigants
bifurcate takings claims from APA and other claims arising
from the same agency action between the District Court and
the Court of Federal Claims. Without substantially
disputing the existence of a problem, opponents argued that
the Watt amendment solved the bifurcation problem
without at the same time encouraging forum shopping or
vesting broad new poweis in the Article I Court of Federal
Claims in possible violation of Article Ill of the
Constitution. Opponents of the bill also argued that the bill
appeared to be motivated by political rather than practical
concerns, because it would have the effect of significantly
expanding the authority of courts dominated by Republican
appointees.
* * * * *
For more information, please contact John Echevema
or Peter Hoffmann at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.,
Washington, D.C. 20001
tel: (202) 662-9850 / fax: (202) 682-9497
e-mail: envpolyc law.georgetown.edu

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Author: david coursen at X400
Date: 01/28/98 08:58 AN
?riority: Normal
TO: KIMA JONES at REGION4
TO: PHILIP MJ NCUSI-UNGARO at REGION4
TO: STEVEN MOORES at RSCCPO3
TO: laurie williams at X400
TO: Stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy wirier at X400
TO: deborah hilaman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feininark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinaki at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia laxnel at X400
CC: virginia capon at X400
CC: michael boydeton at X400
Subject: Significance of Heck
Message Contents
I circulated a note describing this case yesterday. I think its real
significance is its context. Although it is a routine affirmance of a ripeness
dismissal, it is one of only two (along with Bayou de Famille, affirming an
unpublished statute of limitations dismissal) published Federal Circuit
appellate decisions disposing of a 404 taking claim since Loveladies. For
score-keeping purposes, and because they signal a possible change in the
Circuit’s reticence to address the ultimate disposition of 404 taking cases,
this makes these two decisions “significant.”
Recall that the affirmances in Marks (navigational servitude) and Plantation
Landing (navigational servitude, combined with lack of property right under
state law) were summary, published only in tables, and the decision to vacate
and remand in Broadwater (improper to reject taking claim on economic impact
grounds without considering the other two Penn Central factors) was also
unpublished; for that matter, even the “decision” in Florida Rock was
technically a remand. Also, I suspect there won’t be another published Circuit
? 404 final disposition decision for some time: Forest Properties should
produce an unpublished affirinance, and Good will either lead to a remand, on
the basis that summary judgment was premature, or a published opinion that will
take at least 18 months to produce.

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Page 1 .1
Note: Heck v. U.S. , No. 97-5064 (Fed. Cir., Jan. 23, 1998),
Michel J., joined by Mayer, C.J. and Rich, J., on appeal from 37
Fed. Cl. 245 (1997), Wiese, J.
Plaintiff had applied for a Clean Water Act (CWA) § 404
permit for dredge and fill activities on 13 acres of wetlands
within a 24 acre parcel. Under CWA § 401 the Corps of Engineers
cannot issue a § 404 permit without a state water quality
certificate. The state concluded that Heck’s analysis of
alternatives to the proposed activities was legally inadequate to
support a § 401 certificate, and Heck declined to provide
additional analysis. Eventually, the state canceled Heck’s § 401
application as incomplete, and the Corps then withdrew Heck’s §
404 application from active consideration without prejudice due
to its incompleteness. Heck alleged that the Corps’ refusal to
grant a § 404 permit in these circumstances worked a taking.
The court rejected Heck t s taking claim as unripe, holding
that there been no final decision as to the application of the
challenged regulatory program to the property as is required to
ripen a taking claim under MacDonald, Soinmer & Frates v. Yolo
County , 477 U.S. 340 (1986) and Williamson County Regional
Planning Coniin’n v Hamilton Bank , 473 U.S. 172 (1985). The court
further held that the fact that federal agencies other than the
Corps submitted negative comments concerning the § 404 proposal
did not suffice to establish that filing a completeapplication
would have been futile.
This decision appears to be a relatively straightforward
application of established ripeness doctrine. The decision could
assume some political significance, in light of current proposals
for legislation that would alter ripeness requirements.

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Author: david courseri at X400
‘ate: 01/27/98 01:18 PM
‘riority: Normal
TO: KIMA JONES at REGION4
TO: PHILIP MANCUSI-UNGARO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy winer at X400
TO: deborah hilsman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feirzxnark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakaxni at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinoki at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC: Virginia capon at X400
CC: michael boydston at X400
Subject: Heck--Ripeness/Futility Wetland Takings Decision -Forwarded
Message Contents
deck v. United States, No. 97-5064 (Fed. Cir. Jan. 23, 1998) Ripeness, Futility
In an opinion by Judge Michel (joined by Chief Judge Mayer and Judge Rich), the
Federal Circuit affirmed the Court of Federal Claims, 37 Fed. Cl. 245 (1997),
and held that the takings claim was not ripe because there was no final federal
decision. Specifically, the Army Corps of Engineers? withdrawal of Heck?s
section 404 wetlands permit from active status for failure to complete the
application, including the statutorily-required state Water Quality
Certificate, was not a decision on the merits by the Corps. The state did not
make a final decision in canceling the Heck?s WQC application because Heck
refused to submit an alternatives analysis of on site mitigation and avoidance
and off-site alternatives.
The futility exception did not apply because it only prevents submission of
*?multiple applications when the manner in which the first application was
rejected makes it clear that no project will be approved.?* (Quoting Southern
Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir 1990).
Heck?s first application was never rejected because it was not complete. Also,
comments from the EPA and Interior Dept. that a permit would violate the Clean
Water Act did not justify a futility exception because the Corps has granted
other permits despite similar negative agency comments.

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Author: david coursen at X400
late: 01/27/98 09:21
.‘riori.ty: Normal
TO: KIMA JONES at PEG 10N4
TO: PHILIP MANCUSI-UNGARO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy wirier at X400
TO: deborah hilsman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feinmark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami. at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinski at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC: virginia capon at X400
CC: michael boydston at X400
Subject: Favorable Takings Decision
Message Contents
Friday, in a brief opinion, the Federal Circuit affirmed the lower court ruling
rejecting a taking claim in Heck v. U.S. on the basis of ripeness. I have not
yet read the decision, but will prepare a brief summary after I have done so.

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Author: david coursen at X400
)ate: 01/14/98 10:36 AN
‘riority: Normal
TO: KIMA JONES at REGION4
TO: PHILIP MANCUSI-UNGARO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: Stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy winer at X400
TO: 874388930 at x400
TO: deborah hi].sman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feinmark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinaki at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC: virginia capon at X400
CC: michael boydston at X400
subject: Notes on Phillips argument
Message Contents
Attached are some fragxnentai:y notes on the oral argument yesterday in Phillips
v. Washington Legal Foundation, which, it turns out, is technically not a
taking case at all, but in which the issue of whether a form of economic
regulation works a taking looms large.

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Page L
On January 3, at 10 AN, the Supreme Court heard oral argument in
Phillips v. Washington Legal Foundation , a challenge to a system
of funding indigent legal services by using the interest from
certain lawyers’ client trust accounts. Under the system the
interest from any client account large enough to earn sufficient
interest to cover service charges goes to the client. However
smaller accounts are aggregated, with the resulting interest used
to fund indigent legal services. Washington Legal Foundation,
which disapproves of some of the activities undertaken with these
funds, alleged a taking of a property interest; the Fifth Circuit
agreed that there was a property interest, without reaching the
merits of the taking claim. Two other circuits have rejected
taking claims.
I found the argument difficult to follow and impossible to take
coherent notes on. So caveat emptor as to what follows.
The argument on petitioners’ side (i.e. against the taking
assertion) was almost entirely consumed by persuading the Court
that, in fact, the government only uses interest where, for legal
or practical reasons, there is no way the client could receive
any net income from the use of the money. The Court made the
intuitive suggestion that if the client accounts could all be
aggregated, they should produce a tidy sum, which could be
remitted to the clients. The problem with this is that the
interest rate is 2%, and the costs to the bank and the lawyers of
calculating who gets how large a share of the interest, tacking
on service charges, disbursing the interest, and reporting the
interest payment to the IRS would exceed the client’s pro rata
share in many cases. It is only in these cases that the
interest is diverted to legal services.
Also, the option of allowing clients to decide whether or not
they want interest generated by their money to be used for legal
services is problematic. The IRS apparently has ruled that
making such a decision could constitute the exercise of control
over the interest, and make the interest taxable for the client
(this seems strange, but no one said the tax code was a model of
rationality).
Also, by law corporations and partnerships are prohibited from
holding the type of interest-bearing accounts at issue here;
interest from money in their client accounts is thus available
f or legal services, and may generate more than half of the total
revenue at issue.
Ultimately, the Court was persuaded that the government’s gain
was not necessarily someone else’s loss. This apparently means
that the money at issue would go to the banks (who will not have
to pay interest as they now do) in the absence of this program.
Under questioning, the WLF attorney conceded that ultimately the
claim rests on two prior decision: Webb’s Fabulous Pharmacies ,

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• • Page2
where the court found a taking (on facts similar to those here,
with the important wrinkle that in Webb’s there was net interest
that could be attributed to the individual plaintiff) and Lucas .
WLF attempted to invoke categorical takings doctrine, primarily
by characterizing the program as a physical taking of the right
to exclude.
If the tone and direction of questioning is any indicator of
likely voting (and traditionally it has not been), there are five
likely votes to reverse (i.e. in favor of the program) two very
likely to affirm, and two a little more likely to affirm than to
reverse.
At one point some of the Justices seemed to assume that the Court
could properly find that the interest at issue could constitute
property, but, on remand, there could still be a finding of no
taking. I seem to recall, though my notes don’t reflect, some
suggestion there could be a taking for which no compensation is
due. If this line of reasoning were to be developed in the
Court’s decision, it could conceivably have some impact on
Hendler , where, despite the Circuit having already held that
there has been a physical taking, the trial court found no just
compensation due.

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Page 1 1
Note to File: Bass Entervrises Production Co. v. United States ,
No. 96-5132 (Fed. Cir. Jan. 7, 1988).
The Federal Circuit has recently issued this ruling
reversing a trial court finding a permanent taking and awarding
$8.94 million as just compensation.
DISCUSSION
Plaintiffs hold long-term oil and gas leases near and
beneath the Waste Isolation Pilot Plant (WIPP) land withdrawal,
an area in New Mexico that Congress set aside for underground
geologic disposal of defense-related radioactive waste.
Plaintiffs sought permits for drilling under the leases, and the
Bureau of Land Management (BLM) denied those permits at this
time to allow EPA time to establish regulatory disposal criteria
for the WIPP. After criteria are established, there are two
options: grant a permit or purchase the lease.
Despite this statutory framework, the trial court found a
permanent taking. The court refused to consider evidence whether
there had been a temporary taking, assuming that a temporary
taking cannot arise from regulation while it remains in effect.
On appeal, the Federal Circuit reversed the permanent taking
award and remanded for findings regarding a temporary taking.
The panel further held that a temporary taking can arise from a
regulatory restriction that has not ceased, particularly where a
statutorily mandated end to the regulatory process will
ultimately occur.
This decision is quite significant. It is the first recent
decision in which the Federal Circuit has reversed a lower court
finding of a taking from enviromnental regulation.1 In addition,
the lower court decision had been the sole recent reported
decision awarding just compensation for EPA action. Indeed, Bass
is one of only three pending taking cases against the Agency.
In the second, the trial court decision denying compensation for
the installation of Superfund groundwater monitoring wells in
Hendler v. U.S. , 38 Fed. Cl. 611 (1997) has been appealed. The
third, Millard v. U.S. , No. 95-649L, also seeks compensation for
Superfund monitoring wells, although plaintiff has already
recovered nearly $300,000 as compensation for harm from a
Superfund release in a state court tort action against the party
responsible for the release.2

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Author: david coursen at X400
late: 01/08/98 03:23 PM
‘riority: Normal
TO: KIMA JONES at REGION4
TO: PHILIP MANCUSI-UNGARO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy wirier at X400
TO: deborah hilsman at X400
TO: charles ordirie at X400
TO: ann williams at X400
TO: phyllis feinmark at X400
TO: marc aeidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinski at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC; virginia capon at X400
CC: michael boydaton at X400
Subject: Bass Enterprises Taking Reversed -Forwarded
Message Contents
Forwarded Mail received from: DAVID COURSEN
Attached is a reasonably accurate summary of the Bass decision.

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Author: david coursen at X400
nate: 01/08/98 03:23 PM
riority: Normal
£0: KIMA JONES at REGION4
TO: PHILIP NANCUSI-UNGARO at P.EGION4
TO: STEVEN MOORES at RSCCPO3
TO: laurie williams at X400
TO: Stephen botte at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: cathy winer at X400
TO: deborah hilsman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feinmark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micinski at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC: virginia capon at X400
CC: michael boydaton at X400
Subject: Bass Enterprises Taking Reversed -Forwarded
Message Contents
Sass Enterprises v. United States, No. 95-52 (Fed. Cir. Jan. 7, 1997) Federal
Circuit Senior Judge Archer, joined by Senior Judge Cowen and Judge Newman, (1)
held that the U.S. did not permanently take the Bass* rights under a lease to
remove oil and gas deposits; and (2) remanded for evidence as to whether or not
a temporary taking had occurred. The Federal Circuit reversed Court of Federal
Claims Judge Hodges* June 20, 1996 $9 million plus interest permanent takings
judgment and his refusal to hear evidence on a temporary takings theory. In
1994, the Bureau of Land Management (BLM) had denied Bass permits *at this
timee based on EPA*s current inability to assess whether acquisition of the
Bass lease would be required to protect the Waste Isolation Pilot Plant (WIPP)
for permanent storage of nuclear waste. After Bass filed suit, BLM issued a
supplemental decision noting that BLM was willing to reconsider the drilling
permits after EPA made its statutorily required decision. In remanding, the
Federal Circuit ruled that there is no bright line rule that a temporary
takings cannot occur until regulation has been concluded- - noting that *the
termination of regulatory proceedings here is not as speculative as in other
regulatory settings. *
- -Glenn Sugameli
National Wildlife Federation
202-797-6865
FAX 202-797-6646
sugameli®nwf . org

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Author: david coursen at X400
nate: 01/08/98 12:18 PM
riority: Normal
TO: KIMP. JONES at REGION4
TO: PHILIP MP 1 NCUSI-tJNGP.RO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: stephen botts at X400
TO: clarence featherson at X400
TO: Stephen hess at X400
TO: Cathy winer at X400
TO: deborah hilsman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feinmark at X400
TO: marc seideriberg at X400
TO: heathergray torres at X400
TO: Janet williams at X400
TO: cynthia kawakaini at X400
TO: patrick rankin at X400
TO: Jonathan kahn at X400
TO: cheryle micinski at X400
CC: robert dreher at X400
CC: scott fulton at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: keith matthews at X400
CC: James nelson at X400
CC: richard ossias at X400
CC: vickie patton at X400
CC: earl salo at X400
CC: marcia lamel at X400
C: Virginia capon at X400
X: michael boydston at X400
Subject: Victory in Bass Enterprises
Message Contents
Yesterday the Federal Circuit issued a decision in Bass Enterprises one of
three currently active taking cases in which EPA is a named defendant. The
court reversed the lower court’s finding of a permanent taking, and remanded
the case for further proceedings concerning whether there had been a temporary
taking. I have not yet seen the decision, and will circulate a note on it
shortly.

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Author: david coursen at X400
nate: 01/07/98 01:26 PM
riority: Normal
TO: KIMA JONES at REGION4
TO: PHILIP M NCUSI-UNGARO at REGION4
TO: STEVEN MOORES at R8CCPO3
TO: laurie williams at X400
TO: stephen botts at X400
TO: clarence featherson at X400
TO: stephen hess at X400
TO: Cathy wirier at X400
TO: deborah hilsman at X400
TO: charles ordine at X400
TO: ann williams at X400
TO: phyllis feirunark at X400
TO: marc seidenberg at X400
TO: heathergray torres at X400
TO: janet williams at X400
TO: cynthia kawakami. at X400
TO: patrick rankin at X400
TO: jonathan kahn at X400
TO: cheryle micineki at X400
CC: robert dreher at X400
CC: scott fultori at X400
CC: tony guadagno at X400
CC: susan lepow at X400
CC: james nelson at X400
CC: earl salo at X400
CC: marcia lamel at X400
CC: virginia capon at X400
CC: michael boydston at X400
Subject: Gallegly Material
Message Contents
Attached is a sununary of the takings legislation that came closest to passage
in the last session of Congress.

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Pagelj
SI1 Tm1 ry of Gallegly Sill (H.R. 1534) as passed 10/22/97.
Purpose: to expedite access to federal court for persons deprived
of Constitutional rights by actions under federal or state law;
to prevent federal courts from abstaining from exercising
jurisdiction in actions where there is no State law claim; to
permit certification of unsettled state law questions; and to
clarify when a taking claim becomes ripe.
Abstention: A district court generally may not abstain from
exercising or relinquish its jurisdiction to a state court in any
action where there is no claim of a state law violation.
Certification: Where a district court has jurisdiction and the
claim raises an unsettled question of State law, in certain
circumstances the question may be certified to the State’s
highest appellate court.
Ripeness: Any § 1983 action against a State alleging a taking,
or any taking action against the United States, is ripe for
federal adjudication upon a final decision by any person acting
under color of any state law, or by the United States, thaL
causes actual and concrete injury to the party seeking redress.
Final Decision: A final decision occurs where:
there is a definitive decision regarding the extent of
permissible uses on the property that has been allegedly
infringed or taken, and
one meaningful application has been submitted but not
approved and there has been one appeal or waiver;
a second application is necessary if the first
disapproval explains in writing the use, density, or
intensity of development that would be approved, with
any conditions therefor, and the party seeking redress
has resubmitted another meaningful application taking
into account the terms of the disapproval.
A final decision in an action against a state or local
government does not require the Party seeking redress to
exhaust judicial remedies provided by any State.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C 20460
p Ø1
APR 10 98
OFFICE OF
GENERAL COUNSEL
MEMORANDUM :
SUBJECT Favorable Wetlands Takings Decisions: Cristina Investment Con,. v. U.S. . No. 95-
128L (Court of Federal Claims, Feb 25, 1998), Merow, J.; Robbins v. U.S. . No.
96-779L (Court of Federal Claims, Feb 20, 1998), Miller, J.; K & K Construction
Co. Inc v Department of Natural Resources . No 106712 (Michigan Supreme
Court, March 24, 1998)
FROM James C Nelson
Acting Associate General Counsel
Cross-Cutting Issues Law Office (2322)
Susan G Lepow (,
Associate Generál’ Eouns l
Water Law Office (2355)
TO Robert Perciasepe
Assistant Administrator for Water (4101)
This memorandum is to advise you of three recent favorable wetland takings decisions
(copies attached) The first two are trial court decisions dismissing claims against the United
States arising under § 404 of the Clean Water Act. The third is a state supreme court decision
reversing a taking finding based on state wetland regulation, a finding which had been of serious
concern to the Agency.
Cristina is based on a 1979 denial of a permit for construction of a levee that would have
enabled plaintiffs to develop their property The taking claim was filed in 1995 The court ruled
that the six-year statute of limitations applicable to takings barred the action, since the limitations
period began when the taking claim became ripe, that is, when the government made its final
decision on the permit in 1979 The fact that plaintiffs still had avenues for seeking relief from the
decision, for example by overturning the permit denial or having the levee reconfigured, did not
delay the ripening of the taking claim
Pnntea on e ecyc!ed Paper

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2
In Robbins , plaintiffs signed a contract to sell a portion of their land After the Corps of
Engineers identified wetlands on the property, the sale fell through. Without seeking a permit,
plaintiffs filed a taking claiñ , alleging that the wetlands identification worked a taking of both the
land sales contract and the land. The court found that there had been no taking of the contract,
since the land sale was essentially a private transaction, which the government had not prohibited.
The court further found that a claim for the taking of the land was not ripe, since there had been
no final decision as to the effect of the regulation on the property, as would have occurred with a
decision on a permit application
In K & K , a trial court found a taking from the state’s denial of a permit to fill 28 acres of
wetlands, due to the severe economic impact of the denial on the 55- acre tract covered by the
permit application The state supreme court reversed, finding that the impact of the denial should
be assessed at least as to 72 contiguous acres plaintiffs owned and included in the development
plan associated with the permit application
The court remanded for further fact-finding, directing the lower court to determine
whether an additional ten contiguous acres in which plaintiffs had an interest should also be
considered in assessing the impact of the permit denial. Once the lower court has properly
identified the relevant parcel against which to weigh the impact of the regulation, it can then apply
traditional takings analysis to determine whether there has been a taking in light of the nature of
the government action, its economic impact on the relevant parcel (properly characterized), and
its effect on plaintiffs’ reasonable, investment-backed expectations.
EPA was strongly interested in this case, and had requested the filing of the amicus brief
the Department of Justice ultimately submitted in support of the state. A particular concern was
that Michigan, one of two states presently authorized to administer the § 404 program, might be
reluctant to retain that program if it were to be subject to the broad liability for wetlands
regulation the trial court’s method of analysis would have imposed.
If you have any questions about any of these decisions, please contact either of us or
Cathy Winer (260-7719) or David Coursen (260-4554) of our staffs.
Attachment
cc Jonathan Cannon
Scott Fulton
Robert Dreher
Robert Wayland
Regional 404 Attorneys
EPA Takings Workgroup

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s sar tb cd i1V*j . ri* sUèot of a v.ktsq
sbvi.oaly be il th. p pezty at £iavs
4... Oe besa41 - , s tahiaq• ass
• *IPPOof to .,. .•at• Lu viewed toe
áUowl . Tb. he. tá ideiitUy the
• ! .paèesi as z.aLtat 1 - -, f 1;1.y as psmaákl..
.‘ ‘“ s: Ftar t.1 asA nqulatmoy
I.. % .I . — ,
Xe this aaa it is neither. x itj.tic air fair to c,pidcg osly
pII s O5 Le e p’us o.u’.f .aalyii.a. Pausl* ese,
I . . V •
tVr . g ate be .ê ts flhisr th ,o thus c.stiq U.ty. the
of .1.r.E. çosal is il tiit of thea.
pa l.. sñd pluintiUo pisjsHiI eespa.k .aaL . d e1. S5
.c e. Th is, tb. CO 1 t 0. a.IpO . sr’a.d sa it .cs.l dsd
• ....
U.:
£T’d TP6 06 W •
3311snr O J43 I t89a SRO XY Pt:SI aa

-------
. :3’22
PG CJTIV
,;. . 11
tar 2d ‘9
CTO
TD:S g . ç j w
I..
q•, I •
p,..
that st .aipiw.ps. I. . baa. zis3 sa t t. s... d.x ealy p .res3.
an. ta th aaA 7si...:,
2i t, th .s • •t&’th.t p ZCaL1 OftS, t q, cad
Lou. us coatigasas. isas 4, iP!*. 144 as owmc sbip ntuuat
pardm i see, tv . 9 aat;1$ is . It the t.L Ike
vu ar.artad, . s the p. *ta were
. 1 1tt.4 4. sad dasL.4 by J.P..Z. vu the tatL. QimS
U s 1 the.. pszsais ár a I n
sad eoe s ‘$ jp reste a c ft thread tying
,.. .• .
• • third. the Csseact4s*. ,1. ‘ i,a4 four
*e v#ksi u.lidLltsd by p1a ttUa C rshanai.ev dw&.. .nt
• The i.aJ . a E Eá i$ e fat that J.r.X ia the
tLt1 g. Property SImSI : pS1 ( Z Sa c. I.usv r. it £oiaad that
thg ass, as. “.qeitsbl. L14 on -the $it3.s to the pgop.z y an
fi øX of Icr. sad Kr . Zs.I,k ! ;M th. ssat, Ike r.cQrd
• a4Lça4. that J.V. . ohszsI I t piMiship interest A the
PIffSt? ‘iith Mr. sad ;I . .;I p* VS £ n4 thia joint
o.zhLp.srert, tte fast that vu the
.o . .. .t t . s.t st ths aa that the
ts ii, oác a re4 4 .ofSL mi ts. sreitc a cir
• iicot s OS paiiiiló -
• V acknevladqa that ;thi e .: hcim. pssms3.a aS pzcpeaty 4.
hA . dLUS sat aoainq . .a.â eIt&asa • :r. . . sr. , r .t that
pa4i.t42S. 4.sd.d ta •1”A 1 :th ee .1 ! in a single
du . s t pi.sui nags t s : , , fs t that they er seaM
1tsreItiy, in this CMS. :5O1.17 v .1 Pi.k.sM. 30&
wi *4 U i ; 545 2d 3z1 .(1j vI . oeØ seaLaq chøaqa* *
•. thá ty .. Ltad in ti i... 4 s $nt zeeL q e a. fi .tiOfl3
lbs p Lat .W a parcel of 3 inS,. ths. Øtics 10.4 acres e the
‘ vaf . casaidsrsd va*. âa% c bs taking anaLysis cSk 5
th ntIte 2.2 as ... that. i’ea
risnr . o U3a
ce g g*o xv c: aa 6/SZ,co

-------
: 12 Gakkfrcu.i Lct,
ç - cuTt € —.14 /22
pies.. The pIwitLffs pxop+1...pI. • •
g. •wIt...t. p
pajpUty. eim•r tnau hUe. it’ ió$ Sxt1sa s. aes
pzadáeiag. iiait, th ia set sL i1y
thi f the sft.o;s4 by the Go’azu’a
sitsis,’ StbSZ £.t £, :,Lt La e . . the vilus aS
th .aéti. w jt. rm.fri 4sui.s, Z v tI.d SU a.a,
ia3i d spia&ea of d i i. tst its teS Casrt g ?edáal
•I •,
&Gg it G,.2N ’!.J oak,% it • ,a -’aiii. . p3 1.
h. *.:ps Ls appiieatz i
coat jatid, a c r..i .Lviiid*r.ii Loj at u-in pert ol paxcslu
sel, ,30, aad g..r t* L1,,E ..ituat.t5 the LtS4
atsta. . .,*rt of Cla.iua. ft at\t p3t e áfI y st asparatv
u t ii it . ,.apst Erei othava that hi eumad pith
zi.qiiad to hi. takuag olaL be4 pzsvio e.Ly tr.st.4 th
eiaq .. parcel, foe p st puzchaa. med faaisncLsg. W
. ,a ae .320. teappr.paut to
•, ;,•. ...
:‘ Ib.U f*rat s4.d: . th fl
y ser•i of axi ff! p apesty were go eq a. be
Le o3w*d is the dswsl.ops.M ,L t.se’ar, . t srv wee ta.tt.oay at
tr44. s p1. n.thg that a1. thth. c.a, cUoa a iliaC. X.
a it’. . . Os.
p1öL iffs Oft StDSaS%iV tateo eS poed
med . i1eipi.-ImeL1y issi ‘ t1i&1. ca parcels t sad
- iS e@ae pe t c 4c tLoa alas c.nt lst. i Li g
psg I . ewe a d .iar a sp$I . sS e . dswelop..ae. Ze .di..o Lbsd
e è. as asI a “dew lap df * 72 2 core pereel which
Lidlsds ‘- c.ta1, ó fi e, . sslta.p3.. bob. asq sad
citjace as g et s wi
H •13’
t•d t :5 86. - OT9t- d—4 .tg.xi.
toI j
3 I.LS.1f O 143c1 699 9O ZV Sc:ct aa 96/a/CO

-------
Q—25--.998 1:12

• pá.oi t o “a...’ th ‘1 •. fo qsd, vb s it
,&!iJP.& ’l*pl ug ait..Z4..I i ,.ths’plsJatiffa Eorpd;
.‘ “eti .* bsivs par tue aa tour through the
pw.po.àdda .l.p..st soà4 4 pa t pi.a.eati.a.’ t
• • ii : .
iim ld be “iaa px.pgaate ta l.%dö p1 LfttLtSs to i sr this
oe n .e tbt it .: J. a3 a g, .at at .nge
i aX y the r.lta*cØJ the Court .1 £pps.J.s se
IIdLS °•‘ ‘ ]m CA 1A,
94 ; i a *iapls 4. Zá La id .,. tb plit tifti g.ed to
• •••. I .
34 S seise •6 ès a .t sII *5 ..tuaa fsa a
t • II .
plait *0 dvelop tk. 1Z.3 sc so •S their l.sd.
I. Svs., t e plaLM.Uf a’ .Wu ifr I*.d. tsdral w.t to fill
12 5 a ss oa th• basis stat.’. ‘ 1 a ttø a to
thi i C.z a of Is$o..ra t oP.snIt be A.l Lsg. a Uls
a ssa*It O.iC5 • tits a .ad thss h. u.a t Aou34
a’! •1.’
*21 EUtr.o. sdxc Iøt the plaMeift. pro oxty for
th t tf4uiai.ysis. nt :th..:12..I listed in thu peruat
me r.p ,M .f 4ota’ a1!I.’ t,
•p 1*i—efag t L*t it .as to “riquire LovsIadi.. to
iivqr to . pthJLe the 4 the U5 sorco La ocbasiq.
•‘ t as a tba . the 1s4at4.W. suit La
Poruse P .p.zfriu rn £o th t jag. .9 5.4 H 1ak
p oprsxey wbo. their p tc**Aoa d..or*bed chs
pIlI Ht aa ‘53 .36 a.’.. **ii * s S .4 aczss like kstt . N
r.at .rzup.xtes at IS. e.i áb of 2aiaa g.a tMs as
of thc aa&ty u 1 .*.i.peast aM the i& . ’nAsiC
e .etaeLàaa” of sbe Lat f • .d.
• •
qt,i 86 Ot9T- -d.tg:x
STO lMLsflr o •u: a C6999S90 IYd v i

-------
::
3 P.16 /22
: ig t dsvei p L3. aM theft to ine vd. the
vglue of the r,.at a ’ a he Lvari.” Zd. at
II.bL. Let1ariy i asj::1 in this e e o c. for J.r.Z
.: pe t. .t.’di ‘ p psasel. 0 •, evs, cM liii,,
I.i
: •
Leg enSlylis. •1
V aeei sda that the l °‘°
aeaL stv of the taking O1M L k paxc. one. Zn this case • the
pliLetLU. P, P s .d • C s divsi.peeet, 9 5&oq r a
‘paronas one, o, ,agg x 4.t p epor y. .s eaki.g
C1d*1 LI based on thc.n e’ iis1 e iu s. psxmita to
thLa. eflhö,iv. de1 ., .‘ j, ae ii asalogv.s
:, • m .i pie LetLUs’
I . .‘
I ,., I.
parceL. of pgopaty .hsv S •o.a.tdmg in the ti Lag
a . .
We note that dssdmi insind.
piizCsi three .. et thar imO.iMtax pa’e.1 Parcel t a..
•
• ‘ Zn this cue. tea •. posa •n. a .x*giaai].y
p diIs.d have bs.e bScadeet ar es. ‘hat tha
tX I1 eo irt LLe4 te soneL is t1.ji tee pascsis in its auLthq
of p.aesI:oe .iJ it j. . gi.ar’ fi the crie.
.otk .Ca pMion vhethe*. thak ØÁ . th ..•ou.. .s. o• reeoso
!s uhon two parte 01 par U v to be oroLeded Loss the
tateq alMycis. ThI i 1 pSX .1 parS.1
c e hiy ptrcbaa.d, .a4 eac. sags ear d.wo .p.4 betsy.
thó of the s qn1ai,j in aontiss. Ic c liv . UI car
;aiu C v .OJ . 1,1 ithApjjt2Lj UI 1 .431 4 33 (1913) ( O
psarcela to a thud bed.z. ,agiJseeo action Via
. : .i . is tak&s saMyspaY
.1
t d 86 S JEW O 9T-L —LTc ze
331.LSflr dO J43 I C8992se0 TYd 9t: T (f M QR,U/cri
.aTo’

-------
Ps eata,Sa thi,.sme an E JI1’.L
ps..a1 tb ... I. .,ae the
the eatent of 2.T. .’s
f
.. ; £ artaatiy. azcel
.4 dcvs *ps.at pus: te
Liiqizix The f.L3 a s .
plea ebevid se, y
u put o th.
i. .aes isg. pLec e1.
.cea isfely state t st i.
,!S.lIa 4a m 1 , • aa Eanr • vs
ass .y o tbs otbei
i id wa £s.ts i.t the trial
i jyj ’a oureraMp nto .st
4 . : gc sii1. co ssets to
U tour p.rco3. i au ].& be
t• oi f ets is tio that IS.
tk. amtant .E IS.
! tb$ .*tiit of laL tUf a
4 t e a14, tbe c.a% ej iiIp of
piresie bess
;4i41 b. çsnaid.red. ign. asce
,ár S.ra •.wS.thss th .3s’vS$t
p.zc.3 p se ued see
. ‘. 4 a. s2.dLáa Ra r a ra;
. p’e,.h... . t s eMlant if
c • -.
P T &I L JJ
is e. LqUou vith the ethos
uI.à’s•ba e in .vs.rabip litor.
recàsd. LI 1..s with rn
I3hLp Lnteg..t Lop.x aà,
V I! Mt aalsd.d La II &
PL. 23P bees
tat. a oai ii I
i d s a. paze i of laM La?
£tsU.. axetade tilet pOeai
de i at.x. To .. ess,
d L.I.ment. The 1
dssssMs v p.cc.&
iis LaeS at ii
!$1 iea 4 to parcel .thsse j:
eSXt to dtsr .ls tb .
is’prcsl tb.ss. n
.. .
.‘si bId. s4 as IS. taMso. W I
_______________ I .
— - I
Thou is no oLn lt
trial d.u*t .abanld apply
doà Lsatj s po...l. L I
. 1ai AP *ntázeit i, tbe’
th per.sZa, cad cbs .arsiié
so a .tsgl. ssIt
that say be Last at
c $. wsee pat i i
CL tC i/ I.&u. Wa tar xe -I ’

ii
Pi:c” fin: c
3ILsi1r
. 5
Rt ,4
£10
I.
699 Vo IVA c:s1 a 98/u/co

-------
P. : ‘22
r -25—t9 ai:: L EEOLe
ax51?— ?3—25 .s6 I i’gr . . •
..v.
• P.it, we’ a4dssu tk..Ci i ó 2ppea1. eoaeior&es that the
— — • L
oE p3.Lntgffa i• iaà co.st t t.d £
i I. : I L, sur ss ag .aLmts
wh :. (11 tM r.qialatiem fi’ sdr&aes a.1.q.itiiat. stat.
io1 sat, or (2) the
.• •j•. •1 •e.
vs. .t bi. aM. .. . U’ ; 4 type e t1 k*Ag La
ri Idiu 4 ’ad thto: (a) . oct P 1á1 taking, or (b) i takimq
rsqvilsd cc tM baaAa 01 u I cc1bLóc .E tbs aditLoa1
ba2a*e&k tact. bs iaii L i c vcwds that the. uteta Ma
& s it . st. ictereet ic PrC erti v s od px.ssrciAq weed,”
this fa.flt. type .1 tsktaq i• . i f £is a s. Thva, w. Iiait o4ir
to vu -r d.p,4vs o
j • • •f i. . ;: i e eqcrice . teM&c or
ider U i. ba1socicq t.at.- j. .
A. Ca 3 .küiq
• L .i
th. : p MUI peOPort?
coi at its4 a .theLr lied.
• ;•
dcfl .’sp.uit ro1.at .vs to:
cb*2J.uq!4 regvl.atLeor, ‘Z.
ao L 01 tM pageats, JVS
I • a
• ‘ SweIu*.iage
32d 520 U24 S3 •
et.S.
teI 2V:6 SS. c .icw
‘
. at . s actaOftt •1. the
4âaa lasher. • z t aa4 th.
‘•
.:.
..I
•
iái ri a.vzc.a, 20 1 ULd Aip
(“th A
.!F’ ”
I ’
Q ’
.u3a C8a9ggRO yY 9 : T (flEA *g,e , n
rio
331LS3(’ IO

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- —2!—i9 : ..Ai P -
G 1ZWT1 -- --
‘,. ., , .
•1 f , s o ear that
wa ao. a e esgorL I Mq’sI pAaintith pzap ty.
:.
. :r. a et qzie 1 tI k4. that. seat be a 4aaLaL
.:
• .lj Ps1 IcuaLciily bi is. f
. ra at 1013. Z . •pl.aLatLff purthaa .d t.
• rOü ‘.1 Zaad apgsa t1 . fast fxse s beach,
skp l eaat. It Pt0,atW.
. bu àat r!ivisiam at *ois eoaata Ttd Pl d3
Ws Lia a’ ACt tkw.gtsd. tk. ir’. pL.n,* coMtreattoa,
£4 pia .atm bás fz ds, jhs laM M any way. This
I S
• Is i S 13. to : .. tb . . . , o ...l
11 54 bSSft e4 Sá. 3 I i1 ó eLfies al! i &L1y
s iscis3 aess s t . .—.. .. t.
Isaw. h 1 p.o saty Sda i!13P Idle, h MS SVfSSZad a
• Id. at LC2.9 ( i i akL i*aL . Th. fact that
the .&‘ upqxt.y ovuax aa b* si ’ It.2E i!P ’ d et ser ’ sa 7
• b i t .ciai u i. of hi. PèSPf ‘jiü hIaáac LA a Ieo *ta
if
tO 3 ’is taew ),sr4af Maw.àti , -
_____ i:. ’;: .. i
• • . auutes *ts,su ’ c t4ciams the “deprivatis. .1
• Ltr .c ic*l1y b.ii i éiIi Z.” is a.
• th iZitV, LA th4t’ WhOIS pt.pacty
• is .n•s ,’ while
• th and.’.ssg wh iu I sLLA atLo1I Of
• : aeewsz. wai’ss.• Post at
I ft, jg jjysi3 j jtp a,. pttoa tbat
_______________ I.’
• sc Code, S •I_ 3 aoivII 2 :r1I:1J.
I •r!
O d £VS 86. S .J w oigt - - ts x A
3I.LSf1L’ dO 143 l C699 S9O !Vd hL’: t a1 1 1 QR, 7i n
ero

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P. 2a’22
GEORGET N L J
fJ?1 7r D
• tha 1 u doe.z vhqas,
.t c 1ets La anti .
an e sr aLq t M1 *i
• ‘IaC : astsq.sLcaLI,
tLni
;.1 t • sga a
•óñàt to vbtah
diatLa t
za1 vait to
caeizL, 431 3
•‘ 1 *e ij.V we did 1
* ‘ .tapp.. s c.U .
•e irR.4 La eat
•t . t Lai cea t S
efwc aa vsLa iZ1 i
•SSS dLC va2. e Z iM I
r4 u at. pg p.nty lic
its
—9’ Ma. • ‘ — nLiha4 .
d. Aia tióft in yams
!natiad, it
ca.• apsc i.c inqidz .
it
‘p
w
II
I I
is en. atop ahogt
1541 i s .saUun. i’jab
;. , 4, S3.a a the ‘beaslit S
bet, as we
, b* SC.a L. L SCt
Iaatud . the
häa.iate.frnd v ith
IttI5lw us kssftiy
!‘rna.LLY. tZ.s
III
plaLatLtSa’ liM Lu the
aisaisily: L 3 a &vcu, the
tbuu we.1.pL q soy part
o 1at.4 sath
of land oly ba ,.
b t £p
• 13
A parcel sue is
a .5atsqew J. taking had
:4. Zn ita fLr t
it i .as that ae
£ s that .bs ’t lLtt a
- tien of the 5.0ft c
.1 of it could be
: the rcg*tiOP
laintiffs’ land, tb.Ls
su. to
the traditiossi.
- —3— .558 j::2
__ I
s U.k the
present etae was ass
p 9 iLetlff was e..p1st y
• •O hiS 1 4I a_i.
rous d1çi $Mq the
.. .l of parsele.
deload ’ p. t, appL isti ’
d 2iaaset. Wnil. th •
ba p 4bytb.
ast pi.bibit.d
so parent ens, U enu. a.
!.dsnd, pl.intiffa’
S.
I.
- s ; •c Jew
3IJ.S1W
o o I j
CBO9SftO XV1 l.c: t 03M 98/ca/CO

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—2s— e øi’.a
1,
Li csa A4 tSlIrP
*!e1I •g * Mteq.cLci1 t1
ths lev.I
?hasfcix. p1a ntiffa
b..s rw2yaia MI
‘id .ôc,. f.çt i1 in tLa-
.ckó!&Ct.a.Ot eli*
.t tMceq 1*tici oo t i 1
thö a ax.u e
,. c.i
f.* d.tsg taimq’u

deaLea the
II I
lan6 ea t1,.. at .Wt 1I(
&LSi4a.u. a1 Aasa p
r
.,f taa aith .qUd
on • R. LIWUI4S IP
th at th prspsa .
f.tr. : ü cot ka.v thl
.Ltks otiK cc irLth. at . L.
to Is ..Vkith.e
I,
•1
•1
‘In
.21/22
II. It
tS “ t d. act rice to the
ho so bucá ii cc to
id. at ioii—ioaa, 0.
egkjzq ‘a tao baaI.$ .1 the
port XX , tbLa r.qisiass
kis foatera: (1.) th.
(1) thI eeeaaO .L ’O egg .t
(3 e tsas to vbIoh
there iii c c set
oc zrod widsi thà.
,iabl. ss of hia
ths a1to s is4 ’ vith
_____
• * 391. aLtLc ‘ y.*.a.
4W # U7.
cssfl ds •VSIII
I.. I ’
.ff.et of •
1i ; .a .b . jet. esidcosti.c
11 11
II I
• 1 H
£P:6 86. S .aw a t —S. 4
DIlsrlr ,1o zAaa
ø9Q QO TV .! Lr:aT T’ M e /c,lA
• 1 ’
1•
‘I
5’
.p rs.2.s t w a sad
.bze. pszc3 a o b4as4
It wqi d hi
14 plM$14f1i’.

-------
- l ? Q L —
.. of an
. d.ctaton f tha C. st..
•1 .
rL4 cc j t for fà
a1 •. s oa.3d
;luntg.g,IP WdMI
ft• i&t t .

• ! .. $sciajoa tiil
cams La: aa4ad t. thu
•s d.tsxa.tu. ‘:(l)
•pxu ly s u .Lt bs
•wbs k4a 1 th. su.at
iIaósfl o parcel
tart. •
I I
La • i2i

thrss of pL&LnSLfft’
pa c*4 1 . SRd (3)
thu t re
Asg tho * aaic1nq
Thsgstsx 5 , s s s aa
I.
‘II
th.
thu
va 1 Lou is a. it
-Pax . bs aneinq
33iISI1 . o
TOT P.22
CS9BHVO XV. ee: t Q j
g o IPj

-------
f(&r
Text item 3: 10/31/97 12:47PM (Message:1 IA5Text Enclosure) ——
C ‘5786
A Ailer: Novell GroupWise 4.1
Environmental Policy Project’s
kings
* * * * *
*Takings* Snapshots
To provide more timely information about recent *taking* decisions, the
Environmental Policy Project will be providing brief, bimonthly summaries
of very recently issued decisions and other important case
developments. All of these developments will also be summarized in the
quarterly dockets distributed to participants in the network.
1. Eastern Enterprises v. Appel. On October 20, the U.S. Supreme
granted certiorari in suit involving due process and taking challenges to a
federal statute imposing retroactive liability for health care costs for
retired mine workers. The case appears to raise broad questions about
the *investment backed expectations* prong of the Penn Central test,
and the required degree of fit between a company*s contribution to a
problem and the burden imposed on the company by remedial legislation.
2. Lambert v. City and County of San Francisco (Cal. Ct. App.,
9/23/97). A California appellate court upheld, over a dissent, the city
r ning commission*s rejection of an application to convert a hotel*s
. . g-term residential units to tourist use. Key issue is whether
Dolan/Nollan applies if government denies land use approval, but
(arguably) indicated willingness to grant approval upon payment of an
exaction.
3. California Coastal Commission v. Buckley (Cal. Ct. App, 10/15/97).
A California appellate court overturned trial court finding of a taking
based on what trial court characterized as *government tyranny* and
*tyrannical behavior* by coastal commission. Appellate court concluded
that claimants were not denied all economic use of lot by coastal
restrictions
4 .. .. Thorp v. .Town of Lebanon (Wisc. Ct. App.5/15/97) (unpublished
decision) Wisconsin appellate court affirmed dismissal of taking claim
because .p’Iaintiff failed to allege facts sufficient to demonstrate that
downzoning property to agricultural classification denied owner *al]. or
substantially all practical uses of the property,* as required by Wisconsin
Supreme Coui t, Zealy decision.
5. Rumpke Road Development Corp. v. Union Township Board of
Trustees -(Ohio Ct. App. 1996, discretionary appeal to State Supreme
Court denied 1997). Rejecting taking challenge to zoning decision on the
ground tha ’it advanced a legitimate governmental interest. Following
Ohio Supreme Court Gerijo precedent, appellate court did not consider
whether re ulation also may have denied owner economically viable use
( ‘roperty. By rejecting application for discretionary appeal, Ohio
S reme Court rejected appellate court*s *express invitation* that Ohio
Supreme Court *reconsider* or *explain* Gerijo decision.

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[ 81 From: Cheryl McMenamin 11/3/97 8:33AM (6761 bytes: 94 in)
To: Patricia Strougal, Heather Turnbull
P ipt Requested
S ,ect: “Takings’ 1 Snapshots -Forwarded
Forwarded
From: Philip Mancusi-tJngaro 11/3/97 8:17AM (6246 bytes: 94 in)
To mailing list: #EAD-LEGAL
Subject: “Takings” Snapshots -Forwarded
Forwarded with Changes
From: david coursen at X400 10/31/97 12:47PM (5453 bytes: 87 in)
To: ROLANDO BASCUIVIBE at REGION4, PHILIP MANCUSI-tJNGARO at REGION4, STEVEN MOORES
at R8CCPO3, laurie williams at X400, stephen botts at X400,
clarence featherson at X400, stephen hess at X400, cathy winer at X400,
deborah hilsman at X400, charles ordine at X400, ann williams at X400,
phyllis feinmark at X400, marc seidenberg at X400, heathergray torres at X400,
janet williams at X400, cynthia kawakami at X400, patrick rankin at X400,
jonathan kahn at X400, cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at
X400, virginia capon at X400, michael boydston at X400
Subject: “Takings” Snapshots -Forwarded
Message Contents
Text item 1: 10/31/97 12:47PM (IA5Text Enclosure)
Forwarded Mail received from: DAVID COURSEN
FYI.
F rs, Rolando and I are on the takings workgroup and beside having
monthly calls etc, we are now getting this summary of recent
takings decisions. I will forward these on to the office as
I receive them, if folks are interested.
Phil

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Page 1
11/97DEVELOPMENTS IN TAKINGS LAW
I. General Principles
The Fifth Amendment prohibits taking private property for public
use without just compensation. This “bar [ s] Government from
forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole.”
Armstrong v. U.S. , 364 U.S. 40, 49 (1960).
This had been applied only to physical invasions or
appropriations until 1922, when the Court first recognized that
regulation would work a taking if it went too far.” Pennsylvania
Coal Co. v. Mahon , 260 U.S. 393 (1922). Analyzing a regulatory
taking claim ordinarily requires balancing relevant factors
including the nature and economic impact of the government
action, and its effect on the owner’s reasonable,
investment-backed expectations. Penn Central Transp. Co. v. New
York City , 438 U.S. 104 (1978)
Land use regulation does not work a taking if it substantially
advances a legitimate state interest and does not deny an owner
economically viable use of land. Agins v. Tiburon , 447 U.S. 255,
260 (1980)
Regulation that causes “permanent physical occupation” of
property is generally treated as a “per-se” taking. Loretto v.
Teleprompter Manhattan CATV Corp. , 458 U.S. 419 (1982).
A taking claim is not ripe for adjudication until there has been
a fina1 decision as to the quality and extent of development
permitted on the property. Williamson County Regional Planning
Comm’n v. Hamilton Bank of Johnson City , 473 U.S. 182, 186
(1985)
II. Takings Law in Flux: 1987-92
A. 1987 Supreme Court Decisions
Courts showed great deference to government actions challenged as
regulatory takings, found few takings until 1987, when the
Supreme Court issued significant decisions favoring taking
plaintiffs:
Nollan v. California Coastal Commission , 483 U.S. 825 (1987)
(taking where government action does not substantially advance
legitimate state interest).
First English Evangelical Lutheran Church v. County of Los
Angeles , 482 U.S. 304 (1987) (temporary regulation can work a
taking; action that works a taking is not invalid, if
compensation is available).
B. Increase in Federal Court Taking Judgments

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Page 2 1
Federal courts found takings more frequently after 1987, e.g.
ruling for plaintiffs in nearly half of reported decisions in
1990, finding takings from some forms of environmental
regulation:
Hendler v. U.S. , 952 F.2d 1364 (Fed. Cir. 199].) (physical taking
from monitoring wells installed as part of Superfund cleanup);
Whitney Benefits, Inc. v. U.S. , 926 F.2d 1169 (Fed. Cir. 1991)
(enactment of SMCRA); United Nuclear Corp. v. U.S. , 912 F.2d 1432
(Fed. Cir. 1990) (restriction on uranium mining). See also Yancey
v. U.S. , 915 F.2d 1534 (Fed Cir.1990) (turkey quarantine).
Formanek v. U.S. , 26 C1.Ct. 332 (1992); Loveladies Harbor, Inc.,
v. U.S. , 2]. Cl.Ct. 153 (1990), aff’d 28 F.3d 1171 (Fed. Cir.
1994); Florida Rock Indus v. U.S. , 21 Cl.Ct. 161 (1990), vacated
18 F.3d 1560 (Fed. Cir. 1994) (all three wetlands regulation under
Clean Water Act § 404).
III. Lucas v. South Carolina Coastal Council , 505 U.S. 1003
(1992)
Regulation that makes land valueless works a “categorical”
taking; no taking where regulated use constitutes a nuisance
under state law: owner’s expectations concerning use of property
limited by rules and understandings concerning the property at
time it was acquired. Land given greater protection than other
forms of property. Decision reflects Court’s interest in
“bright-line” taking rules. (In practice, claims usually succeed
under categorical rules, fail under “balancing” analysis).
A. Subsequent Supreme Court Decisions
Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers
Pension Trust for S. Cal. , 508 U.S. 602 (1993) (finding no taking
from commercial regulation, using deferential standard).
Dolan v. City of Tigard , 512 U.S. 374, 114 S.Ct. 2309 (1994)
(where government requires owner to allow public to enter
property in exchange for a development permit, the burdens to the
property from the public entry must be “roughly proportional” to
the burdens to the public from the development).
Suitum v. Tahoe Regional Planning Agency , 117 S.Ct. 1659 (1997)
(finding taking claim ripe for adjudication).
B. Lower Court Decisions
After Lucas , the U.S. won nearly 90% of reported decisions
through 1995. Most federal taking claims arise from commercial,
rather than environmental regulation.
Takings Found:

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Page 3
Preseault v. U.s . 100 F.3d 1525 (Fed. Cir. 1996) (conversion of
railroad right of way to public trail); Loveladies; Bowles v.
U.S. , 31 Fed. Cl. 37 (1994) ( 404); Bass Enterprises Production
Co. v. U.S. , 35 Fed. Cl. 615 (1996) (denial of permit to drill in
radioactive waste storage area), appeal pending.
No Taking:
Kunkes v. U.S. , 78 F.3d 1549 (Fed. Cir.1996) (public lands
management); Clalon Production Co. v. Petera , 70 F.3d 1566 (10th
Cir. 1995) (hunting license restrictions); Branch v. U.S. , 69 F.3d
1571 (Fed. Cir. 1995) (banking regulation) M&J Coal Co. v. U.S. ,
47 F.3d 1148 (Fed. Cir. 1995) (coal mining restrictions); Tabb
Lakes. Ltd. v. U.S . 10 F.3d 796 (Fed. Cir. 1993) ( 404); Good v.
U.S. , No. 94-442L (Fed. Cl. Aug. 22, 1997)( 404, Endangered
Species Act), on appeal; Forest Properties Inc. v. U.S. , No.
92-851L (Fed. Cl. Aug. 6, 1997) ( 404); Heck v. U.s. , 37 Fed. Cl.
245 (1997)( 404 claim not ripe), on appeal; Hendler v. U.S. , No.
456-84L (Fed. Cl., July 16, 1997); 36 Fed. Cl. 574 (Fed. Cl.
1996) (Superfund, two decisions following remand, respectively
awarding no compensation for physical taking, finding no
regulatory taking from access order and response activities), on
appeal.
IV. Emerging Issues
A. Public Health and Safety/Nuisance
Traditional rule that no taking occurs where government acts to
protect public health and safety, abate nuisance-like activity;
no “right” to cause a nuisance. Keystone Bituminous Coal Assoc.
v. DeBenedictis , 480 U.S. 470 (1987)
Lucas precludes even a categorical taking claim where “background
principles of nuisance and property law ... prohibit the
[ proposed] uses ... in the circumstances in which the property is
presently found.” at 1031.
With non-categorical claims, the purpose of the government action
remains a relevant factor in “balancing” analysis.
B. Relevant parcel
Traditional rule: focus on impact of regulation on the affected
parcel as a who1e. Penn Central , 438 U.S. at 130-31. Thus
open space and setback requirements are not treated as takings.
See. e.g. Keystone , 480 U.S. at 498 ( Many zoning ordinances
place limits on the property owner’s right to make profitable use
of some segments of his property. )
Footnote 7 in Lucas raises question whether to consider impact to
part of property or to the entire property. Subsequently, Court
reiterated focus on whether the property taken is all, or only a

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Page 4 1
portion of the parcel in question.” Concrete Pipe , 508 U.S. at
644. See. also Dolan 114 S.Ct. at 2316 n. 6. (analyzing impact
of government action on entire parcel, not regulated portion);
Suitum , 117 S.Ct. at 1672), Scalia J., concurring, (focus on all
contiguous property subject to regulation).
Some courts treat this as a factual issue. Compare Loveladies
(considering only the property subject to regulation) with Tabb
Lakes , (considering unregulated as well as regulated portions).
Some decisions find that particular interests in property have
been taken: Nollan, Dolan (right to exclude); Babbitt v. Youpee ,
117 S.Ct.727 (1997), Hodel v. Irving , 481 U.S. 704 (1987) (right
to devise). But see Andrus v. Allard , 444 U.S. 51 (1979) (no
taking from loss of right to sell).
Finding a taking of a specific interest in a property may have
same effect as focusing on a physical portion that is less than
the entire property. g Claion , 70 F.3d at 1577 (refusing to
consider right to hunt on property as separate from fee title).
Where property only suited to one use, loss of that use may work
a taking. Compare Whitney Benefits (taking of right to mine )
with Florida Rock Industries v. U.S. , 791 F.2d 893, 902 (Fed.
Cir. 1986) (no taking from prohibition on mining if property
retains substantial value for non-mining uses).
C. Diminution in value needed to support taking
Traditional rule: “mere diminution” in value alone is not enough
to establish a taking. Penn Central , 438 U.S. at 131.
Lucas , n.8, suggests a taking may arise from less than total
denial of all use; such a claim should be analyzed under
traditional balancing analysis. Concrete Pipe reaffirmed mere
diminution rule. 508 U.S. 645. Lower courts have found takings
where land has some remaining value, but with de facto taking
threshold of roughly 90% loss in value. See e.g. Formanek. But
see Florida Rock , (suggesting 60% reduction may support taking
claim).
D. Expectations
Traditional rule: reasonable investment-backed expectations a key
factor in taking analysis; absence of expectations can preclude a
taking. Ruckeishaus v. Monsanto Co. , 467 U.S. 1001, 1005 (1984).
Lucas finds expectations relevant to whether a property right
exists at all. 505 U.S. at 1030 (owner’s rights to use property
defined by ru1es and understandings” existing when property
acquired). Courts have found that owners have expectation of
broader freedom from government interference with title and
ownership rights than from regulation limiting uses of property.

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Page 5 I
Preseault , 100 F.3d at 1540. See also Nollan 483 U.S. at 833 n.
2.
Expectations are critical to many taking claims: 767 Third Avenue
Associates v. U.S. , 48 F.3d 1575 (Fed. Cir. 1995); M & J Coal ,
(no taking where no expectation of freedom from regulation at
issue); Loveladies , 28 F.3d at 1177 (no taking unless owners
demonstrate that they bought their property in reliance on a
state of affairs that did not include the challenged regulatory
regime ).
Reasonable expectations may include possibility of creation, or
expansion of regulatory program: [ T] he property owner
necessarily expects the uses of his property to be restricted,
from time to time, by various measures newly enacted by the
State without compensation. Lucas , 505 U.S. at 1027. Moreover,
those who do business in [ a] regulated field cannot object if
the legislative scheme is buttressed by subsequent amendments to
achieve the legislative end. Concrete Pipe , 508 U.S. at 645;
Branch v. U.S . (same); Kunkes (no taking from change in rules
governing what owner must do to retain property obtained from
government).
N.B. Eastern Enterprises. v. Apfel , cert. granted 66 TJSLW 3296
(19-21-97) (cert. petition includes takings/expectations
question).

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Page I
Note
Subject: Abrahim-Youri v. U.S. , No. 97-5011, Dec. 4, 1997,
Michel, Plager, Clevenger; Plager writing for the court,
Clevenger joining court’s opinion and filing separate opinion.
Plaintiffs had claims against the government of Iran related
the 1979 seizure of hostages. The United States espoused and
settled their claims, reaching an agreement with the government
of Iran which provided that awards would be paid from a specified
pool, which, turned out to be sufficient to cover all awards, but
not full payment of interest. Plaintiffs alleged a taking.
On appeal, plaintiffs asserted, and the court agreed, that
by espousing and settling their claims, the U.S. had, in effect,
seized those claims. However, the court reasoned that despite
the apparent physical seizure, there had been no compensable
taking, and, that not all taking claims can be neatly
characterized as either regulatory or hysica1. The court
found two reasons why a categorical takings analysis could not
properly be used to find a taking in this case. First, although
the public gained an incidental benefit from the government
action, plaintiffs were articular intended beneficiar [ ies] of
the governmental activity. Second, under Lucas , plaintiffs’
property rights in their claims against Iran were subject to the
constraints implicit in the government’s broad power over
international relations, and thus no taking occurred when the
government exercised that power.
Judge Clevenger, in a separate opinion, noted that the
familiar per se and regulatory taking categories are not rigid,
and that certain per se’ takings (i.e. those which involve a
property owner being ousted from property by government action)
do not automatically result under the Fifth axnendment in
compensation to the ousted property owner. Instead, takings
analyses follow a rule of reason which attempts to resolve the
collision of private expectations and the publicfls] interests.
Previous Federal Circuit decisions have identified cases
where rigid application of categorical formulas would lead to an
incorrect result. See. e.g. Kunkes v. U.S. , 78 F.3d 1549 (Fed.
Cir. 1996) ( Even the government’s physical occupation of property
as an incident to enforcement of the law does not ordinarily
convert a regulatory taking case into one of physical
occupation. at 1554). brahim-Youri is nevertheless
significant for the candor with which the court, and,
particularly, the concurrence, acknowledge the pitfalls of
categorical analysis and the need to focus attention on fairness
and the reasonable expectations of property owners.
Note that two of the judges on this panel, Plager and Clevenger,
were also on the panel in the original appellate decision in
Hendler v. U.S. , 952 F.2d 1364 (Fed. Cir. 1991).

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, 95.1281 ogc doc
No. 95-128L
(Filed Februazy 25, 1998)
*********•***********t**** * Regulatorytaldngs;Clean
CR1STINA INVESTMENT * Water Act 33 U.s.c. §
CORPORATION AND CRIS REALMS, * 1344, accrual of takings
INC., * claim challenging permit
* denial, inapplicability of
PlaintifFs, * Dickinson stabilization
* doctrine and exhaustion
* doctrine, requirement for
v. * final decision; person
* entitled to maintain takings
THE UNiTED STATES, * claim.
a
Defendant.
a
*
i.*s..**...*.,,..*.aa•a.***s *
Robert E. Arceneaicc, New Orleans, Louisiana, for plaintiffs.
Dorothy A. Burakreis, Washington, D.C., with whom was Assistant Attorney General Lois J Sch er for
defendant. Elizabeth Gr ffin, United States Army Corps of Engineers, of counsel.
OPINION
MEROW, Judge.
Plaintiffs Cristina Investment Corp. and Cris Realms, Inc., claim that the U.S. Army Corps of Engineers’
(“Corps”) selection of an alignment for a government levee effectively proscribed the development of
their wetland property, and therefore gave rise to a taking of that propexty under the Fifth Amendment to
the U.S. Constitution entitling them to $2,156,000.00 in just compensation. A different alignment for a
private levee which would have enabled development had been proposed by Bayou des Families
Development Corp. (“BDF”), which owned similarly situated wetland propq y . On September 21, 1979,
the Corps denied BDF’s permit application reflecting mat alignment on tbe merits . This matter is now
before the court on cross-motions for surnmaiy judgment on liability.
Defendant argues that plaintiff Cristina’s claim is barred by the six-year statute of limitations governing
claims brought before this court. 28 U.S.C. § 2501 (1994). In particular, defendant maintains that all
events fixing the potential liability of the government for the alleged taking occurred by September 21,
lof9 3/16/981046AM

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‘.o 95-I2 L hr p g 1oc
1979, when the Corps denied BDF’s permit application to construct a levee which would have enabled
the development of both BDF’s and plaintiffs’ wetlands. In an unpublished order, this court rejected
BDF’s ‘ kings claim as barred by 28 U.S.C. § 2501. Bayou des Families Dev. Corp. v. United Stares,
No. 91-13 ISL (Feb. 23, 1996). The Federal Circuit sustained that result on appeal. Bayou des Families
Dev. Corp. v. fJiuted States, l 30 F.3d 1034 (Fed. dr. 1997). Defendant adds that plaintiff Cris’ takings
claim fails because it did not own the subject propeTty at the time of the alleged taking in 1979.
Plaintiff note that, notwithstanding the 1979 Corps denial, legal challenges to that denial and local
political debate left open the possibility that either BDF or the Corps would locate a levee along the
alignment which would enable wetlan’l development Ana1ogi ing to the Dickinson stabilization
principle which provides that a takings claim arising from a continuing physical process does not accrue
until the physical situation has stabilized, United States v. Dickinson, 331 U.S. 745, 749 (1947),
plaintiffs argue that their claim did not accrue until the political situation stabilized. Plaintiffs maintain
that stabilization was achieved in 1989 when Jefferson Parish Levee District (“the District”) filed
expropriation suits against them to acquire property for the right-of-way to construct the levee along the
disadvantageous alignment. It was not until that time, according to plaintiffs, that the decision
concerning the levee’s location was finaiiy determined, wetland development was foreclosed, and their
takings claim accrued. Alternatively, plaintiffs argue that the December 18, 1990 Local Cooperation
Agreement (“LCA”) between the Corps and the District, delineating the responsibilities of both parties
regarding the construction and maintenance of the levee along the disadvantageous alignment, had this
accrual effect.
As explained below, the Dickinson stabilization principle is limited to takings claims involving a
continuous physical process, Ariadne Fin. Servs. Ply. Ltd v. United States, 1998 WL 1942, at 4 (Fed.
Cir. 1998); see also Fallini v. United States, 56 F.3d 1378, 138 1-82 (Fed. Cir. 1995), cert. denied, —
U.S. _, 116 S.Ct. 2496(1996), and therefore is not the proper analytical framework to apply to
deteimine when a tAkings claim challenging a government permit denial accrues. Rather, the proper
framework is provided by ripeness doctrine as annunciated in Sultum v. Tahoe Reg’! Planning Agency,
— U.S. ._, - _, 117 S.Ct 1659, 1665-67 (1997), Williamson County Reg’l Planning Comm’n v.
Hamilton Bank, 473 U.S. 172 (1985) and MacDonald, Sommer & Frares v. Yolo County, 477 U.S. 340
(1986), and applied by the Federal Circuit to federal takings claims. Bayou des Families, 130 F.3d at
1037-38; Heckv. United States, 1998 WL 23954, at $ 2 (Fed. Cit. 1998). That doctrine provides that a
government denial will be considered final, and any federal takings claim arising from that denial will
therefore accrue, lithe property owner made a proper application which the government denied both on
the merits and in such a manner as to reveal that reapplication for a modified plan would be futile.
Efforts to secure the reversal of that denial do not operate to deprive such a denial of finality. See
Williamson, 473 U.S. at 192-93. Exhaustion of such potential remedies is not required to ripen a takings
claim, and does not prevent the accrual of that claim.
Both the manner and circumstances surrounding the Corps 1979 denial reveal that the denial was final.
The Corps denial addressed the merits of BDF’s proposal, rejected the proposal on ecological grounds,
and wa based upon the unch nginE fact that the wetlands at issue here fell within a protected zone of a
national park. See Bayou des Families, 130 F.3d at 1040; West Jefferson Levee Dist. v. Coast Quality
Consrr., 640 So. 2d 1258, 1284-88 (La. 1994), cert. denied, 513 U.S. 1083 (1995). Accordingly, plaintiff
Cristina’s takings claim accrued on September 2 I, 1979, when the Corps denied BDF’s permit
application to construct the levee along an alignment which would have enabled Cristina to develop its
wetlands. Because Cristina’s claim was filed more than six years after that date, the claim is barred by
the statute of limitations. Plaintiff Crisp takings claim fails because it did not own the subject property at
the time of the alleged taking . United States v. Dow, 357 U .S. 17, 22 (1958); Argen v. Unaed States,
124 F.3d 1277, 1287 (Fed. Cit. 1997). Plaintiffs’ motion for summary judgment is therefore denied.
Defendant’s motion for summary judgment is.granted.
FACTS
This takings claim, as in Bayou des Families De9. Corp. v United States, 130 F.3d 1034, arose from the
controversy surrounding the location of a levee in Jefferson Parish, Louisiana. Beginning in the early
197 Os, the Corps had under consideration a number of different alignments for a levee project designed
2 of 9 3/16/98 10.46 A.tt’

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o 95 I28L hr:p ogc. oc
to protect portions of coastai Louisiana from hurricane destruc on and flooding from the Mississippi
River. In the reaches affecting the property at issue here, there were two alternatives. West Jefferson
Levee Dist., 640 So. 2d at 1267. One levee alignment would have protected existing developed property
from hurricane and flood damage, but would have placed undeveloped wetlands outside the levee’s
protection. The other alignment would have placed wetlands within the levee’s protection, thereby
enabling their draining and development The choice between these different alignments was
controversial because the decision would potentially determine the growth-conservation Line for the
development of Jefferson Parish, id at 1265, and, more particularly, whether approximately 2,000 acres
wetlands would be drained and developed.
On August 21, 1972, while the Corps was considering its hurricane levee project, BDF purchased those
2,000 acres of wetlands, largely swamp and freshwater marsh, within the levee project area. Plaintiff
Cristina purchased approximately 88.5 acres of these wetlands on August 15, 1977 and March 7, 1978.
Plaintiff Cris purchased a 20% interest in approximately 19 acres of these wetlands in 1987. As part of
the consideration for the sale to plaintiff Cristina, BDF promised to complete a levee and pwnping
station which would enable the development of Crisuna’s wetlands.
In July and August 1973, prior to plaintiffs’ purchase of the wetlands, BDF entered into contracts to
construct a levee and pumping station designed to facilitate the drpining of the wetlands for
development. Without having obtained a permit from the Corps as required by the Rivers and Harbors
Act of 1899, 33 U.S.C. § 403 (1994), and the Clean Water Act of 1972, 33 U.S.C. § 1344 (1994), BDF
began constructing the levee and pumping station. On January 15, 1974, the Corps ordered BDF to stop
wang and required BDF to file an after-the-fact permit application. Together with an environmental
impact statement, BDF filed that application in December of 1975.
While the BDF application was pending, Congress authorized the creation of the Jean Lafitte National
Park on November 10, 1978. 16 U.S.C. § 230-23 Id (1994). That Act established a 8,600 acre park core
area and an 11,400 acre park protection zone. The boundaries of both the core area and the protection
zone were established by statute, and could only be revised by the Secretary of the U.S. Department of
the interior with the consent of Jefferson Parish. 16 U.S.C. § 230, 230a(a), 230a(f). The statute
prescribed that the core area of the park be preserved, and instructed local authorities to establish land
use regulations for the protection
zone which would preserve specified natural resource values. 16 U.S.C. § 230a(b), (c)(1)-(4). Plaintiffs’
wetlands are within the protected zone. Pif. Statement of Facts, at 1-2.
On September 21, 1979, the Corps denied BDF’s permit application to consthzct the levee along the
alignment which would have enabled the development of both BDFs and plaintiffs’ wetlands. In its
denial, the Corps found that:
The project, if completed, would have major adverse impacts on fish and wildlife. In its natural state, it
provides food and shelter for a variety of pnimal life. Detritus from the swamps and marshes enter the
Barataria Bay Estuary through tributaries of Lake Salvador. If completed, the project will change more
than 2,300 acres of habitat to residential and commercial areas. All of this valuable habitat would be lost
and much of the animal life lost. included in the habitat to be destroyed are more than 600 acres of
woodland, 920 acres of swamp, and 430 acres of marsh.
Def. Summ 3. Ex. 1D2 at 4. Based upon these findings, the Corps concluded that the project would
violate the regulatory standards governing the issuance of permits under the Clean Water Act. See 40
C.F.R. § § 230.1-230.80 (1997); 33 U.S.C. § 1344; Def. Sumnt J. Ex. 1D2 at 4 (BDF project would have
major negative environmental impacts, project not water dependent, and alternative non-wetland sites
available for development).
BDF filed suit challenging the Corps denial on November 21, 1979, seeking both to rcvcrsc the denial,
and to enjoin the Corps from placing its own levee along an alignment which would effectively prevent
the draining and development of the wetlands. Bayou des Families Dev. Corp. v. United States Corps of
Eng ’rs, 541 F. Supp. 1025 (E.D. La. 1982), affd, 709 F.2d 713 (5th Cir. 1983) (table), cert. denied, 465
3 o19 3/16/98 10 46 A?

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h rp ‘ c doc.;o f dcIopuiioas95-I2SL.ht
U.s. 1065 (1984). In 1982, the district court ruled on BDF’s challenge, holding that the Corps denial was
not arbitrary and capricious, that it could not order the Corps to place its own Levee along BDF’s
preferred alignment, and that any claim for uncompensated takings of property arising from the denial
could only be brought before this court. Bayou des Families, 541 F. Supp. at 1041-42.
As BDF pursued its challenge against the Corps, the District applied to the Corps to construct a levee
along essentially the same alignment BDF had proposed. West Jefferson Levee Disi., 640 So. 2d at 1267.
In November 1980, the Corps notified the District that its permit application would likely be denied for
the same reasons BDF’s permit had been denied. Id. On June 18, 1984, the Corps offered the District a
permit to construct the levee along the alignment disadvaritMeous to plaintiffs. Although the District
continued to press the Corps to approve the BDF alignment, it finally accepted the Corps permit to
construct the levee along the alignment disadvantageous to plaintiffs on February 25, 1986. Throughout
1989, the District filed a series of expropriation suits against BDF, pIaintiff and other similarly situated
property owners seeking the rights-of-way necessary to construct the levee along that alignment. Def.
Summ. J. Ex. 9, 10.
BDF, among others, responded to the expropriation suits with demands for additional compensation
beyond that deposited by the District with the court, disagreeing with the District’s view that
compensation for the rights-of-way should not embrace the speculative development value of the both
the right-of-way property and the property which would remain on the unprotected side of the levee. In
the course of rejecting the landowner’s claims, the Louisiana Supreme Court noted that “the Corps
denied BDF’s permit application, and would have continued to deny landowners applications [ for a levee
which would have enabled development]..., West Jefferson Levee Dist., 640 So. 2d at 1284, concluding
that:
It is clear from the record that BDP’s permit application was denied by the Corps in 1979 because of the
desire to preserve the wetlands in the park protection zone as undeveloped wetlands and because BDF’s
permit application did not meet the criteria for the granting of a permit
id at 128g.
BDF filed its takings claim in this court on July 25, 1991, first alleging that the Corps 1979 denial gave
rise to a temporary taking of their wetlands, which in some manner then matured into an “actual taking”
in either 1989 when the District filed its expropriation suits, or in 1990 when the District and the Corps
signed the LCA. BDF Compi. ¶ 65. BDF later amended its complaint by deleting its claim for a
temporary taking, and newly alleging that it was the Corps decision in 1986 to grant the District a permit
for construction of the levee along the disadvantageous alignment which gave rise to the taking. BDF
First Amend. Compl. 140. Plaintiffs filed their complaint in this case on February 21, 1995. Raising a
number of legal arguments not considered in the BDF claim, they allege that the District’s 1989 filing of
expropriation suits, or the 1990 LCA, gave rise the raking of their property.
ANALYSiS
Claims brought before this court are governed by a six-year statute of limitations. 28 tJ.S.C. § 2501.
This six-year time limit is jurisdictional, leaving’ the court without the power to entertain a claim filed
beyond that time. Soriano v. United States, 352 U.S. 270, 273 (1957); Hart v. United States, 910 F .2d
815, 818 (Fed. Cir. 1990). A claim accrues for Statute of limitations purposes “when all of the events
necessary to fix the alieged liability QI thc gov;rnin;nt occurred iiM the claimfint is legally enutled
to bring suit,” Stare ofAlaska v. United States, 32 Fed. Cl. 689, 698 (1995) (citing Kinsey v United
States, 852 F.2d 556, 557 (Fed. Cir. 1988)), riot at some later time when “a claimpnt becomes certain he
can prevail on the merits.” State ofAlaska, 32 Fed. Cl. at 701.
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o ) ‘ L ttp ;:.Joc. c cLp iou 9 -I2SL h
A property owner raising a takings claim of this kind is legally entitled to bring suit if the goi ernment
has finally denied a proposed use, Suilum v. Tahoe Reg’l Planning Agency, — U.S. _, - , 117
S.Ct. 1659, 1665-67 (1997); Bayou des Families, 130 F.3d at 1038; Fleck, 1998 WL 23954, at 2, that
purportedly takes his property for public use without just compensation.LU See Alliance of Descendants
of Texas Land Grants v. Untied Slojes, 37 F.3d 1478, 1481 (Fed. Cit. 1994).
I. Dickinson Stabilization Principle
Plaintiffs argue that the Dickinson stabilization principle should be applied here to deprive the 1979
Corps denial of finality and thereby delay the accrual of their takings claim until it became clear that the
government levee would not follow the advantageous aligmnent. The Dickinson stabilization principle
provides that a government taking of land which occurs by a continuing process of physical events
postpones the accrual of that claim until those events have stabilized. Dickinson, 331 U.S. at 749; see
also Applegaze v. United States, 25 F3d 1579 (Fed. Cit. 1994). Plaintiff here argues that this rule should
be applied to a takings claim not involving a continuing process of physical events, but rather a
continuing process of legal and political events.
In Dickinson, the plaintiff claimed that the flooding of his property by a federal dam gave rise to a taking
of a flowage easement. The government maintained that this claim was time-barred because it was filed
more than six years after the first flooding event. The Court rejected this argument on the ground that
‘ft]he source of the entire claim — the overflow due to rises in the level of the river — is not a single
event; it is continuous,” Id at 749, and ruled that the cLaim therefore did not accrue until that physical
situation had stabilized. I’d at 748. Here, by contrast, the source of the entire claim is premised upon the
denial of a government permit to construct a pnvate levee. This was a single eventL
Plaintiffs’ invitation to extend the principle announced in Dickinson to embrace a continuing process of
legal or political events has been rejected by the Federal Circuit. Fallini, 56 F.3d at 138 1-82; Alder v.
Uruied States, 785 F.2d 1004 (Fed. Cit. 1986). InAlder, for example, the plaintiff held grazing permits
to federal land which expired when a federal law returned the [ and to an Indian tribe. The tribe allowed
the plaintiff to continue to use the land for three years, but at the end of that time made clear that gr2 ng
would no longer be permitted. 785 F.2d at 1007-08. At the same time, federal legislation and litigation
were pending which sought to compensate permit owners for improvements made to the formerly leased
grazing lands. Id at 1008. To avoid the statute of limitations time-bar, plaintiff maintained that
Dickinson applied to defer the accrual of his takings claim until it was clear that the compensation
scheme would not fidly compensate their loss. Rejecting this argument, the Federal Circuit held that the
activities which followed the denial of use were “not the quality of continuing events that Dickinson
contemplated in its holding that the cause does not accrue ‘until the situation becomes stabilized.” Id.
(quoting Dickinson, 331 U.S. at 749). The plaintiffs takings claim accrued when he was no longer
permitted to use the former federal lands. Id at J 009.
More recently, the Federal Circuit has definitively held that the Dickinson stabilization principle “does
not apply outside its context” of flooding cases. Artadne Fin. Serf’s. Ply. Ltd., 1998 WL 1942, at * 4.
Rather, the proper analytical framework to be applied to a takings claim which, as here, challenges a
permit denial is ripeness doctrine as applied in Sufiwn, U.S. , 117 S.Ct. 1659, Williamson, 473 U.S.
172, and MacDonald, 477 U.S. 340. See Bayou des Families, 130 F.3d at 1037; Heck, 1998 WL 23954,
at 2.
IL The Accrual of a Regulator, Takings Claim
Plaintiffs argue that their takings claim did not accrue until it became clear that the Corps would not
either directly overturn its 1979 denial, or effectively overturn it by choosing to construct its own levee
along the alignment advantageous to plaintiffs. This argument presumes that the evolution of legal
challenges in a permit dcnial and wholly independent government decision-mnking proce es may
deprive a government determination of finality, and thereby delay the accrual of a takings claim.
Exhaustion of administrative, judicial or other potential remedies which would directly or effectively
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overturn the denial, however, do not affect a property owner’s legal entitlement to bring a takings claim.
Accordingly, resort to such procedures does not defer the accrual of that claim.
a. Requfremen: for Finality not Exhaustion
A property owder aggrievedby a federal government pennit denial has two distinct avenues of judicial
recourse available. That owner may bring a claim in district court challenging the denial on its merits.
By such a claim, a property owner seeks reversal of the denial, and ultimately the right to engage in the
proscnbed use. Alternatively, that owner may bring a takings claim here, seeking not reversal of the
permit denial, but rather compensation for it.Qi Two different ripeness requirements apply to these
distinct claims. In order to ripen the district court challenge, a property owner is typically required to
exhaust any potential 2tiministrative remedies before he will be heard in court. By contrast, a property
owner is not required exhaust remedies directed at reversing the government denial in order to bring a
takings claim in this court. All that is necessary to ripen a federal takings challenge of this kind is a final
decision from the government on the proposed use. 4 l See Williamson, 473 U.S. at 192-93.
Given the similar bases for these two distinct claims, a takings plaintiff wilt often erroneously assert that
challenges to the permit denial legally affect the ripening of his takings claim. In particular, a takings
plaintiff will argue that his takings claim is ripe because the permit denial may not be appealed
administratively. See, e g., Loveladies Harbor v. United States, 15 Cl. Ct. 381, 386-87 (1988). Second,
as here, a takings plaintiff attempting to avoid the statute of limitations time-bar will assert that
administrativc or other challenges directed at overturning the denial delayed the ripening of his takings
claim, and thereby the accrual of that claim.
In Williamson, 473 U.s. 172, however, the Supreme Court provided that challenges to a government
denial are different in kind from a takings claim, and do not bear upon whether the takings claim is ripe
for adjudication. In that case, the government argued that the takingg claim was unzipe because, after an
initial denial of a land use plan, the plaintiff failed to pursue a variance procedure which could have
resulted in the approval of a different, less-intensive plan. The plaintiff countered that the exhaustion of
administrative remedies was not required to ripen his takings claim. The Court agreed with the general.
proposition advanced by plaintiff but disagreed with his characterization of the variance requirement as
one of exhaustion. Rather, explained the Court, the potential availability of a variance deprived the
initial denial of finality:
The question of whether administrative remedies must be exhausted is conceptually distinct. . . from the
question of whether an administrative action must be final before it is judicially reviewable. . . While
the policies underlying the two concepts often overlap, the finality requirement is concerned with
whether the initial decisioninaker has arrived at a definitive position on the issue that inflicts an actual,
concrete injury; the exhaustion requirement generally refers to administrative and judicial procedures by
which an injured party may seek review of an adverse decision and obtain a remedy if the decision is’
found to be unlawful or otherwise inappropriate.
Id at 192-93. Challenges to overturn a government denial is not required to ripen a takings claim, the
Court went on to explain, because the success of such challenges would not afford the takings plaintiff
the relief ofjust compensation that he seeks. See Id at 193.
The Federal Circuit has recognized such challenges do not delay the accrual of a takings claim. In
Loveladies Harbor v. United States, 27 F.3d 1545 (Fed. Cir. 1994) (in bane), the Federal Circuit found
that the filing of a district court challenge to a permit denial was no bar to filing a takings claim in this
couIt ) In so holding, the court noted that “ [ i]t may not always be possible because of the statute of
limitations for a plaintiff to wait for the regulatory challenge case to be finally concluded before filing in
the Court of Federal Claims.” Id at 1555. Further, even in the case where an administrative or district
court challenge must be brought before the takings claim in order to settle a dispute concerning property
ownership, the Federal Circuit has held that litigation to settle that issue does not prevent die accrual of
the takings claim. Aulsron v. United States, 823 F.2d 510, 5 13-14 (Fed. Cir. 1987) (reversing dismissal
and rem rnding with order to stay takings claim so that the statute of limitations would not expire while
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plaintiff pursued m indatory agency procedure).( )
b. Determining Finality
Accordingly, th pursuit of administrative or other potential remedies directed at overturning the Corps
1979 denial did not prevent the accrual of plaintiffs’ takings dairn . The relevant issue implicated by the
determination of when a takings claim of this kind accrues, rather, is whether the government decision at
issue is final. Such a decision generally will not be considered final if the government has the discretion
to consider a modified plan, but the applicant has not asked the government to exercise that discretion.
See Suitwn, U.S. at_, 117 SQ. at 1667. This finality requirement reflects the recognition that
“ [ l]and use plnning is not an all-or-nothing proposition. A governmental entity is not required to permit
a landowner to develop property to [ the] full extent he might desire or be charged with an
unconstitutional taking of the property.. . .“ MacDonal4, 477 U.S. at 347. Accordingly, in Williamson
and MacDonald, the Court rejected takings claims brought by developers after a first denial of a
development plan on ripeness grounds because both developers could have, but did not, seek approval
for a less intensive development plan. Williamson, 473 U.S. at 190; MacDonald , 477 U.S. at 350-Si.
Pursuit of such approval is required to ripen a takings claim unless the applicant demonstrates that such
reapplication would be futile. MacDonala 477 U.S. at 350 ni (1986); see also Heck, 1998 WL 23594,
at $ 3 (purpose of futility exception is “to protect property owners from being required to submit
multiple applications when the manner in which the first application was rejected makes it clear that no
project will be approved”) (quoting Southern Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504
(9th Cir. 1990)).
While neither the Clean Water Act nor its implementing regulations limit the Corps’ discretion to
consider a different permit application for a less intensive proposal after an initial denial, the manner and
circumstances surrounding the Corps denial of BDF’s permit application indicate that such reapplication
would have been futile. The Corps denial addressed the merits of BDFs proposal, and rejected the
proposal on ecological grounds. Further, as both the Federal Circuit and the Louisiana Supreme Court
noted, the Corps denial was based upon an unchanging fact that the wetlands at issue here were within a
protected zone, and that therefore no permit would have been granted for a project which would
facilitate their development. See Bayou des FamilIes, 130 F.3d at 1040; West Jefferson Levee DIst., 640
So. 2d at 1284.
Ill. Persons Entitled to Bring Claim
It is well-established that only the owner of the property at the rime of the alleged laking may assert a
takings claim. Dow, 357 U.S. at 22 (“ [ t]he owner at the time [ of the taking] rather than the owner at an
earlier or later date, is the one who has the claim and is to receive payment”); Argent. 124 F.3d at 1287;
Lacey v. United States, 595 F.2d 614, 619, 219 Ct. Cl, 551, 560(1979). Since the takings claim here
accrued in 1979, and plaintiff Cris did not purchase their interest in the wetland property until 1987, that
claim fails under the rule of Dow.
CONCLUSION
Efforts to secure the reversal a permit denial ar not required to ripen a takings claim, and therefore do
not delay the accrual of such claim. Rather, a takings claim accrues when the government has made a
final determination on the merits of a property owner’s proposed use. Because the Corps September 21,
1979 w 3uch a final donial, plaintiffs takings claim 2ccrued on that date. A. pl intiff February 21,
1995 complaint in this matter was filed more than six years after that denial, their takings claim is barred
by the statute of limitations.
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Accordingly, it is ORDERED that defendant’s motion for summary judgment is GRANTED. Plaintiffs’
motion for summary judgment is DENIED. Final judgment shall be entered dismissing the complaint
with no costs to be assessed.
James F. Merow
Judge
1. The takings clause of the Fifth Amendment to the U.S. Constitution provides “(n]or shall private
property be taken for public use without just compensation.° U.S. Coust. anvm4 V.
2. While the government might have chosen to locate its own levee along the advantageous alignment
after the 1979 denial, plaintiffs admit that they had no compensable property interest in a government
flood control levee:
Cristina had no need for, desire for, or expectancy in government-provided flood protection levee, and
Cristina does not claim it was deprived of any such expectancy. Rather, Crimna claims BDF wo
deprived of the ability to complete its own levee and, as a consequence, of all economically viable use of
their private property.
Pif. Mot. Summ. J. at 30 (emphasis added).
3. In a takings claim, the plaintiff must concede the validity of the government action that is the subject
of his claim. This is ajurisdictional requirement, and stems from the fact that the takings clause of the
Fifth Amendment does not empower the court to award just compensation for the wiauthorized acts of
government officials. Florida Rock!ndu.c.; Inc. v. United States, 791 F.2d 893, 898 (Fed. Cir. 1986),
cert. denied, 479 U.S. 1053 (1987); Tabb Lakes, Ltd v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993)
(If “the taking is unauthorized, the acts of defendant’s officers may be enjoinable, but they do not
constitute taking effective to vest some kind of title in the government and entitlement to just
compensation in the owner or prior owner.”) (quoting Arinyo v. United States, 663 F.2d 90, 95, 229 Ct.
Cl. 34,40(1981)). That is, the takings clause does not empower the government to act beyond its
authority so long as it pays compensation for doing so.
4. Where the property owner is challenging a state or local law, ripeness doctrine requires that he not
only secure a final determination, but that he also seek just compensation in state court before bringing
his claim in federal court. See Suitvm, — U.S. at_, 117 S.Ct at 1665 (“if a State provides an adequate
procedure for seeking just compensation, the property owner cannot claim a violation of the Just
Compensation Clause until it has used the procedure and has been denied just compensation”) (quoting
Williamson, 473 U.S. at 195). This second requirement is not implicated by a challenge to federal law.
See generally Gregory M. Stein, Regulatory Takings and Ripeness in the Federal Courts, 48 Vand. L.
Rev. 1 (1995).
5. The Federal Circuit held that 28 U.S.C. § 1500 (“The United States Court of Federal Claims shall not
have jurisdiction of any claims for or in respect to which the plainliff or his assignee has pending in any
other court any suit or process against the United States... .“), is no bar in such a case because the two
challenges seek di erent relief. Loveladies, 27 F.3d at 1555.(”For thc Court of Fcdcr 1 Cl iin tti be
precluded from hearing a claim under § 1500, the claim pending in another court must arise from the
same operative facts, and must seek the same relief.”).
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6. In finding the 1979 Corps deaial final as applied to BDF, the Federal Circuit relied, in part, upon the
rationale that neither the Clean Water Act nor Corps regulations provide for an adxninistative appeaL of
a permit denial. Bayou des Families, 130 F.3d at 1040. The question of whether such an administrative
appeal is available, however, implicates whether the plaintiff would be required to exhaust such an
appeal before challenging the.denial in district court, see Proposal to Establish an Mnainistrativc Appeal
Process for the Regulatory Programs of the Corps of Engineers, 60 Fed. Reg. 37,280, 37, 290 (July 19,
1995) (proposed appeals process would be precursor to district court challenge to permit denial), not
upon whether the denial is final for the purpose of presenting a ripe takings claim.
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---Fed.Cl. .--
(Cite as: 1998 WL 892’12 (Fed. CL))
Page 1
Nancy A. and Edward W. ROBB]NS,
PI iT Hff!,
- . V. - -
The UNITED STATES, Defendant.
No. 96-779L
United States Court of Federal Claims.
Feb. 20, 1998.
Paul J. Rains, Bichmond, VA, for plaintiffs.
Pamela S. West, Wiii hiiigton, DC, with
whom was Assistant Attorney General Lois J.
- Shiffer, for defenigyif. Robert V. Smyth, U.S.
Army Corps of Engineers, Nashville, TN, of
counsel.
MILLER, Judge,
OPINION
1 This case is before the court after
argument on defendant’s motion for summary
judgment. The issue is whether the
designation and/or delineation of pbiaMilTs ’
property as. jurisdictional wetlands--resulting
in the recision of a private contract to sell the
property-constitutes a compensable t ki ig
under the Fifth Amendment.
FACTS
The following facts are undisputed, unless
otherwise noted. Nancy A. and Edward W.
RobbLns (“plaintiffs”), own and reside on a
38.4-acre parcel of land in Pans, Tennessee
(the “property”), which supports a house, barn,
shed, and ma Plaintiffs purchased
the property / 1975 ii invest nent that
they eventually p anned to seLl in order to
provide for heir retirement
On March 4, 1994, Keith Baker signed a
land sales contract with plaintiffs to purchase
the property for $9,000.00 an acre, or
$351,000.00, and subsequently issued a check
for a $100,000.00 deposit. Mr. Baker inte eded
to sell the home and a portion of the acreage
and. develop the rem ‘in ’ 4 er of the land as a
mobile home sales lot.
Shortly after the contract was signed, Mr.
Baker’s real estate agent, Joe B. Lipps,
learned from a Paris, TN city employee that
the property was in a floodplain and would
require a permit for development. Mr. Lipps
was also informed that the property j iight be
wetlands. On March 7, 1994, plaintiffs
contacted the U.S. Army Corps of Engineers
(the “Corps”) and requested that it determine
whether regulated wetlands eristed on the
site; Carl Olsen. a representative from the
Corps inspected the site a week later. The
Corps based ite wetlands determination on
three environmental parameters: hydrophytic
vegetation, hydric soils, and hydrology, in.
accordance with the 1987 Corps of Engineers
Wetland Delineation ManuaL On March 28,
1994, the Corps notified. plaintifib of its
determination The property contained
jurisdictional wetlands pursuant to section 404
of the Clean Water Act, Federal Water
Pollution Control Act Ame Ame ’ds of 1972,
404, as amended, 33 U.S.C. 1344 (1994) [ FN1]
The Corps advised p]aintiffs to retain a
wetlands delineation expert and gave them
information regarding the permit application
process under section 404 and the pertinent
regulation, 33 CY.R. 325 (1997).
In late March 1994, having been informed of
the i!2 tio and after
receiving severaIi timates fbr the cost of site
preparation and development, (FN2] Mr.
Baker demanded cancellation of the contract
and a return of his deposit because “the
wetlands determination made the land
unsuitable for [ hisi use.” Affidavit of Keith
Baker, Mar. 27, 1997, 1 8. The parties dispute
whether Mr. Baker or pl i t+iffs canceled the
contract and whether plaintiffs would have a
cause of action for breach of contract or
specific perlbrmance in light of an escape
clause in the contract. Although this
unresolved issue is riot particularly material
to the t ic 4 ngs issue, it does highlight the
nature of the land sale canceUation as a
private action. The parties also dispute
whether the Corps knew of the land sale
contract when it made its wethuids
determination and, if so, to what effect.
‘2 I their April 1994 correspondence to the
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(Cite as: 1998 WI. 89272, 2 (Fed.Cli)
Page 2
Corps, plaintiffs stated that the Land sale had
fallen through and that they would not be
seeking a section 404 permIt Responding to
plrnritiffs’ letter dated May 5, 1994, in which
they stated that they could not afford to hire a
wetlands expert for the wetlands d”lineation,
the Nashville division of the Corps and the
State of Tennessee Department of
Environment and Conservation performed a
joint wetlands delineation and investigated
the site in August 1994. The subsequent
delineation report, dated October 21, 1994,
concluded that the appro iv te1y 39 acres of
plaintiffs’ property contained “25 acres of
regulated wetlands” ui two noncontiguous
areas in the east and west of the property.
Plaintiffs subsec uently hired Thomas
Remake, Ph.D., a Certified Wetlands
Scientist, to conduct his own field
investigation. Dr. Heineke reviewed the
delineation report and provided written
comments objecting to the extent of the
wetlands on the Bobbins property, which he
felt was ‘grossly exaggerated.” Although Dr.
Heineke asserted that “the fescue doin m ted
portions of the site are not jurisdictional
wetlands,” he did not speci1 how much of the
property did comprise wetlands, and plaintiffs
do not challenge the Corps’ wetland
designation in their complaint. N31 The
Corps responded to Dr. Heineke’s objections
by letter dated March 13.1995, encouraging
plaintiffs to submit a section 404 permit
application to develop the property and noting
that the “disturbed nature of the regulated
weth irI on (the] property and the excellent
on aite mitigation potential ... (were]
conducive to the preparation of an
environmentally acceptable and. approveable
development plan.”
On December 13, 1995, the Headquarters of
the Corps, Waterways Experiment Station, re-
evaluated the prior wetlands delineation of
the Corps Nashville Disbict. The site
tnvestigation focused on the disputed area of
the fescue field on the West side of the
property. Plaintiffs’ experts, Dr. Remake andY
Eugene Lampley, were among those present
dining the investigation of the subject
property. The Corps issued a re.eva.luation
report on Januarj 8, 1996, concluding that the
original wetland delineation report of October
12, 1.994 was correct and that 25 of the 39
acres of pl intiffa’ property comprised
jurisdictional wetlands.
At no point have plRirttiffs submitted a
section 404 permit application to develop the
wetlands. On December 1.2, 1996 plaintiffs
ified their complaint in two counts to recover
damages arising from the Corps’ alleged
t lriiig of the land sale contact or,
alternatively, the taking of the property
without just compensation in violation of the
Fifth Amendment.
DISCUSSION
1. Sn rn ’ ’uy judgiw ”i+ standards
Snmmiiiy judgm nt is appropriate when
there are no genuine issues of material 1 ,act in
dispute and the moving party is entitled to
judgment as a matter of law. RCFC 56(c).
Summary judgment pursuant to RCFC 56
properly can intercede and prevent ial if the
movant can demonstrate that trial would be
useless Lit that additional evidence in
connection with its motion could not
reasonably be expected to change the result.
See Pure Gold, Inc. v. Syntex (U.S.A.), Inc.,
739 F.2d 624, 626 (Fed.Cir.1984). lit ruling on
defendant’s motion for summary judgment,
the court is mindful of the precedents
a .hnonishing against “precipitous grants of
summary judgment” in ‘fact-intensive”
tpkings cases. Yuba Goldflelds, Inc. v United
States, 723 F.2d. 884, 887 (Fed.Cir.1983).
However, the court has scrutinized the record
to assure that no material facts are in dispute,
that all presumptions and inferences are
drawn in plaintiffs’ favor, and that defendant
has discharged its burden to establish
entitIem ”t to summary judgzn ’ as both a
matter of fact and law.
2. Takings issue
9 Analyring a t k ngs claims invoices a
“two-tiered” inquiry into the governmental
action resulting in a land use restriction. M &
J Coal Co. v. United States, 47 F.3d 1148.
1153-54 (Fed..Cir.1995). First, a court should
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•..Fed.C1.
(Cite as: 1998 WL 89272, 83 (Fed.CL))
assess the nature of the land owner’s private
property interest in order to determine
whether a coxiipenaable interest exists. See id.
at 1154 (citing Lucas v. South Carolina
Coastal Council, 505 U.S. 1003, 1027 (1992)).
Second, once the takings claimant has
established the existence of a property
interest, the court must determine whether
the governmental action at issue constitutes a
compensable taking of private property for a
public purpose. See M & J Coal, 47 F.3d at
1154. In rn i g this latter d .eter’nin- tion,
the court must engage in ‘ ‘essentially ad hoc,
factual inquiries.’ “MacDonald, Sommer &
Frates v. County of Yolo, 477 U.S. 340, 349
(1986) (quoting Kaiser Aetna v. United States,
444 U.s. 164, 175 (1979)). This inquiry
considers three central factors: 1) the
character of the government action or
regulatlon 2) the economic impact of the
government action on the property owner,
and 3) the extent of the interference with the
owner’s investmant.backed expectations. See
Penn Central Transp. Co. v. New York City,
438 U.S. 104, 133 (1978); see also Kaiser
Aetna, 444 U.S. at 175. Although both
plaintiffs and defendant employ this three..
prong analysis, they reach opposite
conclu.siona.
Page 3
•4 That the parties dispute who actually
canceled the contract--plaintiffs ox Mr. Baker,
the buyer-is imsnateriaL The fact remains
• that in no manner did the Corps preclude the
sale of plaintiffs’ property; the arties to the
contract, not the Corps, caused the contrac o
fail though. Although the wetlands
determination may have frustrated the land
sale contract, it is well-settled that
WPf7 Plaintiffs argue that the Corps’ wetlands government action that merely frustrates
e ,NrrJi. rdetezmi11 ation constitutes a government action, expectations under a contract does not
, resulting in a compensable taking of the land constitute a talting. See 767 Third Street
sale In essence, plaintiffs assert that Assoc. v. United States, 48 F.3d 1575, 1581.
becaü ithe wetlv A determination indirectly (Fed.Cfr.1995) (citing Omn3a Commercial Co.
led to the cancellation of the land sales v. United States, 261 U.S. 502, 510-11 (1923));
contract, the $351,000.00 in unrealized see also NL Industries, Inc. v. United States,
proceeds from, the sale were “taken” and thus 839 F.2d 1578, 1579 (Fed. Cir. 1988)
require compensation. Yet at oral argument (“ [ Firustration of a business by lose of a
on defendant’s motion for summary judgment, customer (is] not a taking.”); Kearney &
plaintiffs’ counsel seemed to argue that it was : Trecker Corp. v. United States, 688 F.2d 780,
not the weti A. determination, rather, the 783 (Ct.CL1982) (finding no taking when the
wetlands delineation--finding that 25 of 39 “ [ G]overmnent did not appropriate any of the
acres comprised wet1sn Is -.that effectuated the rights the plaintiff had under the contract but
taking of the contract. [ FN4J The wetlands only made it impossible fo? the plaintiff to
delineation occurved, however, five months .- exform it”).
after the contract was rescinded. Thus, Lc
issue is whether the wetlands deter natio1t . Q For similar reasons, plaintiffs’ alternative
effectuated. a taking of the land sale contract:. argument regarding the tAking of the
Pl i, iffs alternatively contend that therp J “commercial value” of the land also fails. The
wetlands determination and delineation fact that the wetlands determi ation may
constituted a compensable taking of the have prompted the recision. of the land sale
property itself because defe ivi+ “has taken
for public use substantially all beneficial and
productive use of (p)laintiffa’ land.” Conip].
fi.ledDee. 12, 1996, Ii 22-26.
As a threshold issue, the parties dispute how
the wetlands designation and subsequent
cancellation of the land sale contract should be
characterized—as a government action or a
private action. Plaithffs argue that, because
the wetlands designation caused the
cancellation of the land sales contract, it is a
government action that effectuated a
compensable tilc4ng . Defendant counters that
the wetlands determination merely provided
the impetus for the parties to cancel a private
contract; hence, a private action, not a
government action, is responsible for the non-
realised proceeds, which pl i ’Iitift ’s claim were
“taken.”
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coribact, or precluded a future confract with a
similarly attractive price per acre, also is not
material. Tbé Coi ps has jtnisdiction to issue a
permit to fill jurisdictional wetlands pursuant
to sectIon 404. See United States v. Riverside
Homes, Inc., 474 U.s. 121, 126
(1985). The wetlands designation itself cannot
constitute a taking, as “it is quite clear that
the mere assertion of regulatory jurisdiction
by a governmental body does not constitute a
tRking.” Id. at 126 (citing Hodel v. Virginia
Surface Mining & Reclamation Ass’n, 452
U.S. 264, 293-97 (1981)). The wetlands
designation does not preclude the sale or
development of plaintiffs’ property; rather, it
merely precludes development without a
permit. See Tabb Lakes, Ltd. v. United
States, 10 F.3d 796, 800-01 (Fed.Cir.1993).
Indeed, the possibility that the Corps may
grant plaintiffs a permit precludes the
weth rirl determination from constituting a
taking. See id. at 801 (citing Riverside
Bayview, 474 U.S. at 127) (‘rhe permit
requirement “does not itself ‘take’ the
property in any sense: after all, tho very
existence of a permit system implies that
permission may be granted.... ‘D. The requisite
government action is often supplied in takings
cases when the Corps or other Goverrunent
entity declines to grant a permit to an
applicant to use its land in a particular way.
That is not the case here, as plaintiffs have
never applied for a section 404 permit.
c ) The second prong of the t iirings inquiry
,M A J.-focuSes on the economic impact of the alleged
government action, here the wetlands
determir ition. See Penn Central, 438 U.S at
124; see also Pennsylvania Coal Co. v.
Mahon, 260 U.S. 393 (1922). Plaintiffs assert
that by designating as wetlands 25 of the 39
acres of pl 4 4iff 3 ’ property, the Government
“destroyed the commercial value of thEe]
property.” Plfs’ Br. filed Aug. 18, 1997, at 15.
The parties hotly dispute the fair market
value of the property at the time of the 13)
wetlands designation. Plaintiffs argue that
the fair market value was $35 1 ,000.0O..the ’
value that Mr. Baker. the buyer, was willin
to pay for the property. Defendant challenges
this figure by pointing to the 1997 tax
appraisal of the property for $65,600.00 and
arguing that, absent an independent fair
market value appraisal, CFN5] one could not
conclude that the value of the property had
actually declined. [ FN6] Given the terrain
and hydrology of the property, defendant
argues, the property’s value is probably far
closer to the 1997 tax appraisal of $65,600.00
than the contract price of $351,000.00. Once
again, the disputed issue of the amount to
which the property’s value diminished is not
material, given that the purported economic
impact—the loss of the contract proceeds or
drop in the commercial value of the property-.
was not caused by government action, t.e.,
denial of a permit.
5 Ass”nii ig, arguendo, that the property’s
value did decrease, long.standing precedent
nevertheless holds that the mere “diynu ’rntion
in a property’s value, however serious, is
insufficient to demonstrate a taking.”
Concrete Pipe and Products of Ca., Inc. v.
Construction Laborers Pension Trust, 508 U.S.
602, 604 (1993) (citing Village of Euclid v.
Ambler Realty Co., 272 U.S. 365, 384, (1926))
(approximately 75% dIminution in value due
to zoning law). As the Supreme Court noted
in Lucas, 505 U.S. at 1004, the economic
impact factor may be dispositive if the
regulation categorically deprives die claimant
of “all economically viable use” of the
property. Plaintiffs argue that the wetlands
designation precludes them. from ma r4mi ’i ig
the potential profit from selling the property.
An inability to maximize profits, however, is
insuffi cient to establish the deprivation of “all
economically benefit i 1 or productive use” of
the property, as required for a compensable ‘
t fring under Lucas, Id. But ef. Florida Rock
Indus., Inc. v. United States, 18 F.3d 1560,
1.570 (1994) (discussing “balancing of
competing values” “when a partial loss of
economic use of the property has crossed the
line from a noncompensable ‘mere diminution’
to a compensable ‘partial taking.’”)
The third factor of the takings inquiry is the
extent to which the government action
interferes with plaintiffs’ reasonable
investnient.backed expectations. Penn
Central, 438 U S. at 124; see also Keystone
Bituminous Coal Ass’n v DeBenedictis, 480
V
‘I
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i’i
‘7
U.S. 470, 492 (1987). Plai.n.tL 4 Ts had originally
purchased the property as an investment and
insist that the Corps’ wetl. ids deter”i”ation
and deineatinn interfered with their
reasonable investment-backed expectations.
Because the property “was not subject to
frequent flooding or persistently wet
condition’ and because neighboring property
had sold for “sums that greatly exceeded the
canceled land sale contract price,” Plfs’ Br.
filed Aug. 18, 1997, at 21, plaintiffs argue that
they reasonably could have expected that their
land would have the same value. They point
to the commerdal development of the
adjo v’i”g neighbor’s property as further
evidence of the reasonableness of their
expectations. However, that these
expectations were reasonable is u.nclear they
existed without the knowledge that 25 of the
39 acres of the property, including acreage
that abutted the highway, comprised
jurisdictional wetlands.
In Penn Central the Supreme Court rejected,
as “quite simply untenable” the argument
that property owners “may establish a ‘4 i1ring’
simply by showing that they have been denied
the ability to exploit a property interest that
they heretofore had believed was available for
development 438 U.S. at 130; see also
Deltona Corp. v United States, 228 Ct. CL
476, 491, 657 F.2d 1184, 1193 (1981) (fInding
that denial of highest economic use of property
“does not form a sufl cient predicate for a
tRldng ”). Plpintiffs’ taking claim
unfortunately amounts to little more and does
not establish the requisite elements for a
compensable tafring .
3. Ripeness of plaintiffs’ claims
6 The ripeness doctrine frictions to prevent
courts “from entangling themselves in
abstract disagreements over adirunistrative
policies, and also to protect the agencies from
judicial interference until an w n 4v istrative
decision has been formalir. d and its effects
felt in a concrete way by the challenging
parties.” Abbott Labs. v. Gardner, 387 U.S.
136, 148.49 (1967). Defendant contends that
this case is not ripe because plaintiffs have not
sought a permit under section 404 of the Clean
Water Act. Federal Wa±er Pollution Control
Act Amendments of 1972, 404, as amended, 33
U.S.C. 1344 (1994).
Plaintiffs acknowledge the general rule
regarding the ripeness of a t icings claim “ [ A]
claim that the application of government
regulations effects a taking of a property
interest is not ripe until the government
entity chared with implementing the
regulations has reached a final decision
regarding the application of the regulations to
the property at issue.” Wil li mR n Count,
Regal Planning Comin’n v. Hamilton Bank,
473 U.S. 172, 186 (1985); see also MacDonald,
Sonuner & Frates, 477 U.S. at 349. Only
when a section 404 permit is applied for,
denied, and prevents “ ‘economically viable’
use of the land in question” can there be a
taking. Riverside Bayv’iew, 474 U.S. at 127.
To date plaintiffs have declined, to seek a
section 404 permit; they assert that
exhausting the section 404 permitting process ’) 4 . ,j P 1 L
would be “futile” for two reasons, and
therefore is not required before they can bring
a takings clAiYn First, they argue that the
taking occurred at the time of the wetlands
designation and the subsequent cancellation of
the land sale contract, so at that point the
takings claims ripened. Therefore, plaintiffs
contend, “(am after the fact 404 permit
application would in no way serve to clarify
the extent to which the regulatory action
interfered with (pflaintiffs’ property rights.”
Plfa’ Br. filed Aug. 18, 1997, at 24. To the
extent that the genesis of pliti Ws’ ts rings
claim allegedly occurred. at the time of the
wetlands determination, the issue presents a
confroversy ripe for review.
Second, plaintiffs contend that the permit
application process, particularly the allegedly ;
expensive mitigation requirements, would he ,
“unduly burdensome” and thus futile. Plfs ’
Br. ified Aug. 18, 1997, at 25. Although
plamntiff cite several cases to support the
contention that resorting to the section 404
permit process would be futile, they are
distinguishable. For example, in Broadwater
Farms Joint Venture v United States, 35 Fed.
Cl. 232, 235 (1996), plaintiff began
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improvements to Its property without a permit
until the Corps ordered - a complete and
immediate r toration of-the property to its
natural wetlands condition. The court found
that “(nb reasonable h ii wner would find a
‘door left open’ for obtaining a permit (under]
the circumstances of this case TM and that the
“Corps would not allow developnu’nL” It at
237; see also MacDonald, Somemer & Frates,
477 U.s. at 352 (noting takings question, in
doubt because of the “possibility that some
development will be pemmitted.”). The Corps
has ,iu nicested an apparent willingness in the
instant case to work with plaintiffs to prepare
development plan and to secure a section
404 permit. (FN7)
7 Plaintiffs place greater emphasis on what
they term. an” ‘economic futility’ argument.”
P]fs’ Br. ified Oct. 7, 1997, at 2. P1aintifi cite
Hage v. United States, 35 Fed. Cl. 147, 164
(1996), for the proposition that they need not
exhaujt the ction 404 permitting process if
the ( proced ,è “is so burdensome that it
effect i veiy deprives the propety ? value.’
Not only is Hage distingwshable, but this
quotation omits another factor involved in
showing f%itility fFN8] and does not
contemplate speculation as to the expense of
the permitting process.
Plaintiffs assert that in order to “retain the
commercial value of the property” a permit
must be sought to fill the entire 25 acres of
wetl”itd “to clear the taint of the wetlands
designation on the entire parcel.’ P]fs’ Br.
flied Oct. 7, 1997, at 3.4. Attempting to
explain the economic futility of on site
mitigation, plaintiffs present a conser rative
hypothetical indicating that even assuming a
one-to-one acre exchange, [ FN9] the cost of
mitigation could exceed the land sale contract
by 11,000.00. Id. at 4. Plaintiffs’
hypotheticals aside, the cost of determining
and fulfilling an acceptable mitigation plan
under the Corps’ mitigation guidelines is
completely_speculative. (FN1OI Without a
seãffon 404 pe i one cannot know whether
as plaintiffs contend, the cost of m.itigaticln
would be “economically impractical,” or
would, in fact, be akin to a permit denial.
As the Federal Circuit recently expounded,
“the futility exception simply serves ‘to
protect property owners from being zeqwred to
submit multiple applications when the
in which the first application was
rejected makes it clear t no project will be
a proved ’ Howard W. Heck, and Assocs.,
Inc. v. United States, No. 97-5064, 1998 WL
23954, *3 (Fed .Cir. Jan.. 23, 1998) (quoting
Southern Pac. ‘l’ransp. Co. v. City of Los
Angeles, 922 P.2d 498, 504 (9th Cfr. 1990)). In
the case at bar, plai i+icFs have not
demonstrated this type of futility, arid their
speculative economic futility arguments ei joy
little legal support.
Therefore, plaintiffs’ takings claim--pinning ”
the t*king to the wetlands determination..isJ
npe for review, whereas a ta ngs claim baa a
on a denial of a section 404 permit is obviously
not ripe, but would be in the future if
phithiffi apply for, and are denied, a section
404 permit.
While the coral is sympathetic to plaintiffs’
plight, it cannot disregard existing precedents
and invent new law. The wetlands
determinAtion and da1in ation. themselves are
insu cient to constitute a compensable
biking , as they do not supply the requisite
government action required by Penn. Central
and. its progeny. While it may be true that the
wetlands determination directly or indirectly
caused the land sale to fall through, this was a
private, not a government action. Plaintiffs
may continue to use their property as they
always have, but In order to flit the wetlands
they must seek a section 404 permit with the
Corps. If, however, the Corps denies plaintiffs cikV-
a section. 404 permit, a final action, then o i pr’ 11 ”
plaintiffs have an entirely different case, for de tz( ‘
then they can demonstrate the requisite
government action. The Corps has expressed
its willingness to assist pl iiHffs with the
permitting process, and the court has no
reason to believe that such assistance will not
be forthcoming.
CONCLUSION
‘8 Accordingly, based on the foregoing,
defendant’s motion for summary judgmen is
C-
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granted. The Cler]c of the Court shall enter
judgment for defendant -
w
IT IS SO ORDERED.
No costs.
FNI. Spccthcaliy, the determination stared diac (I]hc
Robbins family property, which is located below
‘headwaters’ in thc McGowan Branch walerthed.
reveals the presence or evidence of three
characteristics of regulated wetlands on a large
portion of the property including the majority of the
highway frontege on SR 79. McGowan Branch and
its adjacent wedands are waters of the United States
pursuant to Section 404 of the Clean Water Act.
A wetlands delineation by a qualified consultant
verified by our office is an acceptable procedure (or
dctcrTnining the extent of proposed activities in
regulated wetlands.
FNZ. While die panics supulaic that Mr. Uppe
provided these csthnates. he could not recall the
details. The parties dispute the actual cost of
developing the site, given the permitting
requirements. Plaintiffs assert that defendant’s
canmate of S 189,456 00 is a ‘gross exaggeration of
the actual costs of developing the property.”
FNS. Plaintiffs note, however, that there remain
serious questions regarding the extent to which
such designation accurately reflects the existence of
wcdaiids on the subject property.” Firs’ Br. filed
Aug. 18. 1997. at I a. 1. However, by pursuing a
takings claini, pLaintiff ‘must concede the validity
of die Goveriunent action which is the basis of the
taking claim to bring suit under the Tucker Act.’
Tabb Lakes. Ltd. v. United Scues, 10 F 3d 796,
802 (Fe.d.Cir. 1993) (citing Florida Rock Indus..
Inc. v. United States, 791 F.2d 893, 899
(Fed.Cir. 1986)).
FN4. In the context of discussing thc wetlands
determination, plaintiffs’ couvscl then shifted his
argument to the subsequent wedands delineation:
But in our case what happened after that ft
wetlands determination] was the Government went
beyond that. The GoverTlmcnt then did a full-blown
determination [ delineation?J. something that i very
unique. If we would Put Ofl evidence, we would
show that the l ’f ashville office had never done a
1141-blown dclineadon before I am cot asking
the court to say that every timc you have the
Government come our and make a determination, it
is a taking. We are not asking for that. We are not
trying to change the law. We are just saying that
wider the unique set of facta of this case with that
being the only obstacle to the sale going through.
that under those set of circunis(agiccs, at can be
deemed a raking of the cooa ct. Transcript of
Proceedings, Robbins v. United States, No. 96-
779L. at 31-32 (Fed.Cl. Oct. 27. 1997).
ENS. Plaintiffs have provided dice virtually
identical affidavits that purport to demonstrate the
fair market value of the property. The affidavits
state that ‘the Robbuis’ property was extremely
marketable and the $35 I .000.00 sale pnce was
certainly reasonable.’ Affidavit of Wifliarn M.
Johnson, Aug. 7, 1997. ¶ 7: Affidavit of Samuel
ft. Striker, Aug. 7, 1997, ¶ 7; Affidavit of Harold
Bass Jr., Aug. 8, 1997, 1 7. Only one of the
affianrs is a certified appraiser. and none of the
affidavits reflects an independent appraisal of the
fair marker value of the property.
FN6. As defendant notes, plairnitts purchased the
property in 1975 for $36,000.00; in 1994 the
appraised value of the property was S65. 100.00,
and in 1997 the appraised value was S65,600.O0.
Although the value of the property as set by rax
appraisal is not equivalent to the faiz market value.
it is open to dispute what the fair market value of
the Pioperty was before and after the alleged caking
occurred.
FN7. Keith Wade Whitcinghill, the Corps
Regulatory Project Manager in charge of the
wetlands determination of plaintiffs’ properly,
avers: I explained the Corps of Engineers’ percuc
application process to Mrs. Robbins in detail and I
assured her that the Corps would gladly assist hcr
in any way should she decide to apply for a permit.
I also iit!ormed Mrs. Robbins that, while we could
not guarantee what the final decision would be on
any pcrmit application, she had a situation lending
itself to the preparation of a development plan
which would be eiivironmenmlly acceptable and
approveable by the Corps given the disturbed nature
of the wetlands on the property and the excellent
ort4ite mitigation potential. .kffdavt of Keith
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Wadi Whiuinghill, Scpc. 9, 1997, ¶ 3. Mrs.
Robbins states that ‘Mr. Whiriinghrll cncnaoned
mitigatioii but ncvcr gave .n1 specific information.
Mi. Whithnghill made it clear on nuincrous
occasions chat there was no guar.tncce that a permit
would be issued for my property in the event that I
did apply.’ Affidavit of Nancy A. Robbins, Oct. 3,
[ 997. ¶ 6. This is not akin to denying a pcrmir
application, contrary to plaintiffs’ Intimation during
oral argument.
FN8. 1{age cites two factors involved in a showing
of futility: Trihe law does not require pImntif to
apply for a permit if the procedure icsclf is not a
reasonable procedure, and is so burdensome that is
effectively dcprivcs the property of v.duc.’ 35 Fed.
Cl. at 164 (citations ozniitcd).
FN9. Thc Corps’ mitigation policy under section
404 is set forth in the Memorandum of Agrcvnienz
•Resween the Envuonanental Protection Agency and
the Deparimcns of the Army Concerning the
Deicrmmadon of Mitigation ljndcr the Clean Water
Act Section 404(b)(l) Gutdclmes (Feb. 7, 1990) (the
MOA). In keeping with a policy of no net loss of
wetlands. thc Corps will generally nquirc that at
lca c 1 acre of wetlands be ercated for every I acrc
that is tilled. However, the MOA also states that
thc ratio may l)e less than [ tø 1 for areas where
the likelihood of success dssociaced with the
nuagation proposal is high’ MOA at 6
FNIO. Under the plaintiffs’ hypothetical and a one-
for-one acreage exchange, plaintiffs would need to
purchase eleven acres, so that when added to the 14
non-wetland acres of their property. the resulting 25
acres equala the 25 acres of wetlands which will be
filled. The hypothetical, however, assumes a
purchase price of $10,000.00 per acre, which may
be inflated gwen that the Robbins’ land and
buildings were ro be sold for 59,000.00 an acre and
they were in a commerciaLly desirable location
abutting a highway.
END OF DOCUMENT
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Author: david courseri at X400
Date: 6/9/98 1:25 PM
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP M NCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
charles ordine at X400, ann williams at X400, phyllis feinniark at X400,
marc seideriberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakaini at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinaki at X400
CC: robert dreher at X400, Scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: EPP Takings Snapshots IX (6/9/98) -Forwarded
Environmental Policy Project’s
Takings -Net
* * * * *
To provide more timely information about recent takings
decisions, the Environmental Policy Project provides brief,
bimonthly summaries of very recently issued decisions and
other important case developments. All of these
developments will also be summarized in the quarterly
dockets distributed to participants in the network.
Takings Snapshots IX (June 9, 1998)
1. Seldovia Native Ass*n v. United States, 1998 WL
239337 (Fed. Cir. May 14, 1998) (dismissing certain
rnakings claims asserted by Alaskan Indian village
.orporation as time -barred; dismissing other claims on the
merits because Department of Interior*s redefinition of the
lands in Alaska available for selection by Indian village
corporation did not effect a compensable taking, given that
the initial selection process did not create vested property
rights in the lands at issue).
2. Garneau v. City of Seattle, 1998 WL 214579 (9th Cir. May
4, 1998) (in a case with three separate opinions, court of
appeals ruled, 2 to 1, that Portland, Oregon tenant
relocation assistance ordinance, which requires landlords to
make payments to tenants they intend to displace by
redeveloping their property, did not effect a taking; one
judge said Dolan is limited to unconstitutional conditions
context and therefore is inapplicable to this case, and
plaintiff*s failure to show any economic injury was fatal to
takings claim; one judge concurred in the result, but
concluded that the allegations presented a claim under the
due process clause rather than the takings clause; the third
judge dissented on the ground that the ordinance, in effect,
resulted in an unconstitutional physical occupation).
3 Hidden Oaks Limited v. City of Austin, 138 F.3rd 1036
(5th Cir. 1998) (affirming dismissal on ripeness grounds of
takings claim based on city*s refusal to provide utility
‘ervice to building determined to be in violation of building
.,de, where plaintiff failed to pursue appeal to challenge
citation under code; affirming entry of judgment for city on state inverse
condemnation claim because code served
legitimate and important public purposes).

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4. Landgate, Inc. v. California Coastal Commission, 73
Cal. Rptr. 841 (Cal. 1998) (in a 4-3 decision, the California
Supreme Court ruled that delay in the issuance of a
development permit as a result of mistaken assertion of
jurisdiction by coastal commission over subdivision of land
.d not result in a taking but is a type of *normal delay*
•ithin the meaning of the Supreme Court*s First English
decision; the court reserved the question whether an ultra
vires action can ever provide the basis for a taking).
5. Mission Springs, Inc v. City of Spokane, 954 P.2d 250
(Wash. 1998) (city manager*s arbitrary and capricious
denial of grading permit does not state a claim for just
compensation under the Takings Clause, but states a claim
for a damages for a due process violation under section
1983)
6. Smith Investment Co. v. Sandy City, 1998 WL 227780
(Utah App. April 30, 1998) (rejecting facial takings
challenge to rezoning of property from commercial to
residential, where change resulted in a 43% reduction in
value, and property retained *some economically viable use
and value*).
7. Bellon v. Monroe County, 1998 WL 199907 (Iowa App.
February 25, 1998) C affirming district court*s denial of a
writ of mandamus to compel payment of just compensation
based on county*s refusal to upgrade public road providing
access to plaintiff*s land, because road was unimproved at
the time owner purchased the property, relying on Iowa
Supreme Court decision in Hunziker).
Staubes v. City of Folly Beach, 1998 WL 211752 (S.C.
App. 1998) (where city improperly revoked permit to repair
building damaged by hurricane, city*s action was not within
the exception for temporary takings liability based on
*no l delays* established in First English, but city*B
action did not effect a taking because it did not deny all
economic use of the property).
9. Pacific National Cellular v. United States, 1998 LWL
214259 (Ct.Cl. April 28, 1998) (in a case raising issues related to issues
raised by Landgate and Del Monte Dunes,
the Court of Federal Claims granted summary judgment for
United States on claim that FCC took plaintiff*s property
interests in contracts providing financing for cellular radio
telephone systems, because FCC*s processing of
applications for construction of systems was delayed by 4
years by FCC*s acknowledged violation of Paperwork
Reduction Act; court rejected takings claims because
contract rights were merely frustrated and not taken, and
because plaintiff voluntarily entered into a business subject
to pervasive federal regulation; court did not address
implicit issue whether there could be a taking for *public
uee* in these circumstances).
10. Maritrans v. United States, 1998 WL 214268 (Ct.Cl.
‘pril 24, 1998) (in a limited ruling, the court rejected
rgument that plaintiffs had no property interests in ships
required by federal law to be fitted with double hulls on the
ground that the ships were personalty, and also rejected
claim that plaintiff*s voluntary involvement in a heavily

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regulated business precluded a takings claim; court intends
to later address issues of economic impact and character of
the government action).
11. WJF Realty Corp. v. State of New York, 1998 WL
249100 (N.Y.Sup. April 22, 1998) (rejecting apparently
cial takings challenge to New York Long Island Pine
srrens Protection Act, including TDR provision,
concluding that value of TDR*s are relevant to takings
liability issue and in any event TDR*s may serve as
compensation in the event of a taking).
* * * * *
For more information, please contact John Echeverria
or Peter Not fmann at:
Environmental Policy Project
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly®law.georgetown.edu

-------
Author: david coursen at X400
Date: 6/25/98 2:35 PM
Priority: Normal
TO: KIMl JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, charles ordine at X400,
deborah hilsmari at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakami at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: S. CT. Takings/Due Process (Eastern Enterprises) Decisio...
Eastern Enterprises v. Apfel, No. 97-42 (S. Ct. June 25, 1998)
A majority of a badly divided Supreme Court rejected a Takings Clause challenge
to the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act) imposition
of retroactive liability on the plaintiff company based on Eastern’s activities
between 1946 and 1965. A majority of the Court also declined to find a due
process clause violation. However, the Coal Act was held to be
unconstitutional as applied to Eastern, because 4 Justices concluded that it
was a taking, and Justice Kennedy concluded that it was a due process violation
(but argued strongly that it could not be a taking because there was no
specific property right or interest at stake in a general imposition of
liability)
Four Justices joined in two separate dissents that rejected both the takings
nd due process arguments.
Justice O’Connor’s opinion joined by three others. The plurality opinion
states that this legislation might be unconstitutional if it imposes severe
retroactive liability on a limited class of parties that could not have
anticipated the liability, and if the extent of that liability is substantially
disproportionate to the parties’ experience. The Coal Act’s allocation scheme,
as applied to Eastern, presents such a case, when the three traditional factors
are considered.
The following Syllabus is from the Court’s Website:
http://supct.law.cornell.edu/supct/html/97-42 .ZS.html
Glenn Sugameli
Senior Counsel
National Wildlife Federation
1400 16th Street, N.W., Suite 501
Washington, D.C. 20036-2266
202-797-6865
FAX 202-797-6646
sugameli@nwf.org
SUPREME COURT OF ThE UNITED STATES

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Syllabus
EASTERN ENTERPRISES v. APFEL, COMMISSIONER OF SOCIAL
SECURITY
ETAL . CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
FIRST CIRCUIT
No. 97-42. Argued March 4, 1998 - Decided June 25, 1998
In 1946, a historic labor agreement between coal operators and the United Mine
Workers of America (UNWA) led to the creation of benefit funds that provided
for the medical expenses of miners and their dependents, with the precise
benefits determined by UNWA appointed trustees. Those trusts served as the
model for the United Mine Workers of America Welfare and Retirement Fund (1947
W&R Fund), which was
established by the National Bituminous Coal Wage Agreement of 1947 (1947
NBCWA). The Fund used proceeds of a royalty on coal production to provide
benefits to miners and their families, and trustees determined benefit levels
and other matters. The 1950 NBCWA created a new fund (1950 W&R Fund), which
used a fixed amount of royalties for benefits, gave trustees the authority to
establish and adj st benefit levels so as to remain within the budgetary
restraints, and did not guarantee lifetime health benefits for retirees and
their dependents. The 1950 W&R Fund continued to operate with benefit levels
subject to revision until the Employee Retirement Income Security Act of 1974
(ERISA) introduced specific funding and vesting requirements for pension plans.
To comply with ERISA, the UMWA and the Bituminous Coal Operators’ Association
entered into the 1974 NBCWA, which created four new trusts. It was the first
agreement to expressly reference health benefits for retirees, but it did not
alter the employers’ obligation to contribute a fixed amount of royalties. The
new agreement did not extend the employers’ liability beyond the term of the
greement. Miners who retired before 1976 were covered by the 1950 Benefit Plan
and Trust (1950 Benefit Plan), and those retiring after 1975 were covered by
the 1974 Benefit Plan and Trust (1974 Benefit Plan). The increase in benefits
and other factors-the decline in coal production, the retirement of a
generation of miners, and rapid acceleration in health care costs quickly
caused financial problems for the 1950 and 1974 Benefit Plans. To ensure the
Plans’ solvency, the 1978 NBCWA obligated signatories to make sufficient
contributions to maintain benefits as long as they were in the coal business.
As the Plans continued to suffer financially, employers began to withdraw,
leaving the remaining signatories to absorb the increasing cost of covering
retirees left behind.
Ultimately, Congress passed the Coal Industry Retiree Health Benefit Act of
1992 (Coal Act) to stabilize funding and provide for benefits to retirees by
merging the 1950 and 1974 Benefit Plans into a new fund (Combined Fund) that
provides substantially the same benefits as provided by the 1950 and 1974 Plans
and is funded by premiums assessed against coal operators that signed any NBCWA
or other agreement requiring contributions to the 1950 or 1974 Benefit Plans.
Respondent, Commissioner of Social Security, assigns retirees to signatory coal
operators according to the following allocation formula: first, to the most
recent signatory to the 1978 or a subsequent NBCWA to employ the retiree in the
a1 industry for at least 2 years, 26 U.S.C. ? 9706 (a) (1); second, to the most
recent signatory to the 1978 or a subsequent NBCWA to employ the retiree in the

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coal industry, ?9706 (a) (2); and third, to the signatory operator that employed
the retiree in the coal industry for the longest period of time prior to the
effective date of the 1978 NBCWA, ?9706 (a) (3).
Petitioner Eastern Enterprises (Eastern) was a signatory to every NBCWA
executed between 1947 and 1964. It is “in business” within the Coal Act’s
meaning, although it left the coal industry in 1965, after transferring its
3a1 operations to a subsidiary (EACC) and ultimately selling its interest in
EACH to respondent Peabody Holding Company, Inc.
(Peabody). Under the Coal Act, the Commissioner assigned Eastern the obligation
for Combined Fund premiums respecting over 1,000 retired miners who had worked
for the company before 1966. Eastern sued the Commissioner and other
respondents, claiming that the Coal Act violates substantive due process and
constitutes a taking in violation of the Fifth J znendment. The District Court
granted respondents summary judgment, and the First Circuit affirmed.
Held: The judgment is reversed, and the case is remanded.
110 F. 3d 150, reversed and remanded.
JUSTICE O’CONNOR , joined by THE CHIEF JUSTICE , JUSTICE SCALIA , and JUSTICE
THOMAS , concluded: 1. The declaratory judgment and injunction petitioner seeks
are an appropriate remedy for the taking alleged in this case, and it is Cite
as: ____ U. S. ____ (1998)3 Syllabus within the district courts’ power to award
such equitable relief. The Tucker Act may require that a just compensation
claim under the Takings Clause be filed in the Court of Federal Claims, but
petitioner does not seek compensation from the Government. In situations
analogous the one here, this Court has assumed the lack of a compensatory
remedy and has granted equitable relief for Takings Clause violations without
discussing the Tucker Act’s applicability. See, e.g. , Babbitt v. Youpee, 519
.S. 234, 234-235. Pp. 17-20. 2. The Coal Act’s allocation of liability to
. astern violates the Takings Clause. Pp. 20-35. (a) Economic regulation such as
the Coal Act may effect a taking. United States v. Security Industrial Bank,
459 U.S. 70, 78. The party challenging the government action bears a
substantial burden, for not every destruction or injury to property by such
action is a constitutional taking. A regulation’s constitutionality is
evaluated by examining the governmental action’s “justice and fairness.” See
J ndrus v. Allard, 444 U.S. 51, 65. Although that inquiry does not lend itself
to any set formula, three factors traditionally have informed this Court’s
regulatory takings analysis: “the economic impact of the regulation, its
interference with reasonable investment backed expectations, and the character
of the governmental action.” Kaiser Aetna v. United States , 444 U.S. 164, 175.
Pp. 20-22. (b) The analysis in this case is informed by previous decisions
considering the constitutionality of somewhat similar legislative schemes:
Usezy v. Turner Elkhorn Mining Co., 428 U.S. 1 (Black Lung Benefits Act of
1972); Connolly v. Pension Benefit Guaranty Corporation, 475 U.S. 211
(Multiemployer Pension Plan mendments Act of 1980); and Concrete Pipe &
Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern
Cal., 508 U.S. 602 (same). Those opinions make clear that
Congress has considerable leeway to fashion economic legislation, including the
power to affect contractual commitments between private parties; and that it
may impose retroactive liability to some degree, particularly where it is
“confined to the short and limited periods required by the practicalities of
‘oducing national legislation,” Pension Benefit Guaranty Corporation v. R. A.
cay & Co., 467 U.S. 717, 731. The decisions, however, have left open the
possibility that legislation might be unconstitutional if it imposes severe
retroactive liability on a limited class of parties that could not have

-------
anticipated the liability, and if the extent of that liability is substantially
disproportionate to the parties’ experience. Pp. 22-27. (c) The Coal Act’s
allocation scheme, as applied to Eastern, presents such a case, when the three
traditional factors are considered. As to the economic impact, Eastern’s Coal
Act liability is substantial, 4EASTERN ENTERPRISES v. APPEL Syllabus and the
company is clearly deprived of the $50 to $100 million it must pay to the
3mbined Fund. n employer’s statutory liability for multiemployer plan
oenef its should reflect some proportionality to its experience with the plan.
Concrete Pipe, supra, at 645. Eastern contributed to the 1947 and 1950 W&R
Funds, but ceased its coal mining operations in 1965 and neither participated
in negotiations nor agreed to make contributions in connection with the Benefit
Plans established under the 1974, 1978, or subsequent NBCWA’s. It is the latter
agreements, however, that first suggest an industry commitment to funding
lifetime health benefits for retirees and their dependents. During the years
that Eastern employed miners, such benefits were far less extensive than under
the 1974 NBCWA, were unvested, and were fully subject to alteration or
termination. To the extent that Eastern may be able to seek indemnification
from EACH or Peabody under contractual arrangements that might insure Eastern
against liabilities arising out of its former coal operations, that indemnity
is neither enhanced nor supplanted by the Coal Act and does not affect the
availability of the declaratory relief sought here. Respondents t argument that
the Coal Act moderates and mitigates the economic impact by allocating some of
Eastern’s former employees to signatories of the 1978 NBCWA is unavailing. That
Eastern is not forced to bear the burden of lifetime benefits for all of its
former employees does not mean that its liability is not a significant economic
burden. For similar reasons, the Coal Act substantially interferes with
Eastern’s reasonable investment-backed expectations. It operates retroactively,
eaching back 30 to 50 years to
...mpose liability based on Eastern’s activities between 1946 and 1965.
Retroactive legislation is generally disfavored. It presents problems of
unfairness because it can deprive citizens of legitimate expectations and upset
settled transactions. General Motors Corp. v. Romein, 503 U.S. 181, 191. The
distance into the past that the Coal Act reaches back to impose liability on
Eastern and the magnitude of that liability raise substantial fairness
questions. The pre-1974 NBCWA’s do not demonstrate that there was an implicit
industrywide agreement to fund lifetime health benefits at the time that
Eastern was involved in the coal industry. The 1947 and 1950 W&R Funds, in
which Eastern participated, operated on a pay-as-you-go basis and the classes
of beneficiaries were subject to the trustees’ discretion. Not until 1974, when
ERISA forced revisions to the 1950 W&R Fund and when Eastern was no longer in
the industry, could lifetime medical benefits have been viewed as promised.
Thus, the Coal Act’s scheme for allocating Combined Fund premiums is not
calibrated either to Eastern’s past actions or to any
agreement by the company. Nor would the Cite as: ____ U. S. ____ (1998)5
Syllabus Federal Government’s pattern of involvement in the coal industry have
given Eastern sufficient notice that lifetime health benefits might be
guaranteed to retirees several decades later. Eastern’s liability for such
benefits also differs from coal operators’ responsibility under the Black Lung
Benefits Act of 1972, which spread the cost of employment-related disabilities
to those who profited from the fruits of the employees’ labor, Turner Elkhorn,
supra, at 18. Finally, the nature of the governmental action in this case is
tite unusual in that Congress’ solution to the grave funding problem that it
Jentified singles out certain employers to bear a substantial burden, based on
the employers’ conduct far in the past, and unrelated to any commitment that

-------
the employers made or to any injury they caused. Pp. 27-35.
JUSTICE KENNEDY concluded that application of the Coal Act to Eastern would
violate the proper bounds of settled due process principles. Although the Court
has been hesitant to subject economic legislation to
iue process scrutiny as a general matter, this country’s law has harbored a
ingular distrust of retroactive statutes, and that distrust is reflected in
this Court’s due process jurisprudence. For example, in Usery v. Turner Elkhorn
Mining Co., 428 U.S. 1, 15, the Court held that due process requires an inquiry
into whether a legislature acted in an
arbitrary and irrational way when enacting a retroactive law. This formulation
has been repeated in numerous recent cases, e.g., United States v. Carlton, 512
U.S. 26, 31, which reflect the recognition that retroactive lawmaking is a
particular concern because of the
legislative temptation to use it as a means of retribution against unpopular
groups or individuals, Landgraf v. USI Film Products, 511 U.S. 244, 266.
Because change in the legal consequences of transactions long closed can
destroy the reasonable certainty and security which are the very objects of
property ownership, due process protection for property must be understood to
incorporate the settled tradition against retroactive laws of great severity.
The instant case presents one of those rare instances where the legislature has
exceeded the limits imposed by due process. The Coal Act’s remedy bears no
legitimate relation to the interest which the Government asserts supports the
statute. The degree of retroactive effect, which is a significant determinant
in a statute’s
constitutionality, e.g., United States v. Carlton, supra, at 32, is of
unprecedented scope here, since the Coal Act created liability for events
occurring 35 years ago. While the Court has upheld the imposition of liability
n former employers based on past employment relationships when the remedial
dtatutes were designed to impose an actual, measurable business cost which the
employer had been able to avoid in the past, e.g., Turner Elkhorri, supra, at
19, the Coal Act does not serve this 6EASTERN ENTERPRISES v. APFEL Syllabus
purpose. The beneficiaries’ expectation of lifetime benefits was created by
promises and agreements made long after Eastern left the coal business, and
Eastern was not responsible for the perilous condition of the 1950 and 1974
Plans which jeopardized the benefits. Pp. 9-13.
0’ CONNOR , J., announced the judgment of the Court and delivered an opinion,
in which REHNQUIST , C. J., and SCALIA and THOMAS , JJ., joined. THOMAS ,
filed a concurring opinion. KENNEDY , J., filed an
opinion concurring in the judgment and dissenting in part. STEVENS , J., filed
a dissenting opinion, in which SOUTER , GINSBURG , and BREYER , JJ., joined.
BREYER , J., filed a dissenting opinion, in which STEVENS , SOUTER , and
GINSBURG , JJ., joined.

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Author: david coursen at X400
Date: 6/25/98 11:31 PiN
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, Stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, charles ordine at X400,
deborah hileman at X400, ann williams at X400, phyllis feinniark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakami at X400, patrick rankiri at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: Unfavorable SCt Takings Decision
This morning the Supreme Court issued its decision in Eastern Enterprises v.
.Apfel. I have not yet read the decision.
The Court was seriously divided. A four-justice plurality found that a
retroactive obigitation imposed on a company to provide medical benefits to a
retired employee of that company worked a taking. A fifth justice found a due
process violation. Thus the Court’s judgment was that the retroactive
obligation was unconstitutional.
In the past, the Court has been extremely reluctant to set aside legislative
decisions concerning economic regulation either as takings or on due process
grounds.

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Author: david coursen at X400
Date: 6/18/98 8:12 N
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP M1 NCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botta at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
charles ordine at X400, ann williams at X400, phyllis feinxnark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakami at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, Scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: Takings-Net: EPP/CLE Takings Conference -Forwarded
Environmental Policy Project’s
Takings -Net
* * * * *
As many of you are already aware, Georgetown
University’s Continuing Legal Education program and
Environmental Policy Project, in cooperation with the
National League of Cities, the U.S. Conference of Mayors,
the International Municipal Lawyers Association, and the
California Community Land Use Project, will be
conducting a conference on regulatory takings in
San Francisco on September 24-25 of this year.
If you have not yet received a brochure for the
conference in the mail, or would like extra copies, please let
us know. A press release for the conference follows below.
We hope to see you in San Francisco!
* * * * *
Community Advocates and Government
Attorneys To Meet at a Conference on
Litigating Regulatory Takings Claims
Washington, DC, June 5, 1998 . . . A conference on
*Litigating Regulatory Takings Claims,* on September
24-25 in San Francisco, is expected to draw a large and
diverse audience interested in the controversial *takings,*
or *property rights,* issue. Co-sponsored by the National
League of Cities, the U.S. Conference of Mayors, the
International Municipal Lawyers Association, the
California Community Land Use Project, Georgetown
University Law Center Continuing Legal Education, and the
Environmental Policy Project at GULC, the purpose of the
conference i8 to educate federal, state, and local
government attorneys, environmental and other community
advocates, and others about the takings issue.
The takings issue has recently received enormously
increased attention in the U.S. Supreme Court as well as in
the lower federal and state courts. The Supreme Court has
two pending takings cases that will be decided by July of
this year, and the Court has already agreed to hear next year
iother important takings case, City of Monterey v. Del
.. i nte es of Monterey Limited. In addition the takings
Issue is routinely raised at city council meetings, planning

-------
commission hearings, and other state and local government
proceedings, and is an increasingly important topic in
political debates.
l mong the subjects to be covered at the conference are:
the meaning of recent U.S. Supreme Court takings
decisions; the Supreme Court’s likely future direction on
-he takings issue; takings litigation involving wetlands and
ildlife; urban sprawl, growth management techniques, and
the takings issue; and takings actions against cities and
towns
Featured speakers at the conference include the
Honorable James L. Oakes, senior circuit judge, U.S. Court
of appeals, Second Circuit, Brattleboro, Vermont; and
Joseph L. Sax, professor of law, Boalt Hall School of Law,
University of California, Berkeley, California.
The illustrious list of program instructors includes an
array of government officials, practitioners, and professors.
Speakers include: Hope M. Babcock, professor of law,
Georgetown University Law Center, Washington, DC; John
Bagg, assistant attorney general, Office of the Attorney
General, Salem, Oregon; Alletta Belin, director,
environment, energy & telecommunications division, Office
of the Attorney General, Santa Fe, New Mexico; Brian W.
Blaesser, Esq., Robinson & Cole, LLP, Boston,
Massachusetts; Fred Bosselman, professor of law, Chicago-
Kent College of Law, Illinois Institute of Technology,
Chicago, Illinois; James E. Brookshire, deputy chief,
general litigation section, U.S. Department of Justice,
Washington, DC; J. Peter Byrne, professor of law,
Georgetown University Law Center, Washington, DC;
Peter Coppelman, deputy assistant attorney general, U.S.
epartment of Justice, Washington, DC; David Coursen,
senior takings counsel, U.S. Environmental Protection
Agency, Washington, DC, Joseph de Raismes, III, city
attorney, Boulder, Colorado; Peter M. Douglas, executive
director, California Coastal Commission, San Francisco,
California; John D. Echeverria, director, Environmental
Policy Project, Georgetown University Law Center,
Washington, DC; Richard M. Frank, senior assistant
attorney general, California Department of Justice,
Sacramento, California; Brian E. Gray, professor of law,
Hastings College of Law, University of California, San
Francisco, California; Rachel Horowitz, deputy attorney
general, Department of Law & Public Safety, Trenton, New
Jersey; Edwin S. Kneedler, deputy solicitor general, Office
of the U.S. Solicitor General, Washington, DC; Ronald
Krotoszynski, Jr., assistant professor of law, Indiana
University School of Law, Indianapolis, Indiana; Jan G.
Laitos, professor of law, University of Denver College of
Law, Denver, Colorado; Richard Lazarus, professor of law,
Georgetown University Law Center, Washington, DC;
Molly McUsic, counselor to the secretary, U.S. Department
of the Interior, Washington, DC; Robert Meltz, legislative
attorney, Congressional Research Service, Library of
Congress, Washington, DC; and Tara Mueller, director,
biodiversity legal program, Environmental Law
Foundation, Oakland, California.
Other speakers include: Edward 14. Norton, Jr., vice
president for law and public policy, National Trust for

-------
Historic Preservation, Washington, DC.; Jeffrey Pidot,
chief , natural resources division, Department of Attorney
General, Augusta, Maine; Stanley Pruss, assistant attorney
general, natural resources division, Office of the Attorney
General, Lansing, Michigan; Thomas J. Ragonetti, Esq.,
Otten, Johnson, Robinson, Neff & Ragonetti, Denver,
Colorado; Nelson Rising, Cattelus Development, San
‘rancisco, California; Michael Rubin, assistant attorney
aneral and environmental advocate, Department of the
Attorney General, Providence, Rhode Island; Andrew W.
Schwartz, deputy city attorney, City and County of San
Francisco, San Francisco, California; Timothy Searchinger,
senior staff attorney, Environmental Defense Fund,
Washington, DC; Glenn Sugameli, senior counsel, Office
of Federal & International Affairs, National Wildlife
Federation, Washington, DC.
The program will be held at the Crowne Plaza Union
Square in San Francisco, and will run from 8:30 am to 5:30
pm on Thursday and Friday, September 24 and 25, 1998.
Registration information can be obtained by contacting
Georgetown University Law Center, Continuing Legal
Education Division: phone (202) 409-0990; fax (202) 409-
1431; E-mail to cle@law.georgetown.edu; or website
http : //www. law. georgetown. edu/cle.
* * * * *
For more information, please contact John Echeverria
or Peter Hoffmann at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., NW.
Washington, D.C. 20001
el: (202) 662-9850
fax: (202) 662-9497
E-mail: envpolyt alaw.georgetown.edu

-------
Author: david coursen at X400
Date: 6/18/98 8:12 N
Priority: Normal
TO: KIMP JONES at REGION4, PHILIP Mi%NCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, Stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
charles ordine at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at x400, heathergray torres at X400, janet williams at X400,
cynthia kawakami at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
Virginia capon at X400, michael boydston at X400
Subject: Takings-Net: EPP/CLE Takings Conference -Forwarded
Environmental Policy Project’s
Takings-Net
* * * * *
As many of you are already aware, Georgetown
University’s Continuing Legal Education program and
Environmental Policy Project, in cooperation with the
National League of Cities, the U.S. Conference of Mayors,
the International Municipal Lawyers Association, and the
California Community Land Use Project, will be
conducting a conference on regulatory takings in
San Francisco on September 24-25 of this year.
If you have not yet received a brochure for the
conference in the mail, or would like extra copies, please let
us know. A press release for the conference follows below.
We hope to see you in San Francisco!
* * * * *
Community Advocates and Government
Attorneys To Meet at a Conference on
Litigating Regulatory Takings Claims
Washington, DC, June 5, 1998 . . . A conference on
*Litigating Regulatory Takings Claims,* on September
24-25 in San Francisco, is expected to draw a large and
diverse audience interested in the controversial *takings,*
or *property rights,* issue. Co-sponsored by the National
League of Cities, the U.S. Conference of Mayors, the
International Municipal Lawyers Association, the
California Community Land Use Project, Georgetown
University Law Center Continuing Legal Education, and the
Environmental Policy Project at GULC, the purpose of the
conference is to educate federal, state, and local
government attorneys, environmental and other community
advocates, and others about the takings issue.
The takings issue has recently received enormously
increased attention in the U.S. Supreme Court as well as in
the lower federal and state courts. The Supreme Court has
two pending takings cases that will be decided by July of
this year, and the Court has already agreed to hear next year
nothe r important takings case, City of Monterey v. Del
nte. Duz es of Monterey Limited. In addition the takings
is routinely raised at city council meetings, planning

-------
commission hearings, and other state and local government
proceedings, and is an increasingly important topic in
political debates.
Among the subjects to be covered at the conference are:
the meaning of recent U.S. Supreme Court takings
decisions; the Supreme Court’s likely future direction on
the takings issue; takings litigation involving wetlands and
dldlife; urban sprawl, growth management techniques, and
.he takings issue; and takings actions against cities and
towns
Featured speakers at the conference include the
Honorable James L. Oakes, senior circuit judge, U.S. Court
of Appeals, Second Circuit, Brattleboro, Vermont; and
Joseph L. Sax, professor of law, Boalt Hall School of Law,
University of California, Berkeley, California.
The illustrious list of program instructors includes an
array of government officials, practitioners, and professors.
Speakers include: Hope M. Babcock, professor of law,
Georgetown University Law Center, Washington, DC; John
Bagg, assistant attorney general, Office of the Attorney
General, Salem, Oregon; Alletta Be].in, director,
environment, energy & telecommunications division, Office
of the Attorney General, Santa Fe, New Mexico; Brian W.
Blaesser, Esq., Robinson & Cole, LLP, Boston,
Massachusetts; Fred Bosselman, professor of law, Chicago-
Kent College of Law, Illinois Institute of Technology,
Chicago, Illinois; James E. Brookahire, deputy chief,
general litigation section, U.S. Department of Justice,
Washington, DC; J. Peter Byrne, professor of law,
Georgetown University Law Center, Washington, DC;
Peter Coppelman, deputy assistant attorney general, U.S.
Department of Justice, Washington, DC; D’avid Coursen,
enior takings counsel, U.S. Environmental Protection
Agency, Washington, DC; Joseph de Raismes, III, city
attorney, Boulder, Colorado; Peter M. Douglas, executive
director, California Coastal Commission, San Francisco,
California; John D. Echeverria, director, Environmental
Policy Project, Georgetown University Law Center,
Washington, DC; Richard M. Frank, senior assistant
attorney general, California Department of Justice,
Sacramento, California; Brian E. Gray, professor of law,
Hastings College of Law, University of California, San
Francisco, California; Rachel Horowitz, deputy attorney
general, Department of Law & Public Safety, Trenton, New
Jersey; Edwin S. Kneed].er, deputy solicitor general, Office
of the U.S. Solicitor General, Washington, DC; Ronald
Krotoszynski, Jr., assistant profesBor of law, Indiana
University School of Law, Indianapolis, Indiana; Jan G.
Laitos, professor of law, University of Denver College of
Law, Denver, Colorado; Richard Lazarus, professor of law,
Georgetown University Law Center, Washington, DC;
Molly McUsic, counselor to the secretary, U.S. Department
of the Interior, Washington, DC; Robert Meltz, legislative
attorney, Congressional Research Service, Library of
Congress, Washington, DC; and Tara Mueller, director,
biodiversity legal program, Environmental Law
Foundation, Oakland, California.
Other speakers include: Edward M. Norton, Jr., vice
president for law and public policy, National Trust for

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Historic Preservation, Washington, DC.; Jeffrey Pidot,
chief, natural resources division, Department of Attorney
General, Augusta, Maine; Stanley Pruss, assistant attorney
general, natural resources division, Office of the Attorney
General, Lansing, Michigan; Thomas J. Ragonetti, Esq.,
Otten, Johnson, Robinson, Neff & Ragorietti, Denver,
Colorado; Nelson Rising, Cattelus Development, San
Francisco, California; Michael Rubin, assistant attorney
general and environmental advocate, Department of the
Attorney General, Providence, Rhode Island; Andrew W.
Schwartz, deputy city attorney, City and County of San
Francisco, San Francisco, California; Timothy Searchinger,
senior staff attorney, Environmental Defense Fund,
Washington, DC; Glenn Sugameli, senior counsel, Office
of Federal & International Affairs, National Wildlife
Federation, Washington, DC.
The program will be held at the Crowne Plaza Union
Square in San Francisco, and will run from 8:30 am to 5:30
pm on Thursday and Friday, September 24 and 25, 1998.
Registration information can be obtained by contacting
Georgetown University Law Center, Continuing Legal
Education Division: phone (202) 408-0990; fax (202) 408-
1431; E-mail to cle@law.georgetown.edu; or website
http://www.law.georgetown.edu/cle.
* * * * *
For more information, please contact John Echeverria
or Peter Hoffmann at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpo1y law.georgetown.edu

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Author: david coursen at X400
Date: 6/25/98 2:35 PM
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MANCUSI-UNGARO at P.EGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botts at X400, clarence featherson at X400,
Stephen hess at X400, cathy winer at X400, charles ordine at X400,
deborah hilsman at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakami at X400, patrick rarikiri at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydstori at X400
Subject: S. CT. Takings/Due Process (Eastern Enterprises) Decisio...
Eastern Enterprises v. J pfel, No. 97-42 (S. Ct. June 25, 1998)
A majority of a badly divided Supreme Court rejected a Takings Clause challenge
to the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act) imposition
of retroactive liability on the plaintiff company based on Eastern’s activities
between 1946 and 1965. A majority of the Court also declined to find a due
process clause violation. However, the Coal Act was held to be
unconstitutional as applied to Eastern, because 4 Justices concluded that it
was a taking, and Justice Kennedy concluded that it was a due process violation
(but argued strongly that it could not be a taking because there was no
specific property right or interest at stake in a general imposition of
liability)
Four Justices joined in two separate dissents that rejected both the takings
‘nd due process arguments.
Justice O’Connor’s opinion joined by three others. The plurality opinion
states that this legislation might be unconstitutional if it imposes severe
retroactive liability on a limited class of parties that could not have
anticipated the liability, and if the extent of that liability is substantially
disproportionate to the parties’ experience. The Coal Act’s allocation scheme,
as applied to Eastern, presents such a case, when the three traditional factors
are considered.
The following Syllabus is from the Court’s Website:
http://supct.law.cornell.edu/supct/html/97-42.ZS.html
Glenn Sugameli
Senior Counsel
National Wildlife Federation
1400 16th Street, N.W., Suite 501
Washington, D.C. 20036-2266
202-797-6865
FAX 202-797-6646
sugameli Bnwf .org
SUPREME COURT OF THE UNITED STATES

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Syllabus
EASTERN ENTERPRISES v. .APFEL, COt .24ISSIONER OP SOCIAL
SECURITY
ETAL . CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
FIRST CIRCUIT
No. 97-42. Argued March 4, 1998 - Decided June 25, 1998
In 1946, a historic labor agreement between coal operators and the United Mine
Workers of America (UMWA) led to the creation of benefit funds that provided
for the medical expenses of miners and their dependents, with the precise
benefits determined by UNWA appointed trustees. Those trusts served as the
model for the United Mine Workers of America Welfare and Retirement Fund (1947
W&R Fund), which was
established by the National Bituminous Coal Wage Agreement of 1947 (1947
NBCWA). The Fund used proceeds of a royalty on coal production to provide
benefits to miners and their families, and trustees determined benefit levels
and other matters. The 1950 NBCWA created a new fund (1950 W&R Fund), which
used a fixed amount of royalties for benefits, gave trustees the authority to
establish and adjust benefit levels so as to remain within the budgetary
restraints, and did not guarantee lifetime health benefits for retirees and
their dependents. The 1950 W&R Fund continued to operate with benefit levels
subject to revision until the Employee Retirement Income Security Act of 1974
(ERISA) introduced specific funding and vesting requirements for pension plans.
To comply with ERISA, the UMWA and the Bituminous Coal Operators’ Association
entered into the 1974 NBCWA, which created four new trusts. It was the first
agreement to expressly reference health benefits for retirees, but it did not
alter the employers’ obligation to contribute a fixed amount of royalties. The
new agreement did not extend the employers’ liability beyond the term of the
agreement. Miners who retired before 1976 were covered by the 1950 Benefit Plan
and Trust (1950 Benefit Plan), and those retiring after 1975 were covered by
the 1974 Benefit Plan and Trust (1974 Benefit Plan). The increase in benefits
and other factors-the decline in coal production, the retirement of a
generation of miners, and rapid acceleration in health care costs quickly
caused financial problems for the 1950 and 1974 Benefit Plans. To ensure the
Plans’ solvency, the 1978 NBCWA obligated signatories to make sufficient
contributions to maintain benefits as long as they were in the coal business.
As the Plans continued to suffer financially, employers began to withdraw,
leaving the remaining signatories to absorb the increasing cost of covering
retirees left behind.
Ultimately, Congress passed the Coal Industry Retiree Health Benefit Act of
1992 (Coal Act) to stabilize funding and provide for benefits to retirees by
merging the 1950 and 1974 Benefit Plans into a new fund (Combined Fund) that
provides substantially the same benefits as provided by the 1950 and 1974 Plans
and is funded by premiums assessed against coal operators that signed any NBCWA
or other agreement requiring contributions to the 1950 or 1974 Benefit Plans.
Respondent, Commissioner of Social Security, assigns retirees to signatory coal
operators according to the following allocation formula: first, to the most
recent signatory to the 1978 or a subsequent NBCWA to employ the retiree in the
oal industry for at least 2 years, 26 U.S.C. ? 9706 (a) (1); second, to the most
recent signatory to the 1978 or a subsequent NBCWA to employ the retiree in the

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coal industry, ?9706(a)(2); and third, to the signatory operator that employed
the retiree in the coal industry for the longest period of time prior to the
effective date of the 1978 NBCWA, ?9706(a) (3).
Petitioner Eastern Enterprises (Eastern) was a signatory to every NBCWA
executed between 1947 and 1964. It is “in business” within the Coal Act’s
meaning, although it left the coal industry in 1965, after transferring its
coal operations to a subsidiary (EACC) and ultimately selling its interest in
EACH to respondent Peabody Holding Company, Inc.
(Peabody). Under the Coal Act, the Commissioner assigned Eastern the obligation
for Combined Fund premiums respecting over 1,000 retired miners who had worked
for the company before 1966. Eastern sued the Commissioner and other
respondents, claiming that the Coal Act violates substantive due process and
constitutes a taking in violation of the Fifth Amendment. The. District Court
granted respondents suzmnary judgment, and the First Circuit affirmed.
Held: The judgment is reversed, and the case is remanded.
110 F. 3d 150, reversed and remanded.
JUSTICE O’CONNOR , joined by THE CHIEF JUSTICE , JUSTICE SCALIA , and JUSTICE
THOMAS , concluded: 1. The declaratory judgment and injunction petitioner seeks
are an appropriate remedy for the taking alleged in this case, arid it is Cite
as: ____ U. S. ____ (1998)3 Syllabus within the district courts’ power to award
such equitable relief. The Tucker Act may require that a just compensation
claim under the Takings Clause be filed in the Court of Federal Claims, but
petitioner does not seek compensation from the Government. In situations
analogous the one here, this Court has assumed the lack of a compensatory
remedy and has granted equitable relief for Takings Clause v .olations without
discussing the Tucker Act’s applicability. See, e.g. , Babbitt v. Youpee, 519
U.S. 234, 234-235. Pp. 17-20. 2. The Coal Act’s allocation of liability to
Eastern violates the Takings Clause. Pp. 20-35. (a) Economic regulation such as
the Coal Act may effect a taking. United States v. Security Industrial Bank,
459 U.S. 70, 78. The party challenging the government action bears a
substantial burden, for not every destruction or injury to property by such
action is a constitutional taking. A regulation’s constitutionality is
evaluated by examining the governmental action’s “justice and fairness.” See
.Andrus v. Allard, 444 U.S. 51, 65. Although that inquiry does not lend itself
to any set formula, three factors traditionally have informed thio Court’s
regulatory takings analysis: “the economic impact of the regulation, its
interference with reasonable investment backed expectations, and the character
of the governmental action.” Kaiser Aetna v. United States , 444 U.S. 164, 175.
Pp. 20-22. (b) The analysis in this case is informed by previous decisions
considering the constitutionality of somewhat similar legislative schemes:
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (Black Lung Benefits Act of
1972); Connolly v. Pension Benefit Guaranty Corporation, 475 U.S. 211
(Multiemployer Pension Plan Amendments Act of 1980); and Concrete Pipe &
Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern
Cal., 508 U.S. 602 (same). Those opinions make clear that
Congress has considerable leeway to fashion economic legislation, including the
power to affect contractual commitments between private parties; and that it
may impose retroactive liability to some degree, particularly where it is
“confined to the short and limited periods required by the practicalities of
‘roducing national legislation,” Pension Benefit Guaranty Corporation v. I L A.
:ay & Co., 467 U.S. 717, 731. The decisions, however, have left open the
possibility that legislation might be unconstitutional if it imposes severe
retroactive liability on a limited class of parties that could not have

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anticipated the liability, and if the extent of that liability is substantially
disproportionate to the parties’ experience. Pp. 22-27. Cc) The Coal Act’s
allocation scheme, as applied to Eastern, presents such a case, when the three
traditional factors are considered. As to the economic impact, Eastern’s Coal
Act liability is substantial, 4EASTERN ENTERPRISES V. APFEL Syllabus and the
company is clearly deprived of the $50 to $100 million it must pay to the
ombined Fund. p.n employer’s statutory liability for multiemployer plan
benefits should reflect some proportionality to its experience with the plan.
Concrete Pipe, supra, at 645. Eastern contributed to the 1947 and 1950 W&R
Funds, but ceased its coal mining operations in 1965 and neither participated
in negotiations nor agreed to make contributions in connection with the Benefit
Plans established under the 1974, 1978, or subsequent NBCWA’s. It is the latter
agreements, however, that first suggest an industry commitment to funding
lifetime health benefits for retirees and their dependents. During the years
that Eastern employed miners, such benefits were far less extensive than under
the 1974 NBCWA, were unvested, and were fully subject to alteration or
termination. To the extent that Eastern may be able to seek indemnification
from EACH or Peabody under contractual arrangements that might insure Eastern
against liabilities arising out of its former coal operations, that indemnity
is neither enhanced nor supplanted by the Coal Act and does not affect the
availability of the declaratory relief sought here. Respondents’ argument that
the Coal Act moderates and mitigates the economic impact by allocating some of
Eastern’s former employees to signatories of the 1978 NBCWA is unavailing. That
Eastern is not forced to bear the burden of lifetime benefits for all of its
former employees does not mean that its liability is not a significant economic
burden. For similar reasons, the Coal Act substantially interferes with
Eastern’s reasonable investment-backed expectations. It operates retroactively,
teaching back 30 to 50 years to
impose liability based on Eastern’s activities between 1946 and 1965.
Retroactive legislation is generally disfavored. It presents problems of
unfairness because it can deprive citizens of legitimate expectations and upset
settled transactions. General Motors Corp. v. Romein, 503 U.S. 181, 191. The
distance into the past that the Coal Act reaches back to impose liability on
Eastern and the magnitude of that liability raise substantial fairness
questions. The pre-1974 NBCWA’s do not demonstrate that there was an implicit
industrywide agreement to fund lifetime health benefits at the time that
Eastern was involved in the coal industry. The 1947 and 1950 W&R Funds, in
which Eastern participat d, operated on a pay-as-you-go basis and the classes
of beneficiaries were subject to the trustees’ discretion. Not until 1974, when
ERISA forced revisions to the 1950 W&R Fund and when Eastern was no longer in
the industry, could lifetime medical benefits have been viewed as promised.
Thus, the Coal Act’s scheme for allocating Combined Fund premiums is not
calibrated either to Eastern’s past actions or to any
agreement by the company. Nor would the Cite as: ____ U. S. ____ (1998)5
Syllabus Federal Government’s pattern of involvement in the coal industry have
given Eastern sufficient notice that lifetime health benefits might be
guaranteed to retirees several decades later. Eastern’s liability for such
benefits also differs from coal operators’ responsibility under the Black Lung
Benefits Act of 1972, which spread the cost of employment-related disabilities
to those who profited from the fruits of the employees’ labor, Turner Elkhorn,
supra, at 18. Finally, the nature of the governmental action in this case is
iite unusual in that Congress’ solution to the grave funding problem that it
Jentified singles out certain employers to bear a substantial burden, based on
the employers’ conduct far in the past, and unrelated to any commitment that

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the employers made or to any injury they caused. Pp. 27-35.
JUSTICE KENNEDY concluded that application of the Coal Act to Eastern would
violate the proper bounds of settled due process principles. Although the Court
has been hesitant to subject economic legislation to
due process scrutiny as a general matter, this country’s law has harbored a
singular distrust of retroactive statutes, and that distrust is reflected in
this Court’s due process jurisprudence. For example, in Usery v. Turner Elkhorn
Mining Co., 428 U.S. 1, 15, the Court held that due process requires an inquiry
into whether a legislature acted in an
arbitrary and irrational way when enacting a retroactive law. This formulation
has been repeated in numerous recent cases, e.g., United States v. Canton, 512
U.S. 26, 31, which reflect the recognition that retroactive lawmaking is a
particular concern because of the
legislative temptation to use it as a means of retribution against unpopular
groups or individuals, Landgraf v. USI Film Products, 511 U.S. 244, 266.
Because change in the legal consequences of transactions long closed can
destroy the reasonable certainty and security which are the very objects of
property ownership, due process protection for property must be understood to
incorporate the settled tradition against retroactive laws of great severity.
The instant case presents one of those rare instances where the legislature has
exceeded the limits imposed by due process. The Coal Act’s remedy bears no
legitimate relation to the interest which the Government asserts supports the
statute. The degree of retroactive effect, which is a significant determinant
in a statute’s
constitutionality, e.g., United States v. Carlton, supra, at 32, is of
unprecedented scope here, since the Coal Act created liabili ty for events
occurring 35 years ago. While the Court has upheld the imposition of liability
on former employers based on past employment relationships when the remedial
statutes were designed to impose an actual, measurable business cost which the
employer had been able to avoid in the past, e.g., Turner Elkhorn, supra, at
19, the Coal Act does not serve this 6EASTERN ENTERPRISES v. APPEL Syllabus
purpose. The beneficiaries’ expectation of lifetime benefits was created by
promises and agreements made long after Eastern left the coal business, and
Eastern was not responsible for the perilous condition of the 1950 and 1974
Plans which jeopardized the benefits. Pp. 9-13.
0’ CONNOR , J., announced the judgment of the Court and delivered an opinion,
in which REHNQUIST , C. J., and SCALIA and ThOMAS , JJ., joined. THOMAS ,
filed a concurring opinion. KENNEDY , J. , filed an
opinion concurring in the judgment and dissenting in part. STEVENS , J., filed
a dissenting opinion, in which SOUTER , GINSBURG , and BREYER , JJ., joined.
BREYER , J., filed a dissenting opinion, in which STEVENS , SOUTER , and
GINSBURG , JJ., joined.

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Author: david coursen at X400
Date: 6/25/98 11:31 N
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botts at X400, clarence featherson at X400,
stephen hess at x400, cathy winer at X400, charles ordine at X400,
deborah hilaman at x400, ann williams at X400, phyllis feirimark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400 ,
cynthia kawakami at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, Scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: Unfavorable SCt Takings Decision
This morning the Supreme Court issued its decision in Eastern Enterprises v.
Apfel. I have not yet read the decision.
The Court was seriously divided. A four-justice plurality found that a
retroactive oblgitation imposed on a company to provide medical benefits to a
retired employee of that company worked a taking. A fifth justice found a due
process violation. Thus the Court’s judgment was that the retroactive
obligation was unconstitutional.
In the past, the Court has been extremely reluctant to set aside legislative
decisions concerning economic regulation either as takings or on due process
grounds.

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Author: david coursen at X400
Date: 6/25/98 11:30 N
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botte at X400, clarence feathersori at X400,
Stephen hess at X400, Cathy winer at X400, charles ordine at X400,
deborah hilsman at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakaini at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydston at X400
Subject: Unfavorable SCt Takings Decision
This morning the Supreme Court issued its decision in Eastern Enterprises v.
2 pfel. I have not yet read the decision.
The Court was seriously divided. A four-justice plurality found that a
retroactive oblgitation imposed on a company to provide medical benefits to a
retired employee of that company worked a taking. A fifth justice found a due
process violation. Thus the Court’s judgment was that the retroactive
obligation was unconstitutional.
In the past, the Court has been extremely reluctant to set aside legislative
decisions concerning economic regulation either as takings or on due process
grounds.

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Author: david coursen at X400
Date: 6/25/98 11:30 AM
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MANCUSI-UNGI4RO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, Stephen botts at X400, clarence featherson at X400,
stephen hess at X400, Cathy winer at X400, charles ordine at X400,
deborah hilsman at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, janet williams at X400,
cynthia kawakami. at X400, patrick rankin at X400, jonathan kahn at X400,
cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
virginia capon at X400, michael boydstori at X400
Subject: Unfavorable SCt Takings Decision
This morning the Supreme Court issued its decision in Eastern Enterprises v.
I4pfel. I have not yet read the decision.
The Court was seriously divided. A four-justice plurality found that a
retroactive oblgitation imposed on a company to provide medical benefits to a
retired employee of that company worked a taking. A fifth justice found a due
process violation. Thus the Court’s judgment was that the retroactive
obligation was unconstitutional.
In the past, the Court has been extremely reluctant to set aside legislative
decisions concerning economic regulation either as takings or on due process
grounds.

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Phillips v. Washington Le al Foundation , No. 96-1578 (Supreme
Court, June 15, 1998). The Supreme Court has now issued the
first of two expected property rights decisions this term, (the
second, Eastern Enterprises v. Apfel , will be issued later this
month). The Court held that the gross interest earned from bank
deposits too small to earn net interest (after accounting and
servicing expenses) was nevertheless the “property” of the owner
of the principal.
In Texas and many other states, the funds from individual
attorney client trust accounts too small to earn net interest are
aggregated, with the resulting interest dedicated to a fund to
provide legal assistance for the indigent. Plaintiffs alleged
that this use of revenue generated by money belonging to them
worked a taking.
Following the rule that interest follows principal, the five
justice majority concluded that in this situation the interest
did, indeed, constitute “property.” The four dissenters
criticized this result as abstract and theoretical, arguing that
the “property” question cannot meaingfully be resolved without
also considering whether there has been a taking, and, if so,
whether the government must pay just compensation. The Court’s
decision expressly did not address either of these issues.
The decision can thus be characterized as extremely narrow
in scope and reasoning, and it is questionable whether plaintiffs
will ultimately succeed with their taking claim. At the same
time, the decision strongly favors property owners and takes an
expansive view of property rights.
The United States also filed two appellate briefs in takings
cases significant to the Agency.
On June 5, the United States filed its respondent’s brief in
the appeal of the trial court rulings in Hendler v. U.S. , 38 Fed.
Cl. 611 (1997), 36 Fed. Cl. 574 (1996) . The challenged trial
court rulings resulted in plaintiffs receiving no compensation as
a result of the installation on their property of wells to
monitor groundwater contamination from the Stringfellow Superfund
site. The court held that the order authorizing the wells did
not interfere with the owners’ property rights seriously enough
to work a regulatory taking. It also held that the benefit to
the property from the installation of the wells was greater than
the burden imposed by the physical presence of the wells.
Plaintiffs’ appeal primarily challenged the factual
determinations supporting these two conclusions. Thus EPA’S
respondent’s brief emphasizes the relative absence of disputed
legal questions, and notes the difficulty of challenging
fact-finding on appeal. The brief is heavily factual in
emphasis, with extensive citations to the voluminous record

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developed during the six week trial. The case will likely be set
for oral argument early in the fall.
At the request of EPA and other federal agencies, on June 5
the Solicitor General filed an amicus curiae brief before the
Supreme Court in City of Monterey v. Del Monte Dunes at Monterey .
g, No. 97-1235. This taking case was brought by a party that
purchased property which had been conditionally approved for
development. When final approval was denied, plaintiff filed a
federal court action against the city under 42 USC § 1983,
alleging a taking of property without just compensation. A jury
found that the city’s decision was unreasonable and thus worked a
taking.
In its petition for certiorari, the city had argued that it
was improper to have a jury (rather than a judge) determine
liability for a taking. It had also raised two questions as to
the appropriate level of scrutiny a court should give to a
government action challenged as a taking: that the jury verdict
showed insufficient deference to the city’s regulatory
determination, and that the 9th Circuit had used an improper
legal standard in sustaining the trial court’s refusal to set
aside the jury verdict.
The amicus brief takes no firm position on the jury trial
question. It argues strongly that regulatory decisions
challenged as takings are entitled to deferential review, since
courts have a very narrow role in second-guessing governmental
legislative or regulatory decisions. The brief further urges the
Court to re-examine the supposed rule that a regulatory action
works a taking if it fails to advance a legitimate governmental
interest. The brief suggests that the proper response to such
governmental action is invalidation. It further suggests that a
regulatory taking can only arise from action that advances
legitimate governmental interests, but has such a severe impact
on the owner that just compensation is required. The case is
likely to be argued in November, with a decision next year.

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Author: david coursen at X400
Date: 7/13/98 2:27 PM
Priority: Normal
TO: KIM7 , JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, Stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
ann williams at X400, phyllis feinmark at X400, marc eeidenberg at X400,
heathergray torres at X400, cynthia kawakami at X400, patrick rankin at X400,
jonathan kahn at X400, cheryle micinski at X400
CC: robert dreher at X400, scott fulton at X400, tony guadagno at X400,
susan lepow at X400, james nelson at X400, earl salo at X400, marcia lamel at X400,
Virginia capon at X400, michael boydaton at X400
Subject: Takings legislation
This afternoon, the Senate will debate S 2271, a property rights bill that
combines features of HR 1534 (statutorily defining ripeness, limiting
abstention in taking cases, making it easier to sue local governments for
takings in federal court) and HR 992 (giving Court of Federal Claims and
District Courts concurrent jurisdiction over actions alleging takings,
challenges to governmental regulations that affect property value; also
includes feature not found in House bill permitting challenge to governmental
regulations affecting property at any time within six years, “notwithstanding
any other provision of law,” such as “preclusive review” provisions of
environmental statutes). Debate will be on the procedural question of whether
to proceed to consider the bill itself, and opponents will filibuster. A
cloture vote on the filibuster is scheduled at 5:45 today. If that vote fails,
debate would continue, and the leadership will likely withdraw the bill and let
it die rather than letting it take up more time.

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Author: david coursen at X400
Date: 7/20/98 9:51 P N
Priority: Normal
TO: KIMA JONES at REGION4, PHILIP MI4NCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botts at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
charles ordine at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, cynthia kawakami at X400,
patrick rankin at X400, jonathan kahn at X400, cheryle micinski at X400
CC: robert dreher at X400, tony guadagno at X400, susan lepow at X400,
james nelson at X400, earl salo at X400, marcia lamel at X400, virginia capon at X400,
michael boydston at X400
Subject: EPP Takings Snapshots XI (7/17/98) -Forwarded
Environmental Policy Project’s
Takings - Net
* * * * *
To provide timely information about recent takings
decisions, the Environmental Policy Project provides brief,
bimonthly summaries of very recently issued decisions and
other important case developments. All of this
information is also summarized in the quarterly dockets
distributed to network participants.
Takings Snapshots XI (July 17, 1998)
1. Dittmer v. County of Suffolk, 1998 WL321575 (U.S.
2nd Cir, June 4, 1998) (reversing trial court order
dismissing under abstention doctrine facial due process
nd equal protection challenges to Long Island Pine
•arrens Protection Act, because the suit did not seek to
overturn a prior state court or administrative determination
as required for Burford abstention, and because there was
no contemporaneous state court action involving the same
parties and therefore abstention was not warranted under
Colorado River Water Conservation District).
2. Woodland Manor III Associates v. Keeney, 1998 WL
340376 (R.I., June 25, 1998) (State Supreme Court
vacated trial court order granting summary judgment to
Director of Department of Environmental Management in
takings suit, where State had effectively denied a wetlands
fill permit and a court had previously ruled that State was
equitably estopped from denying a permit to fill the site).
3. Loretto Development Co., Inc. v. Village of Chardon,
1998 WL 320981 (U.S. 6th Cir., June 4, 1998)
(unpublished decision) (affirming rejection of takings
claim based on denial of application for rezoning of
property to allow construction of a Walmart, where
rezoning denial did not deny owner all economically viable
use of the property and decision substantially advanced a
legitimate state interest).
4. In re Brotherton v. DEC J ppeal (N.Y. App.Div. May
14, 1998) (J ppellate Division of the New York Supreme
urt affirmed the trial court’s dismissal of this wetlands
cakings action, ruling that the owner’s expectations were
fixed as of the date he acquired the property, not the earlier
date when his close corporation acquired the property, and

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that two lots on either side of coastal road were properly
treated as one parcel).
5. Moore v. United States (U.S.Cls.Ct. July 2, 1998)
(order granting motion to certify opt-in class of over 2000
landowners burdened by ICaty trail in suit alleging that
‘stablishment of trail under federal rails-to-trails program
ffects unconstitutional taking)
* * * * *
For more information, please contact John Echeverria
or Peter Hoffmann at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly 1aw.georgetown.edu
EPP website: http://www.envpoly.org

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Author: david coursen at X400
Date: 7/23/98 2:31 PM
Priority: Normal
TO: KIM1 JONES at REGION4, PHILIP MANCUSI-UNGARO at REGION4, STEVEN MOORES at X400,
laurie williams at X400, stephen botte at X400, clarence featherson at X400,
stephen hess at X400, cathy winer at X400, deborah hilsman at X400,
charles ordine at X400, ann williams at X400, phyllis feinmark at X400,
marc seidenberg at X400, heathergray torres at X400, cynthia kawakami at X400,
patrick rankin at X400, jonathan kahn at X400, cheryle micinski at X400
CC: robert dreher at X400, tony guadagno at X400, susan lepow at X400,
james nelson at X400, earl salo at X400, marcia lamel at X400, Virginia capon at X400,
michael boydston at X400
Subject: New EPA 404, Superfund Taking Cases
On July 1, a complaint alleging a taking against EPA was docketed in the Court
of Federal Claims in S jori v. U.S. - The complaint alleges that plaintiffs
own 1280 acres of farmland in Florida. When they undertook maintenance
activities on the property, the Corps issued a cease and desist order in 1993.
Allegedly at EPA’s suggestion, plaintiffs hired an ecologist to determine
whether the property contained wetlands. Allegedly using EPA-approved
methodology, the ecologist concluded there were no wetlands. Two months after
the ecologist allegedly reached this conclusion, EPA issued a cease and desist
order in December 1994. In March 1998, EPA filed a complaint against
plaintiffs seeking injunctive relief and civil penalties for unlawful fill
activities.
Plaintiffs asserts that the EPA orders preclude any use of the property, and
thus work either a temporary or permanent taking of his property (depending on
what is eventually determined about the wetland status of the property). He
lso asserts breach of contract, deprivation of substantive due process, and
quitable estoppel.
The docket number of the case is 98-553 L, and Philip Mancusi-Ungaro is the ORC
attorney who worked on the cease and desist order.
On July 9, property rights Attorney Roger Marzulla filed Bassett v. U.S. .No .
98-568 in the CFC alleging a taking from a Superfund removal action. Bassett
owns 69 acres containing limestone deposits and quarries near a Superfund site.
The removal action will deposit contaminated soil from neighboring properties
in a quarry on the Bassett property. Plaintiff seeks just compensation for a
physical taking. According to material not in the complaint, Bassett consented
to the use of hi property, but filed this suit when EPA began investigating
its potential liability.
I will provide you with copies of the case and related materials.

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Pane 1
From: ENVPOLY 
To: DCWICO1 .IN(”takings-net©igc.org”)
Date: Thursday, March 12, 1998 3:00 pm
Subject: H.R. 992 Passed by U.S. House of Representatives
Environmental Policy Project’s
Takings-Net
* * * a *
Today, March 12, the U.S. House of Representatives, by
a vote of 230 to 180, passed H.R. 992, the Tucker Act
Shuffle Relief Act. The bill would expand the jurisdiction
of the federal District Court (a little) and the Court of
Federal Claims (a lot) by granting each court concurrent
jurisdiction to hear all claims arising from agency action
alleged to be a taking under the Takings Clause of the Fifth
Amendment. The bill provides that all appeals in cases
brought under the bill, whether initiated in the District
Court or the Court of Federal Claims, would go to the U.S.
Court of Appeals for the Federal Circuit. The bill also
would repeal 28 USC 1500, which bars the simultaneous
prosecution of the same claim seeking the same relief in
both the Distnct Court and the Federal Court of Claims.
Before passing the bill, the House narrowly rejected, by a
tie vote of 206 to 206, an amendment offered by
Congressman Mel Watt (D-NC), which would have granted
the District Court new jurisdiction to hear takings claims
and allowed the District Court to exercise comprehensive
jurisdiction over takings, Administrative Procedure Act,
and other challenges to regulations affecting property.
Under this proposal, the existing Court of Claims
jurisdiction would have been left intact but not expanded,
and appeals from decisions by the District Court would
have gone to the regional Courts of Appeal.
Prior to the vote, the House adopted by voice vote an
amendment offered by the bill’s chief sponsor, Lamar
Smith (R-T)Q, which makes dear that the bill is not
intended to override preclusive review provisions granting
jurisdiction over particular agency actions to specific
federal Courts of Appeal or District Courts.
The Statement of Administration Policy on the bill
indicated that the Attorney General, the Administrator of
the Environmental Protection Agency, the Secretary of the
Interior, and the Chair of the Council on Environmental
Quality would recommend a veto of the bill as reported by
the House Judiciary Committee.
H.R. 992 is similar to provisions contained in H.R. 1534
as reported by the Senate Judiciary Committee on February
26, 1998. Last Fall, the House, by a vote of 248 to 178,
passed H.R. 1534, the provisions of which are incorporated
into the Senate bill of the same number. While the earlier

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Paae2
House bill sought to remove procedural hurdles to suing
cities, towns, and counties for an alleged taking in federal
court, H.R. 992 focuses on removing procedural hurdles to
takings suits against the federal government.
The proponents of H.R. 992 argued the legislation was
necessary to address the unfair requirement that litigants
bifurcate takings claims from APA and other claims arising
from the same agency action between the Distnct Court and
the Court of Federal Claims. Without substantially
disputing the existence of a problem, opponents argued that
the Watt amendment solved the bifurcation problem
without at the same time encouraging forum shopping or
vesting broad new powers in the Article I Court of Federal
Claims in possible violation of Article Ill of the
Constitution. Opponents of the bill also argued that the bill
appeared to be motivated by political rather than practical
concerns, because it would have the effect of significantly
expanding the authority of courts dominated by Republican
appointees.
* * * * *
For more information, please contact John Echevema
or Peter Hoffmann at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.,
Washington, D.C. 20001
tel: (202) 662-9850 I fax: (202) 662-9497
e-mail: envpoly law.georgetown.edu

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Page
Note to File
Recent CWA § 404 Takings Decisions: Cristina Investment Corp. v.
U.S. , No. 95-128L (CFC Feb. 25, 1998), Merow, J.; Robbins v.
U.S. , No. 96-779L (CFC Feb. 20, 1998), Miller, J.
Cristina
In 1979, the Corps of Engineers denied a permit application by
the parties who later became plaintiffs in Bayou des Families
Develolment Corr. v. U.s. , 130 F.3d 1034 (Fed. Cir. 1997) (claim
dismissed due to statute of limitations) to construct a levee.
The levee would also have made it possible to develop property
belonging to plaintiff Cristina Development Corp. The denial was
based on the fact that the property was located within a
protected area. Plaintiffs filed a taking claim in 1995.
Plaintiffs attempted to overcome the six year statute of
limitations applicable to taking claims by arguing that their
taking claim did not accrue so long as there was still some
possibility that a levee might be constructed with an alignment
that would allow development of their land. The court held that
the limitations period commenced when plaintiffs’ taking claim
became ripe, that is, when the government made a final decision
as to the application of the regulation to the property (i.e.
when it denied the permit). Exhaustion of all possible avenues
for relief, such as efforts to overturn a government decision are
not necessary to ripen a taking claim.
In this case, the court’s reasoning defeated an untimely claim.
However, the same reasoning could also be used by plaintiffs with
timely claims to overcome ripeness challenges.
The court also rejected the taking claim of a second plaintiff,
which did not acquire its property until 1987, after the time of
the alleged taking.
Robbing .
Plaintiffs purchased a parcel of land in 1975. In 1994, they
signed a contract to sell a portion of the parcel to a
prospective developer. After the Corps of Engineers identified
wetlands on the property, the sale fell through. Without seeking
a permit, plaintiffs filed a taking claim.
Plaintiffs alleged that the Corps’ action in identifying the
wetlands worked a taking of the land sales contract, and the
property itself. The court found no taking of the land sales
contract, a private transaction which the government took no
action to prohibit. It further found that any claim for a taking
of the property was not ripe, since there had been no permit
application and hence no final decision as to the effect of the
regulation on the property. Moreover, plaintiffs could not

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Page 1
Notes on Recent Takings Decisions
Compiled by David Courson
1. Babbitt v. Youpee , 117 S.Ct. 727 (1997).
This case arises from the same factual background, and
nearly the same statutory framework, that the Court addressed in
Hodel v. Irving , 481 U.S. 704 (1987). Ownership of lands
allotted to individual Indians nearly a century ago has become
very fractionated as interests in the lands have been inherited
over time. Because Indian lands are not subject to state and
local taxes, and tribes have chosen not to tax them, there are no
practical constraints on fractionation. Many of the lands are
now leased and managed by the Department of the Interior, which
finds it difficult and inefficient to disburse the revenues to
the owners, some of whom may be entitled to a few cents a month.
To address this problem, Congress provided that, in certain
circumstances, owners could not leave small shares to their
heirs, and that such shares instead would pass to the tribe. In
Irving , the Court invalidated this law because it worked an
uncompensated taking.
Before the Court’s decision in Irving , Congress had amended
the law to allow for the shares to be inherited under some
circumstances; Irving did not address the constitutionality of
the amended law. The Supreme Court, in a narrow ruling that
closely followed Irving , has now found the amended statute
unconstitutional. The Court concluded that the changes to the
law were quite limited and did not change its essential
character, which effectively abrogated, in many cases, the right
to devise property to one’s heirs. This ruling affects only a
very narrow type of property regulation, and does little to
expand the Constitutional principles articulated in Irving .

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Paae 2
2. Suitum v. Tahoe Regional Planning Agency , No. 96-243, cert.
granted , 65 U.S.L.W. 3292 (Oct. 15, 1996).
Mrs. Suitum owns a parcel of land in Nevada which she is not
allowed to develop because it is environmentally sensitive.
Ownership of this parcel also carries with it ownership of
certain transferable development rights (TDR8). Mrs. Suitum
filed an action under 42 U.S.C. § 1983, alleging that the
development prohibition worked a compensable taking under the
Fifth mendment. The trial court ruled that the taking claim is
not ripe, because Mrs. Suituin had not attempted to sell her TDRB.
The Ninth Circuit affirmed. Suitum v. Tahoe Regional Planning
Agency , 80 F.3d 359 (9th Cir. 1996).
Mrs. Suitum had originally asserted that the TDRs had no
value and thus no relevance to the ripeness of her taking claim.
However, she now concedes that those rights have some value and
argues that her claim is ripe because that value can be
calculated without a sale of the property or the rights.
As a general matter, ripeness refers to the requirement
that there be a final governmental action before a court will
decide a taking claim. This ensures that a court can assess
precisely what regulatory restrictions have been imposed on the
property. For example, denial of one permit proposal may not
mean that some other, less ambitious proposal could not be
approved.
In this case, Mrs. Suitum argues that her claim is ripe
because it has been established that she cannot develop her
property and the value of her development rights can be assessed
with certainty. This argument appears to be correct. There has
been a final, definitive regulatory decision as to what
activities Mrs. Suitum can undertake on her land. It is
difficult to identify any additional action the government could
take to ripen the claim. Mrs. Suituxn’s ability to utilize the
TDRs, and the return she might realize from doing so, are
relevant to the economic impact of the regulation but not to
whether the taking claim is ripe.

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Paae 3
3. Preseault v. U.s. , 100 F.3d 1525 (Fed. Cir. 1996) ( in banc) ,
Plager, J.
In 1899, a railroad had acquired rights of way across land
that now belongs to plaintiffs, with the condition that the
owners would regain fee title if the rights of way were
abandoned. Although a 1920 federal statute prohibited
abandonment of rights of way without a federal permit, the
railroad obtained no permit when it ceased to operate on the
rights of way in 1970 and removed its tracks in 1975. The
plaintiffs acquired their properties beginning in 1979.
Subsequently, the state, which had acquired the rights of way
from the railroad prior to 1970, converted them to public trails
under the federal Rails to Trails Act, to be banked and
retained for possible future conversion back to rail use.
Plaintiffs had initially claImed the conversions were
invalid because they worked takings. The Supreme Court held that
the conversions could not be invalid even if they did work
takings, because the owners could seek just compensation for any
takings under the Tucker Act. Preseault v. ICC , 494 U.S. 1
(1990). Plaintiffs subsequently filed a taking claim, which the
trial court dismissed, ruling that when plaintiffs acquired their
property they had no compensable expectation that the rights of
way would revert to them under the circumstances. Preseault v.
U.S. , 27 Fed. C].. 69 (1992). A divided Federal Circuit panel
affirmed, Preseault v. U.S. , 66 F.3d 1167 (Fed. Cir. 1995), but
the Circuit then vacated the panel opinion to reconsider the case
in banc. Preseault v. U.S. , 66 F.3d 1190 (Fed. Cir, 1995).
The Court’s Decision
The decision includes three different opinions. The lead
opinion by Judge Plager for four judges found that the rights of
way constituted easements, but there had been no conveyance of
fee title to the railroad. It further found that those easements
reverted to plaintiffs when the rights of way were abandoned.
Consequently, the placement of a public trail on land which
actually belonged to plaintiffs effected a physical taking. A
two-judge concurrence agreed with the lead opinion that the
railroad had abandoned its right of way but did not join other
portions of the lead opinion. Rader, J. Concurring. The three
dissenting judges found no abandonment and thus no taking.
Clevenger, J.
A majority of the court rejected the government’s argument
that the federal laws limiting abandonment, because they were in
place when plaintiffs acquired the property, precluded plaintiffs
from having a compensable expectancy that the government would
allow abandonment, and thus that the rights of way would revert.
A number of cases could be read to support this argument. Lucas
. v. South Carolina Coastal Council , 505 U.S. 1003, 1026 (1992)
(‘takings’ jurisprudence ... has traditionally been guided by the

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Page 4
understandings of our citizens regarding the ... state’s power
over, the ‘bundle of rights’ they acquire when they obtain title
to property.” ) (emphasis added); 767 Third Avenue Assoc. v. U.S. ,
48 F.3d 1475 (Fed. dr. 1995), M&J Coal Co. v. U.s. , 47 F.3d 1148
(Fed. Cir. 1995) (no right to use property free of federal
regulatory interest asserted before property acquired).
Judge P].ager’s plurality opinion concludes that those cases,
which turned on expectations regarding property use in the
context of regulatory taking claims, were not applicable to this
case, which involved a claim of a physical takin9 which
effectively produced a transfer of ownership. (T]itle and
ownership expectations must be distinguished from the question
that arises when the Government restrains an owner’s use of
property, through zoning or other land use controls, without
disturbing the owner’s possession. . at 1540. (emphasis in
original). C.f. Kunkes v. U.s. , 78 F.3d 1549, 1554 (Fed. Cir.
1996), Plager, J. (“Even the Government’s physical occupation of
property as an incident to enforcement of the law does not
ordinarily convert a regulatory taking into one of physical
occupation.”) Government regulation in place at the time
property is acquired can limit what an owner can reasonably
anticipate doing with property; it generally cannot- - outside of
the enforcement context- - be used to divest an owner of title
without compensation.

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::::::i
4. Avenal v. U.s. , 100 F.3d 933 (Fed. Cir. 1996), Plager J.
Plaintiffs leased oyster beds from the state of Louisiana in
an area that had become suitable for oyster cultivation as a
result of federal water diversion activities. Subsequent federal
water diversion projects, under discussion at the time plaintiffs
entered the leases, altered conditions again, making the area
again unsuitable for oyster cultivation. The trial court
rejected a taking claim.
The Federal Circuit affirmed, holding that the leases
plaintiffs claimed had been taken were, indeed, property rights.
The Circuit further observed that the government action had a
serious impact on the value of those rights. Nevertheless, it
found that the government had not interfered sufficiently with
plaintiffs’ reasonable, investment-backed expectations to
establish a taking. Plaintiffs had not been unfairly surprised,
since they could have anticipated the government action at the
time they entered the lease: (P]laintiffs as a matter of law
must be assumed to have known that their right to use the
bottom-lands for oystering were subject to the inevitable changes
that the anticipated government program would bring about.

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Paqe 6
5. Heck v. U.s. , 37 Fed. Cl. 245 (1997), Wiese, J.
Plaintiff owns an undeveloped parcel in New Jersey and
obtained local approval for a subdivision which would have
required filling federally regulated waters and wetlands on the
property. In order to obtain a dredge and fill permit under §
404 of the Clean Water Act, plaintiff first had to obtain a state
water quality certificate under § 401 of the Clean Water Act.
The application for the certificate contained a rather cursory
discussion of alternatives. The state requested a more extensive
discussion, that would address both on and off-site alternatives,
which plaintiff declined to provide. Plaintiff had also applied
for a § 404 permit from the U.S., but consideration of the merits
of that application was held in abeyance until such time as” he
received necessary state permits for the work.
Heck alleged that the refusal to grant his § 404 permit in
these circumstances worked a taking. The court dismissed the
taking claim for lack of ripeness. In so doing, the court
rejected Heck’s claim that pursuing a permit would be futile.
The court recognized that there were indications that it might be
difficult to obtain a permit, including adverse comments on the
application from agencies not responsible for the permitting
decision, but held that these indications were not sufficient to
establish that it would be futile even to apply for a permit.

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Page 71
6. Hendler v. U.s. , 36 Fed. Cl. 574 (1996), Robinson, J.
This case involved a claim that Superfund response
activities worked a compensable taking of private property under
the Fifth Amendment. Plaintiffs alleged a taking from the 1983
installation of groundwater wells on their undeveloped property
to monitor the plume of contamination from the Stringfellow Acid
Pits Superfund site, and from an order authorizing the
installation of the wells.
The case has an elaborate procedural history. Plaintiffs
originally filed their claim in 1984, and were denied summary
judgment in 1986. In 1989, the case was dismissed for failure to
comply with court orders. The Federal Circuit reversed the
dismissal. Hendler v. U.S. , 952 F.2d 1365 (Fed. Cir. 1991).
he Federal Circuit also reviewed the entire record of the case
below and made a number of findings of fact and conclusions of
law, Hendler , 36 Fed. Cl. at 581, holding that the presence of
the wells amounted to a permanent occupation of the property and
worked a physical taking. To date, this has been the sole
reported decision finding that Superfund response activities work
a compensable taking under the Fifth Amendment.
The case was remanded to the trial court to determine the
scope and extent of the physical taking, and to decide whether
any governmental regulatory action interfered with the property
so significantly that it worked a taking. After an exhaustive
trial, the court found that there had been no regulatory taking.
It further found that the installation of the wells worked a
physical taking of a narrow property interest similar to ... an
easement for electrical cables or water or sewer-line easements
which ... do not materially interfere with the property’s
day-to-day use, even in those areas occupied by the we1ls.
at 584.
The court also found that plaintiffs benefited from the
cleanup: The evidence shows that the value of plaintiffs’
property was reduced by the contamination, rather than by the
actions pursuant to the access order... The remediation of the
contamination restored value to plaintiffs’ property and
increased its marketability and financeability. . at 588.
In rejecting the regulatory taking claim, the court also noted
that plaintiffs had failed to discuss the response with EPA and
explore uses of their property that would not interfere with
response activities.
Subsequently, a hearing has been held to assess what
compensation, if any, plaintiffs should receive for the physical
taking.

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Using the actual contaminated value of the property, Cox valued the easements
at less than $3,000. A885. Cox’s analysis demonstrated that the monitoring
wells’ impact on the value of the property was nominal. Cox’s interviews with
local residents confirmed that monitoring wells did not disrupt the use of their
property. A2107-08; A1547-48 (Tr. 5048-50 - Cox).
4. The success of characterization and remediation, and their benefits
to the value of the property . -- By 1987, the plume of contamination on the
property was successfully characterized. During the investigatory period
(1 983-1987), levels of contamination on the property more than doubled,
reaching approximately 100 times Safe Drinking Water Act (SDWA) levels.
Compare A1833 to A1864 & 1866. Since 1987, as a result of remedial activities,
continuing progress has been made in narrowing the size of the plume and
reducing the concentrations of contaminants. By 1995, contamination levels on
the property were close to SDWA standards. A1343-44 (Tr. 3086-97 - Bergman).
Evidence established that the characterization and remediation of the
groundwater contamination on the property was a significant financial benefit to
landowners. To begin with, landowners were able to avoid significant costs of
investigation. The government’s environmental engineering expert estimated the
cost to delineate the plume of contaminated groundwater on the property to be at
least $100,000 to $150,000. A2254 (Larson). Shahin, landowners’ expert,
admitted that a uPhase I/Phase II investigation” of the property, which would
have been required to obtain financing, would have cost approximately $100,000.
Al 108, 1117-18 (Tr. 740- 42; 928-34). These costs were avoided by landowners
as a result of the characterization activities. Landowners’ appraiser, Finnerty,
admitted in his report that if the CFC’s rulings regarding the scope of the
easements were followed, the value of this benefit (cost avoided) exceeded the
value of the easements. A750-51.

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Information about the plume and its remediation improved the property’s
financeability and marketability, and hence its value. Both Warmuth (landowners’
banking expert) and Flavell (their appraiser) admitted that identification and
cleanup of the plume was a benefit. Al 162 (Tr. 1192-94); Al 126-27
(Tr.2308-09). Landowners’ development expert also admitted that data on the
nature of the plume was a necessary prerequisite to development. A 1254-55 (Tr.
2536, 2540-41 - Oliver).
The government’s appraiser testified that remediation provided a benefit
many times greater than the nominal burden imposed by the Order and the
presence of the monitoring wells. A161 I (Tr. 5457 - Patchin). Patchin’s report
found that as a result of the investigation and remediation, the property’s value
increased from 20% of its unimpaired value in 1983 to 80% of its unimpaired
value in 1995. A959. While some of the improvement is attributable to the
increasing sophistication of the marketplace with respect to contaminated
property, most of the improvement is due to the investigation and remediation
and the resulting decrease in uncertainty. A953.
In the damages phase of trial, Cox presented his calculations of the 1983
present values of these benefits from characterization and remediation.
A884-888. Cox utilized the percentages of diminution found by Patchin in 1983
when the contamination was discovered, in 1987 when the contamination had
been characterized and in 1993 when the contamination had been substantially
remediated. Id. He concluded that the net time-adjusted benefit of
characterization and remediation to landowners was $524,000. A886-87.
SUMMARY OF ARGUMENT
1. Landowners err in attempting to make the “nuisance exception” to
takings liability the Iinchpin of this case. The CFC cited nuisance principles as”
one of the bases” for finding no regulatory taking. Add. D at 4. With respect to
the physical occupation taking, the CFC based its determination that no
compensation was due on the fact that special benefits to the property more than
offset any damage -- not on the “nuisance exception.”

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2. The CFC correctly evaluated the physical occupation taking by looking to
the actual scope of activities carried out on the property. Landowners’ contention
that the Order defined the rights taken is contrary to Hendler II , which affirmed
that the Order was not a taking, and remanded for a consideration of”
subsequent events.” Here, as in any inverse condemnation case, the scope of
the taking is determined by what the government actually did, not by what the
government might have done.
3. The CFC did not err by rejecting the valuation testimony of landowners’
appraiser Mr. Finnerty. Finnerty’s assumption that the government took”
exclusive use” easements was contrary to abundant evidence that the wells and
associated easements could easily be incorporated into parking lots or
landscaping. Finnerty’s belief that the well easements, rather than the
Stnngfellow contamination itself, lowered the value of the entire property was
unsupported by any probative evidence, and contrary to landowners’ own
admissions that the contamination devalued the property. Finnerty’s testimony
that the wells adversely impacted the development potential of the property as a
whole was contrary to abundant evidence (including his own prior appraisals)
showing that wells can easily be accommodated and do not devalue property.
4. The CFC made well-supported findings that the monitoring wells
conferred special benefits, by enabling landowners to avoid the cost of doing their
own groundwater investigation (which all parties agreed would have cost at least
$100,000), and by restoring the value of the property-- first by determining the
nature and extent of the contamination and then by helping to clean it up.
Landowners’ protestations that they were not benefitted because they did not
intend to use the groundwater are misguided. The characterization and cleanup
of the contamination on their property enhanced its value in the market,
regardless of whether they intended to use the groundwater.

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5. The record strongly supports the factual findings on which the CFC
based its conclusion that no regulatory taking occurred. Landowners failed to
introduce any evidence showing a nexus between EPA’s activities and their
failure to sell the property. The evidence showed that factors other than EPA’s
actions, such as landowners’ unreasonable terms for sale and the lack of
necessary zoning, prevented sales. Landowners’ claim that EPA actions
devalued the property was thoroughly discredited at trial; the CFC was well
warranted in finding that EPA’s actions actually restored the value of the land.
The CFC’s findings that the character of EPA’s actions did not warrant a finding
of a regulatory taking were also supported by abundant evidence that EPA
responded appropriately to an imminent public health threat, and did not restrain
landowners’ ability to use the land for their intended purpose of selling to
developers.
ARGUMENT
Standard of Review -
This Court reviews judgments of the CFC “to determine whether they are
‘incorrect as a matter of law’ or premised on ‘clearly erroneous’ factual findings.”
Whitney Benefits, Inc. v. United States , 926 F.2d 1169, 1171 (Fed. Cir.), cert.
denied, 502 U.S. 952 (1991). Many of landowners’ arguments challenge factual
findings by the CFC, or challenge its determination to credit the testimony of the
government’s experts over landowners’ experts. The CFC’s determinations to
accept certain expert testimony and reject other testimony is reviewed under the
clearly erroneous standard. Whitney Benefits , 926 F.2d 1169, 1177-1178. Its
determinations regarding the value of land, the nature of the property and its
alternative uses, and the extent to which a property is limited by government
actions, are all reviewed under the clearly erroneous standard. . at 1172-73,
1177-78. Landowners’ challenges to findings regarding what factors caused the

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decrease in the property’s value are reviewed under the clearly erroneous
standard. Loesch v. United States , 645 F.2d 905 (Ct. Cl.), cert. denied, 454 U.S.
1099 (1981); ACS Hospital Systems v. Montefiore , 732 F.2d 1572, 1578 (Fed.
Cir. 1984).
The clearly erroneous standard requires great deference to the CFC’s
findings after a full trial. Anderson v. City of Bessemer City , 470 U.S. 564, 575
(1985). Deference to the trial court’s credibility determinations is also appropriate
with respect to the testimony of experts. Graver Tank & Mfq. Co. v. Linde Air
Prods. Co. , 336 U.S. 271, 274 (1949).
I. The CFC determined that no compensation was due for the physical
occupation because the wells provided special benefits in excess of the
nominal damage to the property, not because they fit within a unuisance
exception” to liability.
Landowners have misinterpreted the holding of the CFC with respect to the
taking by physical occupation. As the CFC explained in its opinion on damages,
the unuisance exception” to takings liability “was one of the bases for finding that
no re ulatorv taking had occurred.” Add. D at 4 (emphasis added). The CFC did
not rely on the nuisance exception in determining that no compensation was due
for the physical occupation claim. The CFC noted, in dicta , that the nuisance
exception could logically apply to the physical occupation taking, but conduded
that law of the case precluded denying compensation on that basis. Add B at 17
n.14. In thirteen pages of careful analysis of whether compensation was due for
the physical occupation, the CFC nowhere mentions the nuisance exception.
Add. 0 at 10-23. Its conclusion that no compensation was due was based on the
fact that ‘ 1 [ t]he special benefits from the investigation, characterization, and
remediation outweigh any damage from the limited property interest needed to

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conduct those activities.” Add. 0 at 23. The CFC reexamined the nuisance issue
(Add. D at 4-8) only because landowners continued to challenge its earlier ruling
on lack of a regulatory taking.
Landowners (Br. 13-14) highlight, out of context, a statement in the
damages opinion that recent cases had “clarified” the nuisance exception since
this Court’s opinion in Hendler II . Add 0 at 4. This statement, as the immediately
preceding paragraph in the opinion makes clear, relates to the “regulatory taking”
issue, not the physical occupation. In sum, landowners’ attempt to make the
nuisance exception central to review of the denial of compensation for the
physical occupation is misguided.
II. The CFC correctly defined the scope of the physical occupation by
examining the government’s actions on the land, rather than by treating the
1983 Order as a taking.
Landowners argue (Br. 22) that the CFC erred “by focusing entirely on the
activities the government eventually camed out on the Property * * *I They urge
(Br. 24, 27) that the Order was TM an unqualified appropriation of property rights,”
which “defined the property rights that Hendler was required to surrender to the
United States * **I They argue (Br. 25) that the measure of compensation for
the physical occupation must be what a purchaser would have paid to acquire all
the rights mentioned in the Order, including the right to install extraction wells and
storage facilities.
Following this approach, landowners’ appraiser (Finnerty) valued the well
easements as “exclusive easements” worth $67,364 as of the date of taking,
based on all the activities that he thought could potentially occur on the property
under the terms of the Order. A745, 750. Finnerty did not review the parties’
stipulation (A670) setting out the activities that actually were carried out on the
property, and conceded he could not provide a value for the easements based on

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BRIEF FOR APPELLEE THE UNITED STATES
IN THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
NO. 97-5143
HENRY HENDLER, PAUL GARRETr, and TILLIE GOLDRING, as
Trustees for HENRY HENDLER and IRVING GRONSKY,
Plaintiffs-Appellants,
V.
UNITED STATES,
Defendant-Appellee.
Appeal From A Judgment Of The United States
Court Of Federal Claims In 84-456L Entered
July 24, 1997, Judge Wilkes C. Robinson
LOIS J. SCHIFFER
Assistant Attorney General
ROBERT L. KLARQUIST
DAVID F. SHUEY
ERIC S. GOULD
OF COUNSEL: DAVID C. SHILTON
Attorneys. Environment and Natural
LAURIE WILLIAMS Resources Division
DAVID COURSEN DeDartment of Justice
U.S. Environmental Protection P.O. Box 23795 LEnfant
Station
Agency Washington. D.C. 20026
( 202) 514-5580

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
NO. 97-5143
HENRY HENDLER, PAUL GARRETT, and TILLIE GOLDRING, as
Trustees, and HENRY HENDLER and IRVING GRONSKY,
Plaintiffs-Appellants,
V.
THE UNITED STATES,
Defendant-Appellee.
Appeal From A Judgment Of The United States
Court Of Federal Claims In 84-456L Entered
July 24, 1997, Judge Wilkes C. Robinson
BRIEF FOR APPELLEE THE UNITED STATES
STATEMENT OF RELATED CASES
This Court’s opinion in a prior appeal in this same action is reported as
Hendlerv. United States , 952 F.2d 1364 (Fed. Cir. 1991)(Judges Plager, Archer
and Clevenger). The United States is not aware of any related cases in this or
any other court.
JURISDICTION
The United States agrees with plaintiffs-appellants’ Henry Hendler, et al.
(hereafter “landowners”) statement of jurisdiction. ’

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ISSUES PRESENTED
I. Whether landowners’ argument that the Court of Federal Claims (“CFC”)
improperly applied the “nuisance exception” described in Lucas v. South Carolina
Coastal Council , 505 U.S. 1003 (1992), to a taking of well easements by physical
occupation is based upon a misinterpretation of the decision below.
H. Whether the CFC properly determined just compensation for the physical
occupation taking based on the scope of the government’s actual activities on the
property, rather than the scope of possible activities under a 1983 Access Order.
Ill. Whether the CFC committed clear error when it found convincing the
testimony of the government’s experts regarding the minimal impact of the
monitoring wells, and rejected as speculative and unsupported the testimony of
landowners’ experts that the wells precluded other uses of the property and
rendered it unmarketable.
IV. Whether the CFC committed clear error by finding that the monitoring wells
conferred special benefits on the property which offset any damage caused by
the wells, where expert testimony showed that the wells allowed landowners to
avoid the cost of doing their own groundwater tests, and enhanced the value of
the property by characterizing the scope of the contamination on the property,
and by facilitating its successful cleanup.
V. Whether the CFC erred in finding that there was no regulatory taking of the
property above and beyond the physical occupation taking, where the evidence
This brief will refer to pages in the Addendum to Appellant’s Brief as “Add._”;
to pages in Appellants’ Opening Brief as “Br._”; and to pages in the Joint
Appendix as “A_.” Where appendix references are to condensed transcripts,
we will also give parallel citations to the particular transcript page as “Tr. .“

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showed that EPA’s activities did not interfere with the landowners’ efforts to sell
the property for commercial development or otherwise impair the value of the
property, and where EPA’s activities were a necessary and appropriate response
to contamination which afflicted this and other properties, and which threatened
drinking water supplies.
STATEMENT OF THE CASE
A. Nature of case and course of proceedings. -- This case arises from the
Environmental Protection Agency’s (EPA’s) issuance of an Access Order (Order)
to landowners, and EPA’s subsequent installation of groundwater monitoring
wells pursuant to that Order on their property. The property consists of
approximately 97 acres of unfenced and undeveloped land immediately down
gradient from the Stnngfellow Acid Pits, a notorious toxic waste dump in Riverside
County, California. Add. B at 1-3.
EPA issued the Order based on its determination that surface testing
indicated a plume of contaminated groundwater, originating at the Stringfellow
Acid Pits, was moving through the property. The plume was a threat to the
drinking water of local residents as well as to the larger Chino Ill groundwater
basin, the drinking water source for approximately 40,000 people. Testing of the
monitoring wells installed pursuant to the 1983 Order confirmed that the property
contained the plume of contamination. Ongoing monitoring and installation of
additional wells assisted EPA and the State in determining the location, nature
and extent of the plume and in designing and implementing effective remediation.
Add. B at 3-4.
Landowners filed this takings claim in September 1984, alleging that the
Order and installation of monitoring wells effected a taking of the property.
Landowners sought $4,500,000 as compensation. A1971.
In 1986, the Claims Court ruled on cross-motions for summary judgment.

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The court found that the Order did not constitute a regulatory taking, that the EPA
was not responsible for the State’s activities on the property and that issues of
fact remained concerning whether compensation was owed for a taking by
physical occupation. Hendler v. United States , 11 Cl. Ct. 91 (1986)(Hendler_I),
aff’d in part, rev’d in part, 952 F.2d 1364 (Fed. Cir. 1991). In 1989, the Claims
Court dismissed the case based on landowners’ failure to respond to discovery
requests. This Court reversed and remanded, finding that dismissal was an
abuse of discretion. Hendler v. United States , 952 F.2d 1364 (Fed. Cir.)(Hendler
jfl. This Court found, contrary to the Claims Court, that (a) EPA was responsible
for California’s activities within the scope of the EPA Order and (b) placing the
wells on the property constituted a taking by physical occupation. This Court
upheld the Claims Court’s determination that the Order was not a regulatory
taking on its face, but remanded for further consideration of “whether subsequent
events, in light of the character of the Government’s actions and plaintiff’s distinct
investment-backed expectations, might have had sufficient economic impact on
the plaintiffs to constitute a regulatory taking.” 952 F.2d at 1374.
On remand, the CFC bifurcated the case. The first phase, which was
completed in 1995 after six weeks of trial, focused on the extent and effect of the
permanent physical occupation, and on whether activities undertaken by the
government after September 1983 constituted a regulatory taking. Add. B at 11.
With regard to the physical occupation taking, the CFC determined that 20 wells
had been drilled on the property, and that the resulting easements were similar to
utility easements which require portions of the property to be available for
occasional access, but do not otherwise materially interfere with the use of the
property. Add. B at 14. The CFC noted that both side’s experts agreed that the
well easements could be integrated into parking lots or landscaped areas, so as
not to interfere with development. .. at I 3•2

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The CFC next determined that no regulatory taking had occurred. The court
found that the installation of the wells was necessary to abate a public nuisance
posed by the groundwater contamination on the property, and consequently fell
within the nuisance exception to takings liability. Add. B at 17. See Lucas , 505
U.S. at 1029 & n.16. The CFC nevertheless went on to examine the economic
impact of the government’s actions, It determined that the Order and monitoring
wells did not interfere with landowners’ efforts to market the property for
commercial development, and that, in fact, they helped restore the value of the
property after it had been substantially reduced because of the Stringfellow
contamination. Add. B at 18-21. The CFC also found that the landowners had
failed to take reasonable steps to determine what uses of the land would be
consistent with the Order and the wells. Add. B at 21.
A two day damages phase of trial was completed in 1997. In a
comprehensive opinion, the CFC rejected the contentions of the landowners’
appraiser that the government took “exclusive use” easements worth $67,364,
and that the easements caused severance damages by reducing the value of the
2 In its opinion of October 9, 1996, the CFC initially concluded that the value of
the well easements was $14,500. This figure valued the underlying property as if
it was not contaminated, and assumed that there were no special benefits from
the wells. Add B at 15 n.12. Landowners moved for a new trial, and the CFC
directed the government to respond. The CFC then deleted this part of its
decision, and provided in its place that “(i]n the damages phase of trial, the
parties will have the opportunity to present evidence relevant to compensation for
the physical taking of well easements.” Add. C at 2, 3.

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property by $1,055,000. App. Dat 10-12, 13-15. The CFC found convincing the
testimony of the government’s experts that the wells did not interfere with the
property’s value, but in fact enhanced value by removing the uncertainty
associated with the groundwater contamination of unknown scope. Add. D at
17-22. The special benefits provided by the wells “outweigh any damage from
the limited property interest needed to conduct those activities.” Add. D at 23.
On July 24, 1997, the CFC entered a final judgment, holding that “plaintiffs are
not entitled to compensation from defendant for the well easements and access
corridors on their property.” Al. This appeal followed.
B. STATEMENT OF THE FACTS
The full factual background of this case is set forth in the liability opinion of
the CFC, Add. B at 1-9. Accordingly, we here focus on the evidence introduced
at the two trials regarding specific issues on appeal. Those issues turn on the
scope and impact of (1) the Stringfellow contamination, (2) the 1983 Order, and
(3) the activities undertaken pursuant to the order.
1. The Strinafellow contamination and its effect on the value of the
property . -- The CFC found that “the evidence shows that the value of plaintiffs’
property was reduced by the contamination, rather than by the actions pursuant
to the access order.” Add. B at 20. The evidence showed that the property is
approximately 3,000 feet down- gradient from the Stringfellow Acid Pits. A896.
In 1956, prior to Mr. Hendler’s purchase of the property, the Acid Pits began
operation as a Class I hazardous waste facility licensed by the State to receive
the most toxic industrial wastes. In March 1969, heavy rains caused toxic wastes
to wash over berms and containment dikes and flow through the property into
Glen Avon. In 1975, the Santa Ana Regional Water Quality Control Board
declared Stringfellow a public nuisance and began to undertake measures to
stabilize the Acid Pits. A. 1425 (Tr. 4042 - Berchtold); 1705-1709.

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The federal Superfund law (Comprehensive Environmental Response
Compensation and Liability Act, or “CERCLA”) was enacted December 11, 1980.
42 U.S.C. 9601 et seq . The Stnngfellow Acid Pits was listed as California’s
highest pnonty site for cleanup. A1707. Pursuant to CERCLA Section 101(9),
the Stringfellow “facility” includes “any site or area where a hazardous substance
has * * * come to be located,” and thus includes the extent of the groundwater
plume emanating from the Acid Pits. 42 U.S.C. 9601(9).
In 1983, the State announced the plume had migrated beyond the
Stringfellow Acid Pits property. By August 1983, surface testing showed the
plume of contamination had likely migrated onto the property and was headed
toward the Glen Avon community. A1822; 1363 (Tr. 3288-89 - DahI). The
migrating plume of contaminated groundwater threatened local thinking water
wells and the larger Chino Ill groundwater basin, the drinking water source for
40,000 people. A1700, 1705, 1717, 1737, 1742-44, 1786-87, 1794-96,
2308-2308, 2310, 2314, 2320. Installation of the monitoring wells confirmed hat
the contaminant plume was running directly through the property. Al 833, 949,
986-987. During soil gas sampling, one of the plume contaminants,
trichloroethylene, was detected within 10 feet of the surface on a part of the
property below highway 60. A1842-43, 1856-58.
Landowner Paul Garrett conceded that the groundwater contamination”
absolutely” had an adverse effect on the property’s value, A1056 (Tr. 430)
(confirming deposition testimony), and that “ [ t]he stigma of the presence of toxic
waste on the subject property has decreased the value of the subject property.”
A1057 (Tr. 431-32) (confirming interrogatory answer); A2281. Landowner Henry
Hendler uassumed the value of the property decreased when the Stnngfellow
contamination became public knowledge. A1008-09 (Tr. 135-36) (confirming
deposition testimony); A2298. Landowners’ damages phase appraiser confirmed

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that “ [ a]s of the 1983-86 time period, the perception in the Southern California
real estate market was negative toward any association with contamination
resulting in a very small universe of potential tenants and buyers for
contaminated property, or properties associated with contamination, due to
uncertainty.” A755 (Finnerty).
Landowners admitted that in 1982 a prospective buyer lost interest in
acquiring the property after learning of the groundwater contamination.
A2258-2262, 1005-06 (Tr. 117-21 - Hendler). In a 1987 letter to landowners
seeking a listing on the property, a real estate broker stated the contamination
from Stringfellow would be “the main deterrent for potential buyers.” A2346,
1502 (Tr. 4696-4698 - Jaramillo).
The government’s banking expert, James Rockett, testified the presence of
groundwater contamination on the property would make it neatly impossible to
obtain financing during the relevant period. A1447, 1458 (Tr. 4288, 4355).
Banks understood groundwater contamination to be “contamination” under
CERCLA, and potential liability for the cleanup of groundwater contamination was
a significant concern to lenders from 1983 onward. A1449-50 (Tr. 4302-4305). A
loan applicant would have had to disclose groundwater contamination in an
environmental questionnaire, and “it would be highly unlikely that any
sophisticated lender would make such a loan.” A1445-46 (Tr. 4278-4280). A
sophisticated lender would have either known of the Stringfellow site because of
its notoriety or discovered it through “due diligence,” and would have avoided
making a loan due to the potential for being brought into litigation. A1446 (Tr.
4280-82). While appellants might be “innocent landowners” under CERCLA, a
bank that agreed to finance acquisition of the property knowing it was
contaminated would not be. Moreover, the banking industry believed that even
an “innocent” landowner could be held accountable for any damage to

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down-gradient property owners from contamination emanating from that owner’s
property. A1457 (Tr. 4350). Rockett’s testimony regarding the concerns banks
would have about property with contaminated groundwater was confirmed by
landowners’ own banking expert. A1590 (Tr. 5345-47 - Warmuth); see also
A714-716 (Warmuth report).
The government’s appraiser, Peter Patchin, had investigated the impact of
similar contamination on the value of property nation-wide, and his studies of the
impact of contamination on the value of real property have received widespread
professional acceptance. A990-992, 1580-83 (Tr. 5293-5302). Patchin’s report
(A889-992) found that contaminated properties face discrimination in the
marketplace due to the many types of uncertainty associated with the
contamination. A909-912, 966-979. These include: buyers’ concerns regarding
potential liability to the public and neighboring properties; lenders’ liability
concerns; changing environmental regulations; the possibility that additional
contamination may be discovered; and the additional time and costs for cleanup.
A909-917; 1605 (Tr. 5422-23). Patchin’s research showed that discrimination
against contaminated properties results in a loss of value in excess of the actual
cost to clean up the contaminated properties. A909-910, 917. This concept of”
contamination stigmau is accepted by the national Appraisal Standards Board.
A2353-59, 1583 (Tr. 5303-06).
Patchin found the value of the property was particularly vulnerable to the
impact of contamination because it was undeveloped. A922-923, 936, 1605 (Tr.
5424-25). Raw land is generally not unique in that many other comparable
undeveloped sites exist, and a purchaser can readily seek an uncontaminated
substitute site for development. j .. The substitution” principle was applicable
here, as considerable undeveloped property exists in proximity to Highway 60.
A16081620 (Tr. 5439-40, 5511-13). Unlike property which has already been

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developed, raw land lacks an existing income stream for any period in which
purchase or development of the property is delayed due to environmental
uncertainties. Using the case study method, Patchin found the groundwater
contamination reduced this property’s value by at least 80% of its 1983
uncontaminated value. A936-939. This was consistent with an appraisal the
landowners’ appraiser had prepared before being retained for this litigation, which
showed an 80% diminution in the value of a Southern California property with
contamination which had not been characterized. A2416, 326-28 (Finnerty).
2. The 1983 access order and its impact on value . -- In August 1983,
State officials contacted landowners to request permission to install three
monitoring wells on the property. A1952-58; 1000 (Tr. 85-87 - Hendler). After
discussions with Hendler, the State sent a letter attaching an access agreement
that addressed Hendler’s stated concerns. A639. The access agreement
provided the landowners would retain “the right to compensation, if any” for the
proposed access. A641. Hendler refused to sign the proffered access agreement
and declined to negotiate further regarding access. A1000-01 (Tr. 87-88 -
Hendler).
After the State’s efforts to obtain voluntary access failed, EPA personnel
recommended that Acting Regional Administrator John Wise attempt to obtain
access to the property. A164 (Ir. 2350-51). Wise testified that EPA’s practice
was to first seek voluntary access, and “as a general matter, people that are
threatened with this kind of contamination are fully cooperative in enabling access
to occur and remediation to proceed.” A177, 181 (Tr. 2430, 2452); A650. EPA’s
proffered agreement would have provided access to EPA and the State to carry
out those activities necessary for the investigation and remediation of the plume,
but did not otherwise restrain use of the property. A652-53, A163 (Tr. 2346). In
September, 1983, after Hendler failed to respond to EPA’s request for voluntary

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access, Wise issued the 1983 Order at issue pursuant to Sections 104 and 106
of CERCLA. A658.
The Order directed that access would be provided to the “Trust Property”
defined as three Assessors’ parcels -- 171-030-012, 171-030-001 and
171-020-022. A659. The Order did not contain any prohibition on sale of the
Property, nor did it purport to bind successors in interest. It directed the
landowners ‘not to interfere in any manner with EPA/State activity on the Trust
Property,” and recited the statutory penalties for “willful violation or failure or
refusal to comply with this Order.” A666.
a. Landowners’ response to the Order.
The landowners who testified, Hendler and Garrett, stated that they did not
inquire whether any proposed uses of the property would interfere with activities
subject to the Order. A1017-18 (Tr. 189-190 -Hendler), A1061 (Tr. 455-56 -
Garrett). Hendler did not recollect reading the Order, and at trial confirmed his”
modus operandi” would be to turn it over to his attorney. A1006-07 (Tr. 123-24).
Hendler’s attorney requested an “Opportunity to Confer” pursuant to the Orders
provisions. A665. During the conference, EPA personnel stated they wanted to
leave Hendler’s attorney “with the thought that it’s our understanding that both the
State of California and Environmental Protection Agency are willing to continue
discussions * * * with regard to a voluntary access agreement.” A1690.
Landowners never directed their attorney to contact either EPA or the State to
EPA terminated the Order on September 30, 1994, as monitoring was no
longer needed to continuing successful remediation. EPA requested voluntary
access because information from the wells would still be helpful (A1694-96, 1351
(Tr. 3136-38 - Bergman)), but landowners have refused (A1963).

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attempt to reach an agreement. A1057 (Tr. 436).
b. The order and wells play no part in unsuccessful efforts to market
the property.
Between 1987 and 1992, landowners received at least five proposals
regarding purchase of the property and one regarding leasing. None resulted in
a sale or lease. There is no evidence that the failure of any of these proposals
was caused by the Order, the monitoring wells or related activities. Real estate
agents and potential buyers testified that landowners rejected these proposals
without ever disclosing the existence of either the Order or the monitoring wells.
A1464-65 (Tr. 4469-71 - Hinkle); A1491 (Tr. 4640-41 - Megdal); A1504 (Tr.
4703-05 - Jaramillo); A1485 (Tr. 4596-98 - Crane); A1529 (Tr. 4911-12 - Hubert);
A1577 (Tr. 5273 - lsraelski); A1450-61 (Tr. 4363-69 - Swieca). See also A1009
(Tr. 140-41 - Hendler), A1061 (Tr. 458 Garrett).
Despite landowners’ admissions that “stigma of the presence of toxic waste
on the subject property has decreased the value of the subject property” (A2281)
and their understanding that it would have to be sold at a discount due to
contamination, they rejected all but one of the purchase proposals because of
price. A1009, 1012-13 (Tr. 137, 155-56, 164-65 - Hendler), A1519 (Tr. 4739 -
Jaramillo). Even when landowners received an offer in 1987 for their listing price
of $4,525,000, they considered it unacceptable and allowed it to expire. See
A1902 (1987 Offer by l.S. Properties for $4.5 million); A1908 (1989 Offer from
Collins for $5.7 million); A1918 (1990 Offer from Schneider Commercial for $4.1
million); A1930 (1990 Offer from Megdal for $10.4 million); A1944 (1991 Offer
from Kanter Assoc. for $5.3 million); A1942 (Offer to Lease from Silver Crest Real
Estate).
The only proposal which met landowners’ price was for $10.4 million from
Megdal and Associates for the 41 acres south of Highway 60. A1930-41, 1562

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(Tr. 5192 - Garrett). Like other prospective purchasers Megdal was neither
informed, nor aware of the contaminated’groundwater, the Order or the
monitoring wells. A1491 (Tr. 4640-41). Had he known, he would not have been
interested in the property. A21 11; 1548 (Tr. 5052 - Cox). Landowners admitted
that the Megdal deal failed because of the parties’ inability to reach agreement on
terms concerning the escrow period. A1067 (Tr. 495-96 - Garrett); A2303-04;
1492 (Tr. 4642 - Megdal testifies that landowners’ insistence on large,
non-refundable payments during escrow period was ‘ludicrous”).
3. The monitonnci wells and effects on value . --Twenty wells were
installed on four parcels of the property between September 1983 and
September 1986. A1828. Four of the wells were installed by EPA between
September of 1983 and January 1984. Id. In 1984, the State took over
management of the Stringfellow investigation, including the activities on the
property. A1289 (Tr. 2851 - Jines). In a Cooperative Agreement between EPA
and the State, the State took responsibility for securing access for both EPA as
well as State employees and their contractors. A1300 (Tr. 2918-24); A2345 (See”
Special Condition 19”). Sixteen wells were installed by the State. A1828. Eight
of these wells were installed by the State on a parcel not subject to EPA’s Order.
Compare A658 with A669. The State’s project manager testified that she kept
Hendler’s counsel informed of the State’s activities on the property and that he
never informed her that these activities were interfering with plans for
development, nor did he request a modification of the state’s activities with regard
to the wells. A1301 (Tr. 2924-27-Jines).
The monitoring wells confirmed that the plume ran directly through the
property. A1371 (Tr. 3406-7 - Ullensvang). The landowners’ environmental
engineer agreed that approximately one-sixth of the total length of the
Stnngfellow plume of groundwater contamination was contained in the property,

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and that, proportionally, approximately one-sixth of the monitoring wells were
placed there. Al 116 (Tr. 920-24 - Shahin).
The parties stipulated concerning what activities were undertaken with
regard to the wells, by whom, and when. A670-689. All of the actions taken on
the property were related to locating and characterizing the plume of
contaminated groundwater, and, subsequently, to tracking the status of the
remediation of the contaminated groundwater. Four categories of activities
occurred: (a) surface diagnostic tests to determine whether contamination was
present and the appropriate locations for wells; (b) installation of wells; (c) water
quality monitoring; and (d) water level measurement. A670-689. The only other
activities which occurred were a few pump tests, an informational tour of the
wells, and one well repair. Id.
Well installation required a space 30 feet by 50 feet for each well for the use
of heavy equipment. A1656 (Tr. 5747-48 - Van Sittert). Each well took an
average of four days to install, and all the wells were installed by September
1986. Al 828. Water quality sampling occurred monthly for a period of
approximately 3-4 years, and infrequently thereafter. A672-685. The sampling
process took between one and a half and several hours. A1656-57 (Tr.
5749-51). The most frequent activity, water level measurement, took a single
individual using hand-held equipment a few minutes per well. A1381 (Tr.
3468-69 - Ullensvang); A1408 (Tr. 3605-06 - Larson). Landowners’ assertion (Br.
11) that 4,400 ‘ 1 activities” occurred on the property was discredited at trial. Carol
Roman, the paralegal who prepared the document supporting this number
(A690), admitted that her lack of understanding of the records led to numerous
errors, including counting of single events as two or more activities. Al 324-26
(Tr.282l-2833).
The more intrusive activities of extraction and treatment of contaminated

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water for remediation purposes occurred on up-gradient property owned by the
State of California. Nevertheless, the monitoring wells played a crucial role in
developing remediation strategies and, once those strategies were implemented,
in determining their efficacy. A1397-1400, 1405-06 (Tr. 3551-53; 3563-64;
3590-95 - Larson).
a. Compatibility of the wells with development.
While the activities on the property required physical entry, the installation
and use of monitoring wells was consistent with development of the property.
Landowners’ environmental engineer admitted that he knew of instances where
monitoring wells were located in shopping center parking lots or landscaping
(Al 114 - Tr. 910 - Shahin), and the government introduced photographs of
groundwater monitoring wells installed in landscaping, driveways and parking
areas of fully operational shopping centers and other commercially developed
properties. A2490-2528 (photos). Wells were installed both before and after
construction of these developments. A1413, 1420 (Tr. 3833-34, 3878-79
(Webb); A1426-28 (Tr. 4051-62 - Berchtold). As the photographs demonstrate,
the wells have not prevented successful commercial use of the properties shown,
even though some of the properties are substantially smaller and have a greater
concentration of well sites than the property. A1650 (Tr. 5683-84 - Shahin).
Similarly, wells in the Glen Avon Elementary School grounds and parking
area did not adversely impact the operation of the school. A1501 (Tr. 4678-83 -
Edmunds). Wells installed in residential developments southwest of the property
were monitored routinely without incident. See A2108, 1547-48 (Tr. 5048-50 -
Cox). EPA’s standard practice, which was followed in the Stnngfellow
remediation, was to accommodate landowners’ needs to the extent technically
feasible, including with respect to the placement, construction and abandonment
of monitoring wells. A1378-85 (Tr. 3449-54, 3479, 3490 - Ullensvang)(placement

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and construction of wells to accommodate landowners’ ongoing uses); A1306 (Tr.
2952-56 - Jines); A1341 (Tr. 3075-76 -Bergman); A1367 (Tr. 3310-11-
Dahl)(abandonment of wells to accommodate development). Landowners’
witness Shahin admitted that regulatory authorities took property owners’
concerns and activities into account in developing monitoring plans. Al 115-16
(Tr. 917-20).
b. Impacts of the Order and wells on property value.
EPA’s expert Patchin explained that the Order and wells had little if any
detrimental impact on the value of the property. He analogized the Order to a
blanket utility easement under which developers and utilities typically negotiate
the actual placement of utilities to avoid interference with development. A1610
(Tr. 5453-54). He determined that the existence of the monitoring wells would
not have inhibited development. A958-959, 1610. Patchin stated that market
data did not indicate monitoring wells would cause any additional loss in property
value beyond that attributable to contamination. j .
The government’s banking expert testified that if a bankwere to consider
the Order, it would be analyzed similarly to a blanket encumbrance or easement.
A1449, 1454 (Tr. 4298, 4330 - Rockett). A bank would have approached EPA
with the loan applicant’s development plan to determine whether EPA’s needs
would interfere with the proposed development. A1449 (Tr. 4298-99). Banks
routinely make loans on properties subject to blanket easements if the easement
rights do not affect the proposed use of the property. j .
The government’s other appraiser, Cox, analyzed the value of well
easements and access corridors for each of the twenty wells on the property.
A2184. He found the combined value of these easements was approximately
$14,500 using his unimpaired (i.e. uncontaminated) values for the property on the
date each well was installed. Id.; Al 551-53 (Tr.5072-81), see also A884-85.

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what actually occurred. A261. The CFC rejected Finnerty’s approach, noting that”
[ i]n determining the value of the physical taking, what counts is what the
government did, not what the government said it was doing.” Add. D at 11, citing
Hendler I , 11 Cl. Ct. at 95-96, aff’d in relevant part, 952 F.2d 1364, 1375 (Fed.
Cir. 1991)fl
The CFC properly rejected landowners’ theory. First, the theory conflicts
with the law of the case. It has been established in this case that the Order was
not, by itself, an appropriation of property rights. Hendler II , 952 F.2d at 1375.
Having affirmed the Claims Court ruling that the Order was not a taking, this
Court defined the issue for remand as “whether subsequent events , in light of the
character of the Government’s action and the plaintiffs’ distinct
investment-backed expectations, might have had sufficient economic impact on
the plaintiffs to constitute a regulatory taking.” Id (emphasis added). This Court
did not instruct that the scope of the physical occupation taking be defined by the
Order, but by evidence of what actually occurred. See id. at 1383-1385. Thus,
this Court said that the CFC could consider evidence on landowners’ allegation
that an extraction well had been installed on the property. 952 F.2d at 1383
q Even if Finnerty’s value of $67,364 for the easements were correct, it would be
more than offset by special benefits. See at 33-38. Finnerty conceded that
the $100,000 cost the landowners avoided by reason of EPA’s completion of
monitoring on their land, if allowed as a special benefit, would exceed the value
he assigned to the easements. A750-51.
The landowners stipulated that “there was no evidence that in fact that
extraction activities took place on any of these wells and there’s no evidence in
fact that there’s storage activities of a permanent nature that took place on the

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Under landowners’ theory such evidence would be irrelevant, since all that
matters would be whether the Order permitted extraction wells. Similarly, this
Court’s statement that “ [ n]othing we have said will preclude the Government from
presenting evidence during the damages phase of this case on the intended
duration of its occupancy,” id. , would have been unnecessary, since under
landowners’ theory the CFC would simply assume the maximum duration allowed
by the Order.
Landowners provide no grounds for departing from the law of the case. The
Fifth Amendment requires compensation only for what the government has
actually taken. Florida Rock Industries v. United States , 18 F.3d 1560. 1572 n.30
(Fed. Cir. 1994) (upayment need only be made for what is taken, but for all that
the Government takes it must pay”) (citation omitted), cert. denied (1995). When
the taking is by physical invasion, its scope is measured by examining the nature
and scope of the government activities themselves. Thus, in Loretto v.
Teleprompter , 458 U.S. 419 (1982), the Court did not evaluate the taking on the
basis of the full scope of the potential invasion allowed under the statute
authorizing installation of cables and equipment, but on the basis of the actual
invasion that took place.
Landowners rely (Br. 26) on cases involving acquisition of easements by
condemnation, which indicate that landowners are entitled to assume in the
condemnation suit that the Government will make the full use physically possible
of any easement described in the complaint.” 2,953.15 Acres (Russell County) v.
United States , 350 F.2d 356, 360 (5th Cir. 1965); see also United States v.
101.88 Acres (St. Mary Parish) , 616 F.2d 762, 767 (5th Cir. 1980)(complaint in
property.” A259.

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condemnation). But the Order was not the equivalent of a complaint in
condemnation. It informed landowners of EPA’s statutory rights and obligations
in light of the contamination; it did not condemn or take title to a specific interest
in the property. See Hendler I , 11 Cl. Ct. at 95-96, aff’d in part, 952 F.2d at 1375;
see also Tabb Lakes. Ltd. v. United States , 10 F.3d 796, 801 (Fed. Cir. 1993)(”ln
Hendler , this court affirmed a ruling that an order of the Environmental Protection
Agency directing the plaintiff to allow EPA access to its property in itself did not
effect a taking.”).
Landowners overlook that suits for “inverse condemnation” differ in some
critical respects from condemnation actions. See, United States v. Clarke ,
445 U.S. 253, 258 (1980)(distinguishing takings by physical invasion from
condemnation actions); 101.88 Acres , 616 F.2d at 771-772 (same). As the
Supreme Court noted in Clarke , 445 U.S. at 258, when examining a physical
invasion, “(i]t is that event which gives rise to the claim for compensation and
fixes the date as of which the land is to be valued * * * This confirms that the
CFC properly viewed this case as hinging on the actual events which gave rise to
the taking claim, rather than on the scope of the government’s authority as set
out in the Order. Accord, Yuba Goldfields Inc. v. United States , 723 F.2d 884,
889 (Fed. Cir. 1983)(” [ W]hat counts is not what government said it was doing * *
* What counts is what the government did”).
Landowners’ argument (Br. 27) that the Order decreased the market value of
the property by discouraging potential buyers relates to a different issue --
whether the government’s actions in this case caused a regulatory taking. On
that issue, the CFC concluded that “the access order did not have an adverse
economic impact on the value of plaintiffs’ property and did not prevent
development of the subject property.” Add. D at 2. We discuss those findings

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infra at 39-48.

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Ill. The CFC properly rejected the theories of well-site valuation and
severance damages presented by landowners’ appraiser as speculative and
contrary to the law of the case.
Landowners next argue (Br. 29 et seq.) that the CFC erred by rejecting the
testimony of their appraiser (Finnerty) that the value of the part taken for the well
easements and access corridors was $67,364, and that severance damages
resulting from the taking amounted to $1,055,000. A760. Finnerty’s
determinations were unsupported by credible evidence, and were based on
improper assumptions. The CFC’s determination to reject his testimony and
accept that of the government’s experts (Add. 0 at 10-15) was not clearly
erroneous.
A. The CFC correctly rejected Finnerty’s assumption that the
government took uexclusive use easements . -- Finnerty valued the well-site
easements at 100% or more of the underlying fee value based on the assumption
that they were exclusive use easements. As the CFC pointed out (Add. 0 at 11),
this assumption was not credible. The wells interfered neither with the current
use of the property nor with its full commercial potential, since “parking lots or
landscaped areas could be planned to coincide with the clear zones needed for
the wells, and the wells could be capped flush with the ground surface.” . The
CFC noted that it had observed wells on private property during a site visit which
were capped at or below the ground surface, and evidenced only by a metal
cover. Add. B at 13. The CFC pointed out that two of landowners’ own expert
had “agreed that landscaped spaces or parking areas could be planned to
coincide with the wells on the subject property.” Add B at 13 n. 11; see A 1650
(Tr. 5683-84 - Shahin). The CFC noted that landowners’ development expert,
Bauer, had testified that the wells would need to be set apart by fencing, but
found “Mr. Bauer’s testimony on this point was extremely conjectural and not

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supported by any studies or personal experience of his own * * 14 This
testimony was also contradicted by landowners environmental engineer, Shahin.
Al 114, 1128 (Tr. 909-12, 993-94). Bauer later testified that if the wells could be
incorporated into parking and landscaping, there would be no significant loss of
developable area. A1199-1200 (Tr. 1821-27). Finally, “Mr. Finnerty’s opinion on
exclusivity is undercut by a prior appraisal,” where Finnerty found that access
easements for monitoring wells were non-exclusive because they were located in
parking areas or existing circulation routes. Add. D. at 11, n.4. See A352-355,
see also A347-352, A2367-69, 2376-77.
Landowners make little attempt to show that the CFC’s findings regarding
the unintrusive nature of the wells were clearly erroneous. Instead, they argue
(Br. 30) that the market would have perceived the impact of the wells as being
equivalent to exclusive use easements, because EPA had the authority under the
1983 Order to engage in activities that might have required complete control over
the surface, such as extraction and storage. The CFC (Add. D at 11 & n.5)
correctly rejected this theory. As explained supra at 22-25, an approach which
assumes the government will take all actions that are legally authorized is
inappropriate. But even if this were an acceptable valuation approach, Finnerty
produced no credible evidence to support his theory that potential buyers in 1983
would have assumed that EPA would have made more intrusive use of the
easements than it actually did. Landowners did not disclose the contents of the
Order to any prospective purchaser. See supra at 11. Moreover, landowners
mischaractenze the contents of the Order when they argue (Br. 34) that the Order”
serv(ed] legal notice on the owners and any successor of [ EPA’s] intention to
conduct groundwater extraction and other cleanup operations there * * The
Order made clear that “groundwater extraction operations on the Trust property”
would be performed only “if necessary,” and did not purport to bind successors.

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A662, 664.
In contrast to Finnerty, the government’s appraiser fairly considered the
actual nature of the wells and their impact. Based on extensive experience in
valuing similar easements, such as for sewer or power lines, A504, Cox assigned
full fee value for the five-foot square immediately adjacent to the well head (25
square feet), and for the remaining areas, which would be used for working,
turnaround and access, he assigned an easement value of 25% of fee value.
A502-03. On this basis, he calculated that the value of the easements would be
$14,500, if the land had not been impaired by contamination (A500-02), and were
worth $2,878 taking into account the contamination. A2184; see generally
A2120-2252 (Cox Report). This testimony further confirms that Finnerty’s
valuation of $67,364 for the easements was significantly inflated.
B. The CFC’s finding that the easements did not cause any severance
damaaes was firmly supported by the evidence . -- Landowners’ primary theory
supporting severance damages is that the government, by installing the
monitoring wells and issuing the Order, “created the false impression in the
marketplace that the Property was a source of contamination and a potential
liability to a prospective buyer or lender.” Br. 34. Landowners also assert that
the wells damaged the remainder by complicating development plans, and
suggest that the threat that more wells might be drilled contributed to uncertainty
which made the property unmarketable. Br. 33.
The CFC found that none of these severance damage theories were
supported by the evidence. Pointing out that “severance damages based wholly
on speculation and conjecture are not recoverable,” the CFC found that “the
easements and the EPA order did not materially interfere with the subject
property’s daily use and did not result in severance damages.” Add. D at 15.
Moreover, “based on testimony from both parties’ experts, this court determined

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that the easements could be incorporated into any planned development as
parking lots or landscaped areas, without any significant loss of buildable area.”
Add. 0 at 15, citing 36 Fed. Cl. at 583. Finnerty’s testimony that the well
easements, rather than the contamination itself, caused a perception in the
market that the property was contaminated “defies logic,” and was “based wholly
on speculation and conjecture * * h.” j .. As we show below, none of these
findings were clearly erroneous.
1. Adequate Opportunity to Prove Severance Damages.
Landowners’ suggestion (Br. 32) that the CFC “rejected Hendler’s attempt to
prove severance damages at the later ‘damages’ trial,” is mistaken. The CFC, as
noted in its 2/13/97 Order at I (A72), “heard extensive damages evidence during
the liability phase without objection.” Many of the issues relating to severance
damages, such as the impact of the wells on the development potential of the
property, were determined during the liability trial. j. . Landowners did not object
to resolving these issues at that trial. Indeed, in May 1995, they moved to
reverse the bifurcation of liability and damages that they had initially sought,
claiming that they were “prepared for both aspects of the trial” and that “the
evidence that Plaintiffs must put before this Court on the Government’s liability for
a regulatory, as well as for the physical taking, overlaps with the evidence
necessary to show the damages from those takings.” A1975, 1977.
In any event, the CFC allowed landowners’ expert to testify at the damages
trial regarding alleged damages to the property as a whole. A273-74, 292-295,
428-29, 431-32. The CFC also admitted into evidence Finnerty’s report which
contained a section concerning severance damages. A752-761. While this
evidence did not cause the CFC to alter its conclusion about lack of severance
damages, see Add. D at 15, landowners plainly had sufficient opportunity to
present their case.

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2. No damages from “false association” with contamination.
Economic losses which are not caused by government action are not
compensable. See B.W. Parkway Associates, Ltd. Partnership v. U.S. , 29
Fed.Cl. 669, 680-681 (1993), aff’d, 36 F.3d 1116 (Fed. Cir. 1994)(Table), cert.
denied, 514 U.S. 1015 (1995). The CFC found that the “evidence shows that the
value of plaintiffs’ property was reduced by the contamination, rather than by the
actions pursuant to the access order.” 36 Fed. Cl. at 588. Causation is a factual
determination, see Loesch v. United States , 645 F.2d 905 (Ct. Cl.), cert. denied,
454 U.S. 1009 (1981), and accordingly is reviewed for clear error. Landowners
fail to show that the CFC committed clear error in finding that it was the
contamination which caused the value of the property to fall, rather than the
government’s activities.
Contrary to landowners argument (Br. 33), the CFC was entitled to reject
Finnerty’s testimony on this point. Finnerty admitted that he had no market
evidence to support his conclusion that the presence of the groundwater
monitoring wells, rather than the contamination itself, resulted in lowering the
value of the property. He did not investigate contaminated properties with and
without monitoring wells, and had no comparable sales to show the respective
values of properties with contaminated groundwater and no monitoring wells as
opposed to contaminated properties with monitoring wells. A425-26. He
21 Other factors contributing to the lowered value of the property during this period
were the owners’ failure to take reasonable steps to enable development, and
their inability to obtain necessary rezoning for commercial/industrial or high
density residential use. See j fra at 39-40, 42-43. These factors also cannot be
attributed to EPA.

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produced no evidence that monitoring wells, as opposed to groundwater
contamination itself, caused any loss in value for any property during the
1983-1986 time frame or thereafter. A427-428. He could not give any specific
instances in which someone was ‘scared off’ from purchasing a property
because of the presence of monitonng wells rather than because of the presence
of groundwater contamination. A323-24; 426. The CFC did not err by rejecting
the “false association” theory of severance damages as illogical and unsupported
by evidence.
3. No damages from interference with development plans.
Landowners make little effort to show that the CFC’s findings of
non-interference with development potential are clearly erroneous. They simply
suggest (Br. 35) that the CFC based its finding of no severance damages on a”
bare conclusion” in the government appraiser’s report that well sites could be
relocated to conform with a precise plan of development. Landowners ignore that
a wealth of evidence supported that conclusion, and they offer no evidence that
undercuts it. Landowners overlook that they have the burden of proving both the
existence of severance damages, and that the government’s action, not some
other factor, caused them. United States v. 760.807 Acres of Land , 731 F.2d
1443. 1448 (9th Cir. 1984).
The evidence supports the CFC’s finding. The report of the government’s
expert found that “ [ c]onsidenng the relatively large size of the subject property
and probability that any of the existing wells could be relocated or placed in open
space areas below grade, we believe the twenty wells would have a minimum
impact on development plans.” A959 (Patchin). The CFC also relied on
photographs and testimony concerning shopping centers built before and after
the installation of wells, with a greater concentration of wells than those on the
subject property. A2490-2528, A1650 (Tr. 5683-84 - Shahin).

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Moreover, Finnerty’s testimony that the wells adversely impacted
development potential of the land was belied by his own prior appraisals of
contaminated property. Of the seven prior appraisals Finnerty performed of
contaminated properties, none found a diminution in the value of property due to
the presence of monitoring wells. A347-375. Instead, he either ignored the
presence of monitoring wells, or found that the monitoring wells — or in some
cases, treatment systems — were compatible with parking and other activities
occurring on the developed property. ld Indeed, these prior appraisals
supported conclusions that property is devalued by the presence of
uncharactenzed contamination, and that monitoring wells can help bring a
property’s value “back to a whole position.” A367.
Landowners’ other arguments for severance damages were no more
convincing. Their theory (Br. 33) that the physical occupation created
uncertainties regarding the possibility of additional wells was unsupported by
evidence, and was rebutted by the government’s expert who pointed out that any
potential buyer/developer would have resolved such uncertainties by dealing with
EPA or the State. A958 (Patchin). See also supra at 15. In short, the CFC’s
findings that the monitoring wells did not cause any severance damages have not
For instance, in a 1989 appraisal of Lakeshore Towers, an unimproved property
with contaminated groundwater (A348), there was an ongoing remediation of the
property with a treatment facility as well as monitoring wells in three or four
different locations. A349. An office tower and restaurant were designed so that
the monitoring wells and treatment facility would be located in parking areas.
A349-350; A2367-69, 2376-77. Finnerty found no adverse impact on the value of
that property. A348-350, 351, 392-393.

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been shown to be clearly erroneous.
IV. The CFC’s finding that the monitoring wells conferred special benefits in
excess of any damage to the property was supported by the evidence.
As landowners note (Br. 35-36), the CFC found that the monitoring wells
specially benefitted Hendler’s property in two ways. First, the CFC found that
landowners were able to avoid the cost of doing their own “Phase Two”
groundwater investigation, a required step for development of contaminated
property, because EPA had done it for them. This was worth at least $100,000,
which exceeds even landowners’ expert’s estimate of the value of the easement
taken. Add. B at 19; Add. D at 15-16. Second, the monitoring wells were an
integral part of the characterization and remediation which reversed the
diminution in value caused by the contamination. See su ra at 16-17. With the
information from these wells, “the boundaries of the plume could be identified,
including its depth and width,” and “the agencies were able to regularly evaluate
the success of the Stnngfellow cleanup project itself in mitigating the levels of
contamination reaching plaintiffs’ property and other property and communities
down-canyon.” Add. B at 7.
The CFC credited Patchin’s analysis that the groundwater contamination
reduced the value of the property to 20% of its unimpaired value as of September
1983, while the successful characterization of the nature and extent of the
groundwater plume brought back the value to 40% of its unimpaired value by
1987, and the successful remediation of the groundwater contamination restored
the property to 80% of its unimpaired value by 1995. Add. 0 at 19, citing Patchin
Report (A940-952); Add. 0 at 22-23. The CFC also credited the expert opinion of
Cox, that on the basis of Patchin’s conclusions regarding the effect of
contamination and remediation, the special benefits conferred on the property
exceeded the value of the monitoring well and access easements by over

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$500,000. Add. 0 at 22.
Landowners do not argue that the CFC misunderstood the law of special
benefits. The CFC properly recognized that benefits from a government
undertaking can offset compensation only where they “inure specifically to
plaintiff, rather than to the community at large.” Add. D at 8, citing Laughlin v.
United States , 22 Cl. Ct. 85, 111-112 (1990), aff’d, 975 F.2d 889 (Fed. Cir.
1992)(Table); see City of Van Buren v. United States , 697 F.2d 1058, 1062 (Fed.
Cir. 1983). Nor do landowners take direct issue with the CFC’s conclusion that”
[ s]pecial benefits do not become general because other lands in the area are
similarly benefitted.” j . at 8, citing Laughlin , 22 Cl. Ct. at 112.
Landowners instead allege that the CFC mistook “general” benefits for
special benefits. They argue (Br. 38-39) that the avoided cost of the Phase II
study was a “general” benefit because its results were available to the general
public. As to the characterization and remediation of the groundwater, they
submit (Br. 38) that the only properties specially benefitted were those “whose
owners either used, or intended to use, the groundwater for drinking water,
agricultural and other purposes * * Landowners argue that they were not
specially benefitted because they did not intend to use the groundwater. As we
show below, these essentially factual challenges are strongly rebutted by the
record in this case.
A. The special benefit from avoided costs of the Phase II Study . -- The
fact that the results of the monitoring were made public does not rebut the CFC’s
finding that the avoided cost of a Phase II study was a special benefit.
Landowners do not dispute that any owner of this property would have had to do
a Phase II study before successfully marketing it; nor do they dispute that EPA’s
monitoring on the property satisfied the need for a Phase II study. As the CFC
noted, even landowners’ appraiser admitted that during the 1983-1986 period,

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lending institutions routinely required these investigations for properties that might
be contaminated. Add. D at 16; see A313-315. This benefit was different from
any general benefit to the public from the monitoring well information. It was a”
special” benefit because it obviated an otherwise necessary requirement for
developing this very property. The avoided cost of a Phase II study was plainly”
associated with the ownership of particular property affected by the fl taking,” y•.
of Van Buren , 697 F.2d at 1061, and thus qualified as a special benefit.
B. The special benefit from characterization and remediation of the
groundwater . -- The fact that landowners did not intend to use the groundwater
does not suggest the value of the property was not specially benefitted by EPA’s
characterization and remediation of the contamination. There was abundant
credible evidence showing that the contamination on the property had a serious
negative effect on its market value, no matter what landowners’ plans might have
been regarding use of the groundwater. Even landowners’ appraiser conceded
that in the 1983-1987 period, properties that were perceived to be contaminated
were, for the most part, unsalable. A310-313 (Finnerty).
The CFC found credible the expert testimony of Patchin that the
contamination reduced the value of this property to 20% of its prior value as of
1983, and that the remediation brought the value back to 80% of its value.
Landowners’ efforts (Br. 39-42) to discredit Patchin’s analysis are unconvincing.
Patchin’s report makes clear that landowners’ non-use of the groundwater does
not insulate them from the devaluation caused by the contamination. In fact,
owners of raw land held for sale for development are more exposed to the effect
of contamination stigma, since a buyer looking for developable property can
easily find substitute uncontaminated property, and there is little incentive to buy
into the uncertainty that contaminated groundwater brings with it. See supra at
8-9, and A922-923.

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Landowners concede (Br. 32-33) that contamination can have devastating
effects on the value of undeveloped property -- but wrongly blame the monitoring
wells for creating a “false association of the Property with contamination * *
The “association” was not “false.” This property was contaminated, as any
reasonable buyer or financier would have discovered. See supra at 6, 7-8. The
fact that landowners did not themselves intend to use the groundwater does not
mean that they were not specially benefitted by the characterization and
remediation. The value of their land in the market was plainly restored -- that
benefit is special to their land, and exists independent of their own non-use of the
water.
Patchin found that the investigation/remediation caused the property’s value
to increase from 20% of its unimpaired value in 1983 to 80% of its unimpaired
value in 1995. A959; see also A953. Landowners’ argument (Br. 41) that
Patchin’s analysis was “unanchored in any geographically relevant comparable
sales” is off the mark. Patchin did “use the sales comparison approach to
estimate the impaired market value of the subject and resulting stigma value
loss.” A918. Landowners complain that the sales used by Patchin were not
strictly comparable to his property “in terms of physical characteristics or
location.’” Br. 40, quoting Patchin Report, A919-20. The reason for this was
sufficiently explained by Patchin: since “most contaminated properties are
regarded as un-marketable” there are only “occasional sales of contaminated
properties.” A919. With regard to the 26 sales he studied, Patchin explained that”
[ t]he comparability lies in the fact that all of the sales are impaired by
environmental contamination.” A920. With each case study, Patchin analyzed
the percentage diminution in the value of the property attributable to the
contamination, by comparing the sale of contaminated properties with other
similar but non-contaminated properties in the vicinity, or by comparing sales of

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the same property before and after contamination was discovered. A918-34.
Patchin found that three of these case study sales were “most similar” to
Hendler’s property, as they involved undeveloped commercial/industrial land
which were subject to groundwater contamination from off-site sources. The
range of value loss for these three was from 66% to 74% of unimpaired value;
since none were near a site that was serious enough to have made the
Superfund National Priorities List, as StringfeUow had, a slightly higher estimate
of value loss was warranted for this site. A938-39. Landowners’ criticism (Br.
40-41) simply notes the fact that the properties studied by Patchin differed in
various respects from their property, but fails to note that Patchin made
adjustments to take account of these differences. A937-938.
Landowners’ own experts recognized the benefit of the information
generated by the wells. Flavell agreed that the Stnngfellow contamination
caused “a lot of hysteria in the early eighties, and I think that, as more accurate
information was disseminated, it had a tendency to stabilize people’s attitudes.”
A 1225 (Tr. 2252). Flavell also admitted that characterization of contamination
was a benefit to the value of property. A1226-27 (Tr. 2308-09. Landowners’
banking expert admitted that identification and cleanup of the plume was a
benefit. A1155, 1162 (Tr. 1149, 1192-94 - Warmuth); see also A1226-27 (Tr.
2308-9 - Flavell). Landowners’ development expert admitted that data on the
nature of the plume was a necessary prerequisite to development. A1254-56 (Tr.
2536, 2540-41- Oliver). Landowners’ refusal to recognize the beneficial impact to
the value of their property from EPA’s activities defies logic and ignores the
record in this case.
V. The evidence did not support a regulatory taking beyond the
physical occupation taking.
Landowners assert (Br. 47) that EPA’s actions caused a regulatory taking of

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the entire property by “frustrating Hendler’s ability to realize [ fair market] value
through orderly marketing of the Property * * *• Landowners failed to prove a
regulatory taking, however, for multiple reasons. As the CFC found, “ [ t]he EPA
order was never invoked to bar any sale or development of plaintiffs’ property.”
Add B at 20. As for the wells, even “ [ p]laintiffs’ expert conceded that the
monitoring wells could have been incorporated into a commercial development
without significant difficulty;” hence, the wells caused at most a noncompensable”
mere diminution” in value. Id. Landowners’ claims of economic harm were
misdirected, since “ [ t]he evidence shows that the value of plaintiffs’ property was
reduced by the contamination, rather than by the actions pursuant to the access
order.” iP. Moreover, landowners’ plans for marketing the property for
commercial development were inconsistent with current zoning on all but eight
acres of the property (j at 20), and they failed to “explore economically beneficial
uses of their property that would not interfere with investigation and remediation
of the contamination on their property.” j . at 21. These findings, which were
strongly supported by the record, rebut the claim of a regulatory taking.
A. EPA’s actions did not interfere with landowners’ efforts to market the
property . -- This Court remanded for an examination of whether “subsequent
events, in light of the character of the Government’s action and the plaintiffs’
distinct investment-backed expectations, might have had sufficient economic
impact on plaintiffs to constitute a regulatory taking.” 952 F.2d at 1375. The
evidence showed that the Order was never invoked to do more than authorize
installing and periodically monitoring wells - - acts which separately form the basis
of the physical taking. There were no “subsequent events” which interfered with
landowners’ only intended use of the property, which was marketing it for
development.
The Order and the wells played no role in landowners’ efforts to sell the

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property. See supra at 11-12. Landowners did not disclose the existence of the
Order to any of the prospective purchasers, and none of the proposals for
purchase of the property were made with knowledge of it. it Landowners
offered no evidence showing any nexus between the EPA’s actions and their
failure to sell the property.
Landowners do not challenge the CFC’s finding that they “failed to explore
economically beneficial uses of their property that would not interfere with
investigation and remediation of the contamination on their property.” Add. B at
21. That finding was well supported by evidence that landowners never inquired
of EPA or the State regarding what development would be compatible with the
wells. See supra at 10-11. Landowners simply assert (Br. 49), without citation to
authority, that ‘ [ i]n these circumstances the government, not Hendler, had the
duty to clarify, modify or narrow its Order and to reconcile its operations with
Hendler’s property rights.” The CFC rejected that proposition, citing 767 Third
Ave. Assocs. v. United States , 48 F.3d 1575 (Fed. Cir. 1995). Add B at 21. That
case makes clear that where, as here, a government action is not directed
specifically at the particular economic use an owner wishes to make of his land,
the owner must take reasonable steps to determine what economically beneficial
uses of his land remain after a regulatory action. In 767 Third Ave. Assoc. , an
owner’s failure to seek clarification from the Treasury Department regarding what
uses would be consistent with a notice barring access to a property was held to
be fatal to a claim of a regulatory taking. Id. at 1584. Here as well, landowners’
failure to explore with EPA what development of the land could occur consistent
with the Order should bar any claim that the Order caused a regulatory taking by
preventing development.
For purposes of a regulatory taking inquiry, it is impossible to evaluate a
regulation’s economic impact without knowing the full extent to which that

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regulation would permit economically viable use of the claimant’s land. For that
reason, a regulatory takings claim typically is not ripe for review until the agency
has taken “a final, definitive position regarding how it will apply the regulations at
issue to the particular land in question.” Williamson County Reg’l Planning
Comm’n v. Hamilton Bank of Johnson City , 473 U.S. 172, 191 (1985).
Landowners did not communicate with EPA regarding any prospective sale or
development of the property, nor did they seek to have the Order clarified,
modified or narrowed. Landowners’ failure in this regard should bar their claim
(Br. 45) that the presence of the Order and the well easements took their property
by rendering development impossible.
B. EPA’s actions did not result in any loss of value . -- Just as
landowners presented no evidence that EPA’s actions interfered with their ability
to sell the property, they also failed to present any credible evidence that EPA
actions resulted in any loss of value to the property. A regulation which does not
decrease the value of the property regulated does not give rise to a taking claim.
Goldblatt v. Town of Hempstead , 369 U.S. 590, 593 (1962).
The CFC found that the value of the property was not reduced by anything
EPA did, but was reduced by the underlying contamination and by proximity to
the Stnngfellow site. Add B at 20. Landowners largely ignore the detailed
findings rendered by the CFC regarding economic impact evidence. ! . at 18-21.
Landowners simply point out (Br. 45) that their experts testified to an economic
impact of “$16,700,000 in lost rentals,” and “a loss of $17,800,000 amounting to
nearly 60% of the property’s ‘before’ value.” As this Court noted in Whitney
Benefits , 926 F.2d 1169, 1177-1178, “citation of conflicting testimony does not
establish error in the findings made.” In any event, these estimates were based
on erroneous assumptions and were unsupported by any credible evidence.
Landowners’ appraiser Flavell, who arrived at the estimate of $16,700,000 in lost

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rentals, stated in his report that he had no knowledge of the existence of any
hazardous materials “on or in the property” and that “the value estimate is
predicated on the assumption that there is no such material on or in the property
that would cause a loss of value.” A781. That assumption was clearly incorrect.
Supra at 6, 16. Flavell also admitted he had no experience in appraising the
impact of an order like the EPA Order. A1220 (Tr. 2123). He had simply relied
on landowners’ counsel’s instruction that the EPA Order prevented the property
from being developed to its highest and best use. A1220, 1222-23 (Tr. 2122,
2188-90).
Similarly, the estimate of a 60% loss in value was based on a report (the
INTERRA report) whose assumptions were discredited at trial. For instance,
landowners’ development expert admitted that the report assumed that the
presence of a monitoring well would have required maintenance of a one acre
fenced “clear zone.” Al 189 (Tr. 1761-62 - Bauer). Landowners’ environmental
engineer conceded there was no basis for that assumption. Al 128 (Tr. 993-94 -
Shahin). The development experts who prepared the report were unaware that
monitoring wells could be installed in parking lots or other locations within
developed areas. Al 175 (Tr. 1502-03 - Bauer). If he had known this, Bauer
admitted, there would have been no significant loss of developable area. Al 199
(Tr. 1821). The CFC cited Bauer’s admissions in this regard, and properly
rejected this unsupported evidence of devaluation. Add B at 20.
Landowners complain (Br. 45, quoting Add. D at 15) of “the trial court’s
adamant disbelief ‘that the monitoring wells, rather than the actual existence of
groundwater contamination, would devalue plaintiffs’ property.” They overlook
that the CFC’s “disbelief” was based on substantial credible evidence that the
monitoring wells did not cause adverse economic impacts, while the
contamination did. See supra at 6-9, 11-16. Landowners’ main attack on the

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CFC’s findings regarding the impact of contamination is that they allegedly”
rested on the rickety foundation of Patchin’s ‘stigma’ theory * *•I Br. 45-46. But
as shown supra at 8, Patchin was well qualified as an expert on this subject, and
his analysis was thoroughly supported. Moreover, as shown supra at 6-7, the
landowners conceded that the groundwater contamination adversely affected the
value of the property, and their own expert had found an 80% diminution in value
from uncharactenzed contamination in a prior appraisal ( supra at 8-9 &
A326-328).
Landowners particularly rely (Br. 46) on the testimony of Melba Dunlap, a
former member of the County Board of Supervisors, that she would have looked
favorably upon a proposal for commercial development of the property. The CFC
reasonably did not credit this highly speculative testimony of one Board member
regarding how the Board might have reacted to a proposal that was never
presented to it. The CFC properly credited the uevidence showing that the kinds
of economic activities for which plaintiffs consider their property to be ideally
suited are not consistent with current zoning and land-use designations * *
Add. B at 20. Owner Garrett acknowledged the existing zoning of the property
was incompatible with its commercial development. A1058 (Tr. 437); see A2489.
Landowners’ attempt in March 1987 to have the property south of highway 60 be
designated either commercial/industrial or high density residential (A2326,
1474-75 (Tr. 4529-30), was largely denied. A1477-78 (Tr. 4543, 4547-49 -
Denne). Ms. Dunlop’s testimony in no way supports a claim that the property was
devalued by EPA action.
In sum, landowners have failed to undermine the CFC’s conclusion that uthe
value of plaintiffs’ property was reduced by the contamination, rather than by the
actions pursuant to the access order.” Add. B at 20.
C. The character of the government’s actions did not support a

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regulatory taking claim . -- The CFC rejected landowners’ arguments that the
installation of wells on their property was unnecessary and harsh, pointing out
that it “was necessary in order to abate the nuisance posed by Stringfellow,” and
that “public injury, due to insufficient data, would likely have resulted from
installation of the wells in locations other than on the subject property.” Add B at
17. Landowners disagree with this finding, but mere disagreement does not
show that the finding was clearly erroneous. Landowners complain (Br. 43) that
there was no evidence that “the Property itself was contaminated in any manner
relevant to its use and value or that it posed a health risk to anyone.” Br. 43. The
CFC properly rejected this claim. It correctly noted that EPA acted after it
obtained evidence, “that the plume was flowing directly underneath the subject
property.” Add. B at 17. Moreover, the plume of groundwater contamination “was
moving * * * south down Pyrite Canyon, where it threatened to poison the drinking
water supplies of thousands of residents.” Add. B at 17.
EPA was justified in acting quickly, given the imminent threat to downstream
water users. While the public health threat was clear, the actual scope of the
contamination from Stringfellow was uncertain. App. B at 4. “As of 1983, neither
the depth nor the boundaries of the contaminated plume of groundwater were
known,” and “a significant number of additional monitoring wells were required in
order to characterize the plume with a degree of certainty.” j . EPA and the
State installed an appropriate number of wells to “identify the width, depth, and
composition of the plume, and thereby enabled them to assess the extent of the
public health threat.” j The intrusion onto the property was proportional to the
extent of the hazard on the property. Landowners’ own expert noted that
approximately one sixth of the contaminant plume and one sixth of the monitoring
wells were located on Hendlers property. Al 116 (Tr. 920-24 - Shahin).
Landowners fail to undercut the CFC’s findings regarding the appropriateness of

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the response actions.
Landowners’ attacks on the manner in which the Order was issued (Br. 43)
are also unwarranted. Landowners quote (Br. 43) statements by the EPA official
who signed the order, but out of context. While the official characterized the
Order as “unique,” that was because voluntary access to property is almost
always obtained: “as a general matter, people that are threatened with this kind of
contamination are fully cooperative in enabling access to occur and remediation
to proceed.” A177, 181 (Tr. 2430, 2452 - Wise). While the official thought that
some language in the order regarding potential penalties sounded “harsh,” he
recognized that it was legally necessary to give notice to recipients of the
penalties for noncompliance. A170 (Tr. 2387).
Landowners’ attack (Br. 45) on the “open-ended” nature of the Order
conflicts with law of the case. As the Court of Claims found in Hendler I , the
terms of the order “were not necessarily inimical to simultaneous use of the
property by plaintiffs, as long as they did not interfere with defendant’s admittedly
beneficent activities.” 11 Cl. Ct. at 95. This Court upheld that ruling in Hendler II
at 952 F.2d at 1375. In any event, because of the uncertainties in 1983
regarding the scope of the contamination and the measures that would be
needed to combat it, it was reasonable for the Order to permit access for a variety
of possible measures, including groundwater extraction “if necessary.” A662. It
was not unreasonable to authorize access for a variety of possibly necessary
purposes, and leave it to the landowners, should they wish to sell or develop the
property, to seek clarification from EPA as to whether more intrusive activities
such as extraction were actually going to take place. Add. B at 21.
Landowners highlight (Br. 43) that eight wells were drilled on a parcel not
mentioned in the Order, but ignore the CFC’s finding as to the reason. These
wells (and all but four of the others) were drilled by contractors working for the

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State. Add. B at 6. A 1983 cooperative agreement between EPA and the State”
assigned to the State the responsibility for securing access to private property so
that either agency or its contractors could conduct remediation activities.” Add. B
at 3-4. Hence, the fact that eight of the State wells were on a parcel not
mentioned in the Order simply indicates that “since the EPA at the time of issuing
the access order contemplated installing only three wells on the plaintiffs’
property, it was only necessary to identify the three specific parcels where those
wells would be located.” Add. B at 6.
Contrary to Hendler’s argument at Br. 43-44, the evidence did not show that
EPA disregarded Hendler’s nghts to develop the property. As shown supra at 9,
EPA and the State attempted first to proceed by voluntary agreement. It was
reasonable that EPA did not offer compensation, in light of the fact (supported by
the findings in this case) that monitoring wells typically benefit contaminated
property far more than they damage it, and in light of EPA’s experience that
landowners typically welcome efforts to discover the scope of contamination on
their land and track the progress of remediation. EPA took no action to prevent
Hendler from carrying out his goal of selling the property. The CFC found that
any contention that EPA would have restricted or opposed development was”
purely speculative.” Add. B at 12, 21. Landowners point to no evidence that
indicates that these findings are clearly erroneous.
Finally, landowners ignore an important factor in regulatory takings analysis
If the drilling of the eight wells were beyond the scope of EPA’s lawful authority,
as landowners seem to suggest, no action for a taking could lie. Florida Rock
Indus., Inc. v. United States , 791 F.2d 893, 898-899 (Fed. Cir. 1986), cert.
denied, 479 U.S. 1053 (1987).

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-- the existence of “direct compensating benefits accruing to the property, and
others similarly situated * * .“ Florida Rock , 18 F.3d at 1571. As shown, supra at
16-18, EPA’s actions restored value to landowners’ property, as well as to other
properties afflicted with groundwater contamination from Stringfellow. Even if the
landowners suffered some economic loss from the presence of the wells on their
property, they received an “average reciprocity of advantage” from the
government’s regulatory actions, and accordingly did not suffer a compensable
taking. Pennsylvania Coal v. Mahon , 260 U.S. 393, 415 (1922).
D. The groundwater contamination constituted a nuisance .
In its damages opinion, the CFC made clear that its findings that the
groundwater contamination on the property constituted a nuisance was “one of
the bases for finding that no regulatory taking occurred.” Add. D at 4. The fact
that the contamination on the property qualified as a nuisance bolstered the
CFC’s findings regarding the necessity for, and appropriateness of, EPA’s
actions. As the CFC noted, “ [ t]he installation of the wells was a necessary first
step to determine the plume’s parameters in order to effectively abate the
nuisance posed by the contaminated groundwater.”
The CFC noted (Add. B at 16-17) that it would be possible to reject the
regulatory taking claim solely on grounds that the landowners’ “bundle of rights”
does not include the right to maintain the “nuisance” of contaminated
groundwater on their property free of government efforts to remedy the
contamination. See Lucas v. South Carolina Coastal Council , 505 U.S. 1003,
1029 & n.16 (1992). It is apparent, however, that the CFC’s rejection of the
regulatory taking rested on the three-factor test set out in Penn Central Transp.
Co. v. City of New York , 438 U.S. 104, 124 (1978), rather than on any
single-factor analysis. Add. B at 15-16. Accordingly, Landowners’ arguments
that the contamination cannot be considered a public nuisance as a matter of

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California law so as to invoke the nuisance exception of Lucas , even if correct,
would not undermine the CFC’s finding that there was no regulatory taking, since
that finding was based on a full analysis of the three-factor Penn Central test.
Moreover, landowners’ analysis of California law is incorrect. As
Landowners recognize (Br. 17), California’s definition of nuisance includes”
anything * * * injurious to health * * *H California Civil Code § 3479. Landowners’
attempt ( .) to show that the contamination was not Uinjunous to health” because
it was below the surface of their property is unconvincing. California Health and
Safety Code § 25400 provides, “ [ t]he Legislature finds and declares that a threat
to the public health and safety exists wherever there is a discharge, spill, or
presence of hazardous substances on public or private property * * (Emphasis
added.). Hazardous substances were present on the property even if they were
beneath the surface, and plainly posed a serous threat to down-gradient users of
water.
Landowners protest (Br. 17-18) that they were not responsible for creating
the contamination, but that does not render the nuisance exception inapplicable.
In Miller v. Schoene , 276 U.S. 272 (1928), the Court held that property owners
whose cedar trees had, through no fault of their own, become infected with rust
could be required to destroy diseased trees, or allow the State to enter property
to destroy trees, in order to prevent further spread of rust to nearby apple
orchards, and that compensation was not required. The situation was similar
here. Landowners may rightly claim to have been victims of the contamination
themselves, but that does not imply that they had no duty to allow the
government to take reasonable steps to prevent the contamination from claiming
more victims.
Under California law, a party need not be responsible for creating a hazard
in order for it to constitute an abatable nuisance while on his land. Thus, in Leslie

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Salt Co. v. San Francisco Bay Conserv. , 153 Cal.App.3d 605, 200 CaI.Rptr. 575
(Cal.App. 1984), the party subject to regulation was not responsible for the
dumping of fill on its property. Nevertheless, the court found that common law
nuisance pnnciples supplemented the State’s statutory authority to order a
landowner to remove the fill. See also People v. Southern Pac. Co . 150
CaI.App.2d Supp. 831, 311 P.2d 200 (1957) (current owner had duty to control
discharge of air pollutants from property, despite fact that source of pollutants
was fault of predecessor). Thus, the CFC did not err in finding that the
groundwater contamination here would qualify as a nuisance under California
law.
CONCLUSION
For the foregoing reasons, the judgment of the Court of Federal Claims
should be affirmed.
Respectfully submitted.
LOIS J. SCHIFFER
Assistant Attorney General
ROBERT L. KLARQUIST
DAVID F. SHUEY
ERIC S. GOULD
DAVID C. SHILTON
Attorneys. Department of Justice
Environment & Natural Resources
Division
WashinQton. D.C. 20026
( 202) 514-5580
OF COUNSEL:
DAVID COURSEN
LAURIE WILLIAMS
Environmental Protection Agency
JUNE 1998
90-1-23-2650

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CERTIFICATE OF SERVICE
I certify that copies of the Brief For Appellee The United States has
been served upon counsel by first class mail, postage prepaid, on this 5th day of
June, 1998, to:
John 0. Hoffman By Federal Express
David H. Blackwell
ElIman, Burke, Hoffman & Johnson
One Ecker Building, Suite 200
San Francisco, CA 94105
Paul Hamilton
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, 10th Floor
Los Angeles, California 90067
DAVID C. SHILTON
Attorney, Appellate Section
Washington, D.C. 20026
(202) 514-5580

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b 4: pl____
- %C-CLI DIVISION
17/22/98 . . 13:21 PAIJD2 3Ø oe DOJ Gen Lit 8th FL.
P. 1/6
0(7.00)
FAX TRANSMITTAL
Bassett, New Mexico LLC, a New Mexico limited)
liability go iporation 98 —
Plaiz*ift ) Civil Aetion No
)
)
)
The United iStates of America, )
)
Dcf ndznt. )
COMPLAINT FOR JUST COMPENSATION AND DAMAGES
INT O QCI ION
This is a suit for the physical raking of plainti We propetly, located in Dana Ma
County, New Mexico, resulting from defendant’s deposit of appruximately l6O OOQ cubic
yards cf 1 hvardoug waste in a limestone quany located thereon.
2AR
.1. P1almif Bassett, New Mexico LLC is a liuutad liability coiporatioji
organc ea and e,d ting under the laws of theState of New Mexico. Bassett, New Mexico
LLC is the owner of an unimproved parcel of real propetty located In Done Ana County,
New Mexiâo and containing approximately 69 acres. This property is more parti ular1y
described in Exhibit A, aneebed hereto.
. Defendant, United States of America, is a republic fonucd pursuant to the
Constltudpn of the United States, and exercising th: powers described thcMn subject to
certain (Imitations, including the Fifth Amendment to the United Smate Constitution.

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HLIi.,. - -
4-3 4Pri —OGC CCI DIVISIcIN
0V22/08 ED 13:21 PA l 2 2 308 0508 DOJ £NRD Gen Ut 8th FL. NO. 7 2 P.2’ 6 -• -
IR fl T1O
3. ‘Uds Couxt hasiurisdiction of this case under 28 tJ.S C. 1491 (the
Tucker Act) s a claim against th tJnited Stares founded upon the Constitution of the
United StateS.
QFERAT 1VLF& TS
4. In 1996, plakiti fad uired apareel of unimproved real popertyconta ing
69 acres, 1o ated in Dona Ma County, New Mexico, the subject property, and more
particuLarlyjdescribed In Exhibit A. The subject property comains large deposits of
limestone ideh, during the 1980’s and early 1990’ s, were mined for use in the making
of concrete products. Although substantial amounts of limestone have been rernoved
large dapo Jts of marketable limestone 5th remain on the subject property. The subj ct
property a’so cantatas large quantities of other valuable tnirte als, including silver a d
lead,
5. The subject property is located adjacent to public lands owned and
managed ty defendant and by the State of New Mexico. Private r 1dcrdial leads are also
located ir the vicinity of the subject propcrty.
6. In April of 1998, defendant, acting through the Environmental Pror.action
Agency C PA”), commenced a rvmoval action pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (popularly knqwn as
“Super id”). EPA’s stated plan, which has been commenced and is now ongoing , law
excavate and transport approximatcly 160,000 cubic yards of contaminated soil nd
mining waste from the public lands and residential land to the subject property. This
soil and mining waste, which contain high levels of lead and arsenic, are being deposited
a

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AUG. 3 A • ____
- - - .,. lrji ;GC CCI DIVISION
37 /22/08 I ED 13 22 FA 202 305 0509 DOS FNRD Can Lit 8th P1_
in the limestone quarry located on the s zbjoctpropeit ’. The hazardous waste will then
bc covered with az impermeable layet, re.contoured and re-vegetated. Plaintiff is
itLforrned and believes, and theron a1le es, that EPA intends that the subject proper ’
will serve as the pernuntent rep ository for this hazardous waste.
7. These actions of deforLdant have, without plaintit?s authorization or
cons tt, coflverted plaintiWs private property into a hazardous waste repository winch
canDot now be used for any othe purpose,
& As a direct and proximateresult ofthc acts of Defendant United States,
del ndant has taken plaintiWs property, Paintiffis imoertain of this actiial fair market
value of the property taken, but believea that value to be in excess of 5,OO0 1 OOO.
1 iMFORRE IEj
PIRMANENT TAIaNG
9. The Constitntion of t1i United States requirea that Defendant Unite4
States pay t pla(ntiffjuet cqrnpenaation r all property taken for public use.
10. To date, Defendant UnIted States has paid nothing to plaintiff as
compensation for the property taken br public use, in violation of the Constitution pf the
United States.
11, As a proximate result of the acts of Defendant United States, plaintiff also
has been required to rotairi legal counsel Lu order to prosecute this action, and wift incur
reasonable attorneys fees in an amount piusontly unascertaineble.
12. As a further proximate result of the acts of Defendant United Stares,
plaintiff will incur the fees of appraisers and other expert tnesses reasonably required
to prosecute this action, in an amount presently uriascertainable.
I

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A1JG. 3.’99a _ 4:40p,4... OGC-CCI DIVISIO ’
07122/9B 13: 2 FAX 202 305 oSOB DU ENRD Gen Lit 8th FL. NO. 7 2
13. Pkintiffi therefore entitled to damages in the amount of the just
comp sation denied to t in violation of the ConstitutIon of the United States and costs
incurred, together with interest at the legal rate from the date of taking.
PRAYER ITOR R LJEP
WH.ERBFOB.E, Plaintiff prays for relief as foLlows
1. A money judgem.ent equa1 to thejust.compensation owing to the Plaintiff
for the pentlanent taking of its property for pubLic uses together with interest thereon at
the legal rate front the date of taking;
2. Reaaonable attorneys fees for the bringing of this a t on;
3. The expenses of appraisers and other expcit reasonably required to
prosecute this action 2 and
4. Such other and 5 rther relief as the Court may doom just.
Dated: JuLy 9, 1998
ogir Marzulia
MAB.ZULLA & MA ZULLA
1350 Coimectzcut Avenue, NW.
Suhc4IO
Was Wngtori, D.C 20036
(202) 822-6760
(202) 822-6774 (fax)
Counsel fo Plaintiff
4

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— - e_. ¼ LLLJ U.LVj jUl1
O1/U’ 6 !D 13:22 PAZ 202 30 0506 DOJ ENRD Gen Lit 8th FL., P.5 ,6
EXWB T A

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07/22/ga W D L3 22 FAX 202 305 0500 bQJ ENRD aen Lit 8th PL_ NO. 7E P.6,’6 ’.
E H B &‘
A tract e,f Lsnd situate ibout 11 title. so Ch of Ofl15, Done Ane County, flay
Kexico locate4 in £aoUou 1,. l2 9 L4 T.225., LH.P.M. of the
L$.G.L.0. 8ur eys cohs tIng of the B n ttMLris Lode San Augustia Leda
Sevenion But Lode and the M Cle1l.n Lode nd being tots particularly dee—
erih.4 as follows, to vit
DECX?*IIHC * • e p found at the southwest corner of the
Bennett Mine Lode, for a cornar of this tract vhence s bras.
cap found; for the south corner ef Sectiâ 11 T.225., LU ,,
t1.flPJI. if the UIS.G.L.0. Surveys beers ll.78’LI’OO”W., a
distance of 1034.44 fist;
‘I
THENCE Cram the place of beginning N.L549”lO”E., 1500.00 fsst
to en iron rod sat for the northvuc corner o this tract,
identical! to the northvest corner of the Beneitt tUne Lode;
THENCE S.732S’50” ., 900.00 fact to in iron rod psi for an
* 1e point of this tract, identical to the northeast corner
of the S rt Auguscin Lode;
?a C2 S7150”19”E., 599.22 test to the nerth.ast corner of
this tract, ideitticil to the. norchaut corner of the Stavuiaon
.Eaat Lads;
TBBKCE S l6I4’5 ”V. 1300.00 ieee to a s ouod of scones found
for an sng .e point of this tract;
THEt CE I. L54S 4O”E., 1500.00 feet to en iron rod set for the
coutbeast corner of this tract i4encicat. to the southeast
corner of c l i. McCIsllaui lode;
TRE cg!p. 7322’58’V., 61L39 feat to an i ou rod sat for the
aauthgovt corner of this tract, identical to the oouthieat
corner at the Mccl..l1.n Lode;
?NENCZ Uj4’34’53”jl., 1300,00 feet to an iron rod and a mound
of tacks found for an angle point of this trect, identical to
the aouthsaet corner of the San £uguot4.n Lode;
the cs W.73’25’50”W ., 900.51, feet to the plac, of bsgthnio ,
containia 68.8369 acre of land, more or ii .. . Field notsa by
Dote ford Land Surveying, Inc.

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page 1
Note to File K & K Construction Co. Inc. v. Department of
Natural Resources , No. 106712 (Michigan Supreme Court, March
24, 1998)
Plaintiffs include owners of 82 contiguous acres, including
28 acres of wetlands, in Michigan. Plaintiffs applied for a
permit to fill wetlands and undertake development activities on
three of the four designated parcels on the property, covering 72
acres. When the permit was denied, plaintiffs filed a complaint
alleging a taking and seeking just compensation.
After filing their complaint, plaintiffs submitted a revised
permit application, with a modifieçl development plan f or the 72
acres. The State rejected the revised application and, in 1991,
the trial court found a taking. After that decision, the State
granted the revised permit application, which it had the right to
do under State law. The trial court then found a permanent
taking of the wetlands left undeveloped under the modified plan,
and a temporary taking of the remaining acreage.
Although the appeal to the state Supreme Court raised a
number of issues, the court focused primarily on the relevant
parcel for consideration. The lower court analyzed the impact of
the government’s regulatory actions on Parcel 1, consisting of
approximately 55 of the 82 acres (including all 28 of the wetland
acres), was the relevant parcel to consider. The court based its
decision on the facts that Parcel 1 is zoned commercial, while
the others are zoned residential, and that the owners of record
of the four parcels are not identical. The court then found
that the permit denial rendered parcel one valueless, and, thus,
the subject of a categorical taking of all value.
The supreme court concluded that this ruling was incorrect,
and that the relevant parcel for consideration was, at a minimum,
the 72 contiguous acres plaintiffs had treated as a unit in their
permit applications. The Court then ruled that the larger parcel
retained substantial value and had not been taken
categorically. The court remanded the case to permit the
lower court to do additional fact-finding to determine whether
the remaining ten acres should also be included in the relevant
parcel. The trial court should then apply traditional
balancing analysis to determine whether, in light of the nature
of the government action, its economic impact, and its effect on
plaintiffs’ reasonable, investment-backed expectations, there has
been a taking.
Because of serious errors in the lower court’s ruling, and
because Michigan is one of two states now authorized to
administer the Clean Water Act § 404 program, the Department of
Justice, at EPA’S request, had filed an amicus brief in this
case.

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Reply or post new material just to me at sugameli©nwf.org or to the entire takingscases policy list serve
by sending e-mails to
takingscases connect.nationalwildlife.org
--Glenn Sugameli
Glenn -- For your Listserve:
The 9th Circuit has requested a response to the rehearing petition in
Thomas v. AERC, in which a panel struck down municipal and state fair
housing laws that prohibit discrimination against unmarried couples. The
panel struck down the laws as a violation of the plaintiff-landlords’
religious beliefs under the Free Exercise Clause, but it bolstered the Free
Exercise claim by ruling that the landlords had presented “colorable”
takings and free speech claims as well.
The court’s request for a response to the rehearing petition is good news because the 9th Circuit rules
state that the court will not grant rehearing without giving the non-moving party an opportunity to
respond. Pacific Legal Foundation has weighed in as amicus on behalf of the landlords, focusing on the
takings issues. Those who want further information about the case may call me at the number listed
below. Community Rights Counsel is assisting Anchorage with the case.
Timothy J. Dowling
Community Rights Counsel
1726 M St. NW
Suite 703
Washington, D.C. 20036
Phn: 202.296.6889 Ext. 2
Fax: 202.296.6895
tim©communitynglits.org
http://www.communityrights.org/
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Author: COURSEN.DAVID at IN
Date: l2/22/9B 1:42 PM
Priority: Normal
BCC: kima jones at REGION4
‘ ‘O: RSORC . R5ORC1 . KAWAKAMI-CYNTHIA@rt-mail2 . rtp.epa.gov at IN, WINER. CATHY at IN,
WILLIAMS.LAURIE at IN, WILLIAMS.ANN at IN, TORRES.HEATHERGRAY at IN,
SHERMAN.RUTHANN at IN, SEIDENBERG.MARC at IN, ORDINE.CHARLES at IN,
MOORES.STEVEN at IN, MICINSKI.CHERYLE at IN, L NEL.MARCIA at IN, KABN.JONATHAN at IN,
JONES.KIMA at IN, HILSMAN.DEBORAH at IN, HESS.STEPHEN at IN, FEINMARK.PHYLLIS at IN,
FEATHERSON.CLARENCE at IN, CAPON.VIRGINIA at IN, BOYDSTON.MICHAEL at IN,
BOTTS.STEPHEN at IN
CC: SALO.EARL at IN, R NKIN.PATRICK at IN, NELSON.JAMES at IN, LEPOW.SUSAN at IN,
GUADAGNO.TONY at IN, DREHER.ROBERT at IN
Subject: Takings-Net: EPP Takings Snapshots XVII (12/22/98) -Forwarde
Environmental Policy Proj ectOs
Takings -Net
Takings Snapshots XVII (December 22, 1998)
To provide timely information about recent takings
decisions, the Environmental Policy Project provides
brief, bimonthly summaries of very recently issued
decisions and other important case developments. All
of these developments also are summarized in the
quarterly dockets distributed to participants in the
EPP takings network.
* * *
1. Suitum v. Tahoe Regional Planning Agency, CV-
‘q-9l-040 (D. Nev., December 9, 1998) (on remand from
.he U.S. Supreme Courtós decision (ruling that Mrs.
Suitum had a ripe takings claim), federal district court
denied TRPAÔS motion for summary judgment, ruling
that both prongs of Williamson County ripeness test are
satisfied, and that asserted value of TDR rights is
irrelevant to issue of whether there has been a Lucas-
type taking, and ordering a trial on whether non-
development uses are sufficient to avoid a finding of
a taking on that theory).
2. DLC Management Corp. v. Town of Hyde Park,
1998 WL 865128 (2nd Cir, December 15, 1998)
(affirming grant of summary judgment to town on land
ownerós substantive due process claim, on the ground
that change in zoning and denial of special use permit
did not result in the denial of a property right protected
by substantive due process; court distinguished
definition of property for substantive due process
purposes from broader definition of property for takings
purposes, justifying distinction on the ground that
successful due process claim can Icompletely estopo
government action).
3. Palm Beach Isles Associates v. United States, 1998
WL 784551 (Fed.C1., October 19, 1998)
‘rejecting takings claim based on Army Corps of
gineersó denial of permit to fill 49.3 acres of
submerged land in Lake Worth in Palm Beach County
Florida, because of federal navigational servitude; also
rejecting taking claim based on denial of permission to

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Author: COURSEN.DAVID at IN
Date: 12/22/98 1:42 PM
Priority: Normal
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WILLIAMS.L ,AURIE at IN, WILLIAMS.ANN.at EN, TORRES.HEATHERGRAY at IN,
SHERMAN.RUThANN at IN, SEIDENBERG.MARC at IN, ORDINE.CHARLES at IN,
MOORES.STEVEN at IN, MICINSKI.CIjERYLE at IN, LAMEL.MARCIA at IN, KAHN.JONATH.AN at IN,
JONES.KIMA at IN, HILSMAN.DEBORAH at IN, HESS.STEPHEN at IN, FEINMARK.PHYLLIS at IN,
FEATHERSON.CLARENCE at IN, CAPON.VIRGINIA at IN, BOYDSTON.MICHAEL at IN,
BOTTS.STEPHEN at IN
CC: SALO.EARL at IN, RANKIN.PATRICK at IN, NELSON.JAMES at IN, LEPOW.SUSP ,N at IN,
GUADAGNO.TONY at IN, DREHER.ROBERT at IN
Subject: Takings-Net: EPP Takings Snapshots XVII (12/22/98) -Forwarde
For all you wetlands attorneys, take a look at
item #3, which sounds, from the brief
description, like a potential landmark “parcel as
a whole” case.
Also, if the note on case #2 is correct, the
decision must include some really bizarre
language; a claim that property is defined more
broadly for takings purposes than for due
process purposes flies directly in the face of an
enormous body of jurisprudence. For example,
due process property, (i.e. property of which
one cannot be deprived without due process)
includes things like government employment,
that no one would argue cannot be “taken”
without just compensation.

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fill additional 1.4 acres of adjacent (non-navigable)
swamp, because owner laêked reasonable investment- backed
expectations given the date of purchase of the property
and because relevant parcel included the entire 312 acres
originally purchased by owner; court ruled that major
portion of property previously sold off for development
‘ iould be included in relevant parcel because owner made
ale with awareness of the restrictions on the portion
that remained-; distinguishing Loveladies Harbor).
4. Adirondack League Club v. Sierra Club, 1998 N.Y.
Lexis 4137 (N.Y. , December 17, 1998) (in a trespass
action brought by a private club in the Adirondacks
against the Sierra Club and a group of individuals who
traveled by canoe and kayak down the South Branch of
the Moose River through the clubós land, New Yorkós
highest court ruled that suitability of river for
recreat .onal boating is sufficient to demonstrate
navigability in fact and the existence of a public
easement to use the river; court rejected the argument
that this expanded version of the navigability test to
reflect *modern circumstances* effected a taking for
public use without just compensation).
5. Board of Zoning Appeals v. Leisz, 1998 WL
865107 (Indiana, December 2, 1998) (reversing trial
court finding of a taking and rejecting takings challenge
to city ordinance requiring owners to register non-
conforming uses or forfeit right to maintain 1s.eB; courtS.
repudiated prior Indiana Supreme Court precedent
establishing that elimination of non-conforming uses
through amortization process was per se
•inconstitutional).
6. Buckley v. California Coastal Commission, 1998
Cal.App. LEXIS 997 (Cal.Ct.Apps., December 1, 1998)
(on remand from the California Supreme for
reconsideration in light of Landgate (ruling that
erroneous assertion of regulatory jurisdiction is not a
taking), the court of appeals reaffirmed its earlier
decision reversing the finding of a taking, concluding
that this claim based on delay resulting from erroneous
assertion of commission jurisdiction was barred by
Landgate and that, in any event, commissionOs action
never denied plaintiffs all economic use of the
property).
* * *
For more information, please contact John Echeverria
or Jon Zeidler at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly@law.georgetown.edu
EPP website: http://www.envpoly.org

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Bormann v Board of Supervisors, 584 N.W.2d 309 (Iowa Sept. 23, 1998), cert.
denied (U.S. Feb. 22, 1999)
I have included the USA Today article, an earlier opinion piece by Doug
Kendall of Community Rights Counsel and a report on the Iowa decision by
Environmental Policy Project.
--Glenn Sugameli
National Wildlife Federation
202-797-6865
sugameli©nwf.org
02/23/99- Updated 01:01 AM ET USA TODAY Feb. 23, 1999 p.IA
The Nation’s Homepage
Farmers’ anti-sprawl law falls in
court
By Tony Mauro, USA TODAY
WASHINGTON - The Supreme Court Monday
handed farmers a sharp defeat in their growing battle
against “suburban sprawl” in rural areas.
Justices let stand an Iowa Supreme Court ruling that
struck down that state’s “right to farm” law - similar to
laws on the books in all other states.
Although farmers still had to obey state and federal
environmental regulations, the law protected them
from being sued by neighbors as a “public nuisance”
for the odors, noise or dust they produced.
Without that immunity, farm advocates say, farmers
can be sued by residents of new developments who
don’t appreciate those aspects of rural life.
“There’s a lot of concern in Iowa and beyond that you
have more and more people coming to rural America
who think food comes from the supermarket, not from
the farm,” says Richard Degner of the 18,000-member
Iowa Pork Producers Association. “Some are not
tolerant of farm practices, and now they can sue.”
The right-to-farm laws were passed in the 1970s and
1980$ during a wave of disputes between farmers and
developers. In September, Iowa’s law became the first
struck down by a state supreme court.
Property owners in Algona, Iowa, challenged the law
after farmers had 1,000 acres designated an
agricultural area protected by the immunity. No actual
development plan or nuisance claim was involved.

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The Iowa Supreme Court said that by protecting
farmers from lawsuits, the law diminishes the value of
neighbors’ land. That amounts to the government
“taking” the neighbors’ land without paying them,
which is unconstitutional.
A broad coalition of farm groups urged the high court
to take up the case.
“Under the Iowa court’s reasoning, the right-to-farm
laws of all 50 states stand to be invalidated,” said
John MacLeod, a lawyer for the group. He predicted
that challenges in other states will follow.
Ralph Grossi of the American Farmland Trust says the
court’s action proves that right-to-farm laws are not
enough.
Measures such as tax incentives, zoning and the
purchase of farming easements are needed. “If we
really want to protect the right to farm, we have to
make sure there’s land to farm on.”
Justice John Paul Stevens, who owns a 200-acre farm
in Webster County, Iowa, did not participate in the
case.
Dec. 1.1998
Knight-Ridder News Service sent out the enclosed opinion piece
on the Bormann v. Board of Supervisors case, in which the Iowa Supreme
Court declared that Iowa’s “Right to Farm” law was a taking of farm
neighbors’right to enjoin nuisances. The piece has turned up, to date, in
the Fresno Bee and the Dubuque (Iowa) Telegraph Herald.
Doug Kendall
Community Rights Counsel
(202) 296-6889
*TAKING* THE RIGHT TO FARM
By: Douglas T. Kendall
The delicious irony of it. The Iowa Supreme Court recently struck down
Iowa’s BRight to Farm” law, ruling that the law -- which immunized farmers
from certain nuisance suits -- was an unconstitutional “taking” of
neighboring landowners’ right to stop smells and noises from spilling over
on their property. Having watched the American Farm Bureau tirelessly
promote both Right to Farm laws and extreme interpretations of the
“Takings
Clause” of the U.S. Constitution, I take a slightly guilty pleasure in
seeing the prodigal takings son return to slay his elder Right to Farm
brother, all under the Farm Bureau’s horrified eyes.
But proponents of community rights must not celebrate, lest we foster a
bad
seed of our own. For however laudable the policy result, the Iowa Supreme

-------
Court’s analysis in Bormann vs. Board of Supervisors is badly off the mark
and, if adopted in other contexts, the court’s ruling will cause serious
problems for communities.
Right to Farm laws are the Farm Bureau’s response to what every law
student
knows as the “coming to the nuisance” problem. A hog farmer sets up shop
in
a rural area and, for years, goes memly about his dirty business,
sending
loud noises and foul odors onto his neighbor’s vacant property.
Then, 10 and behold, the neighbor develops a subdivision and the new
residents suddenly complain about those same smells and noises. It is
among
the most vexing policy questions in property law: Should what was formerly
an uncontroversial and productive use be deemed a nuisance simply because
neighbors settle within smelling distance?
Right to Farm laws, which the Farm Bureau has succeeded in passing in
numerous states, resolve this policy question in favor of farmers. The
laws
immunize farmers from some types of nuisance suits (generally suits based
on noise and smell, but not those based on other forms of pollution).
But Right to Farm laws are bad public policy. Why should farmers have the
right to foul their neighbors property, even if they have been doing it
for
a long time? Yet they do not, as the Iowa court ruled, always constitute
takings.
The Bormanns and the other farm neighbors who challenged the law could not
establish either of the touchstones of a successful takings claim. The
government had not physically taken their property or deprived them of all
beneficial uses.
In finding a taking nonetheless, the Iowa court relied heavily on an
analogy between Right to Farm laws and overflights by military planes. The
court opined that by stripping neighbors of their ability to stop noise
and
odor nuisances, the government had, in effect, created an easement in
favor
of the farmers. Because courts have occasionally found takings based on
government overflights — which create similar easement-like interests for
the government -- the Iowa court, by analogy, struck down the Right to
Farm
law.
In terms any hog farmer can relate to, the court’s analogy stinks. The
successful government overflight takings claims have been “as applied”
claims, in which the landowner demonstrated that the flights were low and
frequent enough to have a dramatic impact on their specific parcel of
property. The Bormanns’ claim was a general challenge to the law itself.
While Right to Farm laws may sometimes have a dramatic enough impact on
farm neighbors to support a takings claim (the Bormanns may, in other
words, have an “as applied” takings claim), these laws are not always

-------
takings.
In ruling for the Bormanns, the Iowa court continued a disturbing trend by
courts of finding a taking based on government interference with just one
aspect of property ownership -- here, the right to enjoin nuisances.
Because innumerable laws -- ranging from the federal Clean Water Act, to
workplace safety rules, to local zoning -- impact on some aspect of
property ownership, this trend gravely threatens the ability of communities
to protect their health and safety.
Bormann’s silver lining is that it shows takings litigation is a
double-edged sword. Every developer’s claim to a “right” to develop is
counterbalanced by an equally or more valid claim by a neighbor of a
“right” to be free of spillover costs. Thoughtful farmers have long ago
concluded that it is not in their interest for either side to win this
battle of absolute rights. If developers have an unfettered right to build
subdivisions, communities will be unable to protect farmland from
encroaching sprawl. If neighbors have an absolute right to be free from
spillover costs, farms will operate entirely at their neighbor’s mercy.
Perhaps after Bormann, the Farm Bureau, which has heretofore blindly taken
the developer’s side in takings disputes, will get this message.
Environmental Policy Project’s
Takings-Net
* * * * *
On September 23, 1998, in a blockbuster decision, the
Iowa Supreme Court ruled the Iowa right to farm law
effected an unconstitutional taking in violation of the
Fifth Amendment and the Iowa Constitution. Bormann
v. Board of Supervisors, 1898 WL 650904. Iowa is
apparently the first state supreme court to reach this
result.
Like similar laws in virtually every other state in the
country, the Iowa law immunizes farmers from liability
in nuisance actions brought by neighbors complaining
that farm operations produce offensive odors,
unreasonable noise, etc. The Court held that the law
resulted in a per se physical taking of the neighbors’
property, and effected what it called a condemnation by
nuisance. Although not explicitly discussed in the
opinion, the case was fought out against the background
of widespread public controversy in Iowa over
corporate hog farm operations. (According to press
reports, one of the Iowa Supreme Court justices who
recused himself from the case has openly opposed a
proposed hog operation near his home.)
The case presents a delicious irony. The American
Farm Bureau Federation and many of its state affiliates

-------
have vigorously supported the takings agenda, confident
that it would serve farmers’ self interest. The Bomiann
case suggests that the agricultural community may need
to rethink its position on takings.
For more information, please contact John Echeverria
or Jon Zeidler at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly@law.georgetown.edu
EPP website: http://www.envpoly.org
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Environmental Policy Project’s
Takings-Net
* * *
Takings Snapshots XIX (March 10, 1999)
To provide timely information about recent takings
decisions, the Environmental Policy Project provides brief,
bimonthly summaries of very recently issued decisions and
other important case developments. All of these develop-
ments also are summarized in the quarterly dockets
distributed to participants in the EPP takings network.
1. City of Monterey v. Del Monte Dunes Limited (U.S.)
(Nearly five months since the oral argument in October,
the U.S. Supreme Court still has not issued a decision in
this case involving a takings challenge based on the denial
of a permit to construct a major development along the
Pacific coast; the decision may resolve the issue of the
applicability of the Nollan/Dolan test outside the exactions
context, as well as the viability of any type of means-ends
analysis in takings doctrine).
2. Thomas v. Anchorage Equal Rights Commission, 1999
WL 11337 (the defendant, supported by numerous amid,
has requested rehearing of this January 2 to 1 decision by the Ninth Circuit concluding that a prohibition
against
discrimination against unmarried couples in housing
violates the free exercise clause, a decision based in part
on a ruling that the plaintiffs stated a colorable claim
that the law effected a per se physical occupation; the court
has requested a response to the application for rehearing).
3. Diamond Bar Cattle Co. v. United States, 1999 WL
88945 (10th Cir. February 23, 1999) (affirming dismissal
of claim by public land rancher seeking to establish right to
use public range based on New Mexico water rights: court
ruled that public land grazers hold only a revocable
privilege to use public land, criticizing and distinguishing
the decision by the U.S. Court of Claims in Hage v. United
States).
4. Jones v. City of Berkeley Rent Stabilization Board, (On March 9, 1999, the California Supreme
Court dis-
missed the pending appeal in this case on the ground that
review had been improvidently granted; the court of
appeals, consistently with the California Supreme Court*s
very recent decision in the Santa Monica Beach case, had
ruled that intermediate means-ends scrutiny does not apply
to ordinary regulations such as rent control; thus, dismissal
of this appeal was the only logical result following the
Supreme Court*s ruling in Santa Monica Beach).
5. Eberth v. Carlson, 1999 WL 45178 (Kan. January 29,

-------
1999) (affirming trial court finding that removal of existing
highway crossover which eliminated direct highway access
from plaintiff*s private property did not effect a taking).
6. Cook v. United States No. 94-344L (Cl. Ct. January
27, 1999) (granting summary judgment to plaintiffs on
takings claim where the plaintiffs had complied with all
the terms and conditions necessary to establish their right
to a patent under the 1872 Mining Act but were denied the
patent due to the enactment of legislation designating a
national recreation area and prohibiting the issuance of any
new patents in the area).
7. Chicago Title Insurance v. The Village of
Bolingbrook, 1999 Westlaw 65054 (N.D. III. February 5,
1999) (holding that city*s impact fees on proposed new
development for the purpose of financing road expansion
violated the Illinois constitution because the city failed to
carry its burden of demonstrating the fees were
*specifically and uniquely attnbutable* to the new
development;* while the decision borrowed language from
Dolan v. City of Tigard, plaintiff did not argue and the
court did not rule that the fee effected an unconstitutional
taking under Nolan/Dollan)..
8. Champion*s Auto Ferry, Inc., v. Michigan Public
Service Commission, 588 N.W.2d 152 (Mich. Ct. App.
October 2, 1998) (rejecting claim that Public Service
Commission order requiring twelve-month continuation of
ferry service effected an unconstitutional taking because
(1) rates allowed plaintiff to operate at a profit and were
not confiscatory, and (2) even if plaintiff*s claim were
viable, the proper remedy would be an award of just
compensation filed in the Michigan Court of Claims).
For more information, please contact John Echeverria or
Jon Zeidler at the Environmental Policy Project,
Georgetown University Law Center, 600 New Jersey
Avenue, N.W., Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly law.georgetown.edu
EPP website: hhtp:/Iwww.envpoly.org
March 12, 1999

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Author: COURSEN.DAVID at IN
Date: 3/11/99 8:55 AM
Priority: Normal
BCC: kiina jones at REGION4
TO: WINER.CATBY at IN, WILLIAMS.LAtJRIE at IN, WILLIAMS.ANN at IN, TORRES.HEATHERGRAY at IN,
SHEPMAN.RUTHANN at IN, SEIDENBERG.MARC at IN, ORDINE.CHARLES at IN,
MOORES.STEVEN at IN, MICINSKI.CHERYLE at IN, LAMEL.MP RCIA at IN,
KAWAK NI.CYNTHIA at IN, KAI .JONATEP N at IN, JONES.KIMA at IN, HILSMAN.DEBORAH at IN,
HESS.STEPHEN at IN, FEINMARK.PHYLLIS at IN, FEATHERSON.CLARENCE at IN,
CAPON.VIRGINIA at IN, BOYDSTON.MICHAEL at IN, BOTTS.STEPHEN at IN
CC: SHAMET.STEFANIA at IN, SALO.EARL at IN, RANKIN.PATRICK at IN, NELSON.JAMES at IN,
LEPOW.SUSP 1 N at IN, GUADAGNO.TONY at IN, DREHER.ROBERT at IN
Subject: Takings-Net: Saboff -Forwarded
Keeping in mind the source of this info, an
enviro group, this still sounds like quite a radical
decision: a taking from an approval to build a
house because of what sounds like a kind of
“set-back” requirement. In any case, it doesn’t
sound much like the “parcel as a whole” has
been taken. Sounds like it could provide some
ammunition for anyone subject to a “buffer”
condition. Also sounds like it is not well
supported by existing precedent.

-------
Author: COURSEN.DAVID at IN
Date: 3/11/99 8:55 AM
Priority: Normal
BCC: kima jones at REGION4
TO: WINER.CATHY at IN, WILLIAMS.LAURIE at IN, WILLIANS.AZ4N at IN, TORRES.HEATHERGRAY at IN,
SBERMP .N.RUTHP .NN at IN, SEIDENBERG.MARC at IN, ORDINE.CHARLES at IN,
MOORES.STEVEN at IN, MICINSKI.CHERYLE at IN, LAMEL.MARCIA at IN,
KAWAKAMI.CYNThIA at IN, KAHN. 7ONATHAN at IN, JONES.KIMA at IN, HILSMAN.DEBORAH at IN,
HESS.STEPHEN at IN, FEINMARK.PHYLLIS at IN, FEATHERSON.CLARENCE at IN,
CAPON.VIRGINIA at IN, BOYDSTON.MICHAEL at IN, BOTTS.STEPHEN at IN
CC: SHAMET.STEFP 1 NIA at IN, SALO.EARL at IN, RAMKIN.PATRICK at IN, NELSON.JAMES at IN,
LEPOW.SUSPIN at IN, GUADAGNO.TONY at IN, DREHER.ROBERT at IN
Subject: Takings-Net: Saboff -Forwarded
Environmental Policy Project’s
Takings-Net
* * *
On February 16, 1999, the Environmental Policy
Project filed an amicus curiae brief on behalf of the
Florida Audubon Society in the U.S. Court of Appeals
f or the Eleventh Circuit in the case of St. John’s River
Water Management District v. Saboff. The Audubon
brief supports the District’s appeal from a federal
district court decision finding the District liable for a
taking and awarding nearly $200,000 in financial
compensation. The plaintiffs sought and received
permission to construct a single family residence on
their lot, but alleged a taking based on the conservation
restrictions imposed on the portion of the property
bordering the Wekiva River. The Audubon brief
addresses, among other things, physical vs. regulatory
takings, parcel as whole, and the partial takings theory.
The Pacific Legal Foundation has indicated that it will
be filing a brief in support of the district court decision.
A copy of the brief can be accessed on the
Environmental Policy Project webpage,
www. envpoly . org
* * *
For more information, please contact John Echeverria
or Jon Zeidler at the Environmental Policy Project:
Georgetown University Law Center
600 New Jersey Ave., N.W.
Washington, D.C. 20001
tel: (202) 662-9850
fax: (202) 662-9497
E-mail: envpoly@law.georgetown.edu
EPP website: http://ww.envpoly.org
March 10, 1999

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