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Cca Associates v. United States
2011 U.S. App. LEXIS 23257
Fed. Cir.
2011
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Background

  • HUD-regulated low-income housing program documents (regulatory agreement, secured note, mortgage) were signed in 1969 to induce participation in a 40-year mortgage with a 20-year prepayment option.
  • LIHPRHA/ELIHPA prohibited prepayment after 20 years, effectively extending HUD rent controls for the property for several years.
  • CAAs predecessor owned Chateau Cleary; LIHPRHA extended restrictions beyond the 20-year prepayment window until new sale or exit could occur.
  • The 1996 HOPE Act later lifted the prepayment prohibition after a period of continued LIHPRHA enforcement, reducing the total burden.
  • Two consolidated issues: (1) whether the prepayment restriction constituted a temporary regulatory taking; (2) whether Congress breached HUD-CCA contractual obligations by abrogating the prepayment right.
  • The Court of Federal Claims previously held a taking existed and that Cienega IV foreclosed the breach-of-contract claim; the Federal Circuit reverses the takings finding under Cienega X framework while affirming the contract claim ruling.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Did the prepayment restriction amount to a regulatory taking? CCA argues economic impact and lack of offsets support takings. United States contends economic impact is modest and offsetting benefits offset the harm. No, economic impact insufficient for a taking under Cienega X framework.
Did Congress breach HUD-CCA contract by abrogating prepayment rights? CCA asserts privity and integrated-contract theory support breach. Government contends Cienega IV forecloses contractual breach claims. No privity; Cienega IV forecloses contract claim.

Key Cases Cited

  • Cienega Gardens v. United States, 503 F.3d 1266 (Fed. Cir. 2007) (develops Cienega X framework for takings with offsetting benefits)
  • Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir. 2003) (Cienega VIII; reiterates whole-property/context in takings analysis)
  • Cienega Gardens v. United States, 194 F.3d 1231 (Fed. Cir. 1998) (Cienega IV; privity/contract claim discussion)
  • Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (U.S. 2002) (life-of-property approach to takings analysis; context for Penn Central)
  • Penn Central Transp. Co. v. New York City, 438 U.S. 104 (U.S. 1978) (Three-factor takings test: economic impact, investment-backed expectations, character of action)
  • Rose Acre Farms, Inc. v. United States, 559 F.3d 1260 (Fed. Cir. 2009) (offsetting benefits analysis; government evidence lacking)
  • Eastern Enterprises v. Apfel, 524 U.S. 498 (U.S. 1998) (burden of proof for takings claims; substantial burden on plaintiff)
  • Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (U.S. 1987) (heavy burden of showing economically viable use)
  • Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211 (U.S. 1986) (consideration of mitigating provisions in takings context)
  • Forest Properties, Inc. v. United States, 177 F.3d 1360 (Fed. Cir. 1999) (burden to prove entire economic impact with offsets)
Read the full case

Case Details

Case Name: Cca Associates v. United States
Court Name: Court of Appeals for the Federal Circuit
Date Published: Nov 21, 2011
Citation: 2011 U.S. App. LEXIS 23257
Docket Number: 2010-5100, 2010-5101
Court Abbreviation: Fed. Cir.