Hearts Bluff Game Ranch, Inc. v. United States
669 F.3d 1326
| Fed. Cir. | 2012Background
- Hearts Bluff purchased ~4,000 acres in Titus County, Texas to use as a mitigation bank.
- Mitigation banking allows credits to offset environmental impacts from development under the Clean Water Act.
- Corps regulates mitigation banking and requires perpetual-held property for a valid mitigation bank.
- Corps initially indicated no impediments to mitigation banking, but public notices and plans for Marvin Nichols Reservoir later conflicted with Hearts Bluff’s bank.
- Corps denied Hearts Bluff’s mitigation bank proposal in July 2006; reconsideration was denied in July 2008.
- Hearts Bluff sued in the Claims Court for just compensation under the Tucker Act; the court dismissed for lack of a cognizable property interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hearts Bluff had a cognizable property interest in a mitigation bank | Hearts Bluff owned land and sought to operate a mitigation bank as a property right. | Mitigation banking access is discretionary and not a property interest inherent to ownership. | No cognizable property interest exists in mitigation banking access. |
| Whether the denial of access to the mitigation bank program constitutes a taking | Denial deprived Hearts Bluff of a property right and its investment-backed expectations. | No property interest in the program; discretionary denial cannot be a taking. | Not a taking because no cognizable property interest exists. |
| Whether Hearts Bluff had a vested investment-backed expectation as a property interest | Corps representations induced substantial investments in mitigation bank preparation. | Hope or expectation is a collateral, not compensable interest. | No cognizable interest; reliance on discretionary promises does not create a taking. |
Key Cases Cited
- Palm Beach Isles Assocs. v. United States, 208 F.3d 1374 (Fed. Cir. 2000) (section 404 permit denial can be a taking)
- Loveladies Harbor, Inc. v. United States, 28 F.3d 1171 (Fed. Cir. 1994) (denial of permit may constitute a taking)
- Fla. Rock Indus., Inc. v. United States, 18 F.3d 1560 (Fed. Cir. 1994) (permitting regulatory takings analysis)
- Acceptance Ins. Cos. v. United States, 583 F.3d 849 (Fed. Cir. 2009) (threshold cognizable property interest required)
- American Pelagic Fishing Co. v. United States, 379 F.3d 1363 (Fed. Cir. 2004) (no property interest in fishing permit; discretionary govt. control)
- Mitchell Arms, Inc. v. United States, 7 F.3d 212 (Fed. Cir. 1993) (economic expectations not cognizable property interest)
- Conti v. United States, 291 F.3d 1334 (Fed. Cir. 2002) (no cognizable property interest where permit transfer rights lacking)
- Maritrans Inc. v. United States, 342 F.3d 1344 (Fed. Cir. 2003) (two-part takings framework applied)
- Acceptance Ins. Cos. v. United States, 583 F.3d 849 (Fed. Cir. 2009) (threshold cognizable property interest required)
- Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed. Cir. 2005) (two-part takings framework and property interest analysis)