Lost Tree Village Corp. v. United States
100 Fed. Cl. 412
Fed. Cl.2011Background
- Lost Tree sought a wetlands fill permit from the Corps for Plat 57, a 4.99-acre tract on Stingaree Point, Island of John’s Island, Florida, contending the denial deprived it of economically viable use and constituted a taking.
- The dispute centers on defining the relevant parcel (the denominator) for takings analysis, considering Lost Tree’s ownership history, development plans, and subsequent disposals of property.
- Lost Tree acquired the John’s Island properties under a 1968 Option Agreement; development proceeded in a piecemeal fashion over years, with plats recorded and permits issued for various parcels but no master development plan ever realized.
- By the 1990s Lost Tree shifted to investing in commercial real estate and began liquidating residual lands, including Plat 52, the North and West Acreages, Plat 54, and other parcels, while Plat 55 and Plat 57 remained largely undeveloped.
- In 2002 Lost Tree identified Plat 57 as a potential site to utilize mitigation credits for McCuller’s Point, applied for local approvals and a Corps permit, and the Corps denied the Plat 57 permit in 2004 for lack of a suitable development plan and because less environmentally damaging alternatives existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the relevant parcel for the takings analysis? | Lost Tree argues Plat 57 alone should be the denominator. | Government argues the whole John’s Island community (or larger parcel) should be the denominator. | Parcel as a whole includes Plat 57 and Plat 55 plus scattered wetlands within John’s Island. |
| Should Plat 55 be included in the relevant parcel? | Plat 55 is a distinct parcel and should be excluded. | Plat 55 is contiguous and economically connected to Plat 57; inclusion is warranted. | Plat 55 and Plat 57 are contiguous and economically related; include Plat 55 in the denominator. |
| Did the denial of Plat 57 constitute a taking under Penn Central? | Regulatory action caused substantial economic impact and thwarted investment-backed expectations. | Impact was not a per se taking and the regulation did not leave the parcel with no economically viable use. | Economic diminution (58.4%) is not a compensable taking under Penn Central. |
| Are the Penn Central factors met to support a taking here? | Government action unfairly targeted Lost Tree and impaired its investment-backed expectations. | Regulation serves a legitimate public welfare goal and is not retroactive to a single owner beyond reasonable use. | Character and investment-backed expectations weigh against a taking; overall denial is a noncompensable diminution in value. |
Key Cases Cited
- Loveladies Harbor, Inc. v. United States, 28 F.3d 1171 (Fed.Cir.1994) (parcel-as-a-whole analysis; temporality and development context in denominator)
- Palm Beach Isles Assocs. v. United States, 208 F.3d 1374 (Fed.Cir.2000) (denominator determination in development contexts; integration of related parcels)
- Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (S. Ct. 1978) (multifactor test for regulatory takings; focus on parcel as a whole)
- Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302 (S. Ct. 2002) (temporality and duration of restrictions; not per se rule; context matters)
- Forest Properties, Inc. v. United States, 177 F.3d 1360 (Fed.Cir.1999) (parcel-as-a-whole and how development plan affects unitization)
- Palazzolo v. Rhode Island, 533 U.S. 606 (S. Ct. 2001) (investment-backed expectations under regulatory regime; flexible approach)
- Norman v. United States, 429 F.3d 1081 (Fed.Cir.2005) (denominator and aggregation considerations in development contexts)
- Concrete Pipe & Prods. v. Construction Laborers Pension Trust for S. Cal., 508 U.S. 602 (S. Ct. 1993) (valuation and extent of taking; framework for assessing diminution)