Florida Rock Industries, Inc. v. United States

AFTER AND PROCESS UFACTURING CONTRACT.

THE particular phrasing not intend

doWe limit questions to consideration

of these by the case. The entire problems posed problems liberty to is at consider the

Court per- in this case as issues involved to assist the them be. order

ceives record, along

determination, entire parties, shall transmitted

the briefs of Florida.

QUESTIONS CERTIFIED. INDUSTRIES,

FLORIDA ROCK

INC., Plaintiff-Appellee, STATES, Defendant-

The UNITED

Appellant.

No. 91-5156. Appeals, Court of

United States

Federal Circuit.

March DeVault, III, Bedell, Dittmar,

John A. De- Pillans, P.A., Jacksonville, FL, Vault & ar- gued plaintiff-appellee. himWith on the Jr., Tripp, brief was C. Warren of counsel. Klarquist, Atty., Robert L. Dept, of Jus- tice, DC, Washington, argued for defendant- appellant. him on Barry With the brief were Hartman, Acting Gen., M. Atty. Asst. Envi- Div., ronment & Natural Resources A. John Bryson Disheroon, and Fred R. Attys., Washington, Rog- DC. Also on the brief was Clegg, Acting Atty. Gen., er B. Asst. Envi- Div., ronment & Natural Resources Wash- ington, DC.

Timothy Searchinger, C. Environmental Fund, of City, Defense New York was on the curiae, brief for amicus The Environmental Inc., Fund, Defense The Nat. Wildlife Feder- ation, Inc. Burling, A.

James S. Ronald Zumbrun and Rivett, Foundation, Legal Robin L. Pacific CA, Sacramento, were on the brief for ami- curiae, Legal cus Pacific Foundation. Dicrescenzo, Mary V. Nat. Ass’n of Home Builders, DC, Washington, on the brief curiae, amicus Nat. Ass’n of Home Builders, Realtors, Nat. Ass’n of Intern. Centers, Shopping Council of Nat. Ass’n of Indust, Parks, Realty and Office Nat. Com- mittee, Housing Nat. Flor- Multi Council and ida Home Builders Ass’n. With her Ethier, brief H. was William Cohn & Birn- Hartford, baum, CT. Miller, Smith,

George Walter A. W. Jr. and Abram, DC, Washington, Jonathan L. were curiae, Whitney amicus brief for Ben- efits, Inc., Kiewit Peter Sons Co. NIES, Judge, Before Chief NEWMAN PLAGER, Judges. Circuit PLAGER, Judge. BACKGROUND Circuit background The detañed case is taking ease. It arose is a This opinions described several referred to Rock plaintiff Florida Industries provide Florida I-III. We above as Rock Rock) (Florida sought permit a under Inc. only proceeding here a brief overview before Act1 the Water from the § 404 of Clean to of the the heart matter: whether the (Corps) Army Corps Engineers to mine Corps’ § permit denial of the effected a 404 lay tract of limestone which beneath a the regulatory taking, requiring the thus Govern- permit the Corps The denied wetlands. just pay compensation. The ment to answer 25, 1982, 5, May 1980. Florida On October impact question depends to on the that the United States Court of Rock filed suit the regulatory imposition the had on economic Claims,2 seeking monetary compen Federal use, value, property. and hence of the from the United States sation defendant (Government); alleged Rock that the Florida 1972, shortly before the enactment of Corps’ permit denial constituted an uncom Act, pur- the Florida Rock Clean Water private property pub for pensated 1,560 parcel a acre chased wetlands Dade in violation the Fifth Amendment.3 lic use Florida, County, to the west suburban agreed, of Federal Claims Florida The Court $2,964,000 purchase price Miami. The Indus., States, Inc. v. United 8 Cl.Ct. Rock (an $1,900 acre).4 average per Florida (Florida (1985) I), 160 Rock and awarded parcel Rock obtained the in order to extract $1,029,000 plus attorney Rock fees Florida underlying process limestone —a simple appeal, and interest. On this court destroys the surface wetlands. judgment vacated the had oc 1970s, however, During ecological and for further consider curred remanded importance increasingly ap- of wetlands was Indus., Inc. v. ation. Florida Rock United preciated. Corps regu- The in 1977 enacted States, (Fed.Cir.1986), 791 F.2d cert. de 893 requiring parcels lations owners of wetlands 926, 1053, 107 U.S. 93 L.Ed.2d nied 479 permits § of the obtain under 404 Clean (1987) (Florida II). remand, Rock On engaging dredging Act before Water the Court of Federal Claims found that the filling generally activities. See United States permit deprived Florida of all denial Rock Homes, Inc., Bayview Riverside land, again value in its and so concluded that 121, 123-24, 88 L.Ed.2d taking and there had been a reinstated the after, long Not Florida Rock award, $1,029,000 damages with time began mining operations parcel, on the with- Indus., compound Florida Rock interest. having applied permit. § out for a Inc. v. United Cl.Ct. 161 Corps issued cease and desist order on (Florida III). ap Rock The Government 7, September stopped Rock Florida damages and peals both the award the choice could, mining, restored area as best simple compound rather than interest. negotiating Corps began and with for the necessary to again find it vacate the We permit. judgment taking, that there has been Initially, permit sought remand for further consideration consistent for 1,560 opinion. Corps responded acres. with this entire (Oct. average per prices, § Stat. 1. Pub.L. No. 92-500 4.The acre calculated on the 1972), 1,560 amending provid- parcel, Federal Water Pollution overall value of the acre (codified Act amended only permit rough comparison Control at 33 U.S.C. ed here (1988)). § 1344 figures parcel acre other in the record for the 98 per at of the issue. acre value 98 acre parcel may significantly per 2. The Federal Courts Administration Act of differ from the acre 102-572, 1,560 tract; testimony § Pub.L. No. 106 Stat. 4506 acre value (1992), changed States the name United indicates that market value of the land record States Claims Court the United Court of Fed- highly dependent parcel size of the (the eral Claims. larger per parcel, the lower offered price), parcel and on acre the location CONST, V, existing cl. 4. to the 3. U.S. amend. relative roads. permits parcels Id., would be issued market value.” 791 F.2d at 903. The years of a to suffice for mining; size three case was remanded to the Court of Federal ease, in Florida Rock’s 98 acres would serve Claims for proceedings. further anticipated years. needs for three Flori- remand, On the Court of Federal Claims acquiesced in Corps’ da Rock demand entertained seeking evidence to establish the applied permit covering only the 98 fair market value of the subsequent parcel acre considering issue here. After denial. pre- The Government application, Corps the revised concluded assessors, sented two Mr. Slack and Mr. proposed mining would cause ir- Cantwell, investigated who had contempora- ecologically remediable loss of an valuable neous land sales Using area. parcel wetland and would create undesirable comparable method, standard sales valuation turbidity. water permit application was one assessor concluded that the had 2, denied on October $4,000 a fair acre, market value of per while the $4,615 other found a Rock, per value of acre. conceding validity Florida the of the addition, Florida Rock had actions,5 received actual Corps’ filed suit in the United purchase range $4,000 offers the per Claims, States Court of Federal alleging that acre. The President of Florida Rock Indus- permit uncompensated denial was an reg tries, Baker, Mr. Edward testified that he ulatory taking of its land. In Florida Rock $10,000 believed the to be worth I, the Court of Federal Claims found that the acre, per Corps’ permit even denial parcel value of the taking before the was after (thus presumably explaining why all such $10,500 per acre and that the value after the purchase declined). offers were negligible was mining— because rock court, in the view of viable Finally, presented the Government a state economic use —had been foreclosed. Florida opinion court which had affirmed the state’s I, Rock at (citing Virgi Cl.Ct. Hodel v. $4,089,950 tax 1,560 assessment of for the Ass’n, nia Mining and Reclamation parcel, comparable acre based on Surface sales of 264, 295-96, 101 2352, 2370, 452 U.S. 69 nearby parcels during the 1979-1982 time (1981)). L.Ed.2d (This The Court of Federal period. figure larg assessment for the Claims permit concluded that the denial was parcel er average reflects an value of regulatory taking, $2,621.76 for which the acre; 3.) landowner per supra see note Flori I, compensated. Indus., must be Inc., 8 da Rock Bystrom, 485 So.2d Cl.Ct. at 165. denied, (Fla.App.1986), 444-45 review (1986) (Bystrom). 492 So.2d 1332 That as appeal court, On to this judgment was sessment comparable was based on sales vacated in Florida Rock II. The Federal presumably which reflected the market’s Circuit held that the Court of Federal Claims present evaluation of and future land use in determining after-taking value of the restrictions. Id. at 444 and 447.6 affected had erred in focusing on immediate proper Rock, use —the hand, focus should in- Florida on the other read stead have been on a determination of “fair require Florida Rock II to inquiry detailed established, 5. Florida Rock chose not to avail taking. itself of the thus there could be no Flori provided by mechanism argued the Administrative Pro- da Rock that the Court of Federal Claims Act, (1988), § cedure challeng- 5 U.S.C. 706 by holdings was not bound in a state tax assess ing validity Corps' in District Court the of the general proper ment and that the rule that application refusal to entertain ty an for the entire tax assessments are not admissible as evidence 1,560 parcel subsequent acre and proceed denial of the of fair market value in a condemnation permit application parcel. ing (citing for the 98 acre Miller v. United 223 Ct.Cl. (Ct.Cl. 1980)) fully applicable. 620 F.2d 812 Rock, judge agreed The trial with Florida and admissibility significance 6. The of this state that, purposes concluded since valuation for dispute court decision was a matter of heated purposes state taxation and valuation for of de parties, appeal. between the both at trial and on termining under the Fifth Amendment that, argued The Government under doctrine issues, are not identical the court was not bound estoppel (citing nonmutual defensive collateral Bystrom findings court's on that issue. Mendoza, United States v. 104 S.Ct. (1984)), Bystrom 78 L.Ed.2d 379 judge’s was con- We find no error in the trial conclusion clusive on the placed of the fair market value of that the value in the tax and, property, given the value of the case should not be determinative of the fair mar- subject on-going occurred is a debate.7 sophistication the motivations into upon comparable properties buyers provided various Court has It crafted a was based. influenced, assessment articulations, which expect- could be of Federal the Court survey ed, by of the particular circumstances —viewed novel,” “admittedly Florida to be Claims it. formula that has cases before One III, 173 —and concluded Rock Cl.Ct. emerged repeated in and has been several virtually buyers compara all the requires that the court balance several cases lacking in sufficient properties were ble making regu- pragmatic considerations knowledge purchases in order their latory takings These consid- determination. truly comparable sales. Florida qualify as impact erations include: economic Failla, assessor, used the results Rock’s Mr. claimant, regulation the extent justify discarding survey evidence of this with invest- interferes price parcels average retail that the expectations, and the character ment-backed $6,100 per Rock’s land was vicinity of Florida (The leading action. case Government fair acre, that the actual mar and concluded Transp. New is Penn. Co. v. York Central following tract ket value 2646, 2659, City, 438 U.S. Implicit in this result negligible. denial (Penn Central)). 57 L.Ed.2d 631 assumption that no with full knowl one is the impact appeal, this it is economic regime would be will edge regulatory regulation that is at issue.8 ecological ing gamble that concern for the way give wetlands would importance of the development to the economics of the future Supreme The recent Court decision nearby from Miami. The Court of pressure Council, Lucas v. Carolina Coastal South agreed III in Florida Rock Federal Claims -, 2886, 120 L.Ed.2d matter, view of the and Florida Rock’s

with (1992) (Lucas), that the econom- 798 teaches accordingly. decided determinative; impact ic alone factor circumstances, balancing of fac- in some no DISCUSSION required. regulation categorically is If a tors A. prohibits economically of all beneficial use destroying pri- value for its economic regula How whether a to determine land — regulation has an ownership Fifth vate effect tory under the Amendment has —the Mandelker, Smith) (1993); explain takings purposes. David Mice and As we A. ket value for below, Of tax valuation it is not the assessor’s which Missiles: True Account Lucas v. South Car A of here, whether there was market is at issue Council, 8 J. Use & L. olina Coastal Land EnvtI. value could be established. At a fair (1993). Law School Lewis Northwestern of of however, least, very judicial proceeding Lucas, College: Colloquium and Clark A on thorough provides a review of several real estate (contributions by C. Envtl. L. 869 Blumm, Michael analyses of the fair value at the market assessors' Huffman, Funk, William James L. Don time, provides of relevant and judicial the Court Federal Sullivan, Large, ald Edward and Lawrence Wat based on a Claims with a determination Rubenfeld, ters) (1993); Usings, Jed 102 Yale L.J. familiarity high degree with the Florida real of (1993); Symposium Law Review: such, it estate market. As is admissible and Stanford Council, argu- Lucas persuasive support v. South Carolina Coastal Government’s parcel (contributions more by Ep ment that the 98 acre retained than Richard Stan.L.Rev. 1369 fair value after denial of the Fisher, nominal permit. market stein, Lazarus, and William W. Richard Sax) (1993); Wipeouts: Joseph and L. Windfalls Regulation, Property, and the ‘Tak Environmental extensive; 7. readers conversant The literature ings’ Lucas v. South Carolina Coastal Clause much of with the field will be familiar with it. after Council, Walker, (1993); Among symposia significant and individual con- Vt.L.Rev. 645 Com Ausness, year tributions in last are: Richard Regulations: mon Law and Land Lucas Rules Use Impact Bogs: Wild.Dunes Serbonian and Takings Jurisprudence, 3 Seton Hall and Future the Lucas Decision on Shoreline Protection Pro- Const.L.J. 3 (1993); grams 70 Catholic Denv.U.L.Rev. University Law Review: United States formulas, 8. For discussion of the various and Symposium, Federal Cath.U.L.Rev. 717 Claims 'categorical' 'per the mix consideration Brookshire, (contributions by James E. Dennis J. rules, Mandelker, 'balancing' Humbach, Jr., rules see se’ and Glynn Lunney, Coyle, John S. A. Abram, George supra n. W. & Jonathan Loren Miller permanent physical equivalent occupa- (citing Bystrom, 447; to a 485 So.2d at em- is, more, added). compensable phasis tion.9 There without The court noted the testimo- taking.10 ny assessor, of the Government’s Mr. Cant- well, and said: If, however, regulation prohibits less opinion We are of the that Mr. Cantwell’s economically than all beneficial use of the testimony, believed, if considered and es- partial land and causes at most a destruction tablished the existence of a market value, of its the case does not come within which Florida Rock disposed could have ‘categorical’ taking Court’s rule. mitigated severity below, explain reject As we we the trial action here involved. analysis court’s that led to its conclusion that economically all beneficial use of the land Id. And while the court stated that “we take was taken the Government. We remand granted, did, it for as Mr. Cantwell that the for determination of what economic use as. ‘willing buyer’ of the market value formula value, any, measured market if remained got has correctly be one who is informed denial, after the and for consideration physical land, about the character of the whether, light properly assessed legal aswell restrictions on its use ...” id. at land, value of the Florida Rock has a valid 902, we also indicated that the market as a takings claim. whole was not persons dominated en-

gaged in illegal fraudulent or behavior: B. sale, Since the tract was not listed for $4,000 offer, per.acre frequent inqui- In Florida Rock II this court stat ries, value, and the assessed must have that, regard issue, ed reflected knowledgeable interest of people, although may “there be a what foreigners gulls.11 knowledgeable buyers paid, would have they paid would have some substantial short, Id. we understand Florida Rock II Id., figure seems certain.” 791 F.2d 893 at purchases to hold that which are made 903. The trial court on remand was instruct speculators market as well as home bufiders “if ed: there is found to exist a solid and developers sales, and other comparable are (for acres) adequate fair market value the 98 with the particular might caveat that sales be which Florida Rock could have obtained from discarded ap- the assessor if those sales property, others for that that would be a pear questionable light of the market as a remaining sufficient use of the to whole. forestall a determination that a had Rock, Florida and the Court of Federal just any occurred or that had III, Claims on remand in Florida Rock read paid by government.” the Id. We did differently. Florida Rock II passing Our not discuss what residual fair market value buyers reference to being “correctly in- “adequate” would be to forestall a formed” require inqui- was read to a detailed determination. ry into the sophistication motivation and of explicitly

We did buyers indicate that the Court of purchases comprised the whose give Federal Claims comparable should consideration to sales used the fair market “a up relevant market made of investors who value assessment. The Court of Federal are speculating real but are rejected whole or testimony Claims of Mr. Cant- major II, part.” Florida Rock testimony F.2d at well—the same which we had not- 9. See Hendler v. United 952 F.2d generally preclude 11.Since state law does not (1991), legal for a discussion of the land, and historical foreigners owning and since there is interplay ings. physical regulatory between and tak- (other meaning 'gulls’ no established to the term among ornithologists), than we understand this governing reference to be to the law fraudulent Lucas, however, gives a de 10. illegal persons generally and land sales and to fense based on nuisance limitations that inhere protected by that law. -, at -, in the owner's title. 505 defense, by at 2900. A nuisance definition, incorporates degree balancing. remains, determined, still, it to be but was solely approval in Florida Rock ed with II — certainly Cantwell, exception, higher much than the nominal $500 with little Mr. because accepted by part per acre value the Court of knowledge on the sufficient assumed II, 21 Cl.Ct. Federal Claims. purchasers. Instead, accepted court the testi- at 172. Florida, survey indicate that Rock’s does assessor, reject- Rock’s who mony of Florida buyers in market did not most of the this on comparable sales values all of ed knowledge provisions have extensive were purchasers that none principle impact and Act the Clean Water knowledgeable. sufficiently sophisticated and development potential properties of those in- contrary instruction was to our That error — volving any It is wetlands. doubtful II, contrary generally in Florida Rock legal should from this. conclusions be drawn valuation, understandings of accepted market disregard current broad-based for land Such finally, contrary working assump- that, parties regulations suggests while use of a free market.12 tions law, long term contract the shadow the market in real estate values disagreement as to the facts trends There no necessarily correlated Government con- regarding existence and nature study appraisers in trols. The testified market. Rock’s identified Government’s Florida knowledge regulatory con- vicinity of 98 acre tract that detailed the immediate goal during 1971 straints relevant when the period, land sales development. purchasers was through significant A number of those immediate 1980s, testified, early despite And as Mr. “there was not in the Slack sales occurred really far intervening change environ- demand out People at this time. were not average price per [from sales acre in Miami] ment. $6,100. buying anything right it price per acre to do then 1980 was varied anyway.” function the overall lot predominantly as a size; per higher smaller lots commanded speculative A market exist land prices. survey Rock’s acre Florida indicated regulated well in land that is as that is pur- roughly buyers had 80% not, regulations precise content of purposes chased land ‘investment’ any given may particularly im- time be that, overall, purchasers intended to portant to those active in the market. As years. average to 10 hold the land for an of 9 II, this court observed 902-03, Everglades

Thus, specula- yesterday’s though an F.2d 893 at there was active mosquito a swamp to drained as haven is tive market for Florida Rock’s be investment today’s preserved for following permit wetland to be wildlife land at the time of and Accord, aquifer recharge;13 what Bystrom, at 447- who knows to- denial. 485 So.2d bring, price public policy of will market which Florida morrow’s view 48. fair respond it. that how the market will Rock could have commanded at time judge’s acknowledged accep- fair market. And it was the trial of Federal Claims The Court may presume "[u]sually, adequate today's be all’ approach requires it tance of re- knowledge legal part however, of restrictions on of whole, as a versal. When read arms-length purchasers transactions.” Flori support opinion II in Florida Rock does not such III, agree; da at 173. We Florida Rock 21 Cl.Ct. approach concept a to the well-established novel require It is true that Rock II did not more. opinion clearly willing buyer. a focussed of there is a statement in Florida Rock II—that question: central the fair market the issue on the willing buyer 'correctly who is informed' is one imposition regu- value after the of before and legal about the restrictions the use restraint, change, latory any. and the if extent that, a blanket taken in isolation and as land— requirement, of law. is not correct statement may Maloney, Plager, value S .J. and F.N. Bald The market from which fair be 13. See F.E. market only legally win, need not contain ascertained Florida Water Law and Administration—The advised) (or investigate persons fully trained who Experience 141-45 for a discussion regulations; ignorance of the current land use law is inter-relationship hydrologic cycle and the be every right. buyer’s true that It is also ground recharge and the wa tween wetlands gave was this statement that yers Florida Rock's law public acquifers, major source of water ter through they attempted a crack supplies in Florida. approach to constitutes a drive their novel what speculative ques- need not decide such We Florida by Rock’s the Govern ment. This turns on tions here. The uneontroverted evidence of “the economic impact regulation claimant,” compels an active real estate market Central, Penn 438 U.S. at 98 S.Ct. at typical “willing buyer- conclusion that by change, measured if any, in the willing requirement seller’ of fair market val- fair market by value caused met; inappropriate ue had been it would be imposition. On the state of the record before judgment court to substitute its own us we are unable to question. answer the value for that of the market. While an as- The Court of Federal Claims answered it might justified adjusting sessor the fair straightforward with a ‘yes’ when per by figure discarding market value aberra- acre value of parcel the 98 acre after the upon tional values based sales between relat- permit denial was found to be a nominal ed entities or fraudulent sales to widows and acre, per $10,500 compared $500 as to the orphans, may an assessor not discard an found the trial per court to be acre entire market as aberrational.14 ‘Aberration- prior permit value repre denial. This al’ means outside the norm established sented a roughly loss in value of 95%. Flori general activity. many players The fact that III, da Rock 21 Cl.Ct. at 175. The court in disregard in the market chose to the immedi- permit effect treated the denial essentially as potential development ate in favor of a a ‘categorical’ taking of all economic use. long-term perspective hardly unusual be- Lucas, — at -, See 112 S.Ct. at history havior Florida’s in- real estate 2893. “The second situation in which we vestment —does not make the market as a categorical have found appropriate treatment whole ‘aberrational.’ pro- When the market where denies all economically vides a well-substantiated proper- productive value for a beneficial or use of land.” Id. ty, a court judg- substitute its own The Court of analysis Federal Claims’ ment as to what is a wise investment. theory, correct in but started from an incor- premise rect parcel value of the It was error to read Florida II —that Rock as after denial of the nominal was a $500 requiring inquiry a detailed into the motiva- per $4,000 figure acre. When a per closer to sophistication buyers tion and of com- substituted, acre is the correct outcome is no parable parcels. fungible; Dollars are longer remand, clear. On with a fair market speculative provides market a landowner value calculated in opin- accordance with this monetary with just which is ion, the Court of Federal again Claims must satisfactory provided by any as that other approach return to the dictated Florida market. pick Should a landowner wish to Rock II: buyers, luxury and choose her is not consider, court along [T]he should chargeable to the federal fisc. To conclude matters, other relationship relevant concluding otherwise would be tantamount to investment, the owner’s basis or and the that there could a never be market fueled fair market alleged taking value before the speculation conclusion at odds both with —a to the fair market alleged value after the common sense and with our directions in taking. determining severity In the of the Florida Rock II. impact, economic opportunity the owner’s recoup better, to its subject investment or C. regulation, ignored. to the cannot be Id., 791 at F.2d Ultimately, question the that must be whether, answered is as a result of the denial The Court of Federal Claims must recon- uses, of certain taking economic there awas proffered by sider the assessments par- the 14. Florida Rock did not introduce evidence that were known to the seller but not disclosed to the comprised the illegal market was buyer; holding of or fraudu appears the of that case to be However, lent sales. readily cites Johnson limited to material facts "which are not Davis, (Fla. 1985), support 480 So.2d 625 buyer." to observable and not known Id. at argument parcel their that the quite legal could not have 629. That is a different matter from Johnson, committing been sold without subsequent fraud. restrictions on the use of the years issued several necessarily part public after the deni which are of the record al, involved defects in the roof of a home which and ascertainable from it. record, ‘categorical’ taking in a similar to a in the suits evidence other

ties and Lucas, taking accordingly.15 physical property.19 of value a fair market determine -, establish, as S.Ct. 2886. the U.S. that determination Should suggests, that there in the record evidence total) (but remains, question partial a reduction the does a

was some plaintiffs property deprivation resulting regulatory impo from a value of market overall is, sition, regula regulatory imposition, the that a in which a the situation a result deprives part that reduc- the a posed: then be does tion owner of substantial question will compen- essentially taking economic a but not all the use or tion constitute partial property, Amendment?16 of the constitute a the Fifth value sable under taking, compensable and is it as such? This requires question has been much debated the question the litera To answer this Supreme the preliminary two issues. ture since Court’s decision an court to resolve destroy nouncing proposition general regu must that as a regulation a a first is whether takings latory compensable; are the property’s of a economic Court’s proportion certain an compensable provided to date have not ans in order for a decisions use or value occur. The second is wer.20 taking of to determine, any given what to

how Nothing language the Fifth is. proportion compels a to find a Amendment court Supreme the divests the Court’s decision in when Government total Since Mahon, 393, ownership Fifth property; Pennsylvania Coal v. Amend (Pennsylva prohibits uncompensated taking 67 L.Ed. 322 ment 43 S.Ct. Coal), to problem private courts has been without reference nia remaining property interests. to which the Fifth owner’s the extent to determine Lucas, po upon touched burdens the exercise Amendment is, through question partial regulatory taking, of a regulation,17 to see power lice 2893-95, but, regulation concluding particular determine it that of Justice Holmes— facts before the case was one which words somehow—in far,” upon id at the owner called “to sacrifice all goes “too economically taking.18 It is now clear beneficial uses name of therefore effects at -, good,” a total the common id S.Ct. at that constitutes de economically goes categorical taking the Court beneficial use found privation partial far;” regulatory imposition and thus did have to decide the such re- “too regulate development preclude power intend to wetlands. 15. We do not this evidence; challenges power that is a of additional matter While to the Government’s through agencies judicially the discretion of the Court of Federal within act various reviewable, seg., § see 5 et Claims. U.S.C. 701 Admin- Act, power istrative Procedure appeal issue 16. Because the determina is, only question act is not before here us. The properly as a the value whole tion of when the to act in the Government chooses man- imposition, and after before did, pay just compensation must ner it present the additional difficulties case does not by the mandated Fifth Amendment. properly by parcelling interests af created Lucas, -, Compare 505 U.S. at 112 fected. governmental 19. There is limited defense to a Central, at n. 7 438 S.Ct. 2886 with Penn 'categorical' taking; supra, and ac- see note 10, 130, 2646, S.Ct. at 98 at 2662. 104 companying discussion. “police power" term is used herein to 17. The Lucas, U.S. -, 7, 2886, 505 S.Ct. 20. n. n. power federal refer to the to accompanying 7 and text. For recent academic engaged engage in activities not unlike those problems partial regulatory of tire discussion sovereign pow- by under inherent the states their takings, Epstein, see Richard A. Lucas South ers, recognizing power that the in the federal Tangled Coastal Web Carolina Council: A Ex origin. system is of Constitutional (45 supra pectations, n. 7 Stan.L.Rev. 1387-1392, Rubenfeld, 7, (1993)); supra n. Part 18. be clear in cases It should V, E, Subpart "Parceling Usings.” and Partial such as this is not whether the Government has - n. 9, 112 cally, just taking question.21 Id. at S.Ct. the amount of should proportional 2896 n. 9. to the value of the interest compared taken as total to the value of the Stevens, writing separately, criti Justice up property, including depriva- to and total arbitrary as notion that land “[a] cized tion, by taking physical whether the is occu- property diminished in owner whose is value pation public for park, by to as a use or nothing, an owner 95% recovers while whose regulatory imposition preserve proper- to is 100% property diminished recovers the ty may by as wetland so that it be used at -, full land’s value.” Id. S.Ct. at public ground recharge for water and other 2919, Stevens, response, dissenting. Jus ecological purposes.24 Scalia, Court, writing tice for the noted that analysis Stevens’s “errs in its Justice as The felt kind special need for some of a sumption depriva that the landowner whose in regulatory may takings rule eases stem step complete tion is one short of is not from the difficult line that has to be drawn at -, compensation.” to Id. entitled partial between and the at 2894 n. S.Ct. 8.22 mere ‘diminution value’ often accom- panies regulatory imposi- otherwise valid conceptual problem No such seems to exist expressed tions. As by Justice Holmes in occupation. physical If Coal, Pennsylvania hardly “Government tract, property owner owns a acre go could on if to values some extent incident public acres for the Government takes 95 to could not be diminished without park, argue no one would that the five acres every change paying general such remaining precludes somehow As long recognized, law. some values are just claiming to owner entitlement com- enjoyed implied under an limitation and must Indeed, pensation for the loss the 95. if yield police power. obviously But just the Government took 5 acres and left the implied limits, limitation must have or the 95, there owner with would be no process gone.” contract and clauses are due question that the owner was entitled to com- Id., 260 U.S. at at 159. S.Ct. Gone as pensation parcel (plus taken sever- well, add, it superfluous is almost would be damages remaining ance attributable to the imposed the constraints tract).23 Government takings clause. relatively Courts have even mi- held that physical occupations compensable. way linedrawing problem nor One to avoid this Teleprompter Loretto v. regulatory taking Manhattan would be to CATV declare that no Corp., compensable Amendment; Fifth 73 is under the (1982); L.Ed.2d 868 Hendler remedy v. United available for a (Fed.Cir.1991). goes Logi- impo- F.2d 1364 ‘too far’ is invalidation U.S., Benefits, (1980), Similarly, Whitney 21. Inc. v. 67 L.Ed.2d 551 Justice Brennan (Fed.Cir.1991), 926 F.2d 1169 this court held wrote: impact Mining that the of the Surface Control power regulations zoning Police such as ordi- plaintiff and Reclamation Act of 1977 on was a nances and other restrictions can de- land-use use; economically total destruction of all viable stroy enjoyment the use and arguments regarding possible the Government's promote good just public order as effec- uses, farming, alternative such as were consid- tively physical as formal condemnation or in- Id., "completely ered off the mark.” at 1174. property. vasion of own- From view, point er’s matter little whether analytical In addition to the discontinuities flooded, his land is condemned or whether rule, all-or-nothing that are created such an by regulation it is restricted to use in its natu- practical Ep- there are difficulties well. See state, deprive ral if the cases is to effect in both stein, supra n. 14. gov- him of all beneficial use of it. From the view, point flowing ernment's benefits See, e.g., Plager, 23. & A.V. Kendall S.J. Sever- public preservation open space the from Damage Proceedings, ance in Eminent Domain 10 through regulation equally great may be as (1957). U.Fla.L.Rev. 1 creating refuge through a wildlife formal increasing electricity produc- condemnation or Dissenting private Diego through project 24. Gas San & Electric Co. v. tion a dam that floods 652, 621, 1287, Diego, property. San 450 U.S. 101 S.Ct. 1570 also, alia, practice in 159. inter United States v. historic the See That was the

sition. 200, 149, 156, 203, century, Caltex, much of the twentieth 344 U.S. courts definitively rejected (1952); that Supreme Court v. the States Central 97 L.Ed. 157 United Evangelical English Lu Co., 155, 168, in First practice Mining 78 Eureka 357 U.S. Angeles County, v. 482 Los (1958); Church 1097, 1104, theran 2 1228 L.Ed.2d S.Ct. 2378, 304, 96 250 107 L.Ed.2d S.Ct. 124, U.S. 98 438 104 at S.Ct. Penn Central U.S. designed “is Fifth Amendment The hoc, 2659, “essentially noting ad 2646 at the governmental interference to limit ‘not takings jurisprudence. inquiries” factual se, rights per but rather to with hardly But to the solves the recourse facts in the event of other secure simply at is no problem basic hand —there amounting to a tak proper interference wise bright dividing compensable from non- line ” ICC, 1, 11, 494 U.S. 110 v. ing.’ Preseault compensable the Government’s exercises of (1990) 921, 914, 1 (quoting L.Ed.2d 108 S.Ct. power regulatory imposition a a causes 315, 482 at 107 at English, U.S. S.Ct. First is partial to the owner. What loss cases).25 Nothing in 2385; emphasis both judicial bal- necessary is a classic exercise protection to Amendment limits the Fifth competing ancing values.27 takings, ‘categorical’ regulatory nor has reciprocity advantage, is this court held.26 When there Supreme Court or so see, zoning e.g., such in a paradigmatically there remains in cases as this Thus partial Co., 365, resolving when a loss 47 Realty task of Ambler 272 U.S. difficult Euclid v. (1926), 114, use of the has crossed of economic L.Ed. then the claim S.Ct. 71 303 noncompensable from a ‘mere dimi private the line prop taken the Government has ‘partial taking.’ compensable to a nution’ erty has in a has little force: the claimant public compensated by pro sense been itself trial court will find with little The gram “adjusting the benefits and burdens of guidance. Pennsylvania law As case direct good.” promote common economic life subsequent appellate court deci- Coal Central, 104, 124, 438 98 Penn U.S. S.Ct. recognized, question a of when have sions 2646, impacts 2659. Thus shared economic cannot answered occurs land doctrine, resulting types from certain use con a matter of but instead as absolute non-compensable. trols have been held to be adjudication: requires case case “the Tiburon, 255, 262-63, Agins 447 depends upon particular facts.” v. U.S. 2138, Id., 413, 2143, L.Ed.2d 393 43 S.Ct. at 158 at 100 65 106 260 U.S. at S.Ct. approximately passing English We note in that in both First owner was breeder 25. 75% compensable Supreme applied a Court flock’s value. This court found and Preseault compen- taking. takings interests clause less English simple. than a fee First concerned dious 255, Tiburon, 260, temporaiy prohibition Agins on the use of in a 27. See v. 100 land hold, 2138, 2141, (1980) (“The Supreme floodplain. The Court did S.Ct. 65 L.Ed.2d 106 governmental today, action us that the Govern- consti the dissent would have determination is, essence, temporary taking required the Gov- a determination that tutes ment’s Instead, owner, single Supreme public large, purchase at rather than a the fee. ernment required an exercise of held that the Fifth Amendment must bear burden of state Court taken, interest.”); power public First compensation for what was the use of Lutheran viz. 304, period AngelesCounty, 482 U.S. petitioner’s land for a limited of time. Church v. Los 318- 2378, 2388, on an S.Ct. L.Ed.2d involved a reverter easement. Preseault ("It just takings Supreme held that the chal- is axiomatic that the Fifth Amendment’s Court petitioner compensation provision 'designed lenge premature to bar Gov because had forcing people brought alone to bear under the Tucker Act in the ernment from some claim which, justice, public Court burdens in all fairness of Federal Claims. ”) public as a the interest be borne whole.’ was not concerned that should States, Armstrong allegedly (citing v. United U.S. had interfered was the Government (1960)); 4 L.Ed.2d 1554 contingent 80 S.Ct future interest. Central, 104 at Penn ("the regulation impact Yancey economic 915 F.2d 1534 United and, (Fed.Cir.1990), particularly, government quarantine the extent to on the claimant federal with distinct which the has interfered control avian influenza had caused the owner are, course, expectations turkeys healthy to market investment-backed of a flock breeder takings analysis). resulting slaughter. relevant considerations" them for loss (1980) (shared through and of a community ‘benefits shared burdens’ and the soci- Central, ordinance); zoning ety, Penn while the costs are focused on a few? (same). 104 at 98 S.Ct. 2646 at 2662 permitted Are alternative activities economi- cally light realistic in setting and cir- purpose regu- function That the and cumstances, they and realistically are avail- latory imposition drawing is relevant to short, In able? has the in Government acted partial line between mere diminution and responsible way, limiting a the constraints on suggest should not be read to that property ownership necessary to those pursuit when acts in im- Government of an purpose, achieve public and allocating portant public purpose, its actions are ex- individuals, all, to some number of liability. less than cused from To so hold would evis- burden that should plain language Takings cerate the be borne all? Clause, and would be inconsistent with Su- Admittedly line, bright simply this is not a preme guidance.28 necessary It Court Property drawn. regulators, owners and at- cause, good in the Government act but it is tempting predict governmental whether a takings already not sufficient. The clause far, gone has too will still need to acting assumes the Government is in the judgment- use making and exercise care in public private property interest: “nor shall decisions. In today this sense our decision just -public compen- be taken use without continues the judicial tradition of ad hoc added). (emphasis sation” decisionmaking time, area. Over how- .this It is for the trial court as an initial matter ever, enough cases will be decided with suffi- to determine whether the Government acted clarity cient care and that the line will more proper within its role the circumstances clearly emerge. presented by the case of Florida Rock. rejects drawing dissent the line be- Marketplace decisions should be made under non-compensable tween ‘mere diminution’ working assumption that the Government regulatory land use compensa- restraints and citizens, prejudice private will neither unfair- takings ble interests that involve ly shifting public good the burden of a onto a less than all of the fee estate. The dissent people, arbitrarily few nor act capricious- nothing approach favors an all or some —if is, ly, disappoint will not act to reason- critical threshold of value loss is reached as a expectations. able investment-backed regulatory imposition, result of the then the Government, word, fairly in a must act and owner is entitled to reasonably, private parties pur- so that can is, for the of the entire fee. This time, sue their interests. At the same course, way. problem another to handle the intermediary Government acts as the be- partial takings, prob- are serious there private provide tween mutually interests to approach. lems with the dissent’s beneficial environment from which all benefit thrive, and which all can the shared dimi- approach provided bright If the dissent’s nution of free choice that results not rise hocery line and problem, avoided the ad constitutionally required to the level of com- might argue in its fávor. But it does not. pensation. Determining any given the threshold case which, addition, then, trigger under the dissent’s

In view would to a demonstration of compensation, requires full the same sort of loss of economic use to the owner as weighing balancing of indeterminate fac- regulatory imposition result of the fact—a Furthermore, yet properly tors. the dissent determined in this endorses case— questionable policy forcing the trial court must consider: are there di- Govern- compensating pay rect accruing something benefits ment to it does not want property, situated, similarly approach and others and has not taken. flow- The dissent’s ing requires from the pay environment? Or the Government to for the ‘fee’ benefits, any, general widely i.e., if the entire bundle of land — Lucas, Supreme the South Carolina Court held that was not the correct criterion for purpose protecting Lucas, U.S. -, had held that the State’s jurisprudence. takings ecology oceanffont excused the State from liabili- S.Ct. 2886. ty regulatory imposition. for its

1572 (1982). 3164, 419, may though 73 L.Ed.2d 868 the Government be rights —even any difficulty finding in only kinds of de- Nor was there seeking to restrict certain label, interest it property This has the taken —if needs velopment or certain uses. co-tenancy it a limited with an to both the Govern- call easement potential of unfairness sank property The latter for access—when the Government wells the owner. ment and paid property periodically has lost an owner’s and en- may to be for what she but wish rest; to make tests and should tered to service wells and keep the the Government States, paying put obligation to the for of the water. Hendler v. United not be (Fed.Cir.1991). fact that it wants it does not set out F.2d 1364 more than any regula- particular taking is a property it.29- The owner is entitled source to take taken, entry just compensation physical rather than a should for what no tion to less, legal in- no nature of but no more.30 make difference —the defining re- property terests affected being that what is The dissent is concerned unchanged. mains ‘value,’ fact, in not In property.31 taken is By Finally, Supreme regulatory context this it is both. the dissent believes such as portion precedent that a Fifth taking some of Florida Rock’s eco- Court establishes power specific property to dis- Amendment claim has property nomic use —its wetlands, overlying nothing proposition. it taken is an turb the and with been all or regulatory taking property right law to mine its sub- If taken to mean that a common appears taking cannot result than a of the surface minerals —the Government less estate, destroyed part property value of Florida owner’s entire fee we cannot to have holdings. any question proves agree. If that to be There has been Rock’s never application any if and the of the ad hoc tests but that the Government can take kind warrant, previously proper- recognized estate described so or interest it Government, ty proceeding; in an it belongs interest taken chooses eminent domain right just no compensation and the to for the is not limited to fee interests. We see support rule in belongs interest taken to Florida Rock.32 reason or for a different cases, condemnation and that is true inverse any have diffi Court did not physical or whether the results from a culty finding that a interest was regulatory action. taken when the authorized Government apart installation of a box on an In this case we concluded that the small cable have building; support finding not re that the fee ment was record does Government land, i.e., value, buy quired building. to Loretto v. Tele all use or economic Corp., although that prompter regulation, 458 U.S. was taken Manhattan CATV problem property lawyers. Property 29. course for This of does not free Government little paying 'categorical' are about as as the human mind for a interests diverse even Property though may only conceive. interests thought can real have it was restrict- tangible uses, personal, intangible, possessory and and consequence ing certain if in fact nonpossessory. They can be defined and regulatory imposition essentially is to take all (present sequential rights possession terms of to See, e.g., economic value. Lucas. types estates various of fees— interests—life interests), terms shared and future and in course, payment 30. "Of be made need (such co-owner- interests as various kinds of taken, what is that the Government for all ship). specially There are structured takes, Dickinson, pay." it must States v. United lessee, (such mortgagee, as interests those of a 1385, L.Ed. bailee, possessor), and there are interests adverse water, (such special things kinds of contracts). And interests commercial just Yancey supra 31. v. n. United see see, range legal play ideas: across entire paid required for a to be loss Superior e.g., Tompkins Francis- San in value sustained owner. The co, Cal.Rptr. Cal.2d 378 P.2d 113 3,295 any Government did take title to (did give joint occupancy apartment of an turkeys. occupant possessory property one kind of power grant that carried with it the interest legal entry specific property police without a warrant Identification interest to search stash). pose occupant's marijuana be transferred to the should the other Government open is still an one to be claim decided of inverse condemnation of land trans- properly the facts of valuation property rights found. Since fers salutary. However, is majority’s loss economic use and value is the issue in throw-in line on the transfer of regulatory taking possible, this it is not a right to the United States does absent a valid determination in the change record of not opinion thrust of its imposition’ land, the ‘after value of the to damages paid must be to the extent of loss of occurred, taking know if a much less what in value the fee to the 98 acres. pay

the Government must for it. We are majority’s partial taking theory, now therefore, compelled, to remand the matter vaguely tied to property rights, appears to to the trial court for a determination of that borrow from the views of then Justice Rehn information, piece essential and for an quist in his dissent in Transp. Penn Central initial determination significance as to its in City, 104, 138-153, Co. v. New York 438 U.S. order to decide compensa- whether there is a 2646, 2666-2674, 98 S.Ct. 57 L.Ed.2d 631 taking property. ble (1978), Keystone and in restated Bituminous DeBenedictis, Coal Ass’n v. 480 U.S. CONCLUSION 506-521, 1232, 1252-1261, 107 S.Ct. judgment of the Court of Federal L.Ed.2d 472 taking of an Claims is vacated and the matter is remand- identifiable right compen- should be proceedings ed for further consistent with However, sable. Supreme Court, in opinion. (and Penn Keystone) rejected Central in AND VACATED REMANDED. division of the fee owner’s bundle of rights separate into rights. takable Penn NIES, Judge, dissenting. Chief Central, 130-31, 2662; at at S.Ct. Keystone, 470-501, 480 U.S. at S.Ct. procedural grounds, On I substantive 1232-1250. These decisions and all others respectfully majority’s dissent from the re- require one to focus on regula the effect of a mand for a determination of whether tory totality restriction on the of an owner’s pay compensation United States must under rights in property. See also Concrete the Fifth Amendment to the extent that the Pipe Tr., & Prod. v. Const. Laborers Pen. 98 acres in part, issue lost a substantial - U.S. -, -, 2264, 2291, all, essentially of its economic use or (1993) (citing Keystone). L.Ed.2d 539 A majority’s theory value. The contrary to diminution in value denial an eco “takings” jurisprudence Fifth Amendment as (even nomic if expressed use the loss can be Supreme delineated Court and this terms) in property right is insufficient to Labelling court. theory its lost use/value taking effect a dixit) Supreme under all Court “partial taking” (ipse give does not precedent long so any substantial other uses legitimacy. are left to the owner. While the land, Inverse condemnation of like af- change rulings, rethink and power firmative exercise of the of eminent this court adopt positions is not free to in domain, requires the transfer of the Court, conflict with anticipat decisions of the found to be taken to the United States. Val- ing that persuaded the Court will adopt to Thus, ue is not a transferable interest. dissenting event, any Justice’s view. In claim for loss of value does not constitute a majority espouses compensation for a takings meaning claim within the of the Fifth fee, partial taking of the which is not the Amendment. same as the total of a severable inter response dissent, majority support partial taking theory est. No for the opines any regula- loss value due to a can be found even in dissents. tory restriction on easily land use can be property right transmuted into a of a respect procedural With error after the 26) (Op. remand, p. the land n. and that such first the issue this case was limit- 1570). right belong will (p. taken, ed to whether the entire fee had been majority’s recognition that a successful which turned on whether the had a peal,2 support an per- argument and it is not the denial of the value after substantial United v. American States judgment. specifically instructed this court mit. As II, Co., Ry. Exp. 68 L.Ed. to exist solid is found there [I]f (for value the 98 shape fair market adequate court has no case This license acres) ob- Rock could have liking only ignoring which Florida more to its property, that for that effectively taking from others an tained law of the case but also remaining use of the be a sufficient trial appeal would for Florida Rock. The court that a to forestall determination government pay to million ordered the $1+ any just or that com- taking had occurred for and Florida Rock to the 98 acres ordered by paid govern- had to be pensation property. tender a deed upholding judgment. ment. tied fate to its majority’s ruling entirety that the Under the (Fed.Cir.1986). This court 903 791 F.2d taken, of not Florida Rock loses. the fee was Rock II remanded for in Florida a determi- value remained. of whether substantial nation dispositive, procedural I While the issue did, majority no occurred. The If it majority will also address merits government on that and issue sides with theory “partial” taking conflicts of a which taken, which the entire fee was holds that Supreme precedent with current and litigation prin- under have ended should precedent of this court. Instead, major- law of case. ciples of prove to Florida Rock to ity allow remands I claim, indeed, a claim once raised different subject judgment.1 legal There- No has received the attention and now subsumed “takings” fore, “partial taking,” jurispru- had it of scholars more than issue of a Rock, years. by dence in recent A flood of literature argued appeal Florida been advocating scope appellate produced of re- has various theo- outside the been would be ap- responsibilities.3 filed no cross ries of and social party view because Tangled Expectations," complaint in the Court of Fed- Council: A Web of 45 Rock's 1. Florida III, (1992); alia, damages 1369 William W. originally sought, Stan.L.Rev. Fisher inter eral Claims Lucas," but, 45 Stan.L.Rev. during "The Trouble 1393 value of its land for ihe diminution in Sax, (1992); Joseph Rights "Property L. and the litigation, dropped that issue out in the course of Economy Understanding Nature: Lucas v. trial, viability appeal no the first and Council," Coastal 45 Stan.L.Rev. South Carolina Rather, type was taken. the issue of claim Lazarus, (1992); “Putting Richard J. 1433 litigated United had tak- was whether the States Lucas," Spin in 45 Stan.L.Rev. Correct (1992); 1411 entirety fee to the 98 acres. en Peterson, Takings Andrea L. "The brings majority back the en- a closed issue into Underlying Principles Clause: In Search Part theory. partial tirety of the case Takings Critique I—A of Current Clause Doc trine," (1989); Douglas 77 Cal.L.Rev. W. 1299 appeal appellee a cross 2. An must file Kmiec, Original Understanding of the "The Tak constitute an on the it seeks raise attack issues Obtuse," ing Clause Is Neither Weak Nor 88 judgment not when the issues are below but Fischel, (1988); 1630 William A. Colum.L.Rev. merely arguments support alternative Balancing and "Introductions: Utilitarian For Moore, judgment. Moore's Federal Practice Takings,” Colum.L.Rev. malism in 88 1581 ¶ (1993). [3] at 4-46 254.11 Michelman, 1987", (1988); "Takings, Frank 88 (1988); Margaret Jane Colum.L.Rev. 1600 Ra Rubenfeld, "Usings," din, 102 Yale L.J. 1077 3. Jed Conception Property: "The Liberal Cross (1993); "Takings Sugameli, Glenn Issues in Jurisprudence Takings," Currents in the 88 Light (1988); Lucas v. Carolina Coastal Council: South 1667 Rose Acker Colum.L.Rev. Susan Fury Signifying man, A Decision Full of Sound and "Against Hocery: Ad Comment A on Mi (1993); chelman," (1988); Nothing,” Virginia 439 Erika 12 Env.L.J. 88 Colum.L.Rev. 1697 Rich " al., Property Jones et Amendments Just Com Epstein, Takings: "The Fifth ard Private and A. Implications Regulatory (1985); pensation Margaret Clause: Eminent Domain" Power of (1993); Personhood," Radin, Policy," "Property American U. 6 Adm.L.J. of and 34 Jane Walker, Michelman, (1982); and Hon. John M. "Common Law Rules Frank Stan.L.Rev. Regulations: Utility, “Property, Tak Comment on Land Use Lucas Future Fairness: (1993); Compensation ings Jurisprudence,” Const.L.J. 3 Rich Foundations of Just Ethical Law," Epstein, Harv.L.Rev. ard Carolina Coastal "Lucas v. South I espouse separately the view that is held will address lost value Some subject complete property rights as to its use concepts, control because the Others, governments.4 the state and federal be the same under “law-and-economics” extreme, theories, premise opposite interchangeable at the start from in estab- right proper- takings jurisprudence. that owners have a to use their lished manner, ty any virtually without restric-

tion, and, damages paid any must be A. governmental interference with their use.5 Loss Value pay The more often the must private property, exercising control over majority view that lost value of land in reality. less control there will be. That is the compensable itself is is not-the course set Court. States v. United Caus majority “takings” decision discusses by, L.Ed. 1206 through law a conventional manner sec (1945), provides perhaps the clearest state analysis. B tions A and of its But then it ment that an inverse condemnation claim camp leads us into the of those who advocate respecting rights requires land an identifica damage awards for restriction specific property tion of the interest to be 1568). justification (Op. p. Its economic government. Causby transferred to the in government pay regula will now less takings volved a claim reason of mili low tory private property interference with tary flights aircraft plaintiff’s over the chick specious. governmental In the absence of destroyed en farm which its use for that rising very high restrictions level of a purpose. As held therein: “taking” total in issue re held, [T]he Court Claims as we have quired by Supreme precedent, Court Connol noted, that an easement was taken. But ly Guaranty Corp., v. Pension 475 Benefit findings 211, 225-228, 1018, 1026-1027, precise of fact contain no de 106 U.S. S.Ct. scription as to It (1985); its nature. is not de 89 L.Ed.2d 166 Penn Central frequency flight, scribed in terms of 104, Transp. City, Co. v. New York 438 U.S. altitude, permissible type airplane. or 130-31, 136-38, 2646, 2662, 98 S.Ct. 2665- finding Nor is there a as to whether the 2666, (1978), government L.Ed.2d 57 631 temporary perma easement taken was pay. may pay in does not now It more description Yet nent. an accurate satisfy few cases where a claimant can those essential, standards, taken is since that in high requires imagina but it little terest in vests the United States. United required tion to envision the vast sums Cress, 316], supra v. 328- [243 States U.S. government if lost claims must value/use 380, 385, [37 329 S.Ct. 61 L.Ed. 746 pay Indeed, impairment rights. for mere (1917)], and eases cited. objective theory preclude is to regulation6 precisely because added). 267, (emphasis Id. at 66 S.Ct. at 1069 great Only will entail too a cost. property right “Value” is not a under Flor respect theory public in this will the save the any ida law or that I can uncover. state law fisc. unclear, takings While much of law is one majority analyze principle Rights depend does not loss of value is not. land on property right separately particular and transfer of a the law of the state. Preseault v. ICC, 1, 9, 20-25, 110 914, partial taking theory. Essentially under its 494 U.S. 16 n. 9, property right, it (majority sees no distinction an 924 n. 108 L.Ed.2d 1 However, concurring opinions); economic use and loss of value. Ruckelshaus v. Mon 4.Sax, supra, “Property Rights Economy Epstein, Takings: Property and the Private and the Pow- Understanding Domain, (1985). of Nature: v. South Lucas Car- er Eminent Council," olina Coastal 45 Stan.L.Rev. 1433 (1992). stated, Although not so such theorists 6. Id. would, effect, superimpose the constitutional powers Congress rights on land much as the powers may negate immunity constitutional state under the Eleventh Amendment.

1576 986, 1001, 2862, Co., private by government regu 104 S.Ct. lands caused 467 U.S. santo (1984) (“Property requires compensation. 2871, inter lation of its use L.Ed.2d Transp. City, Penn v. New York ... not created the Constitution. Central Co. ests 2662, 2646, Rather, they are created and their dimen 438 U.S. 98 S.Ct. (1978); existing Swasey, rules or under L.Ed.2d 631 Welch v. sions are defined 91, 567, independent standings that stem from an 29 S.Ct. 53 L.Ed. 923 law.”). Central, generali “[Supreme Use of As stated in Penn source such as state uniformly reject[s] respecting “property” precedent] proposition law disserves the ties value, takings jurispru standing development of coherent that diminution alone, taking.” right taken must be identified can establish a Penn Central dence. Co., because, transferred, 131, Transp. be 438 U.S. at 98 S.Ct. at 2663 Co., (citing Realty comes the United States. Euclid v. Ambler 272 U.S. States, (1926) (75 Id.; 365, 114, Corp. Deltona v. United 47 S.Ct. 71 L.Ed. 303 1184, (1981), 476, percent by zoning F.2d Ct.Cl. diminution value caused law); Sebastian, compensation is fixed at the fair Hadachek v. 239 U.S. also because (1915) (87fc per of the transferred market value 60 L.Ed. 348 Resources, value)). right. Yuba Natural Inc. cent diminution in issue (Fed.Cir.1 by focusing 904 F.2d United “is resolved the uses 990).7 Central, requirement regulations permit.” This bedrock means Penn that, purchased having the United States 98 S.Ct. at 2663. property right, no second claim that fee or a Appellants argued in Penn Central that specific government property the took that taking the NYC landmark law effected a

possible. operation significantly because its had dimin- contrast, damage In a lost value claim ished the value of the Penn Terminal Central impose not even an easement on the would Appellants argued any site. further that re- only possible land. claims are not Successive imposed striction on individual landmarks likely. If of value loss alone created pursuant to the Landmark Law constituted a claim, Florida Rock not would receive taking requiring just compensation. The award, damage keep the but also would its argument. “no Court found merit” the Id. effect, takings jurisprudence land. In would Thus, it is clear that no claim under the type a novel of Fifth Amendment become taking by Fifth Amendment for a is stated injury tort for to the land- claim allegations property simply that the issue owner under which United States must value. lost receiving quid pay damages pro quo. while no This is not the law. B. jurisprudence, like Inverse condemnation Property Rights in Issue power, of eminent domain direct exercise large is based to a extent on in rem con- In the instant while there is no alle- Thus, cepts.8 theory compensation gation government property that the took a value, simply in the land’s not for loss Rock, right from the fee owned Florida taking property right aof founded on majority suggests throughout opinion law, Florida is untenable. mining rights property rights that are the long rejected require prorata compensa- Court has issue whose loss position position that a diminution in economic value Florida Rock’s in contrast is tion. domain, temporary taking, proper power 7. In a measure of cise of its of eminent the entire prop predicated is the value of the use of the doctrine of inverse condemnation is erty during taking, govern interest since the taking may proposition on the that a occur with ment owner returns interest proceeding." English out such formal First Lu Yuba, taking when the ends. 904 F.2d at 1580- Angeles County, theran Church v. Los 482 U.S. 304, 316, 2378, 2386, L.Ed.2d 250 taking gov- typical 8. "While the occurs when the ernment acts to condemn in the exer- at -, Connolly 2893. In v. mining 112 S.Ct. at denial of Guaranty Corp., reason of effectively the entire fee Pension U.S. took Benefit economically 224-25, 106 viable use. of all the denial S.Ct. 89 L.Ed.2d (1986) precedent tracks position (citing Transporta This latter Penn Central actions, prop leave some Co., 2659), tion 438 U.S. at 98 S.Ct. at nevertheless, may, erty rights in the owner provided following guid the Court had private land use severely interfere with so ance: outright equivalent to they are deemed determination, however, we To aid public use. of the land for condemnation three factors which have have identified Co., Bay Pumpelly v. Green (1) significance”: “particular “the economic (1871) 177-180, (“taking” by 20 L.Ed. 557 claimant”; impact construction). by dam flooding land (2) regulation has “the extent to which the — Carolina, -, U.S. Lucas South interfered with distinct investment-backed (1992), is the 120 L.Ed.2d S.Ct. (3) expectations”; and “the character “takings” in a series of eases issued latest governmental action.” previously appeal. on since this ease was Lucas, categories regu two discrete plaintiff pleaded the of the “fee compensable latory action were delineated as at - simple lands. Id. interest” certain (1) namely, reg case-specific inquiry without 7, 112 is instruc at 2894 n. 7. Lucas n. S.Ct. private allowing physical “invasion” of ulation fee be found that a tive regulation denying all eco though owner was left with some even nomically productive use of land. beneficial or rights governmental ac after the — Thus, at -, at 2893. regulations at issue Lucas tion. The state economically less than all beneficial or where any building Lucas’ two ocean prohibited productive use of land is lost reason regulations privately-owned lots. The front regulation, to an governmental one reverts rights, strip of all did not the owner inquiry whether ad hoc to determine land. e.g., right to sell or devise the the fee, issue, in was taken. property here Nevertheless, that the denial the court held regula economically use state of all viable contrast, majority the “ad In divides categorical taking of and total tion effected types takings, total inquiry into two hoe” unless, law, under state the action the land finding there is no cate- partial. After of a “nuisance.”9 amounted to abatement preven- gorical taking physical invasion or land, the of all economic use of two tion opinion begins recogni- with the The Lucas Lucas, majority recognized in situations regula- governmental a claim that a tion that that, inquiry, the ad hoc concludes under property public use has private tion took for compensa- may proportional claimant recover inquiries factual generally required ad hoc use if it impairment of economic tion for the there into the circumstances of each beyond “diminution passes a threshold deciding that the being no set formula for Contrary majority, in an ad Id. value.”10 action effected an inverse condemnation. noncompensable inapt applied compensation. houses, cars, seizure exception appears to fed- 9. This boats, private regulation. airplanes, action is eral constitutional, The source of federal or other compen- requirement drug as is the seems property crimes in connection takings by respecting state Precedent sation. assumption (Op. p. majority’s 1577 n. belie the to carefully parsed to determine action must be 10) alone defines the that state nuisance law applicable principles equally to whether the Amend- and the Fifth interrelation of commerce authority Congress regulation. to federal impose ment. in this case rests on use restrictions which, true, may it is be exer- commerce clause theory majority supports with citation 10. The police purposes achieve akin to a state’s cised to Teleprompter Loretto v. to Loretto and Hendler. States, 432, power. Brooks v. United 419, Corp., U.S. 102 S.Ct. CATV Manhattan 436-37, S.Ct. 69 L.Ed. 699 (1982); 3164, v. United 73 L.Ed.2d 868 Hendler logical that a state's But it is not at all clear or States, (Fed.Cir.1991). Both are 952 F.2d law, recognized which the Lucas court nuisance occupation under a cate physical cases decided compensation respecting for no as the basis taking majority’s gorical analysis, whereas police powers, is also the limit state’s exercise of analyzed analysis. In theory under an ad hoc power property is to take without of the federal resulting ‘deprivation’ pro fraction reduction value nator our has inquiry, the hoc pronouncements by the pertains to whether a duced inconsistent use restriction — Lucas, “taking” making omitted].” Court U.S. “taking” [citations occurred. Id., determination, loss is a factor. at at - n. 112 S.Ct. at 2894 n. 7. The such (95 percent majority “partial at 2895 n. 8 - n. seeks to shoehorn its tak may get categorical for ing” theory open question. “benefit It loss into does “keenly takings relevant open ques mulation” but not fit. The Lucas court left value, however, analysis”). is not property The loss tion of how to determine the inter (as supra) nor issue, taken discussed est in the denominator. would One Yuba, 904 compensation. the measure of taking still determine whether there is a total F.2d at 1580. “partial of that interest. The tak ing” theory change does not the denominator precedent, a Fifth Under majority’s or even the numerator. The de specific claim that has Amendment nominator remains the fee and if an ad hoc nothing proposition. or been taken is an all taken, negates inquiry the fee is one property in issue has been taken Either the (under on, simply go majority’s would at time of and the fair market value view) proportional compensation to consider taking paid, must be or the is not injury, if a threshold of more than “mere taken and no is due. Tabb diminution”, passed.11 is Lakes, Ltd. v. United 10 F.3d (Fed.Cir.1993). “yes” The answer is 800-803 “partial” can no that the There be —Lucas, “no,” “partially.” See theory majority taking does not - n. 8, 112 (“Takings at n. 8 at (the change in issue denomina- ‘all-or-nothing’ full of those situa law is tor) mining rights. from the fee to If the tions.”). Thus, analysis, under an ad hoc issue, taking mining rights were the one land, percent of value in the loss simply mining rights would evaluate the sufficient, example, when considered the time the was denied. And there factors, require with other if would be no need to remand to determine purchase percent of the interest rights of such occurred. would One land, Conversely, i.e. the fee. the landowner merely for their remand evaluation. Cf. asserting the of the fee receives noth Central, Penn 438 U.S. at 98 S.Ct. at ing, despite the loss in value caused (Rehnquist, dissenting). Mining J. action, weighed if the factors to clearly precluded right and such has zero gether do not mandate that the value to Florida Rock after the action on the “involuntary purchaser” an of must become instead, permit. majority, engages The in a II, Rock 791 F.2d at 905. the fee. Florida complicated taking before after evalua- Lucas, majority states that in tion of the fee. But the loss in value of Supreme upon mining rights Court touched did does not reflect the value of fee partial taking question.” have to decide “the the date of denial. One must also 1568) (op. p. Court did note take into account that the land is zoned clear, precedent development that in did not make it even five-acre as well. It residential taking, speculation a categorical pure how to determine “the is whether the substantial against majority loss of interest residual value found reflects mining value is to be measured.” The court noted investment value for future use or for uncertainty regarding majority’s that the denomi- future “this residential use.12 What the permanent physical occupation taking light the size of a in of the owner’s alternative uses for Loretto, property.”). interest taken is irrelevant. 434-35, at 102 S.Ct. at 3175. Had U.S. analyzed inquiry, majority Anomalously Loretto been under an ad hoc 11. remands for advice legal .percentage standard of what must be the result well have been different. See id. 452-53, (Blackmun, partial taking. taken to rise to the level of at 102 S.Ct. at 3185 J. dis senting) ("[A]ny intelligible takings inquiry must mining rights gov- also ask whether the extent of the state's interfer Once transferred ernment, majority’s theory post-takings compensable ence is so severe as to constitute a restricts, which a its fee owner analysis makes clear is evaluation right, an rights merely serves to called a economic mining whether discussion substantially use, less theory .simply Pipe that a in or value. As Concrete obfuscate us, in the fee must always taking loss of value a total than total forms there is compensated. conversely, partial taking that interest and is, indeed, precise ratio of the fee. This taking theory finds majority’s partial analysis. requiring an ad hoc One nale analysis. As reaffirm- in an ad hoc no home (and value) rights weigh must Proc., Pipe recently in & most Concrete ed — regulatory action issue before —, at 2290: 113 S.Ct. value) (and after against rights therein property could not parcel of claimant’s [A] confiscatory regulatory restriction and find taken and into what was first be divided taking disparity between the two values for purpose of demon was left for the what Thus, only portion to be found. where to be taking of the former strating the acreage of a tract is affected denial of compensable. To the hence complete and permit, we have held under an ad a wetlands any property is tak portion extent taking analysis that no of the tract oc hoc en, always in its portion is taken no was due. Delto curred and however, question, entirety; the relevant Corp. 228 Ct.Cl. na v. United all, only a property taken is whether the (1981).13 1184, 1192 F.2d Accord, question. portion parcel Assn. v. De Keystone Bituminous Coal issue of what is the The difficult Benedictis, denominator) (the was avoidable issue (1987) (“[0]ur 94 L.Ed.2d plaintiff the fee Lucas because the claimed taking requires us test for Respecting the taken. Here as well. has been taken compare the value that denominator, indicated, we do not have re property with the value that from the interest, question of a severable property, one of [and] mains i.e., rights rights from the bundle of mineral determining how to questions is critical Indeed, Florida Rock aban- in the land.14 property ‘whose value is the unit of define any than the doned issue other of the frac to furnish the denominator appeal. entirety prior to the first fee in its omitted). ”) (citation tion’ III, n. 5 21 Cl.Ct. analysis hoc answers the The ad nothing stage proceedings, At this entirety property in issue whether the fee interest is at stake than the entire less where the be deemed confiscated even should majority’s ruling 'that the the 98 acres. The gives guid- rights. It no owner retains some analysis not taken under an ad hoc fee was proper- is the ance on how to determine what reversal. mandates issue, i.e., It is sim- ty in the denominator. apply after the ply the formula to denomina- II “complex ques- That properly defined. tor is facilely by giving the answered tion” is majority de- remands for Inasmuch as the interest a name. restricted in value of the of the difference termination denial, fee, permit it is and after before to man- law has been and continues The legal in the point out the error only appropriate to may not look to the date that a court $10,500 of the figure the value valuation entirety property rights of of a part of the issue may noted that there is no buy 14. It also be the land because of value based on offers to possible change mining regulations entirely involving thrown Florida Rock's in is frustration of change regulations There could be no askew. II conclud- This court in Florida Rock business. subsequent right give would owner finding of a based trial court's ed that the majority which the to mine the mineral estate prevented from that Florida Rock on the fact property. agrees becomes profitable mining made conducting business "improperly frustra- to recover for the case one Indeed, my clear in in this it is far from purposes.” Id. of business tion acres should be treated as mind that the 98 part the 1500+ total tract rather than of severed acreage. permit. recognize that One must come to wetlands are neces- prior to denial fee require protec- sary special fair market value on the date resources which focus on the 2, 1982, denial, namely Contrary development. on October be- tion from unbridled alleged taking. majority, develop- the date of the cause that is to the limitations 10, Lutheran, at 321 n. permit may imposed 482 U.S. under on First ment be (the property n. 10 valuation type property compensation. S.Ct. at 2389 without this taking); calculated at time of taken must be Id. States, Indus., Inc. v. United Kirby Forest property right Owners of such have no 2187, 2194, ownership to use natural lands (1983) (just compensation deter- L.Ed.2d Ownership property resource unfettered. taken); property date is Tabb mined on the responsibilities community to the as a carries States, 10 F.3d Lakes v. United privileges. height whole as well as Like (Fed.Cir.1993) (compensation is measured zoning or limitations five-acre laws other occurs). from the time the use, government’s similar restrictions on value ascribed to the fee pre-denial generally of control use of assertion over $10,500 trial is the value of the court wetlands, property which devalues all such acreage regulations. wetlands with no extent, compensable. some is not itself $10,500 figure trial court based hardly go could on if to “Government some upward adjustments. acquisition cost with extent values incident to could not Indus., Inc. v. United paying every be diminished without such (1990) (Florida n. 5 Rock 21 Cl.Ct. change general Pennsylvania law.” III). Mahon, 393, 413, v. Coal Co. record, $10,500 per Thus, On the evidence of 67 L.Ed. 322 figure acre does not reflect the fair market the fair market value of the fee must be immediately prior of the fee general value determined with these restrictions on prop permit on Florida Rock’s denial place, regulations land use in not as if no prior per erty. The value of these lands Only wetlands existed at all. with this ad- previously mit had been diminished denial justment pre-taking prop- is value of the regulations applicable the state and federal Indeed, erty properly determined. the evi- However, regulations to all wetlands. “comparable” dence of sales of lands in the taking. specifi no themselves constitute As 1980’s, majority discussed in connec- cally Bay held United States Riverside valuation, post-taking appears tion with Homes, view Inc.: pre-taking impact gener- fact to reflect the requirement person per- regulations neighboring

A that a obtain a prop- al wetlands on engaging erty mit in a certain use of before his values. or her does not itself “take” the majority prop- treats sales of wetland all, any very after sense: erty permit on which no was denied as evi- permit system implies existence of a dence of the value of wetland may granted, permission leaving permit which a was denied. ma- Under the landowner free to use the as de- rationale, jority’s permit the denial of the has Moreover, sired. even if the is Actually, majority no on valuation. effect denied, there be other viable uses suggesting partial taking occurred based Only per- available to the owner. comparison original aon between the value mit and the effect of the is denied denial is subject land and the later lower value “economically prevent viable” use of the property, depressed of other lower because it be that a land can said by general regulations, per- but for which no has occurred. mit That was denied. would mean the exis- 455, 459, general regulations respecting tence wet- L.Ed.2d 419 taking, contrary lands effected the which is

Thus, any regula- loss attributable to the Court’s decision Riverside Moreover, noncompensable. by Bayview, supra. As actual al- tions evidenced FWPCA, majority’s leged enactment of the the nation has act of under the view though simply ignored. can be Muddled be, takings

land law is not so muddled pass can concepts

that these muster.

CONOCO, INC., Citgo Corpora Petroleum Ter

tion and Lake Charles Harbor and District, Plaintiffs-Appellants,

minal

The UNITED STATES FOREIGN-TRADE BOARD; Franklin, Barbara H.

ZONES

Secretary Commerce, as Chairman Foreign-

and Executive Officer of the Board; Brady,

Trade Zones Nicholas F.

Secretary Department Foreign-

Treasury, as Member of the Board;

Trade Zones Michael P.W.

Stone, Secretary Army, Mem as a Foreign-Trade

ber Board Zones Ponte, Jr.,

and John J. Da Executive

Secretary Foreign-Trade Zones

Board, Defendants-Appellees.

No. 92-1396. Appeals,

United Court of States

Federal Circuit.

March

Case Details

Case Name: Florida Rock Industries, Inc. v. United States

Court Name: Court of Appeals for the Federal Circuit

Date Published: Jun 21, 1994

Citation: 18 F.3d 1560

Docket Number: 91-5156

Court Abbreviation: Fed. Cir.