Third time around for Lost Tree's takings case against the federal government on this blog.
The first was the Federal Circuit's decision concluding that a single Florida parcel owned by the plaintiff was the relevant parcel against which the impact of the Corps of Engineers' denial of a § 404 wetlands dredge and fill permit is to be measured. The court overturned a Court of Federal Claims decision which concluded the relevant parcel was that single plot plus an additional nearby lot, plus "scattered wetlands in the vicinity" also owned by the same owner.
Second was the Court of Federal Claims, which on remand held that there was a taking, and that, after applying either the Lucas total wipeout or the Penn Central ad hoc test (the diminution in value caused by the denial of the permit was 99.4%), the just compensation owed to Lost Tree was in the neighborhood of $4.2 million. The CFC calculated the diminution by subtracting the parcel's value without a permit from its value had a permit been issued.
The government appealed to the Federal Circuit, which yesterday issued an opinion affirming the CFC, concluding that yes, there was a Lucas taking. The court didn't consider the CFC's Penn Central analysis, concluding it was not necessary to do so.
It's not a terribly long opinion so please read the case yourself if your boat, like ours, is floated by issues such as "whether residual value arising from noneconomic uses precludes application of Lucas and requires application of Penn Central's balancing test." (No, held the court, it does not. See slip op. at 7-10.)
Nor is the ability to sell the parcel an "economic use." The court rejected the government's argument:
The government argues that a landowner’s ability to sell an affected parcel is an economic use that precludes Lucas’s per se treatment. According to the government, Lucas classifies a sale as an economic use. The government cites this court’s decision in Conti v. United States for the same proposition. See 291 F.3d 1334 (Fed. Cir. 2002). Because Plat 57 has residual value, the government argues Lost Tree’s ability to sell Plat 57 precludes Lucas’s application.
We disagree. The government’s argument incorrectly assumes that negligible noneconomic appraisal value enables a landowner to sell a regulated parcel. As the trial court found, Plat 57’s residual environmental value has been reduced by mosquito abatement measures, which left isolated hummocks and stagnant eutrophic pools. Lost Tree CFC II, 115 Fed. Cl. at 231 n.9. The government did not produce evidence indicating that Lost Tree could sell Plat 57 in such a condition. Speculative land uses are not considered as part of a takings inquiry. See Olson v. United States, 292 U.S. 246, 257 (1934).
Slip op. at 10. Why? Because '[t]ypical economic uses enable a landowner to derive benefits from land ownership rather than requiring a landowner to sell the affected parcel." Id.
Finally, the Federal Circuit also rejected the government's argument that the CFC should have calculated the diminution in value caused by the permit denial from the parcel's purchase price, and not its value if the permit had been issued. No, held the Federal Circuit, the "highest and best use" is the proper "before" condition, not the purchase price:As the trial court understood, the government cannot rely on the regulatory taking at issue to reduce the fair market value of an affected parcel. See Fla. Rock Indus., Inc. v. United States, 791 F.2d 893, 905 (Fed. Cir. 1986).
Id. at 12-13.
All in all, a good case to add to your memory banks.