Remember the Lost Tree case? That's the one where the Federal Circuit concluded that a single 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.
The case got remanded to the CFC, which now has issued its opinion determining the loss of economic value caused by the denial of the 404 permit. The CFC concluded that the "after" value was $27,500, and the "before" value was $4,245,388, a diminiution in value of a whopping 99.4%. Lost Tree Corp. v. United States, No. 08-117L (Fed. Cl. Mar. 14, 2014).
The court held that under either a per se Lucas analysis (loss of economically beneficial use), or an ad hoc Penn Central analysis (was denial of the permit the functional equivalent of an exercise of eminent domain such that "justice and fairness" require the public to bear the cost of preserving wetlands), Lost Tree is entitled to be compensated, to the tune of the difference, $4,217,888. Next up for the court: attorneys' fees and relocation benefits.
The opinion is a worthy read at only 15 pages, and well worth your time. But whatever you do, don't miss this part, in which the court rejected the government's argument that the before valuation must take into account the denial of the permit:
Even if the court were to find the government’s proffer to be adequate, the proposed alternative valuation method has no merit. The government may not lower the fair market value of Plat 57 by relying on the possibility of the very taking at issue. Prior attempts by the government to make this argument have been rejected by the Federal Circuit and this court’s predecessor. Specifically, in Loveladies Harbor, Inc. v. United States, 21 Cl. Ct. 153, 156 & 156 n.5 (1990), aff’d, 28 F.3d 1171 (Fed. Cir. 1994), the plaintiffs asserted that the highest and best use for the disputed property was as a prepared site for a 40-lot residential development and submitted an appraisal assuming such development. The government attacked the plaintiff’s appraisal as “inadequate because it d[id] not account for a possibility that all permits would not be obtained, a factor by which a knowledgeable buyer would discount his purchase price.” Id. at 156. In response to the government’s argument that the plaintiffs lacked the “very permit approval by the Army Corps of Engineers that is at issue in this case,” id. (emphasis in original), the trial court recalled a similar argument made before the Federal Circuit in Florida Rock Indus., Inc. v. United States, 791 F.2d 893, 905 (1986), stating, “This argument is reminiscent of defendant/appellant's argument in Florida Rock[,] to which the Federal Circuit responded, ‘We suppose appellant added this contention to provide a little humor for an otherwise serious and scholarly brief, and say no more about it.’ 791 F.2d at 905. Neither shall this court,” Loveladies Harbor, 21 Cl. Ct. at 156 n.5.
Slip op. at 11. It's not good when the court laughs at your argument.
Appeal expected? The government lost a takings case. What do you think?
Our thanks to colleague Dwight Merriam for the heads-up about this decision.