In CRV Enterprises, Inc. v. United States, 626 F.3d 1241 (Fed. Cir. 2010), the U.S. Court of Appeals for the Federal Circuit (the court that hears appeals in regulatory taking and inverse condemnation cases against the federal government) held the EPA’s installation of a log boom on a navigable waterway in California’s central valley was not a taking even though it cut off the plaintiffs’ riparian access. We summarized the opinion here.
The property owners have filed a cert petition, asking the Court to review two Questions Presented:
1. In Palazzolo v. Rhode Island, 533 U.S. 606 (2001), this Court repudiated the so-called Notice Rule, which held that post-enactment purchasers could not state a claim for a regulatory taking arising from restrictions adopted before they took title to the property. The Federal Circuit’s decision in this case — like the Ninth Circuit’s decision in Guggenheim v. City of Goleta, No. 10-1125 (Petition for Writ of Certiorari docketed Mar. 11, 2011) — effectively revives the Notice Rule, fragmenting the Circuits in their interpretation of Palazzolo. The specific aspect of the issue presented by this case is: Does a post-enactment purchaser have standing to bring a regulatory takings claim arising from the implementation of preexisting regulations, if the previous owner could not have ripened a takings claim when the regulations were enacted?
2. When the federal government physically deprives a littoral property owner of the long-established right to access navigable waters by placing a log boom in a waterway, does the government incur liability for a physical taking notwithstanding that (1) neither the boom nor its supporting pilings are situated on the littoral owner’s land, and (2) the government has not appropriated or diverted any water from the waterway?
Pacific Legal Foundation (petitioners’ counsel) posted a video about the case here.
As the QP notes, this case is very similar to Guggenheim v. City of Goleta, the case in which the en banc Ninth Circuit held that a mobile home park owner had no “investment-backed expectations” because a rent control ordinance was adopted before he purchased his property. Like CRV, Guggenheim revived the “notice rule,” even though the Supreme Court in Palazzolo rejected it.
In the amicus brief we recently filed in Guggenheim, we criticized CRV and suggested that both cert petitions raise similar concerns and should be heard together (and granted):
After Lucas, some courts treated pre-acquisition regulations as part of the “background principles” inherent in title. Under this theory, a post-regulation purchaser does not possess Constitutionally-recognized “property,” and thus cannot assert a takings claim.
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The most recent example is the Federal Circuit’s decision in CRV Enters., Inc. v. United States, 626 F.3d 1241 (Fed. Cir. 2010), a case in which the court concluded a property owner could not assert a takings claim since it did not own the property at the time of the alleged taking. Id. at 1250. In that case, the owner of a riparian parcel asserted that the agency’s installation of a log boom in a waterway adjacent to its parcel cut off its riparian access and was a taking. The court first rejected the claim that the installation of the log boom was a physical taking. Id. at 1246. The court next concluded that the regulatory taking did not take place at the time the agency installed the log boom, but must have been brought years before when it decided to install it. Id. at 1248-49. Because CRV had not yet acquired the property at that time, the Federal Circuit – like the Ninth Circuit in the case at bar – simply halted its analysis and affirmed the dismissal of CRV’s takings claim. The court concluded that a takings claim “if it existed, was owned by the prior owner.” Id. at 1250. The court held that “plaintiffs did not own the property at the time of the alleged regulatory taking and therefore lacked standing.” Id. at 1249.
Even though the Federal Circuit couched its analysis in terms of “standing” and not on Lucas background principles, its decision that the postregulation transfer of property barred the takings claim was plainly grounded in the idea that the plaintiff did not possess “property” protected by the Fifth Amendment from uncompensated de facto acquisition.
Brief at 8-10 (footnotes omitted).
Here is the Court’s docket for the CRV case. Stay tuned.
Petition for a Writ of Certiorari, CRV Enterprises v United States No 10-1151