The San Diego area must be on the karmic radar this week, and here’s the latest: a Federal Circuit decision in a case involving the U.S. Border Patrol’s activities on private land on the border with Mexico. In Otay Mesa Property, L.P. v. United States, No. 2011-5002 (Jan. 25, 2012), the court held that an agreement by which property owners allowed the federal government to install motion-sensing devices on their land resulted in a permanent physical taking and not temporary. The court also clarified the property “taken,” and how just compensation should have been calculated.
You can’t get any closer to the border than San Diego’s Otay Mesa neighborhood. The plaintiffs own several parcels abutting the border, and 20 years ago their predecessor-in-title granted the Border Patrol an easement along the border to allow it to, well, patrol the border.
The Border Patrol stepped up its activities after 2001, and began operating outside the easement footprint. Otay Mesa Properties and the other landowners sought just compensation in the Court of Federal Claims. Slip op. at 3 (“The suit alleged that the Border Patrol’s activities of patrolling outside the boundaries of the easement, assuming stationary positions on Otay Mesa’s land, creating new roads, constructing a permanent tented structure on Otay Mesa’s land, and installing underground motion-detecting sensors constituted a ‘permanent and exclusive occupation’ entitling the plaintiffs to just compensation under the Fifth Amendment’s Takings Clause.”).
After trial, the CFC held (opinion here) that most of the owners’ claims were barred by the statute of limitations. But on the remaining claim for the underground motion sensors which had been placed on the land pursuant to a stipulation between the parties, the CFC held the government is liable for $3 million-plus in just compensation for a temporary physical taking. The court based compensation for the temporary taking on the rental value of the land as a skydiving training area.
Both sides appealed: the feds asserted that compensation should have been calculated on the basis of a permanent taking, and that the correct measure was the “before and after” method; the property owner asserted on cross-appeal that the CFC mistakenly limited the scope of the taking to the parcels and the time period specified in the stipulation because the Border Patrol placed more than than the agreed-upon number of sensors on the land and placed them there earlier than it acknowledged.
The Federal Circuit agreed with the government that the stipulation by which the property owners allowed the Border Patrol to install motion sensors was a permanent physical taking because the stipulation did not set forth a specific date by which the sensors must be removed. Under the stipulation, the sensors are subject to removal if one of two conditions occurs, but those conditions might never occur “and most importantly, the easement has not terminated,” slip op. at 12, and “in this case there is no potential termination of the sensor easement on the horizon.” Id. at 15.
Thus, we disagree with the Court of Federal Claims and Otay Mesa that the parties’ respective abilities to terminate the sensor easement in this case renders the taking temporary. Just as the landowner in Loretto could have terminated the taking by discontinuing use of the property as a residential rental facility, so Otay Mesa could decide to develop the entirety of its property, thereby terminating the sensor easement. Further, read in its entirety, we agree that the stipulation defines a “perpetual” easement that reserves in the government the right to “redeploy” the sensors in the case of Otay Mesa’s development of the property.
Slip op. at 17. The court, as quoted above, acknowledged the easement could be terminated by the property owner. Which pretty much turns the notion of “permanent” on its head. It’s one thing to conclude that a taking is “permanent” event though the government could decide to walk away (which it always can), and another to hold that a taking in which the landowner retains the right to unilaterally terminate is also “permanent.” Since an inverse condemnation claim seeks compensation for the legal equivalent of an affirmative exercise of eminent domain (which is forced acquisition of property from an unwilling private owner) it seems odd that the property owner has control of how long the government may occupy the property, something that is plainly lacking in “permanent” exercises of eminent domain.
In the end, however, it didn’t really matter whether the taking was “permanent” or “temporary,” because the court remanded the case to the CFC for a recalculation of damages. However, the court did not endorse the “before and after” method of calculating compensation as the government urged:
The government has argued that, because the sensor easement is permanent, the compensation due Otay Mesa is much less than the compensation that would be due if the easement were temporary. We find this argument difficult to accept. It does not seem to us logical that Otay Mesa should receive less compensation for the taking of a permanent easement than it would for the taking of a temporary easement.
Slip op. at 17-18. But while the court held that the focus must remain on compensation for what has been taken, it concluded the only thing taken was an easement for the placement of sensors, and the CFC therefore should not have calculated compensation on the rental value of the land as a skydiving training area:
The sensor easement clearly differs from a lease to use land for those purposes. By exclusively applying a rental value methodology and looking to rents paid for the use of land for skydiving and parachute training, the court, we believe, overlooked exactly what has been taken by the Border Patrol – a minimally invasive permanent easement to use undeveloped land that is unilaterally terminable by Otay Mesa. Under the easement, each sensor must be located so as not to affect the functionality of the property. In addition, should Otay Mesa wish to develop any portion of the property, any affected sensor will be removed or redeployed upon 30 days written notice that a grading permit has been issued by the County of San Diego. Finally, upon removal of a sensor, the portion of the easement relating to that sensor terminates. In short, the court did not squarely address the just compensation appropriate to compensate Otay Mesa for the taking.
Slip op. at 18-19.
The court rejected the property owners’ cross-appeal and concluded that the CFC did not abuse its discretion when it limited the scope of the taking. Finding no clear error, the court affirmed.
Otay Mesa Property, L.P. v. United States, No. 11-5002 (Fed. Cir. Jan. 25, 2012)