**United States Court of Appeals for the Federal Circuit**

03-5056

BASS ENTERPRISES PRODUCTION COMPANY;

PERRY R. BASS, INC.; LEE M. BASS, INC.; SID R. BASS, INC.;

THRU LINE, INC.; KEYSTONE, INC.;

ENRON OIL & GAS COMPANY (now known as EOG Resources, Inc.),

SID R. BASS, EDWARD P. BASS, ROBERT M. BASS,

LEE M. BASS, and REAGAN H. LEGG,

> Plaintiffs-Appellants,

v\.

UNITED STATES,

> Defendant-Appellee.

[Harold L. Hensley, Jr.]{.underline}, Hinkle, Hensley, Shanor & Martin,
L.L.P., of Roswell, New Mexico, argued for plaintiffs-appellants. Also
on the brief were [James M. Hudson]{.underline} and [Joel M. Carson,
III]{.underline}.

[Susan V. Cook]{.underline}, Attorney, Environment & Natural Resources
Division, United States Department of Justice, of Washington, DC, argued
for defendant-appellee. With her on the brief were [Thomas L.
Sansonetti]{.underline}, Assistant Attorney General; and [Kathryn E.
Kovacs]{.underline}, Attorney, and [Kristine S. Tardiff]{.underline},
Attorney.

Appealed from: United States Court of Federal Claims

Judge Robert H. Hodges, Jr.

**United States Court of Appeals for the Federal Circuit**

03-5056

BASS ENTERPRISES PRODUCTION COMPANY; PERRY R. BASS, INC.;

LEE M. bASS, INC.; SID r. bASS, iNC.; tHRU LINE, INC.; KEYSTONE, INC.;

ENRON OIL & GAS COMPANY (now known as EOG Resources, Inc.),

SID R. BASS, EDWARD P. BASS, ROBERT M. BASS, LEE M. BASS,

and REAGAN H. LEGG,

Plaintiffs-Appellants,

v\.

UNITED STATES,

> Defendant-Appellee.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DECIDED: August 31, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before NEWMAN, GAJARSA, and DYK, [Circuit Judges]{.underline}.

GAJARSA, [Circuit Judge]{.underline}.

Appellants Bass Enterprises Production Co., Perry R. Bass, Inc., Lee M.
Bass, Inc., Sid R. Bass, Inc., Thru Line, Inc., Keystone Inc., Enron Oil
& Gas Co., Sid R. Bass, Edward P. Bass, Robert M. Bass, Lee M. Bass, and
Reagan H. Legg (collectively "Bass") appeal from the United States Court
of Federal Claims' decision dismissing Bass's claim that the Bureau of
Land Management's ("BLM") delay in approving Bass's Applications for
Permits to Drill ("APD") oil and gas wells constituted a temporary
taking requiring compensation from the Government. [Bass Enters. Prod.
Co. v. United States]{.underline}, 54 Fed. Cl. 400 (2002). Because the
BLM's delay permitted the Government to critically evaluate whether the
proposed wells would cause the release of radioactive material from an
underground nuclear waste storage facility, this Court finds that the
BLM's delay was not an extraordinary delay and, moreover, the [Penn
Central]{.underline} factors were not satisfied. We therefore affirm the
Court of Federal Claims' dismissal of Bass's takings claim.

[I. BACKGROUND]{.smallcaps}

A. [Bass's ADPs]{.underline}

Bass owns interests in Federal Oil and Gas Lease NMNM-02953C, which was
initially conveyed by the Government to Bass's predecessors-in-interest
in 1952. The current dispute concerns Bass's lease of mineral rights on
320 acres of the South Half of Section 31, Township 22 South, Range 31
East, in Eddy County, New Mexico, near Carlsbad (the "Lease"). The Lease
conveys to Bass the "exclusive right and privilege to drill for, mine,
extract, remove, and dispose of all oil and gas deposits except helium"
in the lands covered by the Lease, subject to "all reasonable
regulations of the Secretary of the Interior now or hereafter in force
when not inconsistent with any express and specific provision."

In 1976, the Government withdrew approximately 17,200 acres in Eddy
County from appropriation under public land laws and began to study the
feasibility of a Waste Isolation Pilot Plant ("WIPP") to provide for
underground storage of nuclear waste. 41 Fed. Reg. 54,994-95 (Dec. 9,
1976). Bass's Lease is located in the southwestern-most corner of the
area set aside for the waste facility. [Id.]{.underline} at 54,995.

Shortly after the land withdrawal, Bass's predecessor-in-interest filed
an APD for a natural gas well, which was approved. Before drilling could
commence, however, the Government condemned the first 6000 vertical feet
of the Lease in order to "preserve the integrity" of the proposed waste
site. In the condemnation order, the Government stated that Bass's
predecessor could continue the "exploration, development, production or
removal of oil and gas by way of entries other than through the
aforesaid surface and initial 6,000 feet of subsurface." Ultimately, in
1982, the owners of the Lease at that time drilled a directional natural
gas well outside the condemned property that reached under the WIPP site
at a depth below 6,000 feet. Bass acquired its interests in the Lease
after the directional well had been drilled.

In 1992, Congress passed the Waste Isolation Pilot Plant Land Withdrawal
Act (the "WIPP Act"), which established a process for opening the
storage facility to receive hazardous waste. Pub. L. No. 102-579, 106
Stat. 4777 (1992).

The WIPP Act required considerable interagency coordination to permit
the site to open. First, the WIPP Act required the Environmental
Protection Agency (the "EPA") to promulgate disposal and operational
regulations for the facility as well as criteria for judging compliance
with such regulations. WIPP Act § 8(b)-(c). Next, the Department of
Energy ("DOE") was to submit an application to the EPA outlining how it
would comply with the EPA's regulations. [Id.]{.underline} § 8(d).
Finally, the EPA was to review the DOE's application and determine
whether the facility could be certified and opened for storage of
nuclear waste. [Id.]{.underline} § 7(b).

As part of the certification decision, the EPA was also required to
consult with the DOE and the Secretary of the Interior to consider
whether Bass's Lease should be acquired to ensure the safety of the
waste storage site. [Id.]{.underline} § 4(b)(5), § 7(b)(4). The WIPP Act
prohibited all manner of mining or oil and gas production, including
slant drilling, that could affect the WIPP site with the exception of
Bass's rights under its Lease. With respect to the Lease, the WIPP Act
established a consultative process to evaluate whether to condemn Bass's
property:

(5) MINING.---

```{=html}
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```
(A) IN GENERAL.---Except as provided in subparagraph (B), no surface or
    subsurface mining or oil or gas production, including slant drilling
    from outside the boundaries of the Withdrawal, shall be permitted at
    any time (including after decommissioning) on lands on or under the
    Withdrawal.

(B) EXCEPTION.---[Existing rights under Federal Oil and Gas Leases No.
    NMNM 20953 and No. NMNM 02953C \[the Lease\] shall not be affected
    unless the Administrator determines, after consultation with the
    Secretary and Secretary of the Interior, that the acquisition of
    such leases by the Secretary is required to comply with the final
    disposal regulations]{.underline} or with the Solid Waste Disposal
    Act (42 U.S.C. 6901 et seq.).

[Id.]{.underline} § 4 (b)(5) (emphasis added). The WIPP Act did not
otherwise change the administrative process associated with receiving a
drilling permit. The BLM remained responsible for issuing ADPs until the
EPA made a determination as to whether condemnation would be required.
To effectuate the purposes of the WIPP Act, however, BLM entered into a
series of memoranda of understanding ("MOUs") with the DOE relating to
the BLM's permitting procedures on or near the nuclear waste disposal
site.

In March 1993, inspired by the passage of the WIPP Act and the possible
threat that the Secretary would acquire its Lease pursuant to the WIPP
Act, Bass filed eight ADPs to drill directional oil wells that would
reach below 6000 surface feet and extract oil from underneath the area
covered by the WIPP Act. Upon receiving the ADPs, the BLM contacted the
DOE pursuant to the first MOU between the agencies. The MOU required the
BLM to (1) withhold approval of ADPs until it received comments from the
DOE and (2) not approve any ADP that may "affect the integrity of the
WIPP site." After being put on notice of Bass's ADPs, the DOE notified
the EPA of the proposed wells, noting that the grant of the ADPs "may
have long-term ramifications, if not addressed thoroughly."

In May 1994, the DOE notified the BLM that, while both the EPA and the
DOE had not found any indication that the wells would impact the waste
facility, the EPA had not yet determined whether to acquire the Lease
pursuant to the WIPP Act. The DOE therefore requested that the BLM delay
its ADP decision until the EPA was able to make an informed decision
regarding the need for condemnation.

In July 1994, the BLM circulated an internal document recommending that
the ADPs be approved. By the end of the month, however, the BLM
reconsidered its position and recommended denial of the ADPs because of
new concerns over reinjection wells and water flooding for secondary
recovery. In addition, BLM had signed a new MOU with the DOE that
emphasized the importance of preserving the WIPP site.

On August 22, 1994, the BLM wrote to Bass and denied the ADPs "at this
time," because the EPA had not yet made a decision on the acquisition of
Bass's leasehold. Bass filed an action for damages in the Court of
Federal Claims in January 1995. After Bass filed its action, on August
9, 1995, the BLM sent a Supplemental Decision letter to Bass indicating
that, although the prior denial had been final for purposes of appeal,
it was willing to reconsider the ADPs once the EPA certified that
drilling would not conflict with the WIPP regulations.

Bass's ADPs were ultimately approved in May 1998, forty-five months
after the ADPs were initially denied by the BLM. BLM's approval issued
shortly after the EPA published its final decision certifying the DOE's
application for the WIPP and finding that the Lease did not need to be
acquired to comply with safety regulations.

B. [Takings Litigation]{.underline}

In 1996, the Court of Federal Claims entered judgment in favor of Bass,
finding a final denial of the ADPs and a permanent taking of Bass's
leasing rights. [Bass Enters. Prod. Co. v. United States]{.underline},
35 Fed. Cl. 615 (1996). At that time, however, the EPA had not yet
determined whether to condemn the Lease under Section 4(b)(5)(B) of the
WIPP Act. On appeal, we reversed the Court of Federal Claims' finding of
a permanent taking. We held that Congress established a mechanism for
condemning the Lease under the WIPP Act and that, until the EPA rendered
its final decision as to condemnation, the final denial of the ADPs
would not constitute a permanent taking. We then remanded the case for
consideration of whether a temporary taking had occurred. [Bass Enters.
Prod. Co. v. United States]{.underline}, 133 F.3d 893 (Fed. Cir. 1998).

After the BLM approved Bass's permits in 1998, the only issue remaining
on remand was whether the BLM's delay in issuing the ADPs effected a
compensable temporary taking. Bass claimed compensation for only the
forty-five month delay between the BLM's denial of the permits and their
subsequent approval.

In evaluating Bass's temporary takings theory, the Court of Federal
Claims initially found in favor of Bass and awarded damages in the
amount of \$1,137,808. [Bass Enters. Prod. Co. v. United
States]{.underline}, 45 Fed. Cl. 120 (1999); [Bass Enters. Prod. Co. v.
United States]{.underline}, 48 Fed. Cl. 621 (2001); [Bass Enters. Prod.
Co. v. United States]{.underline}, No. 95-52L (Fed. Cl. Apr. 29, 2002)
(order setting damages). In this determination, the Court of Federal
Claims held that Bass had been denied all beneficial use of the property
during the delay period and thus that the taking was a per se,
categorical taking requiring compensation under the Supreme Court's
decision in [Lucas v. South Carolina Coastal Council]{.underline}, 505
U.S. 1003 (1992). [Bass]{.underline}, 45 Fed. Cl. at 123. The damage
calculation was derived from "the interest earned on the oil and gas
profits" that would have been received during the delay period.

The Government filed a Motion for Reconsideration after the Supreme
Court's decision in [Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Regional Planning Agency]{.underline}, 535 U.S. 302 (2002).
[Bass]{.underline}, 54 Fed. Cl. at 402. In [Tahoe-Sierra]{.underline},
the Supreme Court stated: "Anything less than a 'complete elimination of
value,' or a 'total loss,' . . . would require the kind of analysis
applied in [Penn Central]{.underline}." [Tahoe-Sierra]{.underline},
535 U.S. at 330. Analogizing the moratorium on building development in
[Tahoe-Sierra]{.underline} to the BLM's delay in approving the ADP, the
Court of Federal Claims held that it should apply a [Penn
Central]{.underline} analysis instead of categorically finding a taking
based on the BLM's permitting delay. [Bass]{.underline}, 54 Fed. Cl. at
402-03.

The Court of Federal Claims therefore looked to (1) the character of the
government action, (2) the economic impact of the regulation on the
claimant, and (3) the extent to which the regulation interfered with
reasonable investment-backed expectations. [See]{.underline} [Penn Cent.
Transp. Co. v. New York City]{.underline}, 438 U.S. 104, 124-25 (1978).
While acknowledging that Bass "had reasonable investment-backed
expectations," the court found that the economic impact on Bass was de
minimis and that the Government's delay was reasonable given the
importance of protecting the public from the possible release of
radioactivity. [Bass]{.underline}, 54 Fed. Cl. at 403-04. Weighing the
factors and the circumstances surrounding the delay as a whole, the
Court of Federal Claims concluded that BLM's delay did not create a
temporary taking and dismissed Bass's complaint. [Id.]{.underline} Bass
filed a timely appeal to this Court, and we have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(3).

[II. DISCUSSION]{.smallcaps}

A. [Standard of Review]{.underline}

When reviewing a final decision by the Court of Federal Claims, we
examine the court's legal determinations de novo and its findings of
fact for clear error. [Glendale Fed. Bank, FSB v. United
States]{.underline}, 239 F.3d 1374, 1379 (Fed. Cir. 2001); [Whitney
Benefits v. United States]{.underline}, 926 F.2d 1169 (Fed. Cir. 1991).
Whether a taking that is compensable under the Fifth Amendment has
occurred is a question of law that is based on factual determinations.
[Wyatt v. United States]{.underline}, 271 F.3d 1090, 1096 (Fed. Cir.
2001); [Alves v. United States]{.underline}, 133 F.3d 1454, 1456 (Fed.
Cir. 1998).

B. [Use of Lucas Test]{.underline}

Under the Fifth Amendment to the United States Constitution, private
property shall not "be taken for public use without just compensation."
U.S. Const. amend. V. Supreme Court precedent has long recognized that a
taking can be accomplished by a physical invasion of the property or by
the imposition of a governmental regulation. [Lucas]{.underline}, 505
U.S. at 1014-15; [Penn. Coal Co. v. Mahon]{.underline}, 260 U.S. 393,
416 (1922). In the case of physical possession by the Government where
there is economic damage to the owner, compensation is always due to the
owner regardless of whether the taking was of only part of the property
or of the property as a whole. [Loretto v. Teleprompter Manhattan CATV
Corp.]{.underline}, 458 U.S. 419 (1982); [United States v. Pewee Coal
Co.]{.underline}, 341 U.S. 114 (1951). When the alleged taking is a
result of regulation, however, a court must typically conduct a complex
factual assessment to determine whether compensation is owed to the
property holder. [Yee v. City of Escondido]{.underline},
503 U.S. 519, 523 (1992); [Keystone Bituminous Coal Ass'n v.
DeBenedictis]{.underline}, 480 U.S. 470 (1987). A per se categorical
rule is applied to regulatory takings only in the extraordinary
circumstance "when [no]{.underline} productive or economically
beneficial use of land is permitted." [Lucas]{.underline}, 505 U.S. at
1017. In [Tahoe-Sierra]{.underline}, the Supreme Court clarified that
the rule applied in [Lucas]{.underline} would only be applicable to
permanent, rather than temporary, regulatory takings, stating that
"[Lucas]{.underline} carved out a narrow exception to the rules
governing regulatory takings for the 'extraordinary circumstance' of a
[permanent]{.underline} deprivation of all beneficial use." 535 U.S. at
542 n.19 (emphasis added).

Because Bass alleges a temporary regulatory taking, the Court of Federal
Claims properly eschewed the use of a per se categorical rule such as
that imposed in [Lucas]{.underline}. The appellants submitted two
separate theories as to why there has been a temporary taking. First,
they argue that, even if action on the permit applications was merely
delayed and not denied, they should be compensated because there was
extraordinary delay, and the [Penn Central]{.underline} factors have
been satisfied. Second, they argue that the applications were denied
(and then granted); that under our decision in [Boise Cascade v. United
States]{.underline}, 296 F.3d 1339 (2002), a showing of extraordinary
delay is not required where a permit has been denied; and that
application of the [Penn Central]{.underline} factors shows that a
temporary taking occurred. Neither theory establishes a compensable
taking on the facts of this case.

C. [Extraordinary Delay]{.underline}

In the present case, Appellants allege that the BLM's forty-five month
delay in making its permitting decision constituted a temporary
regulatory taking compensable under the Fifth Amendment. We reject
Bass's argument.

In reviewing the Court of Federal Claims' decision, we first must
emphasize that the evaluation of regulatory takings is an "essentially
ad hoc" process. [Penn Central]{.underline}, 438 U.S. at 124. The
Supreme Court's jurisprudence counsels the courts to weigh all of the
relevant circumstances in context to determine whether a taking has
occurred. [Palazzolo v. Rhode Island]{.underline}, 533 U.S. 606, 636
(2001) (O'Connor, J., concurring).

When looking at a regulatory action by the Government, the Supreme Court
has noted that "government hardly could go on if to some extent values
incident to property could not be diminished without paying for every
such change in the general law." [Mahon]{.underline}, 260 U.S. at 413.
The requirement that a property owner obtain a permit to undertake a
particular use of his land therefore does not in and of itself
constitute a compensable taking. [United States v. Riverside Bayview
Homes, Inc.]{.underline}, 474 U.S. 121, 126-27 (1985). Moreover, as the
Supreme Court emphasized in [Tahoe-Sierra]{.underline},
"[normal]{.underline} delays in obtaining building permits, changes in
zoning ordinances, variances, and the like" have "long been considered
permissible exercises of the police power" and are therefore
noncompensable under the Fifth Amendment. 535 U.S. at 335 (emphasis
added).

A taking may result, however, when an "[extraordinary]{.underline} delay
in governmental decisionmaking" occurs. [Tabbs Lakes, Ltd. v. United
States]{.underline}, 10 F.3d 796, 800 (Fed. Cir. 1933). The Supreme
Court, as well as our own court and other sister circuits, have
recognized that "extraordinary delays" typically last for a substantial
length of time. [See, e.g.]{.underline}, [Williamson County Reg'l
Planning Comm'n v. Hamilton Bank of Johnson City]{.underline},
473 U.S. 172 (1985) (finding no temporary taking despite eight year
delay); [Wyatt v. United States]{.underline}, 271 F.3d 1090 (Fed. Cir.
2001) (same for seven year delay); [Tahoe-Sierra Pres. Council, Inc. v.
Tahoe Reg'l Planning Agency]{.underline}, 216 F.3d 764 (9th Cir. 2000)
(same for forty month delay).

The question of whether a delay is extraordinary is not a simple matter
of the number of months or years taken by the Government to make its
decision however. In [Tahoe-Sierra]{.underline}, the Supreme Court
rejected bright-line proposals that would have made a Governmental delay
longer than a fixed number of years, such as more than six, compensable
under the Takings Clause. 535 U.S. at 333, 337-38. Instead of such an
easy guidepost, courts must evaluate a number of factors to determine
whether the delay is extraordinary. First, the Supreme Court has stated
that it will be rare for a court to find an extraordinary delay in the
absence of bad faith by the Government. [Tabb Lakes]{.underline}, 10
F.3d at 799. In addition, our Court in [Wyatt]{.underline} also
recognized that, since "delay is inherent in complex regulatory
permitting schemes," we should examine "the nature of the permitting
process as well as the reasons for any delay" to determine if the delay
is disproportionate to the regulatory permitting scheme from which it
arises. 271 F.3d at 1098. As we explained in [Wyatt]{.underline}:

Complex regulatory schemes often require detailed information before the
issuance of a permit. The nature of the regulatory scheme is especially
critical when the permitting process requires detailed technical
information necessary to determine environmental impacts. Governmental
agencies that implement complex permitting schemes should be afforded
significant deference in determining what additional information is
required to satisfy statutorily imposed obligations.

[Id.]{.underline} Our precedent thus requires that we examine the
reasons for the Government's delay, including the regulatory scheme
imposed upon the Government under the WIPP Act, in order to assess
extraordinary delay.

In the present appeal, the district court determined that the
Government's delay was reasonable given the possibility that the
drilling proposed by Bass could substantially impact the underground
nuclear waste facility and thereby endanger the health and safety of the
surrounding community. The Court of Federal Claims found neither
extraordinary delay nor bad faith in the Government's attempt to
properly evaluate the potential impact of oil and gas wells under a
nuclear waste site. The Court's factual findings to this respect are
well supported.

In arguing that the delay was extraordinary and hence compensable, Bass
insists that the BLM impermissibly consulted with the DOE and the EPA in
making its drilling decision. According to Bass, only BLM's technical
review and approval was required for the issuance of the permits. Bass's
argument fails to appreciate that the WIPP Act added an additional layer
of complex decisionmaking atop of the BLM's existing duty to review
drilling permits.

With respect to the Lease on the WIPP site, Congress required the EPA to
determine whether condemnation would be required, a decision contingent
on the final disposal and operating regulations for the facility. These
regulations were not yet in place; the EPA had to develop such safety
regulations subject to the standard notice and comment procedure for
agency rulemaking. Congress therefore required the EPA to promulgate the
criteria by which drilling activities near the WIPP Act could be
evaluated, 61 Fed. Reg. at 5229 (Feb. 9, 1996), and then evaluate
whether Bass's activities could endanger the success of the facility.
Further, Congress required the EPA to consult with the DOE and the
Secretary of the Interior regarding the effect that drilling activities
on the Lease property may have on the WIPP facility. The BLM's decision
to evaluate permits relating to the WIPP site with the guidance of the
EPA and the DOE helped to effectuate the purposes of the WIPP Act and
was therefore permissible.

Furthermore, given that the BLM was faced with a possible environmental
and health hazard, we do not want to "encourage hasty decisionmaking" by
the Government. Bass underemphasizes the importance of ensuring the
safety of the nuclear waste facility developed under the WIPP Act. The
WIPP facility became the first certified permanent radioactive waste
facility in the world when it opened in 1999. Dep't of Energy, [Waste
Isolation Pilot Plant]{.underline}, [at]{.underline} http://www.wipp.ws
(last visited Aug. 19, 2004). Prior to the construction of the WIPP
facility, radioactive waste was stored in temporary metal containers in
Colorado, Idaho, New Mexico, Nevada, Ohio, South Carolina, Tennessee,
and Washington. The WIPP facility was designed to provide for the safe
and permanent disposal of up to 6.2 million cubic feet of nuclear waste,
with a goal of isolating the waste for a period of 10,000 years. The
disposal system is located over 2000 feet below ground in an underground
natural salt formation. The site was selected not only because of the
natural advantages of the salt, which can mold around the disposal
system, but also [specifically]{.underline} because the site lacked
artificial intrusions such as oil, gas, and water wells. S. Rep. No.
102-196, at 17 (1991).

Given the critical importance of the decision relating to the issuance
of the ADPs and the complexity of the decisionmaking process established
under the WIPP Act, the BLM's delay does not constitute an
"extraordinary delay." Bass's ADPs were submitted in April 1993, just
six months after the passage of the WIPP Act. On April 26, 1993, the BLM
forwarded the ADPs to the DOE for comment. Two months later, the DOE
responded that the EPA should also be consulted. The DOE then contacted
the EPA to formally request the EPA's views. By October 1993, the EPA
had requested additional time from the DOE to evaluate the need for
acquiring the Lease.

In the meantime, the EPA proceeded to publish general regulations
governing the disposal of waste in the facility. 58 Fed. Reg. 7924 (Feb.
10, 1993). After notice and comment, the disposal regulations issued
December 20, 1993. 58 Fed. Reg. 66,398 (Dec. 20, 1993). More specific
regulations relating to the criteria for certifying the facility were
then published in January 1994; these criteria were in preliminary form.
58 Fed. Reg. 8029 (Feb. 11, 1993).

In May 1994, the EPA repeated its request to the DOE for additional time
regarding Bass's ADPs, stating that "a final determination on a matter
of this importance should wait until all the facts are available." In
light of the EPA's request, DOE asked BLM to delay its permitting
decision. On August 22, 1994, BLM denied the permits on the basis of the
EPA's reluctance to accelerate its decisionmaking process.

In early 1995, the DOE submitted a draft Compliance Certification
Application ("CCA") to the EPA relating to the proposed use of the WIPP
facility. The EPA then issued the final criteria on February 9, 1996,
relating to the WIPP facility, including a listing of the specific
requirements necessary to assess drilling activities near the WIPP site.
61 Fed. Reg. at 5229. The EPA and the DOE continued to work towards
preparing the site for opening, with the DOE amending its CCA in October
1996 and again in May 1997. Once the CCA was completed, the EPA began a
final technical review for compliance and also completed its analysis of
the impact that drilling could have on the WIPP site. On October 30,
1997, less than five months after the final CCA was submitted to it, the
EPA published a notice of its proposed decision to certify the WIPP
site. 62 Fed. Reg. 58,792 (Oct. 30, 1997). In this notice, the EPA also
proposed that the Lease would not need to be acquired to limit drilling
near the WIPP facility. [Id.]{.underline} On May 18, 1998, the EPA
published its final decision certifying the WIPP facility to begin
receiving waste. The EPA also determined that the Bass lease would not
need to be condemned. According to the EPA, "potential activities at
these existing leases would have an insignificant effect on releases of
radioactive material from the WIPP disposal system, and thus, they do
not cause the WIPP to violate the disposal regulations." 63 Fed. Reg.
27,354, 27,356 (May 18, 1998). Within the month, BLM approved Bass's
ADPs. Unlike Bass, we do not agree that the Court of Federal Claims
clearly erred in its determination that the BLM's delay was reasonable.
[See]{.underline} [Boise Cascade]{.underline}, 296 F.3d at 1352;
[Wyatt]{.underline}, 271 F.3d at 1098; [see also]{.underline}
[Tahoe-Sierra]{.underline}, 535 U.S. at 333.

D. [Character of the Government's Action]{.underline}

The Court of Federal Claims properly applied the [Penn
Central]{.underline} factors and concluded that they were not satisfied.
In its appeal, Bass also argues that the Court of Federal Claims
committed clear legal error in its analysis of the "character of the
Government action" under [Penn Central]{.underline}. According to Bass,
the Court of Federal Claims should not have looked at whether the
government's delay was designed to promote public safety, health, and
welfare. Instead, Bass argues that the Supreme Court's decision in
[Lucas]{.underline} limits the "character of the Government action"
factor to an analysis of whether the Government's regulation was
designed to proscribe a nuisance. Under Bass's theory, if the
Government's action was not directed to a nuisance, then the "character
of the Government action" factor of [Penn Central]{.underline} weighs in
favor of the property owner. Following this logic, Bass argues that,
because oil and gas exploration is not a public nuisance, the Court of
Federal Claims improperly considered the concerns for public welfare in
its [Penn Central]{.underline} analysis and should have found that the
"character of the Government action" factor favors Bass.

We reject the Appellants' position. In our earlier decision of
[Loveladies Harbor, Inc. v. United States]{.underline}, 28 F.3d 1171,
1179 (Fed. Cir. 1994), which was decided prior to [Tahoe
Sierra]{.underline} and [Palazzolo]{.underline}, we stated that
[Lucas]{.underline} caused a "sea change" that removed the weighing of
public versus private interests in determining whether a taking has been
effected. Using [Lucas]{.underline} as our guide, we held that federal
courts were to replace the ad hoc process method of evaluating the
Government's actions and instead utilize the more familiar and
predictable doctrines associated with nuisance laws. [Loveladies
Harbor]{.underline}, 28 F.3d at 1179. We interpreted [Lucas]{.underline}
to hold that "if the imposed restraint would have been justified under
the state's traditional nuisance law, then the property owner's bundle
of rights did not include the right claimed, and no taking could occur."
[Id.]{.underline}

We later affirmed this position in 2000. In [Palm Beach Isles Associates
v. United States]{.underline}, we explained that the Government could
"defend" itself from a regulatory takings claim only if it could
articulate "background principles . . . that prohibit the uses \[the
landowner\] now intends." 208 F.3d 1374, 1385 (Fed. Cir. 2000).

In 2001, however, the Supreme Court limited the applicability of
[Lucas]{.underline} to regulatory takings in its decision of
[Palazzolo]{.underline}. The [Palazzolo]{.underline} majority noted
that, under [Lucas]{.underline}, "total" or permanent regulatory takings
required compensation unless the regulation proscribed a nuisance, but a
partial regulatory taking triggered an analysis of the complex factors
associated traditionally with [Penn Central]{.underline}. 533 U.S. at
615-16, 618. In her concurrence in [Palazzolo]{.underline}, Justice
O'Connor further explained that courts should resist "the temptation to
adopt what amount to per se rules" and instead conduct a "careful
examination and weighing of [all the relevant
circumstances]{.underline}." [Id.]{.underline} at 636 (emphasis added).
In particular, the Justice noted that courts were permitted to look to
the public purposes served by the Government's regulatory actions:

We have "identified several factors that have particular significance"
in these "essentially ad hoc, factual inquiries." [Penn
Central]{.underline}, 438 U.S. at 124. Two such factors are "the
economic impact of the regulation on the claimant and, particularly, the
extent to which the regulation has interfered with distinct
investment-backed expectations." [Ibid]{.underline}. [The purposes
served, as well as the effects produced, by a particular regulation
inform the takings analysis]{.underline}. [Id.]{.underline} at 127
("\[A\] use restriction on real property may constitute a 'taking' if
not reasonably necessary to the effectuation of a [substantial public
purpose]{.underline}, \[citations omitted\], or perhaps if it has an
unduly harsh impact upon the owner's use of the property"). . . . Penn
Central does not supply mathematically precise variables, but instead
provides important guideposts that lead to the ultimate determination
whether just compensation is required.

[Palazzolo]{.underline}, 533 U.S. at 633-34 (emphasis added).
[Palazzolo]{.underline} therefore returned the temporary takings
pendulum back to the familiar [Penn Central]{.underline} analysis that
existed prior to [Lucas]{.underline}.

The Supreme Court's decision in [Tahoe-Sierra]{.underline} further
stressed that a gestalt approach should be used when evaluating all of
the [Penn Central]{.underline} factors, including the "character of the
Government action" factor. [Tahoe-Sierra]{.underline}, 535 U.S. at 330.
Echoing Justice O'Connor's concurrence in [Palazzolo]{.underline}, the
Supreme Court stated that regulatory takings should be evaluated using
"essentially ad hoc, factual inquiries" designed to permit full
examination of the relevant circumstances. [Tahoe-Sierra]{.underline},
535 U.S. at 322. As for the "character of the Government action" factor,
the [Tahoe-Sierra]{.underline} Court advocated an examination of the
"purpose and economic effect" of the government's actions.
[Id.]{.underline} at 323 (emphasis added). In its decision, the Supreme
Court also noted that the Government's traditional regulatory actions,
such as those involving zoning, permits, moratoria, and other land-use
provisions, as well as those affecting safety, often do not constitute
takings if done so within a reasonable timeframe. [Id.]{.underline} at
329.

Based on [Palazzolo]{.underline} and [Tahoe-Sierra]{.underline}, our
recent decisions mark a return to the pre-[Lucas]{.underline} evaluation
of the "character of the Government actions" factor. We therefore
consider the purpose of the regulation and its desired effects in
determining whether a taking has occurred. For example, in [Maritrans
Inc. v. United States]{.underline}, we explained that a court should
"consider the purpose and importance of the public interest underlying a
regulatory imposition" in its [Penn Central]{.underline} analysis. 342
F.3d 1344, 1356 (Fed. Cir. 2003). We thus required the court to inquire
"'into the degree of harm created by the claimant's prohibited activity,
its social value and location, and the ease with which any harm stemming
from it could be prevented.'" [Id.]{.underline} (quoting [Creppel v.
United States]{.underline}, 41 F.3d 627, 631 (Fed. Cir. 1994)). Our
analysis in [Maritrans]{.underline} incorporates the recent mandates by
the Supreme Court.

In conducting a full review of "all relevant circumstances" surrounding
the alleged taking by the Government, we again hold that a court may
examine the relative benefits and burdens associated with the regulatory
action. Based on our precedent and that of the Supreme Court, the Court
of Federal Claims therefore did not commit legal error by considering
the potential impact on the public when it evaluated whether the BLM's
delay in permitting drilling near a nuclear waste site constituted a
taking.

III\. CONCLUSION

We have considered Bass's other arguments and find them unpersuasive.
Based on the important and critical nature of the permitting decision
and the required procedures to make the decision, we find more than
adequate support for the Court of Federal Claims' determination that the
BLM's forty-five month delay was reasonable and therefore not an
"extraordinary" delay, and it properly concluded that the [Penn
Central]{.underline} factors were not satisfied. The Court of Federal
Claims' judgment that the Government's delay did not rise to the level
of a compensable taking is therefore

[AFFIRMED]{.underline}

[COSTS]{.underline}

No costs.