United States Court of Appeals for the Federal Circuit 

2008-5058 

 PALMYRA PACIFIC SEAFOODS, L.L.C., 

PALMYRA PACIFIC ENTERPRISES, L.L.C., 

PPE LIMITED PARTNERSHIP, and FRANK SORBA, 

 Plaintiffs-Appellants, 

v. 

UNITED STATES, 

 

 Defendant-Appellee. 

 

Michael A. Johnson, Arnold & Porter LLP, of Washington, DC, argued for plaintiffsappellants. With him on the brief were Alexea R. Juliano, and James K. Rideout.

Maame A.F. Ewusi-Mensah, Trial Attorney, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, of Washington, DC, argued for defendantappellee. With her on the brief were Jeanne E. Davidson, Director, and Mark A. Melnick, 

Assistant Director. Of counsel was Marla T. Conneely, Attorney. Of counsel on the brief 

was Mariel J. Combs, Attorney, Office of the Solicitor, United States Department of the 

Interior, of Portland, Oregon. 

Appealed from: United States Court of Federal Claims 

Judge Christine O.C. Miller 
United States Court of Appeals for the Federal Circuit 

2008-5058 

PALMYRA PACIFIC SEAFOODS, L.L.C., 

PALMYRA PACIFIC ENTERPRISES, L.L.C., 

PPE LIMITED PARTNERSHIP, and FRANK SORBA, 

Plaintiffs-Appellants, 

v. 

UNITED STATES, 

Defendant-Appellee. 

Appeal from the United States Court of Federal Claims 

in 07-CV-035, Judge Christine O.C. Miller. 

 

__________________________ 

DECIDED: April 9, 2009 

___________________________ 

Before BRYSON, GAJARSA, and MOORE, Circuit Judges.

BRYSON, Circuit Judge. 

Palmyra Atoll is a tiny island in an empty portion of the Pacific Ocean. It is 

approximately 4.6 square miles in area and is located about 1100 miles south of Hawaii 

and 1400 miles north of Samoa. There is almost nothing else in between. As the 

Supreme Court aptly put it, “It is hard to conceive of a more isolated piece of land than 

Palmyra.” United States v. Fullard-Leo, 331 U.S. 256, 280 (1947). 

During World War II, the United States established a naval base there, where it 

constructed an airstrip, a base camp, and a pier. After the war the United States sued 
2008-5058 2 

to quiet title to Palmyra, but the Fullard-Leo family successfully opposed the effort and 

obtained fee simple title to the island. Fullard-Leo, 331 U.S. at 280. This case involves 

a claim brought by parties who wished to use the island as a commercial fishing base 

and who contend that the government impermissibly interfered with their fishing 

business by designating the waters around Palmyra as a wildlife refuge. 

I 

Prior to the events at issue in this case, the plaintiffs obtained from the FullardLeo family the right to use certain facilities on Palmyra. The rights were conveyed 

through a series of contracts, beginning with a contract in which the Fullard-Leo family 

granted the Palmyra Development Company the right to convey an exclusive license to 

establish a commercial fishing operation on the atoll. The Palmyra Development 

Company then entered into a licensing agreement with Palmyra Pacific Enterprises, 

L.L.C. That agreement granted Palmyra Pacific Enterprises the exclusive right to 

establish a commercial fishing operation on Palmyra and to use the island’s facilities for 

that purpose. Subsequently, Palmyra Pacific Enterprises assigned its rights to PPE 

Limited Partnership, which in turn assigned its rights to Palmyra Pacific Seafoods, 

L.L.C. (“PPS”). 

The pertinent provisions of the contract between Palmyra Development 

Company and Palmyra Pacific Enterprises conveyed to Palmyra Pacific Enterprises “the 

exclusive right and license to occupy, use and enjoy” the base camp on the atoll as well 

as “the exclusive right to use the Small Boat Harbor,” and “the exclusive right to use 

one-half of the deep water dock.” The contract also granted a “Commercial Fishing 

License” purporting to give Palmyra Pacific Enterprises an exclusive right to fish in the 
2008-5058 3 

waters surrounding Palmyra as well as a non-exclusive “Aircraft Runway License” for 

use of the island’s airstrip. 

The plaintiffs assert that the right to establish a commercial fishing operation is 

valuable because Palmyra is surrounded by a 200-nautical-mile Exclusive Economic 

Zone (“EEZ”) from which foreign fishing vessels are excluded. Palmyra is the only 

place within the EEZ where it is practical to locate a commercial fishing operation. 

According to the plaintiffs, the exclusive use of the island and its airstrip affords a 

material competitive advantage over any competing fishing enterprises that might 

operate in the region. 

In 2000, The Nature Conservancy, a non-profit entity, purchased much of the 

emergent land on Palmyra from the Fullard-Leo family. Beginning some time prior to 

July 2000, the Fish and Wildlife Service of the Department of the Interior began working 

with The Nature Conservancy to establish a nature preserve and eco-tourism camp at 

Palmyra. The plaintiffs allege that the government and The Nature Conservancy were 

concerned about the effect that PPS’s commercial fishing operation would have on the 

proposed eco-tourism camp and accordingly sought to interfere with PPS’s operation. 

According to the plaintiffs, the ensuing government action flowed from the desire to 

support The Nature Conservancy’s efforts. 

On January 18, 2001, the Secretary of the Interior signed an order designating 

Palmyra’s tidal lands, submerged lands, and surrounding waters out to 12 nautical miles 

from the water’s edge as a National Wildlife Refuge. Subsequently, the Department of 

the Interior published a regulation providing for the management of the refuge. 66 Fed. 

Reg. 7660-01 (Jan. 24, 2001). The regulation states, in pertinent part: 
2008-5058 4 

We will close the refuge to commercial fishing but will permit a low level of 

compatible recreational fishing for bonefishing and deep water sportfishing 

under programs that we will carefully manage to ensure compatibility with 

refuge purposes. . . . Management actions will include protection of the 

refuge waters and wildlife from commercial fishing activities. 

In March 2003, The Nature Conservancy conveyed 416 acres of the emergent land of 

Palmyra to the United States to be included in the refuge. It subsequently added 28 

more acres to the conveyance. 

In January 2007 the plaintiffs filed a complaint in the Court of Federal Claims 

alleging that the Interior Department regulation had “directly confiscated, taken, and 

rendered wholly and completely worthless” their property interests “embodied and 

reflected” in their licenses. The government moved to dismiss the complaint for failure 

to state a claim, and the court granted the motion. 

The court noted that the Interior Department regulation was directed only to the 

“tidal lands, submerged lands, and waters” surrounding Palmyra, and that the FullardLeo family lacked authority to grant a license governing activities, including fishing, in 

those areas. Palmyra Pac. Seafoods, L.L.C. v. United States, 80 Fed. Cl. 228, 232 

(2008). To the contrary, the court explained, the plaintiffs’ interests permitted them only 

“to use the emergent land of Palmyra for the purpose of establishing a commercial 

fishing operation.” Id. at 233. The court accepted the plaintiffs’ assertion that the 

government’s “closure of the waters surrounding Palmyra to commercial fishing 

frustrated the purpose of the licenses.” Id. Because the plaintiffs had acquired no right 

to engage in commercial fishing in that area, however, the court held that the 

government’s action “did not appropriate a contractual right to commercial fishing 

granted [by the licenses] as such a right could not have been granted.” Id. Even 
2008-5058 5 

assuming that the plaintiffs’ licenses constituted property interests that would be 

cognizable in a takings action, the court concluded that the plaintiffs had “failed to allege 

that the Government’s designation of the Palmyra National Wildlife Refuge and closure 

of the refuge to commercial fishing directly regulated operations under those licenses,” 

and thus no taking of the plaintiffs’ licenses had occurred. Id. at 236. Because the 

plaintiffs had not “asserted a cognizable property interest subject to the government 

action sufficient to support a takings claim under the Fifth Amendment,” the court ruled 

that they had failed to state a claim upon which relief could be granted. Id. The 

plaintiffs appealed that ruling to this court. 

II 

 The basic principles governing takings analysis are well settled and are not in 

dispute here. First, in order to have a cause of action for a Fifth Amendment taking, the 

plaintiff must point to a protectable property interest that is asserted to be the subject of 

the taking. See Phillips v. Wash. Legal Found., 524 U.S. 156, 164 (1998) (“Because the 

Constitution protects rather than creates property interests, the existence of a property 

interest is determined by reference to ‘existing rules or understandings that stem from 

an independent source such as state law.’”) (citation omitted). Second, contract rights 

can be the subject of a takings action. See, e.g., Lynch v. United States, 292 U.S. 571, 

579 (1934) (“The Fifth Amendment commands that property be not taken without 

making just compensation. Valid contracts are property, whether the obligor be a 

private individual, a municipality, a state or the United States.”); see also United States 

v. Petty Motor Co., 327 U.S. 372, 381 (1946) (holding that plaintiff was entitled to 

compensation for government’s taking of option to renew a lease). 
2008-5058 6 

 The parties disagree about the application of those general principles to the facts 

of this case. The plaintiffs argue they are entitled to compensation because the 

government’s regulation was targeted at their commercial fishing operation and 

“effectively transferred PPS’s property—its rights under the contract—back to PPS’s 

contractual counterparty, the politically favored and powerful Nature Conservancy.” The 

government, on the other hand, contends that it did not “take” any contract right of the 

plaintiffs and that any injury that the plaintiffs suffered as a result of the Interior 

Department regulation was a consequence of lawful government action and did not 

reflect the taking of any property right obtained by the plaintiffs through contract. 

As a general matter, the government does not “take” contract rights pertaining to 

a contract between two private parties simply by engaging in lawful action that affects 

the value of one of the parties’ contract rights. The Supreme Court’s decision in Omnia 

Commercial Co. v. United States, 261 U.S. 502 (1923), has long stood for that 

proposition. In Omnia, the federal government requisitioned all of the steel produced by 

the Allegheny Steel Company. Because Omnia had a contract to purchase steel from 

Allegheny, which was frustrated by the government’s requisition, Omnia brought suit 

against the government for the purported “taking” of its contract. The Supreme Court 

held that there was no taking. The Court made clear that when a party alleges that a 

contract has been taken, courts should distinguish between the claimed taking of the 

subject matter of a contract and the taking of the contract itself, and it held that a 

showing that the subject matter of a contract has been taken is not sufficient to 

demonstrate that the contract itself has been taken. The Court described the 

government’s requisition of the steel underlying the contract as a taking of the subject 
2008-5058 7 

matter of the contract and made clear that by taking that subject matter the government 

did not take the contract. On the other hand, the Court explained, when there has been 

an “acquisition of the obligation or the right to enforce it” by the government, the 

government’s action would qualify as a taking of contract rights. Omnia, 261 U.S. at 

511. 

The Court applied that framework the following year when it considered a 

Presidential order to appropriate a contract to build a ship under the Emergency 

Shipping Act. In that case, Brooks-Scanlon Corp. v. United States, 265 U.S. 106 

(1924), the Court found that the government had taken the claimant’s contract. The 

Court explained: 

[T]he orders given the builder show that expropriation of claimant's 

contract and rights was intended. By its orders it put itself in the shoes of 

claimant and took from claimant and appropriated to the use of the United 

States all the rights and advantages that an assignee of the contract 

would have had. The credit for, and advantages under the contract 

resulting from, payment of $419,500, made by claimant to builder were 

taken. The use of the plans and specifications for the construction of the 

ship as well as the benefit of inspection prior to the requisition date, 

August 3, 1917, were also taken over. The contract was not terminated. 

The direct and immediate result of the requisition orders and acts of the 

Fleet Corporation was to take from claimant its contract and its rights 

thereunder. 

Id. at 120. 

We applied the principles of those cases in our recent decision in Huntleigh USA 

Corp. v. United States, 525 F.3d 1370 (Fed. Cir. 2008). In that case, a private company 

that had contracts to provide baggage and passenger screening in U.S. airports brought 

suit for a taking of its contract rights after Congress federalized the screening functions 

in 2002. The statute creating the Transportation Security Administration had the effect 

of terminating all of Huntleigh’s screening service contracts at U.S. airports. This court 
2008-5058 8 

 

denied Huntleigh’s request for compensation. We held that the government does not 

“take” a party’s contract rights simply because its regulatory activity renders those 

contract rights valueless. Huntleigh conceded that the government did not actually 

assume its contracts, and for that reason we held that no takings claim could be 

predicated on a taking of the contracts. 525 F.3d at 1379. 

In attempting to define the property right that was purportedly taken by the 

regulation at issue in this case, the plaintiffs have provided little beyond the general 

assertion that the Interior Department interfered with their “exclusive right to use 

Palmyra as a commercial fishing base.” They contend that “the contract entitled PPS to 

the exclusive occupation and use of certain lands of the atoll (e.g., the base camp),” and 

refer to a “right to use certain facilities on Palmyra as the base for its commercial fishing 

operation.” The problem with that argument is that the Interior Department’s regulation 

does not prohibit commercial fishing operations on Palmyra—it merely prohibits 

commercial fishing activity in the surrounding waters.1

 The fact that the government’s 

regulation of activities in the waters surrounding Palmyra may have adversely affected 

the value of their contract rights to engage in activities on shore is not sufficient to 

1

 Although the government characterizes the plaintiffs’ claim as a right to 

engage in commercial fishing in the waters around Palmyra, the plaintiffs have made 

clear that their takings claim is not based on any claim of a right to fish in the EEZ or in 

the waters within 12 miles of Palmyra, but rather on their asserted right to operate a 

commercial fishing operation on Palmyra. We agree with the government that our 

decision in American Pelagic Fishing Co. v. United States, 379 F.3d 1363 (Fed. Cir. 

2004), would foreclose any possible claim that the plaintiffs had a compensable “right to 

fish” in the EEZ. In American Pelagic, a fishing company asserted a takings claim 

because of the loss of its fishery permits. After reviewing the history of the pertinent 

legislation, we concluded that there is no “historical common law right to use vessels to 

fish in the EEZ,” id. at 1380, and we therefore held that American Pelagic “did not and 

could not possess a property interest in its fishery permits,” id. at 1374. 
2008-5058 9 

constitute a compensable taking. While at this stage of the proceedings we must 

accept the facts alleged in the complaint and draw all reasonable inferences in favor of 

the plaintiff, Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991), the 

complaint must allege facts “plausibly suggesting (not merely consistent with)” a 

showing of entitlement to relief, Bell Atl. Corp. v. Twombley, 127 S. Ct. 1955, 1966 

(2007). The complaint in this case fails to do so. 

Our decision in Colvin Cattle Co. v. United States, 468 F.3d 803 (Fed. Cir. 2006), 

addressed a claim analogous to the plaintiffs’ claim in this case. In that case, a ranch 

owner argued, inter alia, that the government’s refusal to allow grazing on federal land 

near the ranch had reduced the value of the ranch and thus constituted a taking of the 

ranch. Id. at 808. We rejected that claim, holding that the fact that the ranch may have 

lost value because of the government’s grazing restriction was “of no moment because 

such loss in value has not occurred by virtue of governmental restrictions on a 

constitutionally cognizable property interest.” Id. Because the ranch owner had no 

property right to graze cattle on federal land, the government’s prohibition on grazing 

did not constitute a taking of the ranch owner’s property. See also Air Pegasus of D.C., 

Inc. v. United States, 424 F.3d 1206, 1215-16 (Fed. Cir. 2005) (frustration of heliport 

operator’s business expectations due to new federal air traffic restrictions in the vicinity 

of the heliport did not constitute a compensable taking). The same analysis applies to 

the plaintiffs’ claim that the government’s prohibition on commercial fishing in the waters 

surrounding Palmyra has taken their rights to run a commercial fishing operation on the 

island. The ban on fishing may have reduced the value of the plaintiffs’ license to 
2008-5058 10 

operate on the island, but that reduction in value, as in Colvin Cattle, is not the result of 

a compensable taking of any cognizable property interest. 

The plaintiffs rely on two of this court’s cases, but those cases are 

distinguishable. In United Nuclear Corp. v. United States, 912 F.2d 1432 (Fed. Cir. 

1990), United, a uranium mining company, had a mining lease on Navajo land and 

submitted a mining plan to the Secretary of the Interior for approval. The Secretary, 

however, refused to approve the mining plan until the Navajo Tribal Council approved 

the plan, and the Council declined to do so without the payment of additional funds to 

the Tribe. The mining leases expired without United having been able to conduct any 

mining. United then brought an action against the government, arguing that the 

Secretary’s refusal to approve the mining plan constituted a compensable taking. 

Because United had a leasehold interest in the minerals to be mined, see 912 F.2d at 

1437, there was no question that it had a property interest that was directly affected by 

the government’s action. The question before the court was whether the government’s 

action constituted a taking of that property interest. The court held that it did. 

The court in United Nuclear noted that the economic impact of the Secretary’s 

action was to cause United to lose not only all of its investment in the mining operation, 

but also all of its prospects for profit. 912 F.2d at 1435-36. The court further held that 

the Secretary’s refusal to approve the mining plan “seriously interfered with United’s 

investment-backed expectations by destroying them.” Id. at 1437. And in assessing the 

character of the government’s action, the court stated that “[t]he record leaves no doubt 

that the real reason for the Tribe’s refusal to approve United’s mining plan was an 

attempt to obtain substantial additional money from United.” Id. The Secretary’s action, 
2008-5058 11 

according to the court, “reflects . . . an attempt to enable the Tribe to exact additional 

money from a company with whom it had a valid contract.” Id. at 1438. Accordingly, 

the court held that the Secretary’s action had taken United’s leases and that United was 

entitled to compensation. 

The difference between that case and this one is dramatic. The Secretary’s 

action in United Nuclear effectively terminated a recognized real property interest—

United’s mining leases. United Nuclear was not a case in which a regulation of other 

property made United’s mining operation more difficult or more expensive. Because 

there is no such direct restraint on any property interest held by the plaintiffs in this 

case, United Nuclear is of no assistance to them. 

The second of the two cases on which the plaintiffs place their main reliance is 

Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir. 2003). In that case a 

takings claim was brought by real estate owner-developers who had entered into a 

federal program to construct and operate low-income housing projects. As part of the 

program, the owners financed the construction of the low-income housing projects with 

federally guaranteed mortgage loans. Consistent with federal regulations and the 

owners’ agreements with the government, the mortgage contracts provided that the 

owners could prepay their 40-year mortgages after 20 years. After most of the 20-year 

period had expired, Congress became concerned that the owners would exercise their 

prepayment rights and remove the projects from the low-income housing market. 

Accordingly, Congress enacted legislation that nullified the prepayment provision of the 

contracts. The result of the legislation was that the owners could not “regain normal 
2008-5058 12 

rights of ownership” and had to remain in the government-regulated low-income housing 

program. Id. at 1327. 

Under those circumstances, this court held that Congress’s actions constituted a 

taking of the owners’ property for which compensation had to be paid. The “distinct 

property interest” that was taken in Cienega Gardens was the developers’ “real property 

rights to sole and exclusive possession after twenty years and to convey or encumber 

their properties after twenty years.” 331 F.3d at 1328. The owners gave up certain 

rights during the first 20 years of their mortgages, but had retained the right to regain 

their full ownership rights after that period by prepaying the mortgages. Id. at 1329. 

The court ruled that by enacting legislation that barred the developers from exercising 

their options to prepay their mortgages, Congress had in effect requisitioned the 

developers’ property for up to 20 more years of service as low-income housing. 

Although the relationship between the government, the mortgagees, and the developers 

was governed by a complex web of contracts, statutes, and regulations, the court 

viewed the challenged legislation as having appropriated a real property right that the 

developers enjoyed before the legislation but not afterwards. In essence, the court 

held, the statutes authorized what amounted to a traditional appropriation of real 

property rights, just as if the government had ordered the owners to continue devoting 

their properties to low-income housing use after their contractual obligation to do so had 

expired. By altering the regulatory agreements as they applied to the owners, the 

government ultimately extended an encumbrance upon the owners’ rights to use their 
2008-5058 13 

property beyond the 20-year burden they had bargained for. The court characterized 

that alteration as a taking.2

The plaintiffs here have not alleged that the government has altered their 

contract rights in a way that affects their underlying property rights, as in United Nuclear

and Cienega Gardens. They also have not alleged that the government has stepped 

into the shoes of a contracting party so as to appropriate that party’s contract rights, as 

the Supreme Court discussed in Omnia and Brooks-Scanlon. Instead, the plaintiffs rely 

on United Nuclear and Cienega Gardens principally to support their argument that a 

taking has occurred in this case because the government “targeted” their contract rights 

in order to promote the interests of another party, The Nature Conservancy. To be 

sure, once it is established that a recognized property interest has been affected by 

governmental regulation, governmental “targeting” may make it more likely that the 

destruction of property rights will be regarded as appropriative, rather than merely the 

incidental effect of lawful regulation directed at a different purpose. See Lingle v. 

Chevron U.S.A., Inc., 544 U.S. 528, 543 (2005) (referring to regulation that “single[s] 

out” and “burden[s]” the owner of property). In Cienega Gardens, for example, it was 

important that the statutes in question “intentionally defeated the Owners’ real property 

 

2

 In a subsequent appeal addressing the rights of different parties, this court 

held that the earlier Cienega Gardens decision did not have the effect of resolving the 

takings issue for all other similarly situated plaintiffs. See Cienega Gardens v. United 

States, 503 F.3d 1266 (Fed. Cir. 2007). The court in that case ruled that before 

concluding that a compensable taking of those parties’ property had occurred, the trial 

court needed to consider the effect of the subject legislation on the property as a whole, 

the offsetting benefits provided by that legislation, the duration of the legislation, and 

whether the private parties had a reasonable, investment-backed expectation that they 

would have the option to repay their mortgages after 20 years. See St. Christopher 

Assocs., L.P. v. United States, 511 F.3d 1376, 1386 n.5 (Fed. Cir. 2008). 
2008-5058 14 

rights to sole and exclusive possession after twenty years and to convey or encumber 

their properties after twenty years.” 331 F.3d at 1328. If the owners had been 

prevented from prepaying their mortgages as a result of a change in their economic 

circumstances flowing from unrelated, general changes in the tax code, for example, it 

is far less likely that the court would have found the governmental action to constitute a 

compensable taking. But the fact that the government regulates in response to a 

particular party’s conduct or the conduct of a group of which the party is a member is 

not enough even to trigger an inquiry into whether the government’s conduct constitutes 

a taking unless the government’s action interferes with some recognized property right 

enjoyed by that party. 

The plaintiffs’ “targeting” argument runs afoul of well-settled case law, as 

reflected in several decisions from the Supreme Court and this court. In Omnia, for 

example, the United States requisitioned the steel company’s entire production of steel 

plate for the year 1918 and “directed that company not to comply with the terms of 

[Omnia’s] contract.” 261 U.S. at 507. Notwithstanding that the government’s action 

was specifically directed at Omnia, the Court held that the destruction of the contract did 

not constitute a compensable taking within the meaning of the Fifth Amendment. 

Similarly, in Huntleigh, 525 F.3d 1370, Congress’s decision to substitute the 

Transportation Security Administration for the private airport screening companies 

clearly targeted the private companies in that the legislation was designed to replace 

their contract services with services performed by federal agents. Yet the fact that the 

legislation was specifically directed at replacing the private companies did not affect the 

court’s conclusion that there was no taking. And in Mitchell Arms, Inc. v. United States, 
2008-5058 15 

7 F.3d 212 (Fed. Cir. 1993), the court held that a prohibition on the importation of 

assault rifles did not constitute a compensable taking of the plaintiff’s contracts to 

purchase such rifles for importation, even though the prohibition was directly targeted at 

importers of assault rifles, such as the plaintiff. 

The problem with the plaintiffs’ takings theory in this case, as well as their claim 

that “targeting” converted an otherwise innocuous regulation into a compensable taking, 

can be illustrated by a hypothetical case that contains all the essential elements of this 

case without the complicating details that tend to obscure the analysis. Suppose that a 

business that offers “outdoor adventures” obtains rights from a private party to build a 

facility next to a federally owned national wilderness area for the purpose of attracting 

adventurers who are interested in hiking in the wilderness area. Suppose further that 

the government, being concerned that the influx of large numbers of hikers will disrupt 

the wilderness area, closes the wilderness area to all hikers or strictly limits the number 

of hikers who can enter the area. In that event, no property right of the business has 

been taken, even if the government acted in direct response to the prospect of having a 

hiking tourism business next to the wilderness area. To be sure, the expectation of the 

outdoor adventure company has been disappointed, but it is not an expectation that was 

based on any property right that was taken, and thus the government did not effect a 

taking for which compensation must be paid. While it might be different if the 

government regulated activities on a private individual’s property—in the example, if the 

government were to prohibit private landowners from running a hiking business within 

20 miles of a wilderness area—that is another matter altogether from the government 

regulating activities on its own property, or property over which it has full control, even if 
2008-5058 16 

that regulatory action disappoints the expectations of nearby property owners. 

Accordingly, even if the Interior Department regulation in this case is regarded as 

“targeted” at the plaintiffs, it regulated conduct as to which they had no protectable 

property interest, and it therefore did not constitute a taking for which compensation had 

to be paid. 

III 

There are two remaining issues that must be resolved. First, at oral argument, 

the plaintiffs asserted that the Interior Department regulation would interfere with their 

right to use the pier on Palmyra. In the trial court, however, the plaintiffs asserted that 

the government’s regulation did not affect activities on the “emergent lands or fixtures 

appurtenant thereto.” Because the question of the use of the pier does not appear to 

have been put into issue in the trial court, we have no reason to consider it here. 

Certainly there is nothing on the face of the regulation that suggests any restriction on 

the use of the pier, and if the plaintiffs were concerned about the use of the pier they 

could have obtained clarification as to the application of the regulation in that respect. 

Second, the plaintiffs have raised a question as to whether the regulation affects 

the right of their fishing vessels to traverse the 12-mile zone surrounding Palmyra that is 

governed by the Interior Department regulation. In their complaint, the plaintiffs alleged 

that the Interior Department regulation “restricted public access to Palmyra . . . thereby 

barring Plaintiffs from entering Palmyra.” The plaintiffs have not spelled out the property 

interest underlying that assertion in any detail. However, it can be interpreted as a 

claim that the government has denied them an easement of necessity relating to their 

contract-based interests on Palmyra. 
2008-5058 17 

An easement of necessity has been recognized as a compensable property 

interest. For example, in Bydlon v. United States, 175 F. Supp. 891, 896 (Ct. Cl. 1959), 

our predecessor court considered whether a Presidential Executive Order that 

prevented owners of remote resorts within a national forest from enjoying reasonable 

access to their properties constituted a taking. In light of the “traditional doctrine of 

ways of necessity,” the court observed that there is a general rule that the owners of 

property enjoy a right of reasonable access to their property. Id. at 897-98. While the 

owners retained a method of access “using wilderness trails and waters by packhorses, 

canoes, and walking,” the court determined that “such a method of access would be 

unreasonable and would destroy [plaintiff’s] property for resort purposes” as “[t]he resort 

was planned exclusively with air access in mind.” Id. The court thus concluded that 

“the United States has taken, under the guise of its police power, a property right of the 

plaintiffs . . . consisting of a way of necessity to their properties.” Id. at 900. 

Our predecessor court applied the doctrine of necessity to another takings claim 

some years later, this time with respect to access to an island. See Laney v. United 

States. 661 F.2d 145 (Ct. Cl. 1981). The court described the facts in that case as 

concerning “an effort by the government to utilize its control over navigable waters to 

deny any meaningful access to the island whatsoever. The government’s purpose 

appears to be, or may be, to keep it in its pristine state.” Id. at 146. In that case, the 

government had argued that its authority to regulate activities on the water allowed it to 

prohibit transit over the water to the island. Id. at 147-48. The court rejected that 

assertion, noting: 

If defendant is correct, the just compensation clause of the fifth 

amendment has but little effect in protecting island property. Defendant is 
2008-5058 18 

free to add islands to its system of parks, national seashores, recreational 

areas, and wildlife preserves, without cost to it. We could enter summary 

judgment for defendant solely on the admitted fact that the property 

allegedly taken is an island. 

Id. at 148. The court noted the parallel between an island and a city block surrounded 

by public streets. In the latter case, the court explained, “if his access to his block on all 

four sides is cut off, that is a taking, and if authorized is compensable under the just 

compensation clause.” Id. at 149. In light of those precedents, a regulation that 

prevents a property owner from accessing private property would implicate a cognizable 

property interest for purposes of the Fifth Amendment. 

In this case, the government responded to the plaintiffs’ claim by arguing in the 

trial court that “[t]he plain language of the notice does not prohibit plaintiffs’ ships from 

approaching Palmyra, and the plaintiffs have not alleged or provided evidence that even 

one of their ships was ever turned away from the refuge.” The plaintiffs did not contest 

that assertion or otherwise offer anything to suggest that the Interior Department had 

interpreted the regulation to prohibit access by fishing vessels to the plaintiffs’ facilities 

on Palmyra. There is nothing in the regulation that by its terms restricts the plaintiffs’ 

right to cross the refuge to reach their base of operation on the island. Absent any 

reason to believe the government interpreted the regulation to bar the plaintiffs from 

reaching their facilities, they have failed to make a sufficient allegation that the 

government has taken that right. We therefore have no occasion to decide whether the 

plaintiffs’ contract rights with regard to activities on the island carried with them the right 

of access to the island and whether a restriction on such access would have constituted 

a compensable taking. 

AFFIRMED.