## United States Court of Appeals for the Federal Circuit

2008-5058 PALMYRA PACIFIC SEAFOODS, L.L.C., PALMYRA PACIFIC ENTE RPRISES, L.L.C., PPE LIMITED PARTNERSHIP, and FRANK SORBA, Plaintiffs-Appellants,

v. UNITED STATES, Defendant-Appellee.

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

Maame A.F. Ewusi-Mensah , Trial Attorney, Commercia l Litigation Branch, Civil Division, United States Departm ent of Justice, of Washi ngton, 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 co unsel on the brief was Mariel J. Combs , Attorney, Office of t he 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 is land 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 conc eive 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 est ablished a naval base there, where it constructed an airstrip, a base camp, and a pier . After the war the United States sued2008-5058 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 us e the island as a commercial fishing base and who contend that the gov ernment impermissibly inte rfered 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 obtai ned 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 agreem ent with Palmyra Pacific Enterprises, L.L.C. That agreement granted Palmyra Pacific Enterprises the exclusive right to establish a commercial fishing operation on Palm yra 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 c ontract between Palmyra Development Company and Palmyra Pacific Enterprises conv eyed 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 us e the Small Boat Harbor,” and “the exclusive right to use one-half of the deep water dock.” The contra ct also granted a “Commercial Fishing License” purporting to give Palm yra Pacific Enterprises an exclusive right to fish in the2008-5058 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 ve ssels 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 co mpeting fishing enter prises that might operate in the region. In 2000, The Nature Conservancy, a non- profit entity, purc hased much of the emergent land on Palmyra from the Fullard-Leo family. Begi nning 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 commerc ial fishing operation would have on the proposed eco-tourism camp and accordingly s ought to interfere with PPS’s operation. According to the plaintiffs, the ensuing gov ernment 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 su rrounding waters out to 12 nautical miles from the water’s edge as a National Wildlif e Refuge. Subsequently, the Department of the Interior published a regulation providing fo r the management of the refuge. 66 Fed. Reg. 7660-01 (Jan. 24, 2001). The regul ation 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 fo r bonefishing and deep water sportfishing under programs that we will carefully manage to ensure compatibility with refuge purposes. . . . Management ac tions will include protection of the refuge waters and wildlife from commercial fishing activities. In March 2003, The Nature Conservancy c onveyed 416 acres of the emergent land of Palmyra to the United States to be incl uded in the refuge. It subsequently added 28 more acres to the conveyance. In January 2007 the plaintiffs filed a comp laint in the Court of Federal Claims alleging that the Interior Department regulat ion 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 Departm ent 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 gov erning 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 ar ea, 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. Even2008-5058 5 assuming that the plaintiffs’ licenses cons tituted property interests that would be cognizable in a takings action, the court concl uded that the plaintiffs had “failed to allege

that the Government’s desi gnation of the Palmyra National Wildlife Refuge and closure of the refuge to commercial fishing direct ly 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 proper ty 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 clai m 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 in terest 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 proper ty interests, the existence of a property interest is determined by reference to ‘exi sting rules or understandi ngs that stem from an independent source such as stat e 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 contract s 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 taki ng of option to renew a lease).2008-5058 6 The parties disagree about t he 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 favo red 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 obt ained 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 parti es’ 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 requisiti oned all of the steel produced by the Allegheny Steel Company. Because Omni a had a contract to purchase steel from Allegheny, which was frustrated by the gover nment’s requisition, Omnia brought suit against the government for the purported “taking” of its c ontract. The Supreme Court held that there was no taking. The Court m ade clear that when a party alleges that a contract has been taken, courts should dist inguish 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 cont ract has been taken is not sufficient to

demonstrate that the contra ct itself has been taken. The Court described the government’s requisition of the steel underlying the contract as a taking of the subject2008-5058 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 obligat ion 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 contra ct 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 t he 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 pl ans and specifications for the construction of the ship as well as the benef it 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 prov ide baggage and passenger screening in U.S. airports brought suit for a taking of its contract rights a fter Congress federalized the screening functions

in 2002. The statute creati ng the Transportation Security Administration had the effect of terminating all of Huntleigh’s screening servic e contracts at U.S. ai rports. This court2008-5058 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 c onceded that the government did not actually assume its contracts, and for that reas on 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 ri ght that was purportedly taken by the regulation at issue in this case, the plai ntiffs 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 cont ract entitled PPS to the exclusive occupation and use of certain l ands 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 t hat argument is that the Inte rior Department’s regulation does not prohibit commercial fishing operat ions 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 su rrounding 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 gov ernment that our decision in American Pelagic Fishi ng 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 “h istorical common law right to use vessels to fish in the EEZ,” id. at 1380, and we theref ore 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 s uggesting (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’ clai m 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 r anch and thus constitu ted 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 gov ernment’s grazing restrictio n 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 restricti ons in the vicinity of the heliport did not constitute a compens able taking). The same analysis applies to the plaintiffs’ claim that t he government’s prohibition on comme rcial 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 t he value of the plaintiffs’ license to2008-5058 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 leas es 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 befor e the court was whet her 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 ec onomic impact of the Secretary’s action was to cause United to lose not only a ll of its investment in the mining operation, but also all of its prospects for profit. 912 F.2d at 1435-36. The c ourt further held that the Secretary’s refusal to approve the mining plan “serious ly interfered with United’s investment-backed expectations by destroying them.” Id. at 1437. And in assessing the character of the government’s ac tion, the court stated that “ [t]he record leaves no doubt

that the real reason for the Tribe’s refu sal 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, “reflec ts . . . an attempt to enable t he 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 whic h a regulation of other property made United’s mining oper ation 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 pl aintiffs 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 construc t 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. Consis tent with federal regulations and the owners’ agreements with the gov ernment, the mortgage contra cts provided that the owners could prepay their 40-year mortgages afte r 20 years. After mo st of the 20-year period had expired, Congress became concerned that the ow ners 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 normal2008-5058 12 rights of ownership” and had to remain in the government-regulat ed low-income housing

program. Id. at 1327. Under those circumstances, this court hel d that Congress’s actions constituted a taking of the owners’ property for which co mpensation 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 afte r twenty years and to convey or encumber their properties after twenty years.” 331 F.3d at 1328. The ow ners gave up certain rights during the first 20 years of their mo rtgages, 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 year s of service as low-income housing. Although the relationship between the gover nment, the mortgagees, and the developers was governed by a complex web of contract s, statutes, and regulations, the court viewed the challenged legislation as having appr opriated a real property right that the developers enjoyed before the legi slation but not afterwards. In essence, the court held, the statutes authoriz ed what amounted to a traditi onal appropriation of real property rights, just as if the government had ordered the owners to continue devoting their properties to low-income housing use afte r their contractual obligation to do so had expired. By altering the regulatory agreements as they applied to the owners, the government ultimately extended an encumbranc e upon the owners’ rights to use their2008-5058 13 property beyond the 20-year burden they had bar gained for. The court characterized that alteration as a taking. 2 The plaintiffs here have not alleged t hat 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 inte rests of another party, The Nature Conservancy. To be sure, once it is established that a recogni zed property interest has been affected by governmental regulation, gover nmental “targeting” may make it more likely that the destruction of property rights will be regarded as appropriative, rather than merely the

incidental effect of lawf ul 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 defeat ed 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 si milarly 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’ proper ty had occurred, the trial court needed to consider the effect of the subj ect legislation on the property as a whole, the offsetting benefits provided by that legislation, the durat ion of the legislation, and whether the private parties had a reasonable, investment-backed expectation that they would have the option to repay t heir 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 afte r 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 ac tion to constitute a compensable taking. But the fact that t he 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 whet her the government’s conduct constitutes a taking unless the government’s action interf eres 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 “dir ected that company not to comply with the terms of [Omnia’s] contract.” 261 U.S. at 507. Notwithstanding that t he government’s action was specifically directed at Om nia, the Court held that the des truction of the contract did not constitute a compensable taking withi n 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 t hat the legislation wa s designed to replace their contract services with services perform ed by federal agents. Ye t the fact that the legislation was specifically directed at replac ing the private companies did not affect the

court’s conclusion that ther e 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 prohibiti on on the importation of assault rifles did not constitute a compens able taking of the plaintiff’s contracts to purchase such rifles for importation, even t hough 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 t end to obscure the analysis. Suppose that a

business that offers “outdoor adventures” obtai ns rights from a private party to build a facility next to a federally owned national wil derness 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 stri ctly 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, t he 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 proper ty—in the example, if the government were to prohibi t private landowners from running a hiking business within

20 miles of a wilderness area— that is another matter alt ogether from the government regulating activities on its own property, or property over which it has full control, even if2008-5058 16 that regulatory action dis appoints 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 wh ich they had no protectable property interest, and it theref ore 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 D epartment regulation woul d interfere with their right to use the pier on Palmyr a. 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 t he face of the regulation that suggests any restriction on the use of the pier, and if t he plaintiffs were concerned about the use of the pier they could have obtained clarification as to the applic ation of the regulation in that respect. Second, the plaintiffs have raised a questi on 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 Departm ent regulation. In their complaint, the plaintiffs alleged that the Interior Department regulation “restricted public access to Palmyra . . . thereby barring Plaintiffs from entering Palmyra.” T he 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 rec ognized 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 consti tuted 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 wil derness trails and waters by packhorses, canoes, and walking,” the court determined t hat “such a method of access would be unreasonable and would destroy [plaintiff’s] proper ty 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 pow er, 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 de scribed the facts in that case as concerning “an effort by the government to utilize its contro l 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 activiti es 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 co mpensation clause of the fifth amendment has but little effect in pr otecting island property. Defendant is2008-5058 18 free to add islands to its system of par ks, national seashores, recreational areas, and wildlife preserves, without cost to it. We could enter summary judgment for defendant solely on the admitted fact t hat 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 c ourt explained, “if his a ccess to his block on all four sides is cut off, that is a taking, and if authorized is com pensable under the just compensation clause.” Id. at 149. In light of thos e precedents, a regulation that prevents a property owner from accessing priv ate property would im plicate 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 prohi bit 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 o ffer 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 te rms 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 theref ore 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 restrict ion on such access would have constituted a compensable taking.

AFFIRMED

.