# In the United States Court of Federal Claims

No. 16

- 1545L
(Filed: March 23 , 202 1 )

FRANK PENNA and LISA PENNA,
Plaintiffs,

v.
THE UNITED STATES,

Defendant. ) ) ) ) ) ) ) ) ) ) ) )

Mark R. Cuker , Cuker Law Firm, LLC , Philadelphia, PA , for plaintiff s

. Frank J. Singer , Environment & Natural Resources Division, United States Department of Justice , Washington, DC, for defendant

. With him at trial and on the briefs were Taylor N. Ferrell , Environment & Natural Resources Division, United States Department of Justic e , Washington, DC, and Karrin Minott , Naval Litigation Office, Office of the General Counsel, Department of the Navy ; also on the briefs was Jean E. Williams , Deputy Assistant Attorney General , Environment & Natural Resources Division, United States Department of Justice, Washington, DC

.
OPINION AND ORDER

SOLOMSON

, Judge.
This case presents the question of whether Defendant, the United States, owes Plaintiffs, Frank and Lisa Penna (“the Pennas”) , just compensation for the taking of their property (the “Property” or “Penna Property”) due to chemical contamination the Department of the Navy allegedly caused

. Before t he Court is the government’s pending motion for judgment on partial findings pursuant to Rule 52(c) of the Rules of the United States Court of Federal Claims (“RCFC”). ECF No. 134 (“Def. 52(c) Mot.”). At trial, the Pennas presented evidence in support of their allegation that the government caused fluorosurfactant

- based aqueous film

- forming foam (“AFFF”) to be released onto the Penna P roperty, which, they assert, constitute s a compensable taking pursuant to the Fifth Amendment of the United States Constit ution and the Tucker Act,- 2

-

28 U.S.C. § 1491. The Court ultimately suspended trial to consider the government’s RCFC 52(c) motion , arguing that the Pennas did not prove a compensable taking. ECF No. 125; Def. 52(c) Mot. at 9.
Although the Pennas attempt to shoehorn their takings c laim into the legal framework applicable to direct, physical per se appropriation s of property , the United States Supreme Court and the United States Court of Appeals for the Federal Circuit have issued a line of decision s that specifically address takings based upon alleged government

- caused flooding and that, by extension , apply to chemical contamination

cases

. Those cases govern the outcome here. In that regard, a fter considering the evidence the Pennas presented at trial , the Court concludes that they have failed to carry their burden of proof and, thus , the government is entitled to judgment. In addition, the Court imposes sanctions on Plaintiffs’ counsel for violating discovery obligations.

I. PROCEDUR AL HISTORY

A. The Complaint

On November 18, 2016, the Pennas filed suit in this Court, alleging that the Navy’s use of hazardous chemicals resulted in the contamination of both the Pennas ’ water supply and ground soil, amounting to a compensable Fifth Amendment taking of their P roperty. ECF No. 1 (“Compl.”) ¶¶ 6, 26, 30. The Pennas contend that perfluorochemical compounds (“PFCs”) , including perfluorooctanoic acid (“PFOA”) and perfluoroo ctanesulfonic acid (“PFOS”) , were “used extensively at Willow Grove in fire

- fighting foam materials for decades up until 2010,” Compl. ¶ 8, and “deliberately channeled” by the Navy into a swale running across the Penna P roperty. Compl. ¶ 24.
According to the Pennas, chronic exposure to PFCs is toxic to human health and associated with many potential adverse effects, such as an increased risk of developing various cancers that could “manifest themselves months or even years” after exposure. Compl. ¶¶ 7, 9

– 14. The Pennas aver that although the Environmental Protection Agency (“EPA”) has determined that PFOA and PFOS pose potential adverse effects for the environment and human health, the government failed to prevent PFC use and disposal at Willow Grove and to prevent and abate PFC contamination in water sources (including the Pennas’ private well). Compl. ¶¶ 16

– 17. The Pennas allege that they used their well “for all domestic water purposes” until learning t hat the levels of PFOA and PFOS “far exceeded the EPA’s then provision al Health Advisory Level

. . . of 0.2 μ g/l for PFOS and 0.4 μ g/l for PFOA.” Compl. ¶ 21.- 3

-

The Pennas contend that the Navy intentionally directed contaminated runoff from Willow Grov e towards the Penna Property and discharged drainage from a PFC

contaminated Fire Training Area “directly onto [the Pennas’] property,” rendering it virtually valueless. Compl. ¶¶ 24, 26

– 27. Accordingly, the Pennas claim that because the government ’s action s amounted to a taking of their P roperty , they are entitled to just compensation . Compl. at 6.

B. Discovery And Summary Judgment Briefing
Following briefing on the parties’ cross

- motions for partial summary judgment, the Court held oral argument on April 3, 2019 . ECF Nos. 38, 47, 54, 61; Minute Entry, Apr. 3, 2019. On April 4, 2019, the Court issued a written order denying both cross

motions for summary judgment. ECF No. 64. On May 21, 2019, the Court set a discovery schedule for the case. ECF No. 71.
On February 5, 2020, this case was re assigned to the undersigned judge. ECF Nos. 83, 84. Discovery closed on March 13, 2020, see ECF No. 82, and the parties filed their pretrial memoranda. ECF Nos. 88 (“Pl. Memo.”) , 101.

C. The Trial
Trial commenced on August 3, 2020 via video

- conference. 1 See Minute Entry, Aug. 3 , 2020. Over the course of four days, t he Pennas presented testimony from three fact witnesses and three expert witnesses.

The Pennas’ first witness, Mr. Tony Gilliam, testified regarding his experience working as a fire fighter and then a battalion chief at Willow Grove. Tr. 55:24

– 56:15. 2 He testified that AFFF foam was regularly used in training exercises on the Base, which included dispersing thousands of gallons of AFFF on the Base for years. Tr. 62:5

– 63:24.

The Pennas next played excerpts from the video deposition of Mr. Ronald Kroop, a wastewater treatment engineer with the Air Force, who discussed what he believed “the Government actually knew in the early 1970s” about the environmental effects of

1 Trial in this matter was originally scheduled to take place in May 2020 in Philadelphia, Pennsylvania. See ECF No. 71. In light of the COVID

- 19 pandemic, however, the Court granted the government’s motion for a continuance, ECF No. 91, and vacated both the May and proposed June trial dates. ECF No. 96 at 3; see also Order (Fed. Cl. Mar. 16, 2020) (Sweeney, C.J.) (restricting public access to the National Courts Building until further notice). Thereafter, the Court set trial in this matter to be conduct ed virtually, via videoconference, utilizing the Cisco Webex platform. ECF No. 116 at 1.

2 “Tr.” refers to the transcript of trial proceedings, conducted August 3

– 6, 2020.- 4

-

AFFF. Tr. 97:11

– 20. 3 Mr. Kroop also described t he methods he had recommended to dispose of AFFF waste, memorialized in a report he had authored in February 1974. Tr. 19: 8

– 21:7, 105; Plaintiffs’ Exhibit (“PX”) 3. The Pennas relied upon Mr. Gilliam ’s testimony for evidence of the Navy’s regular use of AFFF on the Base, and upon Mr. Kroop ’s testimony to support their contention that the Navy knew of the potential hazards stemming from AFFF and that the Navy did not properly dispos e of the chemicals despite such knowledge.

Mr. F rank Penna testified third

. Tr. 182. He described his experience with the Penna Property , including when he first learned of the PFOA and PFOS levels there (Tr. 196:25

– 197:4), his communication with the government regarding the issue (Tr. 201:16

– 203:6), and his own efforts to have testing done on the Property’s soil and water (Tr. 198:15

– 19, 199:4

– 13 ; PX 58). Notably, when asked about the value of the P roperty in its current state ( i.e ., contaminated), Mr. Penna testified that he believed “ i t’s not worth anything today. Zero.” Tr. 208:17

– 21.

The Pennas also presented testimony from several experts about the impact of the contamination of the P roperty , including : (1) Mr. Matthew Mulhall (geology and hydro geo logy); (2) Mr. Frank Cammarata (mortgages); and (3) Mr. John Hosey (property appraisal and valuation)

. On August 4, 2020, Mr. Mulhall testified about the existence, extent, and foreseeability of contamination of the Penna Property resulting from the Navy’s use of AFFF at the Willow Gr ove base. 4 Tr. 310.

Next, Mr. Cammarata opined that the presence of PFOS and PFOA on the Penna P roperty presented an immitigable hazard, rendering the P roperty ineligible for a mortgage. PX 130 at 6 ; Tr. 364:1

– 4. He based his opinion on the guidelines and regulations for residential mortgages issued by the U nited States Department of Housing and Urban Development (“FHA ”), the U nited States Veterans Administration (“VA ”), the Federal National Mortgage Association (“Fannie Mae ”), and the Federal Home Loan Mortgage Corporation (“Freddie Mac”)

. Tr. 359:25

– 360: 9

. He also relied upon an engineering study by M2 Associates, Inc.

– i.e. Mr. Mulhall’s report

– as well as

3 Mr. Kroop unfortunately passed away in June 2020. His video deposition had been taken a year prior, however, and thus was accepted in lieu of live testimony. Tr. 19:8

– 11; FRE 804(a)(4) (“A declarant is considered to be unavailable as a witness if the declarant . . . cannot be present or testify at the trial or hearing because of dea th[.]”).

4 Mr. Mulhall experienced technical issues with his internet connection on the day he initially testified. Tr. 355:21

– 23; 417:15

– 23. Consequently, the government was not able to cross

examine him until two days later, on August 6, 2020. Tr. 612

.- 5

-

property appraisals provided to him by both the Pen nas and the government . Tr. 360: 1 9

– 23. In particular, Mr. Cammarata testified that “all of the departments and agencies require that once a hazard is found and noted by the appraiser, then the hazard must be mitigated or the property is not an eligible, mortgageable property.” Tr. 363:5

– 8. He further opined that upon reviewing the appraisals provided to him , “neither appraiser could identify a sale of a comparably contaminated property. Without a sale showing that a comparably contaminated property is marketable, the property will not qualify [for a mortgage].” Tr. 364:5

– 9. In light of Mr. Cammarata ’s view that PFOA and PFOS were immitigable “hazards” within the meaning of the agencies’ definitions, see Tr. 372:22

– 373:5, he concluded that the Penna P roperty was not eligible for a mortgage.
Finally , Mr. Hosey opined that because the Penna P roperty was not mortgageable, it had no value. PX 131 at 23; Tr. 464:17

– 19, 510:8

- 12. Mr. Hosey generally explained his research regarding the negative effects of stigma on property value, including “the uncertainty that follows with it” and its resulting impact on potential purchasers

. Tr. 445:24

– 25 . Mr. Hosey ultimately conceded , however, that he did not analyze the impact, if any, of environmental stigma on the Penna Property. Tr. 467:22

– 468:7. Mr. Hosey also described the process by which he valued the Penna P roperty in two scenarios: the uncontaminated state ( i.e. , absent PFOS and PFOA contamination ), and as
- contaminated; he referenced multiple appraisal principles and described his use of each. See, e.g. , Tr. 452 :22

– 456:12, 468:8

– 11. He explained his determination of the “highest and best use” of the Penna P roperty, which he resolved to be residential. 5 Tr. 452:1

– 4. Mr. Hosey concluded that the Penna P roperty was valueless in its current state. PX 131 at 2 3 ; Tr. 46 4 :1 7

– 19.

D. The Joint Stipulation

O n August 3, 2020, p rior to opening arguments , the government informed the Court that PX 65

— an email from the Pennas’ real estate agent, regarding a potential sale of the P roperty

— was incomplete. 6 Later, during the government’s cro ss
examination of Mr. Penna, the government utilized and sought to introduce into evidence certain parts of Defendant’s Exhibit (“DX”) 322, which included additional

5 The four tests used to determine the highest and best use of a property are physical possibility, legal permissibility, financial feasibility, and maximum productivity. Once a highest and best use is determined, there are generally three approaches to valuation in appraisal science: the sales comparison approach, the income approach, and the cost approach. Tr. 470:11

– 22.

6 Tr. 11:15

– 19 (“[MR. FERRELL]: PX 65[ ] that we received from Plaintiffs on Friday .

. . is in a different form than what we we re expecting. We had in our files for Plaintiffs’ Exhibit 65 a longer composite exhibit.”).- 6

-

emails (and attachments) originally produced by the Pennas along with the email constituti ng PX 65. See Tr. 249:16

– 250:10

. In addition, when the government asked Mr. Penna about the attempted sale of the P roperty, the government relied upon PX 64, which, according to the Pennas’ exhibit list, was a written sales agreement for the P roperty. In fact, that document turned out to be only an excerpt of a proposed purchase agreement

– an offer to bu y the Property

– and an altered one at that. See, e.g. , Tr. 251 : 5

– 1 2 . On redirect, the Pennas’ counsel of record, Mr. Mark Cuker, proceeded to use what appeared to be a complete copy of a proposed sales agreement, including documents that related to, but were not contained in, DX 322. Mr. Cuker readily admitted that the apparently more complete property sales agreement was not one of the Pennas ’ proposed exhibits. See Tr. 2 71 : 5

– 7 (“[MR. CUKER]: I t is not in my [exhibit] binder. I am simply using it because it ’ s been placed in issue here, in having the witness explain the cross examination. ”). In response to Mr. Cuker’s assertion, the government objected on the grounds that “[t]his is the first
t ime that we are seeing this document. This has not been produced to the Government.” Tr. 274 : 22

– 2 4

. This turn of events, in the middle of trial, prompted t he Court to note its concern that Mr. Cuker had not provided the government with the full version of the sales agreement Mr. Cuker displayed during his redirect examination of Mr. Penna . Tr. 275

. Mr. Cuker hypothesized that the version of the agreement he attempted to use was not produced to the government during discovery because the documen t likely was not responsive to the government’s discovery requests. Tr. 275:6

– 9. The Court rejected that assertion as highly improbable , and Mr. Cuker never attempt ed to demonstrate otherwise ( e.g. , by referencing a particular document request)

. See Tr. 275 :1 0

– 1 2

. Because the Court had trouble understanding the facts, documents, and testimony surrounding what appeared to be a bona fide offer to purchase the allegedly worthless Penna P roperty

— combined with the Court’s concern about the possible failure of the Pennas to produce documents during discovery

— the Court instructed the parties to meet

- and

- confer regarding what PX 64 and PX 65 should have included, and to determine which part s, if any, of DX 322

— or any other documents related to the offer to purchase the P roperty

— should be admitted into evidence

. See Tr. 259: 1

– 6

. Furthermore, the Court ordered Mr. Cuker to produce to the government any previously unproduced documents or emails connected to the offer to purchase the Penna P roperty, including the complete version of the sales agreement that Mr. Cuker used during his redirect examination of Mr. Penna. See Tr. 2 80 : 12

– 281:7

.- 7

-

On August 4, 2020, and then again on August 5, 2020, the parties informed the Court that they still had not reached an agreement regarding PX 64, PX 65, DX 322, or any other documents relating to the potential sale of the P roperty that previously had not b een disclosed during discovery.
Finally, on August 6, 2020

– during a recess of the trial proceedings

– the parties filed a stipulation regarding the attempted purchase of the Penna P roperty (the “Stipulation”)

. ECF No. 124 (“Stip.”)

. 7 Notably, the Pennas stipulated , among other facts, that “[t]he prospective sale of the [Penna] property did not fail because of environmental issues.” Id. ¶ 31 (emphasis added). 8 The Stipulation was necessary , at least in

- part, to address prejudice to the government arising from nearly 100 new pages of documents the Pennas produced for the first time during trial , following the Court’s order to do so . Mr. Cuker contended that any untimely production was inadvertent, and, in any event, the documents were duplicative of yet other s that were produced during the discovery period. Ultimately, however, t he Stipulation and the newly produced documents refute

– or significantly undermine

– the Pennas’ central factual assertions in their pretrial Memorandum Contentions of Fact and Law regarding the nature and extent of the government’s alleged taking

. Compare Pl. Mem o . ¶ 110, with Stip. ¶¶ 9

– 30.

E. The Parties’ RCFC 52(c) Briefing
On August 6, 2020, following the close of the Pennas’ case and particularly in light of the S tipulation, discussed supra , the Court suspended trial to permit the government to file its motion for judgment on partial findings pursuant to RCFC 52(c) and to address Mr. Cuker’s potential discovery violation and other related issues

. See

7 As part of the Stipulation, the parties agreed to the admission of ten documents into evidence. See ECF Nos. 124

- 1

– 124

- 10 (DX 323

– 332). The Court hereby admits those exhibits into evidence to the extent they were not previously so admitted.

8 The parties stipulated to various facts that contradicted or undermined the Pennas’ assertions in their Memo randum Contentions of Fact and Law, and other testimony. Compare Stip. ¶ 1 (“On August 9, 2018, Plaintiffs’ realtor, Kathi Coletti, e

- mailed Plaintiffs regarding the listing of their property . . . . The e

- mail states, in part, that ‘[t]he liens and judgm ents plus mortgages are so high not sure if it can go out to realtors for sale if there is no money to pay their commission.’”), with Tr. 243:25

– 244:6 (“[MR. PENNA]: [W]e gave him the [environmental] disclosures. And then I was told it got complicated for him and he backed out, after the disclosures. He didn’t have the disclosures when he wanted to buy it, but I am sure that the realtor gave him those disclosures. I didn’t want Lisa and I to be held responsible for anything later on down the line.”); compa re also Stip. ¶ 9 (“On August 23, 2018, two prospective buyers signed an offer to purchase the Property at a price of $725,000”), with Pl. Memo. ¶ 110 (“An offer for $746,000 was made[.]”).- 8

-

ECF No. 125; Tr. 743:23

– 744:3

. In a subsequent o rder, issued on August 10, 2020, the Court instructed the parties to address several issues in their briefs, including whether the Pennas had provided sufficient evidence at trial of a compensable taking pursuant to the Fifth Amendment of the U nited States Constitution and the Tucker Act. ECF No. 125 at 5. Additionally, the Court sought the parties’ views regarding whether there had been any violations of this Court’s discovery rules or professional ethics rules , including whether Mr. Cuker violated his duty of candor to the Court

. Id . at 5

– 8.
In accordance with the briefing schedule requested by both parties, see ECF No. 132, the government filed its motion for judgment on partial findings pursuant to RCFC 52(c) on August 28, 2020. See Def. 52(c) Mot . On September 18, 2020, the Pennas filed t heir response in opposition to the government’s motion. ECF No. 136 (“Pl. Resp.”) . On October 2, 2020, the government filed its reply in support of its motion. ECF No. 138 (“Def. Rep.”)

. The Court held oral argument on October 7, 2020

. Minute Entry, Oct. 7, 2020.

II. FACTUAL FINDINGS 9

A. The Parties A nd Property

The Pennas are a married couple who reside at 410 Norristown Road, Horsham, Pennsylvania 19044

. Compl. ¶ 1. The Pennas have resided at their present address, the subject Property of their takings c laim , since 1994. Id. ¶ 19. Defendant, the United States, acting through the United States Department of the Navy (the “Navy”), has owned the Naval Air Station Joint Reserve Base Willow Grove (“Willow Grove” or the “Base”), located in Horsham Township, Montgomery County in southeastern Pennsylvania, from 1942 to present. ECF No. 7 (“Ans

. ”) ¶ 2 ; JX 33 at US00051065. The Base was operated by the Navy , in conjunction with other service branches , from 1942 to March 2011 , and is now maintained by the Navy Base Realignment and Closure Program Management Office

. Id . ¶ 5. The Navy’s use of AFFF on the Base , the allegedly resulting contamination of the Pen na Property, and the asserted adverse effects of such contamination on the value of the P roperty form the foundation of the Pennas’ claim.

9 This recitation of facts constitutes the Court’s principal fin dings of fact in accordance with RCFC 52(a). Other findings of fact and rulings on questions of mixed fact and law are contained in the discussion sections of this opinion, see infra Sections V, VI.- 9

- B. The Navy’s Use O f AFFF O n T he Base A nd T he Subsequent Contamination O f T he Penna P roperty

AFFF is a fluorinated surfactant

- based foam that the military and commercial aviation sector has been us ing since the early 1970s to extinguish petroleum fires. JX 4 at US00006851; JX 19 at US00004476. AFFF contains PFCs, which include PFOA and PFOS

. JX 33 at US00051 0 66. PFOA and PFOS are manmade chemicals that are used for a wide variety of residential, commercial, and industrial purposes, including clothing, food packaging, cookware, and firefighting. 10 DX 207 at US00001923

.
The relevant location s of the Base are the Fire Training Area and Building 177, the two alleged sources of PFOA and PFOS that resulted in the contamination of the Penna P roperty

. The Base’s Fire Training Area, approximately 1, 600 feet

n orth/ n ortheast of the Penna P roperty, was used for large

- scale firefighting exercises

. JX 11 at US000010440; PX 128 at 13

. Building 177, approximately 1,700 feet n orthwest of the Penna P roperty, served as a hangar and maintenance facility for various military aircraft. JX 18 at US00036111

.
The Pennas allege, and the government does not dispute , that AFFF was used on the Base while it was operational

. JX 33 at US00051066 ; see also Def. 52(c) Mot. at 11

. While the parties dispute whether any AFFF contamination of the P roperty was intentional , foreseeable, or otherwise the direct, natural, or probable result of the government’s use of AFFF , 11 the Court declines to make a factual finding on those issues ( as explained in more detail below) . I nstead , the Court focuses its decision here on whether or to what extent the government interfered with the Pennas’ use of their

10 PFOS and PFOA are not “hazardous substances” as define d in the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) § 101(14), codified at 42 U.S.C. § 9601(14), nor are they “hazardous wastes” under the Resource Conservation and Recovery Act (“RCRA”), codified at 42 U.S.C. § 6903. See JX 42 at US00066429. PFOS and PFOA are also not considered “hazardous substances” under Pennsylvania’s Hazardous Sites Cleanup Act (“HSCA”), codified at 35 Pa. Stat. Ann. § 6020.103 (West); see Giovanni v. United States Dep't of the Navy, 433 F. Supp . 3d 736, 746 (E.D. Pa. 2020).

11 The parties dispute whether the contamination of the Penna Property was the direct, natural, or probable result of the Navy’s use of AFFF on the Base

– specifically, at the Fire Training Area and Building 177. Plaintiffs c ontend that the Navy’s AFFF use on the Base caused runoff water to flow downhill to the Penna Property, contaminating its soil and private well. Compl. ¶¶ 24, 26

– 27. The Navy contends, in contrast, that not only did it have physical mechanisms in place t o collect contaminated water and prevent its migration, but also that the migration path of any water from the Base would not lead to the Penna Property due to the topography of the surrounding land. ECF No. 134 at 4, 23

– 24 . The government instead attrib utes the chemicals on the Penna Property to an F

- 14 plane crash in 2000 that occurred 300 to 400 feet north of the Penna Property and was extinguished using AFFF. ECF No. 101 ¶¶ 36

– 37.- 10

-

P roperty or appropriated a benefit at their expense

. ECF No. 101 ¶¶ 26

– 27 , 32

– 33

.
In September 2011, the Navy conduct ed groundwater sampling for PFOA and PFOS from four monitoring wells within the Base’s Fire Training Area , which revealed the presence of both compounds

. JX 33 at US00051066 ; PX 128 at 11

. Later, in 2014 , Mr. Penna first learned about potential PFOA and PFOS contamination in the area, and , consequently, he arranged to have his P roperty (including a private well) tested

. Tr. 196:25

– 197:10. I n August 2014, Analytical Labs , a private company , performed testing that showed heightened levels of PFOA (0.298 μg/L) and PFOS (0.701 μg/L) in the Pennas’ well

- water

. Tr. 198:12

– 199: 2 ; see ECF No. 136

- 2. The EPA itself tested the Penna ’ s well, which also revealed the presence of PFOA and PFOS. Tr. 199:4

– 16 ; JX 33 at US00051066. In 2015, the Navy provided the Pennas with a written notice that PFOS and PFOA were detected in the ir private well in concentrations exceeding the EPA’s provisional human health advisory for drinking water. PX 58.
Althoug h the Pennas claimed that they had us ed their private well until 2014 for “drinking, watering shrubs, watering [their] trees, washing [their] vehicles, in the office, [and] filling up [their] cooler every day, ” Tr. 197:11

– 17 , the Pennas ’ primary source of water for most of the ir house since 2005 came from public water; the entire house has been serviced by public water since 2010. Indeed, w hile the Pennas alleged that their “water supply came entirely from a private well located on their property,” and that they “used their well for all domestic water purposes until late 2014” when they received the Navy’s notice , Compl. ¶¶ 20

– 21 , the Penna P roperty was connected to municipal water because of inadequate water pressure, not due to contamin ation. Tr. 215:11

– 216:6 ; Tr. 197:21

– 198:7. T he Navy ha s provided bottled drinking water to the Pennas ’ on
- site business since 2014

. 12 Tr. 203:4

– 6.

C. Attempts T o Sell T he Penna Property

In 2013, prior to learning of the PFOA and PFOS contamination on the P roperty, Mr. Penna spoke to a realtor about potential investment opportunities involving the P roperty, including subdividing the land and selling the house. Tr. 203:11

– 16, 204:9

– 205:4. Although the Pennas halte d any such plans in 2014 after the Navy notified the Pennas of the AFFF contamination, Tr. 205:5

– 13, the Pennas ultimately listed the ir

12 Mr. Penna ran a landscaping business from his garage. Tr. 231:21

– 2 5. When Mr. Penna initially communicated with the Navy regarding the contamination on the Property, the Navy offered to pay a tapping fee to provide public water to Mr. Penna’s business. Tr. 201:16

– 202:11. Because Mr. Penna would have had to bear the ex pense of running a line from Norristown Road to the business, the Pennas and the Navy ultimately agreed that the Navy would supply bottled water instead. Tr. 202:14

– 203:6.- 11

-

property for sale in 2018 after speaking with several realtors . Tr. 206:3

– 9, 207:25

– 208:13.
Independent of any contamination, the P roperty suffer s from several problems, including a swale that frequently flood s the P roperty when it rain s , which negatively impact s its salability . Tr. 189:21

– 190:3 , PX 103. Indeed , as acknowledged by Plaintiffs’ realtor, Ms. Kathi Coletti, the liens, judgments, and mortgages on the P roperty are “so high ” that it was not clear the P roperty could be placed on the market

. 13 See Stip. ¶ 1

. Moreover, despite Mr. Penna’s impression that the P roperty was zoned for commercial purposes, he had no written proof of such zoning

. Id . ¶ 2.
On August 23, 2018, prospective buyers submitted a signed , bona fide offer to the Pennas to purchase the ir Property at a price of $725,000. DX 328 ; Stip. ¶ 9. Notably, the

o ffer required the Penna s ’ acceptance before August 25, 2018. Stip. ¶ 12. The Pennas did not accept the purchase offer in a timely manner, but rather allowed the o ffer to lapse

– remarkably , at the direction of Mr. Cuker, the Pennas’ counsel of record , who instructed them “to sign nothing until he review[ed]

. ” Id . ¶ ¶ 16 , 17

. After the o ffer lapse d , the Pennas worked with their realtor , perhaps another attorney, and Mr. Cuker to prepare a counter offer

. DX 332. The counter offer , dated August 30, 2018 , consisted of a “Marked Up” Agreement of Sale , including : (1) a n increase in the proposed purchase price to $746,000 ; (2) a change in the specified zoning to residential ; and (3) the addition of three attachments . Stip. ¶¶ 21

– 24, 26. The three additional attachments included : (1) an “Addendum to Agreement of Sale ” ; (2) “Compensation Agreement” ; and (3) “Sellers [ sic ] Disclosure and Environmental Report 6/15.” 14 The cover page to the June 15, 2018 M2 Associates, Inc. Environmental Report was attached to the August

13 On August 10, 2018, Ms. Coletti forwarded a title research report to the Pennas for the Property covering the period of July 1, 2005

– July 27, 2018 (“Title Report”). Stip. ¶ 3. The Title Report identified a significant number of problems encumbering the Property: a February 8, 2018 mortgage foreclosure from Chase Bank in the amount of $643,215.55; an October 8, 2014 mortgage foreclosure from Stonebridge Bank in the amount of $265,737.75; ten liens filed by the Pennsylvania Department of Revenue dated between December 5, 2007, and July 11, 2018, totaling $35,809.95; eleven liens file d by the Pennsylvania Unemployment Compensation Fund dated between November 24, 2008, and April 26, 2018, totaling $51,589.12; and an Internal Revenue Service lien dated August 2, 2016, in the amount of $111,877.68. Id . ¶¶ 4

– 8.

14 The specific changes refl ected in the Pennas’ counteroffer were as follows: to alter paragraph 2(A) to increase the purchase price to $746,000 and to increase the second earnest money deposit from $9,000 to $30,000; to alter paragraph 5(A) to require written acceptance of all part ies on or before August 31, 2018; to alter paragraph 6 to provide that zoning is “Residential R3”; to alter paragraph 32(B) to provide for “a due diligence period of 20 days for the buyer to confirm with Horsham Township that the property is permitted to b e used for a Nursery and Landscape Contractors shop”; and to alter paragraph 32(A) to add the three new attachments. Stip. ¶¶ 21

– 24, 26.- 12

-

30, 2018 “Marked Up” Agreement of Sale

. Id . ¶ 25. Plaintiffs also signed an undated “Environmental Adden dum.” Id . ¶ 27.

There is no documentary evidence whatsoever demonstrating that the Pennas

– via their realtor, Ms. Coletti , or anyone else

– actually transmitted the draft counter offer to the prospective buyers or their real estate agent. Stip. ¶ 28. On September 12, 2018, Ms. Coletti e

- mailed her clients, the Pennas, to advise them that, “[u]nfortuantely [ sic ] , the Buyers have decided not to go forward with the purchase of 410 Norristown Road

. T he [prospective buyers ’ ] agent said it was getting to [ sic ] complicated for them. ” Id

. ¶ 30. The re is no evidence in the record explaining what complications the prospective buyers might have been referencing , but the critical fact i s that the sale of the Penna Property did not fail because of environmental contamination issues. Id . ¶ 31. Indeed, if anything, the sale did not move forward simply because the Pennas effectively declined the purchase o ffer tendered to them.

III. JURISDICTI ON AND STANDARD OF REVIEW

Pursuant to the Tucker Act, this Court’s primary jurisdictional statute, “[t]he United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded

. . . upon the Constitution,

. . . or for liquidated or un liquidated damages in cases not sounding in tort. ” 28 U.S.C. § 1491 (a)

. T he Tucker Act thus “ provides the Court of Federal Claims with jurisdiction over [Fifth Amendment] takings claims brought against the United States.” Casitas Mun. Water Dist. v. Uni ted States , 708 F.3d 1340, 1359 (Fed. Cir. 2013) (quoting John R. Sand & Gravel Co. v. United States , 457 F.3d 1345, 1354 (Fed. Cir. 2006), aff ’ d , 552 U.S. 130 (2008) )

.
Before the Court is the government’s motion for judgment on partial findings pursuant to RCFC 52(c) , in which the government argues that the Pennas failed to meet their burden of proof at trial to demonstrate a compensable taking

. Pursuant to RCFC 52(c), “[i] f a party has been fully heard on an issue during trial and the court fin ds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.” In resolving such a motion , “ the judge, a s the sole trier of fact, may weigh the evidence and is not required to resolve all issues of evidence and credibility in the plaintiff’s favor.” Persyn v. United States , 34 Fed. Cl. 187, 195 (1995), aff'd , 106 F.3d 424 (Fed. Cir. 1996) (citations omitted). Rather , after hearing the plaintiff’s evidence , the Court “determine [s] whether or not the plaintiff has convincingly shown a right to relief.” Fifth Third Bank of W. Ohio v. United States , 56 Fed. Cl. 668, 683 (2003) ( citing Howard Indus., Inc. v. United State s, 115 F. Supp. 481, 485

– 86 ( Ct. Cl. 1953) ). “The trial may end at the close of a plaintiff ’ s case if a plaintiff has failed to maintain its claim, RCFC 52(c), because ‘[a] plaintiff has no automatic right to cross

-- 13

-

examine a defendant's witnesses for the purpose of proving what the plaintiff failed to establish during the presentation of its case.’” Columbia First Bank, FSB v. United States , 60 Fed. Cl. 97, 101 (2004) (quoting Cooper v. Unit ed States , 37 Fed. Cl. 28, 35 (1996)).
“[T] he plaintiff has the burden to prove a taking occurred [.]” CCA Assocs. v. United States , 667 F.3d 1239, 1245 (Fed. Cir. 2011) ; see also Loesch v. United States , 645 F.2d 905, 914 (Ct. Cl. 1981) ( “[T]he burden of proof rests on plaintiffs, and not on the defendant, to establish that a taking has occurred justifying the payment of just compensation.” (citations omitted) ) . Plaintiffs have the burden of proving their case by a preponderance of the evidence. Palm Beach Isles Assocs. v. United States , 58 Fed. Cl. 657, 665 (2003), aff’d , 122 F. App’x 517 (Fed. Cir. 2005).

IV. FIFTH AMENDMENT TAKINGS PRINCIPLES
The Takings Clause of the Fifth Amendment guarantees the payment of just compensation when private property is “taken” for public use via inverse condemnation, as alleged here . U.S. Const. amend. V. “It protects ‘private property’ without any distinction between different types.” Horne v. Dep't of Agric., 576 U.S. 350, 358 (2015) (noting that “[ t ] he principle reflected in the Clause goes back at least 800 years to Magna Carta, which specifically protected agricultural crops from uncompensated takings” (citing W. McKechnie, Magna Carta, A Commentary on the Great Charter of King John 329 (2d ed. 1914 ))). Inverse condemnation is “ a shorthand description of the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted.” United States v. Clarke , 445 U.S. 253, 257 (1980). “It is a cause of action against the government to recover the value of property taken by the government without formal exercise of the power of eminent domain.” Moden v. United States , 404 F.3d 1335, 1342 (Fed. Cir. 2005) (citing Clarke , 445 U.S. at 257)

. “Takings claims typically come in two forms: per se or regulatory.” Alimanestianu v. United States , 888 F.3d 1374, 1380 (Fed. Cir. 2018). A per se (or “categorical”) taking occurs where there is a physical invasion or appropriation of property, whether real, Loretto v. Teleprompter Manhattan CATV Corp. , 458 U.S. 419, 427 (1982), or personal, Horne v. Dep't of Agric. , 576 U.S. at 352, 357 . Such a “classic taking” is one “in which the government directly appropriates private property for its own use.” T ahoe

– Sierra Pres. Council, Inc. v. Tahoe Reg ’ l Planning Agency, 535 U.S. 302, 324 (2002) (emphasis added) (other alterations and internal quotation marks omitted). 15 In addition to per se (or

15 “A permanent physical taking involves a ‘permanent physical occupation of property’ and is treated as a per se taking for which the government must pay compensation regardless of the circumstances.” Baley v. United States , 134 Fed. Cl. 619, 660 (2017) (quoting Loretto, 458 U.S. at- 14

-

categorical) takings, the United States Supreme Court has recognized that where a regulatory restriction “does not entirely deprive an owner of property rights,” Horne , 576 U.S. at 364 , but nonetheless goes “too far,” id . at 360 (quoting Pa. Coal Co. v. Mahon , 260 U.S. 393 (1922)), it may resul t in a regulatory taking. 16 The Supreme Court also has treated certain types of regulatory actions as categorical takings. For example, a categorical taking occurs when regulations “compel the property owner to suffer a physical invasion of his property” or prohibit “all economically beneficial or productive use.” Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992) (internal quotation marks omitted).
Thus, Supreme Court “ precedents stake out two categories of regulatory action that generally will be deemed per se takings for Fifth Amendment purposes.” Lingle v. Chevron U.S.A. Inc. , 544 U.S. 528, 537

– 40 (2005). The first category requiring the payment of just compensation involves a case “where [the] government requires an owner to suffer a permanent physical invasion of her property

— however minor

. . . . ” Id. (citing Loretto , 458 U.S. 419 (1982)). The “second categorica l rule applies to regulations that completely deprive an owner of ‘ all economically beneficial us[e]’ of her property.” Lingle , 544 U.S. at 537

– 40 ( quoting Lucas, 505 U.S. at 1019 (emphasis in original)).
Beyond those categories, however, the Supreme Court has not “develop[ed] any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportion ately concentrated on a few persons.” Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 ( 1978 ). Instead, the Court has relied on “ad hoc, factual inquiries into the circumstances of each particular case.” Connolly v. Pension Benefit Guar. Co rp., 475 U.S. 211, 224 ( 1986 ) (citations omitted). In engaging in these ad hoc, factual inquires, the Supreme Court has identified several factors used in determining whether there has been a taking: (1) “[t]he economic impact of the regulation on the cl aimant”; (2) “the extent to which the regulation has interfered with distinct investment

- backed expectations”; and (3) “the character of the government action.” Penn Cent. Transp. Co., 438 U.S. at 124; accord Ruckelshaus v. Monsanto Co., 467 U.S. 986, 100 5 (1984). In requiring courts “ to consider the ‘ character of the government action, ’ the Supreme Court in Penn Central recognized government action may impact property in myriad

441), aff'd, 942 F.3d 1312 (Fed. Cir. 2019).

16 Before the Supreme Court’s decision in Pennsylvania Coal , “the Takings Clause was understood to provide protection only against a direct appropriation of property

— personal or real. Pennsylvania Coal expanded the protection of the Takings Clause, holding t hat compensation was also required for a ‘regulatory taking’

— a restriction on the use of property that went ‘too far.’” Horne, 576 U.S. at 360 (citing and quoting Pa. Coal Co., 260 U.S. at 415).- 15

-

ways and what is important is the nature or substance of the government’s act ion, as opposed to the precise form it may take.” Dimare Fresh, Inc. v. United States
, 808 F.3d 1301, 1307 (Fed. Cir. 2015 ) ( quoting Penn Cent. Transp. Co., 438 U.S. at 124).
Four years after Penn Central, the Supreme Court, in Loretto v. Teleprompter Manhattan CATV Corp. , reaffirmed the rule that a physical appropriation of property gives rise to a per se taking, without regard to other factors. See Horne v. Dep't of Agric. , 576 U.S. at 360 (discussing Loretto ). In Loretto, the Court hel d that the installation of a cable box on a small corner of Loretto’s rooftop was a per se taking, even though the property owner could still sell and economically benefit from the property. Horne , 576 U.S. at 363 (discussing Loretto , 458 U.S. at 43 6 ). T hat was true without regard to the claimed public benefit or the economic impact on the owner. The Court explained that such protection was justified not only by history, but also because such a n intentional, physical “appropriation is perhaps the most se rious form of invasion of an owner's property interests,” depriving the owner of the “the rights to possess, use and dispose of” the property in the manner in which the owner sees fit

. Loretto, 458 U.S. at 435 (internal quotation marks omitted). Thus, wh en there has been a physical appropriation, courts ordinarily “do not ask

. . . whether it deprives the owner of all economically valuable use” of the item taken. Tahoe

– Sierra
, 535 U.S. at 323

. In sum, “[w]hen the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the .

. . owner.” Id. at 322

– 23 (citing United States v. Pewee Coal Co., 341 U.S. 114, 115 (1951)); see also Lingle , 544 U.S. at 537

– 40 (“The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property.”).
On the other hand, “[u]nlike takings cases concerning the physical appropriation or go vernment condemnation of property, the Supreme Court has abjured the application of rigid rules in its regulatory takings analysis.” Dimare Fresh , 808 F.3d at 1307. Indeed, the Supreme Court has “ emphasized that ‘ most takings claims turn on situation

- spe cific factual inquiries, ’ adding ‘ that no magic formula enables a court to judge, in every case, whether a given government interference with property is a taking. ’ ” Quebedeaux v. United States , 112 Fed. Cl. 317, 321 (2013) (quoting Ark. Game & Fish Comm’n v. United States, 568 U.S. 23, 31

– 32 (2012)). Only “in rare instances” has the Supreme Court “drawn some bright lines, giving, as examples, situations in which a permanent physical occupation of property occurs or where regulations require a property owner to sacrifice all economic benefit associated with its land. ” Quebedeaux , 112 Fed. Cl. at 321 (citing Loretto, 458 U.S. at 426, and Lucas, 505 U.S. at 1019). 17

17 In all takings cases, the object of the inquiry is essenti ally the same; courts are tasked with assessing how similar the governmental action is to a direct physical taking such that the- 16

-

Notwithstanding that physical takings are generally considered per se takings, several types of indirect or temporary physical takings are subject to “situation

- specific factual inquiries,” Quebedeaux , 112 Fed. Cl. at 320

– 21, including alleged takings based upon government

- induced flooding and , by extension, chemical contamination. See United States v. Cress, 243 U.S. 316, 328 (1917); Pumpelly v. Green Bay & Miss. Canal Co., 80 U.S. 166, 181 (1871) ( recognizing that “where real estate is [ ] invaded by superinduc ed additions of water .

. . so as to effectually destroy or impair its usefulness, it is a taking, within the meaning of the Constitution”). Flooding cases

– despite the physical nature of the alleged taking

– clearly are not subject to any bright line te sts. In Ark ansas Game & Fish Comm issio n , for example, the Supreme Court reversed a decision from our appellate court, the United States Court of Appeals for the Federal Circuit, in which the latter held that a government

- induced flooding, temporary in dur ation, gains an automatic exemption from Takings Clause inspection. Ark. Game & Fish, 568 U.S. at 38

. “The Court rejected this bright

- line rule because it viewed the determination of whether a flood results in a takings as a case

- specific, factual inquiry, emphasizing that ‘[f]looding cases, like other takings cases, should be assessed with reference to th e ‘particular circumstances of each case,’ and not by resorting to blanket exclusionary rules.’” Quebedeaux , 112 Fed. Cl. at 324 (quoting Ark. Game & Fish, 568 U.S. at 3 7 (quoting United States v. Cent. Eureka Mining Co., 357 U.S. 155, 168 (1958))).

In Arkansas Game & Fish Commission , the Supreme Court identified several factors for courts to consider in assessing whether there has been a taking , among them: (i) the duration of the flooding; (ii) whether the invasion is intended or is the foreseeable res ult of authorized government action; (iii) the character of the land at issue and the owner ’ s “reasonable investment

- backed expectations” regarding the land ’ s use; and (iv) the severity of the interference. Ark. Game & Fish , 568 U.S. at 38

– 39. The reason for the

plaintiff should be compensated. The Supreme Court explained the basic theory in Lingle , 544 U.S. at 537

– 40: Although our regu latory takings jurisprudence cannot be

characterized as unified, these three inquiries (reflected in Loretto, Lucas , and Penn Central ) share a common touchstone. Each aims to identify regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Accordingly, each of these tests focuses directly upon the severity of the burden that government imposes upon private property rights. The Cour t has held that physical takings require compensation because of the unique burden they impose: A permanent physical invasion, however minimal the economic cost it entails, eviscerates the owner’s right to exclude others from entering and using her propert y
— perhaps the most fundamental of all property interests.- 17

-

application of an ad hoc, multifactor test in flooding cases is that, as Loretto itself recognized, “[n]ot every physical invasion is a taking.” 458 U.S. at 43 5 n.12 (emphasis in original)

. “[T]he intermittent flooding [and other] cases reveal [that] such temporary limitations are subject to a more complex balancing process to determine whether they are a taking. The rationale is evident: they do not absolutely dispossess the owner of his rig hts to use, and exclude others from, his property.” Id. (citing PruneYard Shopping Center v. Robins , 447 U.S. 74 (1980), and Kaiser Aetna v. United States , 444 U.S. 164 (1979)). Thus, it is hardly surprising that the “the multi

- factor approach of Arkansa s Game

. . . shares certain features of the Penn Central analysis.” Caquelin v. United States , 959 F.3d 1360, 1366, 1370 (Fed. Cir. 2020) (explaining that “[g]overnment

- induced flooding therefore comes within the rationale for more flexible takings standa rds” in “recognition of ‘the nearly infinite variety of ways in which government actions or regulations can affect property interests’” (quoting Ark. Game & Fish , 568 U.S. at 31)).
This Court also has recognized the similarity between flooding cases and

re gulatory takings, with Senior Judge Bruggink insightfully observing that “flooding cases have been treated as sui generis in takings analysis due to their similarity to tort actions[.]” Banks v. United States , 138 Fed. Cl. 141, 147

– 48 (2018) (explaining t hat in Ark. Game & Fish , 568 U.S. 38

– 40, “the Court viewed temporary physical takings as similar to regulatory takings in that both involve a balancing of various factors to determine ‘the existence vel non of a taking’” and that “[t]hese factors include t ime, foreseeability, severity, the character of the land at issue and the owner’s reasonable expectations”).
A takings claim based on alleged chemical contamination of real property is subject to a multifactor test similar to that employed in the flooding takings cases, 18 as a “plaintiff first must show that treatment under takings law [as opposed to tort law] is appropriate.” Moden , 404 F.3d at 1342 ( applying Ridge Line, Inc. v. United States , 346 F.3d 1346, 1355 (Fed. Cir. 2003)). The Federal Circuit explained the applicable test as follows:

First, [the plaintiff] must show either that the government intended to invade a protected property interest or that the asserted invasion is the direct, natural, or probable result of an authorized activity and not the incidental or consequential injury inflicted by the activity. Second, it must show that the invasion app ropriated a benefit to the government at the expense of the property owner, at least by preempting the property

18 Cf. Cary v. United States , 552 F.3d 1373, 1377, 1380 (Fed. Cir. 2009) (noting that Ridge Line ’s “language developed from the long history of the Supreme Court’s flooding cases” and applying the te st where “the government did not intend to take the landowners’ land by use of an uncontrolled wildfire”).- 18

- owner’s right to enjoy its property for an extended period of time , rather than merely by inflicting an injury that reduces the property ’ s value . If treatment under takings law is appropriate, the inverse

- condemnation plaintiff must then “show that it possessed a protectable property interest in what it alleges the government has taken.”

Moden , 404 F.3d at 1342 (emphasis added) (internal c itations omitted) (citing and quoting Ridge Line , 346 F.3d at 1355).
With these principles in mind, the Court turns to analyzing the evidence the Pennas presented at trial.

V. THE COURT GRANTS THE GOVERNMENT’S RCFC 52(C) MOTION
The Court concludes that the evidence the Pennas presented at trial, at best, sketches out a possible tort, but falls far short of proving a compensable Fifth Amendment takings claim pursuant to the Federal Circuit’s Moden and Ridge Line tests, which artic ulate the applicable legal standard for recovery in this case. Moreover, even if the Pennas had demonstrated a taking of some sort of property right, their case entirely flounders on the issue of damages ( i.e. , just compensation). Indep. Park Apartments v. United States , 465 F.3d 1308, 1311 (Fed. Cir. 2006) (acknowledging “the rule that takings damages are limited to just compensation for what was taken and do not encompass consequential damages” (citing City of Monterey v. Del Monte Dunes at Monterey, Lt d. , 526 U.S. 687, 711 (1999), and Yuba Natural Res., Inc. v. United States , 904 F.2d 1577, 1581 (Fed. Cir. 1990))).

A. The Pennas Failed To Prove A Compensable Taking
Before applying law to fact, we briefly summarize once again the nature of the Pennas’ cen tral, if not only, claim

. It is straightforward. The Pennas assert that the government “improperly disposed of contaminants and hazardous substances” that “have invaded and contaminated Plaintiffs’ property.” Compl. ¶ 6. The contamination, allege the P ennas, has “ left . . . their property virtually valueless.” Id. ¶ ¶ 18 , 27 (“The contamination of Plaintiffs’ property and water supply has caused permanent and irreparable damage to Plaintiffs’ property to the point where their property is virtually valueless and, therefore, amounts to a taking without just compensation.”) ; 33.a (requesting judgment of “[c]ompensation in an amount greater than $1,000,000.00 be awarded to Plaintiffs for the taking of their property”). To be clear, the Pennas ’

c omplaint itself focuses only upon the Property as a whole and asserts that the government effectively has taken the Property’s entire value. In particular, the Pennas- 19

-

assert that “[b]ecause the property is permanently contaminated, not eligible for a

m ortgage, and there are no comparable sales of contaminated properties, it has no market value.” Pl. Memo. ¶ 113.
A perennial problem in takings cases

– as highlighted in the Court’s summary of takings law, supra
– is selecting the appropriate legal lens for analyzing the claims and facts at issue in a particular matter . In that regard, “[b]oth the federal district courts and [this Court] have struggled throughout the years to establish and appropriately apply a
tes t to distinguish torts brought against the United States from constitutional takings.” Alexandra K. McLain, Choose Your Path to Recovery Against the United States: Torts v. Takings , 22 Lewis & Clark L. Rev. 1063, 1064, 1066 (2018) (“Because takings jurisp rudence is somewhat dependent on the basic elements of tort law, drawing the line between takings and torts has caused a great deal of confusion in the courts.” (footnotes omitted)); see also Hansen v. United States , 65 Fed. Cl. 76, 79 (2005) (“One issue
t hat has over the decades divided this court is the distinction between torts and takings under the Takings Clause of the Fifth Amendment. The distinction is important because this court has jurisdiction over taking claims under the Tucker Act, but not ove r tort actions.” (footnotes omitted)). In Hansen , t his Court pr ovided a lengthy, scholarly review as part of its critique of t he state of takings law :

Despite the Serbonian Bog into which the takings jurisprudence of this court has fallen, the historical origin and application of the basic principles of takings jurisprudence reveal that there is no clear cut distinction between torts and takings. The best that can be said is that not all torts are takings, but that all takings by physical invasion have the ir origin in tort law and are types of governmental nuisances or, at times, trespasses.

65 Fed. Cl. at 80. While Hansen concluded that “resort [ing] to the historic development of takings jurisprudence is

. . . essential to resolving the conundrum facing t he court[,]” id. at 80, we may dispense with a ny further historical review here because the Federal Circuit has provided us with clear direction in Ridge Line and Moden , both of which reflect the Supreme Court’s approach in flooding cases: they are not treated as per se physical takings

. Hansen , 65 Fed. Cl. at 97 (noting that “[i]n Ridge Line , the Federal Circuit neatly summarized the tort

- taking distinction test”). 19

19 Whether we have since escaped from the proverbial bog in some narrow respect or sunken deeper into it is a question we leave for the Federal Circui t and the Supreme Court. See Bridge Aina Le’a, LLC v. Hawaii Land Use Comm’n , 141 S. Ct. 731 (2021) (Thomas, J., dissenting from denial of certiorari ) (critiquing the Supreme Court’s regulatory takings jurisprudence on the grounds- 20

-

Like the plaintiffs in Moden , the Pennas “do not attempt to show that the government actually intended to invade a protected property interest.” Moden , 404 at 1342 (emphasis added)

. Accordingly, the Pennas must show: (1) “that the asserted invasion is the direct, natural, or probable result of an authorized activity and not the incidental or consequential injury inflicted by the activity” ; and (2) “that the invasion appropriated a b enefit to the government at the expense of the property owner , at least by preempting the property owner ’ s right to enjoy its property for an extended period of time , rather than merely by inflicting an injury that reduces the property’s value.” Id. (emph asis added). 20

In Moden , the Federal Circuit concluded that because there was “no genuine issue of material fact either that the government intended to contaminate the Modens’ ranch or that the contamination of the Modens’ ranch [was] the direct, natural, or probable result of the authorized use” of the chemical at issue, the court found “it unnecessary to address whether the contamination of the Modens’ ranch preempted the Modens’ right to enjoy their property for an extended period of time, rather than merely by inflicting an injury that reduces it s value.” 404 F.3d at 1346. The Federal Circuit similarly found “it unnecessary to address whether the Modens possessed a protectable property interest in what they allege the government has taken.” Id.
In this case, the Court takes the opposite appro ach. We find it unnecessary to decide the various questions of foreseeability and causation, 21 but rather conclude that, based upon the evidence presented at trial, the Pennas failed to demonstrate that the government either appropriated a benefit at thei r expense or inflicted any concrete

that “nobody

— not States, not property owners, not courts, nor juries

— has any idea how to apply this standardless standard”). Justice Thomas continued: “These starkly different outcomes based on the application of the same law indicate that we have still not provided courts with a ‘workable standard.’ . . . A know

- it

- when

- you
- see
-

it test is no good if one court sees it and another does not.” Id . at 731

– 32.

20 These elements

– adapted from Ridge Line

– “ set out a two part test that can be characterized as causation and appropriatio n.” Cary , 552 F.3d at 1376

– 77.

21 “[P]roof of causation, while necessary, is not sufficient for liability in an inverse condemnation case . . . In addition to causation, an inverse condemnation plaintiff must prove that the government should have predicted or foreseen the resulting injury. ” Moden , 404 F.3d at 1343.- 21

-

injury or quantifiable harm in terms of their use of the Property or its value. 22 Thus, “treatment under takings law ” is unwarranted here. Ridge Line , 346 F.3d at 1355

. 23

For instance, i n Ridge Line , the government effectively “shifted some of its storm water control costs to Ridge Line. ” 346 F.3d at 1358. “ By covering much of its land with impervious surfaces but failing to build water retention facilities, the government

. . . forced Ridge Line to buil d larger, more expensive control facilities in South Hollow than would otherwise have been necessary.” Id

. In other words, the government in that case not only avoided certain costs, but effectively transferred them to the plaintiff property owner. T he Pennas advance a similar contention, arguing that the government appropriated a benefit at the Pennas’ expense by us ing the ir P roperty as a “receptacle for untreated AFFF wastewater,” rather than “incur[ring] the time and expense to handle [the] AFFF pr operly.” Pl. Resp. at 8

. The Pennas presented no evidence , however, supporting the claim that the government imposed any costs on them due to AFFF contamination

. Indeed , the Pennas have not presented any evidence that the government was required to dispose of AFFF (at the time of its use) in any particular manner , as the chemicals at issue were not, and are not , identified or regulated as hazardous by CERCLA, RCRA, or Pennsylvania’s HSCA. See JX 42 at US00066429 ; Giovanni , 433 F. Supp. at 746 (holding that PFOS and PFOA do not constitute hazardous substances under Pennsylvania’s HSCA)

. Nor did the Pennas present any evidence regarding the necessity, requirement , or the cost of any remediation of the contamination of their Property

.
At a minimum , the Pennas must demonstrate that the government interfered with their use and enjoyment of the Property in such a way as to effectuate a taking. See Taylor v. United States , 959 F.3d 1081, 1090 (Fed. Cir. 2020) (considering whether overhead flights “ dir ectly, immediately, and substantially interfered with the claimant’s enjoyment and use of the land” (emphasis added) (citing Brown v. United States , 73 F.3d

22 This appropriation prong, as explained at length supra , “ developed from the long history of the Supreme Court's flooding cases.” Cary , 552 F.3d at 1380

– 81 (citing cases and explaining that “[t]o satisfy the appropriation requ irement, the preemption must be sufficiently permanent that it can be said that the government has exercised dominion over the property”); see also Sandra B. Zellmer, Takings, Torts, and Background Principles , 52 Wake Forest L. Rev. 193, 205 (2017) (“Cases where temporary invasion or damage to private property results from a government action, but where the government had no actual intent to damage the property, much less to occupy it, pose the greatest difficulties for courts attempting to distinguish betw een a tort and a taking. Damages caused by flooding often fall within this legal purgatory.”).

23 See Hansen , 65 Fed. Cl. at 101 (“The real key to the distinction between mere torts . . . and takings by the government is the substantiality of the harm, not the nature of the actions leading to that harm. . . . [O]ne can imagine a theoretical continuum on which torts become takings when a certain threshold of substantial interference with property is reached.”).- 22

-

1100, 1102 (Fed. Cir. 1996))); Ridge Line , 346 F.3d 1346 at 1357 ( examining “whether the government ’ s interference with any property rights . . . was substantial and frequent enough to rise to the level of a taking” (emphasis added)); cf. Argent v. United States, 124 F.3d 1277, 1284 (Fed. Cir. 1997) (holding that when “plaintiffs complain of a peculiarly burdensome pattern of activity . . . that significantly impairs their use and enjoyment of their land, those plaintiffs may state a cause of action [for inverse condemnation]”). The Pennas have not done so.

T he Pennas provide no evidence for th eir contention that the government substantial ly interfered with the ir use of their P roperty , and Mr. Penna’s own testimony undermines any such assertion . For example, while the Pennas alleged that their water supply “came entirely” from their well , which was used “for all domestic purposes” until the AFFF contamination was discovered in 2014, see Compl. ¶¶ 20

– 21, the evidence is clear that the Property was connected to public water by 2010 to address a water pressure issue, and not due to AFFF contam ination con c erns . Tr. 215:11

– 216:6; Tr. 197:21

– 198:7. Moreover, Mr. Penna acknowledged that even after receiving sampling results from the private well , which indicated elevated levels of PFOA and PFOS, the Pennas continued to use the ir well to water pla nts on the Property and to wash their vehicles, just as they had done before . Tr. 232:6

– 233:12. Mr. Penna’s business, operated from his garage, was similarly unaffected, as he continued to use the garage for his business and home office even after receiv ing testing results in October 2014. Tr. 231:21

– 232:5. Although the Pennas contend that the PFOS levels in the surface water constitute a loss of usefulness of the Property, they also acknowledge that they do not use the surface water , and they do not otherwise prove how contaminated surface water substantially impairs their use of the Property or its value

. See Pl. Resp. at 10.

Moreover, the Pennas in their pretrial memorandum raised a concern about their inability to subdivide the Property, Pl. Memo. ¶ 109 , but they never demonstrate that the contamination caused or created any obstacle to subdividing their Property . Tr. 205:1

- 13. Accordingly, t he Pennas’ assertion that their Property could not “be subdivided to construct town homes” because “it was impossible without getting a clean environmental bill of health” is not supported by any objective, documentary evidence. Pl. Memo. ¶ 109.

T he Pennas ’ further assertion that “[a] n offer to purchase the Property for $746,000 was made, contingent on a $475,000 mortgage, and was then withdrawn” is false. Id . ¶ 110. As detailed above, the offer made to the Pennas was for $725,000, not $746,000, and it was not withdrawn but rather lapsed when the Pennas did not accept it in a timely fashion. The failed transaction had nothing to do with environmental problems, Stip. ¶ 31 , and there is no evidence that it fell through because of the inability- 23

-

of the woul d

- be buyers to obtain a mortgage. 24 To the contrary, the Pennas’ real estate agent urged the Pennas to “return [the] completed paperwork asap” because “[a]s you know timing is very important[.]” DX 324. If anything, then, the evidence suggests that the Pennas’ failure to accept the offer in a timely manner

– even if that would have required some sort of environmental disclosure, see id.

– was the cause of the transaction not proceeding. To the extent Plaintiff s generally had trouble selling the Property , that is more explainable by Mr. Cuker’s admission that “[o]bviously, there were other issues with the property, which have been brought out. There was a zoning issue; there was a title issue.” Tr. 295:16

– 19.

In an y event, as noted supra , the Pennas’ case

– both as a legal and evidentiary
matter

– “focused on loss of value [of the Property].” Tr. 229:16

- 18 ( Plaintiff’s counsel, Mr. Cuker, noting that other alleged impacts to the Property or the Pennas’ use of it

“ are ancillary t h ings tha t don’t go to the core of the case” ). In particular, the Pennas’ central thesis is that because “potential buyers can’t obtain financing, t he property can’t be sold. The property is not marketable if it’s not mo r tgageable.” Tr. 29:1

- 3 ( Mr. Cuker’s argum ent). Mr. Cuker conceded , 25 however, that Pennsylvania law does not preclude the Property from being sold even in its allegedly contaminated state. Tr. 29:10

. Moreover, neither the Pennas themselves nor their experts provided any credible testimony to establish that the Property is not mortgageable, unsellable, or otherwise valueless. The Pennas’ own appraisal expert, Mr. Hosey, conceded that “none of the improvements to the Pen na property lost their utility in the as

- contaminated scenario.” Tr. 520:13

– 25

. While Mr. Penna testified that the family stopped gardening on the Property and stopped drinking the well water due to AFFF contamination, see Tr. 201:6

– 15, Mr. Cuker concede d that he did not “think the mere inability to garden, by itself, would rise to the level of a taking.” Tr. 229:19

– 230:3. T he Pennas may have made the personal decision

– out of an abundance caution

– to cease gardening on the Property due to concerns wi th surface or well water contamination, but there is little evidence supporting the necessity of that choice; in fact, the EPA specifically found that PFOS

24 The Pennas similarly assert that they “have no t attempted to rent their house out for domestic use, because they are concerned that it is not safe for children to play in the backyard, or for the owners to plant vegetables in the garden or drink from the well that services the garage.” Pl. Memo. ¶ 11 1. The Pennas make no attempt to reconcile that purported reluctance with their attempt to sell the Property, nor do they

– or any of their expert witnesses

– attempt to explain the relevance of this putative fact to their overall theory of the taking her e: that the contamination rendered the Property not mortgageable and thus valueless.

25 See Minter v. Wells Fargo Bank, N.A. , 762 F.3d 339, 347 (4th Cir. 2014) (“‘[A] lawyer's statements may constitute a binding admission of a party[ ]’ if the statements ar e ‘deliberate, clear, and unambiguous[.]’” (quoting Fraternal Order of Police Lodge No. 89 v. Prince George's Cty., Md. , 608 F.3d 183, 190 (4th Cir. 2010))).- 24

-

and PFOA were unlikely to be taken up by plant roots. DX 273. That is not to say that the Court qu estions the Pennas’ sincerity of concern or prudence , but their well

intentioned precaution alone does not support a takings claim. Further, w ith respect to the well water, specifically, the Navy effectively remediated any issue by providing bottled water to the Penna Property following the notice of AFFF contamination. Tr. 203:4

– 6. Indeed, one of Plaintiffs’ exhibits admitted into evidence at trial indicates that while the Pennas’ “well water is not to be used for drinking or cooking purposes[,]” they are “already hooked up to public water” and thus “no further action is required.” PX 85 (March 13, 2015 letter from Navy to Mr. Penna). 26 And in opposing the government’s pending RCFC 52(c) motion, rather than supporting with evidence their sweeping allegation that contamination interfered with their use of the Property, the Pennas merely posed a string of rhetorical questions regarding the spec ulative concerns a hypothetical buyer might have in purchasing a contaminated property. 27 See Pl. Resp. at 10. Such rhetorical questions do not constitute evidence.
The Pennas’ experts also provided no credible testimony that contamination substantially interfere d with the Pennas’ use of their Property. Tr. 520:9

– 25

. Indeed, Mr. Cammarata, one the Pennas’ expert witnesses, testified that “heightened anxiety is the only reason why [he] feel[s] that PFOS and PFOA impair [] the use or enjoymen t of the Penna property[.]” Tr. 375:12

- 15 (emphasis added). Mr. Cammarata is not a medical doctor or a psychologist and, further, he admitted that at least one mortgage regulator has never “associated anxiety as being incompatible with enjoyment of the property.” Tr. 376:2

- 5. There is no evidence that any bank or regulator examines a property owner’s anxiety when determining whether a property may be mortgageable. In any event, Mr. Cammarata did not examine the effects of an owner’s anxiety on pro perty value, a cause

- and

- effect that, if asserted, is dubious on its face. In that regard, Mr. Cammarata admitted that “the Penna property can be used for residential purposes

26 See also PX 57 (June 9, 2016 Letter from Horsham Township Council) (“All water proved by [Horsha m Water and Sewer Authority] meets or exceeds all state and federal drinking water quality standards, and all nine of our active wells in Horsham show PFC levels significantly below the new EPA . . . [a]dvisory.”).

27 Under the heading “Plaintiffs Presented Evidence of Loss of Usefulness,” the Pennas cite no substantive evidence whatsoever from the record, instead simply posing the following questions: “The Government dismisses [the PFOS contamination levels in the surface water] by saying that the Pennas do not use surface water. .

. . True, but how would a prospective purchaser or renter with minor children feel about living on a property with standing water contaminated above the human health screening level? And what lender would accept a property with su ch contamination as collateral for a mortgage?” Pl. Resp. at 10. If anything, the suggested answers to those very questions are what the Pennas were required to, but did not, prove.- 25

-

despite the presence of PFOS and PFOA [ , ]” which of course is more consistent , i f anything, with the government’s view that the Property is marketable

. Tr. 376:10

- 14.

Mr. Cammarata ultimately concluded that because the Penna Property was contaminated by an immitigable hazard, it was not eligible for a mortgage. Tr. 364:1

– 4. Notably , however, Mr. Cammarata conceded that he did not investigate whether PFOS or PFOA were present in properties near the Penna P roperty, nor did he know whether the owners of other properties impacted with PFOS or PFOA were nevertheless able to obtain a mortgage. Tr. 372:6

– 13. He conceded that he could not identify any loan for a single

- family residence anywhere in the United States that was denied a mortgage because of the presence of PFOS or PFOA. Tr. 379:1

– 6, 382:18

– 22, 386:16

– 19, 390:12

– 16.

On cr oss
- examination, the government showed Mr. Cammarata a list of properties ( near the Penna Property ) that had been sold despite PFOA and PFOS contamination. Tr. 398:24

– 399:16; PX 131 ( Slide 26 of Mr. Hosey ’s direct testimony )

. 28 Mr. Cammarata conceded tha t, at the time he wrote his report, he had not been aware of the transactions. Tr. 409:18

– 23. Furthermore, he was unaware to what extent those properties were contaminated with PFOA and PFOS. Tr. 410:6

- 10 . Mr. Cammarata attempted to distinguish the Penna Property from the properties for which buyers or owners were able to secure mortgages (despite notice of elevated PFOS and PFOA levels in their private wells) by opining that “public water would completely resolve that problem.” Tr. 399:17

– 400:8. But, that fact would not distinguish other nearby properties from the Penna Property insofar as the latter has been connected to public water since 2010. Tr. 197:24

– 198:7. Mr. Cammarata also attempted to distinguish the comparable properti es from the Penna Property on the grounds that the Penna Property has both a contaminated well and contaminated soil. Tr. 402:24

– 403:10. Mr. Cammarata conceded, however, that he had no knowledge of whether the nearby properties had contaminated soil in a ddition to contaminated wells. Tr. 410:6

– 10. Particularly in light of the comparable properties which clearly are mortgage eligible, see PX 131 (Slide 26 of Mr. Hosey’s direct testimony) , the Court rejects Mr. Cammarata’s conclusion that the Penna Proper ty is not mortgageable due to contamination

.
The Court finds that Mr . Cammarata made further concessions and admissions

on cross
- examination that devastat ed the credibility and reliability of his opinion

. For example, h e admitted that:

• he performed no analysis of FHA, VA, Fannie Mae, or Freddie Mac transactions involving land impacted with PFOS or PFOA ( Tr. 372:1

- 5 ) ;

28 See Tr. 597:4

- 8 (admitting Mr. Hosey’s presentation into evidence).- 26

- • there is no VA document “ stating that the VA considers the presence of PFOS or PFOA a hazard under its regs” (Tr. 378:2

- 6);

• h e “did not re a ch a conclusion as to whether there was no comparable market data available” nor did he make an “attempt to identify sales of properties affected by PFOS and PFOA” (Tr. 385:4

- 9);

• he does not have an opinion “on the degree to which an environmental hazard affects the value of the property” (Tr. 391:20

- 23); and

• he did not appraise the Penna Property (Tr. 391:24

- 392:1).
Finally, Mr. Cammarata agreed that even if an appraiser were to determine that there is a hazardous condition on a prope rty, “the person applying for the mortgage . . . can demonstrate that it’s not a hazard or not something that the . . . issuing bank should be concerned about” and then the bank “has the flexibility to make that decision and proceed with the loan anyhow.” Tr. 415:13

- 21. This admission further undermines Mr. Cammarata’s opinion that a buyer cannot obtain a mortgage to purchase the Penna Property. And even assuming that the contamination at issue would make the mortgage process more difficult, Mr. Cammarat a did not assess the relative effect of the contamination versus the liens and other encumbrances impacting the Property. 29

The Court finds that Mr. Hosey’s testimony was equally inconsistent and unreliable as Mr. Cammarata’s . D espite testifying as an appraisal expert in this matter, Mr. Hosey admitted that he did not have experience appraising property with PFOA or PFOS contamination. Tr. 466:7

– 12. Although Mr. Hosey described in depth the effect of stigma on property generally

– pre sumably to bolster the Pennas’ claim that they were entitled “to compensation not only for the physical taking, but for diminution in value due to stigma associated with contaminated property,” see Pl. Memo. at 61

– Mr. Hosey readily conceded that he did n ot analyze the impact of environmental stigma ( resulting from PFOS or PFOA contamination ) on the Penna Property. Tr. 467:22

– 468:7 (admitting that he “did not monetize any stigma impact relation to the presence of PFOS or PFOA on the Pennas’ property”)

. To be clear, Mr. Hosey rendered no opinion on whether stigma impacts the Penna Property or, if so, what the financial impact may be

. 30 Finally,

29 See Cent. R. Co. of New Jersey v. Cent. Hanover Bank & Tr. Co. , 29 F. Supp. 826, 828 (S.D.N.Y. 1939) (noting that a property’s “actual value has been practically destroyed by the tax liens now on them”); Resol. Tr. Corp. v. Cosgrove , 2001 WL 64777, at *4 (E.D. Pa. Jan. 24, 2001) (noting that “tax liens on Deb

– Mar's property .

. . in turn made it difficult to sell Deb

– Mar's assets”); cf. Connecticut v. Doehr

, 501 U.S. 1, 11

– 12 (1991) (noting that “attachments, liens, and simil ar encumbrances” constitute “partial impairments to property rights”).

30 The Court reiterates that despite the Pennas’ having argued that they are entitled “to- 27

-

and just like Mr. Cammarata, Mr. Hosey was “unable to identify any property in the United States that was denied a mortgage because of PFOS or PFOA,” or “that did not sell because of PFOS or PFOA.” Tr. 535:17

– 23.
Additionally, the governmen t successfully undercut Mr. Hosey’s valuation approaches by showing that his methods contradicted or ignored many of the basic appraisal principles he had described. See, e.g., Tr. 515:2

- 9; Tr. 522:22

– 526:4 ; Def. 52(c) Mot. at 26

– 32. For example, Mr. Hosey primarily used the sales comparison approach for his before

- contamination valuation of the Property. Tr. 492:7

– 12. Mr. Hosey conceded that while “[t]he sales comparison approach typically includes techniques such as pairing, case studies, and regression analysis, which support a percent deduction to the unimpaired subject value,” he had not analyzed environmental case studies in determining his after

- contamination valuation for the Penna Property, nor did he perform any kind of re gression analysis or a paired sales analysis for the after

contamination valuation. Tr. 526:12

– 527:7. Mr. Hosey also admitted that he did not calculate the independent , negative impact of the recurring flooding on the value of the Property. Tr. 580: 2

– 1 8

. Mr. Hosey also failed to distinguish the Penna Property from the comparable properties that sold for consideration after the Navy issue d a notice of contamination (notably, properties that the government identified, but that Mr. Hosey failed to assess

as part of his appraisal). 31 Tr. 464:20

– 465:11. Mr. Hosey insisted that while “there [were] sales of properties that were contaminated and then moved to a public water system,” in those cases “their contamination was cured, not ongoing like the Pennas.” T r. 464:20

– 23. He further explained that a cash buyer likely would not purchase the Penna Property and that there was no way to adequately remediate the contamination. Tr. 464:7

– 9, 13

– 15. As discussed , supra , the Penna Property was in fact connected to p ublic water and thus “cured” of any contamination , according to Mr. Hosey’s own standard. Further more , there is no evidence that the Penna Property requires any additional remediation , let alone any attempt by the Pennas to quantify the cost of such remediation ; Mr. Hosey simply did not compute or otherwise account for any cost to cure the contamination. While he opined “that there is no cure for the contamination on

compensation not only for the physical taking [of their Property], but for diminution in value due to stigma associated with contaminated property,” Pl. Memo. at 61, the Pennas presented no evidence at trial to substantiate any “diminution in value due to stigma.”

31 The government identified ten nearby properties that sold for consideration ranging between $212,000 and $620,000 despite PFOA and PFOS contamination. Tr. 549:20

– 550:7; PX 131 (Slide 26 of Mr. Hosey’s direct testimony). Mr. Hosey acknowledged that he had not located those properties during his appraisal and instead had been shown them f or the first time at his deposition. Tr. 544:23

– 545:13.- 28

-

the Penna property” because “[t]he Pennas have no control over the contamination[,]” Tr. 516:11

- 15

– a point which may well qualify as a non

- sequitur

– Mr. Hosey is not an environmental engineer, a hydrologist, or a toxicologist. Tr. 516:16

- 19. Accordingly, t he Court concludes that Mr. Hosey cannot render an opinion on the need for a cu re or remediation, the feasibility of any cure or remediation, or any associated probable costs. Tr. 519:14

- 17 (admitting in any event that he does “not present remediation costs in [his] appraisal of the Penna property”). 32
Mr. Hosey also sought to dis tinguish the comparable properties the government identified by claiming that “[n]one of [those] other properties have contaminated tributaries that run through the property and overflow their banks with every heavy rain [or] . . . have soil with documente d contamination.” Tr. 46 5 :2

– 5. But Mr. Hosey ultimately conceded that , despite his bald assertion, he was unaware of whether the other nearby properties in fact had contaminated soil or flooded in heavy rain. Tr. 551:15

– 21. A gain , Mr. Hosey is not an expert in hydrology , mortgage regulations , or in conducting or reviewing appraisals of property with PFOS or PFOA. Tr. 466:7

- 17. Perhaps Mr. Hosey’s most critical concession, however, was that “under the highest and best use criteria, residential use of the Penna property in the after [contamination] scenario was still legally permissible” and “physically possible[.]” Tr. 507:7

- 14. 33
In the end, the most damaging blow to Mr. Cammarata’s and Mr. Hosey’s respective opinions is the fact that they are all bu t circular: the bottom line of each expert rests to a significant extent on the uncritical , wholesale acceptance of the other’s conclusion. Def. Mot. at 14

- 15. Mr. Cammarata’s testimony is that the Penna Property “is not an eligible, mortgageable property.” Tr. 364:1

- 3. But, Mr. Cammarata “does not opine on the ability to sell a nonmortgageable property[.]” Tr. 391:17

- 19 ; PX 130 (“I will let a qualified appraiser comment on the market value and the ability to sell a nonmortgageable property.”) . The Pennas relied upon Mr. Hosey to fill in the gap ; he testified that “[t]he saleability and the market value of a non

- mortgageable property is very questionable

. . . .” Tr. 463:14

- 17. Mr. Hosey admitted , however, that he based his

32 Mr. Hosey’s conclusion, in that regard, is inconsistent with that of Mr. Cammarata, who, in reliance upon Mr. Mulhall, concludes only that “ it may not be possible to remove these compounds in the environment beneath and surrounding the Penna property . . . .” PX 130 at 6 (italics added, bold in original). Such speculative musings are an insufficient basis for the Court to conclude that any contamination cannot be remediated, even assuming such r emediation were required for health, safety, or by law.

33 Although Mr. Hosey during trial denied that the “residential use of the Penna property was still an economic use in the after [contamination] scenario,” Tr. 507:15

– 24, counsel for the government i mpeached the witness by pointing to his deposition testimony in which he admitted that residential use was an “economically profitable . . . use of the land.” Tr. 508:2

– 11.- 29

-

“ultim ate conclusion of zero market value on Mr. Cammarata’s mortgagability conclusion[.]” Tr. 510:8

- 12; see also Tr. 510:13

- 19 ; PX 131 at 23 . In that regard, Mr. Hosey admitted in his deposition

– which the government employed at trial for impeachment purpose s
– that (1) “Mr. Cammarata’s report, in and of itself, included a zero valuation, and [Mr. Hosey] adopted that conclusion” (Tr. 510:20

- 511:5), and (2) Mr. Hosey “made no attempt to verify Mr. Cammarata’s conclusion that the Penna property had no market va lue or saleability[.]” Tr. 511:6

- 11; see also Tr. 513:6

- 11 (Mr. Hosey conceding that “there was nothing in [his] report that would tell the reader that [he] based [his] opinion of lack of saleability and lack of marketability on [his] experience”). 34 But Mr. Cammarata never opined on market value. PX 130. Mr. Cammarata thus relies upon Mr. Hosey’s testimony that the property cannot be appraise d (due to contamination) in order to conclude that the property is not mor tgageable, while Mr. Hosey relies u pon Mr. Cammarata’s testimony that the Penna Property is not mortgageable in concluding that the Property is not sellable and therefore valueless. 35 Accordingly, the Court concludes that Mr. Cammarata’s and Mr. Hosey’s testimon ies

– both individually and collectively

– fall far short of proving the Pennas’ case.

The Pennas’ own actions with regard to the prospective sale of the ir Property further undermine Mr. Penna’s assertion that the Property, in its contaminated state, is worth “zero.” Tr. 208:17

– 21. Although Mr. Penna opined that the Penna Property is “not worth anything today,” id ., the Court rejects his assessment . Indeed, on August 23, 2018, the Pennas received an offer to purchase the P roperty for $725,000

– an offer which they did not accept in a timely manner and, thus, allowed to lapse. While we do not know whether the sale would have closed if the Pennas had accepted the o ffer in a timely manner, the Pennas

– during the pendency of this case, in which they claim their Property is worthless

– actually returned a counter offer to the potential buyer that was

34 Additionally, Mr. Hosey references several of Mr. Cammarata’s putative conclusio ns that the latter denies having reached. Compare, e.g., Tr. 535:7

– 16 (Mr. Hosey’s testimony that Mr. Cammarata reached all of the points listed on Mr. Hosey’s slide 22), PX 131 (Slide 22 of Mr. Hosey’s direct testimony) (listing six conclusions, includin g the statement that “[d]espite a diligent search of the market, I was not able to discover a comparable sale or listing after contamination”), with Tr. 392:4

– 6 (Mr. Cammarata’s admission that he did not research comparable sales for the Penna Property). Thus, the Court agrees that “[t]o the extent that Mr. Hosey’s analysis incorporates these phantom Cammarata conclusions as a factual predicate or valid assumption, Mr. Hosey’s o pinion is unreliable.” Def. 52(c) Mot. at 15.

35 The Pennas cite Apple Inc . v. Motorola Inc ., 757 F.3d 1286, 1320

– 1322 (Fed. Cir. 2014), to defend Mr. Hosey’s and Mr. Cammarata’s reliance upon one another in reaching their conclusions. Pl. Resp. at 25. A pple

, however, referenced only the truism that one expert may rely on another “for expertise outside of [his] field.” Id . at 1321. The court did not condone circular expert testimony devoid of independent analysis in which each expert simply relies on th e opinions of the other as a predicate for his own conclusions.- 30

-

more than $20,000 higher than the prospective buyer’s offer

. Stip. at ¶ 21. While “[i]t is the general rule that evidence of specific offer s of purchase is not admissible for the purpose of establishing the reasonable market value of property,” United States v. Regents of N. M. Sch. of Mines , 185 F.2d 389, 391 (10th Cir. 1950), “[i]t is well settled that

an offer to sell property at a certain price may be proved against the owner as an admission of its value at or near the time of the offer .” Erceg v. Fairbanks Expl. Co , 95 F.2d 850, 854 (9th Cir. 1938) (citations omitted). And e ven if the rejected purchase offer of $725,000 and the subsequent counter offer do not definit iv ely prove the Property’s value, the y a re probative of what the Pennas believed their Property was worth. Put yet differently, had the Pennas truly believed that the Property had been rendered

wo rthless, they would have jumped at the $725,000 offer and not allowed it to lapse. That the Pennas allowed the o ffer to expire

– and, indeed, returned a higher counter offer to the prospective buyers

– demonstrates, at the very least, that not even the Pennas actually believed th eir Property is worthless.
The Pennas primarily rely on Sharp v. United States , 191 U.S. 341 (1903), for the proposition that unaccepted offer s are not admissible to prove market value. Pl. Resp. at 22

– 23. The reasoning underlying the Supreme Court’s decision in Sharp is inapposite. In Sharp , the Court emphasized the fact that an offer was, “at most, a species of indirect evidence of the opinion of the person making such offer as to the value of the land.” Id . at 348 (emphasis added). The Court thus rejected an unaccepted offer as “too uncertain, shadowy, and speculative to form any s olid foundation for determining the value of the land.” Id . at 348

– 49. The circumstances surrounding the o ffer to purchase the Penna Property, however, do not suffer from the same deficiencies . In fact, the Pennas themselves employed the purchase o ffer as an exhibit, rather than objecting to its admissibility as the party opposing admissibility apparently did in Sharp . Accordingly, the Pennas have waived any objection to the admissibility of the o ffer

. See Def. Rep. at 20 (“[T]here are no questions of admissibility here, as the parties jointly prepared and filed the stipulation, and all of its referenced documents are already part of the factual record.”). The Court thus concurs with the government that the Court may consider those documents “probative of whether Plaintiffs have met their burden of showing that the property is ‘virtually valueless,’ and specifically may consider it probative of the truthfulness of Mr. Penna’s testimony and the credibly of Mr . Hosey’s analysis . . . .” Id. at 21.

Even if the Pennas had not waived such an admissibility objection, however, the

o ffer would be admissible in any event in the instant case. In that regard, Sharp recognized that, depending upon the circumstanc es, a purchase offer may be admissible. Id. at 349 (“To be of the slightest value as evidence in any court, an offer must, of course, be an honest offer , made by an individual capable of forming a fair and- 31

-

intelligent judgment, really desirous of purchasi ng, entirely able to do so, and to give the amount of money mentioned in the offer , for otherwise the offer would be but a vain thing.”); see also Nat'l Exch. Bank & Tr. Tr. for Fife Fam. Tr. A v. Petro

- Chem. Sys., Inc., 2013 WL 12180537, at *7 (E.D. Wis. Oct. 7, 2013) (explaining that “ Sharp addressed the admissibility of “[o]ral and not binding offer s,” and distinguishing Sharp where “the offer s were written and, if accepted, binding upon the parties”). I n the instant case, to employ language from Sharp , “the owner himself, while declining the offer , really believed in the good faith of the party making it, and in his ability and desire to pay the
amount offer ed,” as opposed to having been “regarded as a mere idle remark, not intended for acceptance

. . . .” 191 U.S. at 349. Again , at a minimum, the bona fide purchase o ffer is relevant here to show what the Pennas themselves believed regarding the value of their Property at the time they received the offer , allowed it to lapse, and then countered with a higher amount

– all of which occurred while this case was pending, and during which time the Pennas consistently have claim ed their Property is valueless. See Republican Newspaper Co. v. Nw. Associated Press, 51 F. 377, 379 (8th Cir. 1892) (“[T]he fact [is] that when such property is for sale [and] parties are ready to buy it [,] [it] shows that it has a value, and the price offer ed tends to prove what such value is. In other words, proof of offer s to purchase at given prices, made in good faith, is some evidence of the actual value of the article sought to be purchased, as well as of its salability.”); 50

– Off Stores, Inc. v. Banques Paribas (Suisse), S.A. , 180 F.3d 247, 255 (5th Cir. 1999) ( offer for a significant amount of shares from a “legitimate buyer” appropriately considered by jury in assessing damages); In re Grueneich , 400 B.R. 680, 687 (B.A.P. 8th Cir. 2009) (“an offer to purchase an asset would normally constitute strong evidence of the asset ’ s value, even if there is only one such offer ma de”); Ner Tamid Congregation of N. Town v. Krivoruchko , 2009 WL 10696538, at *7 (N.D. Ill. July 9, 2009) (“whatever the appropriate measure of damages, the $2 million offer might be admissible on the question of the fair market value”).

B. The Pennas Erroneously Rely Upon Intentional, Direct, Physical Takings Cases
Although the Pennas repeatedly concede that the Ridge Line framework governs this case, 36 the Pennas rely on several inapposite cases involving direct physical takings to support their contention that the government appropriated a benefit at the Pennas’ expense by “channel[ing ] ” AFFF in the direction of the Property. Pl. Resp. at 8

. Even assuming that characterization of the government’s actions is accurate , t o the extent that the Pennas continue to maintain that the government’s conduct constitutes a per se physical taking, see Pl. Memo. at 61, the Court rejects that argument. The Ridge Line and

36 See Pl. Memo. at 48

– 49, 58

– 60, 62, 64, 66; see also Pl. Resp. at 7, 9, 15, 37.- 32

-

Moden cases
– and the similar line of flooding cases upon which Moden is ultimately based

– provide the correct lens with which to view the Pennas’ takings claim, and not the Loretto line of intentional, per se physical takings cases. As the government suggests, and the Supreme Court’s decisions confirm, the Pennas’ approach to the case law “seeks to swallow that distinction.” Def. 52(c) Mot. at 11. 37

In the first case the Pennas cite , 38 Bassett New Mexico LLC v. United States, 55 Fed. Cl. 63 (2002) , the government actually conceded liability for a physical taking after the EPA deliberately stored contaminated soil on three acres of the p laintiff’s property under the mistaken belief that t he p laintiff had consented to such use

. 55 Fed. Cl. at 66. Bassett is inapposite here. N ot only has the government not conceded liability in this

case , but also the government did not intentionally use the Penna P roperty for the storage of any substance , let alone a hazardous one that otherwise would have required the government to incur disposal or remediation costs

. Simply put, Bassett involved an intentional g overnment act, resulting in a physical taking. Although, as noted above, the Court does not reach the question of foreseeability or intentionality here, the government conduct at issue in Bassett is not comparable to the government’s conduct in this case, which is governed by the Moden , Ridge Line , and Arkansas Game & Fish Commission tests, as opposed to the direct, physical taking cases. Bassett, 55 Fed. Cl. at 68 (“Plaintiff alleges, and the United States concedes, that the EPA ’ s removal action constituted an uncompensated physical taking of Bassett's property.”). Moreover, even if Bassett somehow were applicable to the facts of this case, Senior Judge Smith in Bassett recognized that “compensable damages

. . . require [] the Court to measure the degree to which the removal action deprived Plaintiff of the value of each use constituting the overall highest and best use of the Property before the re moval action .” 55 Fed. Cl. at 69 . Here, in contrast, the Pennas provided no such credible evidence of compensable damages.

37 As explained above, see Banks , 138 Fed. Cl. at 147

– 48, the rationale of the chemical contamination and flooding takings decisions makes them similar to, and analogues of, the regulatory takings cases. “A regulatory restriction on use that does not entirely deprive an owner of propert y rights may not be a taking under Penn Central .” Horne , 576 U.S. at 364 (“That is why, in PruneYard Shopping Center v. Robins, 447 U.S. 74, 100 S. Ct. 2035, 64 L.Ed.2d 741 (1980), we held that a law limiting a property owner’s right to exclude certain speakers from an already publicly accessible shopping center did not take the owner’s property.”). In PruneYard , “[t]he
owner ret ained the value of the use of the property as a shopping center largely unimpaired, so the regulation did not go ‘too far.’” Horne , 576 U.S. at 364 (quoting PruneYard , 447 U.S. at 83 (internal quotes omitted)). The Pennas cannot avoid Ridge Line and Mode n by redefining at trial the putative property interest at issue.

38 See Pl. Resp. at 8.- 33

-

The Pennas cite Waverley View Invs

. , LLC v. United States , 135 Fed. Cl. 750, 798 (2018), aff’d , 767 F. App ’ x 996 (Fed. Cir. 2019), for the proposition that the government cannot unilaterally burden a plaintiff with removing governmental material

– in Waverley , monitoring wells

– placed on private property. Pl. Resp. at 8

– 9. Just like the Bassett decision, Waverley is inapposite because it , too, is a physical per se takings case. 135 Fed. Cl. at 799 (holding that the “Army’s activities . . . effected a permanent physical taking of those portions of the Waverley View Property actually occupied by t he Army

installed gravel access road and monitoring wells”). The Pennas’ case is further distinguishable from Waverley because there is no credible evidence that the Pennas
must remove or otherwise remediate the AFFF on their Property . In fact, the only evidence addressing the issue is Mr. Mulhall’s unsupported opinion (and Mr. Hosey’s subsequent adoption of it) that “[i]mpacted groundwater, surface water, soils, and sediments must be removed.” Tr. 351:16

– 17

. Mr. Mulhall , however, is a geologist and hydrogeologist and thus is not qualified to opine on the necessity of removing particular substances

. 39 A s the record stands, the Pennas failed to provide any credible evidence not only of the necessity of removing the contamin ation, but also any cost they incurred or would have to incur in order to do so. 40 In fact, as noted above, the Pennas at times argue that the contamination cannot be remediated. See, e.g. , Tr. 464:13

– 16; Tr. 519:10

– 13 (“MR. SINGER: And in your appraisal , you do not present remediation costs in your work, correct? MR. HOSEY: Because the subject property cannot be remediated by the subject property owners.”).
Finally, the Pennas rely on Hendler v. United States , 952 F.2d 1364, 1375 (Fed. Cir. 1991 ) , for the proposition that an individual has the right to exclude “free riders” ( i .e. , the government ) from his or her property. Pl. Resp. at 8

– 9. This is yet another case in which monitoring wells were placed on private property. Hendler , 952 F.2d at 1377 (“When the governmental intrusion is as substantial a physical occupancy of private property as this is, Loretto establishes that there is a taking.”). 41 Unlike Hendler , the

39 See Tr. 613:9

– 14 (Mr. Mulhall admits that he is a not a licensed toxicologist and does not have a wastewater engineering license).

40 If the Pennas had provided credi ble expert testimony that, as a matter of law, the PFOS and PFOA were considered so toxic that their removal was required in order for the Property to be inhabitable, or if the Pennas had provided credible evidence that it was prudent to do so in light of their potential hazard (and provided some evidence of the likely cost), the result of this case may well have been different.

41 The Pennas also cite John R. Sand & Gravel Co. v. United States , 457 F.3d 1345, 1356 (Fed. Cir. 2006), for the proposition that a property owner has the right to exclude others from his or her land, but that case is similarly distinguishable. Moreover, even if the case law supported equating the contamination of the Penna Property with a physical invasion resulting from the intent ional storage of chemicals on their Property, the Pennas failed to quantify (or even to attempt to quantify) the value of such “storage.”- 34

-

instant case is not subject to a Loretto analysis, an approach which would be contrary to Ridge Line and Moden (and the Supreme Court’s similar analysis in flooding cases)

. See Boise Cascade Corp. v. United States , 296 F.3d 1339, 1355, 1357 (Fed. Cir. 2002) (explaining that “[o]ur decision in Hendler rested squarely upon the permanent nature of the wells and the regular government intrusions to monitor them” and that “ Hendler ’s holding was unremarkable and quite na rrow: it merely held that when the government enters private land, sinks 100

– foot deep steel reinforced wells surrounded by gravel and concrete, and thereafter proceeds to regularly enter the land to maintain and monitor the wells over a period of years, a per se taking under Loretto has occurred ” (emphasis added)). In sum

, the Court concludes that, under the appropriation prong of Ridge Line and Moden , the Pennas have failed to demonstrate any substantial impact to their use of the Property or any concret e economic impact from the contamination at issue.

C. The Pennas Failed To Prove “Just Compensation” For Their Property As A Whole (Or Any Property Right)
In terms of the property right the Pennas claim was taken by the government, the Pennas present this Court (and the government) with a moving target. While the Pennas focused almost the entirety of their case at trial on the value of the Property as a whole, the Pennas argued, in their opposition to the government’s RCFC 52(c) motion, that the prope rty right taken by the government “is the plaintiffs’ right to exclude the Government’s chemicals from their property.” Pl. Resp. at 7. 42 Similarly, in their pretrial brief, the Pennas allege that “ [c]ontamination of the well alone is a cognizable taking ,” see Pl. Memo. at 66, but never explain how their use of the well was impaired aside from an inability to drink the water (which the Navy cured by providing bottled water). Nor, for that matter, did the Pennas offer any evidence quantifying the damages associ ated with any alleged interference with the use of any part of the Property, apart from contending that contamination renders the entire Property as a whole worthless.

R egardless of which , if any, specific property right the Pennas ultimately claim
was t aken , the Pennas failed to present any credible evidence of the value of th at right ( i.e. , whether the Pennas point to the ability to use their Property for gardening or their

42 The Court agrees with the government that this claim does not properly address the case law, the government’s argume nts, or the Court’s question regarding Plaintiffs’ definition of the property or scope of property rights that they allege were taken. Instead, as the government explains, “Plaintiffs, rather than addressing the United States’ argument, answer the Court’s questions with a tautology: according to Plaintiffs, the invasion of the ‘the Government’s chemicals’ resulting in a taking of Plaintiffs’ property right to ‘exclude the Government’s chemicals from their Property.’” Def. Rep. at 20 (quoting Pl. Resp. at 7). As noted above, the Court rejects the Pennas’ approach to the takings jurisprudence that governs the outcome here.- 35

-

right to exclude chemicals from their land )

. In that regard, t he Federal Circuit has held that “the trial court in a takings case is not obligated to fashion its own award when a plaintiff has not provided evidence sufficient to determine just compensation with reasonable certainty.” Gadsden Indus. Park, LLC v. Unit ed States , 956 F.3d 1362, 1371 (Fed. Cir. 2020) ; s ee also Otay Mesa Prop., L.P. v. United States , 779 F.3d 1315, 1322 (Fed. Cir. 2015) (“[T]he fact that a taking occurred does not itself establish what compensation should be awarded. What is critical in th e determination of just compensation is not the gain to the government from the taking, but the actual loss to the landowner.”). Here,

e ven assuming that the injury the Pennas claim i s compensable under a Fifth Amendment takings theory, the Pennas have fa iled to prove the quantum of that injury necessary to assess any “just compensation” allegedly owed

. For example, in Vaizburd v. United States , “[t]he Court of Federal Claims concluded that the government ’ s sand deposit on the Vaizburds ’ property constituted the physical taking of a permanent easement, but it denied recovery on the ground that the Vaizburds failed to establish any decline in the fair market value of their property.” 384 F.3d 1278, 1279 (Fed. Cir. 2004). The Federal Circ uit agreed with this Court that “the Vaizburds [had] not established that they are entitled to recover compensation for a decline in the market value of their property,” but vacated the decision and remanded “for further consideration of the Vaizburds ’ cla im that they are entitled to recover on a cost of cure theory.” Id . at 1280. As in Vaizburd , t he Pennas have failed to prove any diminution in the fair market value of their Property other than arguing that the Property is entirely worthless. As explained above, the Court rejects the Pennas’ contention that their Property is valueless. Further more , the Court considered a “cost of cure theory ” here, and the Pennas had ample opportunity to present such evidence, but the Pennas did not establish that remediation of the contamination is necessary, nor did the Pennas attempt to quantify the cost of such a cure. 43

In sum, based on the trial evidence, the Court finds that the Property is marketable and potentially sellable : 44 not only have other, similar properties sold for

43 The Court agrees with the government that Plaintiffs’ complaint does not assert a claim for the appropriation of a flooding (or a simi lar) easement. See Def. Rep. at 2

- 3 n.1. The Court shares the government’s multiple concerns with any suggestion that such claims had been asserted or otherwise preserved, but the Court finds in any event that the government is correct that “Plaintiffs d id not offer any expert testimony suggested any alleged flooding easement reduced the value of Plaintiffs’ property.” Id.

44 To the extent the salability of the Penna Property is impaired, that is more easily explainable by its numerous liens that would ha ve to be cleared in a short sale, a situation for which the government is not in any way responsible. Stip. ¶¶ 3

– 8.- 36

-

consideration

– some during the pendency of this litigation 45

– but the Penna s themselves received a viable offer to purchase their Property , an offer which the Pennas allowed to lapse. Having found that both Mr. Cammarata ’s and Mr. Hosey ’s expert testimony is deeply flawed , the Court concludes that there is little to no evidence to support the allegation that the Property is unmarketable , not mortgageable , unsellable, or valueless in its current state. The Court thus agrees with the government that “[w]hether preemption is measured by a property’s loss in usefulness or loss of market value, Plaintiffs failed to provide any credible factual support for their argument that the presence of PFOS and PFOA on their property preempted their enjoyment of their property.” Def. 52(c) Mot. at 12. Aside from contending that the Property cannot be sold , the Pennas failed to offer any other theory or evidence of diminution in value, which is unsurprising given Plaint iffs’ all

- or
- nothing approach to their case . Compl. ¶ 27 (“[The Pennas’] property is virtually valueless.”). Thus, even if the government could be held liable for some impact to the Property under a takings theory , there is a complete lack of preponderant evidence upon which to award just compensation

.
VI. PLAINTIFF S ’ COUNSEL VIOLATED THIS COURT’S DISCOVERY RULES

As noted above, following the close of Plaintiffs’ case

- in

- chief, the Court suspended the trial proceedings due to Plaintiffs’ apparent discovery violation , newly produced documents, and the parties’ resulting Stipulation. In addition to issuing a schedule for the government to submit its RCFC 52(c) motion, the Court ordered the parties to address a number of question s the Court posed to better understand the impact of the newly disclosed documents, as well as the facts and circumstances surrounding the purchase offer and how Plaintiffs had described that failed purchase transaction in their discovery responses, court filings, and testimony. See ECF No. 125 (raising concerns about whether Plaintiffs’ counsel had a possible conflict of interest in advising the Pennas about the proposed purchase of their property, whether Plaintiffs’ counsel was a witness to the purchase transaction and thus to material facts central to the issue in the trial, and whether he violated his duty of candor to the Court)

. The Court next turns to analyzing those issues.

T he Plaintiffs’ pretrial memorandum includes a section of factual averments with the following heading: “The Navy substantially interfered with the use and enjoyment [of the] property, resulting in a taking for which just compensation is due.” Pl. Memo. at 43 ( S ection IV.G, containing ¶¶ 105

– 16). T hat section lays out the heart of the

45 See PX 131 (Slide 26 of Mr. Hosey’s direct testimony (listing nearby properties, including one on the same street as the Penna Property, that sold for consideration between 2017 and 2019, and indicating associated mortgages)). This action was filed on November 18, 2016. Compl.- 37

-

appropriation the Pennas had intended to prove at trial. In particular, the Pennas explained that the government ’s action contaminated their Property ( id . ¶¶ 105

– 06) and , as a result, the Pennas (1) “stopped using the ir vegetable garden” ( id . ¶ 107), (2) “no longer use their well water for drinking, and stopped using it for outdoor cooking and barbecues” ( id . ¶ 108), (3) could not subdivide their Property to construct town homes “without getting a clean environmental b ill of health,” which was “unavailable . . . because of the known contamination” and “because the full extent of the contamination is not known” ( id . ¶ 109), and (4) “have not attempted to rent their house out for domestic use, because they are concerned t hat is not safe for children to play in the backyard, or for the owners to plant vegetables . . . or drink from the well that service [s] the garage” ( id . ¶ 111).
As discussed above, those allegations at trial were either essentially abandoned or fail for a complete lack of proof (or, in the case of voluntary cessation of an activity, do not constitute support for an alleged taking in any event). Instead, for the p urpose of meeting the Ridge Line and Moden tests for a taking

– and for the purposes of proving a quantum for just compensation

– the Pennas relied at trial almost entirely upon the theory that “[b]ecause there is no cure for the recurrent pollution of the Penna Property [,] it is not eligible for a mortgage” and “[b]ecause the property is . . . not eligible for a mortgage, and there are no comparable sales of contaminated properties, it has no market value.” Pl. Memo. ¶ 112

– 14.

In that context, the Pennas explained that they would prove as follows:
The Pennas have attempted to sell their property, without success. At least two realtors initially refused to list the property. In 2018, as a result of foreclosure proceedings, the property was listed for sale . An offer for $746,000 was made, contingent on a $475,000 mortgage, and was then withdrawn.

Pl. Memo. ¶ 110. T he Pennas further averred that: (1) “[t]he property is not eligible for a mortgage and not marketable for sale”; and (2) “[t]he contamination has prevented plaintiffs from being able to mortgage or sell the property.” Id . at 67 (emphasis added). The pretrial brief was si gned by P laintiffs’ counsel, Mr. Cuker, and filed with the Court

on March 17, 2020

.
P articularly in light of the heading under which the foregoing description of the Pennas’ efforts to sell the Property is located in the ir pretrial memorandum, the calculat ed purpose was to lead the Court to believe that the sale failed due to environmental contamination. T he assertion in the pretrial memorandum that the purchase offer “was . . . withdrawn” is consistent with the Pennas’ interrogatory- 38

-

responses, similarly executed by Mr. Cuker ( transmitted to the government on or about August 30, 2019 ) . In that regard, in response to the government’s interrogatory about “listing the pr operty for sale or the possibilities for selling” it, the Pennas indicated that “[a]n offer was made, but the prospective buyer backed out.” ECF No. 134

- 3 at 6 (Response to Interrogatory No. 11).

At trial, Mr. Cuker attempted to support the allegations regarding the Pennas’ inability to sell the property by eliciting the following testimony from Mr. Penna during his direct examination :

Q. Did you make an effort to sell the property?

A. Yes, we did.
Q. And how long was the property listed for sale?
A. The property was listed for six months. Yes, six months.

. . . Q. And did the property sell when it was listed in 2018?

A. No, it did not.
Q. What do you think your property is worth today?
A. To me, the money and time and everything I ’ ve pu t into it

-- Q. No, let me

-- no, with the contamination, in its contaminated state, what do you think the property is worth today?

A. Well, I

-- well, it’s not worth anything today. Zero.

Tr. 207:25

– 208:21. Accordingly, Plaintiffs and their counsel unequivocally intended the Court ( and the government ) to believe that the Property did not sell and was rendered worthless b ecause of the contamination.

T he government , in contrast, attempt ed to show during Mr. P enna ’s cross

examination that although there had been a potential buyer for the P roperty, one reason for the failed sale may have been the “several liens” the Pennas had to disclose to the realtor . Tr. 235:7

- 21. Plaintiffs’ counsel objected to the entire line of questioning as irrelevant “to the facts of this case.” Tr. 239:9

- 10. The government responded that “it goes to that [Mr. Penna] had stated that he couldn’t sell his property, couldn’t subdivide- 39

-

or do anything with his property due to the contami nation, and this is showing a different alternative reason as to why a property with a potential buyer did not sell.” Tr. 239:14

- 19. In rebuttal, Mr. Cuker essentially denied that he had opened the door to the government’s cross

- examination questions , but in any event withdrew his objection, stating that “I am not going to argue it here. You know, . . . if they want to suggest this is the reason the property can’t sell, I will go into this with Mr. Penn a on redirect examination.” Tr. 240:10

- 23.
Continuing with the cross
- examination, the government showed Mr. Penna what the government believed to be the “ purchase [ offer ] for the property . . . in the amount of $746,000.” Tr. 243:15

- 18. Mr. Penna readi ly agreed with that characterization and testified that the would

- be purchaser “backed out” after the Pennas provided environmental disclosures. Tr. 243:19

- 244:2; see also Tr. 246:9

- 12 (Mr. Penna testifying that “after the offer and after everything that [the buyer] received

. . . from us, . . . it was too complicated for him to get involved with it”); Tr. 247:6

- 12 (Mr. Penna testifying that after the realtor provided the would

- be buyer with environmental disclosures, “that’s when we got the response that it’s complicated and he didn’t want to buy it”); Tr. 278:5

- 7 (Mr. Penna testifying that after the would

- be buyers “received . . . disclosures on the issues of the environment, that they didn’t want to go, that it was too complicated for them” ).

As detailed above, see supra S ection I .D , due to a discrepancy the Court noticed among the documents Plaintiffs’ counsel employed during his examination of Mr. Penna, the Court ordered the parties to meet

- and

- confer regarding a possible discovery violation. Tr. 259:1

– 6

. The resulting Stipulation demonstrates that two critical assertions in the Pennas’ pretrial memorandum were false: (1) the potential buyers nev er offer ed the Pennas $746,000 for their Property; and (2) the potential buyers never withdrew their purchase offer . Instead, what actually happened is that the potential buyers made an offer to purchase the Penna Property for $725,000 which required the Pennas’ acceptance by August 25, 2018, but the Pennas did not sign and accept that offer in a timely manner. Stip. ¶ 9, 12, 16. More significantly, the parties stipulated that “[t]he prospective sale of the property did not fail because of environmental issues .” Id . ¶ 31 (emphasis added).

Given these falsities, t he Court has serious concerns regarding whether Plaintiffs’ counsel violated his duty of candor. Indeed, the clear discovery violation, for which Plaintiffs’ counsel is responsible, exacerbated the impact of both the false assertions of fact and the erroneous impressions conveyed to the Court.- 40

-

Pursuant to Rule 3.3 (“Candor Toward the Tribunal”) of the American Bar Asso ciation’s Model Rules of Professional Conduct: 46

(a) A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

. . . or (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offer ed material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, inc luding, if necessary, disclosure to the tribunal.

. . .

. . . (c) The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6.

Ca ndor Toward the Tribunal , Ann. Mod. Rules Prof. Cond. § 3.3 (explaining that the Rule “sets forth the special duties of lawyers as officers of the court to avoid conduct that undermines the integrity of the adjudicative process”). 47 While “[a] lawyer acting as an advocate in an adjudicative proceeding has an obligation to present the client’s case with persuasive force[,] [the] [p]erformance of that duty . . . is qualified by the advocate’s duty of candor to the tribunal.” Id . “Co nsequently, although a lawyer in an adversary proceeding is not required to present an impartial exposition of the law or to vouch for the evidence submitted in a cause, the lawyer must not allow the tribunal to be misled by false statements of law or fact or evidence that the lawyer knows to be

46 This Model Rule is identical to Rule 3.3 of the Pennsylvania Rules of Professional Conduct, see http://www.padi sciplinaryboard.org/for

- attorneys/rules/rule/3/the

- rules

- of

- professional

conduct.

47 Rule 1.6 “governs the disclosure by a lawyer of information relating to the representation of a client during the lawyer’s representation of the client.” Confidentiality o f Information , Ann. Mod. Rules Prof. Cond. § 1.6.- 41

-

false.” Id .; see also Hanover Ins. Co. v. United States , 146 Fed. Cl. 447, 450 (2019) (noting “the truism that attorneys must not mislead the court”).
In this case, Mr. Cuker is responsible for the assertions in t he pretrial memorandum and Mr. Penna’s testimony

– all of which appear to have been calculated to lead the Court to conclude (erroneously) that while an offer was made to the Pennas to purchase their Property for substantial value, that potential sale was tanked due to the environmental disclosures the Pennas provided. In the context of this case, no other conclusion is reasonable. 48
First, the Court notes that the primary, if not sole, theory of the takings claim here (in terms of the appropriation

- prong of the Ridge Line and Moden tests)

– and the only theory for which Plaintiffs presented a damages calculation of any kind

– is that the Penna Property was worthless because it was not mortgageable and thus not sellable, an assertion significantly undermined, if not completely evisce rated , due to the actual facts contained in the Stipulation.
Second, Plaintiffs falsely asserted that “[a]n offer for $746,000 was made . . . and was then withdrawn” in the context of the appropriation argument in the pretrial memorandum. Pl. Memo. ¶ 110 . Mr. Cuker never corrected the record, but rather elicited testimony from Mr. Penna that the offer was for $746,000. Tr. 243:15

– 18. There is now no dispute that the o ffer , in fact, was not for $746,000

– it was for $725,000

– and that the actual offer for the lower amount was never withdrawn. Rather, it lapsed because the Pennas did not accept it. The Plaintiffs’ erroneous assertions of fact thus had two consequences ( until the Court and the government discover ed the truth) : they left the impression t hat a willing buyer would have valued the Property at an even higher amount, and that environmental concerns doomed the transaction. Again, neither of those things are true , something Plaintiffs now admit

. Third, Mr. Cuker’s defense of his actions in both his filings and at trial provides this Court with more confidence

– not less

– that his conduct is problematic to say the

48 As in many areas of the law, “context is everything” here. Campbell v. Acuff

- Rose Music, Inc. , 510 U.S. 569, 589 (1994) (fair use under copyright law); see also Gissin v. Endres , 739 F. Supp. 2d 488, 506 (S.D.N.Y. 2010) (noting that “context is everything” in securities case involving allegations of false and misleading statements); United States v. Baynes , 369 F. App’x 365, 367 (3d Cir. 2010) (“context is everything when disting uishing between a threat of death and threats of violence in general”); Chapman v. Target Corp. , 2020 WL 8093566, at *1 (D. Colo. Oct. 20, 2020) (noting that “context is everything” in deciding whether a party violated Rule 26 of the Federal Rules of Civil Procedure); Ryan v. Town of Schererville, Ind. , 2005 WL 1172614, at *10 (N.D. Ind. May 4, 2005) (“context is everything” in a sex discrimination case); Gresham v. Meden , 938 F.3d 847, 849 (6th Cir. 2019) (“context is everything in [statutory] interpretati on”).- 42

-

least . Mr. Cuker asserts that the misstatements in the pretrial memorandum “were inadvertent” and that “Plaintiffs’ counsel did not knowingly make a false statement of fact . . . .” Pl. Resp. at 38. He further asserted that he “believes that he mistakenly included the wrong amount when preparing the Memorandum while working remotely in the early days of the pandemic . . . and misinte rpreted the handwritten
counter offer . . . as having been the prospective buyer’s offer .” Id . The Court cannot decide whether these assertions are merely implausible or constitute yet further misrepresentations. For starters, Mr. Cuker’s pretrial memorandum is consistent with his pre
- pandemic interrogatory responses that reflect a similar theme in asserting that the would

- be buyers “backed out” of the proposed purchase. ECF No. 134

- 3 at 6 (Response to Interrogatory No. 11) . Indeed, as explained above, the consistent, but ultimately false, narrative Plaintiffs and Mr. Cuker advanced was that th e would

- be buyers “backed out” of the transaction only after, and due to, the environmental disclosures. See Tr. 247:6

- 12; Tr. 278:5

- 8.
There are three significant problems with the assertion that the would

- be buyers “backed out” due to environmental co ncerns : (1) the buyers’ offer expired by its own terms when the Pennas failed to accept it in a timely manner; (2) “Plaintiffs have no written evidence showing whether or when [a] counter offer was actually transmitted.

. . to the prospective buyers or their real estate agent”; and (3) Mr. Cuker himself was involved in the proposed transaction, insofar as (a) he instructed the Pennas not to sign the o ffer , 49 and (b) he either participated in preparing the draft counter offer or, at the

49 This fact also raises two separate, additional concerns: (1) whether Mr. Cuker had a conflict of interest with respect to advising the Pennas regarding the potential purchase of their Property (because had the transaction proceeded, this takings c ase would have been all but over), and (2) whether because the failed transaction was part of Plaintiffs’ case, Mr. Cuker effectively became a witness when he involved himself in the proposed transaction. See Conflict of Interest: Current Clients , Ann. Mo d. Rules Prof. Cond. § 1.7, cmt. 8 (“Even where there is no direct adverseness, a conflict of interest exists if there is a significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer's other responsibilities or interests.”); Conflict of Interest: Current Clients , Ann. Mod. Rules Prof. Cond. § 1.7, cmt. 10 (“The lawyer’s own interests should not be permitted to have an adverse effect on repre sentation of a client.”); Lawyer as Witness , Ann. Mod. Rules Prof. Cond. § 3.7, cmt. 1 (“Combining the roles of advocate and witness can prejudice the tribunal and the opposing party and can also involve a conflict of interest between the lawyer and client.”); see also Lee J. Rohn & Assocs., LLC v. Chapin , 2018 WL 6721388, at *5 (V.I. Super. Ct. Dec. 18, 2018) (noting that the court was “leery of the ways [the attorney’s] own pecuniary interest [was] tangled up with the interests of [the party] i n the outcome of their dispute”). T he government declines to press this issue, however, and, in the absence of any additional facts, the Court does as well. Def. 52(c) Mot. at 47

– 48 (“The United States cannot identify at this time any harm or prejudice t o its interests as a result of Plaintiffs’ counsel’s possible conflict of interest.”). Instead, the Court focuses

– as does the government

– on “the- 43

-

very least, the realtor expressly sent it to him for his review. Stip. ¶¶ 17, 19

– 21, and included exhibits DX 326 (email from realtor noting that she “[r]eceived a call from [the Pennas’] attorney, he has directed them to sign nothing until he reviews”); DX 329 (realtor noting she is sending to Mr. Cuker “ another email with the copy we marked up including attachments” and instructing that he should “review and make changes, as you see necessary, to protect your clients Lisa and Frank [Penna]”); DX 330 (marked

- up sales agreement including environment disclos ures transmitted to Mr. Cuker). 50
Fourth, Mr. Cuker’s argument during trial provides further support that he may well have acted with scienter in regard to the misrepresentations. At trial, Mr. Cuker asserted that his wording was carefully chosen :

We have never contended that this sale fell through because of environmental issues. All we said was the sale fell through

. . . . [W]e answered interrogatories on this particular issue a

primary prejudice to the United States”

– “the nondisclosure of information about the 2018 sale negotiatio ns and the incomplete production of the documents related to those negotiations.” Id. at 48.

50 Mr. Cuker inexplicably denied being involved with the putative counteroffer or knowing why the Pennas did not sign and accept the offer, see Tr. 691:23

– 692:6 . Indeed, he asserted that “[t]he only communications I had with [the realtor] Ms. Coletti were she sent me the agreements, and, therefore, I was able to produce them. . . . [O]ther than that, I had no communication with Ms. Coletti.” Tr. 692:9

- 692:13. There are two striking problems with that statement. The first is that it undercuts Mr. Cuker’s original assertion to the Court that the documents in question likely were not produced because they were not responsive to the government’s discovery reques ts. Tr. 275:6

– 9. The second problem is that the cited exhibits demonstrate that Mr. Cuker’s involvement certainly was substantive; he did not communicate with Ms. Coletti solely for the purposes of this litigation. Indeed, that much was verified in a la ter (troubling) exchange with the Court:

THE COURT : Let’s look at [Stipulation] Exhibit 7, Defendant’s Exhibit 329. . . . [D]o you recall telling Ms. Coletti that you directed the Pennas not to sign anything until you had a chance to review?
MR. CUKER : I probably did, yes.
THE COURT : Do you recall it?
MR. CUKER : I think I did. I think I said that I had concerns about the sale of contaminated real estate, and I needed to make sure they were protected before any agreement went through. And then when I g ot the agreements, I referred the matter over to another attorney to handle the drafting of the language.
Tr. 754:17

- 18; 755:1

- 19. Thus, even when confronted with clear, documentary evidence, Mr. Cuker was frustratingly evasive.- 44

- year ago, and in those answers to interrogatories, what we said was that we had an offer and the buyer backed out. That is all we ever said.

. . . And neither I nor my client ever said that we know it fell through because of an environmental issue. We are not taking that position.

Tr. 295:1

- 15. But, that assertion critically ignores the context in which one of those assertions was made; to wit, in the pretrial memorandum, in support of the Pen nas’ primary (if not only) takings claim that the property could not be sold due to environmental reasons

. Mr. Cuker seems to contend that because he never used those precise words, he has an escape hatch. Th at implied assertion is pure sophistry. Repub lic Techs. (NA), LLC v. BBK Tobacco & Foods , LLP, 2018 WL 6067252, at *3 (N.D. Ill. Nov. 20, 2018) (criticizing party as having “engaged in a tactic that is, in our view, ‘too cute by half’”). Indeed, if Mr. Cuker did not intend to communicate the false narrative that the proposed transaction failed due to environment disclosures, why did he raise the transaction at all in his pretrial memorandum? After all, Mr. Cuker

– not the government

– put this subject a t issue , both in his pretrial memorandum and in presenting Plaintiffs’ case

- in

chief. In that regard, before the correct and complete facts were known to the government and the Court, Mr. Cuker doubled down in his redirect examination of Mr. Penna, specif ically eliciting testimony to make it appear that the transaction at issue failed due to environment al concerns. Tr. 273:19

- 274:2 (Mr. Cuker asking Mr. Penna about a putative counter offer including “the environmental addendum”). 51

Fifth, it was Mr. Cuker’ s aforementioned line of questioning of Mr. Penna that, in part, led to the government’s and the Court’s learning of a possible discovery violation and, ultimately, to the Stipulation in which the true facts finally came to light. Thus, when Mr. Cuker ask ed Mr. Penna about what happened following the alleged environmental addendum’s having been provided to the would

- be purchasers

– again, an asserted fact for which there is no documentary evidence

– the government objected and, in response, the Court raise d what turned out to be an appropriate tone of concern:

MS. MINOTT : . . . This is the first time that we are seeing this document. This has not been produced to the Government.

51 As the Court has noted, however, the parties agree that there is no documentary evidence whatsoever that any counteroffer or any environmental addendum was ever transmitted to the buyers. Stip. ¶ 28.- 45

- So we would just ask that it be provided to us, if we could . . . be allowed to look at this material before it’s submitted or before anything

-- because this is the first time we are seeing this.

THE COURT: Mr. Cuker, if that's the case, there is going to be a problem.

MR. CUKER: We will certainly send it to them right now. We thought we had produced it. If not , it may be because it was not actually responsive to any specific discovery request

.
THE COURT: Oh, come on. It’s your [same] exhibit. It’s just more complete.

Tr. 274:22

– 275:11 (emphasis added)

. Mr. Cuker never made any attempt to show that the government’s discovery requests were inadequate or somehow did not cover the documents he failed to turn over to the government during discovery.

Sixth, while Mr. Cuker later asserted that his failure to provide to the government nearly one hundred documents during discovery was inadvertent, 52 the discovery violation furthered Plaintiffs’ narrative

– which ultimately proved false

– surrounding the purchase o ffer and the Pennas’ having declined to accept it, the latter pursuant to Mr. Cuker’s direction. The prejudice to the government was wel l articulated by its counsel (which the Court quotes at length due to its importance):

MR. SINGER: . . . [W]e did not receive a version of the offer

. PX64 is not the offer . It’s a permutation of a counter offer that we have seen no evidence was ever sent to the buyers, and, in fact, PX64 is what misled the United States

-- and, frankly, the Court

-- into believing, during Mr. Penna ’ s testimony, that there was a sales contract [that failed] when there was none. Your Honor may recall that you asked Mr. Pen na why Mr. Penna did not enforce the contract. The reason Mr. Penna did not enforce the contract is because there was no contract to enforce. What you’re seeing in PX64 is an internal write

up by the Pennas of the original sales contract that they

52 Tr. 698:6

– 8 (“I admit, I should have produced the complete agreements, and that was an inadvertence on our part”).- 46

- receiv ed. The original sales contract did not have . . . any of the handwritten text . . . or the stamps that we see . . .

THE COURT: Mr. Singer, I’m looking at Plaintiffs’ version of

– [PX]64 provided to the Court . . . in their exhibit binder, and my version has the buyers’ signatures, some stamps for initials without initials, and [other handwritten edits]. . . . So, I’m sorry, can you now explain

– it’s got the counter offer of [$746,000], like you said, and [$725,000] is crossed out, and the
counter offer of [$746,000] is written in. So is your point, Mr. Singer, that this is a mocked

- up version of the
counter offer but isn’t the offer standing alone?

MR. SINGER: That ’ s correct, Your Honor.

THE COURT: And you never got th [e] [offer itself] ?

MR. SINGER: We never received

-- I had never seen the clean offer , because that was why the Government was laboring under the [incorrect] assumption that the handwritten notes that Your Honor sees on page 1 of PX64, it was our understanding that those were th e terms of the original offer , and it was not until supplemental production this week that we understood that the original offer did not have the handwritten text that you see under paragraph 32(a), and also did not have . . . the strike

- out of the word “z oned” and the addition of “permitted to be used.” Those were all changes made in the formulation of a counter offer

.
THE COURT: Mr. Singer, when you said supplemental production, you mean the one essentially ordered by the Court during trial?

MR. SINGER: Yes. That’s exactly what I’m referring to . . . .

THE COURT: Okay. There was no . . . voluntary production where someone realized that some documents were missing, some production, on the Plaintiffs ’ side[?]

MR. SINGER: No. That’s correct, Your Honor.- 47

-

Tr. 699:14

- 701:17

; Def. 52(c) Mot. at 8 (“Plaintiffs’ counsel’s initial revelation was followed by a staggered production of additional documents that culminated in a stipulation the parties filed on August 6, 2020 . . .”)

. In response to Mr. Singer’s explanation, Mr. Cuker argued th at his discovery failure was harmless because it actually benefited the government insofar as “[t]he document we produced makes it look like the buyer, with full knowledge of the environmental problem, offer ed $746,000.” Tr. 701:21

– 23; see also Pl. Memo

. at 40. But, as the Court pointed out, “it also makes it look like . . . from the email, that the buyers backed out before the close date of the . . . acceptance period, when really the acceptance period had lapsed without the sellers signing the agreement .” Tr. 702:13

– 17. In that regard, the Court pressed Mr. Cuker to explain “[w]hat was the point

– - what were you trying to show with paragraph 110 [of the pretrial memorandum]?” Tr. 763:11

– 12 . Mr. Cuker responded: “Well, I’m just giving context of the history . . . . We simply wanted to present the evidence that didn’t come out that there was an offer and that the sale did not go through, but we did not say in here that it was withdrawn because of

e nvironmental concerns.” Tr. 763:1 3

– 18 (emphasis added). The Court still does not understand how Mr. Cuker’s reference to “evidence that didn’t come out” addresses the Court’s concern

. Moreover, Mr. Cuker’s response merely begs the further question of why Plaintiffs would have any interest in providing “context” or “history” that either is irrelevant or is beneficial to the government

. Admissible t rial evidence, by definition, is that which is probative regarding som e element of the case before the Court. Fed. R. Evid. 401 . Thus, the only reasonable answer to the Court’s question is that Mr. Cuker sought to induce the Court at least to infer that the failed transaction supported Plaintiffs’ central claim that the Penna Property is not sellable. 53 Put differently still, the point of the erroneous assertions in the Pennas’ pretrial memorandum

– when considered in context, and in light of the interrogatory responses (executed long before the pandemic) and Mr. Penna’s subsequent trial testimony

– can only be read as averring the very thing that Mr. Cuker never said in so many words: that the offer was withdrawn because of en vironmental concerns. The fact that Mr. Cuker never used that formulation verbatim is immaterial , particularly where, as here, the evidence necessary to determine the whole truth was never disclosed to the government until during trial and, even then, onl y when ordered to do so by the Court. Raymo v. Sec’y of Health & Hum. Servs. , 2014 WL 1092274, at *16 (Fed. Cl. Feb. 24, 2014) (failure to “tell the whole

53 Thus, the government fairly argued that “certainly the initial production that we got is not representative of what happened, and . . . we came in not having an understanding of what the

. . . sequence of events were in relation to what’s actually a pretty important issue at trial . . . So in that sense we were pretty unfairly disadvantaged . . . .” Tr. 435:25

– 436:9.- 48

-

truth . . . demonstrate[s] a lack of candor”); In re SoCal Sleep Centers, LLC , 2016 WL 4198534, at * 9 n.13 (B.A.P. 9th Cir. Aug. 8, 2016) (noting that the court was “particularly dismayed by [counsel’s] argument that, despite her ethical duty of candor to the tribunal, . . . she was free to use her ‘discretion’ to decide when to tell the bankruptcy
court the whole truth, rather than just part of the story. A half

- truth is a half

- lie”).
In sum, the Court agrees with the government that “Plaintiffs’ production omitted at least three key documents

– the buyer’s original offer, the draft counter

- offer, and t he Plaintiffs

- signed counteroffer” and thus “never answered the United States’ [interrogatory] questions before introducing these documents at trial.” Def. 52(c) Mot. at 39

- 40 (citing and discussing DX328, DX330, and DX332). The Court further agrees that “[t]hese three documents are critical to evaluating Plaintiffs’ substantiality claims and Plaintiffs have provided no substantial justification for their failure to produce them in discovery or at any point prior to trial.” Id. Indeed, Mr. Cuker did not produce the documents in question until the Court ordered him to do so. Pl. Resp . at 33 (acknowledging supplemental production of documents during trial “[p]ursu ant to court order”). The result is that the government was denied “the opportunity to explore the significance of these documents in discovery.” Def. 52(c) Mot. at 41.

To be clear, the Court is not criticizing Mr. Cuker for creatively arguing about what the Court should conclude based upon a proven set of facts, or for arguing about the significance of those facts within the substantive legal framework applicable in this takings case ( e.g., Ridge Line and Moden )

– all of whi ch would constitute zealous advocacy by counsel . What a lawyer may not do, however, is decide on the conclusion he or she wants the Court to reach, and then selectively shape and edit the facts

– i.e. , by making erroneous factual assertions in briefs and eliciting erroneous testimony at trial

– all while relying upon carefully crafted verbiage to preserve plausible deniability and failing to disclose documents that would otherwise significantly undermine the desired conclusion.
In considering whether to is sue sanctions here, the Court is mindful of the rationale underlying the duty of candor, to the extent simple honesty is insufficient:

The duty of candor is an important part of our justice system for several reasons. First, . . . the duty of candor is an integral part of ensuring that our system of justice functions properly because first and foremost an attorney is an officer of the court, an institution whose purpose is to seek the truth in order to do justice . . . . Second, the duty of candor is impor tant to providing clients with an attorney ’ s “independent professional judgment” so as to not create unreasonable client- 49

- expectations, which when dashed can undermine confidence in the justice system

. . . . Third, the duty of candor helps promote judicial efficiency and avoid crowding the court’s docket with frivolous actions.

Bautista v. Star Cruises , 696 F. Supp. 2d 1274, 1281 (S.D. Fla. 2010) (internal citations omitted). We are particularly cognizant of the following admonition from the United States Court of Appeals for the Fourth Circuit: “The system can provide no harbor for clever devices to divert the search, mislead opposing counsel or the court, or cover up that which is necessary for justice in the end.” United States v. Shaffer Equip. Co. , 11 F.3d 450, 457

- 58 (4th Cir. 1993).
With those principles in mind, and after careful and deliberate consideration, the Court reluctantly concludes that it cannot ignore Mr. Cuker’s conduct in this case. In deed, as much as the Court and the government both wasted an inordinate amount of time discovering and deciphering facts that should never have been obscured, the Court is troubled the most, by far, about the impact of Mr. Cuker’s handling of this matter o n the Pennas themselves. Would the sale of the Penna Property have been successful had the Pennas been counseled differently

– i.e. , to promptly accept the purchase o ffer and to provide any environmental disclosures (if necessary) simultaneously with that acceptance ? Was Mr. Cuker concerned about how a successful sale would impact the viability of this case that had be en pending since 2016 (and did any such concerns create a conflict) ? What is the likelihood that this litigation would have ende d differently but for the Stipulation that Mr. Cuker was all but compelled to negotiate with the government? If the government had been provided with all of the documentation during discovery , would a tougher deposition of Mr. Penna (and possibly Plaintif fs’ experts) have convinced the Pennas that they should abandon their case, or, perhaps, at least modify their takings and damages theories ( and/ or trial strategy) ? Would the government have improved their chances for at least partial summary judgment and possibly have avoided the expense of trial imposed on both parties ? These are all questions the answers to which are unknowable, but they illustrate the harm to the Pennas , at a minimum. The harm to the government and the Cou rt is apparent.
The Court’s authority to impose sanctions given the above findings is clear:
Many courts, including the U.S. Supreme Court, the U.S. Court of Appeals for the Federal Circuit, and the U.S. Court of Federal Claims, have held that “[a]ll jud icial bodies inherently have the power to sanction parties, or their attorneys, for failure to conform to their rules or to respect their dignity, or for unnecessarily impeding the tribunals'- 50

- business.” Tecom, Inc. v. United States , 2006 WL 5616336, *5 (Fe d. Cl. May 4, 2006); see also In re Bailey , 182 F.3d 860, 864, 864 n. 4 (Fed. Cir. 1999) (citing inter alia Chambers v. NASCO , Inc. , 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991), and explaining that “[t]he United States Supreme Court and federal cour ts of appeals have repeatedly recognized that regulation of attorney behavior is an inherent power of any court of law and falls within the discretion of such court”).
Multiservice Joint Venture, LLC v. United States , 85 Fed. Cl. 106, 112 (2008) (explainin g that “[ t]his Court’s inherent authority to enter sanctions is embodied in [RCFC 11] (requiring a reasonable inquiry into statements alleged in papers filed), RCFC 16(f) (authorizing sanctions for violations of pretrial orders), RCFC 37 (authorizing sanct ions for failure to cooperate during discovery), and 28 U.S.C. § 1927 (allowing the Court to impose costs upon any attorney who ‘ multiplies the proceedings in any case unreasonably and vexatiously ’ ) ” ) , aff’d , 374 F. App’x 963 (Fed. Cir. 2010) ; see also RCFC 26(a)(1)(A), RCFC 26(e) . “Although the language of RCFC 37(b) would suggest that a violation of a judicial order is necessary before imposing sanctions, ‘a formal, written order is not required, where a litigant engages in abusive litigation practices.’” Multiservice Joint Venture , 85 Fed. Cl. at 112

– 13 (quoting Dotson v. Bravo , 202 F.R.D. 559, 570 n.68 (N.D. Ill. 2001), aff’d , 321 F.3d 663 (7th Cir. 2003)). Moreover, although the Court finds that both parties were harmed by the discovery v iolation , “[t]he Court does not merely have the inherent authority to sanction conduct designed to harm a party, but also to sanction conduct that delays and disrupts the judicial process.” Precision Pine and Timber, Inc. v. United States , 2001 WL 1819224, *4 (Fed. Cl. Mar. 6, 2001).
All of that said, the government declines to press the duty of candor issue, see Def. 52(c) Mot. at 44 , and thus the Court similarly does not reach that issue here . On the other hand, the government does seek sanctions for the discovery violation. Id . at 49. T he Court agrees with the government that imposition of sanctions is warranted for the discovery violation , 54 and that Mr. Cuker’s overall conduct may be taken into

54 The Court agrees wi th the government that while Mr. Cuker apologizes for the discovery violation on behalf of Plaintiffs, Mr. Cuker makes no attempt to “demonstrate in their brief why their failure to disclose all of the documents .

. . is not a discovery violation or why th eir failure was substantially justified.” Def. Rep. at 23

– 24. The Court further agrees that Plaintiffs instead improperly attempt to “place the blame on the United States for failing to ask for something it did not know existed.” Id. at 24. Indeed, the government correctly explained that “Plaintiffs had superior knowledge of what transpired during the 2018 negotiations, and they perpetuated that knowledge gap by failing to answer interrogatory questions, by failing to produce documen ts, and by misstating the facts of the negotiations.” Id. Mr. Cuker’s argument that the government should have policed his work better does not come close to qualifying as a- 51

-

consideration in fashioning such sanctions

. See, e.g., Monsanto Co. v. E.I. Du Pont de Nemours & Co. , 748 F.3d 1189, 1201 (Fed. Cir. 2014) (holding that “ the district court properly exercised its dis cretion in imposing targeted sanctions by carefully fitting its sanctions to the conduct that it found to be improper ”) ; see also Adana Investing, Inc. v. Wells Fargo Bank, N.A. , 2017 WL 3668553, at *2 (S.D. Fla. Apr. 10, 2017) (“ Based on the Court ’ s review of Defendants ’ overall conduct throughout litigation, the Court finds sanctions are warranted. ” (emphasis added)); Grethen v. Clarke , 2015 WL 13387681, at *8 (E.D. Va. Nov. 24, 2015) (finding “ that the sanction of dismissal is the only appropriate

s anction given Plaintiff ’ s overall conduct in this litigation ” (emphasis added)) , aff’d , 672 F. App ’ x 300 (4th Cir. 2017) ; Lyell Theatre Corp. v. Loews Corp. , 91 F.R.D. 97, 99 (W.D.N.Y. 1981) (“ The court should look to the overall conduct of the litigation before imposing any sanction

. . . . ” (emphasis added)) , aff’d , 682 F.2d 37 (2d Cir. 1982)

. Accordingly , the Court orders Mr. Cuker to reimburse the government for attorney’s fees, costs, and expenses arising from the time its counsel was forced to spend on: (1) reviewing the documentation Plaintiffs provided to the government during trial as a result of the Court’s order to do so; (2 ) negotiating and preparing the resulting Stipulation to mitigate any prejudice to the government ; and (3) preparing and filing the government’s responses (in its RCFC 52(c) motion) to the Court’s questions contained in its August 10, 2020 order. 55

In addition, the Court finds that an adverse inference is warranted. Plaintiffs seek to avoid the results of the Stipulation , arguing that even though “the sale ‘did not fail because of environmental issues[,]’” that “does not mean that a sale for $725,00 0 could have succeeded in spite of environmental issues. ” Pl. Resp . at 10 (emphasis in original). T he Court will not permit Plaintiffs to now argue that the Court should infer that the sale ultimately may have failed anyhow as a result of the contamination. Given Plaintiffs’ failure to disclose responsive documents consistent with this Court’s discovery rules, and the resulting Stipulation, the government is entitled to an adverse inference that the sale did not fail

– and would not have failed

– due to environment al concerns. Plaintiffs cannot be permitted to avoid the implication of the Stipulation. Moreover, such an adverse inference is consistent with Mr. Cuker’s admission that the documentary evidence produced during discovery “disclosed problems with zoning and liens which could have caused the deal to fail”

– thus undercutting the notion that
substantial justification for the prejudicial discovery violation. Council for Tribal Emp. Rts. v. United States , 110 Fed. Cl. 244, 250 (2013) (sanctioning the government where it “had no substantial justification for its categorical refusal to respond . . . [to] discovery requests”).

55 Although the Court would be justified in permit ting the government to seek costs for specific depositions that may have been less than fully productive or helpful due to the previously undisclosed documents, the Court believes that the sanction delineated herein is sufficient to deter future such condu ct and, in the process, to protect the public and the Court.- 52

-

any contamination somehow was the sole or “but for” cause of the Pennas’ putative inability to sell their Property. Pl. Resp . at 40. 56 To be clear, the Court does not rely upon the adverse inference in granting the government’s RCFC 52(c) motion, but nevertheless issues this adverse inference sanction for the sake of the completeness of the record in this case.

Because Mr. Cuker , “[and] not his client, was responsible for the untimely discovery

. . . , ” Mr. Cuker shall “ pay the sanctions himself rather than passing the sanctions on to his client.” Canvs Corp. v. United States , 104 Fed. Cl. 727, 734 (2012) (citing cases). “ The value of the attorney’s fees will be measured by the reasonable number of hours worked multiplied by the prevailing market rates, that is ‘those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.’” Id. (quoting Pac. Gas & Elec. Co. v. United States , 82 Fed.Cl. 474, 487

– 88 (2008) ); see also Multiservice Joint Venture , 374 F. App’x. at 966. T he sanctions assessed represent the Court’s attempt to compensate the government “for losses sustained due to [the] discovery violations, . . . and to deter other litigants from engaging in similar discovery abuses.” SynQor, Inc. v. Artesyn Techs., Inc. , 709 F.3d 1365, 1386 (Fed. Cir. 2013) (applyi ng regional circuit law, and noting that “[t]he sanctions awarded bear a ‘reasonable relationship’ to the harm that occurred, and serve as a deterrent against similar discovery violations by future litigants” (citing BMW of N. Am. v. Gore , 517 U.S. 559, 58 0

– 81 (1996))); see also K

- Con Bldg. Sys., Inc. v. United States , 106 Fed. Cl. 652, 663 (2012) (holding that “the court has even greater discretion to award costs than it does to award the default sanction because the former is not limited to discovery viol ations that lack substantial justification or cause harm to the opposing party”).
The government and Mr. Cuker shall endeavor to stipulate to the awarded costs, expenses, attorney’s fees, and a payment schedule (if warranted), and , if they so agree, shall file a joint statement listing the amount of such items with the court no later than April 6, 2021 . In the event that the government and Mr. Cuker are unable to agree, the government shall file with the court a bill of their costs, expenses, and attorney ’s fees, together with any necessary explanation or supporting documentation, on or before April 9, 2021 . Mr. Cuker shall then file his response no later than April 23, 2021

.

* * * * *

56 See also Def. Rep. at 5 (“The stipulation removes environmental contamination as a basis for withdrawal of the 2018 offer, and it undermines Plaintiffs’ and their experts’ claim that the proper ty could not be sold.”).- 53

-

The Court has great sympathy for the Pennas ’ overall situation

. And w hile no reasonabl e property owner would be pleased to learn that their land may be contaminated with potentially harmful chemicals , Plaintiffs’ evidence simply does not support the claim that they have suffered a compensable taking. That is particularly true where, as here, there is almost no evidence demonstrating any actual impact of PFOS and PFOA on human health , no credible evidence demonstrating that the Property cannot be sold, and no evidence of negative environmental stigma impacting the Property’s valuation. Indeed, at least one of Plaintiffs’ exhibits, admitted into evidence, notes that the “EPA is working to improve its understanding of the prevalence and toxicity of these chemicals to determine if safe drinking water regulatory limits are needed” and that “[i]t is not possible to link exposure to PFOS and PFOA in water to a person’s individual health issue s.” PX 29 (emphasis added) (explaining that “PFOS, PFOA . . . are unregulated contaminants that are being sampled for the first time in Public Water Systems” (emphasis added) ). The Court recognizes that the science and the regulatory environment may well be evolving towards Plaintiffs’ view of the contamination, 57 but the evidence presented to the Court during trial is very far from what is required to recover on their takings claim. At best, on this record, the Pennas’ “claims against the government are moral, not legal.” Calvin v. United States , 63 Fed. Cl. 468, 475 (2005).

VII. CONCLUSION
For the above reasons, the Pennas have failed to prove a compensable taking under the Fifth Amen d ment and, accordingly, the government’s RCFC 52(c) motion for judgment on partial findings is GRANTED

. Following a determination of fees, costs, and expenses, an appropriate order will be entered in this matter , instructing the Clerk to enter judgment for defendant, the United States.

It is so ORDERED.

s/ Matthew H. Solomson Matthew H. Solomson Judge

57 S. Boxerman, B. Bolen and M. Morales, Cos. Should Brace For More EPA Action On PFAS Under Biden , Law360.com (Mar. 12, 2021), available at https://www.sidley.com/en/insights/publications/2021/03/cos

- should

- brace

- for

- more
- epa
act ion

- on
- pfas

- under

- biden (last accessed Mar. 15, 2021).