United States Court of Appeals 

for the Federal Circuit ______________________ 

OTAY MESA PROPERTY, L.P., RANCHO VISTA 

DEL MAR, OTAY INTERNATIONAL, LLC, OMC 

PROPERTY, LLC, D & D LANDHOLDINGS, LP,

INTERNATIONAL INDUSTRIAL PARK, INC.,

(also known as Rancho De La Fuente),

Plaintiffs-Appellants

KYDDLP & RDLFGFT NO. 1, LLC.,

Plaintiff

v.

UNITED STATES,

Defendant-Cross Appellant

______________________ 

2013-5122, 2014-5002

______________________ 

Appeals from the United States Court of Federal 

Claims in Nos. 06-CV-0167, 06-CV-0877, 06-CV-0876, 06-

CV-1670 and 06-CV-1671, Judge Thomas C. Wheeler.

______________________ 

Decided: March 6, 2015

______________________ 

ROGER J. MARZULLA, Marzulla Law LLC, Washington, 

DC, argued for plaintiffs-appellants. Also represented by 

NANCIE GAIL MARZULLA. 
2 OTAY MESA PROPERTY, L.P. v. US

JOHN EMAD ARBAB, Environment and Natural Resources Division, United States Department of Justice, 

Washington, DC argued for defendant-cross-appellant. 

Also represented by SAM HIRSCH. 

______________________ 

Before TARANTO, SCHALL, and CHEN, Circuit Judges.

SCHALL, Circuit Judge. 

DECISION

This is the second time this case has been before us. 

In Otay Mesa Property, L.P. v. United States, 670 F.3d 

1358 (Fed. Cir. 2012) (“Otay Mesa I”), we held that the 

United States was liable to plaintiffs Otay Mesa Property, 

L.P., Rancho Vista Del Mar, Otay International, LLC, 

OMC Property, LLC, D & D Landholdings, LP, and International Industrial Park, Inc. (collectively, “Otay Mesa”) 

for the taking of property owned by them.1 Specifically, 

we ruled that the U.S. Border Patrol’s placement of 

motion sensors on five separate parcels of land owned by 

Otay Mesa adjacent to the Mexican border in Southern 

California constituted the taking of permanent easements 

over the parcels. Id. at 1365. We remanded the case to 

the United States Court of Federal Claims for a determination of the damages to which Otay Mesa was entitled as 

a result of the taking. Id. at 1369–70. 

On remand, the Court of Federal Claims held (1) that 

Otay Mesa was entitled to no damages for the taking of 

an easement over land that could be developed for industrial use (“the development property”); (2) that it was 

1 In relevant part, the Fifth Amendment requires 

that the United States pay “just compensation” whenever 

it takes private property for public use. U.S. Const. 

amend. V (“[N]or shall private property be taken for 

public use, without just compensation.”). 

 
OTAY MESA PROPERTY, L.P. v. US 3

entitled to damages in the amount of $455,520 for the 

taking of an easement over land that could be used for 

environmental mitigation purposes (“the mitigation 

property”); and (3) that interest on the $455,520 damages 

award should run from August 28, 2008, the date the 

court found Otay Mesa became aware of the taking as a 

result of the filing of a stipulation of liability by the 

government. Otay Mesa Prop., L.P. v. United States, 110 

Fed. Cl. 732, 743–47 (2013) (“Otay Mesa II”) (interest on 

the damages award was initially deemed to run from 

October 16, 2008, but the date was adjusted following a 

motion for reconsideration, 111 Fed. Cl. 422, 424 (2013)

(“Reconsideration Decision”)). 

Otay Mesa appeals the decision of the Court of Federal Claims denying damages for the taking of an easement 

over the development property. It also appeals the decision of the court to compute interest on the $455,520 

damages award from August 28, 2008, rather than from 

the dates sensors were first installed on the parcels 

containing the mitigation property, as stated in the government’s stipulation of liability. For its part, the government cross-appeals the damages award for the taking 

of an easement over the mitigation property.

For the reasons set forth below, we affirm the decision 

of the Court of Federal Claims denying damages for the 

taking of an easement over the development property. 

We also affirm the decision of the court awarding Otay 

Mesa $455,520 in damages for the taking of an easement 

over the mitigation property. However, we vacate the 

decision of the court computing interest on the $455,520 

damages award from August 28, 2008. As we explain, 

Otay Mesa is entitled to interest computed from when

sensors were first placed on its property. The dates the 

Border Patrol first placed sensors on Otay Mesa’s property are set forth in the government’s stipulation of liability. 

We thus affirm-in-part, vacate-in-part, and remand. On 

remand, the Court of Federal Claims will determine the 
4 OTAY MESA PROPERTY, L.P. v. US

amount of interest to which Otay Mesa is entitled on the 

$455,520 damages award.

BACKGROUND

The facts of the case are set forth in Otay Mesa I and 

in the several decisions of the Court of Federal Claims. 

We recite here the facts pertinent to the issues now before 

us. 

I. 

Otay Mesa owns eleven contiguous parcels of largely 

undeveloped land adjacent to the Mexican border in the 

Otay Mesa area of San Diego County. Otay Mesa I, 670 

F.3d at 1360. Five of those parcels, Nos. 1, 3, 4, 5, and 10, 

are at issue in this case. Beginning in April 1999 and 

continuing through November 2005, the Border Patrol 

placed a total of fourteen motion sensors on those parcels 

in order to detect illegal immigrants entering the United 

States from Mexico. The motion sensors are approximately one cubic foot in size and are buried underground, 

except for a one foot antenna that remains above the 

surface of the soil. Joint Appendix (“J.A.”) 1792 at ¶ 3; see 

also Otay Mesa II, 110 Fed. Cl. at 734. 

In 2006, Otay Mesa filed suit in the Court of Federal 

Claims alleging, inter alia, that the installation of the 

sensors constituted a taking of Otay Mesa’s property, 

entitling it to “just compensation” under the Fifth 

Amendment’s Takings Clause. Otay Mesa Prop., L.P. v. 

United States, 86 Fed. Cl. 774, 775 (2009) (“Liability 

Decision”).2 On August 28, 2008, prior to the trial on 

liability, the government filed a document in which it 

2 From our review of the record, it appears that 

plaintiff KYDDLP & RDLFGFT No. 1, LLC., is not named 

as an appellant here because the parcel it owns, or at one 

time owned, No. 9, is not at issue on appeal. 

 
OTAY MESA PROPERTY, L.P. v. US 5

stipulated that “by virtue of its placement of the 14 sensors on the five parcels of land, it had taken a property 

interest in the nature of an easement over the parcel of 

land on which the sensors have been placed.” J.A. 1793 at 

¶ 6; see also Liability Decision, 86 Fed. Cl. at 777, 790–91. 

The document stated that the Border Patrol had installed 

sensors during the period beginning April 1999 and 

ending November 2005. The document described the 

easement, in relevant part, as: 

A perpetual and assignable easement to locate, 

construct, operate, maintain and repair or replace 

the specified underground seismic intrusion sensors on the specified parcels, including the right to 

ingress and egress to each sensor location. The 

easement shall be deemed to have commenced on 

the date the sensor is listed as having been installed, and will continue until the sensor is no 

longer needed or the property is developed. Each 

sensor is and shall be located so as not to affect 

the functionality of the property. Should the 

landowner desire to develop any portion of the 

subject parcel, the sensor will be removed or redeployed upon 30 days written notice that a grading 

permit has been issued by the County of San Diego permitting development of all or a portion of 

the property. Upon removal of a sensor, the portion of the easement relating to that sensor shall 

terminate. 

J.A. 1794 at ¶ 7; see also Otay Mesa I, 670 F.3d at 1361–

62. 

Based on the government’s stipulation, the Court of 

Federal Claims held that the government was liable for 

the physical taking of a temporary easement over the five 

parcels for the purpose of installing and operating the 

sensors. The court reserved the determination of damages for subsequent proceedings. Otay Mesa I, 670 F.3d at 
6 OTAY MESA PROPERTY, L.P. v. US

1362. Following a trial on damages, the court determined 

that Otay Mesa was entitled to compensation in the 

amount of $3,043,051, plus interest for the taking of the 

easement. Id.

II.

The government appealed the decision of the Court of 

Federal Claims. According to the government, the trial 

court incorrectly ruled that the taking of the easement 

was temporary rather than permanent. That ruling, the 

government contended, led the court to use the fair market rental value method of determining compensation, 

rather than the before-and-after method, which resulted 

in an erroneous calculation of Otay Mesa’s damages.3 The 

government argued that, under the before-and-after 

method, Otay Mesa was entitled to only a nominal award, 

in view of the court’s finding that the use of the sensors 

had not resulted in any restriction on the functionality of 

the property. Id. at 1363. For its part, Otay Mesa crossappealed the Court of Federal Claims’ decision to limit 

the scope of the taking to five parcels of land (Nos. 1, 3, 4, 

5, and 10) and the time period (April 1999 through November 2005) identified in the government’s stipulation. 

Id.

In Otay Mesa I, we held that the Border Patrol’s blanket easement to install, maintain, and service sensors on 

Otay Mesa’s property constituted a permanent physical 

taking. Id. at 1365. We thus remanded the case to the 

3 As we noted in Otay Mesa I, the usual measure of 

compensation for a temporary taking is the fair rental 

value of the property for the period of the taking, whereas, for a permanent taking, the owner is typically entitled 

to the diminution in the fair market value of the property. 

670 F.3d at 1364. The latter measure of compensation is 

sometimes referred to as the “before-and-after” method. 

 
OTAY MESA PROPERTY, L.P. v. US 7

Court of Federal Claims for a redetermination of damages. We stated that, “[o]n remand, the court should determine damages based upon the Border Patrol having taken 

a permanent blanket easement over Otay Mesa’s property, as set forth in the stipulation.” Id. at 1368. We agreed 

with the government that the Court of Federal Claims 

erred in ruling that the Border Patrol had temporarily 

taken Otay Mesa’s property. We did not, however, endorse the government’s view that Otay Mesa’s damages 

should be determined based upon a before-and-after 

methodology. Id. at 1369. Rather, we stated: 

As noted, the government has argued before 

us that Otay Mesa’s damages should be determined based upon a before-and-after methodology. 

While diminution in value is a useful methodology 

in many cases, we reiterate that the focus of the 

damages analysis must always remain on awarding just compensation for what has been taken. 

To award just compensation, a court must sometimes deviate from the traditional permanent taking-diminution in value and temporary takingrental value approaches.

Id.

We thus instructed that, on remand, the Court of 

Federal Claims “will have discretion in identifying a 

methodology that fulfills the goal of awarding Otay Mesa 

just compensation.” Id. We emphasized that what was 

important was for the focus to be on awarding just compensation for exactly what had been taken in the case. 

We identified what had been taken as “a minimally 

invasive permanent easement to use undeveloped land 

that is unilaterally terminable by Otay Mesa.” Id. at 

1368.

Turning to Otay Mesa’s cross-appeal, we concluded 

that the Court of Federal Claims had not clearly erred 

when it limited the scope of the taking to the parcels of 
8 OTAY MESA PROPERTY, L.P. v. US

land and the period of time identified in the government’s 

stipulation. Id. at 1370. Accordingly, we affirmed-in-part 

and vacated-in-part the decision of the Court of Federal 

Claims. We remanded the case to the court for further 

proceedings consistent with our opinion. Id.

III.

On remand, the Court of Federal Claims approached 

the damages issue by considering the two types of land 

that make up parcels 1, 3, 4, 5, and 10. The court determined, and the parties generally agree, that of the 897 

acres of land at issue, approximately 278 acres are suitable for development (the development property), while 

approximately 619 acres are suitable for environmental 

mitigation purposes (the mitigation property).4 Otay 

Mesa II, 110 Fed Cl. at 734, 738, 740. The court held that 

Otay Mesa was entitled to no damages for the taking of 

an easement over the development property. Based upon 

the evidence before it, the court determined that the 

sensor easement “would have no material effect” on the 

development property because Otay Mesa could have any 

sensors removed upon thirty days written notice that the 

4 In valuing real property, a primary consideration 

is its “highest and best use”—i.e., its most profitable use. 

Some of Otay Mesa’s property’s highest and best use is as 

mitigation land, which is land that qualifies under federal 

and state regulations for use by developers to offset 

development of other environmentally sensitive land. 

Otay Mesa II, 110 Fed. Cl. at 735–36. Because developers 

may find it difficult to locate appropriate mitigation land, 

landowners can profit from selling certain land that 

compensates for adverse effects on protected species and 

habitats. Id. at 736. The balance of Otay Mesa’s property 

has a highest and best use as land suitable for standard 

industrial development. Id. at 738.

 
OTAY MESA PROPERTY, L.P. v. US 9

property had been approved for development. Id. at 734, 

744. 

The Court of Federal Claims determined, however, 

that Otay Mesa was entitled to $455,520 in damages for 

the taking of an easement over the mitigation property. 

This figure represented five percent of the $9,110,400 fair 

market value appraisal for the mitigation property. Id. at 

747. Faced, on the one hand, with Otay Mesa’s argument 

that the placement of the sensors on the mitigation property had reduced the value of the property by forty percent, and on the other, by the government’s contention 

that the sensor placement had not had any effect on the 

value of the property, the court stated:

Despite the Court’s conclusion that the conflicting 

evidence tilts in Defendant’s favor, the Court is 

not convinced that a landowner would willingly 

convey an interest in land to the Government for 

absolutely no compensation whatsoever, nor that 

the encumbrance has absolutely no effect on the 

value of the subject property. . . . Here, Plaintiffs 

undeniably face a risk that their environmentally 

sensitive property will not be approved for mitigation use. The Court does not assess this risk to be 

anywhere near the 40 percent level advocated by 

[Otay Mesa’s expert], but the risk is significant 

enough that the Court cannot accept the Government’s position of a zero impact either. For Plaintiffs to assume this risk without any compensation 

for the admitted Fifth Amendment taking would 

leave Plaintiffs in a worse position than before the 

taking occurred. . . . [I]t is plausible that the Government’s sensor easement might prevent the use 

of Plaintiffs’ property for mitigation purposes. 

Even if this outcome never occurs, Plaintiffs’ assumption of the risk should be ascribed some value.
10 OTAY MESA PROPERTY, L.P. v. US

Id. at 746–47.

In its decision, the Court of Federal Claims awarded 

Otay Mesa interest from October 16, 2008, “the date,” the 

court stated, “on which [Otay Mesa] became aware of the 

taking through the Government’s filing of the stipulation.” Id. at 747. Otay Mesa moved for reconsideration 

on the issue of interest. It argued that interest should 

run from April 1999, when the first sensor was installed 

on its property, not from the date when the government 

filed its stipulation of liability in 2008, which, in any 

event, was August 28, 2008, not October 16, 2008. The 

court granted the motion for the limited purpose of setting 

August 28, 2008, as the starting date for the computation 

of interest. Reconsideration Decision, 111 Fed. Cl. at 424. 

In all other respects it denied it. The court acknowledged 

“the existence of ample case law holding that interest in a 

Fifth Amendment taking should run from the date of the 

taking.” Id. at 423. It determined, though, that that 

proposition did not apply in this case. The court pointed 

out that, in arriving at its $455,520 damages award, it 

had ascribed a value (five percent) to the risk Otay Mesa 

assumed in having its property subjected to the government’s easement. Pointing to August 28, 2008, the court 

stated that, before that date, “only the Government knew 

that the sensors were in use on Otay Mesa’s property.” 

Id. at 424. The court reasoned, “[i]f no person or entity 

outside of the Government was aware of the sensors until 

the disclosure date in 2008, the risk on which the Court’s 

damages award is based did not exist until 2008.” Id.

On July 22, 2013, the Court of Federal Claims entered 

judgment awarding Otay Mesa damages in the amount of 

$455,520, with interest computed on that amount from 

August 28, 2008. Otay Mesa’s current appeal and the 

government’s cross-appeal followed. We have jurisdiction 

pursuant to 28 U.S.C. § 1295(a)(3).
OTAY MESA PROPERTY, L.P. v. US 11

DISCUSSION

Following a damages trial, we review the Court of 

Federal Claims’ legal conclusions de novo and its factual 

findings for clear error. Ind. Mich. Power Co. v. United 

States, 422 F.3d 1369, 1373 (Fed. Cir. 2005); Am. Pelagic 

Fishing Co. v. United States, 379 F.3d 1363, 1371 (Fed. 

Cir. 2004). “A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court 

on the entire evidence is left with the definite and firm 

conviction that a mistake has been committed.” Renda 

Marine, Inc. v. United States, 509 F.3d 1372, 1378 (Fed. 

Cir. 2007) (quoting United States v. U.S. Gypsum Co., 333 

U.S. 364, 395 (1948)). 

As noted above, Otay Mesa appeals the denial of 

damages for the taking of an easement over the development property. The government cross-appeals the award 

of damages for the taking of an easement over the mitigation property. And Otay Mesa appeals the court’s decision not to award interest from the date sensors were first 

installed on the parcels containing mitigation property.5 

We first address Otay Mesa’s appeal with respect to the 

development property. 

I.

A.

The Court of Federal Claims found that the “Border 

Patrol’s sensor easement would have no material effect on 

5 In its motion for reconsideration, Otay Mesa requested that interest run from the date the first sensor 

was installed, in April 1999. Reconsideration Decision, 

111 Fed. Cl. at 424. On appeal, Otay Mesa argues that 

interest should run from the date a sensor was first 

installed on each respective parcel containing mitigation

property. 

 
12 OTAY MESA PROPERTY, L.P. v. US

the developable land” and denied damages for the government’s easement over that portion of Otay Mesa’s 

property. Otay Mesa II, 110 F.3d at 734. While Otay 

Mesa’s expert witness testified that the easement caused 

a ten percent diminution in the value of the development 

property, the court found much of that evidence to be 

“minimally persuasive,” and instead credited the government’s evidence to the contrary. After weighing the 

competing evidence, the court ultimately held that Otay 

Mesa “failed to prove actual damages with respect to a 

diminution in value of developable land.” Id.

On appeal, Otay Mesa contends that it met its burden

of showing a fair and reasonable approximation of damages as to the development property. See Ark. Game & 

Fish Comm’n v. United States, 736 F.3d 1364, 1379 (Fed. 

Cir. 2013); Precision Pine & Timber Inc. v. United States, 

596 F.3d 817, 833 (Fed. Cir. 2010). It argues that all that 

was required to prove its damages case was “reasonable 

certainty,” not absolute precision. Otay Mesa states that, 

in addition to its diminution in value theory, it presented 

evidence showing that other parties, such as utility companies and the Border Patrol itself, paid relatively large 

sums for easements over the development property in 

question and other nearby land owned by Otay Mesa. It 

points to testimony suggesting that the very existence of 

the easement could negatively affect the ability to receive 

project approvals. Otay Mesa argues that the court 

ignored much of this evidence and, thus, its decision to 

deny damages was clearly erroneous. It contends that the 

court’s holding amounts to a conclusion that Otay Mesa 

would have conveyed the easement to the government for 

no consideration at all. 

In response, the government contends that Otay Mesa’s evidence was not ignored, but, rather, was considered

and found to be insufficient, or was not probative of 

damages. The government points out that the Court of 

Federal Claims discounted Otay Mesa’s expert witness’s 
OTAY MESA PROPERTY, L.P. v. US 13

valuation as being premised on faulty assumptions. The 

government also states that evidence relating to prior 

easements over Otay Mesa’s property was not presented 

during the remand trial and that, in any event, those 

easements were not probative of damages because they 

were not examples of the “minimally invasive” or “unilaterally terminable” easements at issue here. Unlike the 

prior easements, the government points out, the sensor 

easements require the Border Patrol to remove or redeploy the sensors upon thirty days written notice. The 

government reasons that, because Otay Mesa failed to 

provide reliable expert witness evidence or to produce any 

comparable easement sales, the court’s decision to credit 

the government’s valuation and to deny damages was not

clearly erroneous. 

B.

We conclude that the Court of Federal Claims’ decision to deny damages for the easement over 278 acres of 

development property was not clear error. As an initial 

matter, the fact that a taking occurred does not itself 

establish what compensation should be awarded. What is 

critical in the determination of just compensation is not 

the gain to the government from the taking, but the 

actual loss to the landowner. United States ex rel. Tenn. 

Valley Auth. v. Powelson, 319 U.S. 266, 281 (1943) (noting 

the “well settled rule” that it is “the owner’s loss, not the 

taker’s gain, which is the measure of compensation for the 

property taken”); United States v. Chandler-Dunbar 

Water Power Co., 229 U.S. 53, 80–81 (1913) (“[I]n a condemnation proceeding, the value of the property to the 

government for its particular use is not a criterion.”). 

Once a taking has been established, it is the landowner

who bears the burden of proving an actual loss has occurred. Bd. of Cnty. Supervisors of Prince William Cnty., 

Va. v. United States, 276 F.3d 1359, 1364 (Fed. Cir. 2002). 

To carry its burden, the landowner must show actual 

damages “with reasonable certainly,” which “requires 
14 OTAY MESA PROPERTY, L.P. v. US

more than a guess, but less than absolute exactness.” 

Precision Pine, 596 F.3d at 833. 

During the trial on remand, Otay Mesa presented just 

one expert, Randy Tagg. Mr. Tagg, who is an appraiser, 

testified as to the damages resulting from the taking of an 

easement over the development property. Mr. Tagg’s 

assertion that there was a ten percent diminution in the 

value of the development property was based on the prior 

testimony of a witness from the 2009 trial and on the 

results of a telephonic market survey. Otay Mesa II, 110 

F.3d at 743. In weighting the credibility of Mr. Tagg’s 

damages assessment, the Court of Federal Claims found

that the prior testimony contained “pervasive generalities” and was based on the “mistaken assumption” that 

the easement does not limit the number of sensors. Id. 

The court also found that Mr. Tagg’s telephonic market 

survey of land developers was “casual, undocumented, 

and narrow,” consisting of only seven telephone calls and 

four responses. Id. at 744. Two of the responsive participants, the court noted, refused to provide any estimate of 

diminution of value, while the other two responses were 

“minimally persuasive,” as they were also premised on the 

erroneous assumption that the easement does not limit 

the number of sensors allowed on the property. Id. Mr. 

Tagg, the court stated, “exchanged no written correspondence with these developers, and his work files [did] not 

contain any notes of his conversations with them.” Id. at 

739. It was the judgment of the court that, considering 

foundational flaws of Mr. Tagg’s valuation, a “ten percent 

reduction in value [was] dubious.” Id. at 744. 

On the other hand, the Court of Federal Claims found 

the testimony of the government’s expert witness—who 

testified that the easement would have no impact on the 

development property—to be “much more instructive.” Id. 

The government’s expert, Stephen Roach, an appraiser in 

San Diego, based his valuation on the wording of the 

easement itself. First, Mr. Roach concluded that the 
OTAY MESA PROPERTY, L.P. v. US 15

easement was limited to no more than fourteen sensors. 

Id. at 740. Second, he found that the language stating 

that, “should the landowner desire to develop any portion . . . , the sensor will be removed or redeployed upon 

30 days written notice that a grading permit has been 

issued by the County of San Diego” meant there could be 

no measurable effect on the suitability of the development

property for future development. Id. That conclusion was 

buttressed by the prior testimony of Richard Shick, one of 

the government’s experts from the 2009 trial. Mr. Shick, 

who is project manager for the County of San Diego 

Department of Public Works, was designated as the most 

knowledgeable in his department on the impact of easements on the process of receiving grading permits for the 

development of land. Id. His work responsibilities included issuing grading permits for development of land 

within the central and southern regions of San Diego

County, where Otay Mesa’s property lies. J.A. 889. His 

opinion in 2009 was that the easement would likely not 

prevent his department from issuing a grading permit, 

but might result in an “advisory note” on the development 

plans advising the applicant to notify the United States 

within thirty days of issuance. Otay Mesa II, 110 F.3d at 

737. 

We agree with the Court of Federal Claims that the 

government’s position on the development property is 

much more persuasive than that of Otay Mesa. Otay 

Mesa presents no persuasive argument why, in view of 

the language of the stipulation, it was clear error for the

court to credit the government’s zero-damage valuation 

over its own clearly flawed ten-percent-diminution valuation. The Court of Federal Claims properly exercised its 

judgment in its role as the trier of fact by weighting the 

credibility of the respective witnesses and their beforeand-after valuations of the land. 

Otay Mesa’s contention that the Court of Federal 

Claims ignored relevant evidence stems from its belief 
16 OTAY MESA PROPERTY, L.P. v. US

that the trial court was required to construct a damages 

valuation from evidence presented during the 2009 trial, 

despite such evidence never being formally presented 

during the remand trial. Although we believe the trial

court was properly within its discretion in denying damages based on the evidence presented during the trial on 

remand, we nevertheless address Otay Mesa’s argument.

Specifically, although Otay Mesa concedes that it was 

unable to find any “comparable” easements sales, it urges

that the Court of Federal Claims should have used prior, 

tangentially-related easement sales to create its own 

valuation of the property. The prior easements identified 

by Otay Mesa are easements that it sold for underground 

pipelines for sewer, water, gas, and electricity; they also 

are easements for roads and overhead power lines. While 

those sales may show that substantial value has been 

paid for easements over the subject land, we are unpersuaded that the mere existence of easements that are 

neither “minimally invasive” nor “unilaterally terminable” 

provides a basis for determining that the Court of Federal 

Claims committed clear error in accepting the government’s zero-damages valuation. Unassisted by expert 

reports or trial testimony on how those utility and road 

easements relate to the permanent sensor easements at 

issue here, the court was left to speculate as to how those 

easements would factor into a supposedly proper “just 

compensation” calculation. The court was not obligated to 

construct a damages award for Otay Mesa when it had 

substantial, credible evidence before it indicating that no 

actual loss was suffered. Vaizburd v. United States, 384 

F.3d 1278, 1284–85 (Fed. Cir. 2004) (rejecting the “proposition that a court may not adopt one party’s credible 

appraisal over the other party’s less credible appraisal”

and holding that the taking “did not diminish the market 

value of the [landowner’s] property”).

In Precision Point, we concluded that a trial court is 

not necessarily stuck with the “stark choice” of accepting 
OTAY MESA PROPERTY, L.P. v. US 17

or rejecting a party’s valuation, but it did not foreclose 

that option. 596 F.3d at 832. “As the fact finder in the 

bench trial, the judge is responsible for deciding what 

evidence to credit or reject and what result to reach,” 

which is precisely what the trial judge did here. Id. at 

833. As we explained in Precision Point, while we may 

know more on an appeal from a bench trial than from a 

jury trial as a result of a written opinion, it “does not alter 

th[e] judge’s discretion to weigh evidence or our standard 

of review.” Id. Similarly, in Yaist v. United States, the 

court noted that, where comparable sales data is lacking, 

it is permissible to fashion a damages award from “other 

evidence,” so long as it is “premised on a reasonably 

informed basis.” 17 Cl. Ct. 246, 257 (1989). Contrary to 

Otay Mesa’s contentions, it is doubtful whether the prior 

easement sales, without more, could have provided a 

“reasonably informed basis” to value a unique sensor 

easement that is minimally invasive, unilaterally terminable, and must also not affect the functionality of the 

land for development purposes. 

Finally, Otay Mesa calls it a “paradox” and “irreconcilable” that, as a temporary easement, the encumbrance 

had substantial value, yet as a permanent easement it 

was denied damages. But as we explained in Otay Mesa 

I, the prior valuation was based exclusively on the rental 

value of the property for skydiving and parachute training. 670 F.3d at 1368. That rental market methodology 

was erroneous. Id. Indeed, we explicitly instructed the 

Court of Federal Claims on remand not to “overlook 

exactly what has been taken by the Border Patrol—a 

minimally invasive permanent easement to use undeveloped land that is unilaterally terminable by Otay Mesa.” 

Id. We reminded the court that, “should Otay Mesa wish 

to develop any portion of the property, any affected sensor 

will be removed or redeployed upon 30 days written 

notice” of a grading permit issuance. Id. at 1369. And, 

we gave the court great leeway “to fashion an appropriate 
18 OTAY MESA PROPERTY, L.P. v. US

measure of compensation.” Id. In our view, considering 

the whole record before the court, it was not clear error to 

accept the government’s position and to deny damages for 

the development property. 

II.

A.

Following the damages trial on remand, the Court of 

Federal Claims rejected the government’s zero-percent

diminution valuation of the mitigation property, as well 

as Otay Mesa’s forty-percent-diminution valuation. Otay 

Mesa II, 110 Fed. Cl. at 746. The court then exercised its 

discretion in formulating a damages award that it believed accounted for the real, but minimal, risk that the 

property would be rejected for mitigation use due to the 

sensor easement over it. Id. at 747. It awarded $455,520 

for the taking of a permanent easement over Otay Mesa’s 

mitigation property—an award of five percent of the

property’s $9,110,400 fair market value. Id.

The government now cross-appeals that award. It argues that the damages award is based on clearly erroneous factual findings and that it is inconsistent with other 

conclusions in the Court of Federal Claims’ damages 

decision. Specifically, the government contends that the 

court found that the easement would not affect the biological resources of the mitigation land. See id. at 745. In 

addition, it notes that the court found that, even after the 

sensors were placed on its property, Otay Mesa used 

portions of the property for mitigation purposes. Reconsideration Decision, 111 Fed. Cl. at 424. It further points 

out that evidence was presented during the 2009 trial 

indicating that the sensors would have no measurable 

impact on the use of Otay Mesa’s land for mitigation 

purposes. Otay Mesa II, 110 Fed. Cl. at 737. The government, in other words, argues that there is no credible

evidence from which the Court of Federal Claims could 
OTAY MESA PROPERTY, L.P. v. US 19

conclude that there was a five percent risk that the property would not be approved for mitigation use. 

Otay Mesa responds that, even though the Court of 

Federal Claims arrived at a damages award that neither 

party suggested, it was well within its broad discretion to 

do so. It argues that the court had ample evidence from

which it could conclude that Otay Mesa’s land might not 

be approved for mitigation use. It contends that its 

appraiser, Mr. Tagg, as well as its other witnesses, testified that there would be a diminution in the value of land 

as mitigation property as a result of an easement that 

provides for installation of sensors, as well as for ingress 

and egress to and from the sensors. It points, for example, to its expert on mitigation, James Carter, who testified that ingress and egress to the sensors, in addition to 

the redeployment and relocation of the sensors, would 

negatively impact the ability to find a management company that would take title to the land. J.A. 681–82. It 

explains that the Court of Federal Claims did not sua 

sponte fashion an arbitrary “risk” award, as it is characterized by the government, but that the court laid out

factual bases for awarding a five percent diminution in

value due to the identified risk. 

B. 

We conclude that the Court of Federal Claims properly exercised its discretion in shaping an award that accounted for the potential that the mitigation property

might not be approved for mitigation use. As noted above, 

we explicitly instructed that “on remand the Court of 

Federal Claims will have discretion in identifying a 

methodology that fulfills the goal of awarding Otay Mesa 

just compensation.” Otay Mesa I, 670 F.3d at 1369. 

During the damages trial on remand, the court was 

confronted with conflicting evidence and relatively extreme valuations for the mitigation property—proposals 

of zero percent or forty percent diminution in value. 
20 OTAY MESA PROPERTY, L.P. v. US

Recognizing that the “Plaintiffs undeniably face a risk 

that their environmentally sensitive property will not be 

approved for mitigation use,” but that the risk was not 

“anywhere near the 40 percent [diminution in value] level 

advocated by Mr. Tagg,” the court chose its own valuation 

that captured what it perceived as the risk of a “potential 

denial of a mitigation request.” Otay Mesa II, 110 Fed. Cl. 

at 734, 746. It explained that, “[e]ven if this outcome 

never occurs, Plaintiffs’ assumption of the risk should be 

ascribed some value.” Id. at 746. It found that Otay 

Mesa would not have willingly assumed that risk for its 

mitigation property without some, albeit minimal, consideration. Id.

We detect nothing inappropriate with the Court of 

Federal Claims looking at the evidence as a whole and 

using its own methodology to calculate a damages award. 

Contrary to the government’s assertion, the court’s decision to ascribe its own valuation to the damages associated with the mitigation land is consistent with both our 

instruction on remand and our case law. In Precision 

Pine, discussed above, we made clear that a trial court

need not accept either party’s damages position. 596 F.3d 

at 832–33. We explained that it is both correct and important for a trial court to use its flexibility to tailor a fair 

and reasonable result based on the evidence it credits or 

rejects. Id.; see also Seravalli v. United States, 845 F.2d 

1571, 1575 (Fed. Cir. 1988) (“[Trial] courts necessarily 

must have considerable discretion to select the method of 

valuation that is most appropriate in the light of the facts 

of the particular case.”). Here, where the parties took 

divergent and extreme positions, and the court believed 

that the landowner was in a worse position after the 

taking, the court had few options in determining a just 
OTAY MESA PROPERTY, L.P. v. US 21

compensation award other than creating its own valuation.6

Moreover, the government overlooks that many of the

arguments it advances for why it was not clear error for 

the Court of Federal Claims to deny damages for the 

easement over the development property likewise apply to 

the court’s decision to award damages for the easement 

over the mitigation property. When a trial court provides

a damages award that is within the range of credible 

testimony, it is not an appellate court’s role to reweigh the 

evidence or second-guess the finder of fact. E.g., Rapid 

Transit Co. v. United States, 295 F.2d 465, 467 (10th Cir. 

1961) (finding that “[s]ince the award was well within the 

range of credible testimony this court may not reweigh 

the evidence or retry the facts”), cert. denied, 369 U.S. 

819. The Court of Federal Claims’ five-percent award for 

the mitigation property—like its denial of damages for the 

development property—is reasonable on the evidence. 

III.

A.

Last, we address Otay Mesa’s appeal with respect to

the date from which interest on its damages award should 

be calculated. Following the trial on remand, the Court of 

Federal Claims awarded compound interest from October 

16, 2008, the date on which it believed Otay Mesa first 

became aware of the taking through the government’s 

stipulation. Otay Mesa II, 110 Fed. Cl. at 747. On reconsideration, the trial court “acknowledge[d] the existence of 

6 To the extent the government contends that the

court’s methodology is inconsistent with the methodology 

used in the original damages decision, that decision was 

based on the notion that the taking was temporary in 

nature. As discussed above, that methodology was incorrect and was based on a rental value calculation. 

 
22 OTAY MESA PROPERTY, L.P. v. US

ample case law holding that interest in a Fifth Amendment taking should run from the date of the taking,” but 

declined to adjust the date beyond granting a change from 

October to August 2008, when the government’s stipulation was first filed. Reconsideration Decision, 111 Fed. Cl. 

at 423. The court believed that “[i]f no person or entity 

outside of the Government was aware of the sensors until 

the disclosure date in 2008, the risk on which the Court’s 

damages award is based did not exist until 2008.” Id.

On appeal, Otay Mesa argues that the case law is unequivocal that interest must be calculated from the date 

of the taking. And it argues that the date of the taking 

cannot be disputed, as the government expressly listed 

the dates that each sensor was first installed on the 

subject property in its 2008 stipulation. In response, the 

government defends the Court of Federal Claims’ decision. It does so, not by arguing that the case law allows 

for interest to be computed from some other point in time

other than the date of the taking, but, rather, by contending that, since no damage occurred before 2008, the court 

essentially applied an interest rate on zero damages from 

the date of the taking until the date of the government’s 

stipulation. It argues that before the stipulation Otay 

Mesa did not know about the sensors and therefore could 

not have suffered any damages on which interest could be 

compounded. Awarding Otay Mesa interest from a date 

prior to the 2008 stipulation, the government contends, 

would place it in a better position than if the taking had 

never occurred.

B.

We hold, as a matter of law, that interest on Otay Mesa’s damages award must be calculated from the date 

sensors first encumbered Otay Mesa’s property. The 

Supreme Court has long held that “just compensation” 

includes interest compounded from the date of a taking

when payment for the taking does not coincide with the 
OTAY MESA PROPERTY, L.P. v. US 23

taking itself. Phelps v. United States, 274 U.S. 341, 344 

(1927); Seaboard Air Line Ry. Co. v. United States, 261 

U.S. 299, 306 (1923). In Phelps, the Court recognized that 

the “Plaintiffs’ property was taken before its value was 

ascertained or paid.” 274 U.S. at 344. It explained that 

the “[j]udgment in 1926 for the value of the use of the 

property in 1918 and 1919, without more, [was] not 

sufficient to constitute just compensation.” Id. The Court 

instructed that the landowner was “entitled to have the 

full equivalent of the value of such use at the time of the 

taking paid contemporaneously with the taking.” Id. 

Thus, “if disbursement of the award is delayed, the 

owner is entitled to interest thereon sufficient to ensure 

that he is placed in as good a position pecuniarily as he 

would have occupied if the payment had coincided with 

the appropriation.” Kirby Forest Indus., Inc. v. United 

States, 467 U.S. 1, 10 (1984) (citing Phelps, 274 U.S. at 

344 and Seaboard, 261 U.S. at 306). In order for an 

owner to be placed in “as good a position pecuniarily,”

interest must be added to the damages award in order to 

compensate for the time value of money and the potential 

opportunity the owner has lost to earn income on its 

damages award as a result of the taking. It is now axiomatic that “the Fifth Amendment’s reference to ‘just 

compensation’ entitles the property owner to receive 

interest from the date of the taking to the date of payment 

as a part of his just compensation.” United States v. 

Thayer-W. Point Hotel Co., 329 U.S. 585, 588 (1947); see 

also Jacobs v. United States, 290 U.S. 13, 17 (1933) 

(“[J]ust compensation is comprehensive, and includes all 

elements, ‘and no specific command to include interest is 

necessary when interest is part of such compensation.’”). 

Here, as in Kirby Forest, the government stipulated to 

the precise date of its taking. It conceded in its 2008 

stipulation that “by virtue of its placement of the 14 

sensors specified above on the listed parcels of land, it has 

taken a property interest in the nature of an easement.” 
24 OTAY MESA PROPERTY, L.P. v. US

J.A. 1793 at ¶ 6 (emphasis added). It stipulated that the 

“easement shall be deemed to have commenced on the 

date the sensor is listed as having been installed.” J.A. 

1794 at ¶ 7. The stipulation also enumerates the dates 

that each sensor was first installed: dates ranging from 

April 1999 to November 2005. J.A. 1793 at ¶ 5. Because 

the government’s payment of consideration for its taking 

was not paid contemporaneously with the taking, Otay 

Mesa is now entitled to interest “sufficient to ensure that 

[it] is placed in as good a position pecuniarily as [it] would 

have occupied if the payment had coincided with the 

appropriation.” Kirby Forest, 467 U.S. at 10. 

We are not persuaded by the Court of Federal Claims’ 

and the government’s justifications for why interest 

should not begin to run until the date of the government’s

stipulation. To begin with, delaying the running of interest until Otay Mesa supposedly first knew about the 

taking would be contrary to the established precedent just 

discussed. Moreover, if the government’s easement 

created a risk that Otay Mesa’s mitigation land might be

denied approval for mitigation use as of 2008, then the 

sensor easement would have also created the same risk 

when the land was first encumbered. Otay Mesa’s 

knowledge of the easement is irrelevant to whether the 

easement objectively created that risk. Finally, if interest 

is not computed from the date of the taking, but instead 

from the date a landowner is first made aware of the 

taking, the government is presented with an incentive to

delay disclosure of physical invasion for as long as possible. We see no logic in creating such an incentive.

Accordingly, we vacate the decision of the Court of 

Federal Claims to award interest from August 28, 2008, 

and remand for recalculation of the interest owed to Otay 

Mesa. As noted, Otay Mesa argues before us that interest

should be calculated based on the different dates that the

respective parcels constituting the mitigation property

were first encumbered by a sensor easement. The gov-
OTAY MESA PROPERTY, L.P. v. US 25

ernment has not proposed a method for calculating interest in the event that we rule against it. On remand, after 

receiving the views of the parties, the Court of Federal 

Claims will be in a position to formulate a methodology 

for calculating interest. 

CONCLUSION

For the foregoing reasons, we affirm-in-part and vacate-in-part the decision of the Court of Federal Claims. 

The case is remanded to the court for further proceedings 

consistent with this opinion.

AFFIRMED-IN-PART, VACATED-IN-PART, and

REMANDED

COSTS

Each party shall bear its own costs.