United States Court of Appeals 

for the Federal Circuit ______________________

ANAHEIM GARDENS, L.P., THETFORD 

PROPERTIES III, L.P., THETFORD PROPERTIES 

IV, L.P., B-L ASSOCIATES, L.P., C-W ASSOCIATES, 

L.P., GLENVIEW GARDENS L.P., INDIAN HEAD

MANOR, L.P. I, METRO WEST LIMITED, L.P.,

MILLWOOD ASSOCIATES L.P., NAPA PARK 

APARTMENTS L.P., ONTARIO TOWNHOUSES,

L.P., PALOMAR APARTMENTS, L.P., SIERRA 

VISTA ONE, L.P., 825 SAN TOMAS APARTMENTS, 

L.P., 5324 FOOTHILL APARTMENTS, G.P., 

ALGONQUIN HEIGHTS ASSOCIATES, L.P., 

BRANDY HILL COMPANY, BROOKSIDE MANOR 

ASSOCIATES, L.P., BRIAR CREST, G.P., BRIAR

CREST APARTMENTS II, L.P., BRIAR HILLS, L.P., 

CLARENCE W. GOSNELL, JR., JOHN G. GOSNELL, 

MURRAY HABER, RICHARD S. BRIGHT, PHILIP 

BERMAN, ALFRED S. BRIGHT, SAMUEL 

EISENSTAT, MELVIN S. HELLER, MILTON S. 

LIDER, MARTIN MYERS, MALCOMB MEISTER, 

HAROLD D. PRICE, HERBERT W. SAVIT, WALTER 

WEITZNER, ESTATE OF JACK N. BLINKOFF, 

HAROLD D. FRAZEE, TRUSTEE U/A DTD 4/2/89

FOR E.D. FRAZEE, CAMBRIDGE SQUARE NORTH 

ASSOCIATES, LP, CAMBRIDGE SQUARE OF FORT

WAYNE ASSOCIATES I, LP, CAMBRIDGE SQUARE

OF GRAND RAPIDS ASSOCIATES I, LP, 

CAMBRIDGE SQUARE OF GRAND RAPIDS 

ASSOCIATES II, LP, CARRIAGE HOUSE NORTH 

ASSOCIATES LP, CARRIAGE HOUSE OF 

MISHAWAKA ASSOCIATES II LP, CARRIAGE 

HOUSE WEST IV ASSOCIATES, LP, CROMWELL 

COURT COMPANY, FIRST LANDMARK 

Case: 19-1277 Document: 49 Page: 1 Filed: 03/25/2020
2 ANAHEIM GARDENS, L.P. v. UNITED STATES

ASSOCIATES, L.P., FOREST GLEN LIMITED 

DIVIDEND HOUSING ASSOCIATION, FORT 

HEATH ASSOCIATES, GARRISON FOREST 

ASSOCIATES, JODANI ASSOCIATES, L.P., 

KIMBERLY ASSOCIATES L.P., KING'S GRANT 

COMPANY, LEADER HOUSE ASSOCIATES, 

LEADER HOUSING CO., INC., NEW AMSTERDAM 

ASSOCIATES, NEW AMSTERDAM HOUSES, INC., 

PINE CREST COMPANY, RIVERSIDE VILLAGE 

COMPANY, SUBURBIA ASSOCIATES, L.P., 

STEPHEN G. DAKES, HARVEY E. JOHNSON, JR., 

W. DEWEY RASNAKE, MARTIN E. BROWN, 

WARREN W. TAYLOR, JR., WARREN W. TAYLOR,

JR., TRUSTEE, LUDLOW KING, JAMES L. 

BREHONY, SUEHAR ASSOCIATES LP, TOWER 

WEST ASSOCIATES LP, TOWER WEST INC., TOWN 

& COUNTRY APARTMENTS & TOWNHOUSES,

Plaintiffs

CEDAR GARDENS ASSOCIATES, ROCK CREEK 

TERRACE L.P., 620 SU CASA POR CORTEZ, 

BUCKMAN GARDENS, L.P., 3740 SILVERLAKE 

VILLAGE, L.P., CHAUNCY HOUSE COMPANY,

Plaintiffs-Appellants

v.

UNITED STATES,

Defendant-Appellee

______________________

2019-1277, 2019-1278, 2019-1279, 2019-1280, 2019-1281, 

2019-1282

______________________

Appeals from the United States Court of Federal 

Claims in Nos. 1:93-cv-00655-PEC, 1:93-cv-06568-PEC, 

1:93-cv-06578-PEC, 1:93-cv-06580-PEC, 1:93-cv-06582-

Case: 19-1277 Document: 49 Page: 2 Filed: 03/25/2020
ANAHEIM GARDENS, L.P. v. UNITED STATES 3

PEC, 1:97-cv-05837-PEC, 1:97-cv-05845-PEC, Judge Patricia E. Campbell-Smith.

______________________

Decided: March 25, 2020

______________________

HARRY JAMES KELLY, III, Nixon Peabody LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by JOHN C. HAYES, JR., BRIAN J. WHITTAKER. 

 SHARI A. ROSE, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, 

DC, argued for defendant-appellee. Also represented by 

JOSEPH H. HUNT, ANNA BONDURANT ELEY, ROBERT EDWARD 

KIRSCHMAN, JR., FRANKLIN E. WHITE, JR. 

 ______________________

Before LOURIE, CHEN, and STOLL, Circuit Judges.

LOURIE, Circuit Judge.

These cases involve takings claims resulting from the 

enactment of the Emergency Low Income Housing Preservation Act of 1987, Pub. L. No. 100-242, § 202, 101 Stat. 

1877 (1988) (“ELIHPA”) and the Low-Income Housing 

Preservation and Resident Homeownership Act of 1990, 

Pub. L. No. 101-625, 104 Stat. 4249 (1990) (“LIHPRHA”) 

(collectively, the “Preservation Statutes”). Currently, approximately fifty plaintiffs are asserting takings claims in 

consolidated cases in the United States Court of Federal 

Claims (“Claims Court”). The appellants here are Buckman Gardens L.P. (“Buckman”), Chauncy House Company 

(“Chauncy”), Cedar Gardens Associates (“Cedar”), Rock 

Creek Terrace L.P. (“Rock Creek”), 620 Su Casa Por Cortez 

(“Su Casa”), and 3740 Silverlake Village, L.P. (“Silverlake”). The six appellants have been designated the First 

Wave Plaintiffs (“FWPs”) in the Claims Court litigation. 

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4 ANAHEIM GARDENS, L.P. v. UNITED STATES

The Claims Court granted summary judgment in favor 

of the government on all six FWPs’ takings claims. Anaheim Gardens v. United States, 140 Fed. Cl. 72 (2018) (“Decision”). For the reasons below, we affirm the Claims 

Court’s judgment with respect to Su Casa but we vacate 

and remand with respect to the other five FWPs.

BACKGROUND

I

The history of the statutes involved in ELIHPA and 

LIHPRHA takings cases has previously been summarized 

by this court. See, e.g., CCA Assocs. v. United States, 667 

F.3d 1239, 1242–43 (Fed. Cir. 2011); Cienega Gardens v. 

United States, 503 F.3d 1266, 1270–74 (Fed. Cir. 2007) 

(“Cienega X”). For completeness, we provide the following 

brief summary of the relevant portions.

In 1961, Congress amended the National Housing Act 

to provide financial incentives to private developers to 

build low-income housing. Cienega X, 503 F.3d at 1270. 

The financial incentives included below-market mortgages 

insured by the Department of Housing and Urban Development (“HUD”). Id. To participate in this development 

program, each developer was required to sign a regulatory 

agreement with HUD that limited its ability to increase 

rent. Id. The restrictions in the regulatory agreement 

would be in effect as long as HUD insured the mortgage; 

for practical purposes, this meant a developer was subject 

to HUD regulation until its mortgage was paid off. Id. Importantly, while the term of the mortgages was 40 years, 

the contracts allowed developers to prepay their mortgages

after 20 years. Id. This prepayment option gave each developer “an opportunity to cast off the regulatory burden 

and convert [its] development to market rate housing.” 

CCA, 667 F.3d at 1242.

Many developers were induced by the development program to purchase properties and develop low-income 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 5

housing. Id. But Congress later grew concerned that too 

many developers would exercise the prepayment option 

and exit the program, which would cause a shortage of lowincome housing. Id. at 1242–43. To address that concern, 

between 1988 and 1990, Congress enacted the Preservation Statutes, which effectively eliminated the prepayment 

option and prevented the developers from converting their 

properties to market rate housing. Id.; see 12 U.S.C. § 4101.

In 1996, however, Congress enacted the Housing Opportunity Program Extension Act of 1996, Pub. L. No. 104-120, 

110 Stat. 834 (1996) (“HOPE Act”), which restored prepayment rights to the developers that had remained in the program.

II

The six FWPs are developers who owned properties 

that were developed subject to the development program 

under the 1961 amendments to the National Housing Act. 

The six FWPs can be broken down into three categories 

based on the timing of their purchases and their later decisions with respect to the Preservation Statutes prior to the 

enactment of the HOPE Act.

The first category consists of four FWPs—Buckman, 

Chauncy, Cedar, and Silverlake—that fit two criteria: 

(1) they owned their properties before the enactment of the 

Preservation Statutes; and (2) they sold their properties after the enactment of the Preservation Statutes in conformance with the sale requirements of LIHPRHA. See 12 

U.S.C. §§ 4102, 4103, 4110. The LIHPRHA sale requirements included a requirement that the owners sell the 

property at the “highest and best use of the property” to 

organizations that would agree to preserve the rent restrictions. See Cienega X, 503 F.3d at 1272 (quoting §§ 

4103(b)(2), 4110). The statute and regulations established 

a procedure to determine the sale price based on a thirdparty appraisal of the property’s value. Cienega X, 503 

F.3d at 1273 n.3; 24 C.F.R. §§ 248.111(j), 248.131(b).

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6 ANAHEIM GARDENS, L.P. v. UNITED STATES

The second category consists of Rock Creek, which

owned its property prior to the enactment of the Preservation Statutes but chose not to sell its property after the enactment of the Preservation Statutes. Instead, Rock Creek 

elected to remain in the low-income housing program by 

entering into a “use agreement” with HUD. Decision, 140 

Fed. Cl. at 80–81. The use agreement provided Rock Creek 

with financial incentives in exchange for Rock Creek’s 

agreement to abide by the low-income housing restrictions 

“for the remaining useful life” of the property. Id.; 

Cienega X, 503 F.3d at 1273 (quoting 12 U.S.C. § 4112) 

(footnote omitted). 

The third category consists of Su Casa, which is different from the other five FWPs in one important respect: Su 

Casa did not own its property prior to the enactment of the 

Preservation Statutes. Rather, Su Casa purchased its 

property from the original owner in July 1991, which was 

after the enactment of LIHPRHA but before HUD promulgated its regulations for implementing the Preservation 

Statutes. Su Casa subsequently sold its property pursuant 

to the LIHPRHA sale requirements. 

III

Each of the FWPs filed suit in the Claims Court alleging a regulatory taking under the Fifth Amendment’s “just 

compensation” clause. After the close of discovery, the government moved for summary judgment. The Claims Court 

evaluated the government’s motion under the three-factor 

test set forth in Penn Central Transportation Co. v. City of 

New York, 438 U.S. 104 (1978). The Penn Central test considers: (1) the economic impact of the regulation on the 

claimant; (2) the extent to which the regulation has interfered with reasonable distinct investment-backed expectations; and (3) the character of the governmental action. Id.

at 124. 

The Claims Court first considered Su Casa’s evidence 

of investment-backed expectations. Su Casa presented a 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 7

declaration and deposition testimony from one of its general partners regarding its expectations based on its contract rights that it would be able to prepay the mortgage at 

or after the prepayment date. See J.A. 386–96, 3298–301. 

The Claims Court determined, however, that because the 

Preservation Statutes eliminated the prepayment option 

prior to Su Casa’s purchase of the property, Su Casa “could 

not possess reasonable investment-backed expectations in 

a mortgage prepayment right.” Decision, 140 Fed. Cl. at 

77. The court then granted summary judgment against Su 

Casa because the complete lack of evidence of reasonable 

investment-backed expectations was sufficient to dispose 

of Su Casa’s takings claim. Id. at 79. 

For the remaining FWPs, the court considered their evidence with respect to each of the three factors in the Penn 

Central test. The court concluded that both the character 

of the governmental action and the investment-backed expectations weighed against disposing of the FWPs’ takings 

claims on summary judgment. Id. at 87, 88. Regarding the 

economic impact factor, however, the court found that the 

FWPs “have not pointed to evidence sufficient to prevail on 

the economic impact prong of the Penn Central analysis.” 

Id. at 89. Thus, the court granted summary judgment in 

favor of the government.

The Claims Court entered separate final judgments in 

favor of the government with respect to each of the FWPs’ 

individual cases. The FWPs timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(3).

DISCUSSION

We review de novo the Claims Court’s summary judgment decision that the FWPs did not suffer a taking. Biafora v. United States, 773 F.3d 1326, 1330 (Fed. Cir. 2014)

(citing McGuire v. United States, 707 F.3d 1351, 1357 (Fed.

Cir. 2013)). Summary judgment is appropriate when there 

is no genuine issue of material fact and the moving party 

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8 ANAHEIM GARDENS, L.P. v. UNITED STATES

is entitled to judgment as a matter of law. R. Ct. Fed. Cl. 

56(a).

I

We begin, as the Claims Court did, with Su Casa. Su 

Casa argues that the court erred as a matter of law by finding, as a per se rule, that Su Casa lacked reasonable investment-backed expectations because it purchased its 

property after the enactment of the Preservation Statutes. 

Su Casa further argues that there are genuine issues of 

material fact regarding Su Casa’s understanding of its contract rights in view of the alleged uncertainty about how 

the Preservation Statutes would later apply at the prepayment date.

The government responds that the Claims Court did 

not create a per se rule, but rather determined that Su Casa 

could not meet its difficult burden to establish reasonable 

investment-backed expectations. The government argues 

that the Claims Court properly relied on the undisputed 

fact that Su Casa was a sophisticated investor that bought 

its property knowing that the Preservation Statutes had 

already eliminated the prepayment option. 

We agree with the government. The governmental action in this case is the enactment of the Preservation Statutes. Su Casa purchased its property in an arms-length 

transaction after it already knew that the Preservation 

Statutes had eliminated the prepayment option that previously existed under the 1961 amendments to the National 

Housing Act. While the HUD regulations had not yet gone 

into effect at the time of the transaction, the Preservation 

Statutes themselves were sufficiently detailed to remove 

any reasonable expectation that Su Casa could have had 

that it would have the option to prepay its mortgage and 

convert its property from low-income housing to a marketrate rental property. See 12 U.S.C. § 4101 et seq.

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ANAHEIM GARDENS, L.P. v. UNITED STATES 9

Su Casa’s reliance on Palazzolo v. Rhode Island, 533 

U.S. 606 (2001), is inapposite. In Palazzolo, the Supreme 

Court held that “[a] blanket rule that purchasers with notice have no compensation right when a claim becomes ripe 

is too blunt an instrument to accord with the duty to compensate for what is taken.” Id. at 628. But the Court 

acknowledged in Palazzolo that it had “no occasion to consider the precise circumstances when a legislative enactment can be deemed a background principle of state law or 

whether those circumstances are present here.” Id. at 629. 

Thus, because the petitioner’s Penn Central claim was not 

barred per se, the Supreme Court remanded for the state 

court to consider whether the claimant—to whom title had 

transferred by operation of law rather than by purchase—

could prove that he had reasonable investment-backed expectations regarding his development rights. Id. Here, unlike in Palazzolo, the Claims Court did have occasion to 

consider whether Su Casa could prove reasonable investment-backed expectations in view of the timing of its purchase and its knowledge about the Preservation Statutes. 

The Claims Court determined, not as a per se rule but rather as an evidentiary failure, that Su Casa lacked sufficient evidence to prevail at trial.

The Supreme Court’s decision in Murr v. Wisconsin, 

137 S. Ct. 1933 (2017), is more instructive. There, the 

Court confirmed that “[a] reasonable restriction that predates a landowner’s acquisition . . . can be one of the objective factors that most landowners would reasonably 

consider in forming fair expectations about their property.” 

Id. at 1945 (citing Palazzolo, 533 U.S. at 627). The Court 

held that the prior passage of the relevant state law “inform[ed] the reasonable expectation” that the property 

owners had with respect to their property. Id. at 1948. 

Likewise, here, the prior passage of the Preservation Statutes informs the question whether Su Casa could have expected when it invested in its property that it would later 

be able to prepay the mortgage.

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10 ANAHEIM GARDENS, L.P. v. UNITED STATES

What emerges from the case law is a flexible principle 

that, while “[a] valid takings claim will not evaporate just 

because a purchaser took title after the law was enacted,” 

Murr, 137 S. Ct. at 1945 (citing Palazzolo, 533 U.S. at 627), 

the timing of the purchase and knowledge of the purchaser 

are relevant considerations in determining whether a purchaser had reasonable investment-backed expectations 

with which the government’s regulatory action interfered. 

See Norman v. United States, 429 F.3d 1081, 1092–93 (Fed. 

Cir. 2005) (holding that “it is particularly difficult to establish a reasonable investment-backed expectation” if the 

property was acquired after the alleged regulatory restriction); Loveladies Harbor v. United States, 28 F.3d 

1171, 1177,(Fed. Cir. 1994), (collecting cases) (noting that 

the investment-backed expectations factor of the Penn Central test is “a way of limiting takings recoveries to owners 

who could demonstrate that they bought their property in 

reliance on a state of affairs that did not include the challenged regulatory regime”), abrogated on other grounds by

Bass Enterprises Prod. Co. v. United States, 381 F.3d 1360, 

1369–70 (Fed. Cir. 2004). The Claims Court in this case 

abided by that principle when it considered the evidentiary 

support for Su Casa’s claim despite the undisputed material fact that Su Casa was a sophisticated investor that 

purchased its property with knowledge about the effects of 

the Preservation Statutes. J.A. 3298–301 (testimony of one 

of Su Casa’s general partners). We agree with the Claims 

Court that there is no genuine dispute regarding Su Casa’s 

inability to prove that it purchased the property with an 

expectation that it would later be able to prepay the mortgage. 

In the context of the Penn Central balancing test, the 

complete absence of reasonable distinct investment-backed 

expectations can weigh sufficiently heavily to be dispositive of a takings claim. See Ruckelshaus v. Monsanto Co., 

467 U.S. 986, 1005 (1984); Good v. United States, 189 F.3d 

1355, 1363 (Fed. Cir. 1999); Golden Pac. Bancorp v. United 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 11

States, 15 F.3d 1066, 1074 (Fed. Cir. 1994). Here, because 

a sophisticated investor voluntarily purchased its property 

with knowledge that it had no prepayment option, the complete lack of investment-backed expectations overwhelmingly outweighs the other Penn Central factors. We 

therefore agree that summary judgment in favor of the government on Su Casa’s takings claim is appropriate.

II

We next turn to the Claims Court’s determination that 

the remaining FWPs have not provided evidence sufficient 

to prevail on the economic impact factor in the Penn Central analysis. The Claims Court noted that the FWPs’ only 

evidence of economic injury was founded on the methodology of their expert witness, Dr. William W. Wade. Decision, 

140 Fed. Cl. at 89. The court granted summary judgment 

after finding Dr. Wade’s entire analysis to be nonprobative

of the Preservations Statutes’ economic impact on the 

FWPs. 

Dr. Wade’s expert report contains more than 200 pages 

of opinions regarding the severe economic impact of the 

Preservation Statutes on the FWPs. In the executive summary of his report, Dr. Wade gave a general explanation of 

his analysis, and specifically why it focused on the lost 

rental income that the FWPs suffered due to the Preservation Statutes:

From an economic point of view, denial of the owners’ opportunity to increase their rents to market 

levels is the issue in this litigation. The restrictions imposed upon the use of the properties 

limited the owners’ intangible property right: renting apartments on their properties at market rents. 

Where income losses are the issue, standard economic practice begins with measuring the cash 

flows with and without the loss-causing disruption 

within a discounted cash flow model (DCF). Just 

compensation and the Penn Central economic 

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12 ANAHEIM GARDENS, L.P. v. UNITED STATES

prongs are evaluated by the change in income from 

the rental businesses . . . .

The reported financial cash flows of the property 

owners are discounted to the present value 

amounts at the prepayment dates. Losses are determined as the difference in the [net present value

or] NPV of the projected lost opportunity to prepay 

and convert the properties to market rentals less 

the actual outcome imposed by LIHPRHA. In other 

words, losses are calculated as the difference between what the owners received as a result of their 

LIHPRHA process and what they would have 

earned, if they had been allowed to prepay. 

Whether the losses frustrate Penn Central’s [distinct investment-backed expectations] is evaluated 

by comparison of the Net Present Value (NPV) of 

cash flows for each property benchmarked to 

[transfer preservation equity or] TPE.

J.A. 3810–11. Consistent with that explanation, Dr. 

Wade provided the following equation to determine the 

economic loss suffered by the FWPs as a result of the 

Preservation Statutes:

J.A. 3811. To calculate the percentage reduction in net 

present value, Dr. Wade divided the calculated economic loss by the net present value of the lost market 

conversion opportunity. See J.A. 3812–22. 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 13

Despite Dr. Wade’s opinions, the Claims Court found 

that Dr. Wade’s analysis was nonprobative of economic impact under Penn Central. First, the court found that Dr. 

Wade’s lost income analysis was nonprobative because he 

was required to analyze and compare fair market values. 

Decision, 140 Fed. Cl. at 89 (“[FWPs] have not established 

the fair market value (FMV) of the FWPs’ properties at the 

time of the taking, for either the scenario where the mortgage prepayment right was unrestricted, or the scenario 

where the mortgage prepayment right was restricted by 

LIHPRHA.”). And second, the court found that “Dr. Wade’s 

methodology is unsound because it is inconsistent with 

binding precedent,” in particular relating to “the parcel as 

a whole concept” and “economic loss severity measures.” 

Id. at 89–91. We address the Claims Court’s findings in 

turn, as well as the government’s proposed alternative 

ground for affirmance based on Dr. Wade’s use of data that 

post-dated the alleged taking.

A

The Claims Court concluded, as a matter of law, that a 

comparison of fair market values was the only permissible 

methodology for measuring economic impact in this case. 

From the start of its analysis, the Claims Court strictly adhered to the following asserted proposition of law:

When a real estate parcel has been permanently affected by a regulatory taking, the measure of economic injury is the difference between the fair 

market value of the property, without the restriction imposed by the government action, and 

the fair market value of the property, with the restriction imposed by the government action, both 

measured at the time of the taking.

Decision, 140 Fed. Cl. at 80 (citing Forest Props., Inc. v. 

United States, 177 F.3d 1360, 1367 (Fed. Cir. 1999); Fla. 

Rock Indus., Inc. v. United States, 18 F.3d 1560, 1567 (Fed. 

Cir. 1994))The Claims Court repeatedly confirmed its 

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14 ANAHEIM GARDENS, L.P. v. UNITED STATES

reliance on that proposition. See, e.g., id. at 82 (“First, the 

court determines the difference in the fair market value of 

the property, without and with the restriction, both measured at the time of the taking.” (citing Colony Cove Props. 

LLC v. City of Carson, 888 F.3d 445, 451 (9th Cir. 2018)); 

id. at 83 (“[I]ts evidence of economic injury must allow the 

court to first determine the difference in fair market value 

caused by the Preservation Statutes . . . .”); id. at 86 (“To 

determine the economic injury, if any, suffered by these 

plaintiffs, the first step is to determine the difference in fair 

market value caused by the Preservation Statutes.”). 

For that proposition of law, the Claims Court cited this 

court’s decision in Forest Properties, 177 F.3d at 1367, 

which in turn cited our earlier decisions in Loveladies, 28 

F.3d at 1178, and Florida Rock, 18 F.3d at 1567. In each 

of those cases, this court did in fact determine that the appropriate measure of economic impact, under the factual 

circumstances, was the “change . . . in the fair market 

value caused by the regulatory imposition.” See Fla. Rock, 

18 F.3d at 1567. We do not, however, interpret those cases 

to mean that change in fair market value is the only permissible way to measure economic impact in every case. 

Indeed, the government conceded during oral argument 

that such a sweeping rule is not legally supported:

[Court:] Where is the holding that only fair market 

value is probative evidence? 

[Government:] I don’t think that what the court has 

held is that only fair market value is probative evidence.

Oral Arg. at 19:44, http://oralarguments.cafc.uscourts.gov/

default.aspx?fl=2019-1277.mp3.

We are guided by the Supreme Court’s cautions against 

rigidity in this area of the law. See Ark. Game & Fish 

Comm’n v. United States, 568 U.S. 23, 31–32 (2012) (“[N]o 

magic formula enables a court to judge, in every case, 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 15

whether a given government interference with property is 

a taking. . . . [M]ost takings claims turn on situation-specific factual inquiries.”). To that end, it is clear that courts

must have flexibility to determine in each individual case 

how to most accurately measure the economic value of 

what a takings claimant actually lost due to the governmental action. See Hodel v. Va. Surface Mining & Reclamation Ass’n, 452 U.S. 264, 295 (1981) (“These ‘ad hoc, 

factual inquiries’ must be conducted with respect to specific 

property, and the particular estimates of economic impact 

and ultimate valuation relevant in the unique circumstances.” (quoting Kaiser Aetna v. United States, 444 U.S. 

164, 175 (1979)).

In the context of the very Preservation Statutes that 

are at issue in this case, this court has previously outlined 

two possible approaches to measuring the economic impact 

suffered by property owners who were deprived of their 

prepayment options. Cienega X, 503 F.3d at 1282. 

(1) In the first approach, “a comparison could be made 

between the market value of the property with and 

without the restrictions on the date that the restriction began (the change in value approach).” Id. 

(2) The second approach is to “compare the lost net income due to the restriction (discounted to the present value at the date the restriction was imposed) 

with the total net income without the restriction 

over the entire useful life of the property (again discounted to present value).” Id. 

The court in Cienega X emphasized that “[n]either approach appears to be inherently better than the other.” Id. 

Yet, in this case, the Claims Court concluded that only the 

first of Cienega X’s two approaches—i.e., the change in 

value approach—was permissible for the FWPs. Decision, 

140 Fed. Cl. at 80. We conclude that the Claims Court 

erred in that respect. 

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16 ANAHEIM GARDENS, L.P. v. UNITED STATES

The Claims Court placed significant emphasis on its 

finding that the takings in this case are in the nature of

“permanent” takings rather than “temporary” takings. See 

id. at 79–86. And, to be clear, Cienega X did begin its endorsement of its two possible approaches by noting that it 

was “in a temporary taking situation.” Cienega X, 503 F.3d 

at 1282 (citing Rose Acre Farms Inc. v. United States, 373 

F.3d 1177, 1188 (Fed. Cir. 2004)). But Cienega X also concluded that “in a temporary regulatory takings analysis 

context the impact on the value of the property as a whole 

is an important consideration, just as it is in the context of 

a permanent regulatory taking.” Id. at 1281. 

We recognize that the distinction between temporary 

and permanent takings can affect the economic impact 

analysis. See, e.g., CCA, 667 F.3d at 1246 (considering the 

temporary takings claims of developers who retained their 

properties and had their prepayment options restored by 

the HOPE Act); Cienega X, 503 F.3d at 1287–88 (discussing 

need to consider duration of regulation’s effect on plaintiffs 

when assessing takings claims and noting differences in effective duration of LIHPRHA legislation between HOPE 

Act and LIHPRHA use agreement plaintiffs). But we see 

no meaningful reason why the distinction between temporary and permanent takings should affect which method is 

appropriate to measure economic impact in any given 

case—i.e., the choice of which equation to use in the first 

place. Regardless whether a taking is permanent or temporary in nature, there is no one-size-fits-all method for 

measuring the economic impact of a governmental action.

See Hodel, 452 U.S. at 295.

In this case, the properties at issue were income-producing properties. The value of each property to its respective owner derived, not from any inherent objective “fair 

market value” of the land or the fixtures on the property, 

but rather from the property’s ability to generate a future 

stream of rental income as of the prepayment date. See 

J.A. 3810 (Dr. Wade’s qualitative description of what the 

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FWPs lost due to the Preservation Statutes). The FWPs 

have consistently argued that lost future rental income, rather than fair market value, is the appropriate measure of 

economic impact because that is what the government actually took from them. The FWPs’ position is that a change 

in fair market value approach would not accurately account for the fact that the governmental action targeted 

their “going business concerns.” See Appellants Br. 226. 

We agree with the FWPs that, consistent with the second approach in Cienega X, they may attempt to prove the 

economic impact of the Preservation Statutes on their 

property interests by demonstrating their lost opportunity 

to earn market-rate rental income after prepaying their 

mortgages. That is what Dr. Wade did in his expert report. 

Dr. Wade first determined FWPs’ “lost net income due to 

the restriction,” Cienega X, 503 F.3d at 1282, by taking the 

net present value of the FWPs’ future rental income without the Preservation Statutes and subtracting it by the actual income that each FWP earned from the sale of its 

property (or, in the case of Rock Creek, the low-income 

housing rental income earned under its LIHPRHA use 

agreement). J.A. 3810–22. Dr. Wade then “compare[d] the 

lost net income due to the restriction . . . with the total net 

income without the restriction,” Cienega X, 503 F.3d at 

1282, by dividing the lost net income by the net present 

value of the future rental income. J.A. 3810–22. Thus, Dr. 

Wade’s approach was in accordance, at least broadly speaking, with a method for measuring economic impact that 

this court has expressly endorsed.

The Claims Court never wavered from its initial conclusion that the one, and only one, way that Dr. Wade was 

allowed to measure economic loss in this case was by comparing fair market values. That initial conclusion resulted 

in, what the FWPs’ counsel accurately termed, “a series of 

cascading errors” that led to the court’s finding that Dr. 

Wade’s entire expert report was nonprobative. Oral Arg. 

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18 ANAHEIM GARDENS, L.P. v. UNITED STATES

at 38:20. That erroneous finding cannot support the court’s 

grant of summary judgment.

B

Next, we turn to the Claims Court’s conclusion that Dr. 

Wade’s analysis contained two additional flaws that were 

contrary to binding precedent and thus rendered his opinions nonprobative. Decision, 140 Fed. Cl. at 92 (“Dr. 

Wade’s methodology is not probative as to economic injury, 

or the severity of economic injury.”). The Claims Court 

characterized the two flaws as (1) the “parcel as a whole” 

concept and (2) economic loss severity measures. See id. at 

90–91. We address each of those alleged flaws in turn.

1

The Claims Court concluded that “Dr. Wade’s approach 

is inconsistent with the parcel as a whole teaching of 

Cienega X.” Id. at 91; Cienega X, 503 F.3d at 1280 (“[T]he 

correct approach is to consider the ‘parcel as a whole.’”) (citing Concrete Pipe & Prod. of Cal., Inc. v. Constr. Laborers 

Pension Tr. for S. Cal., 508 U.S. 602, 643–44 (1993)). The 

court took issue, in particular, with Dr. Wade’s statement 

that the economic impact was “benchmarked . . . to the 

owners’ equity at stake.” Decision, at 91 (quoting Plaintiffs’ 

Appendix at 253, Anaheim Gardens v. United States, 140 

Fed. Cl. 72 (2018) (No. 1:93-cv-00655), ECF No. 441-4). The 

court raised two concerns with that benchmarking approach. 

The Claims Court’s first concern with Dr. Wade’s 

benchmarking was that he supposedly “substitute[d] the 

owner’s equity portion of the entire property for the parcel 

as a whole.” Decision, 140 Fed. Cl. at 91. The government, 

in its brief, similarly accuses Dr. Wade of using the equity 

as the denominator of his equation. See Appellee Br. 16. 

But the Claims Court and the government appear to have 

misunderstood Dr. Wade’s analysis. Dr. Wade used a net

present value as the denominator of his equation, with “net 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 19

present value” representing “present value” of future cash 

flows subtracted by “equity.” Thus, not only did Dr. Wade 

not substitute the equity for the parcel as a whole in the 

denominator, he actually subtracted the equity out of the 

denominator. Dr. Wade’s report explains that he used net 

present value because it “provides absolute measures of the 

dollar amounts at stake in the litigation.” J.A. 3811. While 

we are not in position to decide whether Dr. Wade’s decision to use net present values was sound under principles 

of economics, we do not agree with the Claims Court that 

his approach failed to consider the parcel as a whole.

The Claims Court’s second concern with Dr. Wade’s 

benchmarking was that he reduced the denominator in his 

equation and thus inflated the economic impact. Decision, 

140 Fed. Cl. at 91. But every choice by an expert to use one 

input over another will necessarily increase or decrease the 

final number. The mere fact that Dr. Wade used a lower

denominator and thus calculated a higher loss percentage 

does not, in itself, mean that his calculations were incorrect 

or improper. Again, questions remain as to whether Dr. 

Wade’s methodology was consistent with principles of economics and whether his explanation for using that approach is credible. But those are not questions that we can 

resolve on appeal, nor are they questions that the Claims 

Court should resolve on summary judgment. Rather, the 

Claims Court should consider the admissibility of Dr. 

Wade’s expert analysis under the Federal Rules of Evidence and, at trial, evaluate his credibility and persuasiveness when he explains why he used net present values.

Finally, even if the Claims Court were to conclude that

Dr. Wade’s decision to subtract equity was problematic—a

conclusion that the court cannot have yet reached—we note 

that Dr. Wade’s expert report is likely still probative of economic impact. To illustrate, Dr. Wade presented an economic loss equation and used net present values as inputs 

to that equation. The economic loss equation itself appears 

to be unchallenged, but the Claims Court has suggested 

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20 ANAHEIM GARDENS, L.P. v. UNITED STATES

that perhaps Dr. Wade should have used present values as 

inputs. Either way, Dr. Wade’s report includes both sets of 

possible inputs because before he calculated the net present values, he had to first determine the present values of 

the future income streams at the prepayment date for each 

of the properties. See, e.g., J.A. 3897 (calculating the present value for Cedar Gardens at the prepayment date to be 

$6,810,385). Thus, Dr. Wade’s expert report provides the 

relevant equation and all possible inputs for that equation.

Ultimately, the Claims Court’s concerns about Dr. 

Wade’s benchmarking do not support a grant of summary 

judgment. There are evidentiary issues that the Claims 

Court has not yet considered as well as genuine issues of 

fact regarding Dr. Wade’s decision to use net present values in his calculations. On the record presented, we do not 

agree with the Claims Court that Dr. Wade’s benchmarking approach renders his opinions entirely nonprobative of 

economic impact.

2

The Claims Court also concluded that Dr. Wade’s opinions about economic severity were illogical and unhelpful, 

mostly because they resulted in calculated losses that were 

larger than the appraisal values that determined the sale 

price under LIHPRHA. See Decision, 140 Fed. Cl. at 91–

92. For that conclusion, the court cited Cienega X, where 

this court took issue with a damages award that was higher 

than the appraised value of the property. Cienega X, 503 

F.3d at 1282 n.13 (“A determination that damages exceed 

the value of the property should be indicative that the 

method of computing damages is flawed.”).

As this court stated in Cienega X, “[l]ogically speaking, 

the government cannot take more than what the plaintiffs 

actually possess.” Id. But that footnoted statement was in 

the context of a post-trial damages award that exceeded the 

amount of an unchallenged appraisal. Id. Here, in contrast, the FWPs do not concede that the appraisal values 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 21

accurately represent the value of the properties they actually possessed. Thus, our dictum in Cienega X does not preclude a finding in this case that the actual economic loss 

suffered by the FWPs could have been larger than the appraisal values of their properties.

The Claims Court explicitly acknowledged that Dr. 

Wade disputed the accuracy of the appraisals. Decision

140 Fed. Cl. at 90 n.12 (citing Dr. Wade’s expert report). 

And the court recognized that Dr. Wade’s methodology 

could be justified “if he persuasively explained why the 

LIHPRHA FMV appraisal[s] grossly undervalue[] [the 

properties].” Id. at 92. The court simply did not find his 

explanation “persuasive.” See id. But the persuasiveness 

of an expert’s explanation is not an issue to be weighed by 

the court on summary judgment. See Jay v. Sec’y of Dep’t 

of Health & Human Servs., 998 F.2d 979, 982 (Fed. Cir. 

1993) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

255 (1986)). 

The government argues that Dr. Wade has not presented an alternative fair market value and has only argued that the process cannot yield a fair market value at 

all. Oral Arg. at 32:15. Regardless, Dr. Wade’s expert report sets forth his opinion that the appraisal values did not 

accurately reflect the full values of the properties. See Decision, 140 Fed. Cl. at 90 n.12. Moreover, the FWPs have 

clearly asserted their position that the appraisals are poor 

proxies for the actual losses that they suffered in this case. 

See, e.g., Oral Arg. at 39:05. At the very least, because 

there is no dispute that “the fair market value of incomeproducing property reflects and includes the value of income that might be realized from the property,” Decision, 

140 Fed. Cl. at 80 (citing First Fed. Lincoln Bank v. United 

States, 518 F.3d 1308, 1317 (Fed. Cir. 2008)), Dr. Wade’s 

opinions regarding lost income inherently reflect his view 

that the appraisals did not accurately account for the value 

of the income-producing properties in this case. 

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22 ANAHEIM GARDENS, L.P. v. UNITED STATES

For the foregoing reasons, we do not agree with the 

Claims Court that Dr. Wade’s calculation of losses greater 

than the appraisal values is necessarily illogical and unhelpful. Because there are unresolved fact questions regarding the accuracy of the appraisals and the proper 

measure of the FWPs’ losses, the economic severity issue 

does not support the Claims Court’s grant of summary 

judgment.

C

Lastly, we address the government’s proposed alternative ground for affirmance on the basis that Dr. Wade used 

data that post-dated the alleged taking. The government 

argues that Dr. Wade should have restricted his analysis 

to the data that were available to the parties (i.e., the developers and the government) at the date of the taking, 

which in this case is the prepayment date for each of the 

properties. The government cites the “settled principle in 

takings law that the proper date for valuing the property 

allegedly taken . . . is the date on which the taking allegedly occurred.” Appellee Br. 20 (citing Supreme Court and 

Federal Circuit precedent).

The FWPs respond that the law requires that the future values of their losses be discounted to the relevant prepayment date for each property, which is what Dr. Wade 

did. Reply Br. 15–16. They argue that, not only are ex post

data allowed to be used in measuring economic impact, 

they are in fact the best measure to ensure that FWPs receive compensation for the full extent of the takings. Id. at 

16–17.

We agree with the FWPs. We do not find a basis in the 

law to categorically favor the use of outdated ex ante forecasts or projections over verifiable real-world ex post data. 

While ex ante data may be preferable in some cases for policy reasons (e.g., to avoid “post hoc fluctuations,” see Appellee Br. 22), the Claims Court must decide based on the facts 

and circumstances at issue whether this is such a case. As 

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ANAHEIM GARDENS, L.P. v. UNITED STATES 23

the Claims Court did not reach that issue and we cannot 

decide it in the first instance on appeal, we reject the government’s proposed alternative ground for affirmance 

based on Dr. Wade’s use of ex post data.

CONCLUSION

For the foregoing reasons, we affirm the Claims Court’s 

grant of summary judgment with respect to Su Casa. With 

respect to the remaining FWPs, we vacate the Claims 

Court’s grant of summary judgment and remand for further proceedings.

AFFIRMED-IN-PART, VACATED-IN-PART, AND 

REMANDED

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