T a k i n g s C l a u s e ; inverse condem nation;

U.S. Const. am end. V;

c o g n i z a b l e p r o p e r t y i n t e r e s t ; j u s t

com pensation. 

# In th e United States Court of Federal Cl aims

No. 10-757L (Filed: May

18, 2018)

* * * * * * * * * * * * * * * * * * * * * *

GADSDEN INDUSTRIAL PARK, LLC,

Plaintiff

,

v.

THE UNITED STATES,

Defendant.

* * * * * * * * * * * * * * * * * * * * * *

Kent E. Baldauf, Jr.

, Pittsburgh, PA, with whom were Bryan P. Clark, Anthony W

. Brooks, and Edward Levicoff f or plaintif f

.

Eric John S

ingley

, United States Departm ent of Justice, Civil Division,

Com m ercial Litigation B ranch, W a s h i n g t o n , D C

, w ith whom were Kenneth M.

Dintzer and Margaret J. Jantzen f or def e ndant.

OPINION

BRUGGINK, Judge

.

T his is a takings claim brought b y Gadsden Industrial Pa r k

, L L C

. Plaintif f asserts t hat the Environm ental Protectio n A g e ncy (“EPA”) t ook kish 1

, slag, and scrap belonging to it. Plaintif f alleges that it purchased t he m a terials

at a bankruptcy a

uction f rom a def unct steel m ill and t hat EPA e ither used the

m aterials itself or p e rm itted its contractor s t o r em ove t hem despite GIP’s ownership. Trial was c onduc t e d i n Birm i ngham

, Alabam a, f rom July 25 through 28, 2017. W e hold that EPA’s a c tions constituted a com pensable

1 K i s h i s a b y

product of the steel-m aking process. W e def er a m ore particularized def

inition f or n ow, as t he m eaning i s dispu t e d between the parties.t a king under t he Fif t h Am endm ent Takings Clause, although we f i n d t h a t plain t i f f ’s proof of t he c om

pensation to which it is e ntitled f ails in m ost
respects

.

BACKGROUND

The personal property in which plaintif f c laim s an interest i s kish, slag,

and scrap l ocated on a 761-acre site in Gadsden, Alabam a. The site was used

f or m any y ears as a steel m ill, m o st recently by G ulf States Steel, which went
into bankruptcy in 1999, l eaving all personal and real property at the site to be disposed of

by the Trustee in Bankruptcy

.

A north-south road transects the property

. To the west s ide of this r oad,

Gulf States S tee l h o used its steel-m aking operation, including a coke plant,

blast f u rnace, and basic oxy gen f urnace, am ong other equipm e nt. To the east
side of this road (“Eastern Excluded Property ”), there were two settlem ent lagoons, l a n d f

i l l s, and two large areas where Gulf States Steel deposited

m aterials genera t e d by steel-m aking, along with other discarded m aterials.

The p arties r ef

erred to these a reas where Gulf S t a t es Steel d eposited steelm aking by

products, scrap, and trash as the north and south piles.

W hen Gulf S tates Steel operated t he m i ll, it contracted with H eckett, a

m etal r ecovery c om

pany , to recover reusable o r saleable m aterials f r o m t he

Eastern Excluded Property

. Heckett screened m aterial dum ped on the Eastern

E x cluded Property and returned recovered m etals to Gulf States S t e e l t o

recy cle into its steel-m aking process o r to s ell. H e c kett’s operation could not keep pace with Gulf

States Steel’s steel-m aking, however. Thus, a stockpile

of m aterials accum

ulated prim arily o n the Eastern Excluded Property

. There

were two piles of stockpiled m a terial. Each occupied m o re t han ten acres and

contained an estim ated total o f three to f o u r mi llion cubic y ards of m aterial.

Each was m o re than eighty f eet high.

Gulf States Steel f

i led a Chapter 11 bankruptcy p e t i t i on i n 1 999 t hat

was converted to Chapter 7 in 2000. It ceased operations in 2000. Heckett’s

me t a l recovery ceased at the sam e tim e. Another m etal recovery pr o j e c t
occurred on the property during t he course of the bankruptcy proceeding,

however. A b l e c o Finance LLP (“Ableco”) e n f orced its senior security

i n t erests and liens and received the necessary a uthorization t o atte mp t t o collect am ounts G ulf States Steel o w e d it. Ableco h eld “a f irst priority and perf ected lien on t he kish iron” and c h ose to contract with Regional Recy cling

in Nove m

b e r 2 0 0 1 “to recover and rem ove kish iron and other f e rrous

m aterials f

rom the slag he a ps at the Gulf States Steel f a cility on a ‘constant

and continuing b asis[ .]’” Letter f rom Jef f r ey Herm ann, Ableco’s Counsel, to Carrie Casey , GIP (Jan. 31, 2003), Pl.’s Ex. 15 at 3.

2W hen Gulf States Steel f i led i ts bankruptcy petition, a group o f f o rm er Gulf States Steel em

p loy ees worked to secure the plant and catalogue assets.

A Gulf States S teel bondholder f orm e d the Gulf States Reorganization Group

to purchase som e of the a ssets in order to restart p art of the pla n t

. A n entity

nam ed DoveBid conducted a f irst auction, s e lling t he b last f ur n a c e , r a i lroad tracks, cranes, and cold f

inishing m ill. T he rem aining a ssets were c atalogued, including those that t he Gulf States Reorganization Group wanted t o b u y

. Thereaf ter, the bankruptcy trustee, Jam es Henderson, f il e d a m otion f

or an order to establish bidding procedures f or the sale of the r em aining Gulf States

Steel assets i n July 2 002 (“Bidding Motion”). Two instrum ents described the
property to be sold. The Bidding Motion f irst generally described the assets:

Tangible property

, including real, personal a n d m ixed property

, all situated a t or adjac e n t to t he s ite where the debtor [ Gulf States Steel] f

o rm erly conducted its m anuf

acturing operations, consisting of approxim ately 600 a c res o f real property and the

im provem ents thereon, easem ent rights appurtenant th e r e t o, inventory a nd equipm ent. The property t h a t i s the subject [ of ] this sale is generally

described in Exhibit A hereto.

Bidding Motion, Joint Ex. 1 at 1.

Exhibit A to the Bi d d i n g Motion was p repared by Gulf States Reorganization Group. It included a general description providing that both

real and personal property would be auctioned. The real property included the

East e r n E x c l u ded Property

. The personal property f o r sale included “[ a ]ll

m aterials, w hether raw m inerals or by -products, situated within the boundaries

of the r eal property b eing sold, including kish a n d s c r a p

. ” I d. at 6

. The Bidding M o t ion explained that Gulf States Reorganization Group had of f e red

to purchase a l ist of assets detailed in an a s set purchase agreem ent, Exhibit 1 to which included units that the group proposed to purchase:

ATTACHMENT 5 – INVENTORY

BY PRODUCTS OF MANUFACTURING INCLUDING BUT

NOT LIMITED TO KISH AND MISCELLANEOUS OTHER

MATERIALS AND ASSORTED SCRAP.

Id. at 32.

The bankruptcy trustee did not sell the assets t o Gulf States Reorganiz a t i o n G r oup because the p resence of o ther bidders, i ncluding D on Casey

, required Mr. Henderson to o pen bidding t o the public. Mr. Casey i s the proprietor of Casey Equipm ent, a f am ily -owned business based in Pittsburgh, Pennsy lvania, since 1961. Casey Equipm e nt is in the business of buy ing and

3selling steel m i ll equipm e nt and had worked with Gulf States Steel prior to its

bankruptcy

. Mr. Casey

, o n behalf of Casey Equipm ent, participated in the f irst bankruptcy auction. He b ecam e aware that Gulf States Reorganization Group

was interested in p u rchasing the rem a i n ing assets in the second auction and inquired i nto partnering with the group. Ultim a tely

, Mr. Ca s e y determ ined t hat

his best option was to bid o n the assets independently

. T o p a r t i c ipate in the

second auction, Mr. Casey f o rm ed plaintif

f Gadsden Industrial Park, LLC (“GIP”). GIP was a b idder in the second auction. Carrie Casey

, M r. Casey ’s daug h t e r w ho w orked f

or Casey Equipm ent until her retirem e nt in 2016, represented GIP in the second auction process.

Attached to the Bidding Motion f o r the second auction was t he asset

p u rchase agreem ent and the a sset list draf ted by Gulf States Reorgan i z a t i o n Group a nd set out above. GIP did n ot w ant t o p u r c h a s e a l l of those assets.
GIP thus requested a bidding procedure m odif i cation to p er mi t c o mp eting

bidders to b id on a m ore lim ited s et of assets. The bankruptcy court granted

the request. During t he bid d i n g p r ocess, on Septem b er 19, 2002, M r. C asey

em ailed Ms. C asey , “ [ W ]e want to buy the rights to m ine th e slag piles[ .] [ D]on’t let m e f

orget[ .]” Pl.’s Ex. 5.

GIP s ubm itted an all-cash bid of $6.3 m illion f o r m ost, but n ot all, of

the rem aining estate assets. The bankruptcy court f o und that GIP of

f ered the highest and b est bid and directed Mr. Henderson to close the sale to GIP. Mr. Henderson and GIP executed an asset purchase agreem ent on Septem

ber 30, 2002, which was consum m ated on Decem ber 3, 2002. The trustee r eported the

sale on Decem

ber 13, 2002.

GIP purchased b oth real property and p ersonalty

. The Trustee’s Bill of

Sale and the Trustee in Bankruptcy Deed describe the r eal property that GIP purchased a s m ore t han 4 00 acres of land a n d the buildings o n them

, but it was

not the entire real property estate. GIP purposely o m itted approxim ately 2 00

acres, i n cluding the Eastern Excluded Property

, although, as indicated below,

it purchased personal property present o n the e xcluded acreage. It did this in order to avoid potential environm ental responsibility

.
The p e r s o n a l property GIP purchased is described in part in the

Trustee’s Bill o f Sale, which included Exhibit A, the Bidding Motion, with its

g e n e r a l description of personal property : “[ a]ll m aterials

, w h e t h e r r a w m i n e r a l s

or b y -products, s ituated within the b oundaries of the real property being sold, including kish and scrap.” Joint Ex. 19 at 67. Exhibit A, the list of property units sold, included “Attachm ent 5 – Inventory : ”

4BY PRODUCTS OF MANUFACTURING I NCLUDING BUT

NOT LIMITED TO KISH AND MISCELLANEOUS OTHER

MATERIALS AND ASSORTED SCRAP.

Id. at 117. This m aterial had accum ulated on the land

that GIP did not buy

.
Exhibit B to the Trustee in Bankruptcy Deed not only carved out the

eastern portion of the site, b ut i t also excluded certain personal property (“Exclusion List”):

1. W ith ref

erence to the property identif ied in “ATTACHMENT 5 – INVENTORY,” Purchaser excludes:

A. All m iscellaneous other m a terials.

B

. A ll by -products of production other than k ish and 4 2 0

, 0 0 0

cubi c y a r d s of slag which a r e located o n t he Excluded Real Property as i s d e scribed on Exhibit B to the deed f r om Seller to
Purchaser of e ven dat e herewith, together w ith a r easonable period of tim e to rem ove such item s

.
Id. at 120.

Ms. Casey wrote the Exclusion List. She testif ied tha t t he Exclusion

List was the only part of the bankruptcy sale contract that GIP had participated

in writing and t hat she “cut and pasted” term s in t he Exclusion List. Trial Transcript (“Tr.”) at 105. Ms. Casey did not discuss the reasonable period of

tim e language with the bankruptcy trustee. She a dded the reasonable period

of tim e language because s h e w a s i n the habit of including such a term in contracts she was involved in negotiating f or Casey Equipm ent. She did not

know how long GIP would require to retrieve the m aterials it bought and thus

added language that she believed would s e cure GIP’s right to access the Eastern Excluded Property to retrieve the m aterials.

Following the bankruptcy sale, GIP began work at the site and becam e

aware of Regional Recy cling’s m etal recovery operation on b ehalf of Ableco.

GIP believed that Ableco had recov e r e d and sold m aterials GIP purchased. Thus, on January

2, 2003, GIP wrote a letter to Ableco inf orm ing it that GIP purchased “the kish a nd scrap m etal located at the f orm e r G u l f States Steel

site.” Letter f

r om Carrie Casey , GIP, to Jef f r ey Herm ann, Ableco’s Counsel (Jan. 2, 2003), Pl.’s Ex. 14 at 1. G IP dem anded “restitution in an am o unt equal

t o t he value of the assets sold[ .]” Id

. Ableco responded, contesting any liability t o G IP f

or t he m a terials recovered and sold, explaining that Regional Recy cling ran i t s recovery operation until Decem b er 2002 “at w hich tim e Ableco term i nated the K ish Iron Contract based upon A bleco’s u nderstanding

5that the T rustee

. . . had agreed to t ransf er to G IP t he right to rem ove kish iron

af ter the date of the C losing

. . . . ” L e t t e r f r om Jef f rey Herm ann, Ableco’s Counsel, to Carrie Casey , GIP (Jan. 31, 2003), Pl.’s Ex. 15 at 3.

Im m e diately

af ter the bankruptcy

sale, GIP f

ound tenants f o r som e of

the buildings and d ism antled others and f ound purchasers f

or som e of the steel

m ill e quipm e nt it had p urchased. GIP u s e d s l a g f rom the E astern Excluded Property t o f

i l l the below-ground-level voids lef t af ter the rem oval of equipm ent. It also sold additional slag. In total, Mr. Casey estim ated that GIP

used or sold a

pproxim ately 15,000 cubic y ards of slag, which he e stim ated was ten percent of

the slag on the Eastern Excluded Property

.

In 2004 a nd 2005, GIP brought W a t kins Metals Co., Inc. (“W a tkins”),

on site to recover m etal f

rom a pile of slag located in the northwest corner of

the real property that GIP had p u r c h a s e d

, not f rom the piles on the Eastern

Excluded P roperty

. W atkins is located in Birm ingham

, Alabam a, and is in the

business of m etal recovery , scrap processing, and recy cling. To recover m etal

f rom GIP’s r eal property

, W atkins used s e p a r a t i n g equipm ent, weighed the

recoverable m etal, and loaded it into railca r s f o r GIP. During the one-y ear project, W atkins rec o vered m e tal pieces ranging f rom six inches to f

our f eet
in s ize. W atkins r e c e i v e d $ 3 5 p er ton of m etals retrieved and loaded f or its

work recovering the m etal, but GIP retained ownership of t he m e t a l s

. G IP

later contracted with W atkins t o com p lete another r ecovery project near the

m iddle of G IP’s property f ro m w h i c h W atkins recovered item s such as steel

beam s and m etal m ixed in with slag.

Af t er a request f

rom the Alabam a Departm en t o f E n vironm ental Managem ent and pursu a n t to an Action Mem o randum relating to potential Superf und sites, EPA began its f irst rem o val action on the site in 2003. EPA investigated a claim that contam inants were leaching out of the piles a nd f rom nearby lagoons. Barbara Scott, EPA’s o n-scene c oor d inator f rom 2003 to
20 0 6

, d e t erm ined that the piles as well as the lagoons were causing

environm ental p r o b l e m s

. S p e c i fi c a l l y , EPA was concerned that environm ental

contam inants associated with the piles and lagoons, such as oil and leachate,

were m igrating f

rom the Eastern Ex c l uded Property

. Although E PA did

endeavor to rem ove as m

uch oil as possible, M s. Scott determ ined that sim ply

rem oving the o il f

rom the lagoons w ould not be a long-term solution, because

the equipm ent to m aintain the lagoons had d eteriorated, and solids within the lagoons a lso posed a problem

. The EPA’s on-scene coordinator f or 2007 and 2008, Randy Nattis, and t he rem edial p roject m anager, Jordan Garrard, elected

to f ill one of t he lagoons with on-site slag as a way t o r e d u c e c o ntam inated

overf low.

6In 2006, Multi S e r v , a mi ll service com p any that is a division of the

Harsco Corporation (“Harsco” )

, c o n t a c t e d t h e E P A R e m e d i a l P r o

j e c t M a n a g e r, Am y McLaughlin, regarding recoveri n g m a t e r i a l s fr o m the piles on t he Eastern

E x c l u ded Property

. She had reviewed GIP’s bankruptcy sale contract a n d

inf orm ed MultiServ: “It looks like the G adsden Industrial Park h as t he m ining

ri g h t s f o r t he slag at the Gulf States Steel Property

. If y o u are interested in

reclaim ing the s lag, I suggest c ontacting Don C a sey .” Em ail f rom Am y McLaughlin, Rem edia l Project Manager, EPA, t o Ken Orndof f

, Business Developm ent Manager, MultiServ (Fe b

. 1 3

, 2006), Pl.’s Ex. 25

. MultiServ subsequently m ade a proposal t o GIP t o process t he piles, but the two parties

did not m ove bey ond initial discussions.

In 2007, EPA inquired into ow n e r s h i p of the piles and m a terials stockpiled on the Eastern Excluded Property in connection with its ef

f orts to
address environm ental concerns. T h i s b e g a n a series of com m u nications

between EPA and GIP that f ueled conf

usion r egarding what GIP h ad purchased f

rom the bankruptcy estate. EPA sent GIP a request f or inf orm ation through Mike Stevenson, counsel f or EPA, under section 104 of the

Com p rehensive Environm ental Response, Com pensation, and Liability A ct 2 ( “ CERCLA ” )

. Pl.’s Ex. 37. The request noted that, “GIP purchased what is

now operated as the Gadsden Industrial Par k a s well a s two large slag piles

located on t he rem aining G ulf States Steel property and t hat are adjacent to the

w a s te lagoons and Black Creek.” Id

. at 1. EPA asked if Gadsden h a d

“conducted o r a rranged f or any environm ental cleanup or m ana g em ent of

hazardous m aterials ” a nd whether GIP had taken action to stop or prevent “ any continuing releases of

hazardous substances.” Id. at 6.

Thereaf ter, a series of

em ails and m e e tings f

ollow, som e of which we

set out herein. Initially

, Mr. Casey responded by em ail to Mike Stephenson,

EPA counsel, on January 29, 2008, explaining, “ I n y o ur cover l et t e r i t is

m entioned that GIP b ought two large s lag piles a d j a c e n t to the lagoon. My understanding is Gadsden does not own the two rem aining slag piles b ut does

have the r i g h t t o mi n e them

. ” P l.’s Ex. 39. He provided details regarding various aspects of

GIP’s operation on the site and closed by writing,

It is to GIP’s best interest that th e G I P p roperty and the

su r r o u n d i ng estate owned properties be rem ediated. GIP will

continue to rem ediate its property and has a l r e a d y volunteered

to work with the EPA to discuss way s to m ore ef f iciently clean

up t he coke plant area. Outside of the coke plant area, GIP will

2 42 U.S.C. §§ 9601–9675 (2012).

7continue to help the clean up of t h e estate p roperty by continuing to reduce the size of the two s lag plies. In addition

GIP is now study ing way s to reduce the very large and v ery ugly Kish piles[ .]

Id. at 3.

On February 4, 2 008, Mr. Casey e m ailed Mr. Stephenson again to
discuss alleged e nvironm ental concerns on the Eastern Excluded Property

. He

wrote:

The two big p i les are kish or f urnace dust which i s f

errous oxide

and is not basic[ .] Slag piles are basic with h igh PH[

. ] I am not

s u r e what slag p iles rem ain or where they are l ocated[ .] W e bought the right t o m ine 400[

, ]000 cu f t w hich w e m ay have already used. W e used a l ot f or f illing the PM pits and other pits

around the park. W e l e t the city of Gadsden take truck loads.

W e sold som e and gave away truck loads to churches f or use on their parking lots.

Pl.’s Ex 41.

Mr. Casey ’ s com m

unications with G IP’s attorney s at this tim e r ecited

that G IP was “presently negotiating a contract f or t he sale of the kish which is

the nam e [ G IP] uses f

or the ‘red dirt’ in the l andf ill a nd w hich is f

errous oxide

or rust.” Pl.’ s Ex

. 45. Mr. Casey noted that “ the purchase ag reement is clear that

GIP did not buy any

thing else in t he landf

ill[ ,] none o f the other GSS by products.” Id.

Thereaf ter Mr. Stevenson requested that Mr. Casey m eet with EPA to
discuss leachate that was accum ulating in a collection ditch b o r d e r i n g the north and south piles. During a March 4, 2008 m e eting, Mr. Casey inf orm ed EPA

that GIP had purchased kish and 42 0

, 0 0 0 c u bic y ards of s lag and had a reasonable a m o unt of tim e to rem o ve it. GIP com m unicated during the

me e t i n g that it was planning to begin r ecovering m etal f r om the Eas t e r n Excluded P roperty in the near f uture. Mr. N attis and Mr. Garrard understood through this m eeting that kish w as f errous oxide, which Mr. Casey ref erred to

as red dirt. In his c ontem

poraneous sum m ary of the m eeting, Mr. Casey wrote
that GIP m ight be able to work with EPA if a r easonable am ou n t o f t i me is

def ined as when “the EPA is ready to go to work on the piles.” Pl.’s Ex. 46.

This would give GIP tim e to rem o ve som e Kish and if po s s i b l y [ sic] som e

m ore slag helping to reduce the sizes of the piles, a win win f or both parties[

. ]”

Id.

8Mr. C asey f ollowed up with EPA via em ail on March 19, 2008,

rem inding EPA of GIP’s plans to start r em oving kish in t he near f uture. P l.’s

Ex. 51 at 2. In that em ail, h e wrote, “I believe I alread y a n swered y ou concerning the Kish or red dirt as we call it[ .] GIP has not r em oved any Kish

or red dirt to d ate.

. . . GIP plans to start rem oval of Ki s h i n t h e v e ry n ear f uture.” Id. Mr. Casey

then provided

an explanation regarding GIP’s use of slag by separating slag into “Arc Furnace Slag” and “Blast Furnace Slag,” writing that the f

o rm er has little m arket value a nd GIP used i t to f ill pits or

gave it a w ay to the city o r churches, w hereas the latter has m arket value and

GIP had b een s elling it. Id. Mr. Casey explained that “ n o records are kept” of

ho w mu c h s l ag was t aken. Id. T hese com m unications are silent regarding

scrap.

Further dissecti o n o f the com m u nications between GIP and EPA concerning plaintif

f ’ s ownership rights is unnecessary

. The y c a n b e

sum m arized as a desultory a nd i m precise conversation, the substance o f which

was that GIP claim ed the right to extract kish and slag, a nd that EPA persisted

in dem anding to know o f plaintif f ’s intentions and plans. Given M r. Casey ’s

im p recise characterizations of what GIP bought, we are not surprised that he

did not item ize scrap. The com m unications a r e b e st seen in the context of

EPA’s concern about environm ental issues, and GIP’s lack of precision about

title m atters i s hardly surprising. The issue o f what GIP owned is one o f law, which we explore below.

At the sam e tim e that M r. Casey was com m unicating with EPA regarding what GIP owned and GIP’s o wn r e m ediation ef f orts, G IP was

m aking plans to recover m a terials f rom the Eastern E xcluded P roperty and sell

them

. GIP n egotiated w ith Metawise Group to purchase C f i nes, which are

sm all pieces of f

errous m aterial less than one inch i n s i z e , f o r $4.50 per ton
af ter l o ading costs. In 2007, GIP reached out to W a tkins to discuss whether

it would be interested in recovering the m aterials GIP bel i e v e d to be in the piles on the Eastern Exclude d P r o p e rty

. It proposed the sam e $35 p er ton

agreem ent as GIP and W atkins had on the previous recovery project. See P l.’s Ex. 55. The projects that W atkins had com pleted on the northwest corner of

GIP’s property h ad been sm aller in scale, but Danny Stevens, W atkins’ owner,

was f am i liar with the piles on the Eastern Excluded Property

. He agreed with GIP that recy clable m aterial could be extracted.

Mr. Stevens rejected the $35 per ton proposal, however. Instead, Mr.

S t e v e n s proposed to r ecover m etal at W atkins’ own expense and pay G I P a

com m ission af

ter the sale of recovered m aterials. Mr. Stevens explained t hat

reclaim ing m aterials f

rom the piles on the Eastern Exc l u d e d P roperty w ould

9be “a lot m ore labor intensive a nd is not as easy to get the i r o n out as t hat

northwest corner was.” Tr. 373. Mr

. S t e v e n s wrote i n h is letter to GIP t hat

W a tkins would list the products i t h o p e d to recover and develop a pricing

f orm ula to avoid conf

usion r egarding the a m ount of com m ission f or each

m aterial. Pl.’s Ex. 55.

GIP did not accept W a t k i n s ’ proposal, so W atkins proposed an alternative in which GIP would pay W a tkins a f ee p er t on of recovered m etal

with GIP retaining ownership of the m etal along w ith responsibility f o r its s ale.

This proposal was m em orialized in a draf t “Agreem ent to Process Kish.” P l.’s

Ex. 71. The agreem ent recited, “This a g r e e m ent details the processing of Kish, m o re com m o n l y known as Red Dirt which c onsists of various size

m etals. The Kish is located on the landf ill East of the P ark on property owned by the def

unct Gulf S tates Steel.” Id. W atki n s a greed to provide the equipm ent and labor to “ separate and s creen t he Kish in order f or [ G I P] to

recover and sell the m etals i n t he Kish.” Id. The draf t identif ied s ix categories

of recoverable m a terials: f our m etal s izes ranging f rom “ l e s s t h an one i nch (f i nes)” to m etals greater than three f eet along with two categories of scrap. Id.

The proposal involved GIP pay ing W atkins seventy d ollars p er g r oss

ton to screen, separate, and load m etals that were m ore t han one inch i n size

. 3

W a tkins also proposed to screen, separate, m ove, a n d pile the sm aller f ines at

no cost to GIP. W atkins would obtain an option to purch a s e s e p a r a t e d piles

of f ines f or ten dollars per ton. W atkins also would obtain the exclusive right

to recover m aterials f

r om the piles “so long a s W atkins reclaim s 500 gross tons
of m aterial each m onth.” Id. The proposal would perm it W atkins to withdraw

af ter a two-week written no t i c e i f the q uantity of m aterial available f or processing did not allow f or prof itable operations.

Mr. St e v ens anticipated being able to begin within a m onth a f ter an

agreem ent was reached. At trial he d escribed how W atkin s w o u l d have perf orm ed the work. The basic process f o r m etal recovery was to excavate the

m aterial, p ull out the larger pieces of visible m etal, and run the s m aller

m aterials over a m agnetized convey or belt t hat would separate and screen out

3 Plaintif f ’s d am ages expert, Mark Gleason, incorporated i nto his analy sis an oral revision to t he agreem ent that Mr. Casey and Mr. Stevens com m unicated

to him in his preparation: GIP would not have paid W atkins f or m aterials t hat

GIP u ltim ately s old f

or less than $ 70 per ton. T his term does not appear in the

draf t agreem ent, and it also was not ref e renced in Mr. C asey ’s or Mr. Steven’s

testim ony . W e f

ind that the oral provision was not proven.

10the m etal. The lef tover nonm etallic m aterial w ould be re-piled o n the Eastern

Exclu d e d P roperty

. W atkins had bulldozers, m agnetic cranes, s creens,

m agnetic convey ors, and trucks. It had f ive or six local em

ploy ees. If it was

necessary to increase the rate of

processing the piles, W atkins could bring in

a second set of equipm ent o r p u r c hase additional equipm e nt. Mr. S tevens expected the job to take ten y ears or m ore.

As GIP and W atkins negotiated their m etal recovery agreem ent, EPA

h a d t asked an on-site contractor, CMC Inc., with addressing environm ental issues, including h o w to s top calcium in the slag f rom prec i p i t a t i n g out as leachate. EPA’s initial plan was to r e mo v e s lag f rom the site. EPA also

considered o ther alternatives to a m assive rem oval of s l a g. It considered capping the p iles a s they stood and sim ultaneously im

proving the surrounding

drai n a g e d i tches. Mr. Casey testif ied t hat GIP had of

f ered to im

prove these

sam e ditches at no cost t o the governm ent. Another a l te r n a t i v e , a nd the one EPA ultim ately adopted, w as t o reduce the si z e o f the piles by rem oving

saleable m e tal, and then c apping what was lef t of the piles. In order to pursue the latter alternative, EPA sought bids to perf orm an invest i g a tion i nto the

f easibility of recovering s aleable m aterials f rom the piles to o f

f set the cost of

CMC’ s r e m e diation work. There was no testim ony t hat EPA e m ploy ees believed th e m aterials GIP purchased constituted an e nvironm ental hazard. By

this tim e, EPA of

f icials understood that the m e tal in the piles had value.

In A p r i l 2 008, representatives f rom MultiServ toured the site.

Af terwards Mr. Nattis inf

orm ed m em

bers of the EPA team

via em ail in M ay 2008 that he had “ a f

irm very interested in taking ALL the Slag / K ish f rom the

site f or reuse, but [ that] is [ contingent] on t aking all o f i t, including the bef ore

m entioned Kish.” Pl.’s Ex. 65 at 1. Mr. Nattis noted in this em ail, however,

that “GIP claim s they own the r ight t o ‘som e’ of the m aterial (Kish) within the pile.” Id.

As a result of EPA’s exploration of a m etal rec o very operation of its

own, W atkins ultim ately declined to e n t e r a n agreem ent with GIP. Mr.

S t evens m et with E PA’s on-site coordinator, Mr. N attis, and through t hat

m eeting understood that EPA was planning to recover the m etals i n the piles by hiring its own r ecy cling cont r a c t o r

. M r. S tevens recalled the m eeting occurring in May or June of 2008. M r

. N a t t i s ’ r ecords indicate that he

interacted w ith M r. S tevens on June 4, 2008. As a resul t o f these

com m unications with E PA, Mr. Stevens believed t hat, as of June 4

, G IP w ould

not be perm itted to p erf

orm its own recovery operation. GIP and W atkins thus

did not consum m ate t he draf

t agreem ent, and W atkins never began recovery

11of m etals f rom t h e p i l e s

. W atkins was also am ong the contractors w ho

subm itted a bid to EPA to conduct EPA’s recovery operation.

By late June 2008, GIP knew f rom Mr. Stevens that EPA planne d t o hire a recy cling c ontractor a n d that W atkins did not believe GIP had the authority to conduct its own recovery operation. Mr. Casey em ailed counsel

f or EPA o n J une 29, 2008, stating that GIP h ad becom e aware that EPA

intended to recover the m etal but that GIP would be contracting with W atkins

to extract the sam e m aterials. M r. Casey again asserted GIP’s right t o kish and requested a m e eting w ith EPA to resolve “ a ny dif f erences between the EPA

and GIP concerning the Kish.” Pl.’s E x. 8 2 at 5

. Mr. Greg Luetscher, counsel

f or EPA, responded via e m ail on June 30, 2008, proposing a conf erence call

at which the parties would discuss “the nature, e xtent, and d erivation of GIP’s rights t o t he k ish” and “adm inistrative m e chanism s u nder which p ersons other

than EPA m ight ty

pically p e rf

orm rem oval work at a S uperf und site.” I

d. at
4. Af ter Mr. L uetsch e r ’ s e ma i l

, Mr. Casey m et with Mr. Nattis in October 2008, and l earned f

rom him tha t EPA did n ot want GIP to leave hazardous

m aterials b ehind af

ter extracting valuable m a terials. T he only hazardous

m aterials, of course, were a ssociated with the sam e slag that EPA proposed to
leave on site.

EPA ultim ately c hose MultiServ to com plete the project. On October 21, 2008, EPA’s co n tractor CMC entered a “Site I nvestigation Agreem ent”

with MultiServ

, w h i c h provided f o r a pilot study o f the Eastern Excluded Property to d eterm ine whether a m etal recovery operation was econom i cally

f easible. The pilot study t ook place i n 2009. During the s i t e investigation,

EPA sent a s econd Request f or Inf orm ation to G I P i n April 2 009, inquiring

into w h at GIP’s interest was in the landf i lls. GIP’s response claim ed that it had rights to kish and slag, ref e rencing the bankruptcy

sale contract.

Based on its pilot r e c overy t est, MultiServ determ ined t hat it was

econom ically f

easible to conduct a f

ull scale m etal recovery operation. It

thereaf t er entered into a “Slag Processing Agreem ent” with CMC in October

2 0 0 9

, which gave MultiServ the right to m ine t he north and s outh pil e s t o

recover m e tal a nd other valuable m aterial. MultiServ also h ad the authority to

m arket and sell what it recovere d

. T h e rem aining m aterials, m ainly slag,

would then b e capped by CMC. At the t im e, MultiServ issued a press release stating that it believed a $50 m illion recovery was possible.

Under the agreem ent, MultiServ would pay CMC f i f teen percent of the

gross proceeds MultiServ received f rom the sale of the recovered m aterials f or the f irst twelve calendar m onths of the agree me n t and t wenty percent of the

gross proceeds in each calendar m onth thereaf ter. That pay

m e n t w as expected

12to relieve EPA f rom p ay ing f

or CMC’s rem ediation activities. CMC

determ ined the percentage based on t he total e s tim ated r e v e n ue f rom MultiServ’s m etal recovery and it s estim ated cost to com p lete the capping

process. MultiServ would retain t he balance o f the proceeds f rom the s ale of

any m aterials.

MultiServ’s m etal recover y p r o cess was basically t he sam e a s t hat

which W atkins anticipated using, although MultiServ a pparently began with

m ore equipm ent and em

ploy ees. Larger pieces of m etal, such as ingots, slabs,

and I-beam s were rem oved bef ore the other m aterial was p rocessed to capture

sm aller p ieces of m etal. MultiServ sold the f e r rous m aterials on a f

reight-onboard basis at Gadsden. To com p lete the project, MultiServ b u i lt a

m aintenance f

acility a nd a large processing plant near the n o r t h p ile.

MultiServ h a d a p p roxim ately twenty em p loy ees working o n s ite when processing the north pile. W hen work expanded t o the south pile in l ate 2011,

MultiServ added f

our hourly

equipm ent operators. It ran two shif ts, totaling

sixteen hours of production per day

, f ive day s per week. MultiServ processed

450 tons of

m a terial per hour at the north pile. Michael Brady

, Harsco’s site

m anager, testif

i ed t h a t s u c h a processing plant would cost approxim ately $150,000 p er m o nth t o r e n t

. MultiServ used a second, lower capacity processing plant at the south pile.

M u l tiServ had help f

rom CMC, which extracted m ixed m ateri a l a n d placed i t in a location f

rom which it could be loaded f or processing. CMC also

m oved nonm etallic m aterials out of the processing zone f or storage on site.

Mr. B rady estim ated that CMC perf orm ed approxim ately f

orty percent of the

work.

MultiServ s old r ecovered m aterials b e g i n n ing in October 2009.

Thro u g h o u t t h e course o f the project, it processed a n d s old 245,890 tons of

m aterial, grossing m ore than $13.5 m illion of m etal-bearing m aterials. Out of

the $13.5 m illion in gross sales, M u l tiServ paid CMC approxim ately $2.4

m illion. Acc o r d i ng to MultiServ’s s ales report, it recovered the f ollowing categories of m aterials: 1” x 0” slag; 3” x 1” slag; A s crap; B scrap; three ty p es of C f ines; C scrap; ingots; m anganese scrap; m iscellaneous; oversized scrap; oversized skulls; plat e ; s kulls; slabs; slag “overbur:” s m all pit scrap; s m all skulls; steel f

ines; steel pit scrap; and wire rope.

During the course o f M ultiServ’s w ork, GIP did not attem pt its o wn

recovery operation. Instead, GIP purchased slag f rom MultiServ f

o r f ive to six

dollars per ton, or approxim ately twelve dollars per c ubic y a r d. T h e t o t a l

volum e of

slag GIP purchased f

rom MultiServ is not set out in the record.

13MultiServ and CMC continued the recovery project through January

2013, when recovery f

rom s a l eable m aterials becam e insuf f icient to f

u nd

CMC’s rem ediation w ork. MultiServ project m anagers estim ated that it had processed approxim ately seventy p ercent of the north pile and t wenty percent
of the south pile by the tim e it ceased working. Peter Mazzarella, who is the

North Am e rican sales m anager f o r Harsco Metals & Minerals and who j oined

Harsco i n 2 008

, estim ated that f if ty percent of the p iles r em ained. Neither CMC nor any

other EPA contractor ever capped the piles.

DI SCUSSI ON

Af t er r e v i e w ing the bankruptcy sale contract, we f i nd that GIP purchased kish, a ssorted scrap, and 4 20,000 cubi c y a r ds of slag at the bankruptcy auction. GIP s uccessf ully proved

that each m aterial was p resent

on the Eastern Excluded Property a n d t h a t it was u sed or sold by EPA. W e hold that EPA’s actions constituted a com pensable taking und e r t he Fif th

Am endm ent Takings Clause. W e f ind, however, that plaintif f ’s proof of the

com pensat i o n t o w h i ch it is entitled f ails regarding kish and assorted scrap.
W e thus a ward plaintif

f c om pensation f

or EPA’s taking of 92,500 c ubic y ards

of slag.

I. W as There A Taking?

GIP c laim s that the governm ent took f rom it kish, 92,500 cubic y ards

of slag, and a ssorted s crap, all of which i t c laim s to have purchased f r om the

Trustee in B ankruptcy

. The com p laint and GIP’s p re-trial m a terials assert t hat

the only m aterials as to which a taking is claim ed were those actually used by

EPA and sold by MultiServ. In other words, GIP i s not claim ing a taking of

all m aterials in the piles as of a particular d a t e , o nly those rem oved by the

governm e nt.

Prelim inarily

, the governm ent argues that p laintif f d i d not include

assorted scrap in its taking c laim until the post-trial brief ing stage and thus any claim f or j ust com

p ensation f

or s crap i s not properly b ef ore the c o u rt. W e disagree. GIP pled that EPA took p laintif f ’s property p u r c h a s ed at the bankruptcy sale, a claim w h i c h f airly e n com

p asses kish, slag, and assorted

scrap. The original com

p laint alleges the g overnm ent took its property on the

Eastern Exclud e d P roperty

, and specif ically m e ntions kish. P laintif f ’s

am ended com

plaint state s that it purchased “kish and other m aterials.” P l.’s

Am

. Com

p l. ¶ 12. Even if a claim f or assorted scrap had n ot been p led specif i cally b ef ore t rial, the issue was tried b y consent. Rule of United States

Court of F ederal Claim s 15(b)(2). Both pa r t i e s ’ w itnesses testif ied to the

d i f f e rences between kish a nd scrap, whether GIP o wned s crap, and whe t h e r EPA took k ish, scrap, or b oth. See, e.g. , T r. 86–88 (C. Casey ), 1 03 (C. Casey ),

14263–70 (D. Casey )

, 494–97 (Clay m an), 618

– 2 0 ( G arrard), 757–58 (Nattis). The governm ent did not object to that testim ony at trial.

W ith respect to s lag, as of trial, plaintif f only s o ught com

pensation f

or 92,500 cubic y ards of slag that EPA used to f i l l t he lagoon o n the Eastern

Excluded Property

, and the report of its com p ensation expert was l im ited in

that respect. In its post-trial brief

, plaintif f adds a separate calculation f o r slag

it expects to r equire in the f uture (113,000 cubic y a r d s), which counsel

estim ates to be worth between $ 1.3 and $6.7 m illion. Since plaintif f ’s

additional dam ages calculation f or s lag w as introduced post-trial and was not

t r i e d by consent, we decline to consider it. As w e explain below, m oreover, the post-trial claim f

or additional slag raises a m o re general problem about how GIP approached its claim

.
There is no question that the m a t erials at issue—kish, s lag, and assorted

scrap—m ay constitute personal property f or purposes of a takings claim

. Horne v

. D e

p a r t m ent of Agriculture

, 135 S

. Ct. 2 419, 2425–28 (U.S. 2015).

To decide whether the governm e n t owes G IP com pe n s a t i o n, we m

ust
determ ine whether GIP had a cognizable property interest in the m aterials the

governm e nt rem oved.

The governm ent contends that GIP purchased a non-exclusive right f or

a lim ite d p e r i o d of tim e t o retrieve only kish, w hich it c haracterizes as a

wort h l e s s , non-f

errous m aterial, a long w ith 4 20,000 cubic y a r ds of slag. It

asserts that the valuable f errous m ater i a l s E P A’s contractor r em oved do not constitute kish, that GIP excluded scrap f rom the m aterials it

purchased, and that any right GIP had to retrieve the l im ited m aterials it d id buy had expired by the t im e MultiServ perf orm ed its work. Plaintif

f respond s t hat kish is a blast f urnace by p r oduct that does have valuable f errous c ontent and that i t did

not exclude s c r ap f

rom its purchase. Finally

, it contends that its right to
retrieve t he m aterials had not expired when MultiSer v w a s on site. T o determ ine what GIP purchased, we return to the bankruptcy sale contract.

The relevant language is f ound in the Trustee’s Bill of S ale Exhibit A

clause “Attachm ent 5
– Inventory :” “By p roducts of m anuf acturing including

but not lim ited to kish and m iscellaneous o ther m a terials and assorted scrap.”

Joint E x

. 1 9 at 117. This provision is t hen m odif ied by the Exclusion List written by

Ms. Casey :

1. W i th ref

erence to the property identif ied in “ATTACHMENT 5 – INVENTORY,” Purchaser excludes:

A. All m iscellaneous other m a terials.

B. All by -products of

production other than kish and 420,000

15cubic y ards of slag which are located on the Excluded Real Property as is described on Exhibit B to the deed f rom Seller

to Purchaser of

even date herewith, together with a reasonable period of tim e to rem ove such item s

.
Id. at 120.

The asset pur c h ase agreem ent attached to the Trustee’s Bill of S ale

states that it “shall b e governed by and construed in accordance w ith the laws

of the State of Alabam a[ .]” I d

. a t 7 5. A labam a a

pplies the general rule of

contract construction t hat “the intention of the parties c o ntrols in construing

a written contract, a nd the intention of the parties is to be d e rived f rom the

contract itself

, where the language i s plain a nd unam biguous.” Loerch v. Nat’l

Bank of C ommerce of

Birmingham

, 624 So. 2d 552, 553 (Ala. 1 993); see also

Homes of Legend, Inc. v. McCollough

, 776 So. 2 d 741, 746 ( A l a

. 2000) (“[ T]he i ntent of the contracting part i e s i s d i scerned f rom t he whole o f the contract.”). Moreover, “if there exists inconsistency between two clauses of a contract which cannot be reconciled, the inconsistency m ust be resolved in

f avor of the prior clause, unless an intention to t he r e a f t er qualif y is plainly expressed.” City of Fairhope v. Town of D aphne

, 208 So. 2d 917, 924 (Ala. 1968).

The governm ent reads Attachm ent 5 to i nclude a s i n g l e c a tegory of
property : by

p r oducts of m anuf

acturing, which include but are n o t lim ited to
k ish, m iscellaneous other m aterials, and assorted scrap. This interpretati o n reads all the words f

o llowing “including b ut not lim ited t o ” a s ty pes of by products. Because GIP excluded “all by

- produc t s ” e x c e p t f o r k ish and a portion of slag, def endant concludes that GIP excluded assorted scrap.

G IP reads Attachm ent 5 to include three categories of pro p e r t y : by products o f m a nuf

acturing, m iscellaneous other m a t erials, and assorted

scrap. GIP argues that the Exclusio n L ist excluded m iscellaneous other

m aterials and narrowed by products of m anuf

acturing t o only kish and 420,000 cubic y ards of

slag, but did not af

f ect GIP’s purchase of a s sorted scrap.

The parties agree that the language of Attachm ent 5 and the Exclusion

List unam

b i guously provides tha t GIP e x cluded f rom its p urchase any “m iscellaneous other m at e r i a l s .” The instrum ents also p rovide that GIP purchased only two by

products of m anuf

a cturing: “ kish” a nd “420,000 cubic

y ards of slag.” The rem aining term in Attachm ent 5 i s “assorted scrap.” The

Exclusion List is silent regarding assorted scrap. Given that “assorted scrap”

was f irst listed in Attachm ent 5 as p urchased property

, and GIP did n ot qualif y its pu r c h a s e b y p lacing assorted scrap on the Exclusion List, it f o llows t hat GIP purchased “assorted scrap” at the bankruptcy sale. W e note as well that

16the testim ony at trial was that scrap is ty pically a f inished product, som e thing

like an I-beam , f

or exam ple, and not a by

p roduct intended f

or discard.

T h e s t ructure of GIP’s Exclusion List a l so contradicts the governm e nt’ s construction that k i s h

, m i s cellaneous m aterials, and assorted scrap are all

b y products of m anuf

acturing. Although m iscellaneous other m ateria l s i s l i s t e d

af ter “including but not lim ited to” i n A ttachm ent 5, along with kish and

assorted scrap, the Exclusion List does not treat m iscellaneous other m a terials

as a by product. Instead, m iscellaneous other m aterials i s a category called out
in its own provision. If all term s f ollowing “including but not lim ited to” were by products, then m i scellaneous other m aterials would have b een excluded by

the second sentence of the Ex c l u sion List. B ecause m i scellaneous other

m a t e r i a l s w a s not treated as a by product on the Exclusion List, it is not
reasonable t o l um

p the term “assorted scrap” f r o m Attachm e nt 5 into by products. Thus, at the bankruptcy s ale, GIP purchased kish, 420,000 cubic

y ards of slag, and assorted scrap.

Even though we f

ind t hat GIP purchased k i s h

, scrap, and slag,

im p ortant q uestions rem ain: what are these m aterials, do they have a ny v alue, and did the governm ent take them f rom plaintif f ?

The bankruptcy sale contract d id not def ine these term s. Moreover, the bankruptcy trustee did not com m u n i c a t e with G IP bef

ore, during, or af

ter executing t he sale i nstr

u me n t s regarding the def inition of kish, or t he other

m aterials GIP purchased, s l a g a n d assorted scrap. W here the m e aning of an undef ined word or phrase m

ust be a scertained, “ the court should sim ply g ive

the undef ined word o r phrase the s a me me a n i ng that a person of ordinary intelligence w ould give i t.” Twin City F ire Ins. Co. v. Alfa Mut. Ins. Co.

, 8 17

So. 2d 687, 692 (Ala. 2001). Additionally

, “[ p]arties to a contract will not be

im p uted with using language that is m eaningless or without ef f ect.” B la c k

Diamond Dev., Inc. v. Thompson

, 979 So. 2d 47, 51 (Ala. 2007). Each

m aterial can be def

ined by drawing on the language of t h e a g r e e me n t,

com m unications between EPA a n d G I P af ter the bankruptcy sale, and

testim ony f

rom those involved with recovery p rojects on the Eastern Excluded Property

.
The m ost straightf

orward term to def

ine is “slag.” The language of the bankruptcy s ale c ontract lists slag as a by product of m anu f

a c t uring. Trial

testim ony f

rom those f

am iliar with steel pro d u c t i o n d ef ined slag as a nonf errous m aterial that separates duri n g sm elting. E.g.

, 8 9–90 (C. Casey ),

176–80 ( D. C a s ey ), 479–95 (Clay m an), 875–76 (Kingham ). Af ter being siphoned away , the slag hardens. I t c o n s ists prim arily of c alcium oxide and

17silicon dioxide, the m aterial that EPA a ssociated with pollution problem s on

site.

According to the Casey s, a s s o r t ed s crap is m etal of v arious sizes t hat

m ay or m ay not be f

errous, but that can be e i t h er recy cled into steel

m anuf acturing or sold f

or other purposes. It is ty

pically f inished steel product,

like an I-beam

, a r ailroad car, or wire, which has been d iscarded in a f i nished

f orm and is thus not a by

product.

The parties hotly contest the m e aning of “ k ish.” The b ankruptcy

contract describes kish as a by product o f m anuf

actu r i n g

. A f

ter GIP’s purchase, Mr. Casey characterized kish to EPA representatives as red dirt with

f if ty percent or m ore i ron content. Sim ilarly

, EPA’s on-scene coordinator Mr.

Nattis testif

ied that through m eetings with Mr. Casey he understood kish to be

f errous m aterial with resale value. Mr. Nattis testif ied that the piles held both what he perceived as kish and scrap m etal.

Both Ms. Casey and her f a ther testif

ied to their understanding of kish.

M s

. C asey explained that kish is m etal siphoned of f with slag d

uring s t e e l

m anuf acturing. Mr. Casey dif

f e rentiated between E S P kish, which is a f ine

m etallic that resem

bles rust or red dirt, and larger chunks of

f errous m a terial

that accum

ulates in the sm e lting process and is siphoned o f f with the s lag. He

stated that i t was his intent at the tim e of the purchase to purchase all the

recy clable m etals lef

t in the north and s o uth piles, whether they w ere w hat he

term ed kish or scrap m etal.

The Casey ’s use of the term ki s h i s c o nsistent with both the draf t

W a tkins agreem ent a n d t h e Ableco r ecovery contract. Prior t o the GIP purchase, t he Ableco r ecovery c o n t r a c t with Regional Recy cling, d enom inated

a “Kish Iron Contract,” provided that Regional Recy cling would “recover and

rem ove kish iron and other f errous m aterials f

rom t he slag heaps.” P l.’s Ex.

15 at 3. The draf

t “Agreem ent to Pr o c ess Kish” between GIP a nd W atkins

def ined kish as “m ore com m only known as Red Dirt w hich consists of various

size m e tals.” P l.’s Ex. 71. Both of these agreem ents ref lect the u nderstanding

that kish is or contains recoverable m etal of various sizes.

Mr. Stevens of W atkins testif ied as som eone f

am iliar with the recovery

process. He v i ewed kish as a m etal that could be recovered f r om the slag piles

and recy c led. He explained that he had heard the term “kish i ron” used b y Mr. Casey a nd others in the m etal recovery industry and that he t ook it to b e “steel

and iron” that could be recovered, regardless of its s i ze. T r. 377. Mr. S tevens
testif ied t hat he did not personally use the term “ kish,” b ut that his g oal was to extract and process m etals f rom the pile, whatever the m etal was called.

18Sim ilarly

, Harsco’ s s a l e s m anager Mr. Mazzarella testif ied t hat he

under s t o o d k i sh to be the sam e thing as kish iron, a by product of the blast

f urnace process. Kish, he testif ied, is a grade of i ron, b ut he had never sold it

and did not know if it was in the piles. He e xplained that MultiServ m ade no distinction between kish a nd other r ecoverable m aterials. I nstead, MultiServ’s goal was t o e x t r a c t all m etals w ithin the piles. Stevens and Mazzarella thus

indicated that, f

rom t he persp e c t i ve of recy cling c ontractors, “kish” ref erred

to a m e tal b y

product of m anuf

acturing; it was ju s t a n o t h e r m etal to be

recovered. W e note that, consistent with testim ony

f rom those f

am iliar with

the m etal recy cling industry

, MultiServ ref erred to iron by

p roduct on i ts sales
report not as kish but a s A scrap, B scrap, C scrap, and f ines, depending o n the

size of the m etal recovered.

Both parties also of

f e r e d expert testim ony on t he def inition of kish.

Plaintif f ’s e x p e r t o n the m eaning of kish within the m etal recy c l ing industry

was Charles Brown, who h a d e x perience i n m e tal recovery and had worked

with both Gulf States Steel and Regional Recy cling. He testif ied that kish was

a term used i n t h e me t al recy cling industry

. He testif i ed t hat kish is “iron containing sla g

. ” T r

. 1195. He explained that the t erm s kish, kish iron, and

f oundry kish were interchangeable as long as the recovered m aterial c ontained

a m inim um percentage of iron. Mr. Brown testif i ed t hat when r ecovering kish,

the recovery m ight include m aterial that was alm ost 100% iron, which w ould

be classif ied as A

, B

, or C s crap according to its size and iron content (A scrap being the largest and h ighest in iron content). He explained that the recy cling

would rem ove f

errous m aterials of all sizes, but that kish was essentially a catch-all term f

or iron m ixed with slag.

Moreover, p laintif

f ’s expert on the m etal recy cling m arket, Gary Clay m a n, who is em

ploy ed by a scrap m etal processing com pany , testif

ied t hat

kish is a m etal l i c b y

p r oduct of t he blast f

urnace o peration t hat is g enerated

when skim m ing by

products out of

the iron ore. He def

ined it as “iron o f

f of

the blast f

urnace. It com es f

rom a n integrated mi l l t h a t has a blast f urnace. There i s n o other w ord f

or this but k ish. U S Steel calls it kish.” T r. 474. He explained that k ish is a chunky m aterial that m ay be recovered in dif f erent
sizes and m ay be sold under nam es such as A scrap, 3-f o o t i r o n , or blast

f urnace iron.

The only witness o n the m eaning of kish who testif i ed t h a t i t w a s not

a f e rrous by product of a b last f

urnace operation was the g overnm ent’s expert,

Dr. R. Fruehan. Dr. Fruehan holds a Ph.D. in m etallurgical engineering. He

served as a scientist f

o r US Steel and has b een a prof essor at Carnegie M ellon

19and director of its Center f or Iron and Steelm ak i n g R e s e a r c h. Dr. Fruehan

def ined kish as graphite f

lakes without iron content or resale value.

W e do not doubt Dr. Frueh a n ’ s e x p e r tise in the c raf t of steel

m anuf acturing, but his understanding of the m eaning of

kish was plainly not
how t he C asey s, persons a ssociated with the bankruptcy

, other steel com panies

or m etal recovery c om

panies, and EPA em

ploy e e s used the term

. Contracting parties are en t i t l e d t o reach their o wn understanding of the m eaning of

technical term s in an industry

. That is plainly w hat happened here. Although

the trustee d id n o t testif

y as to his understanding of kish, he and those assisting

him in obtaining value f

r om the bankrupt e state clearly were of f ering f or sale

m aterials t hat they understood bidders suc h a s G IP were interested in

r ecy c ling. There is certainly no evidence of f ered by the governm e nt

, w h i c h

appears as a third party to the agreem ent, t ha t t here was no m e e ting of the

m inds. In buy ing kish f rom the trustee

, G I P p u r c h ased m aterial that both parties understood to be a f errous by product of a b last f

urnace operation in

various sizes that has econom ic value.

The governm ent’s f

inal argum ent regarding GIP’s property interest is that, according to t he r easonable period of tim e language in t he E xclusion L ist,

GIP only purchased a license to explore the Eastern Excluded Property

, which

was t oo i ndef

inite t o enf

orce or h ad expired b y the tim e EPA u s e d o r s o l d

m aterials on the site. W e disagree. The Trustee’s Bill of Sale states,

[ The] Trustee does h ereby grant, bargain, sell and convey , a s is,

unto Gadsden Industrial Park, LLC, all right, title and interest

which the bankrupt Debtor ha d o n the date of the

c o mme ncem ent of the proceedings in bankruptcy on the

f ollow i ng property ref

erenced in [ the Bidding Motion] and m ore particularly described [ in the asset purchase agreem ent] l ess and
except those item s set f

orth on an exclusion list, prepared b y the purchaser

. . . to have and to h old all t he right, title and interest

in and to said propert y u n to the s a id Gadsden Industrial Park, LLC, and to its assigns f

orever.

Joint Ex. 19 at 59 (em

phasis om itted). This is not a license. It is an outright

sale of personalty , and it is not shared with any one else.

Adm ittedly , GIP introduced conf usion in the contract when it wrote a provision in the Exclusion List that states,

All by -products of production other than kish and 420,000 cubic

y ards of s lag which are lo c ated on the Excluded R e al P roperty

as is d escribed on Exhibit B to the deed f rom Seller to Purchaser

20of even date herewith, together with a reasonable period of t ime
to remove such items

.
Joint Ex. 19 at 120 (em

phasis added). This i s clearly a lim itation on what was

not excluded. As a lim itation on the excluded m aterials i t would be u s e l ess language. So we can saf ely presum e i t is a l im itation on plaintif f ’s right to
take possession of what i t purchased, which is u nderstandable, as the personalty was located on land GIP did not own. Although the provision i s a lim itation on GIP’s tim e to rem ove the m aterials

, we f ind that GIP’s tim e to

rem ove i ts m aterials had n ot expired by t he t im e EPA u sed or sold those

m aterials and that the governm ent i s not the proper party to determ ine when GIP’s access to the Eastern Excluded Property ended.

First, t h e g o vernm ent contends that the r easonable period of tim e language is t oo indef

inite to be enf

orceable. D ef

e n dant cites t o cases in which

the Suprem e Court o f Alabam a struck do w n lease e xtension p rovisions in coalm ining l eases t hat it determ ine d w e r e t o o indef i nite to be enf

orceable.

Drummond Co., Inc. v. W alter Industrie s

, I

n c

. , 9 62 So. 2d 7 53, 758 ( Ala. 2006) (lessee under f

o ur coal-m ining leases b r o ught claim s against lessor

based on a will-extend clause t hat the court f ound too indef

inite to enf

o r c e);

Linton Coal

Co. v. South Central Resources, Inc.

, 590 So. 2 d 911, 912 ( Ala. 1991) (coal-m ining lessee’s assignees brought action f o r specif ic perf orm ance of a lease af

ter roy alty arrearage was paid a nd the court h eld that the lease term

was t oo indef

inite to be ascertained). In those cases both parties to the lease

were the p a r t i e s b e f

o r e the court, disputing the term of the lease. Here, the

owner of the u nderly ing real property is n o t a p a r t y a nd there is n o evidence

th a t it has challenged GIP’s access to the Eastern E xcluded Property

. It is

theref ore unnecessary f

or this court to inquire i nto def initeness of the reasonable period of

tim e provision’s end date.

A l t ernatively

, the governm ent m aintains that GIP’s tim e to enter t h e
Eastern E xcluded Property expire d e i t h er when the bankruptcy estate closed

or within six y ears o f G I P ’s purchase. It argues that, because the agreem ent
that GIP c ould enter the Eastern Excluded Property to rem ove its m aterials was

m ade between the bankruptcy trustee and GIP, when the bankruptcy e state closed, GIP’s r easonable period of tim e e nded a s w ell. This i s incorrect. The bankruptcy trustee acts as the representative of the estate in the bank r u ptcy

process, which includes s a les of property to red u c e t h e e s t a t e to m oney

. 11

U.S.C. §§ 541(a), 701-704 (2012). W hen the b ankruptcy estate is closed, any property s c h e duled but not adm inistered i s abandoned to the debtor. I d. §§ 554(c), 726(a)(6). Thus, GIP continued to own the m aterials it had purchased

af ter the close of the bankruptcy p roceeding. The proper party to dispute when

21G I P ’ s reasonable t im e ends is the underly ing real property owner, who

, a s

noted above, did not lim it GIP’s access prior to th e E P A using or selling

m aterials f

rom the Eastern Excluded Property

. Relatedly

, t h e g o v e rnm ent

argues that the s ix y e ars that GIP o w n e d the m aterials prior to MultiServ’s

recovery operation was a reasonable tim e to rem o ve the m aterials. This expiration argum ent i s an additional r e d h e r r i ng: GIP’s reasonable period of

tim e was not constrained by the governm ent’s perception, as a s t ranger to the contract, of

when that period ended.

Final l y the governm ent suggests t hat Mr. C a sey ’s conf used

com m unications w ith EPA am ounted to a b andonm ent of its property i nterest.
Under Alabam a law, “[ a] determ ination whether c e rtain perso n alty is

abandoned stem s f

r o m a consideration o f the nature of the particular property

, the intent to a

bandon, a nd s om e external act evidencing this intent.” Milford

v. Tennessee R i v e r P u l

p & Paper Co.

, 355 So. 2d 6 87, 698-90 (Ala. 1978).
Moreover, “ordinarily there exists a presum ption that one does not i ntend to
abandon his property ,” but this presum ption d oes not exist “where the a rticle

claim ed to have been abandoned is generally considered valueless.” Id. The

governm e nt relies on Milford as an exam ple of a bandonm ent, but in that c ase “Milf ord adm i t [ t e d ] h e considered t he coal valueless and that all p urchasers

had ref used f uture shipm ents of i t.” Id. GIP, on t he o ther hand, assigned value

to the m aterials at the tim e of the bankruptcy a u ction, m aintained a r ight t o the

m aterials as evidenced by its correspondence with Ableco, E PA, and W atkins,

and attem pted to recover those m aterials.

In sum , we are satisf

ied that GIP purchased the m aterials outright and

that GIP w as within its reasonable period of tim e to rem ove its m aterials when

EPA used and sold m aterials f rom the Eastern Excluded Property

. Having f ound t h at GIP bought k ish, 4 20,000 cubic y ards of slag, and

assorted scrap, and was within its reasonable period of t im e to rem o ve those

m aterials at the t im e of MultiServ’s recovery operation, w e now turn to
“whether t he governm ent a ction at issue am ounted to a com pensable taking of

that property i nterest.” American Pelagic Fishing Co., L .P. v. United States

, 379 F.3d 1363, 1 372 (Fed. Cir. 2004). A com pensable taking m ay occur when

the governm ent i nvades or phy sically app r o p r i a tes a claim a n t’s property

. Lucas v

. S .C. Coastal Council

, 505 U.S. 1003, 1014–15 (1992). EPA does not dispute that it did not purchase any of the p r o p e r t y a t issue but nevertheless

used and sold m aterials f

rom the Eastern Excluded Property

.

As f or s crap, MultiServ’s sales report i ndicates i t sold m a terials expressly classif

ied a s scrap as well a s assorted other m etals s uch as p late, skulls, sl a b s , o r ingots that were not by products of s teel m anuf

acturing but

22were m e t a l s G u l f States Steel had discarded in the piles. M ultiServ’s sales

report does n ot list m aterials sold as “kish,” but it does list several m a terials

such as A scrap, B scrap, C scrap, a n d f ines that overlap w ith the sizes and

term s used f

or kish in trial testim ony

. Plainly E PA took G IP’s scrap and kish.

Regarding slag, GIP purchased 420,000 cubic y ards. E PA contractors
used 92,500 cubic y ard s d u r i ng the c lean-up of a t least one lagoon.

MultiServ’s sales records also ref lect that it sold 9392 tons of slag; presum ably

som e o r a l l o f t h i s was purchased b y plaintif f

, although we do not know the

am ount. A lthough t he governm ent hints t hat, slag being f ungible, we cannot
b e certain that GIP’s s lag was used, we r eject that def ense. A lthough Ms. Casey testif

ied that 420,000 cubic y a rds was n ot all t h e slag on site, the

governm e nt of

f ers no evidence as to who owns any slag bey ond the 420,000

cubic y a rds plaintif

f p urchased, nor of any perm ission EPA or any other p arty
obtained to r e mo v e slag. W e note as well that EPA s culpted the rem a ining piles to m inim ize pollutant runof f in such a way as, f

or all practical p urposes,

to em balm perm anently

all rem aining m aterials, including slag.

Thus, GIP dem onstrated that EPA used and sold slag, k ish, and scrap. Plainly

, by the tim e Mult i S e r v h a d concluded its operation, EPA had taken those quantities of

slag and m etal that Mr. G leason attem p ted to value. That

does not answer the question of when the taking or takings o ccurred, however.

The date of asserted taking f or kish, scrap, a n d slag is June 4, 2008. This

is the date on which plaintif f asserts EPA precluded it f r om beginning its o wn

recovery operation. W e agree that June 4, 2008, can be u sed as the date of taking f or scrap and kish, because Mr. C asey legitim ately concluded at t hat

tim e that GIP would be barred f r o m b e g i nning its own recy c ling operation.

W e note, h owever, t hat by June 4, 2008, t he slag f or which plaintif

f seeks

com pensation had already been taken by EPA. A lthough p laintif f ma y have

chosen to propose a n e a r l i e r d ate, it is theref ore also correct to say that the taking occurred no l ater than June 4, 2008. The governm ent does not p resent

a com peting date of

taking.

As discussed earlier, plaintif f ’s taking claim i s lim ited to the value of

the m aterial the g overnm ent took f rom t he E a s t e r

n Excluded P roperty

. If plaintif f had sought com

p ensation f

o r the value of m aterials in place, it w ould

have had t o p r e s e nt evidence of w hat a willing buy er w ould have paid f or those m aterials im m ediately bef ore access ended, even t hough the p r e cise quantity was unknowable. It chose instead to quantif y the volum e t aken by

lim iting its claim to m aterials actually r em oved, b u t t h e n v alued those

m aterials as of June 4, 2008. This is a problem

. The price of recy cled m a terial

in June 2008 happens to coincide with a relatively brief but signif

icant spike

23in t he price of recy cled steel. Even though GIP has lim ited the q uantity taken by valuing only what MultiServ sold, the abnorm al prices in J une 2008 m ake

that date an unf

a ir o ne f or valuation purposes. It would only be a f air date if plaintif f a lso had undertaken to pro v e w h a t a w illing b uy er would have p aid

f or the opportunity to recover all the kish and scrap, a nd 420,000 cubic y ards

o f s lag. But GIP did not u ndertake that e xercise. Although June 2 0 0 8 i s a legitim ate date f

or a sserting that EPA took all of p l aintif f ’s rights to what it

had purchased, G IP also did not then f ollow that l ine of p roof by s howing what

a willing buy er would have paid as of J une 2008, a date f or which the evidence

of quantity would be problem atic. 4 Alternatively

, GIP could have c laim ed a series o f rolling dates of taking f or specif ic quantities, beginning with EPA’s

use of slag bef

ore 2008, b ut then plaintif f would have had t o value the t aking on those dates. Once again, som ething it did not do.

II. Just Com

pensation

W hen the United States takes private property f or public use , i t mu st

pay just c om

pensation, which requires the governm ent to pay the “equivalent

in m o ney o f the property taken,” to place t h e o wner in the sam e pecuniary position as i f t he p r operty had not been t ak e n

. U n i ted States v

. Miller

, 3 17

U.S. 369, 370–71 (1943); s ee also United States v. Reynolds

, 3 97 U.S. 14, 16 (1970). T he Suprem e Court has e m phasized that j ust com

pensation c annot be

reduced to a specif

ic f orm ula a nd that com

pensation m

ust be based on all

relevant f acts. See United States v. C ors , 3 37 U.S. 325, 332 (1949); see also

Jack Daniel Distille r

y v

. U n i ted S tates

, 379 F.2d 569, 574 (Ct. Cl. 1967).

Wh e n the g overnm ent phy sically appropriates plaintif f ’s property

, however,

the general rule in m easuring com p ensation i s the f

a i r m a r k e t value of the
property on the date it is appropriated. K irby Forest Indus., Inc. v. U nited

States

, 4 67 U.S. 1, 9–10 (1984) (citing United States v. 5 64.54 Acres of Land

, 441 U.S. 506, 511–513 (1979)). “Under this standard, t he owner is entitled to
receive ‘what a willing buy er would p ay in cash to a willing seller’ a t t he tim e of the taking.” Id. at 511 (quoting United States v. Miller

, 317 U .S. 369, 3 74 (1943)).

Plaintif f of f ered two m easures of

just com pens a t i o n : l o s t p r o fi t s and f air

m arket v alue. B ecause los t p r o f i t s i s n ot the appropriate m easure of just

com pensation, United States v. General Motors Corp.

, 323 U.S. 373, 3 79 (1945), we s et that theory aside and turn to plaintif f ’s f ai r ma r ket value

4 But n o t i m

possible, as MultiServ’s site i nvestigation w ould be available as

som e contem

poraneous proof

of quantity

. 24calculation. 5 As m entioned above, M r. G l eason, d e t e r mi n e d the f air m arket

value of the m aterials as of June 4, 2008.

Mr. G leason’s dam age c laim is calculated based only on m a terials

recovered and sold by MultiServ, along with 92,500 cubic y ards o f slag which

EPA used i n the lagoons. 6 H e e x p l a i n ed that h e was unaware of any reliable

estim a t e o n t h e volum es of recoverable m aterials as of the date of taking. “[ Y]ou couldn’t reasonably estim ate what’s in these piles or what’s the y i eld

or r ecovery in these piles.” Tr. 1265 (Gleason). H e t heref o re did not attem

pt

to reconstruct what a willing buy er would have paid f or m aterials in the piles using what was known o r knowable at the tim e

. I n s t e a d

, h e a ttem p ted to
calculate the f

air m arket v alue of the m aterials taken based on a projection using the earnings o r incom e appro a c h

, w h ich projects f uture earnings f

rom the p r o p e r t y and then discounts those f u ture earnings to a specif ic point in

tim e. Once a gain, h owever, he did not have actual f igures to w ork with as of

June 2008, other than the general projections by M ultiServ. Instead, he used

the actual f

igure f or the volum e of m aterials recove r e d b e t ween 2008 and

2013: 245,890 tons. As t o price, he a ttem p ted to recreate what those m a terials

would have been w orth in June 2008. Against this calculation, he t hen applied

his own calc u l a t i o n of avoided costs and d iscounted the results back to June

2008.

Because MultiServ’s characterization of the various m aterials sold did

not line up with the ty

pes of item s that could be priced f rom p ublicly available records, Mr. Gleason c alculated an assum ed 200 8 price by p icking a

com parison m etal to the m etal that MultiServ s old. To calculate a selling price

f or kish and scrap, he drew f rom a p ublication of the Am erican Metal Market,

which collects and p ublishes price l ists f or v arious ty

pes of m etal on a m onthly

basis

. T h e com

parison m etal he chose was “No. 1 h eavy m etal” or “heavy

m elt,” which Mr. G leason explained was a close e quivalent to the “scrap” t hat

MultiServ sold. He t hen projected selling price s f o r A scrap, B scrap,

m iscellaneous s crap, sm all pit s c r a p, s kulls, plate scrap, oversized scrap, ingots, and m a nganese.

5 W e note, however, that Mr. Gleason ’ s lost prof it calculation suf

f ers f r o m

m any o f the sam e def

ects discussed below due to t he unreliable calculation of

avoided costs.

6 There was t estim ony that plaintif f had t o buy other slag f

rom MultiServ f

or its o w n u s e

. Unless the purchased am ount is i ncluded in the 92,500 cubic

y ards, t he specif

ic quantity of purchased slag d oes not appear to s urf ace in Mr.

Gleason’s calculations.

25The projected s e l l i n g price was the result of m ultiply i ng the a verage relationship of MultiServ’s price to the quote price f or h eavy m elt in

Birm ingham by the average quoted price f or heavy m e lt in Cleveland i n April, May

, and June 2008. Mr. Gleason f ound tha t MultiServ sold A s crap at an

average d i scount of approxim ately s ixty

- eight percent o f t h e B i rm ingham quoted m arket price f

or June 2008 and then m u ltiplie d t h a t b y the a verage Cleveland heavy m elt price f rom April to June 2008 t o reach $486.67 per ton.

Mr. Gleason conceded that $486 per ton was historically a high value

per ton and that

the 2008 price spike was relatively short-lived. If the t aking

date w ere set twelve m onths later, in 2 009 when the m etal recovery operation began, f or instance, the m arket price would have f allen m u ch lower. O r if the taking h a d been, f

or exam ple, in the 2000 to 2 002 p eriod, the p rice p e r ton would have been approxim ately $100.

That calculus accounts f

or t he vast m ajority of m aterials. For the C

f ines, Mr. Gleason input GIP’s agreem ent with Metawise Group to purchase

C f ines f or $4.50 per t on af

t er loading costs. F or other m aterials, he estim ated selling price as of June 2008 to be the actual average selling price reported by

MultiServ. Mr. Gleason c o n c l u d e d that the p rojected revenue stream as of

June 2008 would have been $19,87 3

, 4 1 8. W e note, by way of com p arison,

that M ultiServ actually o n l y recovered $13.5 m illion during t he nearly f ive

y ears of its recovery

ef f orts.

For the avoided costs, Mr. Gleason a ssum ed that GIP an d Wa t k i n s would have executed their Agreem ent to Process Kish. He thus appl i e d the

cost structure in that draf

t agreem ent: G IP would pay W atkins $70 per ton f or

ma terials recovered in excess of one i nch in size (e.g., A scrap). GIP wo u l d

not pay W atkins any

thing f o r ma t e r ials less t han one inch in size. He also

assum ed, b ased on Mr. C asey ’s explanation t o h im

, that he and Mr. S t e v e n s

m odif ied the draf

t a greem ent orally so that G IP would not pay W atkins f or recovered m aterials o ne inch or l arger that s o ld f or less t han $ 70 p e r ton. In

other words, if m aterial sold f or $69 per ton, GIP owed W atkins n othing. He

assum ed that m aterials were loaded as they were processed. F urtherm ore, the

assu mp t i o n w a s m ade that GIP had no other additional cost t han f reight

because GIP would use its existing inf rastructure. Using those term s, he

determ ined that t he avoided cost based on pay m ents to W atkins w as $4.5

m illion. Mr. Gleason also included a f r eight adjustm ent t o account f or GIP’s

cost to ship the m aterial. He calculated the price to s hip to Birm i ngham or to Cleveland, since Cleveland was appro x i m ately $20 m o re per ton. Total

avoided costs f

or pay m ents to W atkins and f

reight were $4,928,603.

26Using t hese inputs, Mr. Gleason concluded that the projected revenue

f or GIP was $19,873,418, avoided c o sts w ere $4,928, 6 0 3

, a n d the total net $14,944,815 r e covered over an approxim ately 5-y ear period, f rom June 2008

to February 2 013. To establish the present value of that r evenue as of June 4, 2008, Mr. Gleason applied a discounted cash f l o w a n a l y s i s. He used a weighted average cost o f capital approach with a twenty -one percent discount

rate. Ultim at e l y , Mr. Gleason f ound that t he f

a ir m arket value of the m etal

taken as o f the date of taking, and net of all costs, was either $9,780,560, using

a Birm ingham f

reight adjustm e nt, o r $ 1 0,446,005, using a Cleveland f reight adjustm ent.

Mr. Gleason separately valued t he sl a g used by E PA. Mr. Gleason’s understanding was that EPA had taken 92,500 cubic y a rds o f slag as part of its

environm ental rem ediation ef f orts. He a pplied a c onversion f

rom c ubic y ards

to tons, t ot a l i n g 1 3 7

, 3 63 tons. He t hen applied an estim ated price term
b e t w e en f

ive and six dollars per ton, using the sales p rice applied w h e n MultiServ s old slag to GIP, to d eterm ine t hat EPA had taken $755,494 o f slag.

The g overnm ent c hallenges s e veral aspects of p laintif f ’s f air m arket

value calculation. The g o v e r n me n t contends that the relevant question is

“what a would-be m iner would have p aid Gadsden f or the purported right to dig in the w aste piles.” D e f

. ’ s P o s t-Trial Br. at 64, ECF N o. 193 (Jan. 5, 2018). In other w ords, the governm ent argues that p laintif f w o u l d o n ly be

owed the equivalent o f what a buy er would have paid GIP to explore the piles

f or retrievable m aterials in 2008.

On Mr. Gleason’s calculations, d ef endant argues that his analy sis is not
based o n inf

orm ation k

n own at t h e t i me o f the taking because it relies on quantity f

i gures drawn f

ro m w hat M ultiServ’s eventually recovered. Regarding th e p r i c e term

, the governm ent argues that a b uy e r o f the right to

process the piles would not have assum ed that the spike in prices

contem poraneous with the tim e o f t a k i n g would continue i ndef initely

. Mr.

Gleason a nd Mr. C l ay

m an readily acknowledged that scrap iron prices were high in m i d-2008 and that they could have been expected to, and in f a c t did,

f all throughout the course of MultiServ’s recovery p roject.

The gove r nm ent also challenges GIP’s reliance on t he unexecuted

W a tkins agreem ent as a basis on which to calculate avoided c o s t s

. I t was a draf t rather than a contract, and W atkins h ad not com pleted recovery work on these piles in t he past. The draf t cost structure only guaranteed pay m e nt per

ton f or m aterial sold in excess of one inch in size and, if the purported oral

mo d i f i c a t i o n were taken i nto a ccount, sold f or a t least $70 per ton. The

governm e nt notes that plaintif f lum ped B scrap in with sm all, less t han $70 per

27ton m aterials, altering the am ount GIP hy pothetically would ha v e p a i d W a t k ins by up t o $3 m i llion. Even assum ing that W atkins would be able to sustain a

recovery project under such term s, the a greem ent, if it had e ver been e xecuted,

also contained a walk-away provision that w ould allow W atkins to t erm inate

t h e c ontract in its discretion, which presum ably it would do if i t bec a m e unprof itable.

W e sy m pathize with M r. Gleason in putting together a dam age calculation. It would h ave been dif f icult to m easure with any p recision what

was a ctually recoverable in the piles as of June 2 008, either at t h a t tim e or

s u b s e quently

. W hat is not disputable, h owever, is that every single witness involved in processing the piles b ef ore, during, and af

ter the bankruptcy sale agreed that the piles concealed recoverable m aterials, including EPA

, which

was able to persuade MultiServ to undertake an exploratory operation, which produced f

avorable enough results f

or the agency to enter into a sales contract.

At the tim e, t he parties t o that arrangem ent t outed the p ossibility o f $50 m illion

in r ecoverable m etals. W e a r e thus persuaded that a buy er w ould h ave p aid

som ething f

or t h e o p p o r tunity to retrieve the m aterials f rom t he piles.

Determ ining what that v alue would have been, however, is not an exercise Mr.

Gleason undertook.

W e agree with the governm ent that there are a num ber of problem s with

M r

. Gleason’s approach. The governm ent, w e believe, is correc t t h a t
Gleason’s f

i gures are seriously distorted in at least tw o w a y s

. F i rst, his

construction of a n artif

icial sales price as of J une 2008 f or m aterials sold later

was i nappropriate. Although these f igures m ay accurately ref

lect values as of

the date s old, t hey do not r ef le c t t h e r eality that a buy er would know that it

would not r ecover that value instantly ; in f act, the recovery operation itself did

not result i n sales u n til 2009. And a buy er also would be presum e d to know

that the price in J une 2008 was a bnorm ally high. The evidence f r om Mr. Clay m a n and Mr. Gleason was that it was known i n the i ndustry that prices

would not rem ain inf

lated in the l o n g t e r m , or at least n ot f or a y ears-long

recovery operation. A purchaser could not rely on receiving those h igh prices

over the y ears required to go through the piles. A buy e r would d iscount value

to account f

or the virtual certainty

that prices would decline.

The second def

ect in Mr. Gleason’s calculation c o n c e r n s how he

calculated the costs to retrieve the m aterials. He based his cost f igures on the

assum ption t hat the a greem ent between plaintif f and W atkins would have been perf orm ed, i.e., that plaintif

f would only have t o pay $70 per t on f or qualif y ing

m aterials and t hat qualif

y ing m aterials d id

not include m aterials sold f or less

than $70 per ton. All of the risk in t his hy pothetical arrangem ent would have

28been borne by W atkins, which, in actuality

, m aintained the r ight t o walk away

f rom the r ecovery operation by the term s of t he d raf t agreem ent. Nevertheless, building s ize and p r i ce lim itations into GIP’s pay m ent obligation results in GIP

p a y ing W atkins, at m o st, f or 64,285 tons of processed m a terial, where a s MultiServ proc e s s e d 2 4 5,890 tons. M r. Gleason, i n ef f e ct, is assum ing t hat

GIP is getting a subst a n t i a l am ount of W atkin’s labor a t no cost. W ithout crediting the oral addendum , GIP would have paid W atkins an additional $2

to $ 3 m illion. A p p l y i n g the $70 per ton cost to both A scrap and B scrap unif orm ly results in $5.6 m illion avoided costs f or t hose two m a terials a lone.

W h en the $70 per ton cost is applied to all m aterials o t h e r t h a n C s crap or f ines, the avoided costs bef ore considering f

reight are at least $7 m illion.

W e also f ind that it is not l ikely that the balance of the draf t agreem ent
would have been perf

orm ed as written. The draf t agreem ent required W atkins

to process 500 tons per m onth to m aintain e xclusivity

. MultiServ was able to

process n e arly that a m o unt p er hour. Thus Mr. Gleas o n ’ s r e l i a n ce on

ass u m ptions drawn f

rom MultiServ’s r ecords are highly questionable. Even

i f w e a ssum ed W atkins could m aintain such an o peration, the governm e n t correctly points out that GIP would have experienced other costs. GIP retained

the ownership of the s aleable m a terials, m eaning it would have had t o m arket

and sell t hose m aterials in addition to the possibility o f pay ing f or loading the

m aterials as well as supervising the W atkins operation. GIP m ay h ave worked

within its exist i n g i n f

rastructure to sell the m aterials, b ut like any other business, there would be s o m e costs associated with m arketing and delivering

the m aterials.

The governm e nt’s expert on d am ages, Steven Dowd, did not place an

estim ate on those costs, but he aptly o bserved t hat “ to assum e that there’s no

cost to that of any ty

pe, zero, I think is unreasonable.” Tr. 1677. EPA had t wo

contractors handling the m aterials pre- a nd post-processing that, at its height,

involved two processing plants and nearly two d ozen em ploy ees j ust to assist

in MultiServ’s processing. This is not i n c l uding what the rem ediation

contract o r , C MC, was doing to f a cilitate the MultiServ recovery operation. Despite CMC’s help, MultiServ term inated the recovery operation because it was no longer prof

i table. See Pl.’s Ex. 195.

Ultim ately

, plaintif

f as k s the court t o a ccept that a hy p othetical buy er would have p rojected that the piles h eld at l east 245,890 tons of m aterial and

that t he buy e r would

incur substantially

less costs than that actually incurred by MultiServ and CMC. W e f ind these assum

ptions unsupportable. Although

a t rial judge “ m a y award dam ages, even i f he d oes n ot f ully credit t hat party ’s

m ethodology ,” Precision Pine & T imber, Inc. v. United States

, 5 96 F.3d 817,

29833 (Fed. C ir. 2 010), we are not given suf f icien t r e l i a b le proof of what a willing buy er would have paid f o r the scrap and kish.

W e have a dif

f e rent view o f the s l ag E PA actually used. GIP purchased

4 2 0

, 000 cubic y ards of s lag. Mr. Casey e stim ated at t rial that GIP h a d u s e d

1 5,000 cubic y ards, prior to EPA’s use o f slag f or environm ental c lean-u p

. 7
Thus, GIP had not u sed all the slag it had p urchased b ef ore EPA took 92,500

cubic y ards, or 137,363 tons, f or e nvironm ental clean-up. Mr. Gleason valued

the 92,500 cubic y ards o f s lag at $755,494, using the f ive to six d ollars per ton

rate at which M u l tiServ a ctually sold slag to GIP. In the case of the slag, we know both what GIP owned and what EPA took, and plai n t i f f p r esented a credible valuation of the taking. T hus, w e award pl a i n t i f f $ 7 5 5,494 f

or the taking of its slag.

III. Prejudgm e nt Interest

In addition to t he value of the property t aken, j ust com pens a t i o n includes i nterest f

rom the d ate o f the taking to the date of pay m e nt in order to place plaintif

f in “as good a position pecuniari l y as he w ould have occupied

i f the pay m ent h ad coincided w ith the appropriation.” Kirby Forest I ndus.

, Inc., 467 U.S. at 10–11

. GIP did not present a c a lculation of interest at trial,

and the governm ent did not argue f or a particular rate of i nterest. This court, however, consistently h as em ploy ed the rate set f

orth in the Declaration of Takings Act ( “ DTA ” ), 40 U.S.C. § 3116 ( 2012), as the proper interest rate in

a takings claim

. See, e.g. , W averley View Investors, LLC v. United States

, No. 15-371L, 2018 W L 1193439, *3–*4 (Mar. 8, 2018); Textainer Equip. Mgmt.

Ltd. v. United States

, 99 Fed. Cl. 211, 223 (2011); Vaizburd v. United States

, 67 Fed. Cl. 499, 504 (2005). Thus, we f ind that plaintif

f i s entitled to interest

at the DTA r a t e f

r o m t h e d a te of the taking, June 4

, 2008, to the date of

pay m ent.

CONCLUSION

In sum , w e hold that EPA’s actions constituted a t aking com pensable

under t he Fif

th Am endm ent Takings Clause and hold that G I P is entitled to just com p ensation in t he a m ount of $755,494, together with interest calculated

7 W e recognize that this is inconsistent with som e o f his em ail correspondence

with EPA in 2008, in w hich h e s p e c u l a t es that GIP m ay have used up all its

allotm ent. W e f

ind Mr. C asey to be a credible w itness, however, and rely on his trial testim ony

. GIP did not do any recovery o p e r a t i o n s o n the Eastern

Excluded Property and, in any event, k ept no records to su p p o r t t he em ail

estim ate.

30f

rom June 4, 2 008, t o t h e date o f pay m ent in accordance with 4 0 U.S.C. §

3116 . The Clerk is directed to enter judgm ent f or plaintif f

.

s/Eric G. Bruggink Eric G. Bruggink Senior Judge

31