Opinion ID: 2651323
Heading Depth: 2
Heading Rank: 4

Heading: Accrual Suspension

Text: The Court of Federal Claims further erred in its analysis of accrual suspension. The accrual of a claim against the United States is suspended, for purposes of 28 U.S.C. § 2501, until the claimant knew or should have known that the claim existed (“the accrual suspension rule”). Boling v. United States, 220 F.3d 1365, 1373 (Fed. Cir. 2000) (finding that, when determining when a taking claim accrues, “the key issue is whether the permanent nature of the taking was evident such that the landowner should have known that the land had suffered erosion damage”); Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1577 (Fed. Cir. 1988); Kinsey v. United States, 852 F.2d 556, 557 n. (Fed. Cir. 1988) (“A claim does not accrue unless the claimant knew or should have known that the claim existed.”); see also Holmes v. United States, 657 F.3d 1303, 1322 n.15 (Fed. Cir. 2011). For the accrual suspension rule to apply, the claimant “must either show that the defendant has concealed its acts with the result that plaintiff was unaware of their existence or it must show that its injury was ‘inherently unknowable’ at the accrual date.” Young v. United States, 529 F.3d 1380, 1384 (Fed. Cir. 2008) (quoting Martinez v. United States, 333 F.3d 1295, 1319 (Fed. Cir. 2003) (en banc)). The inherently unknowable test “includes a reasonableness component.” Holmes, 657 F.3d at 1320 (“While we have stated that the ‘concealed or inherently unknowable’ formulation of the test for accrual suspension is ‘more common and more precise’ than the ‘knew or should have known’ formulation, we do not view that statement as eschewing the reasonableness component of the ‘inherently unknowable’ prong of the test.”) (internal citation omitted). BANKS v. US 19 The Court of Federal Claims found that Appellants’ argument relating to accrual suspension based on the overruling of adverse precedent was waived because they did not raise it in their opening brief to that court. In the alternative, the court held that the accrual suspension rule was “inapplicable to [P]laintiffs’ claims.” Banks III, 102 Fed. Cl. at 144. On appeal, Appellants argue that accrual suspension should apply because they “should not reasonably have been expected to know that jetty-caused erosion was significantly damaging their properties until 1997.” Appellants’ Br. 23. The Government contends that Appellants “now raise[ ] a second accrual suspension argument that was not raised in the [Court of Federal Claims]” and that argument is waived. Appellee’s Br. 40. Appellants have not waived their accrual suspension arguments. The Court of Federal Claims cited Appellants’ argument “that as late as 1997 it was not understood that the harbor jetties caused increased erosion in [P]laintiffs’ zone. The implication of [P]laintiffs’ argument is that their claims stabilized no earlier than 1997 because it was not understood at that time that the jetties were causing erosion in [P]laintiffs’ zone.” Banks III, 102 Fed. Cl. at 141. Though Banks did not use the term “accrual suspension” in making this argument, the substance is the same as that which it argues before this court. Accordingly, the argument is not waived. The Court of Federal Claims held that “erosion caused by the jetties in [P]laintiffs’ zone was a longstanding problem by 1952, beginning as early as 1903,” id. at 138, and that the forty-nine-year passage of time and “welldocumented” erosion would have made it “clear to a reasonable landowner . . . that the [G]overnment had effected a permanent taking,” 11 id. at 140. Appellants 11The Court of Federal Claims found that “[d]uring the forty-nine years between 1903, when the jetties BANKS v. US 20 argue that they could not have known they had a takings claim until 1997, when the 1997 Report issued. The Government counters that Appellants’ claims were not “inherently unknowable” and that they should have known about the erosion as early as 1950. When there is a gradual physical process, such as erosion or flooding, the “stabilization doctrine” delays claim accrual until the situation has “stabilized.” See United States v. Dickinson, 331 U.S. 745, 749 (1947). Thus, the statute of limitations under the Tucker Act only begins to run when it “becomes clear that the gradual process set into motion by the [G]overnment has effected a permanent taking, not when the process has ceased or when the entire extent of the damage is determined.” Boling, 220 F.3d at 1370–71. In making the determination of permanence, a court considers “the uncertainties of the terrain, the difficulty in determining the location of the government’s easement, and the irregular process of erosion.” Id. at 1373. Claims are deemed to accrue once the damage has “substantially encroached the parcels at issue and the damages were reasonably foreseeable.” Id. The Government argues that even if Appellants inferred from the various Corps Reports that the jetties had not caused the specific damage to their properties, “[they] w[ere] on notice of the well-documented connection between the jetties and erosion along the shore.” Appellee’s Br. 46. Likewise, the Court of Federal Claims implies that Appellants knew or should have known that the jetties were causing erosion because of the “general reached their final length, and 1952, the jetties were responsible for 25% of the material eroded from Dr. Nairn’s study area, the ten mile segment of shoreline south of the jetties.” Banks III, 102 Fed. Cl. at 140. BANKS v. US 21 pattern of erosion that followed the lengthening of the jetties in 1903.” Banks III, 102 Fed. Cl. at 140. Two factors complicate determining when Appellants knew or should have known of their alleged takings claims. First, the shorelines of Appellants’ properties are subject to natural erosion and other natural fluctuations. As this court found in Banks II, “without human intervention, [erosion] occurs naturally at a rate of approximately one foot per year.” 314 F.3d at 1306. Furthermore, Lake Michigan is subject to “[s]hort period fluctuations up to about 1.8 feet, caused by winds and differences in barometric pressures, [which] occur with annual frequency.” J.A. 5939. Waves and storms also affect the shorelines: “Waves from both the northwest and southwest quadrants cause movement of beach material, but as evidenced by the much greater accumulation of beach material north of the St. Joseph Harbor structures, the predominant direction of littoral transport is southward.” Id. The Government’s own expert, Dr. Robert Nairn, a coastal engineer, testified that the slow process of erosion is “masked by far larger swings in the width of the beaches next to [P]laintiffs’ properties caused by cross-shore sand transport, a cyclical process by which sand is moved offshore during times of high lake levels and returned to the shore during times of low lake levels.” Banks III, 102 Fed. Cl. at 121. That the Plaintiffs were aware of some erosion is not sufficient for the claim to accrue. See Nw. La. Fish & Game Pres. Comm’n v. United States, 446 F.3d 1285, 1291 (Fed. Cir. 2006) (explaining because some growth of hydrilla is normal, the damage to Plaintiffs was not known until there was uncontrolled overgrowth and the Corps issued a final refusal to lower the water level). Indeed, the Corps itself stated that only 30% of the damage to Appellants’ shorelines was attributable to the Corps’ activity, meaning 70% of the damage to the subject properties was attributable to naturally occurring erosion. BANKS v. US 22 J.A. 5770. Accordingly, it is unreasonable to assume that a property owner should have been able to discern the difference between the naturally occurring erosion and that caused by the jetties. As found by this court in Banks II, Appellants could not reasonably have known the damage was “permanent” until the Corps issued its 1996, 1997, and 1999 Reports showing that its mitigation efforts could not reverse the damage caused by its jetties. Banks II, 314 F.3d at 1310. It is erroneous to hold Plaintiffs responsible for knowledge that the Government itself had disclaimed prior to the 1997 Report. Cf. L.L.S. Leasing Corp. v. United States, 695 F.2d 1359, 1366 (Fed. Cir. 1982) (by taking upon itself the obligation to report overtime usage, the Government relieved the lessor of monitoring such use). The Government itself explained in the 1958 Study that the Corps believed that the erosion was not permanent and could be mitigated and reversed. Banks III, 102 Fed. Cl. at 133. Moreover, in 1973, the Government believed that the jetty-induced erosion had not reached the majority of Appellants’ properties. 12 The Government’s mitigation efforts thus delayed when Appellants knew or should have known they had a claim. Without a basis for imputing knowledge of the effect of the jetty-caused erosion on Appellants’ properties, it was unreasonable to find that the Appellants were aware of their claim regarding the permanency of the taking before the 1990s Reports. In light of the foregoing, and because “Dickinson discouraged a strict application of accrual principles in unique cases involving Fifth Amendment takings by continuous physical processes,” Applegate, 25 F.3d at 12 The 1973 Report found that the “area of adverse influence” of the jetties included properties less than 21,000 feet south of the harbor. J.A. 5776. BANKS v. US 23 1582 (citing Dickinson, 331 U.S. at 749), the Court of Federal Claims’ finding that Appellants knew or should have known of the damage prior to 1952 is clearly erroneous. V. The Alternative Merits Discussion is Not a Final, Appealable Decision In Banks III, the Court of Federal Claims stated: For purposes of judicial efficiency, if the reviewing court in any appeal should disagree with the court’s view of its jurisdiction, and to avoid the possibility of a trial opinion being drafted months or years after the trial, and the possibility of a repetitive trial, the court also presents here its findings from the trial. These findings are presented in the alternative and, in the absence of jurisdiction, do not entitle [P]laintiffs to just compensation in the amounts determined by the court. 102 Fed. Cl. at 120. In the absence of anything appealable, this court lacks appellate jurisdiction. See 28 U.S.C. § 1295(a)(3). To be final and appealable, see Fed. R. Civ. P. 54, a decision must end the litigation on the merits, Catlin v. United States, 324 U.S. 229, 233 (1945), and the judge must “clearly declare[] h[er] intention in this respect,” United States v. F. & M. Schaefer Brewing Co., 356 U.S. 227, 232 (1958). Here, contrarily, the Court of Federal Claims reasoned that, “[b]ecause [the] references [to when certain shore protection measures were undertaken] are scattered across several thousand pages of trial testimony and documentary evidence,” it would not decide “which of [P]laintiffs’ shore protection expenses were incurred between 1950 and 1970, the period of time during which the government was responsible for 30% of the erosion” “in the absence of briefing or a stipulation by the parties.” Banks III, 102 Fed. Cl. at 212. It declined to “undertake to determine BANKS v. US 24 which of [P]laintiffs’ expenses were incurred after 1970, the period of time during which the [G]overnment has completely mitigated the erosion caused by the jetties.” Id. The Court of Federal Claims added that “[i]f the reviewing court does not agree with the court’s determination that it lacks jurisdiction to address [P]laintiffs’ claims,” it would direct the parties to file either a stipulation or briefing “to enable the court to determine which of [P]laintiffs’ shore protection expenses were incurred prior to 1970 and which were incurred subsequent to 1970.” Id. The Court of Federal Claims’ alternative merits discussion is not a final and appealable decision over which this court has jurisdiction. On remand, the Court of Federal Claims may reconsider any merits rulings that were rendered at a time it mistakenly believed it lacked jurisdiction. In light of the Court of Federal Claims’ clearly erroneous fact finding on claim accrual, it is appropriate that there be no law-of-the-case or comparable obstacle preventing it from reconsidering its earlier, related findings on the merits. This court’s prior mandate—that the claims did not accrue until the 1999 Report—is still law-of-the-case, binding below.