Opinion ID: 2804701
Heading Depth: 3
Heading Rank: 1

Heading: Residual Value

Text: The trial court held that because the government’s permit denial deprived Lost Tree of 99.4% of Plat 57’s value, a Lucas taking had occurred. Lost Tree CFC II, 115 Fed. Cl. at 231. Recognizing that Lucas requires a total loss in economic value, id. at 228 (citing Tahoe-Sierra, 535 U.S. at 330), the trial court explained that Plat 57’s residual value “does not reflect any economic use.” Id. at 231 (emphasis added). Plat 57’s residual value stems from environmental value as wetland. Id. at 231 n.9. 8 LOST TREE VILLAGE CORPORATION v. US Thus, Plat 57’s residual value is not economic value, and hence Lucas applies. The government argues that Lucas is about value, no matter its source. According to the government, if a regulated parcel retains any value, including environmental value, the landowner cannot maintain a Lucas claim. Lost Tree and Amicus Curiae respond that Lucas is about use. If a regulation deprives a landowner of all land use, Lucas’s per se treatment is appropriate. We agree with the trial court that a Lucas claim falls somewhere between the parties’ interpretations. While Lucas itself does not squarely address the issue, this court’s precedent does. In Loveladies Harbor, Inc. v. United States, the government denied plaintiffs a § 404 fill permit. 28 F.3d 1171, 1173 (Fed. Cir. 1994). The fair market value of the affected parcel prior to the permit denial was over $2 million. Id. at 1174. After the permit denial, the parcel was worth $12,500, less than one percent of its original value. Id. at 1175. Because the remaining value was “de minimis,” the relevant parcel was “deprived of all economically feasible use,” and Lucas’s per se treatment was appropriate. Id. at 1181–82. The government argues that subsequent doctrinal developments at the Supreme Court conflict with Loveladies Harbor. We agree that subsequent decisions have explained that a Lucas taking is rare. In Palazzolo v. Rhode Island, the plaintiff argued that wetlands regulations reduced his land value by more than 93%. 533 U.S. 606, 616 (2001). That decrease in value was not sufficient to trigger Lucas’s per se treatment. Id. at 631. The Supreme Court more recently clarified in Tahoe-Sierra that Lucas “was limited to ‘the extraordinary circumstance when no productive or economically beneficial use of land is permitted.’” 535 U.S. 302, 330 (2002) (emphasis in original) (quoting Lucas, 505 U.S. at 1017). LOST TREE VILLAGE CORPORATION v. US 9 We disagree that post-Lucas Supreme Court developments conflict with our holding in Loveladies Harbor. In Palazzolo, the 93% loss in value was insufficient to trigger Lucas because the landowner was left with value attributable to economic uses. As the Court explained, “[a] regulation permitting a landowner to build a substantial residence on an 18-acre parcel does not leave the property ‘economically idle.’” Palazzolo, 533 U.S. at 631. The Court also indicated that the “State may not evade the duty to compensate on the premise that the landowner is left with a token interest[,]” implying that residual value does not defeat a categorical takings claim at least when residual value is not attributable to economic uses. See id. at 629. In Tahoe-Sierra, the Court addressed a “temporary” takings claim. The Court explained that 32month moratoria on development do not deprive a landowner of all economically beneficial use because economic use can resume at the end of the moratoria. See TahoeSierra, 535 U.S. 302, 332 (“Logically, a fee simple estate cannot be rendered valueless by a temporary prohibition on economic use, because the property will recover value as soon as the prohibition is lifted.”). The government argues that this court’s precedent characterizes Lucas as applying only in the narrow circumstance in which all value, regardless of its source, has been lost. We disagree. After Tahoe-Sierra, our cases have characterized the Lucas inquiry in terms of “value.” See, e.g., Cienega Gardens v. United States, 331 F.3d 1319, 1344 (Fed. Cir. 2003) (Lucas requires loss of “100% of a property interest’s value”). Aside from Loveladies Harbor, however, our takings jurisprudence addresses circumstances such as those in Tahoe-Sierra and Palazzolo in which economic use (and hence economic value) was merely suspended, permitted on an unaffected portion of the parcel, or not entirely destroyed. See, e.g., Seiber v. United States, 364 F.3d 1356 (Fed. Cir. 2004); Bass En10 LOST TREE VILLAGE CORPORATION v. US ters. Prod. Co. v. United States, 381 F.3d 1360 (Fed. Cir. 2004).