Opinion ID: 2321964
Heading Depth: 3
Heading Rank: 1

Heading: The elements of delay-based taking claims

Text: The District argues that the absence of any formal restriction on appellants' property rights precludes any finding of a taking. Analysis of the elements of a delay-based taking claim under Penn Central demonstrates the fallacy of this argument. For a determination of whether a regulatory taking has occurred, Penn Central requires essentially ad hoc, factual inquiries into the particular circumstances in that case. Penn Central, 438 U.S. at 124, 98 S.Ct. 2646. These factual inquiries involve two general factors: (1) the character of the governmental action; and (2) the economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations. Id. As this case illustrates, the Penn Central factors may be interrelated. Here, the principal issue relating to the character of the governmental action is whether the District engaged in extraordinary delay after it announced an intent promptly to take appellants' properties, and the principal issue relating to the economic impact of the District's actions involves the extent to which the alleged delay affected appellants' ability to use or sell the properties or to benefit from appreciation in their value. Not only is delay relevant in assessing the character of the governmental action under Penn Central, but delay may also implicate the other prong of the Penn Central analysis by exacerbating the economic impact on the property owner. On the other hand, extraordinary delay may not cause a taking because its economic impact is not sufficiently severe, and delay that is merely ordinary may not cause a taking even though it produces severe economic impact.
The first major factor under Penn Central involves the character of the government's action. As appellants concede, the general rule is that delay following a government's announcement of an intent to take property does not result in a taking. A government's pre-condemnation activities generally do not constitute a taking [e]ven if the appellants' ability to sell their property was limited during the pendency of the condemnation proceeding and even if its fair market value declined. Agins v. Tiburon, 447 U.S. 255, 263 n. 9, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980) (citations and quotations omitted). Indeed, formal initiation of condemnation proceedings, though it affects the owner's ability to profitably use or sell the land, generally does not cause inference with the owner's property interests that is severe enough to give rise to a taking. Kirby Forest Industries v. United States, 467 U.S. 1, 15, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984). At least in the absence of an interference with an owner's legal right to dispose of his land, even a substantial reduction of the attractiveness of the property to potential purchasers does not entitle the owner to compensation under the Fifth Amendment. Id.; see First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 320, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987) (discussing the unexceptional proposition that . . . depreciation in value of the property by reason of preliminary activity is not chargeable to the government). The announcement of government planning, like legislation for or the beginning of a project, long before any condemnation activities, may have an effect on value of lands involved, sometimes a beneficial, sometimes an adverse effect, but any decreases in value `are incidents of ownership' and `cannot be considered as a taking in the constitutional sense.' Reservation Eleven Associates v. District of Columbia, 136 U.S.App. D.C. 311, 420 F.2d 153, 157, 158 (1969) (quoting Danforth v. United States, 308 U.S. 271, 285, 60 S.Ct. 231, 84 L.Ed. 240 (1939)). The general rule that post-announcement delay does not ordinarily result in a taking, however, is not absolute, and the character of the government's delay may give rise to a taking claim under Penn Central. Delay in the regulatory process cannot give rise to takings liability unless the delay is extraordinary and [i]f the delay is extraordinary, the question of temporary regulatory takings liability is to be determined using the Penn Central factors. Appolo Fuels v. United States, 381 F.3d 1338, 1351 (Fed.Cir.2004); see Agins, 447 U.S. at 263 n. 9, 100 S.Ct. 2138 (extraordinary delay may give rise to a taking claim). Whether delay is extraordinary depends on its length and the reasons for it. [T]he duration of the restriction is one of the important factors that a court must consider in the appraisal of a regulatory takings claim. Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302, 342, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002). No categorical rule establishes how long governmental action must preclude use of property before a taking occurs. See id. at 335, 122 S.Ct. 1465. Delays that qualify as extraordinary typically last for a substantial length of time. Bass Enterprises Production Co. v. United States, 381 F.3d 1360, 1366 (Fed.Cir.2004) (citations omitted). However, [t]he question of whether a delay is extraordinary is not a simple matter of the number of months or years taken by the Government to make its decision. . . . Id. (citing Tahoe-Sierra Preservation Council, 535 U.S. at 333, 337-38, 122 S.Ct. 1465). Instead of such an easy guidepost, courts must evaluate a number of factors to determine whether the delay is extraordinary, including the reasons for the delay and whether the delay is proportionate to the nature of the government process. Bass Enterprises Production Co., 381 F.3d at 1366. Courts recognize that delay is inherent in complex regulatory . . . schemes and that they therefore must examine the nature of the . . . process as well as the reasons for any delay. Wyatt v. United States, 271 F.3d 1090, 1098 (Fed. Cir.2001). In assessing the reasons for the delay, courts may consider whether the government acted in good faith, and some courts have been reluctant to find extraordinary delay in the absence of bad faith by the government. See id. Government action of an arbitrary or abusive character may also give rise to a de facto taking claim. See Acorn Land, LLC v. Baltimore County, 402 Fed.Appx. 809 (4th Cir.2010) (per curiam) (regulatory taking occurred where a court found that a local government's refusal to take action to permit development was arbitrary, and the government then effectively sidestepped the court's order by rezoning the property); Amen v. City of Dearborn, 718 F.2d 789, 797 (6th Cir.1983) (de facto taking occurred when the city chose not to invoke its condemnation powers, but, rather, elected to engage in a deliberate course of conduct to force the sale of private property at reduced value as part of redevelopment plan); Archer Gardens v. Brooklyn Center Dev. Corp., 468 F.Supp. 609, 613 (S.D.N.Y.1979) (taking occurred through abuse of legitimate condemnation powers where the government tried to appropriate private properties through tax foreclosure proceedings instead of the previously announced condemnation proceeding in which it agreed to pay a substantially higher price).
The other principal factor in the Penn Central test involves the economic impact of the governmental action. A plaintiff must show deprivation significant enough to satisfy the heavy burden placed upon one alleging a regulatory taking. See Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 493, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987); District Intown Properties Ltd. Partnership v. District of Columbia, 339 U.S.App.D.C. 127, 198 F.3d 874, 879 (1999) (a claimant must put forth striking evidence of economic effects to prevail even under the ad hoc inquiry mandated by Penn Central ). The economic impact of the governmental action in a de facto taking case must be severe because even a substantial reduction of the attractiveness of the property to potential purchasers does not entitle the owner to compensation under the Fifth Amendment. See Kirby Forest Industries, 467 U.S. at 15, 104 S.Ct. 2187. A regulatory taking may occur even if an announcement of the intent to take property does not deprive the owner of all economically beneficial use. Even when the owner can still make some economically beneficial use, a taking nonetheless may have occurred, depending on the complex of factors discussed in Penn Central. Palazzolo v. Rhode Island, 533 U.S. 606, 615-17, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001). Penn Central standards determine whether a regulatory taking occurred outside the relatively narrow category of regulations that completely deprive property owners of all economically beneficial use, and as a result, a  Penn Central taking involves a different theory than a `total regulatory taking.' Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538, 548, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005); see Palazzolo, 533 U.S. at 632, 121 S.Ct. 2448 (remanding for examination of claims under the Penn Central analysis after upholding finding that regulatory actions did not deprive the property of all economic value). That a de facto restriction of a landowner's use of its property is temporary rather than permanent is also not dispositive. First English Evangelical Lutheran Church, 482 U.S. at 328, 107 S.Ct. 2378 (temporary denial of all use of property while subsequently invalidated regulation was in effect may constitute a taking). The Takings Clause was `designed to bar Government from forcing some people alone to bear burdens which, in all fairness and justice, should be borne by the public as a whole.' Tahoe-Sierra Preservation Council, 535 U.S. at 321, 122 S.Ct. 1465 (quoting Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960)). If extraordinary delay imposes on one property owner severe economic burdens, fairness and justice may require the public as a whole to bear them even if the owner retains some economic use of the property.
As these cases demonstrate, there exists only a narrow exception to the general rule that substantial delay in carrying out an announced intent to take property, coupled with substantial adverse economic impact, do not constitute a taking. Appellants themselves acknowledge that a delay-based taking claim requires extraordinary circumstances, and they undertake to meet this standard by claiming unreasonable delay and grossly improper conduct, deliberate and unjustifiable government misconduct, deliberate fraud on the rights of plaintiffs, and a gross injustice. The narrowness of the exception reflects two considerations. First, a broader exception would be contrary to public and private interests in advance announcement of capital projects that substantially affect the community. Before an agency breaks ground on any significant project, whether or not it would require any taking, the agency should be able to get input from the community, which requires advance notice. Early public announcement may also benefit targeted property owners by enabling them to avoid wasteful investment; as appellants acknowledge, property owners may not want to make substantial investments if an impending taking would prevent them from realizing a reasonable return. A lax standard for delay-based taking claims would discourage timely announcement and encourage hasty decision-making. See Tahoe-Sierra Preservation Council, 535 U.S. at 335, 122 S.Ct. 1465. As the Second Circuit stated, We do not believe that the Takings Clause requires a state to choose among planning in secret, not planning at all, and exposing itself to takings claims from every property owner whose land might be affected by its plans. Santini v. Connecticut Hazardous Waste Management Service, 342 F.3d 118, 133 (2d Cir. 2003). The second reason for limiting delay-based taking claims to truly extraordinary circumstances is that intensive review of the management of municipal projects by the courts would raise serious separation of powers issues. [2] Courts avoid legal standards in takings cases that would empowerand might often requirecourts to substitute their ... judgments for those of elected legislatures and expert agencies. Lingle, 544 U.S at 544, 125 S.Ct. 2074. Courts eschew intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power. Franco v. National Capital Revitalization Corp., 930 A.2d 160, 168 (D.C.2007). Although Franco involved deference to legislative branch judgments about whether a taking is for a public purpose, the same principles apply to executive branch judgments about how to manage a project that includes takings for indisputably public purposes. [3] The executive branch is entrusted with principal responsibility to decide what is a reasonable amount of time to obtain public comment and complete planning, and what are the relative costs and benefits of extending an initial schedule to seek further public comment, refine plans, or achieve other valid goals. Courts should not adopt a standard for delay-based taking claims that would permit judges or juries to second-guess these judgments. See Bass Enterprises Production Co., 381 F.3d at 1367 (Governmental agencies that implement complex permitting schemes should be afforded significant deference in determining what additional information is required to satisfy statutorily imposed obligations.) (quotation and citation omitted).