Opinion ID: 185020
Heading Depth: 2
Heading Rank: 3

Heading: The Relevant Parcel

Text: The definition of the relevant parcel profoundly influencesthe outcome of a takings analysis. Above all, the parcelshould be functionally coherent. In other words, more shouldunite the property than common ownership by the claimant. Thus, a court must also consider how both the propertyowner and the government treat (and have treated) theproperty. The District Court used several factors to determine therelevant parcel: the degree of contiguity, the dates of acquisition, the extent to which the parcel has been treated as asingle unit, and the extent to which the restricted lots benefitthe unregulated lot. See District Intown, 23 F. Supp. 2d at35 (citing Ciampitti v. United States, 22 Cl. Ct. 310, 318 (1991)). An analysis focused on these factors is eminentlysound and it mirrors the approach taken by other courts inregulatory takings cases. See Forest Properties, Inc. v.United States, 177 F.3d 1360, 1365 (Fed. Cir.) (stressing theowner's treatment of property as a unit from the time ofpurchase), cert. denied sub nom. RCK Properties v. UnitedStates, 120 S. Ct. 373 (1999); K & K Constr. Co. v. Department of Natural Resources, 575 N.W.2d 531, 537 (Mich.)(stressing contiguity, unity of ownership, and a commondevelopment plan), cert. denied, 119 S. Ct. 60 (1998). Applying these factors, the District Court correctly determined that all nine lots should be treated as one parcel forthe purpose of the court's takings analysis. The lots arespatially and functionally contiguous. District Intown purchased the property as a whole in 1961 and treated it as asingle indivisible property for more than 25 years. DistrictIntown presented no evidence that, even after subdivision, ittreated the lawn lots separately from Lot 106, the lot thatcontains the apartment building, for the purposes of accounting or management. The intentional act of subdivision is theonly evidence produced by District Intown that it has treatedthe lots as distinct units. In fact, before the Mayor's agent,District Intown did not come forward with evidence showingthat it had, for accounting purposes, treated the lawn maintenance fees separately from expenses associated with maintaining the apartment building. See Decision & Order ofMayor's Agent p 40, reprinted in J.A. 364. While there is adispute as to whether the adjacent landscaped lawn increasesthe apartment building's value, this is immaterial. Even ifLot 106 were deemed to have the same value with or withoutLots 107 through 114, the application of the other threefactors strongly suggests that Lots 106 through 114 arefunctionally part of the same property. Appellants argue that the District Court was wrong totreat all the lots as a single parcel because it contradictsLucas and two Federal Circuit cases. This argument fallsflat. District Intown first argues that the Lucas Courttermed extreme and unsupportable a similar decision bythe state court in Penn Central to treat multiple holdings as a single parcel for takings analysis. See Brief for Appellants at15-16. This dictum, see Lucas, 505 U.S. at 1017 n.7, referred,however, only to the state court's decision to treat all of PennCentral's holdings in the vicinity of Grand Central Station aspart of the denominator for the purposes of deciding whetherplaintiffs could receive a reasonable return on their investment in Grand Central. See Penn Central Transp. Co. v.New York, 366 N.E.2d 1271, 1278 (N.Y. 1977). The PennCentral Court had no need to address this holding. TheLucas dictum casts aspersions on the state court's elevationof one factor, unity of ownership, over other factors indetermining the relevant parcel. The District Court engagedin no such extreme conduct here; it did not look to all ofDistrict Intown's holdings in the vicinity of Cathedral Mansions South to evaluate the economic effect of the regulationat issue here; it looked to contiguous property that waspurchased and treated as a single unit by appellants. Similarly, the two Federal Circuit cases cited by DistrictIntown do not undermine the District Court's definition of therelevant parcel. See Brief for Appellants at 16 (citing Loveladies Harbor, 28 F.3d at 1171 and Florida Rock Indus., Inc. v.United States, 791 F.2d 893 (Fed. Cir. 1986)). Neither ofthese cases support appellants' position and, in fact, Loveladies Harbor supports the District Court's decision. In Florida Rock Industries, the court reviewed the Army Corps ofEngineers' uncompensated rejection of the plaintiff's application to mine limestone on 98 acres of the plaintiff's wetlandproperty. See Florida Rock Indus., 791 F.2d at 896. TheFederal Circuit affirmed the trial court's decision to considerthe 98 acres as the relevant parcel separate from the adjacent1,462 acres of wetland. See id. at 904. The Federal Circuit'sjustification for this decision, however, was that all the evidence and the findings indicated that the Army Corps ofEngineers would have rejected mining on all of the property,so there was no point to including all 1,560 acres in therelevant parcel. See id. at 904-05. Thus, Florida RockIndustries is not analogous to the instant case; there is noindication that the District of Columbia will prevent District Intown from continuing to use its property to obtain incomefrom its apartment building. Loveladies Harbor lends support to the District Court'sdecision to treat Lots 106-114 as one parcel. The plaintiff inLoveladies Harbor sought to develop a total of 12.5 acres ofland, consisting of 11.5 acres of wetlands and one acre of filledupland. See Loveladies Harbor, 28 F.3d at 1180. The ArmyCorps of Engineers refused to grant the permit required tofill the wetlands acreage. See id. at 1174. In reviewingwhether this denial constituted a taking the Federal Circuitfound that the trial court correctly concluded that the relevant parcel was the entire 12.5 acres, not just the 11.5 acresto which the permit denial applied. See id. at 1181. Thus,Loveladies Harbor argues against treating the property burdened by the regulation separately from contiguous property. Moreover, the Loveladies Harbor Court emphasized that aflexible approach, designed to account for factual nuances,guides its analysis of the denominator problem. Id. Thesefactual nuances include whether there remained substantialeconomically viable uses for plaintiff's property after theregulatory imposition, id. (citing Deltona Corp. v. UnitedStates, 657 F.2d 1184 (Ct. Cl. 1981)), and the timing oftransfers in light of the developing regulatory environment. Id. Both of these factors support our conclusion in theinstant case that Cathedral Mansions South as a whole constitutes the relevant parcel. Finally, Penn Central is instructive where, as here, appellants own a single piece of property that is divisible intoseveral legally recognized entities. Indeed, the Court wasrather blunt in saying that [t]aking jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. Penn Central Transp. Co., 438 U.S. at 130. The Court alsomade it clear that a party may not establish a 'taking' simplyby showing that they have been denied the ability to exploit a property interest they heretofore had believed was availablefor development. Id. The Court found this suggestion to besimply untenable. Id. On the basis of the foregoing authority, it seems clear herethat we must analyze District Intown's property not as separate, potentially divisible and transferable parcels, but as onecontiguous parcel. Appellants note that the District of Columbia has taxed Lots 107 through 114 at a higher rate sincesubdivision, reflecting the District of Columbia's assessmentthat these lots are vacant developable land. They contendthat it is inconsistent for the District of Columbia to speakfrom both sides of its mouth in this regard, claiming for taxpurposes that the lots are developable, but refusing to permitdevelopment on the lots. We simply note that appellantsretain the right to recombine the parcels and treat them asone property for the purposes of taxation, so no furtherdisadvantage will befall them on this score. We are perplexed by our concurring colleague's criticism ofour approach to evaluating a takings claim. As the concurring opinion correctly notes, at bottom, the approach that wefollow and the result that we reach are in accord withSupreme Court case law. Unless and until the Court instructs otherwise, we are obliged to judge within the boundsof established precedent.