Opinion ID: 211579
Heading Depth: 2
Heading Rank: 4

Heading: Regulatory Takings Claim

Text: 29 Having correctly found that there was no categorical taking of plaintiffs' property, the trial court moved on to weigh the three factors of the Penn Central ad hoc analysis to determine whether a regulatory taking occurred. Norman II, 63 Fed.Cl. at 261. That analysis requires the court to balance (1) the extent to which the regulation has interfered with... reasonable investment-backed expectations; (2) the economic impact of the regulation on the claimant; and (3) the character of the governmental action at issue. Id. (citing Penn Cent. Transp. Co., 438 U.S. at 124, 98 S.Ct. 2646). 30 After undertaking a meticulous analysis of the Penn Central factors as applied to the facts at bar, the trial court concluded that appellants had reasonable investment-backed expectations with respect to only the four-acre parcel described as WL 17B, which appellants purchased in 1989 but which was first delineated as wetlands in the 1991 Delineation. See id. at 267-68. The trial court then concluded that the economic impact factor weighed against a finding of a taking, because the 1999 Permit actually increased the economic value of the parcel as a whole by allow[ing] plaintiffs to fill valuable commercial property and develop that property in exchange for setting aside other, less valuable property for mitigation. Id. at 278. Finally, the trial court analyzed the character of the government action, concluding that the issuance of the 1999 Permit served a legitimate public welfare obligation; that appellants were treated fairly by the Corps and that the Permit was itself the product of negotiations between the Corps and appellants; and that appellants were not singled out for disparate treatment. See id. at 282-86. Weighing all these factors in light of the facts of the case, the trial court concluded that no regulatory taking of property ... occurred, because the Corps' actions simply did not unduly burden plaintiffs. Id. at 287. 31 The Normans challenge very little of the trial court's Penn Central analysis. Their briefs do not even mention the trial court's extensive discussion of the character of the governmental action factor. With respect to the other two factors, their rather cursory arguments amount to little more than a reiteration of the claim, rejected above, that the critical causative element at issue here was not the 1999 Permit but the events of 1988-1991. Appellants argue, for example—albeit briefly—that the trial court erred in failing to measure economic impact as of the time of the 1988 Delineation. This position is illogical. The Normans cannot explain why the trial court should have measured economic impact as of a time when they did not own the great majority of the property allegedly taken. 32 The same is true regarding reasonable investment-backed expectations. The Normans argue that their expectation interest should have been measured as of 1988, when they purchased the initial 470-acre parcel. We note first that the trial court did, in fact, measure appellants' expectations with respect to the 470 acres as of the date they purchased that land, and found that the Normans had reasonable investment-backed expectations in a few of those acres. See Norman II, 63 Fed.Cl. at 266-70. Appellants do not explain on what theory we should measure their expectation as of 1988 with respect to acreage they did not own until 1994. It is axiomatic that `a reasonable investment-backed expectation' must be more than `a unilateral expectation or an abstract need.' Ruckelshaus v. Monsanto, 467 U.S. 986, 1005-06, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984) (quoting Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980)). As of 1988, the Normans simply could not have had any investment-backed expectation in property in which they had not yet invested. 33 In addition, we note that although a takings claim is not barred by the mere fact that title was acquired after the effective date of the state-imposed restriction, Palazzolo v. Rhode Island, 533 U.S. 606, 630, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001), it is particularly difficult to establish a reasonable investment-backed expectation in circumstances like these. The purpose of consideration of plaintiffs' investment-backed expectations, we have held, is to limit recoveries to property owners who can demonstrate that they `bought their property in reliance on a state of affairs that did not include the challenged regulatory regime.' Cienega Gardens v. United States, 331 F.3d 1319, 1345-46 (Fed.Cir.2003) (quoting Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1177 (Fed.Cir.1994)). Here, the Normans were not only constructively but also actually aware of the applicable wetland restrictions, and purchased most of the land with full knowledge that portions of it were not subject to development. They could not have made those purchases in reliance on a state of affairs that did not include those restrictions. We conclude that the trial court correctly found that the appellants had reasonable investment-backed expectations only with respect to the four-acre parcel known as WL 17B. 34 The trial court found that the Normans reasonably relied on the 1988 Delineation when purchasing their original 470-acre parcel. In that delineation, the Corps designated only 17 acres of the 470-acre parcel as wetlands. The 1991 Delineation identified an additional 70 acres of that parcel as wetlands. Although as of the time they purchased the 470-acre parcel, the Normans had reasonable investment-backed expectations that they would be able to develop those 70 acres, the effect of the 1991 Delineation was considerably mitigated by the 1999 Permit and related Deed of Restrictions, which resulted in the transfer of 220.85 acres to the South Meadows Association but also resulted in the Normans gaining the right to develop all but a few of the 70 acres designated as wetlands in 1991. To be sure, in order to obtain the right to develop those acres, appellants had to agree to set aside additional acreage as mitigation wetlands. The trial court found, however, that almost all of the property that either had been designated as wetlands in the original 1988 Delineation (of which the Normans were fully aware when they purchased the 470-acre parcel), or was outside the 470-acre parcel (and thus was purchased by the Normans only after it had already been designated as wetlands in 1991), or was never intended for development (because it was intended to be used for storm run-off and flood control). Thus, the trial court found that of the 220.85 acres set aside for mitigation, only 4.07 acres constituted property that the appellants intended and reasonably expected to be able to develop. 35 The Normans argue that they had reasonable investment-backed expectations with respect to the entire 220.85 acres that were set aside as mitigation. They do not, however, specifically challenge the trial court's characterization of each of the components of the 220.85 acres. Neither do they suggest any way in which the trial court erred in concluding that the 1991 Delineation, as applied to the 470-acre parcel, had any lingering effects other than with regard to the 4.07-acre parcel as to which the trial court found that the appellants had a reasonable investment-backed expectation. Because the trial court's finding as to the appellants' reasonable investment-backed expectations with regard to the 470-acre parcel has not been shown to be erroneous, we uphold the trial court's finding that the Normans' reasonable investment-backed expectations were limited to the 4.07-acre plot. 36 In light of the trial court's finding with respect to reasonable investment-backed expectations, the Normans' challenge to the court's regulatory takings analysis is unpersuasive. The appellants claim that the trial court's implementation of Penn Central 's inherently fact-specific, ad hoc inquiry was, for lack of a better phrase, insufficiently ad hoc. Decrying the careful three-factored analysis of the trial court as inappropriately employing a rigid set formula, they argue that in a properly fact-sensitive analysis, the single fact of the Corps' illegal redelineation should have been dispositive of the takings issue, and argue that on several occasions the courts have allowed a single extraordinary fact to determine the entire takings question. In that regard, we note that on those occasions when this court and the Supreme Court have found a single factor dispositive of the takings issue, it has been the absence of that factor—not its presence—that proved dispositive. See, e.g., Monsanto, 467 U.S. at 1005, 104 S.Ct. 2862 (finding that the force of the [reasonable expectations factor] is so overwhelming... that it disposes of the taking question, where the plaintiff could not have had a reasonable investment-backed expectation); Golden Pac. Bankcorp. v. United States, 15 F.3d 1066, 1074 (Fed.Cir.1994) (concluding that the absence of reasonable investment-backed expectations was dispositive of a takings claim). 6 None of the authorities cited by appellants identifies a compensable taking in a circumstance like this one, in which reasonable investment-backed expectations existed with respect to a tiny fraction of the allegedly taken property, and the other two Penn Central factors—largely unchallenged here—were resolved decisively against the takings claim. 37 In short, the Normans have provided us no basis on which to reverse the trial court's conclusion that no taking occurred here.