Opinion ID: 900919
Heading Depth: 1
Heading Rank: 8

Heading: Bass III Model

Text: [¶ 39.] The circumstances in the four Bass cases are similar to those underlying the five SDDS and the five Lonetree decisions. To summarize the fact situation in the Bass cases, Bass was prevented from developing oil and gas rights on lands that it had legally leased for that purpose. The Bass III court concluded that it could not award plaintiffs a royalty interest or the present value of the income stream. Both calculations would lead to double recovery. Plaintiff's damages are measured by the interest they would have earned on the oil and gas profits during the period of the delay. [11] 45 Fed.Cl. at 124. The reason for that measure of damages was that the resources were still in place, ready to be developed. Id. at 123. Bass's loss consisted of not being able to exploit those non-renewable resources for the period of the taking. Id. at 124. In our case, SDDS was prevented from developing a parcel of land as a solid waste disposal site. SDDS had rights in the land to exploit a resource, namely, empty volume suitable for waste storage. That resource, empty volume suitable for waste storage, like the petroleum in Bass, was still in place, ready to be developed after the taking ended. Like Bass, SDDS suffered the loss of not being able to exploit a non-renewable resource for the period of the taking. [¶ 40.] The Bass cases are peculiarly relevant here because, essentially, the work of SDDS and that of Bass Oil are inverses of each other. Bass had a resource to be extracted, petroleum; SDDS had a resource to be extracted, empty volume. Both were finite and non-renewable. [12] Petroleum-in-ground (a natural resource) becomes petroleum extracted, a human-altered substance. Insofar as Bass Oil was an extraction company, the natural resource it was to exploit consisted only of petroleum in the ground. Petroleum extracted has a different, higher market value because labor and capital have been expended in its production. Petroleum extracted then enters the general stream of commerce to arrive at last at end-users. On the other hand, end-users are extractors of waste from formerly useful products: they have materials and turn them into waste. Waste uncollected has a lower market value than waste collected and processed (compacted, sorted, etc.), labor and capital having been expended in its processing. Collected and processed garbage enters the general waste stream of commerce until it reaches a landfill. At that point, landfill operators are willing to exploit their non-renewable natural resource, empty volume suitable for waste disposal, by allowing it to be filled with collected, processed garbage. The natural resource which the landfill operator has the right to exploit is not garbage, but room to put garbage. [¶ 41.] Perhaps the analogy between a waste disposal site and an oil well may be clarified graphically: Oil-in-ground (non-renewable resource) = > developed oil = > consumers Empty volume (non-renewable resource) Seen in this way, SDDS is in the position of Bass. Bass insofar as it was a company that developed oil (i.e., pumped it out, rather than refining the crude, transporting it, etc.)  and thereby used up what it had purchased  had something to sell to those downstream (refiners, etc.); similarly, SDDS insofar as it was to be a company that developed volume (i.e., filled it in, rather than processing what was to go into it, transporting it, etc.)  and thereby would use up what it had purchased  would have had something to sell to those upstream (trash collectors, etc.). Both Bass and SDDS were forced to wait and should recoup damages that resulted from having to wait. The fact that Bass was a sufficiently strong company to survive the wait is as irrelevant as the fact that SDDS was insufficiently strong to survive similarly. Such are the market breaks. Mere fluctuations in value during the process of governmental decisionmaking, absent extraordinary delay, are incidents of ownership. They cannot be considered as a taking in the constitutional sense. Tahoe-Sierra, ___ U.S. at ___, 122 S.Ct. at 1484, 152 L.Ed.2d at 546 (citations omitted). [¶ 42.] As noted above, the Supreme Court requires, in a case like ours, of a non-categorical taking, a fact-specific inquiry. Id. at ___, 122 S.Ct. at 1484, 152 L.Ed.2d at 547. One of the facts to be considered, however, is not the fact (alleged by SDDS) that the market for its services collapsed by the time it was allowed to resume work under its permit. That fact, if it is one, is precisely an incident of ownership that any participant in a market-based economy must factor into its calculations. That Bass was able to resume its drilling activities, but SDDS was not able to resume its volume-filling activities are examples of facts which neither the Bass court could nor this Court can consider. [13] [¶ 43.] At this point, however, we come face to face with the same problem that was encountered after the court's decision in Bass III: neither Bass nor SDDS would have made a profit during the period of their respective takings. See Bass IV, 48 Fed.Cl. at 625. Thus, to award interest on lost profits would in either case be to award nothing at all. That result is manifestly unjust. Therefore, we, as did the court in Bass IV, reject the Bass III method of measuring SDDS's losses. See Id.