Real Estate & Property Law

CFC: Trial Needed On Whether Wrongful Assertion Of Clean Water Act Jurisdiction Is "Extraordinary Delay"

By Robert Thomas (inversecondemnation.com)

Head's up on an interesting case from the Court of Federal Claims, Resource Investments, Inc. v. United States, No. 98-419L (Court of Federal Claims, Jan. 23, 2009), a massive opinion (84 single-spaced pages) with what at first glance seems to delve into just about every regulatory takings theory known: temporary takings, categorical takings, partial takings, parcel-as-a-whole, Mahon, Penn Central, First English, Lucas, Tahoe-Sierra, Seiber, delay, and ripeness. And those are just the subjects listed on the caption.

We're not going to digest the entire opinion here, just hit some of the highlights. The short story is that the U.S. Army Corps of Engineers wrongfully asserted jurisdiction over property in Washington state proposed to be used for a landfill, and asserted that until the owner procured a section 404 Clean Water Act permit, it could not construct the landfill. The Ninth Circuit ultimately agreed with the landowner, holding that the Corps did not have jurisdiction and that no 404 permit was necessary. The landowner then sued in the CFC, claiming it was owed compensation for a Lucas wipeout during the time it could not use its property because of the Corps' wrongful claims of CWA jurisdiction. The issue was whether this is a temporary taking, or simply "normal" planning delay and therefore not compensable.

Recall that in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987), the U.S. Supreme Court held that the Fifth Amendment requires compensation for temporary deprivations of property by regulation. The Court cautioned, however, that "normal delays" in processing would not support claims for temporary takings:

We limit our holding to the facts presented, and, of course, do not deal with the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like, which are not before us.

Californians should recognize this issue -- in Landgate, Inc. v. California Coastal Comm'n, 73 Cal. Rptr. 841 (Cal. 1998), the California Supreme Court held that California landowners should expect government agencies to regulate property outside the agencies' jurisdiction, and that the California Coastal Commission's wrongfully blocking a home from being built was simply normal planning delay and not a temporary taking.

Will the CFC hold otherwise?  It's too early to tell. After an exhaustive primer on regulatory takings and inverse condemnation law that starts on page 19 of the opinion ("Traveling the Path to a Taking"), the CFC held that "the court cannot determine here, at the summary judgment stage, whether plantiffs suffered delay, whether that delay was extraordinary, and to whom any such delay is attributable." Slip op. at 83-84. In other words, the parties dispute the facts and a trial is necessary.

There are other issues in the opinion, and we will follow up with another post on those, shortly.

Read the entire opinion here.

Full post as published by inversecondemnation on February 10, 2009 (boomark / email).