Real Estate & Property Law

Was Ban On Palmyra Commercial Fishing A Taking Of The Right To Operate Seafood Processing Facilities?

By Robert Thomas (inversecondemnation.com)

At its upcoming April 30, 2010 conference, the U.S. Supreme Court is considering the cert petition in a case we've been following since it was decided by the Court of Federal Claims. In Palmyra Pacific Seafoods, L.L.C. v. United States, No. 09-766 (cert. petition filed Dec. 28, 2009), the Court is presented with the following Questions Presented:

1.  Are private contracts property protected by the Takings Clause of the Fifth Amendment to the Constitution?

2.  Assuming that private contracts are property protected by the Takings Clause, is the federal government liable for regulatory as well as appropriative takings of private contracts?

The CFC and the Federal Circuit both rejected the claim that the Secretary of the Interior's designation of the waters surrounding Palmyra and Kingman Reef as National Wildlife Refuges and attendant commercial fishing ban was a taking of Palmyra Pacific Seafood's exclusive licenses to operate commercial fish processing facilities on the atoll. Palmyra Pacific had licenses from the private owners of Palmyra to use the atoll's airstrip, dock, harbor, and base came for their commercial fishing enterprise. In reliance on the licenses, Palmyra Pacific invested several millions of dollars in on-island infrastructure, and actually began commercial fishing operations. The CFC dismissed the case for failure to state a claim because even though the commercial fishing ban virtually wiped out the value of the licenses, they were not "property" protected by the Takings Clause. The Federal Circuit affirmed.

The cert petition asserts that the circuits are split regarding whether contracts are property. See Pet. at 5-8. The petition also asserts a circuit split about whether contracts can be the subject of a regulatory taking (as opposed to a direct appropriation). Pet. at 8-14.

Here are the petition, the federal government's BIO, and reply:

• Palmyra Pacific Seafood's Petition

• Federal Goverment's Brief in Opposition

• Palmyra Pacific's Reply

We'll let you know what happens after the conference.

Full post as published by inversecondemnation on April 23, 2010 (boomark / email).