Loveladies Harbor, Inc. v. U.S.

• Citation: 28 F.3d 1171
• Decision Date: 15 June 1994
• Docket Number: No. 91-5050,91-5050
• Parties: , 62 USLW 2791, 24 Envtl. L. Rep. 21,072 LOVELADIES HARBOR, INC. and Loveladies Harbor, Unit D, Inc., Plaintiffs-Appellees, v. The UNITED STATES, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1171

28 F.3d 1171

38 ERC 1867, 62 USLW 2791, 24 Envtl.

L. Rep. 21,072

LOVELADIES HARBOR, INC. and Loveladies Harbor, Unit D, Inc. Plaintiffs-Appellees, v. The UNITED STATES, Defendant-Appellant.

No. 91-5050.

United States Court of Appeals Federal Circuit.

June 15, 1994.

Rehearing Denied; Suggestion for Rehearing In Banc Declined

Sept. 29, 1994.

Kevin J. Coakley, Connell, Foley & Geiser, Roseland, NJ, argued, for plaintiffs-appellees. With him on the brief were Stephen D. Kinnard and Ernest W. Schoellkopff.

Robert L. Klarquist, Atty., Dept. of Justice, Environment & Nat. Res. Div., Washington, DC, argued for defendant-appellant. With him on the brief, were Lois J. Schiffer, Acting Asst. Gen., Environmental & Nat. Res. Div., John A. Bryson, Fred Disheroon and Gary S. Guzy, Attys.

George W. Miller, Walter S. Smith, Jr., Jonathan L. Abram and Jonathan S. Franklin, Hogan & Hartson, Washington, DC, were on the brief, for amicus curiae, Whitney Benefits, Inc. and Peter Kiewit Sons' Co.

Thomas H. Shipps, Maynes, Bradford, Shipps & Sheftel, Durango, CO, and Scott B. McElroy and Alice E. Walker, Greene, Meyer & McElroy, P.C., Boulder, CO, were on the brief, for amicus curiae, Northern Ute Indian Tribe.

Charles F. Lettow, Michael R. Lazerwitz, Michael A. Mazzuchi, Cleary, Gottlieb, Steen & Hamilton, of Washington, DC, were on the brief, for amicus curiae, Dico, Inc.

Richard Dauphinais, Native American Rights Fund, Washington, DC, and Yvonne T. Knight and Patrice Kunesh, Native American Rights Fund, Boulder, CO, were on the brief, for amicus curiae, Cheyenne-Arapaho Tribe of Oklahoma.

Virginia S. Albrecht, Albert J. Beveridge, III and David G. Isaacs, Beveridge & Diamond, P.C., Washington, DC, and Mary V. DiCrescenzo, National Ass'n of Home Builders, Washington, DC, were on the brief, for amicus curiae, National Ass'n of Home Builders.

Paula K. Smith, Asst. Utah Atty. Gen., Jan Graham, Utah Atty. Gen., Salt Lake City, UT and Cheri Jacobus, Chief Asst. Atty. Gen., Dept. of Law, Anchorage, AK, and Charles E. Cole, Alaska Atty. Gen., Juneau, AK, were on the brief, for amicus curiae, States of Utah and Alaska.

Roland L. Skala, Weeks & Skala, Yakima, WA, was on the brief, for amicus curiae, Cascade Development Co., Inc.

James S. Burling, Ronald A. Zumbrun and Robin L. Rivett, Pacific Legal Foundation Paul D. Kamenar and Daniel J. Popeo, Washington Legal Foundation, Washington, DC, and W. Lawrence Wallace and Carolyn M. White, Vinson & Elkins, of Washington, DC, were on the brief, for amicus curiae, Wash. Legal Foundation.

Sacramento, CA, were on the brief, for amicus curiae, Pacific Legal Foundation.

Timothy D. Searchinger, Environmental Defense Fund, New York City, was on the brief, for amicus curiae, Environmental Defense Fund.

Before PLAGER, CLEVENGER, and RADER, Circuit Judges.

PLAGER, Circuit Judge.

This is a regulatory taking case. It arose when the plaintiffs (Loveladies) sought a fill permit under Sec. 404 of the Clean Water Act ¹ from the Army Corps of Engineers (Corps) to complete the final stage of an ongoing real estate development project. The Corps denied the permit on May 5, 1982. Loveladies challenged the validity of that permit denial in a proceeding in Federal District Court under Sec. 554 of the Administrative Procedure Act. ² Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. Baldwin, Civ. No. 82-1948 (filed June 15, 1982). The challenge proved unsuccessful. Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. Baldwin, Civ. No. 82-1948 (D.N.J. Apr. 3, 1984), aff'd 751 F.2d 376 (3d Cir.1984) (table).

Loveladies then proceeded with a suit in the Court of Federal Claims, ³ which they had filed sometime earlier, Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. United States, No. 243-83 L (filed Apr. 14, 1983), seeking monetary compensation from the United States (Government). That court denied cross motions for summary judgment, Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. United States, 15 Cl.Ct. 381 (1988) (Loveladies 1 ), and after trial on the merits awarded Loveladies $2,658,000 plus interest in compensation. Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. United States, 21 Cl.Ct. 153 (1990) (Loveladies 2 ). The Government here appeals this award.

Subsequent to the time this case was briefed and argued on appeal, two significant legal developments occurred which directly bear on the issues of the case. One was the decision by the United States Supreme Court in Lucas v. South Carolina Coastal Council, 505 U.S. ----, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), and the other was the decision by this court in banc in UNR Industries, Inc. v. United States, 962 F.2d 1013 (Fed.Cir.1992), aff'd sub nom. Keene Corp. v. United States, --- U.S. ----, 113 S.Ct. 373, 121 L.Ed.2d 285 (1992). Based on the decision in UNR, the Government moved to dismiss this appeal for lack of jurisdiction. Because of the importance of the jurisdictional issue, and the fact that other cases pending on appeal raised the same issue, this court, sitting in banc, called for supplemental briefing and argument. In a separately published opinion, we determined that this court's jurisdiction had been properly invoked; the Government's motion was denied, and the merits case ordered to proceed. Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc. v. United States, 27 F.3d 1545 (Fed.Cir.1994) (Loveladies I ). ⁴

We turn then to the merits, and in particular the effect of the Supreme Court's decision in Lucas on the outcome of the case.

BACKGROUND

The property at issue in this dispute is a 12.5 acre parcel (the parcel) consisting of 11.5 In order to develop the remaining 51 acre parcel for residential use, Loveladies needed to fill 50 acres, the one acre having been previously filled, and that in turn required Loveladies to obtain permission from both the New Jersey Department of Environmental Protection (NJDEP) and the Corps. That process proved to be lengthy and contentious, marked by several years of negotiation (with Loveladies submitting progressively less ambitious and less environmentally objectionable proposals), a 1977 permit denial, appeal of that denial to the Commissioner of NJDEP, and judicial review in state court.

                acres of wetlands and one acre of filled land, located on Long Beach Island, Ocean County, New Jersey.  A map showing the location of the parcel is appended to this opinion.  As can be seen from the map, Barnegat Bay bounds the wetlands on the west, while single-family homes bound it on the east and southeast.  The 12.5 acres is part of a 51 acre parcel owned by Loveladies, which in turn is part of an original 250 acre tract which Loveladies had acquired in 1958. 5  The balance of the 250 acres--199 acres--had been developed before 1972 and the enactment of Sec. 404 of the Clean Water Act
                

During the course of the proceedings, NJDEP offered, as a compromise, permission for Loveladies to develop 12.5 of the 51 acres. Loveladies initially declined that offer. Eventually Loveladies acquiesced to the 12.5 acre limitation, the dispute was resolved, and the permit, on September 9, 1981, issued. ⁶ See In re Loveladies Harbor, Inc., 176 N.J.Super. 69, 422 A.2d 107 (App.Div.1980), certif. denied 85 N.J. 501, 427 A.2d 588 (1981). The permit granted permission to fill and develop 11.5 acres in addition to the one acre which had been filled previously--this is the 12.5 acre parcel at issue--and to construct 35 single family homes thereon.

Loveladies then sought the requisite federal permit for the development project. As required, the Corps sought the views of the counterpart state agency, the NJDEP. NJDEP in its response acknowledged that they had issued Loveladies the permit as they were obligated to do under the terms of the settlement, but denied that the permit approval was in compliance with the state's requirements. The response went on to explain that the 12.5 acre development would be "anachronistic," a "throwback to the 1950's--1960's style of shore development," and closed by noting, "[a] denial of the federal permit appears appropriate under this Division's understanding of the pertinent federal law."

The Corps rejected Loveladies' Sec. 404 permit application on May 5, 1982. Loveladies again resorted to the courts. As previously noted, the Sec. 404 permit denial was challenged in Federal District Court under Sec. 554 of the APA, and that challenge was unsuccessful. Loveladies Harbor, Inc. and Loveladies Harbor, Unit D, Inc., v. Baldwin, supra. Between the time the District court made its decision and the appeal was decided, Loveladies filed a claim in the Court of Federal Claims for just compensation under the Fifth Amendment. That case proceeded to trial following issuance of the Third Circuit's affirmance of the district court's rejection of Loveladies' APA claims.

In response to the parties' cross-motions for summary judgment, the Court of Federal Claims initially addressed and decided several of the substantive issues in the case. The court concluded, however, that it would deny the parties' cross-motions for summary judgment on the takings issue as factual questions remained regarding the economic impact of the permit denial. Loveladies 1, 15 Cl.Ct. at 396, 398.

Following a full hearing, those factual issues were resolved in favor of Loveladies. Loveladies 2, 21 Cl.Ct. at 153. The court found that the fair market value of the parcel prior to the permit denial was $2,658,000

                whereas the value after the permit denial was $12,500.  This greater than 99% diminution of value, "coupled with the court's earlier determination of a lack of a countervailing substantial legitimate state interest," led the court to conclude that there had been a taking.  Loveladies 2, 21 Cl.Ct. at 160 (referring to Loveladies 1, 15 Cl.Ct. at 388-90).   The Government appeals the judgment of the Court of Federal Claims.
                

DISCUSSION

At...