Alves v. U.S.

• Decision Date: 12 January 1998
• Docket Number: No. 97-5042,97-5042
• Citation: 133 F.3d 1454
• Parties: 28 Envtl. L. Rep. 20,577 Maynard ALVES, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1454

133 F.3d 1454

28 Envtl. L. Rep. 20,577

Maynard ALVES, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 97-5042.

United States Court of Appeals, Federal Circuit.

Jan. 12, 1998.

Robert T. Moxley, Gage and Moxley, Cheyenne, WY, argued, for Plaintiff-Appellant. With him on the brief was Karen Budd-Falen, Budd-Falen Law Offices, P.C., Cheyenne, WY.

Tamara N. Rountree, Attorney, Appellate Section, Environment & Natural Resources Division, U.S. Department of Justice, Washington, DC, argued, for Defendant-Appellee. With her on the brief were Lois J. Schiffer, Assistant Attorney General, Robert L. Klarquist, Attorney, and Pamela Sue West, Attorney.

Before MAYER, Chief Judge, ^* LOURIE and RADER, Circuit Judges.

LOURIE, Circuit Judge.

Maynard Alves appeals from the decision of the United States Court of Federal Claims dismissing on summary judgment his Fifth Amendment "takings" and breach of contract claims. Alves v. United States, No. 93-261L (Fed.Cl. Nov. 8, 1996). Because the court did not err in determining that Alves' allegations established neither a Fifth Amendment taking nor a breach of contract, we affirm.

BACKGROUND

In 1988, Alves purchased the Dean Ranch, located in Eureka County, Nevada. The ranch consists of 48,000 acres owned by Alves in fee and other public lands concerning which the Bureau of Land Management (BLM) issued to him grazing permits pursuant to the Taylor Grazing Act (TGA), 43 U.S.C. §§ 315-315r (1994).

Since at least 1973, livestock from the neighboring Dann Ranch trespassed on the Dean Ranch. The Dann ranch is operated by Mary and Carey Dann, Shoshone Indians who have asserted aboriginal rights in the Dean Ranch and other public lands, including the right to allow their livestock to roam and graze freely. The BLM disputed the Danns' aboriginal claims in court in 1973. In 1991, after 18 years of litigation, including a ruling from the United States Supreme Court, see United States v. Dann, 470 U.S. 39, 105 S.Ct. 1058, 84 L.Ed.2d 28 (1985), the BLM was granted an injunction against trespass by the Danns' livestock. However, the BLM has been only partially successful in enforcing the injunction against the Danns because of what Alves refers to as the Danns' "abusive tactics" and the "politically sensitive" nature of the Danns' aboriginal claims. ¹

Alves filed suit in the Court of Federal Claims against the government in 1993, alleging that the Danns' livestock had destroyed the forage, water works, and other improvements on the Dean Ranch. Alves argued that the BLM's failure to contain the trespass With regard to Alves' takings claim, the court determined that the livestock trespass on the public lands over which Alves held grazing permits was not actionable because the grazing permits do not constitute compensable "property" under the Fifth Amendment, and that the trespass on Alves' private property was not a "physical" taking because a permanent physical occupation had not been authorized by the government. While the court did not expressly decide whether the government's actions constituted a "regulatory" taking, it did set forth the three-factored regulatory taking test, see infra, and presumably found no regulatory taking either. With regard to the breach of contract claim, the court determined that the grazing permits were revocable privileges, not contracts. Accordingly, the court granted the government's motion for summary judgment and dismissed Alves' claims.

constituted a Fifth Amendment taking and a breach of contract based on his interpretation of his grazing permits and/or an exchange-of-use agreement ² as contracts.

Alves appeals to this court, arguing that the trial court erred in granting the government's summary judgment motion. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (1994).

DISCUSSION

We review a grant of summary judgment by the Court of Federal Claims de novo. Foley Co. v. United States, 11 F.3d 1032, 1034 (Fed.Cir.1993). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986). Whether a taking compensable under the Fifth Amendment has occurred is a question of law based on factual underpinnings. Bass Enter. Prod. Co. v. United States, 133 F.3d 893, 895 (Fed.Cir.1998) (citations omitted). Contract interpretation is a question of law that we review de novo. Burnside-Ott Aviation Training Ctr. v. Dalton, 107 F.3d 854, 860 (Fed.Cir.1997).

A. The Takings Claim

Alves argues that the court erred by failing to recognize that it is the taking of his grazing "preference," not his grazing "permit" that is actionable. Alves explains that his grazing preference is a governmentally adjudicated right attaching to his fee simple (i.e., base) property that gives him a priority position in the procurement of grazing permits on adjacent public lands. ³ Thus, while Alves concedes that the grazing permits are freely revocable by the government without compensation under 43 U.S.C. § 315b (1994), ⁴ he argues that the underlying grazing preference is a compensable property right. Alves further asserts that the BLM's failure to abate the livestock trespass constitutes a regulatory taking.

The government responds that the distinction between a grazing "permit" and a grazing "preference" is irrelevant because the two are inexorably linked, and therefore the grazing preference, like the grazing permit, does not constitute a compensable property interest under the Fifth Amendment. The government further asserts that, even assuming that Alves had a compensable property interest in his grazing rights, these rights were not taken or authorized to be taken by the government. Finally, the government emphasizes that it has labored to We agree with the government that the distinction between grazing "permits" and grazing "preferences" is irrelevant because neither constitutes a property interest compensable under the Fifth Amendment. The Supreme Court's decision in United States v. Fuller, 409 U.S. 488, 93 S.Ct. 801, 35 L.Ed.2d 16 (1973) is instructive. In Fuller, the government condemned 920 acres of respondents' fee lands. Id. at 489, 93 S.Ct. at 802-03. During the condemnation proceeding, the parties disputed whether the "value accruing to the fee lands as a result of their actual or potential use in combination with the Taylor Grazing Act 'permit' lands" was compensable. Id. The Court held "that the Fifth Amendment does not require the Government to pay for that element of value based on the use of respondents' fee lands in combination with the Government's permit lands." Id. at 493, 93 S.Ct. at 805. This was so even if this "element of value" would warrant a higher selling price on the open market than would the fee by itself. Id. at 491, 93 S.Ct. at 803-04. In addition, the court rejected the argument that Congress intended to make such interests directly compensable under the TGA notwithstanding the Fifth Amendment. Specifically, the Court noted that section 315b of the TGA:

prevent the trespass of the Danns' livestock for over twenty years, and that it is not an "insurer" against trespass by third parties.

make[s] clear the congressional intent that no compensable property be created in the permit lands themselves as a result of the permit. Given that intent, it would be unusual, we think, for Congress to have turned around and authorized compensation for the value added to fee lands by their potential use in connection with permit lands. We find no such authorization in the applicable congressional enactments.

Id. at 494, 93 S.Ct. at 805.

Implicit in Fuller is the notion that grazing preferences that are attached to fee simple property are not compensable property interests under the Fifth Amendment. What is compensable is the fee interest only, divorced from other governmentally-created rights or privileges appurtenant to the fee. Thus, the distinction between Alves' grazing preference and his grazing permit is irrelevant from a Fifth Amendment perspective, and neither constitutes a compensable property interest.

Moreover, Alves fails to show that there has been a regulatory taking of any of his compensable property interests. A taking may occur as a result of a regulatory action that is neither a physical invasion nor a physical restraint by the government when the regulatory action goes "too far," 767 Third Ave. Assoc. v. United States, 48 F.3d 1575, 1580 (Fed.Cir.1995) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922)), that is, when regulation "denies an owner economically viable use of his land." Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1016, 112 S.Ct. 2886, 2894, 120 L.Ed.2d 798 (1992). Determining whether a particular regulatory action goes "too far" and is therefore actionable as a taking under the Fifth Amendment involves consideration of "ad hoc, factual inquiries," 767 Third Ave., 48 F.3d at 1580, that focus on "three factors of particular significance: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action." Id. (quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224-25, 106 S.Ct. 1018, 1025-26, 89 L.Ed.2d 166 (1986)) (internal quotations omitted). However, Alves' claim differs from the usual regulatory takings claim because it is premised not on governmental action but on the inaction of the BLM in its failure to abate the trespass by the Danns' livestock.

The Tenth Circuit sitting in banc has addressed whether the government can be liable under the Fifth Amendment for its failure to regulate animals under its regulatory control. In Mountain States Legal Foundation v. Hodel, 799 F.2d 1423 (10th Cir.19...