Florida Rock Industries, Inc. v. U.S.

Citation791 F.2d 893
Decision Date14 May 1986
Docket Number85-2609,Nos. 85-2588,s. 85-2588
Parties, 16 Envtl. L. Rep. 20,671 FLORIDA ROCK INDUSTRIES, INC., Appellee/Cross-Appellant, v. The UNITED STATES, Appellant/Cross-Appellee. Appeal
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Fred R. Disheroon, Special Litigation Counsel, Dept. of Justice, Washington, D.C., argued, for appellant/cross-appellee. With him on the brief was F. Henry Habicht, II, Asst. Atty. Gen.

John A. DeVault, III, Bedell, Dittmar, DeVault, Pillans & Gentry, P.A., Jacksonville, Fla., argued, for appellee/cross-appellant. With him on the brief was C. Warren Tripp, Jr.

Ronald A. Zumbrun and Sam Kazman, Pacific Legal Foundation, Washington, D.C., were on brief, for amicus curiae.

Francis X. Bellotti, Atty. Gen. of Massachusetts, and Nancy S. Marks, Asst. Atty. Gen., Boston, Mass., were on brief, for amicus curiae, The Com. of Mass.

Before DAVIS, Circuit Judge, COWEN and NICHOLS, Senior Circuit Judges, and BALDWIN and BISSELL, Circuit Judges.

NICHOLS, Senior Circuit Judge.

This appeal from the Claims Court, 8 Cl.Ct. 160, confronts us with important and novel issues as to the application of the fifth amendment and, consequently, the Tucker Act, 28 U.S.C. Sec. 1491, to measures by the Secretary of the Army, through the Army engineers under authority of the Clean Water Act, 33 U.S.C. Sec. 1251(a)(1) and ff, to protect Florida wetlands against disturbance by the owner's limestone mining. At times, as by the holding below here, what were intended as mere regulations are converted by force of law into involuntary purchases called "takings." We have the benefit of amicus briefs supporting both sides. We consider it is not legally impossible that the regulatory measures here involved could be a taking, and not impossible that no taking occurred. The trial judge failed to apply the evidence in a manner correct in all respects to determine whether he had an actual instance of a taking before him. The mere existence of authority to regulate did not itself constitute the taking, and a regulation severely damaging an owner's expectations of realizing profit from his holdings, may not because of that necessarily be a taking either. We remand for determination of the taking question according to right principles, as it would be improper for us to constitute ourselves fact finders and weigh the evidence ourselves.

The act that allegedly constituted the taking, denial of a permit to discharge dredged or fill material into navigable waters and other waters of the United States, applied to but 98 acres out of a 1,560-acre tract, but the cross-appeal urges the whole 1,560 acres were taken because the action respecting 98 acres established a precedent that would govern the rest. This cross-appeal we deny. The award for taking 98 acres was $1,029,000 plus interest from a 1981 taking date. Anticipating that the cross-appeal might succeed, the trial court determined that the award for 1,560 acres would be $10,580,000 plus interest.

Statement of Facts

The plaintiff/appellee company, Florida Rock Industries, Inc. (Florida Rock), is a large-scale miner of limestone, which it extracts for conversion into aggregates for the construction industry. Such aggregates are basic material for a variety of concrete products. There are large deposits of limestone in South Florida, but they are rapidly becoming unavailable owing to the rapid growth of the densely populated area. Florida Rock purchased the 1,560 acre tract in question in 1972, paying $2,964,000. The sole purpose was to obtain its limestone deposits for extraction, and no other use, or sale, has ever been considered.

The tract is in the portion of Dade County, Florida, that lies west of the city limits of Miami. Krome Avenue borders its western side and the Tamiami Trail (Route 41) is one and one-half miles to the south. The built-up western residential suburbs of Miami are growing rapidly in its direction, and industrial activity is already visible from the tract itself. The ground is wet, frequently flooded by the state in its control of the water supply, and is part of the Everglades according to the map, but excluded by road, canal, and levee construction. The area is criss-crossed with state-owned canals. The surface is, according to the trial judge, of attractive appearance with variegated vegetation, a habitat of redwing blackbirds, swallows, snipe, American egrets and heron, as well as fish. Defunct vegetation, matted and rotting, lies above the limestone. They are wetlands that recharge the Biscayne aquifer and filter and purify the ground water, if left undisturbed.

It is conceded that before the 1972 amendments to the Clean Water Act, supra, Pub.L. No. 92-500, Florida Rock had the local zoning classification requisite to allow it to mine the limestone and needed no consent by the Federal Government. The amendments followed the acquisition and, according to the trial judge, Florida Rock need not have foreseen them. Actually, because of a slump in the construction industry, Florida Rock allowed the land to remain untouched, though it paid the taxes on it, until 1978, and then commenced to mine. The Army engineers learned of this and stopped it with a cease and desist order. Florida Rock, on October 1, 1980, applied to the Army engineers for a section 404 (33 U.S.C. Sec. 1344) permit to cover 98 acres only. This was estimated to suffice for three-years production, and the Army engineers refused to consider more. Florida Rock would have preferred a permit for the whole 1,560 acres, all of which it meant to mine eventually, but cut down the scope of the application to obtain consideration which would otherwise have been refused.

The Army engineers gave notice of the application to interested federal agencies such as the EPA, the National Park Service, and the Fish and Wildlife Service, to the state, and to Dade County. All urged objections focused primarily on the irremediable loss of wetland, and in the case of some, to water pollution in the form of temporary turbidity caused by the mode of mining proposed, the only feasible method Florida Rock knows of. This is to place a mechanism, called a "drag line," on solid ground, remove the muck overlay, dump it temporarily on the ground, remove the limestone thus made accessible with aid of blasting as necessary, dump some of the previously removed limestone or muck into the hole to make a solid foundation to which the "drag line" can be moved, and commence another phase. As the hole would be filled with water, dumping the fill into it would produce temporary pollution by turbidity which, however, would not be a menace to the drinking water. Dade County, if the permit were to be granted despite its recommendation, would require controls to confine the turbidity to 50 feet. It is clear from the administrative file that the temporary pollution was of primarily legal importance as a source of federal jurisdiction, and the real concern was the threatened loss of valuable wetlands, which rendered a community service whose benefits extended far beyond Florida Rock's own property. The 98 acres, after removal of all limestone, would consist mostly of a deep lake or pond which, if environmentally harmless, was of no value either.

Dade County pointed out that Florida Rock would need various documents from it, including a Tree Removal Permit, and should make certain agreements with the county. The engineers, respecting their jurisdiction, pointed out that their definition of "waters of the United States" in 33 C.F.R. Sec. 323.2(a)(3) includes "wetlands * * * the use, degradation or destruction of which could affect interstate or foreign commerce including any such waters."

Under date of October 2, 1980, after careful consideration, the district engineer determined that the permit would not be in the public interest, and denied it. His findings are our source of the facts stated above, which we take as given.

Proceedings Below

This lawsuit in the Claims Court followed. The "liability" and "damages" phases of the litigation were severed according to immemorial custom of that court and its predecessor, the Court of Claims. The plaintiff introduced evidence of its investment in the property, its intentions respecting use of it for mining with its anticipated profit therefrom, and argued that, if the property could not be mined, it had no viable economic use whatever. The circumstances of the permit application and its denial were of course before the court. It appeared that since the permit denial there had been numerous inquiries about possible sale of the property by Florida Rock and one offer of $4,000 an acre. Florida Rock rejected everything, still wishing only to mine, and believing the property to be much more valuable than the offer, on the hypothesis, presumably, of either the restraints being lifted or the litigation resulting in the government's being held a taker. The value theory of Florida Rock was that the property before permit denial had a use value based on the owner's anticipated profits, and after the denial no "use value;" that fair market value subject to the restriction was a myth, potential buyers being made up of gullible persons, often foreigners, who would pay anything for acreage in South Florida, and more hard-eyed types who would also buy anything if the price was sufficiently trifling. Florida Rock offered, however, no testimony by real estate appraisers. It introduced testimony that the logic of denying the permit for 98 acres would preclude a permit for any other part of the tract.

The government produced a qualified real estate appraiser who testified that there was a fair market value remaining; he assigned $5,466,000 to the 1,560 acres in this case. The hypothetical willing buyers would not necessarily be fraud victims: he tried to disregard them though admitting they existed. The buyers would be aware that rock mining was effectively prohibited...

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