In re Trinco Inv. Co.
| Decision Date | 31 October 2018 |
| Docket Number | No. 11-857L,11-857L |
| Parties | TRINCO INVESTMENT CO. AND KATHLEEN G. ROSE, TRUSTEE OF THE V. & M. ROSE - MARITAL TRUST, Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Subject Matter Jurisdiction; Fifth Amendment; Takings; Just Compensation Self-executing; Sovereign Immunity; Separation of Powers; Article I; Article III; Common Law; Public Rights; Jury Trial; Seventh Amendment; Federal Courts; Legislative Courts; Tucker Act
On October 11, 2017, the eve of the pre-trial conference, Plaintiffs filed a Motion to Transfer (Plaintiffs' "Motion") to the U.S. District Court for the Eastern District of California, pursuant to 28 U.S.C. § 1631 and Rule 12(b)(1) of the Rules of the Court of Federal Claims ("RCFC"), alleging that the Court of Federal Claims lacks subject matter jurisdiction to hear Fifth Amendment Takings claims. See Pls.' Mot., ECF No. 137. In addition to requesting oral argument, Plaintiffs also seek a stay of proceedings and certification of appeal to the Federal Circuit in the event that this Court denies their Motion. Pls.' Mot. at 1. On October 12, 2017, the Court issued a stay of proceedings pending the Supreme Court's decision in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, ___ U.S. ___, 138 S. Ct. 1365 (2018). After Oil States was decided, Plaintiffs filed a supplemental brief on May 18, 2018, addressing the relevance of that case to the issues raised in Plaintiffs' Motion. See Pls.' Suppl. Mem., ECF No. 145. On July 2, 2018, Defendant filed a response. Def.'s Resp., ECF No. 147. On July 20, 2018, Plaintiffs filed a reply. Pls.' Reply, ECF No. 148. This matter is now fully briefed and ripe for decision.
For the reasons set forth below, Plaintiffs' Motion to Transfer is hereby DENIED. Plaintiffs' request for oral argument is hereby DENIED as moot,1 but, Plaintiffs' request for a stay of proceedings and certification of issues for appeal to the Federal Circuit are hereby GRANTED.
This takings case arises out of efforts in California to combat the persistent wildfires that have devastated much of the northwest United States. The Plaintiffs, collectively referred to as "TrinCo," possess interests in 5 properties, all consisting of between 524 and 714 timbered acres, located in and around the Shasta-Trinity National Forest in Trinity County, California. On June 20, 2008, several wildfires, collectively referred to as the Iron Complex fires, ignited near Plaintiffs' properties during a summer of unprecedented fire activity aggravated by drought conditions, high winds, and lightning strikes. As a result, several communities in the vicinity of Plaintiffs' properties were under mandatory evacuation orders.
Although the United States Forest Service ("the Forest Service") and the State of California worked in concert to manage these fires, the firefighters assigned to suppress these fires had limited resources and steep, rugged terrain to consider while implementing their strategies. In order to preserve the maximum amount of property and private structures in the path of the fires, the Forest Service utilized indirect firefighting methods, which involved the setting of control fires ahead of the fire path to consume any unburned timber that might fuel the wildfire. As a result, 1,782 acres of Plaintiffs' merchantable timber, valued at approximately $6.6 million, was destroyed.
On December 7, 2011, Plaintiffs filed suit in the Court of Federal Claims, seeking compensation pursuant to the Fifth Amendment of the U.S. Constitution, based on the Defendant's physical taking of Plaintiffs' merchantable timber through actions of the U.S. Forest Service.
In their Motion to Transfer, Plaintiffs argue that the U.S. Court of Federal Claims cannot constitutionally hear takings claims against the United States based on the Fifth Amendment. Pls.' Mot. at 1. They argue that such cases must be decided in an Article III court rather than in an Article I court, such as the Court of Federal Claims. Hence, Plaintiffs move to transfer their case to the U.S. District Court for the Eastern District of California. Pls.' Mot. at 1.
Plaintiffs argue that the takings clause of the Fifth Amendment is self-executing, by which it means not only that there is no need for Congress to pass legislation to create the right to just compensation for a governmental taking but also that the doctrine of sovereign immunity does not apply to it. Therefore, the United States can be sued ipso facto, without regard to a waiver of its sovereign immunity. Not only can the Government be sued without having waived its sovereign immunity, but it must be sued in an Article III court, because takings claims are actions based in common law. Plaintiffs bolster their argument by declaring a takings case between a private plaintiff and the U.S. Government as concerning a private right rather than a public right, the latter being within the exclusive purview of Article III courts. Finally, Plaintiffs argue that Fifth Amendment takings cases must be decided by a jury.
Defendant agrees that the takings clause is self-executing in that it creates a substantive right to just compensation where the government has taken property, but maintains, however, that it is not a waiver of sovereign immunity. Instead, the right to sue the government, whether for a taking or otherwise, must come from an explicit act of Congress, and can be conditioned as Congress sees fit. Moreover, Defendant argues that the right to bring suit for just compensation is a public right, which Congress can permissibly assign to non-Article III courts for resolution. Finally, Defendant contends that as a condition to the government's waiver of sovereign immunity, there is no right to a jury trial in Fifth Amendment takings cases.
Article III, Section 1, of the U.S. Constitution vests the judicial power of the United states in "one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." U.S. Const. art. III, § 1. Thus, all federal courts, other than the Supreme Court, are creatures of Congressional legislation. Congress need not establish any inferior courts at all, and it has plenary power over the extent of their jurisdiction. See United States v. Union Pac. R.R. Co., 98 U.S. 569, 602 (1878) (). Indeed, even the Supreme Court, which has original jurisdiction in certain matters, does not have unlimited jurisdiction in appellate matters, but only "with such Exceptions, and under such Regulations as the Congress shall make." U.S. Const. art. III, § 2. Therefore, putting aside the doctrine of sovereign immunity, Article III allows for the possibility that citizens could not sue the federal government for compensation for a taking even in an Article III court where Congress did not establish inferior courts, thus proving that the judiciary is "the least dangerous branch." The Federalist No. 78 (Alexander Hamilton).
In addition to inferior courts established under Article III, Congress may establish courts under Article I. See Williams v. United States, 289 U.S. 553 (1933). These have been called "legislative courts." Congress's power to create such courts is well-established, and even the Plaintiffs do not question it. See Pls.' Mot. at 9. The first such courts were territorial courts, but with the expansion of the bureaucratic state under President Franklin Roosevelt, agencies began to exercise judicial power in limited circumstances—and this development was sanctioned by the Supreme Court. See American Ins. Co. v. Canter, 26 U.S. 511, 1 Pet. 511 (1828) (); See also, Opp Cotton Mills v. Administrator of Wage and Hour Division of Department of Labor, 312 U.S. 126, 144 (1941) (); Morgan v. United States, 304 U.S. 1, 22 (1938) ().
The predecessor of the Court of Federal Claims and the Court of Appeals for the Federal Circuit was the Court of Claims, which was thought to be—for most of its existence—a legislative court, that is, one established under Article I. Compare Ex Parte Bakelite Corp., 279U.S. 438 (1929) (), and Williams v. United States, 289 U.S. 553 (1933) (same), with Glidden Co. v. Zdanok, 370 U.S. 530, 584 (1962), superseded by statute, Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25. In general, it dealt with money claims against the United States, and its decisions originally were recommendations to Congress. Act of February 24, 1855, ch. 122, 10 Stat. 612; Langford v. United States, 101 U.S. 341, 344 (1879). Court of Claims decisions were definitively accorded final judgement status in 1866. Act of March 17, 1866, ch. 19, sec. 1, 14 Stat. 9. The Court of Claims' jurisdiction was significantly expanded by the Tucker Act, Act of March 3, 1887, ch. 359, 24 Stat. 505, which articulated the court's jurisdiction over "claims founded upon the Constitution of the United States." The Tucker Act, and later expansions of its jurisdiction, were understood to be waivers of sovereign immunity on the part of the U.S. government. See e.g., Soriano v. United States, 352 U.S. 270, 273 (1957); United...
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