Penna v. United States
| Decision Date | 23 March 2021 |
| Docket Number | No. 16-1545L,16-1545L |
| Parties | FRANK PENNA and LISA PENNA, Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Mark R. Cuker, Cuker Law Firm, LLC, Philadelphia, PA, for plaintiffs.
Frank J. Singer, Environment & Natural Resources Division, United States Department of Justice, Washington, DC, for defendant. With him at trial and on the briefs were Taylor N. Ferrell, Environment & Natural Resources Division, United States Department of Justice, Washington, DC, and Karrin Minott, Naval Litigation Office, Office of the General Counsel, Department of the Navy; also on the briefs was Jean E. Williams, Deputy Assistant Attorney General, Environment & Natural Resources Division, United States Department of Justice, Washington, DC.
This case presents the question of whether Defendant, the United States, owes Plaintiffs, Frank and Lisa Penna ("the Pennas"), just compensation for the taking of their property (the "Property" or "Penna Property") due to chemical contamination the Department of the Navy allegedly caused. Before the Court is the government's pending motion for judgment on partial findings pursuant to Rule 52(c) of the Rules of the United States Court of Federal Claims ("RCFC"). ECF No. 134 ("Def. 52(c) Mot."). At trial, the Pennas presented evidence in support of their allegation that the government caused fluorosurfactant-based aqueous film-forming foam ("AFFF") to be released onto the Penna Property, which, they assert, constitutes a compensable taking pursuant to the Fifth Amendment of the United States Constitution and the Tucker Act, 28 U.S.C. § 1491. The Court ultimately suspended trial to consider the government's RCFC 52(c) motion, arguing that the Pennas did not prove a compensable taking. ECF No. 125; Def. 52(c) Mot. at 9.
Although the Pennas attempt to shoehorn their takings claim into the legal framework applicable to direct, physical per se appropriations of property, the United States Supreme Court and the United States Court of Appeals for the Federal Circuit have issued a line of decisions that specifically address takings based upon alleged government-caused flooding and that, by extension, apply to chemical contamination cases. Those cases govern the outcome here. In that regard, after considering the evidence the Pennas presented at trial, the Court concludes that they have failed to carry their burden of proof and, thus, the government is entitled to judgment. In addition, the Court imposes sanctions on Plaintiffs' counsel for violating discovery obligations.
On November 18, 2016, the Pennas filed suit in this Court, alleging that the Navy's use of hazardous chemicals resulted in the contamination of both the Pennas' water supply and ground soil, amounting to a compensable Fifth Amendment taking of their Property. ECF No. 1 ("Compl.") ¶¶ 6, 26, 30. The Pennas contend that perfluorochemical compounds ("PFCs"), including perfluorooctanoic acid ("PFOA") and perfluorooctanesulfonic acid ("PFOS"), were "used extensively at Willow Grove in fire-fighting foam materials for decades up until 2010," Compl. ¶ 8, and "deliberately channeled" by the Navy into a swale running across the Penna Property. Compl. ¶ 24.
According to the Pennas, chronic exposure to PFCs is toxic to human health and associated with many potential adverse effects, such as an increased risk of developing various cancers that could "manifest themselves months or even years" after exposure. Compl. ¶¶ 7, 9-14. The Pennas aver that although the Environmental Protection Agency ("EPA") has determined that PFOA and PFOS pose potential adverse effects for the environment and human health, the government failed to prevent PFC use and disposal at Willow Grove and to prevent and abate PFC contamination in water sources (including the Pennas' private well). Compl. ¶¶ 16-17. The Pennas allege that they used their well "for all domestic water purposes" until learning that the levels of PFOA and PFOS "far exceeded the EPA's then provisional Health Advisory Level . . . of 0.2 µg/l for PFOS and 0.4 µg/l for PFOA." Compl. ¶ 21.
The Pennas contend that the Navy intentionally directed contaminated runoff from Willow Grove towards the Penna Property and discharged drainage from a PFC-contaminated Fire Training Area "directly onto [the Pennas'] property," rendering it virtually valueless. Compl. ¶¶ 24, 26-27. Accordingly, the Pennas claim that because the government's actions amounted to a taking of their Property, they are entitled to just compensation. Compl. at 6.
Following briefing on the parties' cross-motions for partial summary judgment, the Court held oral argument on April 3, 2019. ECF Nos. 38, 47, 54, 61; Minute Entry, Apr. 3, 2019. On April 4, 2019, the Court issued a written order denying both cross-motions for summary judgment. ECF No. 64. On May 21, 2019, the Court set a discovery schedule for the case. ECF No. 71.
On February 5, 2020, this case was reassigned to the undersigned judge. ECF Nos. 83, 84. Discovery closed on March 13, 2020, see ECF No. 82, and the parties filed their pretrial memoranda. ECF Nos. 88 ("Pl. Memo."), 101.
Trial commenced on August 3, 2020 via video-conference.1 See Minute Entry, Aug. 3, 2020. Over the course of four days, the Pennas presented testimony from three fact witnesses and three expert witnesses.
The Pennas' first witness, Mr. Tony Gilliam, testified regarding his experience working as a fire fighter and then a battalion chief at Willow Grove. Tr. 55:24-56:15.2 He testified that AFFF foam was regularly used in training exercises on the Base, which included dispersing thousands of gallons of AFFF on the Base for years. Tr. 62:5-63:24.
The Pennas next played excerpts from the video deposition of Mr. Ronald Kroop, a wastewater treatment engineer with the Air Force, who discussed what he believed "the Government actually knew in the early 1970s" about the environmental effects ofAFFF. Tr. 97:11-20.3 Mr. Kroop also described the methods he had recommended to dispose of AFFF waste, memorialized in a report he had authored in February 1974. Tr. 19:8-21:7, 105; Plaintiffs' Exhibit ("PX") 3. The Pennas relied upon Mr. Gilliam's testimony for evidence of the Navy's regular use of AFFF on the Base, and upon Mr. Kroop's testimony to support their contention that the Navy knew of the potential hazards stemming from AFFF and that the Navy did not properly dispose of the chemicals despite such knowledge.
Mr. Frank Penna testified third. Tr. 182. He described his experience with the Penna Property, including when he first learned of the PFOA and PFOS levels there (Tr. 196:25-197:4), his communication with the government regarding the issue (Tr. 201:16-203:6), and his own efforts to have testing done on the Property's soil and water (Tr. 198:15-19, 199:4-13; PX 58). Notably, when asked about the value of the Property in its current state (i.e., contaminated), Mr. Penna testified that he believed Tr. 208:17-21.
The Pennas also presented testimony from several experts about the impact of the contamination of the Property, including: (1) Mr. Matthew Mulhall (geology and hydrogeology); (2) Mr. Frank Cammarata (mortgages); and (3) Mr. John Hosey (property appraisal and valuation).
On August 4, 2020, Mr. Mulhall testified about the existence, extent, and foreseeability of contamination of the Penna Property resulting from the Navy's use of AFFF at the Willow Grove base.4 Tr. 310.
Next, Mr. Cammarata opined that the presence of PFOS and PFOA on the Penna Property presented an immitigable hazard, rendering the Property ineligible for a mortgage. PX 130 at 6; Tr. 364:1-4. He based his opinion on the guidelines and regulations for residential mortgages issued by the United States Department of Housing and Urban Development ("FHA"), the United States Veterans Administration ("VA"), the Federal National Mortgage Association ("Fannie Mae"), and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). Tr. 359:25-360:9. He also relied upon an engineering study by M2 Associates, Inc. - i.e. Mr. Mulhall's report - as well asproperty appraisals provided to him by both the Pennas and the government. Tr. 360:19-23. In particular, Mr. Cammarata testified that "all of the departments and agencies require that once a hazard is found and noted by the appraiser, then the hazard must be mitigated or the property is not an eligible, mortgageable property." Tr. 363:5-8. He further opined that upon reviewing the appraisals provided to him, Tr. 364:5-9. In light of Mr. Cammarata's view that PFOA and PFOS were immitigable "hazards" within the meaning of the agencies' definitions, see Tr. 372:22-373:5, he concluded that the Penna Property was not eligible for a mortgage.
Finally, Mr. Hosey opined that because the Penna Property was not mortgageable, it had no value. PX 131 at 23; Tr. 464:17-19, 510:8-12. Mr. Hosey generally explained his research regarding the negative effects of stigma on property value, including "the uncertainty that follows with it" and its resulting impact on potential purchasers. Tr. 445:24-25. Mr. Hosey ultimately conceded, however, that he did not analyze the impact, if any, of environmental stigma on the Penna Property. Tr. 467:22-468:7. Mr. Hosey also described the process by which he valued the Penna Property in two scenarios: the uncontaminated state (i.e., absent PFOS and PFOA contamination), and as-contaminated; he referenced multiple appraisal principles and described his use of each. See, e.g., Tr. 452:22-456:12, 468:8-11. He explained his determination of the "highest and best use" of the Penna Property, which he...
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