Tabb Lakes, Ltd. v. U.S.

• Decision Date: 24 November 1993
• Docket Number: No. 93-5029,93-5029
• Citation: 10 F.3d 796
• Parties: , 62 USLW 2371, 24 Envtl. L. Rep. 20,169 TABB LAKES, LTD., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 796

10 F.3d 796

38 ERC 1179, 62 USLW 2371, 24 Envtl.

L. Rep. 20,169

TABB LAKES, LTD., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 93-5029.

United States Court of Appeals Federal Circuit.

Nov. 24, 1993.

Richard R. Nageotte, Nageotte & Krein, Stafford, VA, argued for plaintiff-appellant.

David C. Shilton, Atty., Dept. of Justice, Washington, DC, argued for defendant-appellee. With him on the brief were Myles E. Flint, Acting Asst. Atty. Gen., Environment & Nat. Res. Div., Dirk D. Snel and Dorothy R. Burakreis, Attys.

Before NIES, Chief Judge, SMITH, Senior Circuit Judge, and MICHEL, Circuit Judge.

NIES, Chief Judge.

Tabb Lakes, Ltd., appeals the judgment of the United States Court of Federal Claims dismissing its claim for compensation under the Fifth Amendment for an alleged taking of its property. The court held that the action of the U.S. Army Corps of Engineers which delayed residential development of Tabb Lakes' land containing wetlands did not constitute a regulatory taking of its property for the alleged period of delay. Tabb Lakes, Inc. v. United States, 26 Cl.Ct. 1334, 1357 (Cl.Ct.1992). We affirm.

I. BACKGROUND

Tabb Lakes, Ltd., purchased 167 acres of land in York County, Virginia, on April 6, 1984, intending to develop all of the property as a residential subdivision. The preliminary subdivision plat, which divided the property in five sections, was approved by the county the next month. After final plats for sections 1 and 2 were approved, the company began construction, substantially selling out all lots in those sections over the next two years. When it then turned to developing sections 3, 4, and 5, an anonymous caller informed the U.S. Army Corps of Engineers, Norfolk District, that the Tabb Lakes property contained wetlands. Immediately, R.H. Jones, a Corps Environmental Scientist, made an on-site inspection and concluded that sections 3, 4, and 5 contained wetlands subject to Corps control under the Clean Water Act, 33 U.S.C. Secs. 1251-1387 (1988) ("the CWA"). On October 8, 1986, the Corps ordered Tabb Lakes to cease and desist from further filling of any wetlands until it obtained a permit. ¹ Tabb Lakes was further advised that failure to submit a permit application under section 404 of the CWA for any additional filling could result in civil or criminal penalties. Approximately 38 acres in sections 3, 4, and 5 of Tabb Lakes contained wetlands.

On October 10, 1986, Tabb Lakes submitted a permit application. For the next ten months, the parties engaged in negotiations directed to agreement on a plan to mitigate damage to the wetlands which would lead to issuance of a permit. Not having reached agreement, Tabb Lakes withdrew its permit application and filed a declaratory judgment action seeking a declaration that its property was not subject to the Corps' regulatory authority under section 404 of the CWA. See Tabb Lakes Ltd. v. United States, 715 F.Supp. 726, 727 (E.D.Va.1988), aff'd, 885 F.2d 866 (4th Cir.1989). Under CWA, the Corps does not have regulatory jurisdiction over all wetlands but only over "waters of the United States." See 33 U.S.C. Secs. 1344(a), 1362(7); 33 C.F.R. Sec. 328.3(a)(3). Such "waters" require a nexus with interstate or foreign commerce. 33 C.F.R. Sec. 328.3(a)(3)

On November 7, 1988, the district court held that the action by the Corps in asserting its jurisdiction over Tabb Lakes' property was procedurally defective under section 3 of the Administrative Procedure Act ("APA"), 5 U.S.C. Sec. 553 (1988). Tabb Lakes, 715 F.Supp. at 728-29. The assertion of jurisdiction by the Corps had been based on a memorandum of the Corps Deputy Director of Civil Works stating that use of isolated wetlands, such as those at Tabb Lakes, by migratory birds could support a nexus with interstate commerce. The court held that this type of ruling had to comply with the notice and comment provisions of APA which had not been followed by the Corps. Id. at 729. Thus, the Corps had not acquired jurisdiction over Tabb Lakes' property. Id. Upon affirmance by the Court of Appeals for the Fourth Circuit, the judgment became final on December 19, 1989.

Following the litigation, Tabb Lakes proceeded to fill the wetlands and develop all of its property as originally planned. The Corps never attempted thereafter to take steps to secure jurisdiction over Tabb Lakes property or interfere in its filling wetlands for residential lots or roads. All lots in the subdivision were sold.

On November 2, 1990, Tabb Lakes filed a complaint in the Court of Federal Claims, seeking to recover just compensation for the alleged "temporary" taking of its property in which wetlands were located, namely, sections 3, 4, and 5. The period of the taking was alleged to run from October 8, 1986, the date on which the Corps issued its Cease and Desist Order, to December 19, 1989, the date on which the judgment of the United States Court of Appeals for the Fourth Circuit became final.

The Court of Federal Claims ruled, on cross motions for summary judgment, that no "temporary" regulatory taking of Tabb Lakes' property occurred. The court rejected plaintiff's argument that it had been deprived of all, or substantially all, economically viable use of its property during the alleged period of the taking on the grounds that there was some continued development and sales activity over the three years and that the government-caused delay in pursuing the permit process was not extraordinary or in bad faith. The court also rejected plaintiff's argument that the delay was inherently unreasonable because the Corps did not have jurisdiction over the property. Accordingly, the court denied plaintiff's motion for summary judgment and granted that of the government.

II. ISSUE

The sole issue is whether the Corps effected a taking of Tabb Lakes' property on October 8, 1986, by issuing an order to the company to cease and desist from filling wetlands without a permit.

III. STANDARD OF REVIEW

The entry of summary judgment by the Court of Federal Claims is "a question of law subject to complete and independent review" by this court. Trayco, Inc. v. United States, 994 F.2d 832, 835 (Fed.Cir.1993). See also Turner v. United States, 901 F.2d 1093, 1095 (Fed.Cir.1990). Thus, the court reviews the record below "essentially ... for itself" to determine whether any genuine issue of material fact exists, and if not, whether the movant is entitled to judgment as a matter of law. Avia Group Int'l, Inc. v. L.A. Gear Cal. Inc., 853 F.2d 1557, 1561 (Fed.Cir.1988).

IV. THE TAKINGS ISSUES

A. Takings Limited in Time Require Compensation

There can be no dispute that the taking of private property for public use requires the payment of compensation under the Constitution. ² Further, a taking may be effected by inverse condemnation. ³ Finally, once a taking is effected, no subsequent activity of the government extinguishes its obligation to pay for the period of deprivation. As stated in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 321, 107 S.Ct. 2378, 2389, 96 L.Ed.2d 250 (1987):

[W]here the government's activities have already worked a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.

In First Lutheran, the county of Los Angeles issued an ordinance prohibiting all construction or reconstruction of buildings on certain land after a devastating flood. The case came to the Court after a motion to strike plaintiff's allegation that it was deprived of all economically viable use of its land by the ordinance was granted, based on the California Supreme Court's decision in Agins v. City of Tiburon, 24 Cal.3d 266, 157 Cal.Rptr. 372, 598 P.2d 25 (1979), aff'd on other grounds, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980). The Court, however, assumed that allegation to be true and ruled that such action would constitute a regulatory taking for which compensation must be paid for the period of the deprivation.

B. The Corps' Order of October 8, 1986 Did Not Effect A Taking

The predicate for plaintiff's taking claim is the cease and desist order of the Corps issued October 8, 1986, which is the only action asserted to trigger the taking. Plaintiff argues that the trial court erred in looking at events and sales activity after that date in determining that no taking occurred. According to plaintiff, the order deprived plaintiff of all economically viable use of that property on that date, and even a one-day taking requires compensation under the Constitution. The evidence of sales activity and the government action after that date, per Tabb Lakes, relates either to a determination of the quantum of damages during the period of the government's denial of use of its property or to a determination of when the taking ended.

We agree in theory with plaintiff that a taking, even for a day, without compensation is prohibited by the Constitution. However, the question here is, "Was there a taking?" Or more specifically, "Did a taking occur on October 8, 1986?" To answer that question, we must give the same effect to the cease and desist order regardless of whether the order ultimately had a permanent effect or only one limited in time. " '[T]emporary' takings, which as here, deny a landowner all use of his property, are not different in kind from permanent takings, for which the Constitution clearly requires compensation." First Lutheran, 482 U.S. at 318, 107 S.Ct. at 2388.

Plaintiff is correct that on October 8, 1986, the Corps' cease and desist order effectively stopped its development of its property as it had planned. However, plaintiff is incorrect that this interference or restriction on the use of its land by government regulatory action necessarily constituted a taking. A taking by regulatory action is recognized only if such action goes "too...