Tuthill Ranch, Inc. v. U.S., 03-5085.

• Decision Date: 23 August 2004
• Docket Number: No. 03-5085.,03-5085.
• Citation: 381 F.3d 1132
• Parties: TUTHILL RANCH, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1132

381 F.3d 1132

TUTHILL RANCH, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 03-5085.

United States Court of Appeals, Federal Circuit.

DECIDED: August 23, 2004.

Appeal from the United States Court of Federal Claims, Robert H. Hodges, Jr., J Michael G. Neff, Haglund, Kelley, Horngren & Jones, LLP, of Portland, OR, argued for plaintiff-appellant. Of counsel was Scott W. Horngren.

Andrew W. Mergen, Attorney, Environment & Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. On the brief were Thomas L. Sansonetti, Assistant Attorney General; and Julia K. Evans, William B. Lazarus, and Lisa E. Jones, Attorneys. Of counsel was Sonya L. Baskerville, Attorney, Bonneville Power Administration, of Portland, OR.

Before MAYER, Chief Judge, LOURIE, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

Tuthill Ranch, Inc. ("Tuthill") appeals the summary judgment granted by the United States Court of Federal Claims ("Court of Federal Claims") in favor of the United States ("government"). Tuthill claimed that the government had physically occupied Tuthill's property, thereby effecting a compensable physical taking. The Court of Federal Claims found that, based upon undisputed facts, the government had not physically occupied Tuthill's property, and was therefore not liable for a physical taking. Based upon this finding, the Court of Federal Claims denied Tuthill's motion for summary judgment and granted the government's motion for summary judgment. Tuthill v. United States, No. 00-635L, (Fed.Cl. Mar. 17, 2003). Because the Court of Federal Claims correctly determined that no disputed material facts could establish a physical taking, we affirm.

BACKGROUND

The Bonneville Power Administration ("BPA"), an agency of the federal government, transmits electrical power along approximately 15,000 miles of power lines in Oregon, Washington, Idaho, and Montana. One of these power lines crosses Tuthill's property in Washington. In 1953, Tuthill's predecessor-in-interest sold the BPA "a perpetual easement and right to enter and erect, operate, maintain, repair, rebuild, and patrol one or more electrical power transmission lines and appurtenant signal lines, poles, towers, wires, cables, and appliances necessary in connection therewith."

The BPA then built both power lines and accompanying communication, or signal lines in accordance with the terms of its easement. Beginning in the 1950s, the BPA upgraded its signal line technology on a number of occasions. In the most recent of these technological upgrades, the BPA decided to convert all of its signal lines to fiber optic cables.

The upgrade to fiber optics began in 1995. According to the government, BPA devised its upgrade plan based "upon planned load growth and wholesale transmission transactions between now and 2025." In most places, the BPA standardized its cables to either the 36- or the 72-fiber size to accommodate a claimed projected need of sixteen fibers by 2008, sixty-four by 2018, and seventy-six by 2025. It is therefore undisputed that the BPA installed more capacity than it requires for its current needs but that the BPA may need this capacity to meet its projected future needs. It is also undisputed that the BPA now leases some of this excess capacity to unrelated third parties. The BPA currently needs only a fraction of the thirty-six fibers crossing Tuthill's property to maintain the power lines. It leases the remainder to a telecommunications company.

Tuthill alleges that the "creation of a fiber optic communication system many times greater than is needed by the agency to serve its energy control needs, coupled with [the government's] leasing and other contractual agreements with for-profit communications companies, is use outside of the scope of the easement [that the government] relies on to burden [Tuthill's] real property." Given this alleged breach of the easement's explicit terms, Tuthill further asserts that the government's "misuse of these easements, and or [the government's] allowing of others to misuse these easements, amounts to a physical occupation of [Tuthill's] real property which is a per se taking without just compensation prohibited by the Fifth Amendment to the Constitution." Finally, Tuthill claims that the government owes it just compensation for the permanent physical taking of its property—or in the alternative, if the government chooses to cease the occupation, just compensation for the temporary physical taking of its property. Tuthill has not brought any other causes of action or theories upon which the government allegedly caused compensable damage to Tuthill's property. Tuthill's entire case therefore rests upon whether or not the government's actions constituted a per se physical taking.

The government contends that the BPA designed this natural upgrade to its infrastructure to accommodate growth projected through 2025. Those projections determined the number of fibers, and thus the size of the cables, laid as necessary "signal lines" per the easement's terms. Once the BPA laid those cables, leasing unused fibers to third parties did not constitute a physical invasion, and did not increase the burden on the servient estate in any way. Therefore, according to the government, "[Tuthill's] property has not been burdened in any way for which it has not been compensated already," that is in 1953.

Tuthill and the government filed cross motions for summary judgment. Based upon undisputed facts, the Court of Federal Claims explained that

[t]he scope of the easement is not relevant in this court because it cannot give rise to a physical taking. Moreover, [Tuthill] has not identified a property interest that could have been taken. Tuthill may have avenues of relief in federal court, but not on a takings theory. For example, misuse of an easement may be a trespass to real property.

The government overbuilt the communication network to accommodate future growth. What is excess capacity today may or may not be excess in the future. The easement allows "appurtenant signal lines ... necessary and in connection therewith. . . ." Physical presence of the fiber optic cable over the easement is not a taking. No additional physical intrusion to [Tuthill's] land has resulted from the lease to the third parties.

Tuthill, slip op. at 6. The Court of Federal Claims therefore denied Tuthill's motion and granted summary judgment in favor of the government. Tuthill timely appealed.

DISCUSSION

We have jurisdiction to hear this appeal under 28 U.S.C. § 1295(a)(3). We review the Court of Federal Claims' grant of summary judgment without deference. Christopher Vill., L.P. v. United States, 360 F.3d 1319, 1326 (Fed.Cir.2004); Agwiak v. United States, 347 F.3d 1375, 1377 (Fed.Cir.2003); Scott Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed.Cir.2003). Summary judgment is appropriate when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

This case involves Fifth Amendment takings jurisprudence. "The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation." Brown v. Legal Found. of Wash., 538 U.S. 216, 235, 123 S.Ct. 1406, 155 L.Ed.2d 376 (2003). Tuthill asserts that the federal government, acting through the BPA, physically occupied its property without just compensation.

The Supreme Court has recognized that the government may "take" private property by either physical occupation or regulation, and that these two categories of takings are subject to different analyses. See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1014-15, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992).

The text of the Fifth Amendment itself provides a basis for drawing a distinction between physical takings and regulatory takings. Its plain language requires the payment of compensation whenever the government acquires private property for a public purpose, whether the acquisition is the result of a condemnation proceeding or a physical appropriation.... When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner, regardless of whether the interest that is taken constitutes an entire parcel or merely a part thereof. Thus, compensation is mandated when a leasehold is taken and the government occupies the property for its own purposes, even though that use is temporary. Similarly, when the government appropriates part of a rooftop in order to provide cable TV access for apartment tenants, or when its planes use private airspace to approach a government airport, it is required to pay for that share no matter how small.

Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 321-22, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002) (citations omitted) (emphasis added).

We must therefore begin our analysis, as did the Court of Federal Claims, by considering whether or not the government took physical possession of Tuthill's property. If we find a physical taking, we must vacate the summary judgment and remand the matter to the Court of Federal Claims to construe the easement and to determine damages. If we do not find a physical taking, we must join the Court of Federal Claims in concluding that "the scope of the easement is not relevant," Tuthill, slip. op. at 5, and affirm the summary judgment.

The essence of Tuthill's argument on appeal is that the BPA, "by deliberately engaging in the overbuilding of its fiber optic system for the purpose of entering communication leases, and by entering those communication leases, has exceeded the scope of its easement rights." According to Tuthill's characterization of the law, "a physical invasion can occur when conditional...