Whitney Benefits, Inc. v. U.S.

Citation926 F.2d 1169
Decision Date26 February 1991
Docket NumberNo. 90-5058,90-5058
Parties, 21 Envtl. L. Rep. 20,806 WHITNEY BENEFITS, INC. and Peter Kiewit Sons' Co., Plaintiffs-Appellees, v. The UNITED STATES, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

George W. Miller, Hogan & Hartson, Washington, D.C., argued for plaintiffs-appellees. With him on the brief were Jonathan L. Abram and Charles J. Felker.

James S. Burling, Ronald A. Zumbrun, Robin L. Rivett and John M. Groen, Pacific Legal Foundation, Sacramento, Cal., were on the brief for amicus curiae, Pacific Legal Foundation.

John A. Bryson, Department of Justice, Washington, D.C., argued for defendant-appellant. With him on the brief were Richard B. Stewart, Asst. Atty. Gen., Environment & Natural Resources Div., Lisa Hemmer and Michael P. Healy, attorneys. Also on the brief were Steven Brown, John Jasper, Jacques B. Gelin and Alfred T. Ghiorzi, Office of the Solicitor, Department of the Interior, Washington, D.C., of counsel.

Before MARKEY, NEWMAN and CLEVENGER, Circuit Judges.

MARKEY, Circuit Judge.

Appeal from a judgment of the United States Claims Court (Smith, C.J.) that the United States (government) took a mineral estate (Whitney coal) from Whitney Benefits, Inc. and Peter Kiewit Sons' Co. (PKS) (collectively Benefits) upon enactment of the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. Secs. 1201 et seq. (SMCRA), and requiring payment of $60,000,000, plus interest to Benefits. 1 We affirm.

I. BACKGROUND

The facts are set forth in Whitney Benefits v. U.S., 752 F.2d 1554 (Fed.Cir.1985) and in the comprehensive findings and conclusions accompanying the judgment appealed from. Whitney Benefits v. U.S., 18 Cl.Ct. 394 (Cl.Ct.1989). All of the probative facts being thus readily available to a reader of this opinion, no useful purpose would be served by a mere recast in our own words of Chief Judge Smith's exhaustive exposition of the facts in his scholarly and well-reasoned opinion.

II. ISSUES

A. Whether the Claims Court correctly concluded, based on not-clearly-erroneous findings, that on enactment SMCRA's prohibition of surface mining of alluvial valley floors (AVF's) constituted a taking of the Whitney coal property.

B. Whether the Claims Court's valuation of the coal property taken is clearly erroneous.

III. DISCUSSION
INTRODUCTION

A key element in this case is that SMCRA expressly precluded a permit for surface mining an AVF described in the statute in terms precisely applicable to, and known to be applicable to, the AVF overlying the Whitney coal property.

Contrary to the tone and tint of the government's arguments on this appeal, the constitutionality of SMCRA is not at risk here. Benefits accepts the untrammeled right of Congress to prohibit surface mining of its Whitney coal property. All

Benefits seeks is the aid of the courts in forcing governmental compliance with the compensation clause of the Fifth Amendment to the Constitution. After an extended trial, the Claims Court found that Benefits had proved facts establishing its right to compensation and the amount thereof that would be just. The case is fact-specific and basically uncomplicated, dealing only with Benefits' property right to mine a single specific deposit of coal (Whitney coal) and the market value of that right. In attempting to shoulder the heavy appellate burden of establishing that the judgment appealed from rests on reversible error, the government proffers a plethora of attorney arguments and assertions, none of which finds adequate support in the evidence, all of which are treated and rejected in what follows.

A. Taking Upon Enactment in 1977

On this issue the government argues that: (1) the standard of review is de novo; (2) no taking could occur until Benefits had applied for and been denied a mining permit; (3) SMCRA did not prohibit Benefits from mining the "Whitney coal"; (4) SMCRA did not deprive Benefits of all economic use of its property; and (5) the Claims Court failed to consider Congress' motivation.

1. Standard of Review

The government cites Bowen v. Public Agencies Opposed To Social Security Entrapment, 477 U.S. 41, 51-55, 106 S.Ct. 2390, 2396-98, 91 L.Ed.2d 35 (1986), but Bowen dealt only with a legal issue and did not address the standard of review. This court reviews Claims Court judgments to determine whether they are "incorrect as a matter of law" or premised on "clearly erroneous" factual determinations. Heisig v. United States, 719 F.2d 1153, 1158 (Fed.Cir.1983).

Having asserted a right to review "de novo", the government then misconstrues the nature of such review and the posture of the case, arguing for the most part as though the Claims Court had not conducted a six-day trial and simply ignoring this court's direction in the earlier appeal that the Claims Court make findings on the factual questions it did. 2

2. Mining Permit

Calling SMCRA a "regulatory statute", the government says it could not be deemed a taking until an expert agency applied its judgment and field reconnaissance to evaluate the surface of the land. The government does not suggest, and did not suggest at trial, any basis whatever on which a permit could be legally granted to surface mine Whitney coal. Indeed, SMCRA expressly provides that "no permit shall be approved" under conditions precisely descriptive of the Whitney coal estate. 3 The Government has not shown The government's facile application of the label "regulatory" and its citation of cases dealing with congressional regulation of the uses of land and other property subject to many uses are inapt here. First, as the Claims Court correctly found, the only property here involved is the right to surface mine a particular deposit of coal. The only possible use of that right is to surface mine that coal. When Congress prohibited that mining of that coal, it did not merely regulate, it took, all the property involved in this case. Second, if SMCRA could somehow be deemed "regulatory" in this case, it would avail the government nothing, for a regulatory statute that "goes too far", will be recognized as a taking. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922). Even if labeled "regulatory," the present statute "went too far" in relation to Whitney coal and its circumstances, when it prohibited surface mining and provided that "No permit ... shall be approved" under those circumstances. That a permit might be obtained to mine coal properties other than Whitney coal does not change the statute to one that merely seeks to "regulate" the mining of Whitney coal for which no permit could legally be obtained. Before SMCRA was enacted, Benefits had a property right it could expect to exercise, i.e., to surface mine the Whitney coal. The moment SMCRA was enacted, Benefits no longer had that property right, for it had no permit and could not possibly under the statute obtain one for a mine that would obviously violate the conditions expressly set forth in SMCRA. 30 U.S.C. Sec. 1260.

clear error in the Claims Court's finding that any surface mining permit application would in this case have been futile. Indeed, the record is clear that any such application was obviously and absolutely foredoomed on the day SMCRA was enacted. 4

We are, of course, fully aware of the cases favoring administrative action. Many are here cited by the government. But in those cases administrative action might have had an effect on whether there was a taking. This is not such a case. On the contrary, this case falls among those in which the Supreme Court has found no need to exhaust administrative remedies: Weinberger v. Weisenfeld, 420 U.S. 636, 641, 95 S.Ct. 1225, 1229-30, 43 L.Ed.2d 514 (1975) (no need to exhaust because statute "on its face precludes granting benefits to men"); McKart v. United States, 395 U.S. 185, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) (no need where facts clearly fit statutory definition). If there be coal properties to which SMCRA's permit provision might apply, Whitney coal is not and never was such a property. Hence, the Claims Court correctly held that "it would be unreasonable under the particular facts of this case to hold that a taking could not have occurred until a subsequent administrative determination was made that mining of Whitney coal was prohibited." 5

3. SMCRA Prohibited Mining Whitney Coal

In 1985, this Court said a taking occurs "when economic development [is] effectually prevented." Whitney Benefits, 752 F.2d at 1559. On remand, the Claims Court carefully considered and discussed every factual and legal argument the government presented and found as a fact that in 1977 SMCRA clearly prohibited surface mining of Benefits' coal, thereby depriving Benefits of "all economically viable use" of its property and destroying its value. That finding is not only correct and fully supported by the evidence, it is entitled to respect and may be upset only if it First, immediately before trial, the government stated in a Federal Register statement by BLM that "[d]evelopment of the [Whitney] coal was halted by the passage of [SMCRA]." 51 Fed.Reg. 3124, 3125 (January 23, 1986). Having made that concession, the government offered absolutely no evidence at trial to counter that official statement. Nor did it present a single witness to testify that there was any uncertainty whatever about SMCRA's taking effect on Benefits' coal property in 1977.

is shown to have been clearly erroneous. Yuba Goldfields, Inc. v. United States, 723 F.2d 884, 889 (Fed.Cir.1983). The government has made no such showing, but, as in Skaw v. United States, 740 F.2d 932 (Fed.Cir.1984) and Drakes Bay Land Co. v. United States, 424 F.2d 574, 586 (Ct.Cl.1970), has on appeal carried its attempt to deny the impact of SMCRA on Whitney coal to unreasonable lengths in an apparent hope of postponing...

To continue reading

Request your trial
39 cases
  • Front Royal Indus. Park Corp. v. FRONT ROYAL, VA., Civil A. No. 87-00019-H.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • April 11, 1996
    ...uses for the plaintiff's property were neither economically realistic nor realistically available. In Whitney Benefits, Inc. v. United States, 926 F.2d 1169 (Fed.Cir.), cert. denied, 502 U.S. 952, 112 S.Ct. 406, 116 L.Ed.2d 354 (1991), the court rejected the Government's argument that the c......
  • Bernardsville Quarry, Inc. v. Borough of Bernardsville
    • United States
    • United States State Supreme Court (New Jersey)
    • July 23, 1992
    ...L.Ed.2d at 498. On this point, BQI claims that Whitney Benefits, Inc. v. United States, 752 F.2d 1554 (Fed.Cir.1985), remanded, 926 F.2d 1169 (1991) (Whitney II), cert. denied, --- U.S. ----, 112 S.Ct. 406, 116 L.Ed.2d 354 (1991), supports its position. The court in Whitney II found that th......
  • Hughes Aircraft Co. v. U.S., s. 94-5149
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • June 19, 1996
    ...domain are reviewed for clear error as are determinations of what constitutes a reasonable royalty. Whitney Benefits, Inc. v. United States, 926 F.2d 1169, 1177-78 (Fed.Cir.1991); Branning v. United States, 784 F.2d 361, 364 (Fed.Cir.1986); SmithKline Diagnostics, Inc. v. Helena Lab. Corp.,......
  • Florida Rock Industries, Inc. v. U.S., 91-5156
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • March 10, 1994
    ...1387-1392, (1993)); Rubenfeld, supra n. 7, Part V, Subpart E, "Parceling and Partial Usings."21 Similarly, in Whitney Benefits, Inc. v. U.S., 926 F.2d 1169 (Fed.Cir.1991), this court held that the impact of the Surface Mining Control and Reclamation Act of 1977 on plaintiff was a total dest......
  • Request a trial to view additional results
16 books & journal articles
  • CHAPTER 8 APPLICATION OF THE LAW OF "TAKINGS" TO RESTRICTIONS ON MINERAL DEVELOPMENT
    • United States
    • FNREL - Special Institute Mineral Development and Land Use (FNREL)
    • Invalid date
    ...P.2d 537 (Cal. 1995) (refusing to permit what the court concluded was a substantial and unplanned expansion in mining operations). [75] 926 F.2d 1169 (Fed. Cir.), cert. denied, 502 U.S. 952 (1991). [76] See also Board of Supervisors v. McClimans, 107 Pa. Commw. 542, 529 A.2d 562 (1987) & 14......
  • LOCAL LAND USE REGULATION OF OIL AND GAS DEVELOPMENT
    • United States
    • FNREL - Special Institute Surface Use for Mineral Development in the New West (FNREL)
    • Invalid date
    ...Rock Industries, Inc. v. U.S., 18 F.3d 1560 (Fed.Cir. 1994), cert. denied, 513 U.S. 1109 (1995); Whitney Benefits, Inc. v. United States, 926 F.2d 1169 (Fed.Cir. 1991); State ex rel. R.T.G., Inc. v. State, 2002-Ohio-6716, 98 Ohio St.3d 1, 780 N.E.2d 998, 160 O.&G.R. 667 (2002), reh'g denied......
  • Where the wild things are: the Endangered Species Act and private property.
    • United States
    • Environmental Law Vol. 24 No. 2, April 1994
    • April 1, 1994
    ...actions against the United States. See, eg., Hendler v. United States, 952 F.2d 1364 (1991); Whitney Benefits, Inc. v. United States, 926 F.2d 1169 (1991); Yancey v. United States, 915 F.2d 1534 (1990); United Nuclear Corp. v. United States, 912 F.2d 1432 (1990). (252.) Exec. Order No. 12,6......
  • The Regulatory Takings Battleground: Environmental Regulation of Land Versus Private-Property Rights
    • United States
    • Land use planning and the environment: a casebook
    • January 23, 2010
    ...hotbed of regulatory takings activities, often with positive results for property owners. 26 In Whitney Benefits, Inc. v. United States, 926 F.2d 1169, 1170, 1176-77 (Fed. Cir. 1991), for example, the appellate panel affirmed a $60-million-dollar judgment (plus interest), noting that “the C......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT