The Urban Lawyer

Regulatory Takings and Vested Rights - An Update

by Robert H. Thomas

Robert H. Thomas is a land use and appellate lawyer at Damon Key Leong Kupchak Hastert in Honolulu, where he focuses on regulatory takings, eminent domain, water rights, and voting rights cases. He blogs about these topics at www.inversecondemnation.com. This article is a summary of the presentation he made at the 31st Annual Land Use Institute in Miami, Florida.


 

I. Federal Circuit: “Economically Beneficial Use” Means More Than Someone Might Buy the Property

THIRD TIME AROUND FOR LOST TREE’S TAKINGS CASE against the federal government. The first was the Federal Circuit’s decision concluding that a single Florida parcel owned by the plaintiff was the relevant parcel against which the impact of the Corps of Engineers’ denial of a § 404 wetlands dredge and fill permit was to be measured. The court overturned a Court of Federal Claims decision that concluded the relevant parcel was that single plot plus an additional nearby lot, plus “scattered wetlands in the vicinity” also owned by the same owner.

Second was the Court of Federal Claims, which on remand held that there was a taking, and that, after applying either the Lucas total wipeout or the Penn Central ad hoc test (the diminution in value caused by the denial of the permit was 99.4%), the just compensation owed to Lost Tree was in the neighborhood of $4.2 million. The court calculated the diminution by subtracting the parcel’s value without a permit from its value had a permit been issued.

The government appealed again to the Federal Circuit, which issued an opinion affirming the Court of Federal Claims, concluding that yes, there was a Lucas taking. The court did not consider the CFC’s Penn Central analysis, concluding it was not necessary to do so. It’s not a terribly long opinion, so please read the case yourself if your boat, like ours, is floated by issues such as “whether residual value arising from noneconomic uses precludes application of Lucas and requires application of Penn Central’s balancing test.” (No, held the court, it does not.

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