Penna v. United States

In the United States Court of Federal Claims

No. 16-1545L

(Filed: March 23, 2021)

)

FRANK PENNA and )

LISA PENNA, )

)

Plaintiffs, )

)

v. )

)

THE UNITED STATES, )

)

Defendant. )

)

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.

OPINION AND ORDER

SOLOMSON, Judge.

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.

I. PROCEDURAL HISTORY

A. The Complaint

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.

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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.

B. Discovery And Summary Judgment Briefing

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.

C. The Trial

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 of

1 Trial in this matter was originally scheduled to take place in May 2020 in Philadelphia,

Pennsylvania. See ECF No. 71. In light of the COVID-19 pandemic, however, the Court granted

the government’s motion for a continuance, ECF No. 91, and vacated both the May and

proposed June trial dates. ECF No. 96 at 3; see also Order (Fed. Cl. Mar. 16, 2020) (Sweeney, C.J.)

(restricting public access to the National Courts Building until further notice). Thereafter, the

Court set trial in this matter to be conducted virtually, via videoconference, utilizing the Cisco

Webex platform. ECF No. 116 at 1.

2 “Tr.” refers to the transcript of trial proceedings, conducted August 3–6, 2020.

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AFFF. 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 “it’s not worth

anything today. Zero.” 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 as

3Mr. Kroop unfortunately passed away in June 2020. His video deposition had been taken a

year prior, however, and thus was accepted in lieu of live testimony. Tr. 19:8–11; FRE 804(a)(4)

(“A declarant is considered to be unavailable as a witness if the declarant . . . cannot be present

or testify at the trial or hearing because of death[.]”).

4Mr. Mulhall experienced technical issues with his internet connection on the day he initially

testified. Tr. 355:21–23; 417:15–23. Consequently, the government was not able to cross-

examine him until two days later, on August 6, 2020. Tr. 612.

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property 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,

“neither appraiser could identify a sale of a comparably contaminated property.

Without a sale showing that a comparably contaminated property is marketable, the

property will not qualify [for a mortgage].” 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 resolved to

be residential.5 Tr. 452:1–4. Mr. Hosey concluded that the Penna Property was

valueless in its current state. PX 131 at 23; Tr. 464:17–19.

D. The Joint Stipulation

On August 3, 2020, prior to opening arguments, the government informed the

Court that PX 65 — an email from the Pennas’ real estate agent, regarding a potential

sale of the Property — was incomplete.6 Later, during the government’s cross-

examination of Mr. Penna, the government utilized and sought to introduce into

evidence certain parts of Defendant’s Exhibit (“DX”) 322, which included additional

5 The four tests used to determine the highest and best use of a property are physical possibility,

legal permissibility, financial feasibility, and maximum productivity. Once a highest and best

use is determined, there are generally three approaches to valuation in appraisal science: the

sales comparison approach, the income approach, and the cost approach. Tr. 470:11–22.

6 Tr. 11:15–19 (“[MR. FERRELL]: PX 65[ ] that we received from Plaintiffs on Friday . . . is in a

different form than what we were expecting. We had in our files for Plaintiffs’ Exhibit 65 a

longer composite exhibit.”).

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emails (and attachments) originally produced by the Pennas along with the email

constituting PX 65. See Tr. 249:16–250:10.

In addition, when the government asked Mr. Penna about the attempted sale of

the Property, the government relied upon PX 64, which, according to the Pennas’

exhibit list, was a written sales agreement for the Property. In fact, that document

turned out to be only an excerpt of a proposed purchase agreement – an offer to buy the

Property – and an altered one at that. See, e.g., Tr. 251:5–12. On redirect, the Pennas’

counsel of record, Mr. Mark Cuker, proceeded to use what appeared to be a complete

copy of a proposed sales agreement, including documents that related to, but were not

contained in, DX 322. Mr. Cuker readily admitted that the apparently more complete

property sales agreement was not one of the Pennas’ proposed exhibits. See Tr. 271:5–7

(“[MR. CUKER]: It is not in my [exhibit] binder. I am simply using it because it’s been

placed in issue here, in having the witness explain the cross examination.”). In response

to Mr. Cuker’s assertion, the government objected on the grounds that “[t]his is the first

time that we are seeing this document. This has not been produced to the

Government.” Tr. 274:22–24.

This turn of events, in the middle of trial, prompted the Court to note its concern

that Mr. Cuker had not provided the government with the full version of the sales

agreement Mr. Cuker displayed during his redirect examination of Mr. Penna. Tr. 275.

Mr. Cuker hypothesized that the version of the agreement he attempted to use was not

produced to the government during discovery because the document likely was not

responsive to the government’s discovery requests. Tr. 275:6–9. The Court rejected that

assertion as highly improbable, and Mr. Cuker never attempted to demonstrate

otherwise (e.g., by referencing a particular document request). See Tr. 275:10–12.

Because the Court had trouble understanding the facts, documents, and

testimony surrounding what appeared to be a bona fide offer to purchase the allegedly

worthless Penna Property— combined with the Court’s concern about the possible

failure of the Pennas to produce documents during discovery — the Court instructed

the parties to meet-and-confer regarding what PX 64 and PX 65 should have included,

and to determine which parts, if any, of DX 322 — or any other documents related to

the offer to purchase the Property — should be admitted into evidence. See Tr. 259:1–6.

Furthermore, the Court ordered Mr. Cuker to produce to the government any

previously unproduced documents or emails connected to the offer to purchase the

Penna Property, including the complete version of the sales agreement that Mr. Cuker

used during his redirect examination of Mr. Penna. See Tr. 280:12–281:7.

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On August 4, 2020, and then again on August 5, 2020, the parties informed the

Court that they still had not reached an agreement regarding PX 64, PX 65, DX 322, or

any other documents relating to the potential sale of the Property that previously had

not been disclosed during discovery.

Finally, on August 6, 2020 – during a recess of the trial proceedings – the parties

filed a stipulation regarding the attempted purchase of the Penna Property (the

“Stipulation”). ECF No. 124 (“Stip.”).7 Notably, the Pennas stipulated, among other

facts, that “[t]he prospective sale of the [Penna] property did not fail because of

environmental issues.” Id. ¶ 31 (emphasis added). 8 The Stipulation was necessary, at

least in-part, to address prejudice to the government arising from nearly 100 new pages

of documents the Pennas produced for the first time during trial, following the Court’s

order to do so. Mr. Cuker contended that any untimely production was inadvertent,

and, in any event, the documents were duplicative of yet others that were produced

during the discovery period. Ultimately, however, the Stipulation and the newly

produced documents refute – or significantly undermine – the Pennas’ central factual

assertions in their pretrial Memorandum Contentions of Fact and Law regarding the

nature and extent of the government’s alleged taking. Compare Pl. Memo. ¶ 110, with

Stip. ¶¶ 9–30.

E. The Parties’ RCFC 52(c) Briefing

On August 6, 2020, following the close of the Pennas’ case and particularly in

light of the Stipulation, discussed supra, the Court suspended trial to permit the

government to file its motion for judgment on partial findings pursuant to RCFC 52(c)

and to address Mr. Cuker’s potential discovery violation and other related issues. See

7As part of the Stipulation, the parties agreed to the admission of ten documents into evidence.

See ECF Nos. 124-1 – 124-10 (DX 323–332). The Court hereby admits those exhibits into

evidence to the extent they were not previously so admitted.

8 The parties stipulated to various facts that contradicted or undermined the Pennas’ assertions

in their Memorandum Contentions of Fact and Law, and other testimony. Compare Stip. ¶ 1

(“On August 9, 2018, Plaintiffs’ realtor, Kathi Coletti, e-mailed Plaintiffs regarding the listing of

their property . . . . The e-mail states, in part, that ‘[t]he liens and judgments plus mortgages are

so high not sure if it can go out to realtors for sale if there is no money to pay their

commission.’”), with Tr. 243:25–244:6 (“[MR. PENNA]: [W]e gave him the [environmental]

disclosures. And then I was told it got complicated for him and he backed out, after the

disclosures. He didn’t have the disclosures when he wanted to buy it, but I am sure that the

realtor gave him those disclosures. I didn’t want Lisa and I to be held responsible for anything

later on down the line.”); compare also Stip. ¶ 9 (“On August 23, 2018, two prospective buyers

signed an offer to purchase the Property at a price of $725,000”), with Pl. Memo. ¶ 110 (“An offer

for $746,000 was made[.]”).

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ECF No. 125; Tr. 743:23–744:3. In a subsequent order, issued on August 10, 2020, the

Court instructed the parties to address several issues in their briefs, including whether

the Pennas had provided sufficient evidence at trial of a compensable taking pursuant

to the Fifth Amendment of the United States Constitution and the Tucker Act. ECF No.

125 at 5. Additionally, the Court sought the parties’ views regarding whether there had

been any violations of this Court’s discovery rules or professional ethics rules, including

whether Mr. Cuker violated his duty of candor to the Court. Id. at 5–8.

In accordance with the briefing schedule requested by both parties, see ECF

No. 132, the government filed its motion for judgment on partial findings pursuant to

RCFC 52(c) on August 28, 2020. See Def. 52(c) Mot. On September 18, 2020, the Pennas

filed their response in opposition to the government’s motion. ECF No. 136 (“Pl.

Resp.”). On October 2, 2020, the government filed its reply in support of its motion.

ECF No. 138 (“Def. Rep.”). The Court held oral argument on October 7, 2020. Minute

Entry, Oct. 7, 2020.

II. FACTUAL FINDINGS9

A. The Parties And Property

The Pennas are a married couple who reside at 410 Norristown Road, Horsham,

Pennsylvania 19044. Compl. ¶ 1. The Pennas have resided at their present address, the

subject Property of their takings claim, since 1994. Id. ¶ 19. Defendant, the United

States, acting through the United States Department of the Navy (the “Navy”), has

owned the Naval Air Station Joint Reserve Base Willow Grove (“Willow Grove” or the

“Base”), located in Horsham Township, Montgomery County in southeastern

Pennsylvania, from 1942 to present. ECF No. 7 (“Ans.”) ¶ 2; JX 33 at US00051065. The

Base was operated by the Navy, in conjunction with other service branches, from 1942

to March 2011, and is now maintained by the Navy Base Realignment and Closure

Program Management Office. Id. ¶ 5. The Navy’s use of AFFF on the Base, the

allegedly resulting contamination of the Penna Property, and the asserted adverse

effects of such contamination on the value of the Property form the foundation of the

Pennas’ claim.

9This recitation of facts constitutes the Court’s principal findings of fact in accordance with

RCFC 52(a). Other findings of fact and rulings on questions of mixed fact and law are contained

in the discussion sections of this opinion, see infra Sections V, VI.

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B. The Navy’s Use Of AFFF On The Base And The Subsequent

Contamination Of The Penna Property

AFFF is a fluorinated surfactant-based foam that the military and commercial

aviation sector has been using since the early 1970s to extinguish petroleum fires. JX 4

at US00006851; JX 19 at US00004476. AFFF contains PFCs, which include PFOA and

PFOS. JX 33 at US00051066. PFOA and PFOS are manmade chemicals that are used for

a wide variety of residential, commercial, and industrial purposes, including clothing,

food packaging, cookware, and firefighting. 10 DX 207 at US00001923.

The relevant locations of the Base are the Fire Training Area and Building 177,

the two alleged sources of PFOA and PFOS that resulted in the contamination of the

Penna Property. The Base’s Fire Training Area, approximately 1,600 feet

north/northeast of the Penna Property, was used for large-scale firefighting exercises.

JX 11 at US000010440; PX 128 at 13. Building 177, approximately 1,700 feet northwest of

the Penna Property, served as a hangar and maintenance facility for various military

aircraft. JX 18 at US00036111.

The Pennas allege, and the government does not dispute, that AFFF was used on

the Base while it was operational. JX 33 at US00051066; see also Def. 52(c) Mot. at 11.

While the parties dispute whether any AFFF contamination of the Property was

intentional, foreseeable, or otherwise the direct, natural, or probable result of the

government’s use of AFFF,11 the Court declines to make a factual finding on those

issues (as explained in more detail below). Instead, the Court focuses its decision here

on whether or to what extent the government interfered with the Pennas’ use of their

10 PFOS and PFOA are not “hazardous substances” as defined in the Comprehensive

Environmental Response, Compensation, and Liability Act (“CERCLA”) § 101(14), codified at

42 U.S.C. § 9601(14), nor are they “hazardous wastes” under the Resource Conservation and

Recovery Act (“RCRA”), codified at 42 U.S.C. § 6903. See JX 42 at US00066429. PFOS and PFOA

are also not considered “hazardous substances” under Pennsylvania’s Hazardous Sites Cleanup

Act (“HSCA”), codified at 35 Pa. Stat. Ann. § 6020.103 (West); see Giovanni v. United States Dep't

of the Navy, 433 F. Supp. 3d 736, 746 (E.D. Pa. 2020).

11The parties dispute whether the contamination of the Penna Property was the direct, natural,

or probable result of the Navy’s use of AFFF on the Base – specifically, at the Fire Training Area

and Building 177. Plaintiffs contend that the Navy’s AFFF use on the Base caused runoff water

to flow downhill to the Penna Property, contaminating its soil and private well. Compl. ¶¶ 24,

26–27. The Navy contends, in contrast, that not only did it have physical mechanisms in place

to collect contaminated water and prevent its migration, but also that the migration path of any

water from the Base would not lead to the Penna Property due to the topography of the

surrounding land. ECF No. 134 at 4, 23–24. The government instead attributes the chemicals on

the Penna Property to an F-14 plane crash in 2000 that occurred 300 to 400 feet north of the

Penna Property and was extinguished using AFFF. ECF No. 101 ¶¶ 36–37.

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Property or appropriated a benefit at their expense. ECF No. 101 ¶¶ 26–27, 32–33.

In September 2011, the Navy conducted groundwater sampling for PFOA and

PFOS from four monitoring wells within the Base’s Fire Training Area, which revealed

the presence of both compounds. JX 33 at US00051066; PX 128 at 11. Later, in 2014,

Mr. Penna first learned about potential PFOA and PFOS contamination in the area, and,

consequently, he arranged to have his Property (including a private well) tested. Tr.

196:25–197:10. In August 2014, Analytical Labs, a private company, performed testing

that showed heightened levels of PFOA (0.298 μg/L) and PFOS (0.701 μg/L) in the

Pennas’ well-water. Tr. 198:12–199:2; see ECF No. 136-2. The EPA itself tested the

Penna’s well, which also revealed the presence of PFOA and PFOS. Tr. 199:4–16; JX 33

at US00051066. In 2015, the Navy provided the Pennas with a written notice that PFOS

and PFOA were detected in their private well in concentrations exceeding the EPA’s

provisional human health advisory for drinking water. PX 58.

Although the Pennas claimed that they had used their private well until 2014 for

“drinking, watering shrubs, watering [their] trees, washing [their] vehicles, in the office,

[and] filling up [their] cooler every day,” Tr. 197:11–17, the Pennas’ primary source of

water for most of their house since 2005 came from public water; the entire house has

been serviced by public water since 2010. Indeed, while the Pennas alleged that their

“water supply came entirely from a private well located on their property,” and that

they “used their well for all domestic water purposes until late 2014” when they

received the Navy’s notice, Compl. ¶¶ 20–21, the Penna Property was connected to

municipal water because of inadequate water pressure, not due to contamination. Tr.

215:11–216:6; Tr. 197:21–198:7. The Navy has provided bottled drinking water to the

Pennas’ on-site business since 2014.12 Tr. 203:4–6.

C. Attempts To Sell The Penna Property

In 2013, prior to learning of the PFOA and PFOS contamination on the Property,

Mr. Penna spoke to a realtor about potential investment opportunities involving the

Property, including subdividing the land and selling the house. Tr. 203:11 –16, 204:9–

205:4. Although the Pennas halted any such plans in 2014 after the Navy notified the

Pennas of the AFFF contamination, Tr. 205:5–13, the Pennas ultimately listed their

12Mr. Penna ran a landscaping business from his garage. Tr. 231:21–25. When Mr. Penna

initially communicated with the Navy regarding the contamination on the Property, the Navy

offered to pay a tapping fee to provide public water to Mr. Penna’s business. Tr. 201:16–202:11.

Because Mr. Penna would have had to bear the expense of running a line from Norristown

Road to the business, the Pennas and the Navy ultimately agreed that the Navy would supply

bottled water instead. Tr. 202:14–203:6.

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property for sale in 2018 after speaking with several realtors. Tr. 206:3–9, 207:25–208:13.

Independent of any contamination, the Property suffers from several problems,

including a swale that frequently floods the Property when it rains, which negatively

impacts its salability. Tr. 189:21–190:3, PX 103. Indeed, as acknowledged by Plaintiffs’

realtor, Ms. Kathi Coletti, the liens, judgments, and mortgages on the Property are “so

high” that it was not clear the Property could be placed on the market.13 See Stip. ¶ 1.

Moreover, despite Mr. Penna’s impression that the Property was zoned for commercial

purposes, he had no written proof of such zoning. Id. ¶ 2.

On August 23, 2018, prospective buyers submitted a signed, bona fide offer to the

Pennas to purchase their Property at a price of $725,000. DX 328; Stip. ¶ 9. Notably, the

offer required the Pennas’ acceptance before August 25, 2018. Stip. ¶ 12. The Pennas

did not accept the purchase offer in a timely manner, but rather allowed the offer to

lapse – remarkably, at the direction of Mr. Cuker, the Pennas’ counsel of record, who

instructed them “to sign nothing until he review[ed].” Id. ¶¶ 16, 17. After the offer

lapsed, the Pennas worked with their realtor, perhaps another attorney, and Mr. Cuker

to prepare a counteroffer. DX 332. The counteroffer, dated August 30, 2018, consisted

of a “Marked Up” Agreement of Sale, including: (1) an increase in the proposed

purchase price to $746,000; (2) a change in the specified zoning to residential; and (3) the

addition of three attachments. Stip. ¶¶ 21–24, 26. The three additional attachments

included: (1) an “Addendum to Agreement of Sale”; (2) “Compensation Agreement”;

and (3) “Sellers [sic] Disclosure and Environmental Report 6/15.” 14 The cover page to

the June 15, 2018 M2 Associates, Inc. Environmental Report was attached to the August

13On August 10, 2018, Ms. Coletti forwarded a title research report to the Pennas for the

Property covering the period of July 1, 2005 – July 27, 2018 (“Title Report”). Stip. ¶ 3. The Title

Report identified a significant number of problems encumbering the Property: a February 8,

2018 mortgage foreclosure from Chase Bank in the amount of $643,215.55; an October 8, 2014

mortgage foreclosure from Stonebridge Bank in the amount of $265,737.75; ten liens filed by the

Pennsylvania Department of Revenue dated between December 5, 2007, and July 11, 2018,

totaling $35,809.95; eleven liens filed by the Pennsylvania Unemployment Compensation Fund

dated between November 24, 2008, and April 26, 2018, totaling $51,589.12; and an Internal

Revenue Service lien dated August 2, 2016, in the amount of $111,877.68. Id. ¶¶ 4–8.

14The specific changes reflected in the Pennas’ counteroffer were as follows: to alter paragraph

2(A) to increase the purchase price to $746,000 and to increase the second earnest money

deposit from $9,000 to $30,000; to alter paragraph 5(A) to require written acceptance of all

parties on or before August 31, 2018; to alter paragraph 6 to provide that zoning is “Residential

R3”; to alter paragraph 32(B) to provide for “a due diligence period of 20 days for the buyer to

confirm with Horsham Township that the property is permitted to be used for a Nursery and

Landscape Contractors shop”; and to alter paragraph 32(A) to add the three new attachments.

Stip. ¶¶ 21–24, 26.

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30, 2018 “Marked Up” Agreement of Sale. Id. ¶ 25. Plaintiffs also signed an undated

“Environmental Addendum.” Id. ¶ 27.

There is no documentary evidence whatsoever demonstrating that the Pennas –

via their realtor, Ms. Coletti, or anyone else – actually transmitted the draft counteroffer

to the prospective buyers or their real estate agent. Stip. ¶ 28. On September 12, 2018,

Ms. Coletti e-mailed her clients, the Pennas, to advise them that, “[u]nfortuantely [sic],

the Buyers have decided not to go forward with the purchase of 410 Norristown Road.

The [prospective buyers’] agent said it was getting to [sic] complicated for them.” Id.

¶ 30. There is no evidence in the record explaining what complications the prospective

buyers might have been referencing, but the critical fact is that the sale of the Penna

Property did not fail because of environmental contamination issues. Id. ¶ 31. Indeed,

if anything, the sale did not move forward simply because the Pennas effectively

declined the purchase offer tendered to them.

III. JURISDICTION AND STANDARD OF REVIEW

Pursuant to the Tucker Act, this Court’s primary jurisdictional statute, “[t]he

United States Court of Federal Claims shall have jurisdiction to render judgment upon

any claim against the United States founded . . . upon the Constitution, . . . or for

liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a).

The Tucker Act thus “provides the Court of Federal Claims with jurisdiction over [Fifth

Amendment] takings claims brought against the United States.” Casitas Mun. Water

Dist. v. United States, 708 F.3d 1340, 1359 (Fed. Cir. 2013) (quoting John R. Sand & Gravel

Co. v. United States, 457 F.3d 1345, 1354 (Fed. Cir. 2006), aff’d, 552 U.S. 130 (2008)).

Before the Court is the government’s motion for judgment on partial findings

pursuant to RCFC 52(c), in which the government argues that the Pennas failed to meet

their burden of proof at trial to demonstrate a compensable taking. Pursuant to RCFC

52(c), “[i]f a party has been fully heard on an issue during trial and the court finds

against the party on that issue, the court may enter judgment against the party on a

claim or defense that, under the controlling law, can be maintained or defeated only

with a favorable finding on that issue.” In resolving such a motion, “the judge, as the

sole trier of fact, may weigh the evidence and is not required to resolve all issues of

evidence and credibility in the plaintiff’s favor.” Persyn v. United States, 34 Fed. Cl. 187,

195 (1995), aff'd, 106 F.3d 424 (Fed. Cir. 1996) (citations omitted). Rather, after hearing

the plaintiff’s evidence, the Court “determine[s] whether or not the plaintiff has

convincingly shown a right to relief.” Fifth Third Bank of W. Ohio v. United States, 56 Fed.

Cl. 668, 683 (2003) (citing Howard Indus., Inc. v. United States, 115 F. Supp. 481, 485–86

(Ct. Cl. 1953)). “The trial may end at the close of a plaintiff’s case if a plaintiff has failed

to maintain its claim, RCFC 52(c), because ‘[a] plaintiff has no automatic right to cross-

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examine a defendant's witnesses for the purpose of proving what the plaintiff failed to

establish during the presentation of its case.’” Columbia First Bank, FSB v. United States,

60 Fed. Cl. 97, 101 (2004) (quoting Cooper v. United States, 37 Fed. Cl. 28, 35 (1996)).

“[T]he plaintiff has the burden to prove a taking occurred[.]” CCA Assocs. v.

United States, 667 F.3d 1239, 1245 (Fed. Cir. 2011); see also Loesch v. United States, 645 F.2d

905, 914 (Ct. Cl. 1981) (“[T]he burden of proof rests on plaintiffs, and not on the

defendant, to establish that a taking has occurred justifying the payment of just

compensation.” (citations omitted)). Plaintiffs have the burden of proving their case by

a preponderance of the evidence. Palm Beach Isles Assocs. v. United States, 58 Fed. Cl.

657, 665 (2003), aff’d, 122 F. App’x 517 (Fed. Cir. 2005).

IV. FIFTH AMENDMENT TAKINGS PRINCIPLES

The Takings Clause of the Fifth Amendment guarantees the payment of just

compensation when private property is “taken” for public use via inverse

condemnation, as alleged here. U.S. Const. amend. V. “It protects ‘private property’

without any distinction between different types.” Horne v. Dep't of Agric., 576 U.S. 350,

358 (2015) (noting that “[t]he principle reflected in the Clause goes back at least 800

years to Magna Carta, which specifically protected agricultural crops from

uncompensated takings” (citing W. McKechnie, Magna Carta, A Commentary on the

Great Charter of King John 329 (2d ed. 1914))). Inverse condemnation is “a shorthand

description of the manner in which a landowner recovers just compensation for a taking

of his property when condemnation proceedings have not been instituted.” United

States v. Clarke, 445 U.S. 253, 257 (1980). “It is a cause of action against the government

to recover the value of property taken by the government without formal exercise of the

power of eminent domain.” Moden v. United States, 404 F.3d 1335, 1342 (Fed. Cir. 2005)

(citing Clarke, 445 U.S. at 257).

“Takings claims typically come in two forms: per se or regulatory.” Alimanestianu

v. United States, 888 F.3d 1374, 1380 (Fed. Cir. 2018). A per se (or “categorical”) taking

occurs where there is a physical invasion or appropriation of property, whether real,

Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 427 (1982), or personal,

Horne v. Dep't of Agric., 576 U.S. at 352, 357. Such a “classic taking” is one “in which the

government directly appropriates private property for its own use.” Tahoe–Sierra Pres.

Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 324 (2002) (emphasis added)

(other alterations and internal quotation marks omitted). 15 In addition to per se (or

15“A permanent physical taking involves a ‘permanent physical occupation of property’ and is

treated as a per se taking for which the government must pay compensation regardless of the

circumstances.” Baley v. United States, 134 Fed. Cl. 619, 660 (2017) (quoting Loretto, 458 U.S. at

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categorical) takings, the United States Supreme Court has recognized that where a

regulatory restriction “does not entirely deprive an owner of property rights,” Horne,

576 U.S. at 364, but nonetheless goes “too far,” id. at 360 (quoting Pa. Coal Co. v. Mahon,

260 U.S. 393 (1922)), it may result in a regulatory taking. 16 The Supreme Court also has

treated certain types of regulatory actions as categorical takings. For example, a

categorical taking occurs when regulations “compel the property owner to suffer a

physical invasion of his property” or prohibit “all economically beneficial or productive

use.” Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992) (internal quotation marks

omitted).

Thus, Supreme Court “precedents stake out two categories of regulatory action

that generally will be deemed per se takings for Fifth Amendment purposes.” Lingle v.

Chevron U.S.A. Inc., 544 U.S. 528, 537–40 (2005). The first category requiring the

payment of just compensation involves a case “where [the] government requires an

owner to suffer a permanent physical invasion of her property—however minor . . . .”

Id. (citing Loretto, 458 U.S. 419 (1982)). The “second categorical rule applies to

regulations that completely deprive an owner of ‘all economically beneficial us[e]’ of her

property.” Lingle, 544 U.S. at 537–40 (quoting Lucas, 505 U.S. at 1019 (emphasis in

original)).

Beyond those categories, however, the Supreme Court has not “develop[ed] any

‘set formula’ for determining when ‘justice and fairness’ require that economic injuries

caused by public action be compensated by the government, rather than remain

disproportionately concentrated on a few persons.” Penn Cent. Transp. Co. v. City of New

York, 438 U.S. 104, 124 (1978). Instead, the Court has relied on “ad hoc, factual inquiries

into the circumstances of each particular case.” Connolly v. Pension Benefit Guar. Corp.,

475 U.S. 211, 224 (1986) (citations omitted). In engaging in these ad hoc, factual

inquires, the Supreme Court has identified several factors used in determining whether

there has been a taking: (1) “[t]he economic impact of the regulation on the claimant”;

(2) “the extent to which the regulation has interfered with distinct investment-backed

expectations”; and (3) “the character of the government action.” Penn Cent. Transp. Co.,

438 U.S. at 124; accord Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984). In

requiring courts “to consider the ‘character of the government action,’ the Supreme

Court in Penn Central recognized government action may impact property in myriad

441), aff'd, 942 F.3d 1312 (Fed. Cir. 2019).

16Before the Supreme Court’s decision in Pennsylvania Coal, “the Takings Clause was

understood to provide protection only against a direct appropriation of property—personal or

real. Pennsylvania Coal expanded the protection of the Takings Clause, holding that

compensation was also required for a ‘regulatory taking’—a restriction on the use of property

that went ‘too far.’” Horne, 576 U.S. at 360 (citing and quoting Pa. Coal Co., 260 U.S. at 415).

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ways and what is important is the nature or substance of the government’s action, as

opposed to the precise form it may take.” Dimare Fresh, Inc. v. United States, 808 F.3d

1301, 1307 (Fed. Cir. 2015) (quoting Penn Cent. Transp. Co., 438 U.S. at 124).

Four years after Penn Central, the Supreme Court, in Loretto v. Teleprompter

Manhattan CATV Corp., reaffirmed the rule that a physical appropriation of property

gives rise to a per se taking, without regard to other factors. See Horne v. Dep't of Agric.,

576 U.S. at 360 (discussing Loretto). In Loretto, the Court held that the installation of a

cable box on a small corner of Loretto’s rooftop was a per se taking, even though the

property owner could still sell and economically benefit from the property. Horne, 576

U.S. at 363 (discussing Loretto, 458 U.S. at 436). That was true without regard to the

claimed public benefit or the economic impact on the owner. The Court explained that

such protection was justified not only by history, but also because such an intentional,

physical “appropriation is perhaps the most serious form of invasion of an owner's

property interests,” depriving the owner of the “the rights to possess, use and dispose

of” the property in the manner in which the owner sees fit. Loretto, 458 U.S. at 435

(internal quotation marks omitted). Thus, when there has been a physical

appropriation, courts ordinarily “do not ask . . . whether it deprives the owner of all

economically valuable use” of the item taken. Tahoe–Sierra, 535 U.S. at 323. In sum,

“[w]hen the government physically takes possession of an interest in property for some

public purpose, it has a categorical duty to compensate the . . . owner.” Id. at 322–23

(citing United States v. Pewee Coal Co., 341 U.S. 114, 115 (1951)); see also Lingle, 544 U.S. at

537–40 (“The paradigmatic taking requiring just compensation is a direct government

appropriation or physical invasion of private property.”).

On the other hand, “[u]nlike takings cases concerning the physical appropriation

or government condemnation of property, the Supreme Court has abjured the

application of rigid rules in its regulatory takings analysis.” Dimare Fresh, 808 F.3d at

1307. Indeed, the Supreme Court has “emphasized that ‘most takings claims turn on

situation-specific factual inquiries,’ adding ‘that no magic formula enables a court to

judge, in every case, whether a given government interference with property is a

taking.’” Quebedeaux v. United States, 112 Fed. Cl. 317, 321 (2013) (quoting Ark. Game &

Fish Comm’n v. United States, 568 U.S. 23, 31–32 (2012)). Only “in rare instances” has the

Supreme Court “drawn some bright lines, giving, as examples, situations in which a

permanent physical occupation of property occurs or where regulations require a

property owner to sacrifice all economic benefit associated with its land.” Quebedeaux,

112 Fed. Cl. at 321 (citing Loretto, 458 U.S. at 426, and Lucas, 505 U.S. at 1019).17

17In all takings cases, the object of the inquiry is essentially the same; courts are tasked with

assessing how similar the governmental action is to a direct physical taking such that the

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Notwithstanding that physical takings are generally considered per se takings,

several types of indirect or temporary physical takings are subject to “situation-specific

factual inquiries,” Quebedeaux, 112 Fed. Cl. at 320–21, including alleged takings based

upon government-induced flooding and, by extension, chemical contamination. See

United States v. Cress, 243 U.S. 316, 328 (1917); Pumpelly v. Green Bay & Miss. Canal Co., 80

U.S. 166, 181 (1871) (recognizing that “where real estate is [ ] invaded by superinduced

additions of water . . . so as to effectually destroy or impair its usefulness, it is a taking,

within the meaning of the Constitution”). Flooding cases – despite the physical nature

of the alleged taking – clearly are not subject to any bright line tests. In Arkansas Game

& Fish Commission, for example, the Supreme Court reversed a decision from our

appellate court, the United States Court of Appeals for the Federal Circuit, in which the

latter held that a government-induced flooding, temporary in duration, gains an

automatic exemption from Takings Clause inspection. Ark. Game & Fish, 568 U.S. at 38.

“The Court rejected this bright-line rule because it viewed the determination of whether

a flood results in a takings as a case-specific, factual inquiry, emphasizing that

‘[f]looding cases, like other takings cases, should be assessed with reference to the

‘particular circumstances of each case,’ and not by resorting to blanket exclusionary

rules.’” Quebedeaux, 112 Fed. Cl. at 324 (quoting Ark. Game & Fish, 568 U.S. at 37

(quoting United States v. Cent. Eureka Mining Co., 357 U.S. 155, 168 (1958))).

In Arkansas Game & Fish Commission, the Supreme Court identified several factors

for courts to consider in assessing whether there has been a taking, among them: (i) the

duration of the flooding; (ii) whether the invasion is intended or is the foreseeable result

of authorized government action; (iii) the character of the land at issue and the owner’s

“reasonable investment-backed expectations” regarding the land’s use; and (iv) the

severity of the interference. Ark. Game & Fish, 568 U.S. at 38–39. The reason for the

plaintiff should be compensated. The Supreme Court explained the basic theory in Lingle, 544

U.S. at 537–40:

Although our regulatory takings jurisprudence cannot be

characterized as unified, these three inquiries (reflected in Loretto,

Lucas, and Penn Central) share a common touchstone. Each aims to

identify regulatory actions that are functionally equivalent to the

classic taking in which government directly appropriates private

property or ousts the owner from his domain. Accordingly, each

of these tests focuses directly upon the severity of the burden that

government imposes upon private property rights. The Court has

held that physical takings require compensation because of the

unique burden they impose: A permanent physical invasion,

however minimal the economic cost it entails, eviscerates the

owner’s right to exclude others from entering and using her

property—perhaps the most fundamental of all property interests.

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application of an ad hoc, multifactor test in flooding cases is that, as Loretto itself

recognized, “[n]ot every physical invasion is a taking.” 458 U.S. at 435 n.12 (emphasis in

original). “[T]he intermittent flooding [and other] cases reveal [that] such temporary

limitations are subject to a more complex balancing process to determine whether they

are a taking. The rationale is evident: they do not absolutely dispossess the owner of his

rights to use, and exclude others from, his property.” Id. (citing PruneYard Shopping

Center v. Robins, 447 U.S. 74 (1980), and Kaiser Aetna v. United States, 444 U.S. 164 (1979)).

Thus, it is hardly surprising that the “the multi-factor approach of Arkansas Game . . .

shares certain features of the Penn Central analysis.” Caquelin v. United States, 959 F.3d

1360, 1366, 1370 (Fed. Cir. 2020) (explaining that “[g]overnment-induced flooding

therefore comes within the rationale for more flexible takings standards” in

“recognition of ‘the nearly infinite variety of ways in which government actions or

regulations can affect property interests’” (quoting Ark. Game & Fish, 568 U.S. at 31)).

This Court also has recognized the similarity between flooding cases and

regulatory takings, with Senior Judge Bruggink insightfully observing that “flooding

cases have been treated as sui generis in takings analysis due to their similarity to tort

actions[.]” Banks v. United States, 138 Fed. Cl. 141, 147–48 (2018) (explaining that in Ark.

Game & Fish, 568 U.S. 38–40, “the Court viewed temporary physical takings as similar to

regulatory takings in that both involve a balancing of various factors to determine ‘the

existence vel non of a taking’” and that “[t]hese factors include time, foreseeability,

severity, the character of the land at issue and the owner’s reasonable expectations”).

A takings claim based on alleged chemical contamination of real property is

subject to a multifactor test similar to that employed in the flooding takings cases,18 as a

“plaintiff first must show that treatment under takings law [as opposed to tort law] is

appropriate.” Moden, 404 F.3d at 1342 (applying Ridge Line, Inc. v. United States, 346 F.3d

1346, 1355 (Fed. Cir. 2003)). The Federal Circuit explained the applicable test as follows:

First, [the plaintiff] must show either that the government

intended to invade a protected property interest or that the

asserted invasion is the direct, natural, or probable result of

an authorized activity and not the incidental or consequential

injury inflicted by the activity. Second, it must show that the

invasion appropriated a benefit to the government at the expense

of the property owner, at least by preempting the property

18Cf. Cary v. United States, 552 F.3d 1373, 1377, 1380 (Fed. Cir. 2009) (noting that Ridge Line’s

“language developed from the long history of the Supreme Court’s flooding cases” and

applying the test where “the government did not intend to take the landowners’ land by use of

an uncontrolled wildfire”).

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owner’s right to enjoy its property for an extended period of

time, rather than merely by inflicting an injury that reduces the

property’s value. If treatment under takings law is appropriate,

the inverse-condemnation plaintiff must then “show that it

possessed a protectable property interest in what it alleges the

government has taken.”

Moden, 404 F.3d at 1342 (emphasis added) (internal citations omitted) (citing and

quoting Ridge Line, 346 F.3d at 1355).

With these principles in mind, the Court turns to analyzing the evidence the

Pennas presented at trial.

V. THE COURT GRANTS THE GOVERNMENT’S RCFC 52(C) MOTION

The Court concludes that the evidence the Pennas presented at trial, at best,

sketches out a possible tort, but falls far short of proving a compensable Fifth

Amendment takings claim pursuant to the Federal Circuit’s Moden and Ridge Line tests,

which articulate the applicable legal standard for recovery in this case. Moreover, even

if the Pennas had demonstrated a taking of some sort of property right, their case

entirely flounders on the issue of damages (i.e., just compensation). Indep. Park

Apartments v. United States, 465 F.3d 1308, 1311 (Fed. Cir. 2006) (acknowledging “the

rule that takings damages are limited to just compensation for what was taken and do

not encompass consequential damages” (citing City of Monterey v. Del Monte Dunes at

Monterey, Ltd., 526 U.S. 687, 711 (1999), and Yuba Natural Res., Inc. v. United States, 904

F.2d 1577, 1581 (Fed. Cir. 1990))).

A. The Pennas Failed To Prove A Compensable Taking

Before applying law to fact, we briefly summarize once again the nature of the

Pennas’ central, if not only, claim. It is straightforward. The Pennas assert that the

government “improperly disposed of contaminants and hazardous substances” that

“have invaded and contaminated Plaintiffs’ property.” Compl. ¶ 6. The contamination,

allege the Pennas, has “left . . . their property virtually valueless.” Id. ¶¶ 18, 27 (“The

contamination of Plaintiffs’ property and water supply has caused permanent and

irreparable damage to Plaintiffs’ property to the point where their property is virtually

valueless and, therefore, amounts to a taking without just compensation.”); 33.a

(requesting judgment of “[c]ompensation in an amount greater than $1,000,000.00 be

awarded to Plaintiffs for the taking of their property”). To be clear, the Pennas’

complaint itself focuses only upon the Property as a whole and asserts that the

government effectively has taken the Property’s entire value. In particular, the Pennas

- 18 -

assert that “[b]ecause the property is permanently contaminated, not eligible for a

mortgage, and there are no comparable sales of contaminated properties, it has no

market value.” Pl. Memo. ¶ 113.

A perennial problem in takings cases – as highlighted in the Court’s summary of

takings law, supra – is selecting the appropriate legal lens for analyzing the claims and

facts at issue in a particular matter. In that regard, “[b]oth the federal district courts and

[this Court] have struggled throughout the years to establish and appropriately apply a

test to distinguish torts brought against the United States from constitutional takings.”

Alexandra K. McLain, Choose Your Path to Recovery Against the United States: Torts v.

Takings, 22 Lewis & Clark L. Rev. 1063, 1064, 1066 (2018) (“Because takings

jurisprudence is somewhat dependent on the basic elements of tort law, drawing the

line between takings and torts has caused a great deal of confusion in the courts.”

(footnotes omitted)); see also Hansen v. United States, 65 Fed. Cl. 76, 79 (2005) (“One issue

that has over the decades divided this court is the distinction between torts and takings

under the Takings Clause of the Fifth Amendment. The distinction is important

because this court has jurisdiction over taking claims under the Tucker Act, but not over

tort actions.” (footnotes omitted)). In Hansen, this Court provided a lengthy, scholarly

review as part of its critique of the state of takings law:

Despite the Serbonian Bog into which the takings

jurisprudence of this court has fallen, the historical origin and

application of the basic principles of takings jurisprudence

reveal that there is no clear cut distinction between torts and

takings. The best that can be said is that not all torts are

takings, but that all takings by physical invasion have their

origin in tort law and are types of governmental nuisances or,

at times, trespasses.

65 Fed. Cl. at 80. While Hansen concluded that “resort[ing] to the historic development

of takings jurisprudence is . . . essential to resolving the conundrum facing the court[,]”

id. at 80, we may dispense with any further historical review here because the Federal

Circuit has provided us with clear direction in Ridge Line and Moden, both of which

reflect the Supreme Court’s approach in flooding cases: they are not treated as per se

physical takings. Hansen, 65 Fed. Cl. at 97 (noting that “[i]n Ridge Line, the Federal

Circuit neatly summarized the tort-taking distinction test”). 19

19 Whether we have since escaped from the proverbial bog in some narrow respect or sunken

deeper into it is a question we leave for the Federal Circuit and the Supreme Court. See Bridge

Aina Le’a, LLC v. Hawaii Land Use Comm’n, 141 S. Ct. 731 (2021) (Thomas, J., dissenting from denial

of certiorari) (critiquing the Supreme Court’s regulatory takings jurisprudence on the grounds

- 19 -

Like the plaintiffs in Moden, the Pennas “do not attempt to show that the

government actually intended to invade a protected property interest.” Moden, 404 at

1342 (emphasis added). Accordingly, the Pennas must show: (1) “that the asserted

invasion is the direct, natural, or probable result of an authorized activity and not the

incidental or consequential injury inflicted by the activity”; and (2) “that the invasion

appropriated a benefit to the government at the expense of the property owner, at least

by preempting the property owner’s right to enjoy its property for an extended period of time,

rather than merely by inflicting an injury that reduces the property’s value.” Id.

(emphasis added).20

In Moden, the Federal Circuit concluded that because there was “no genuine

issue of material fact either that the government intended to contaminate the Modens’

ranch or that the contamination of the Modens’ ranch [was] the direct, natural, or

probable result of the authorized use” of the chemical at issue, the court found “it

unnecessary to address whether the contamination of the Modens’ ranch preempted the

Modens’ right to enjoy their property for an extended period of time, rather than merely

by inflicting an injury that reduces its value.” 404 F.3d at 1346. The Federal Circuit

similarly found “it unnecessary to address whether the Modens possessed a protectable

property interest in what they allege the government has taken.” Id.

In this case, the Court takes the opposite approach. We find it unnecessary to

decide the various questions of foreseeability and causation, 21 but rather conclude that,

based upon the evidence presented at trial, the Pennas failed to demonstrate that the

government either appropriated a benefit at their expense or inflicted any concrete

that “nobody—not States, not property owners, not courts, nor juries—has any idea how to

apply this standardless standard”). Justice Thomas continued: “These starkly different

outcomes based on the application of the same law indicate that we have still not provided

courts with a ‘workable standard.’ . . . A know-it-when-you-see-it test is no good if one court

sees it and another does not.” Id. at 731–32.

20These elements – adapted from Ridge Line – “set out a two part test that can be characterized

as causation and appropriation.” Cary, 552 F.3d at 1376–77.

21“[P]roof of causation, while necessary, is not sufficient for liability in an inverse

condemnation case . . . In addition to causation, an inverse condemnation plaintiff must prove

that the government should have predicted or foreseen the resulting injury.” Moden, 404 F.3d at

1343.

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injury or quantifiable harm in terms of their use of the Property or its value. 22 Thus,

“treatment under takings law” is unwarranted here. Ridge Line, 346 F.3d at 1355.23

For instance, in Ridge Line, the government effectively “shifted some of its storm

water control costs to Ridge Line.” 346 F.3d at 1358. “By covering much of its land with

impervious surfaces but failing to build water retention facilities, the government . . .

forced Ridge Line to build larger, more expensive control facilities in South Hollow

than would otherwise have been necessary.” Id. In other words, the government in

that case not only avoided certain costs, but effectively transferred them to the plaintiff

property owner. The Pennas advance a similar contention, arguing that the

government appropriated a benefit at the Pennas’ expense by using their Property as a

“receptacle for untreated AFFF wastewater,” rather than “incur[ring] the time and

expense to handle [the] AFFF properly.” Pl. Resp. at 8. The Pennas presented no

evidence, however, supporting the claim that the government imposed any costs on

them due to AFFF contamination. Indeed, the Pennas have not presented any evidence

that the government was required to dispose of AFFF (at the time of its use) in any

particular manner, as the chemicals at issue were not, and are not, identified or

regulated as hazardous by CERCLA, RCRA, or Pennsylvania’s HSCA. See JX 42 at

US00066429; Giovanni, 433 F. Supp. at 746 (holding that PFOS and PFOA do not

constitute hazardous substances under Pennsylvania’s HSCA). Nor did the Pennas

present any evidence regarding the necessity, requirement, or the cost of any

remediation of the contamination of their Property.

At a minimum, the Pennas must demonstrate that the government interfered

with their use and enjoyment of the Property in such a way as to effectuate a taking. See

Taylor v. United States, 959 F.3d 1081, 1090 (Fed. Cir. 2020) (considering whether

overhead flights “directly, immediately, and substantially interfered with the claimant’s

enjoyment and use of the land” (emphasis added) (citing Brown v. United States, 73 F.3d

22 This appropriation prong, as explained at length supra, “developed from the long history of

the Supreme Court's flooding cases.” Cary, 552 F.3d at 1380–81 (citing cases and explaining that

“[t]o satisfy the appropriation requirement, the preemption must be sufficiently permanent that

it can be said that the government has exercised dominion over the property”); see also Sandra B.

Zellmer, Takings, Torts, and Background Principles, 52 Wake Forest L. Rev. 193, 205 (2017) (“Cases

where temporary invasion or damage to private property results from a government action, but

where the government had no actual intent to damage the property, much less to occupy it,

pose the greatest difficulties for courts attempting to distinguish between a tort and a taking.

Damages caused by flooding often fall within this legal purgatory.”).

23See Hansen, 65 Fed. Cl. at 101 (“The real key to the distinction between mere torts . . . and

takings by the government is the substantiality of the harm, not the nature of the actions leading

to that harm. . . . [O]ne can imagine a theoretical continuum on which torts become takings

when a certain threshold of substantial interference with property is reached.”).

- 21 -

1100, 1102 (Fed. Cir. 1996))); Ridge Line, 346 F.3d 1346 at 1357 (examining “whether the

government’s interference with any property rights . . . was substantial and frequent

enough to rise to the level of a taking” (emphasis added)); cf. Argent v. United States, 124

F.3d 1277, 1284 (Fed. Cir. 1997) (holding that when “plaintiffs complain of a peculiarly

burdensome pattern of activity . . . that significantly impairs their use and enjoyment of

their land, those plaintiffs may state a cause of action [for inverse condemnation]”). The

Pennas have not done so.

The Pennas provide no evidence for their contention that the government

substantially interfered with their use of their Property, and Mr. Penna’s own testimony

undermines any such assertion. For example, while the Pennas alleged that their water

supply “came entirely” from their well, which was used “for all domestic purposes”

until the AFFF contamination was discovered in 2014, see Compl. ¶¶ 20–21, the

evidence is clear that the Property was connected to public water by 2010 to address a

water pressure issue, and not due to AFFF contamination concerns. Tr. 215:11–216:6;

Tr. 197:21–198:7. Moreover, Mr. Penna acknowledged that even after receiving

sampling results from the private well, which indicated elevated levels of PFOA and

PFOS, the Pennas continued to use their well to water plants on the Property and to

wash their vehicles, just as they had done before. Tr. 232:6–233:12. Mr. Penna’s

business, operated from his garage, was similarly unaffected, as he continued to use the

garage for his business and home office even after receiving testing results in October

2014. Tr. 231:21–232:5. Although the Pennas contend that the PFOS levels in the surface

water constitute a loss of usefulness of the Property, they also acknowledge that they do

not use the surface water, and they do not otherwise prove how contaminated surface

water substantially impairs their use of the Property or its value. See Pl. Resp. at 10.

Moreover, the Pennas in their pretrial memorandum raised a concern about their

inability to subdivide the Property, Pl. Memo. ¶ 109, but they never demonstrate that

the contamination caused or created any obstacle to subdividing their Property. Tr.

205:1-13. Accordingly, the Pennas’ assertion that their Property could not “be

subdivided to construct town homes” because “it was impossible without getting a

clean environmental bill of health” is not supported by any objective, documentary

evidence. Pl. Memo. ¶ 109.

The Pennas’ further assertion that “[a]n offer to purchase the Property for

$746,000 was made, contingent on a $475,000 mortgage, and was then withdrawn” is

false. Id. ¶ 110. As detailed above, the offer made to the Pennas was for $725,000, not

$746,000, and it was not withdrawn but rather lapsed when the Pennas did not accept it

in a timely fashion. The failed transaction had nothing to do with environmental

problems, Stip. ¶ 31, and there is no evidence that it fell through because of the inability

- 22 -

of the would-be buyers to obtain a mortgage. 24 To the contrary, the Pennas’ real estate

agent urged the Pennas to “return [the] completed paperwork asap” because “[a]s you

know timing is very important[.]” DX 324. If anything, then, the evidence suggests that

the Pennas’ failure to accept the offer in a timely manner – even if that would have

required some sort of environmental disclosure, see id. – was the cause of the transaction

not proceeding. To the extent Plaintiffs generally had trouble selling the Property, that

is more explainable by Mr. Cuker’s admission that “[o]bviously, there were other issues

with the property, which have been brought out. There was a zoning issue; there was a

title issue.” Tr. 295:16–19.

In any event, as noted supra, the Pennas’ case – both as a legal and evidentiary

matter – “focused on loss of value [of the Property].” Tr. 229:16-18 (Plaintiff’s counsel,

Mr. Cuker, noting that other alleged impacts to the Property or the Pennas’ use of it

“are ancillary things that don’t go to the core of the case”). In particular, the Pennas’

central thesis is that because “potential buyers can’t obtain financing, the property can’t

be sold. The property is not marketable if it’s not mortgageable.” Tr. 29:1-3 (Mr.

Cuker’s argument). Mr. Cuker conceded,25 however, that Pennsylvania law does not

preclude the Property from being sold even in its allegedly contaminated state. Tr.

29:10. Moreover, neither the Pennas themselves nor their experts provided any credible

testimony to establish that the Property is not mortgageable, unsellable, or otherwise

valueless. The Pennas’ own appraisal expert, Mr. Hosey, conceded that “none of the

improvements to the Penna property lost their utility in the as-contaminated scenario.”

Tr. 520:13–25. While Mr. Penna testified that the family stopped gardening on the

Property and stopped drinking the well water due to AFFF contamination, see Tr. 201:6–

15, Mr. Cuker conceded that he did not “think the mere inability to garden, by itself,

would rise to the level of a taking.” Tr. 229:19–230:3. The Pennas may have made the

personal decision – out of an abundance caution – to cease gardening on the Property

due to concerns with surface or well water contamination, but there is little evidence

supporting the necessity of that choice; in fact, the EPA specifically found that PFOS

24The Pennas similarly assert that they “have not attempted to rent their house out for domestic

use, because they are concerned that it is not safe for children to play in the backyard, or for the

owners to plant vegetables in the garden or drink from the well that services the garage.” Pl.

Memo. ¶ 111. The Pennas make no attempt to reconcile that purported reluctance with their

attempt to sell the Property, nor do they – or any of their expert witnesses – attempt to explain

the relevance of this putative fact to their overall theory of the taking here: that the

contamination rendered the Property not mortgageable and thus valueless.

25See Minter v. Wells Fargo Bank, N.A., 762 F.3d 339, 347 (4th Cir. 2014) (“‘[A] lawyer's statements

may constitute a binding admission of a party[ ]’ if the statements ar e ‘deliberate, clear, and

unambiguous[.]’” (quoting Fraternal Order of Police Lodge No. 89 v. Prince George's Cty., Md., 608

F.3d 183, 190 (4th Cir. 2010))).

- 23 -

and PFOA were unlikely to be taken up by plant roots. DX 273. That is not to say that

the Court questions the Pennas’ sincerity of concern or prudence, but their well-

intentioned precaution alone does not support a takings claim. Further, with respect to

the well water, specifically, the Navy effectively remediated any issue by providing

bottled water to the Penna Property following the notice of AFFF contamination. Tr.

203:4–6. Indeed, one of Plaintiffs’ exhibits admitted into evidence at trial indicates that

while the Pennas’ “well water is not to be used for drinking or cooking purposes[,]”

they are “already hooked up to public water” and thus “no further action is required.”

PX 85 (March 13, 2015 letter from Navy to Mr. Penna). 26 And in opposing the

government’s pending RCFC 52(c) motion, rather than supporting with evidence their

sweeping allegation that contamination interfered with their use of the Property, the

Pennas merely posed a string of rhetorical questions regarding the speculative concerns

a hypothetical buyer might have in purchasing a contaminated property. 27 See Pl. Resp.

at 10. Such rhetorical questions do not constitute evidence.

The Pennas’ experts also provided no credible testimony that contamination

substantially interfered with the Pennas’ use of their Property. Tr. 520:9–25. Indeed,

Mr. Cammarata, one the Pennas’ expert witnesses, testified that “heightened anxiety is

the only reason why [he] feel[s] that PFOS and PFOA impair[] the use or enjoyment of

the Penna property[.]” Tr. 375:12-15 (emphasis added). Mr. Cammarata is not a

medical doctor or a psychologist and, further, he admitted that at least one mortgage

regulator has never “associated anxiety as being incompatible with enjoyment of the

property.” Tr. 376:2-5. There is no evidence that any bank or regulator examines a

property owner’s anxiety when determining whether a property may be mortgageable.

In any event, Mr. Cammarata did not examine the effects of an owner’s anxiety on

property value, a cause-and-effect that, if asserted, is dubious on its face. In that regard,

Mr. Cammarata admitted that “the Penna property can be used for residential purposes

26See also PX 57 (June 9, 2016 Letter from Horsham Township Council) (“All water proved by

[Horsham Water and Sewer Authority] meets or exceeds all state and federal drinking water

quality standards, and all nine of our active wells in Horsham show PFC levels significantly

below the new EPA . . . [a]dvisory.”).

27Under the heading “Plaintiffs Presented Evidence of Loss of Usefulness,” the Pennas cite no

substantive evidence whatsoever from the record, instead simply posing the following

questions: “The Government dismisses [the PFOS contamination levels in the surface water] by

saying that the Pennas do not use surface water. . . . True, but how would a prospective

purchaser or renter with minor children feel about living on a property with standing water

contaminated above the human health screening level? And what lender would accept a

property with such contamination as collateral for a mortgage?” Pl. Resp. at 10. If anything, the

suggested answers to those very questions are what the Pennas were required to, but did not,

prove.

- 24 -

despite the presence of PFOS and PFOA[,]” which of course is more consistent, if

anything, with the government’s view that the Property is marketable. Tr. 376:10-14.

Mr. Cammarata ultimately concluded that because the Penna Property was

contaminated by an immitigable hazard, it was not eligible for a mortgage. Tr. 364:1 –4.

Notably, however, Mr. Cammarata conceded that he did not investigate whether PFOS

or PFOA were present in properties near the Penna Property, nor did he know whether

the owners of other properties impacted with PFOS or PFOA were nevertheless able to

obtain a mortgage. Tr. 372:6–13. He conceded that he could not identify any loan for a

single-family residence anywhere in the United States that was denied a mortgage

because of the presence of PFOS or PFOA. Tr. 379:1–6, 382:18–22, 386:16–19, 390:12–16.

On cross-examination, the government showed Mr. Cammarata a list of

properties (near the Penna Property) that had been sold despite PFOA and PFOS

contamination. Tr. 398:24–399:16; PX 131 (Slide 26 of Mr. Hosey’s direct testimony).28

Mr. Cammarata conceded that, at the time he wrote his report, he had not been aware of

the transactions. Tr. 409:18–23. Furthermore, he was unaware to what extent those

properties were contaminated with PFOA and PFOS. Tr. 410:6-10. Mr. Cammarata

attempted to distinguish the Penna Property from the properties for which buyers or

owners were able to secure mortgages (despite notice of elevated PFOS and PFOA

levels in their private wells) by opining that “public water would completely resolve

that problem.” Tr. 399:17–400:8. But, that fact would not distinguish other nearby

properties from the Penna Property insofar as the latter has been connected to public

water since 2010. Tr. 197:24–198:7. Mr. Cammarata also attempted to distinguish the

comparable properties from the Penna Property on the grounds that the Penna Property

has both a contaminated well and contaminated soil. Tr. 402:24–403:10. Mr. Cammarata

conceded, however, that he had no knowledge of whether the nearby properties had

contaminated soil in addition to contaminated wells. Tr. 410:6–10. Particularly in light

of the comparable properties which clearly are mortgage eligible, see PX 131 (Slide 26 of

Mr. Hosey’s direct testimony), the Court rejects Mr. Cammarata’s conclusion that the

Penna Property is not mortgageable due to contamination.

The Court finds that Mr. Cammarata made further concessions and admissions

on cross-examination that devastated the credibility and reliability of his opinion. For

example, he admitted that:

• he performed no analysis of FHA, VA, Fannie Mae, or Freddie Mac

transactions involving land impacted with PFOS or PFOA (Tr. 372:1-5);

28 See Tr. 597:4-8 (admitting Mr. Hosey’s presentation into evidence).

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• there is no VA document “stating that the VA considers the presence of

PFOS or PFOA a hazard under its regs” (Tr. 378:2-6);

• he “did not reach a conclusion as to whether there was no comparable

market data available” nor did he make an “attempt to identify sales of

properties affected by PFOS and PFOA” (Tr. 385:4-9);

• he does not have an opinion “on the degree to which an environmental

hazard affects the value of the property” (Tr. 391:20-23); and

• he did not appraise the Penna Property (Tr. 391:24-392:1).

Finally, Mr. Cammarata agreed that even if an appraiser were to determine that

there is a hazardous condition on a property, “the person applying for the mortgage . . .

can demonstrate that it’s not a hazard or not something that the . . . issuing bank should

be concerned about” and then the bank “has the flexibility to make that decision and

proceed with the loan anyhow.” Tr. 415:13-21. This admission further undermines

Mr. Cammarata’s opinion that a buyer cannot obtain a mortgage to purchase the Penna

Property. And even assuming that the contamination at issue would make the

mortgage process more difficult, Mr. Cammarata did not assess the relative effect of the

contamination versus the liens and other encumbrances impacting the Property. 29

The Court finds that Mr. Hosey’s testimony was equally inconsistent and

unreliable as Mr. Cammarata’s. Despite testifying as an appraisal expert in this matter,

Mr. Hosey admitted that he did not have experience appraising property with PFOA or

PFOS contamination. Tr. 466:7–12. Although Mr. Hosey described in depth the effect of

stigma on property generally – presumably to bolster the Pennas’ claim that they were

entitled “to compensation not only for the physical taking, but for diminution in value

due to stigma associated with contaminated property,” see Pl. Memo. at 61 – Mr. Hosey

readily conceded that he did not analyze the impact of environmental stigma (resulting

from PFOS or PFOA contamination) on the Penna Property. Tr. 467:22–468:7 (admitting

that he “did not monetize any stigma impact relation to the presence of PFOS or PFOA

on the Pennas’ property”). To be clear, Mr. Hosey rendered no opinion on whether

stigma impacts the Penna Property or, if so, what the financial impact may be.30 Finally,

29See Cent. R. Co. of New Jersey v. Cent. Hanover Bank & Tr. Co., 29 F. Supp. 826, 828 (S.D.N.Y.

1939) (noting that a property’s “actual value has been practically destroyed by the tax liens now

on them”); Resol. Tr. Corp. v. Cosgrove, 2001 WL 64777, at *4 (E.D. Pa. Jan. 24, 2001) (noting that

“tax liens on Deb–Mar's property . . . in turn made it difficult to sell Deb–Mar's assets”); cf.

Connecticut v. Doehr, 501 U.S. 1, 11–12 (1991) (noting that “attachments, liens, and similar

encumbrances” constitute “partial impairments to property rights”).

30 The Court reiterates that despite the Pennas’ having argued that they are entitled “to

- 26 -

and just like Mr. Cammarata, Mr. Hosey was “unable to identify any property in the

United States that was denied a mortgage because of PFOS or PFOA,” or “that did not

sell because of PFOS or PFOA.” Tr. 535:17–23.

Additionally, the government successfully undercut Mr. Hosey’s valuation

approaches by showing that his methods contradicted or ignored many of the basic

appraisal principles he had described. See, e.g., Tr. 515:2-9; Tr. 522:22–526:4; Def. 52(c)

Mot. at 26–32. For example, Mr. Hosey primarily used the sales comparison approach

for his before-contamination valuation of the Property. Tr. 492:7–12. Mr. Hosey

conceded that while “[t]he sales comparison approach typically includes techniques

such as pairing, case studies, and regression analysis, which support a percent

deduction to the unimpaired subject value,” he had not analyzed environmental case

studies in determining his after-contamination valuation for the Penna Property, nor

did he perform any kind of regression analysis or a paired sales analysis for the after-

contamination valuation. Tr. 526:12–527:7. Mr. Hosey also admitted that he did not

calculate the independent, negative impact of the recurring flooding on the value of the

Property. Tr. 580:2–18.

Mr. Hosey also failed to distinguish the Penna Property from the comparable

properties that sold for consideration after the Navy issued a notice of contamination

(notably, properties that the government identified, but that Mr. Hosey failed to assess

as part of his appraisal). 31 Tr. 464:20–465:11. Mr. Hosey insisted that while “there

[were] sales of properties that were contaminated and then moved to a public water

system,” in those cases “their contamination was cured, not ongoing like the Pennas.”

Tr. 464:20–23. He further explained that a cash buyer likely would not purchase the

Penna Property and that there was no way to adequately remediate the contamination.

Tr. 464:7–9, 13–15. As discussed, supra, the Penna Property was in fact connected to

public water and thus “cured” of any contamination, according to Mr. Hosey’s own

standard. Furthermore, there is no evidence that the Penna Property requires any

additional remediation, let alone any attempt by the Pennas to quantify the cost of such

remediation; Mr. Hosey simply did not compute or otherwise account for any cost to

cure the contamination. While he opined “that there is no cure for the contamination on

compensation not only for the physical taking [of their Property], but for diminution in value

due to stigma associated with contaminated property,” Pl. Memo. at 61, the Pennas presented

no evidence at trial to substantiate any “diminution in value due to stigma.”

31The government identified ten nearby properties that sold for consideration ranging between

$212,000 and $620,000 despite PFOA and PFOS contamination. Tr. 549:20–550:7; PX 131 (Slide

26 of Mr. Hosey’s direct testimony). Mr. Hosey acknowledged that he had not located those

properties during his appraisal and instead had been shown them for the first time at his

deposition. Tr. 544:23–545:13.

- 27 -

the Penna property” because “[t]he Pennas have no control over the contamination[,]”

Tr. 516:11-15 – a point which may well qualify as a non-sequitur – Mr. Hosey is not an

environmental engineer, a hydrologist, or a toxicologist. Tr. 516:16-19. Accordingly, the

Court concludes that Mr. Hosey cannot render an opinion on the need for a cure or

remediation, the feasibility of any cure or remediation, or any associated probable costs.

Tr. 519:14-17 (admitting in any event that he does “not present remediation costs in [his]

appraisal of the Penna property”). 32

Mr. Hosey also sought to distinguish the comparable properties the government

identified by claiming that “[n]one of [those] other properties have contaminated

tributaries that run through the property and overflow their banks with every heavy

rain [or] . . . have soil with documented contamination.” Tr. 465:2–5. But Mr. Hosey

ultimately conceded that, despite his bald assertion, he was unaware of whether the

other nearby properties in fact had contaminated soil or flooded in heavy rain. Tr.

551:15–21. Again, Mr. Hosey is not an expert in hydrology, mortgage regulations, or in

conducting or reviewing appraisals of property with PFOS or PFOA. Tr. 466:7 -17.

Perhaps Mr. Hosey’s most critical concession, however, was that “under the highest and

best use criteria, residential use of the Penna property in the after [contamination]

scenario was still legally permissible” and “physically possible[.]” Tr. 507:7 -14.33

In the end, the most damaging blow to Mr. Cammarata’s and Mr. Hosey’s

respective opinions is the fact that they are all but circular: the bottom line of each

expert rests to a significant extent on the uncritical, wholesale acceptance of the other’s

conclusion. Def. Mot. at 14-15. Mr. Cammarata’s testimony is that the Penna Property

“is not an eligible, mortgageable property.” Tr. 364:1-3. But, Mr. Cammarata “does not

opine on the ability to sell a nonmortgageable property[.]” Tr. 391:17-19; PX 130 (“I will

let a qualified appraiser comment on the market value and the ability to sell a

nonmortgageable property.”). The Pennas relied upon Mr. Hosey to fill in the gap; he

testified that “[t]he saleability and the market value of a non-mortgageable property is

very questionable . . . .” Tr. 463:14-17. Mr. Hosey admitted, however, that he based his

32 Mr. Hosey’s conclusion, in that regard, is inconsistent with that of Mr. Cammarata, who, in

reliance upon Mr. Mulhall, concludes only that “it may not be possible to remove these

compounds in the environment beneath and surrounding the Penna property . . . .” PX 130 at 6

(italics added, bold in original). Such speculative musings are an insufficient basis for the Court

to conclude that any contamination cannot be remediated, even assuming such r emediation

were required for health, safety, or by law.

33 Although Mr. Hosey during trial denied that the “residential use of the Penna property was

still an economic use in the after [contamination] scenario,” Tr. 507:15–24, counsel for the

government impeached the witness by pointing to his deposition testimony in which he

admitted that residential use was an “economically profitable . . . use of the land.” Tr. 508:2–11.

- 28 -

“ultimate conclusion of zero market value on Mr. Cammarata’s mortgagability

conclusion[.]” Tr. 510:8-12; see also Tr. 510:13-19; PX 131 at 23. In that regard, Mr. Hosey

admitted in his deposition – which the government employed at trial for impeachment

purposes – that (1) “Mr. Cammarata’s report, in and of itself, included a zero valuation,

and [Mr. Hosey] adopted that conclusion” (Tr. 510:20-511:5), and (2) Mr. Hosey “made

no attempt to verify Mr. Cammarata’s conclusion that the Penna property had no

market value or saleability[.]” Tr. 511:6-11; see also Tr. 513:6-11 (Mr. Hosey conceding

that “there was nothing in [his] report that would tell the reader that [he] based [his]

opinion of lack of saleability and lack of marketability on [his] experience”). 34 But Mr.

Cammarata never opined on market value. PX 130. Mr. Cammarata thus relies upon

Mr. Hosey’s testimony that the property cannot be appraised (due to contamination) in

order to conclude that the property is not mortgageable, while Mr. Hosey relies upon

Mr. Cammarata’s testimony that the Penna Property is not mortgageable in concluding

that the Property is not sellable and therefore valueless.35 Accordingly, the Court

concludes that Mr. Cammarata’s and Mr. Hosey’s testimonies – both individually and

collectively – fall far short of proving the Pennas’ case.

The Pennas’ own actions with regard to the prospective sale of their Property

further undermine Mr. Penna’s assertion that the Property, in its contaminated state, is

worth “zero.” Tr. 208:17–21. Although Mr. Penna opined that the Penna Property is

“not worth anything today,” id., the Court rejects his assessment. Indeed, on August 23,

2018, the Pennas received an offer to purchase the Property for $725,000 – an offer

which they did not accept in a timely manner and, thus, allowed to lapse. While we do

not know whether the sale would have closed if the Pennas had accepted the offer in a

timely manner, the Pennas – during the pendency of this case, in which they claim their

Property is worthless – actually returned a counteroffer to the potential buyer that was

34Additionally, Mr. Hosey references several of Mr. Cammarata’s putative conclusions that the

latter denies having reached. Compare, e.g., Tr. 535:7–16 (Mr. Hosey’s testimony that Mr.

Cammarata reached all of the points listed on Mr. Hosey’s slide 22), PX 131 (Slide 22 of Mr.

Hosey’s direct testimony) (listing six conclusions, including the statement that “[d]espite a

diligent search of the market, I was not able to discover a comparable sale or listing after

contamination”), with Tr. 392:4–6 (Mr. Cammarata’s admission that he did not research

comparable sales for the Penna Property). Thus, the Court agrees that “[t]o the extent that Mr.

Hosey’s analysis incorporates these phantom Cammarata conclusions as a factual predicate or

valid assumption, Mr. Hosey’s opinion is unreliable.” Def. 52(c) Mot. at 15.

35The Pennas cite Apple Inc. v. Motorola Inc., 757 F.3d 1286, 1320–1322 (Fed. Cir. 2014), to defend

Mr. Hosey’s and Mr. Cammarata’s reliance upon one another in reaching their conclusions. Pl.

Resp. at 25. Apple, however, referenced only the truism that one expert may rely on another

“for expertise outside of [his] field.” Id. at 1321. The court did not condone circular expert

testimony devoid of independent analysis in which each expert simply relies on the opinions of

the other as a predicate for his own conclusions.

- 29 -

more than $20,000 higher than the prospective buyer’s offer. Stip. at ¶ 21. While “[i]t is

the general rule that evidence of specific offers of purchase is not admissible for the

purpose of establishing the reasonable market value of property,” United States v.

Regents of N. M. Sch. of Mines, 185 F.2d 389, 391 (10th Cir. 1950), “[i]t is well settled that

an offer to sell property at a certain price may be proved against the owner as an

admission of its value at or near the time of the offer.” Erceg v. Fairbanks Expl. Co, 95

F.2d 850, 854 (9th Cir. 1938) (citations omitted). And even if the rejected purchase offer

of $725,000 and the subsequent counteroffer do not definitively prove the Property’s

value, they are probative of what the Pennas believed their Property was worth. Put yet

differently, had the Pennas truly believed that the Property had been rendered

worthless, they would have jumped at the $725,000 offer and not allowed it to lapse.

That the Pennas allowed the offer to expire – and, indeed, returned a higher counteroffer

to the prospective buyers – demonstrates, at the very least, that not even the Pennas

actually believed their Property is worthless.

The Pennas primarily rely on Sharp v. United States, 191 U.S. 341 (1903), for the

proposition that unaccepted offers are not admissible to prove market value. Pl. Resp.

at 22–23. The reasoning underlying the Supreme Court’s decision in Sharp is inapposite.

In Sharp, the Court emphasized the fact that an offer was, “at most, a species of indirect

evidence of the opinion of the person making such offer as to the value of the land.” Id. at

348 (emphasis added). The Court thus rejected an unaccepted offer as “too uncertain,

shadowy, and speculative to form any solid foundation for determining the value of the

land.” Id. at 348–49. The circumstances surrounding the offer to purchase the Penna

Property, however, do not suffer from the same deficiencies. In fact, the Pennas

themselves employed the purchase offer as an exhibit, rather than objecting to its

admissibility as the party opposing admissibility apparently did in Sharp. Accordingly,

the Pennas have waived any objection to the admissibility of the offer. See Def. Rep. at

20 (“[T]here are no questions of admissibility here, as the parties jointly prepared and

filed the stipulation, and all of its referenced documents are already part of the factual

record.”). The Court thus concurs with the government that the Court may consider

those documents “probative of whether Plaintiffs have met their burden of showing

that the property is ‘virtually valueless,’ and specifically may consider it probative of

the truthfulness of Mr. Penna’s testimony and the credibly of Mr. Hosey’s analysis . . . .”

Id. at 21.

Even if the Pennas had not waived such an admissibility objection, however, the

offer would be admissible in any event in the instant case. In that regard, Sharp

recognized that, depending upon the circumstances, a purchase offer may be

admissible. Id. at 349 (“To be of the slightest value as evidence in any court, an offer

must, of course, be an honest offer, made by an individual capable of forming a fair and

- 30 -

intelligent judgment, really desirous of purchasing, entirely able to do so, and to give

the amount of money mentioned in the offer, for otherwise the offer would be but a

vain thing.”); see also Nat'l Exch. Bank & Tr. Tr. for Fife Fam. Tr. A v. Petro-Chem. Sys., Inc.,

2013 WL 12180537, at *7 (E.D. Wis. Oct. 7, 2013) (explaining that “Sharp addressed the

admissibility of “[o]ral and not binding offers,” and distinguishing Sharp where “the

offers were written and, if accepted, binding upon the parties”). In the instant case, to

employ language from Sharp, “the owner himself, while declining the offer, really

believed in the good faith of the party making it, and in his ability and desire to pay the

amount offered,” as opposed to having been “regarded as a mere idle remark, not

intended for acceptance . . . .” 191 U.S. at 349. Again, at a minimum, the bona fide

purchase offer is relevant here to show what the Pennas themselves believed regarding

the value of their Property at the time they received the offer, allowed it to lapse, and

then countered with a higher amount – all of which occurred while this case was

pending, and during which time the Pennas consistently have claimed their Property is

valueless. See Republican Newspaper Co. v. Nw. Associated Press, 51 F. 377, 379 (8th Cir.

1892) (“[T]he fact [is] that when such property is for sale [and] parties are ready to buy

it[,] [it] shows that it has a value, and the price offered tends to prove what such value

is. In other words, proof of offers to purchase at given prices, made in good faith, is

some evidence of the actual value of the article sought to be purchased, as well as of its

salability.”); 50–Off Stores, Inc. v. Banques Paribas (Suisse), S.A., 180 F.3d 247, 255 (5th Cir.

1999) (offer for a significant amount of shares from a “legitimate buyer” appropriately

considered by jury in assessing damages); In re Grueneich, 400 B.R. 680, 687 (B.A.P. 8th

Cir. 2009) (“an offer to purchase an asset would normally constitute strong evidence of

the asset’s value, even if there is only one such offer made”); Ner Tamid Congregation of

N. Town v. Krivoruchko, 2009 WL 10696538, at *7 (N.D. Ill. July 9, 2009) (“whatever the

appropriate measure of damages, the $2 million offer might be admissible on the

question of the fair market value”).

B. The Pennas Erroneously Rely Upon Intentional, Direct, Physical

Takings Cases

Although the Pennas repeatedly concede that the Ridge Line framework governs

this case,36 the Pennas rely on several inapposite cases involving direct physical takings

to support their contention that the government appropriated a benefit at the Pennas’

expense by “channel[ing]” AFFF in the direction of the Property. Pl. Resp. at 8. Even

assuming that characterization of the government’s actions is accurate, to the extent that

the Pennas continue to maintain that the government’s conduct constitutes a per se

physical taking, see Pl. Memo. at 61, the Court rejects that argument. The Ridge Line and

36 See Pl. Memo. at 48–49, 58–60, 62, 64, 66; see also Pl. Resp. at 7, 9, 15, 37.

- 31 -

Moden cases – and the similar line of flooding cases upon which Moden is ultimately

based – provide the correct lens with which to view the Pennas’ takings claim, and not

the Loretto line of intentional, per se physical takings cases. As the government suggests,

and the Supreme Court’s decisions confirm, the Pennas’ approach to the case law “seeks

to swallow that distinction.” Def. 52(c) Mot. at 11.37

In the first case the Pennas cite,38 Bassett New Mexico LLC v. United States, 55 Fed.

Cl. 63 (2002), the government actually conceded liability for a physical taking after the

EPA deliberately stored contaminated soil on three acres of the plaintiff’s property

under the mistaken belief that the plaintiff had consented to such use. 55 Fed. Cl. at 66.

Bassett is inapposite here. Not only has the government not conceded liability in this

case, but also the government did not intentionally use the Penna Property for the

storage of any substance, let alone a hazardous one that otherwise would have required

the government to incur disposal or remediation costs. Simply put, Bassett involved an

intentional government act, resulting in a physical taking. Although, as noted above,

the Court does not reach the question of foreseeability or intentionality here, the

government conduct at issue in Bassett is not comparable to the government’s conduct

in this case, which is governed by the Moden, Ridge Line, and Arkansas Game & Fish

Commission tests, as opposed to the direct, physical taking cases. Bassett, 55 Fed. Cl. at

68 (“Plaintiff alleges, and the United States concedes, that the EPA’s removal action

constituted an uncompensated physical taking of Bassett's property.”). Moreover, even

if Bassett somehow were applicable to the facts of this case, Senior Judge Smith in Bassett

recognized that “compensable damages . . . require[] the Court to measure the degree to

which the removal action deprived Plaintiff of the value of each use constituting the

overall highest and best use of the Property before the removal action.” 55 Fed. Cl. at

69. Here, in contrast, the Pennas provided no such credible evidence of compensable

damages.

37 As explained above, see Banks, 138 Fed. Cl. at 147–48, the rationale of the chemical

contamination and flooding takings decisions makes them similar to, and analogues of, the

regulatory takings cases. “A regulatory restriction on use that does not entirely deprive an

owner of property rights may not be a taking under Penn Central.” Horne, 576 U.S. at 364 (“That

is why, in PruneYard Shopping Center v. Robins, 447 U.S. 74, 100 S. Ct. 2035, 64 L.Ed.2d 741 (1980),

we held that a law limiting a property owner’s right to exclude certain speakers from an already

publicly accessible shopping center did not take the owner’s property.”). In PruneYard, “[t]he

owner retained the value of the use of the property as a shopping center largely unimpaired, so

the regulation did not go ‘too far.’” Horne, 576 U.S. at 364 (quoting PruneYard, 447 U.S. at 83

(internal quotes omitted)). The Pennas cannot avoid Ridge Line and Moden by redefining at trial

the putative property interest at issue.

38 See Pl. Resp. at 8.

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The Pennas cite Waverley View Invs., LLC v. United States, 135 Fed. Cl. 750, 798

(2018), aff’d, 767 F. App’x 996 (Fed. Cir. 2019), for the proposition that the government

cannot unilaterally burden a plaintiff with removing governmental material – in

Waverley, monitoring wells – placed on private property. Pl. Resp. at 8–9. Just like the

Bassett decision, Waverley is inapposite because it, too, is a physical per se takings case.

135 Fed. Cl. at 799 (holding that the “Army’s activities . . . effected a permanent physical

taking of those portions of the Waverley View Property actually occupied by the Army-

installed gravel access road and monitoring wells”). The Pennas’ case is further

distinguishable from Waverley because there is no credible evidence that the Pennas

must remove or otherwise remediate the AFFF on their Property. In fact, the only

evidence addressing the issue is Mr. Mulhall’s unsupported opinion (and Mr. Hosey’s

subsequent adoption of it) that “[i]mpacted groundwater, surface water, soils, and

sediments must be removed.” Tr. 351:16–17. Mr. Mulhall, however, is a geologist and

hydrogeologist and thus is not qualified to opine on the necessity of removing

particular substances.39 As the record stands, the Pennas failed to provide any credible

evidence not only of the necessity of removing the contamination, but also any cost they

incurred or would have to incur in order to do so. 40 In fact, as noted above, the Pennas

at times argue that the contamination cannot be remediated. See, e.g., Tr. 464:13–16; Tr.

519:10–13 (“MR. SINGER: And in your appraisal, you do not present remediation costs

in your work, correct? MR. HOSEY: Because the subject property cannot be remediated

by the subject property owners.”).

Finally, the Pennas rely on Hendler v. United States, 952 F.2d 1364, 1375 (Fed. Cir.

1991), for the proposition that an individual has the right to exclude “free riders” (i.e.,

the government) from his or her property. Pl. Resp. at 8–9. This is yet another case in

which monitoring wells were placed on private property. Hendler, 952 F.2d at 1377

(“When the governmental intrusion is as substantial a physical occupancy of private

property as this is, Loretto establishes that there is a taking.”). 41 Unlike Hendler, the

39See Tr. 613:9–14 (Mr. Mulhall admits that he is a not a licensed toxicologist and does not have

a wastewater engineering license).

40If the Pennas had provided credible expert testimony that, as a matter of law, the PFOS and

PFOA were considered so toxic that their removal was required in order for the Property to be

inhabitable, or if the Pennas had provided credible evidence that it was prudent to do so in light

of their potential hazard (and provided some evidence of the likely cost), the result of this case

may well have been different.

41The Pennas also cite John R. Sand & Gravel Co. v. United States, 457 F.3d 1345, 1356 (Fed. Cir.

2006), for the proposition that a property owner has the right to exclude others from his or her

land, but that case is similarly distinguishable. Moreover, even if the case law supported

equating the contamination of the Penna Property with a physical invasion resulting from the

intentional storage of chemicals on their Property, the Pennas failed to quantify (or even to

attempt to quantify) the value of such “storage.”

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instant case is not subject to a Loretto analysis, an approach which would be contrary to

Ridge Line and Moden (and the Supreme Court’s similar analysis in flooding cases). See

Boise Cascade Corp. v. United States, 296 F.3d 1339, 1355, 1357 (Fed. Cir. 2002) (explaining

that “[o]ur decision in Hendler rested squarely upon the permanent nature of the wells

and the regular government intrusions to monitor them” and that “ Hendler’s holding

was unremarkable and quite narrow: it merely held that when the government enters

private land, sinks 100–foot deep steel reinforced wells surrounded by gravel and

concrete, and thereafter proceeds to regularly enter the land to maintain and monitor

the wells over a period of years, a per se taking under Loretto has occurred” (emphasis

added)). In sum, the Court concludes that, under the appropriation prong of Ridge Line

and Moden, the Pennas have failed to demonstrate any substantial impact to their use of

the Property or any concrete economic impact from the contamination at issue.

C. The Pennas Failed To Prove “Just Compensation” For Their Property As

A Whole (Or Any Property Right)

In terms of the property right the Pennas claim was taken by the government, the

Pennas present this Court (and the government) with a moving target. While the

Pennas focused almost the entirety of their case at trial on the value of the Property as a

whole, the Pennas argued, in their opposition to the government’s RCFC 52(c) motion,

that the property right taken by the government “is the plaintiffs’ right to exclude the

Government’s chemicals from their property.” Pl. Resp. at 7.42 Similarly, in their

pretrial brief, the Pennas allege that “[c]ontamination of the well alone is a cognizable

taking,” see Pl. Memo. at 66, but never explain how their use of the well was impaired

aside from an inability to drink the water (which the Navy cured by providing bottled

water). Nor, for that matter, did the Pennas offer any evidence quantifying the

damages associated with any alleged interference with the use of any part of the

Property, apart from contending that contamination renders the entire Property as a

whole worthless.

Regardless of which, if any, specific property right the Pennas ultimately claim

was taken, the Pennas failed to present any credible evidence of the value of that right

(i.e., whether the Pennas point to the ability to use their Property for gardening or their

42The Court agrees with the government that this claim does not properly address the case law,

the government’s arguments, or the Court’s question regarding Plaintiffs’ definition of the

property or scope of property rights that they allege were taken. Instead, as the government

explains, “Plaintiffs, rather than addressing the United States’ argument, answer the Court’s

questions with a tautology: according to Plaintiffs, the invasion of the ‘the Government’s

chemicals’ resulting in a taking of Plaintiffs’ property right to ‘exclude the Government’s

chemicals from their Property.’” Def. Rep. at 20 (quoting Pl. Resp. at 7). As noted above, the

Court rejects the Pennas’ approach to the takings jurisprudence that governs the outcome here.

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right to exclude chemicals from their land). In that regard, the Federal Circuit has held

that “the trial court in a takings case is not obligated to fashion its own award when a

plaintiff has not provided evidence sufficient to determine just compensation with

reasonable certainty.” Gadsden Indus. Park, LLC v. United States, 956 F.3d 1362, 1371

(Fed. Cir. 2020); see also Otay Mesa Prop., L.P. v. United States, 779 F.3d 1315, 1322 (Fed.

Cir. 2015) (“[T]he fact that a taking occurred does not itself establish what compensation

should be awarded. What is critical in the determination of just compensation is not the

gain to the government from the taking, but the actual loss to the landowner.”). Here,

even assuming that the injury the Pennas claim is compensable under a Fifth

Amendment takings theory, the Pennas have failed to prove the quantum of that injury

necessary to assess any “just compensation” allegedly owed.

For example, in Vaizburd v. United States, “[t]he Court of Federal Claims

concluded that the government’s sand deposit on the Vaizburds’ property constituted

the physical taking of a permanent easement, but it denied recovery on the ground that

the Vaizburds failed to establish any decline in the fair market value of their property.”

384 F.3d 1278, 1279 (Fed. Cir. 2004). The Federal Circuit agreed with this Court that

“the Vaizburds [had] not established that they are entitled to recover compensation for

a decline in the market value of their property,” but vacated the decision and remanded

“for further consideration of the Vaizburds’ claim that they are entitled to recover on a

cost of cure theory.” Id. at 1280. As in Vaizburd, the Pennas have failed to prove any

diminution in the fair market value of their Property other than arguing that the

Property is entirely worthless. As explained above, the Court rejects the Pennas’

contention that their Property is valueless. Furthermore, the Court considered a “cost

of cure theory” here, and the Pennas had ample opportunity to present such evidence,

but the Pennas did not establish that remediation of the contamination is necessary, nor

did the Pennas attempt to quantify the cost of such a cure. 43

In sum, based on the trial evidence, the Court finds that the Property is

marketable and potentially sellable:44 not only have other, similar properties sold for

43The Court agrees with the government that Plaintiffs’ complaint does not assert a claim for

the appropriation of a flooding (or a similar) easement. See Def. Rep. at 2-3 n.1. The Court

shares the government’s multiple concerns with any suggestion that such claims had been

asserted or otherwise preserved, but the Court finds in any event that the government is correct

that “Plaintiffs did not offer any expert testimony suggested any alleged flooding easement

reduced the value of Plaintiffs’ property.” Id.

44To the extent the salability of the Penna Property is impaired, that is more easily explainable

by its numerous liens that would have to be cleared in a short sale, a situation for which the

government is not in any way responsible. Stip. ¶¶ 3–8.

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consideration – some during the pendency of this litigation45 – but the Pennas themselves

received a viable offer to purchase their Property, an offer which the Pennas allowed to

lapse. Having found that both Mr. Cammarata’s and Mr. Hosey’s expert testimony is

deeply flawed, the Court concludes that there is little to no evidence to support the

allegation that the Property is unmarketable, not mortgageable, unsellable, or valueless

in its current state. The Court thus agrees with the government that “[w]hether

preemption is measured by a property’s loss in usefulness or loss of market value,

Plaintiffs failed to provide any credible factual support for their argument that the

presence of PFOS and PFOA on their property preempted their enjoyment of their

property.” Def. 52(c) Mot. at 12. Aside from contending that the Property cannot be

sold, the Pennas failed to offer any other theory or evidence of diminution in value,

which is unsurprising given Plaintiffs’ all-or-nothing approach to their case. Compl.

¶ 27 (“[The Pennas’] property is virtually valueless.”). Thus, even if the government

could be held liable for some impact to the Property under a takings theory, there is a

complete lack of preponderant evidence upon which to award just compensation.

VI. PLAINTIFFS’ COUNSEL VIOLATED THIS COURT’S DISCOVERY

RULES

As noted above, following the close of Plaintiffs’ case-in-chief, the Court

suspended the trial proceedings due to Plaintiffs’ apparent discovery violation, newly

produced documents, and the parties’ resulting Stipulation. In addition to issuing a

schedule for the government to submit its RCFC 52(c) motion, the Court ordered the

parties to address a number of questions the Court posed to better understand the

impact of the newly disclosed documents, as well as the facts and circumstances

surrounding the purchase offer and how Plaintiffs had described that failed purchase

transaction in their discovery responses, court filings, and testimony. See ECF No. 125

(raising concerns about whether Plaintiffs’ counsel had a possible conflict of interest in

advising the Pennas about the proposed purchase of their property, whether Plaintiffs’

counsel was a witness to the purchase transaction and thus to material facts central to

the issue in the trial, and whether he violated his duty of candor to the Court). The

Court next turns to analyzing those issues.

The Plaintiffs’ pretrial memorandum includes a section of factual averments with

the following heading: “The Navy substantially interfered with the use and enjoyment

[of the] property, resulting in a taking for which just compensation is due.” Pl. Memo.

at 43 (Section IV.G, containing ¶¶ 105–16). That section lays out the heart of the

45See PX 131 (Slide 26 of Mr. Hosey’s direct testimony (listing nearby properties, including one

on the same street as the Penna Property, that sold for consideration between 2017 and 2019,

and indicating associated mortgages)). This action was filed on November 18, 2016. Compl.

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appropriation the Pennas had intended to prove at trial. In particular, the Pennas

explained that the government’s action contaminated their Property (id. ¶¶ 105–06) and,

as a result, the Pennas (1) “stopped using their vegetable garden” (id. ¶ 107), (2) “no

longer use their well water for drinking, and stopped using it for outdoor cooking and

barbecues” (id. ¶ 108), (3) could not subdivide their Property to construct town homes

“without getting a clean environmental bill of health,” which was “unavailable . . .

because of the known contamination” and “because the full extent of the contamination

is not known” (id. ¶ 109), and (4) “have not attempted to rent their house out for

domestic use, because they are concerned that is not safe for children to play in the

backyard, or for the owners to plant vegetables . . . or drink from the well that service[s]

the garage” (id. ¶ 111).

As discussed above, those allegations at trial were either essentially abandoned

or fail for a complete lack of proof (or, in the case of voluntary cessation of an activity,

do not constitute support for an alleged taking in any event). Instead, for the purpose

of meeting the Ridge Line and Moden tests for a taking – and for the purposes of proving

a quantum for just compensation – the Pennas relied at trial almost entirely upon the

theory that “[b]ecause there is no cure for the recurrent pollution of the Penna

Property[,] it is not eligible for a mortgage” and “[b]ecause the property is . . . not

eligible for a mortgage, and there are no comparable sales of contaminated properties, it

has no market value.” Pl. Memo. ¶ 112–14.

In that context, the Pennas explained that they would prove as follows:

The Pennas have attempted to sell their property, without

success. At least two realtors initially refused to list the

property. In 2018, as a result of foreclosure proceedings, the

property was listed for sale. An offer for $746,000 was made,

contingent on a $475,000 mortgage, and was then withdrawn.

Pl. Memo. ¶ 110. The Pennas further averred that: (1) “[t]he property is not eligible for

a mortgage and not marketable for sale”; and (2) “[t]he contamination has prevented

plaintiffs from being able to mortgage or sell the property.” Id. at 67 (emphasis added).

The pretrial brief was signed by Plaintiffs’ counsel, Mr. Cuker, and filed with the Court

on March 17, 2020.

Particularly in light of the heading under which the foregoing description of the

Pennas’ efforts to sell the Property is located in their pretrial memorandum, the

calculated purpose was to lead the Court to believe that the sale failed due to

environmental contamination. The assertion in the pretrial memorandum that the

purchase offer “was . . . withdrawn” is consistent with the Pennas’ interrogatory

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responses, similarly executed by Mr. Cuker (transmitted to the government on or about

August 30, 2019). In that regard, in response to the government’s interrogatory about

“listing the property for sale or the possibilities for selling” it, the Pennas indicated that

“[a]n offer was made, but the prospective buyer backed out.” ECF No. 134-3 at 6

(Response to Interrogatory No. 11).

At trial, Mr. Cuker attempted to support the allegations regarding the Pennas’

inability to sell the property by eliciting the following testimony from Mr. Penna during

his direct examination:

Q. Did you make an effort to sell the property?

A. Yes, we did.

Q. And how long was the property listed for sale?

A. The property was listed for six months. Yes, six months.

. ..

Q. And did the property sell when it was listed in 2018?

A. No, it did not.

Q. What do you think your property is worth today?

A. To me, the money and time and everything I’ve put into it --

Q. No, let me -- no, with the contamination, in its contaminated state, what

do you think the property is worth today?

A. Well, I -- well, it’s not worth anything today. Zero.

Tr. 207:25–208:21. Accordingly, Plaintiffs and their counsel unequivocally intended the

Court (and the government) to believe that the Property did not sell and was rendered

worthless because of the contamination.

The government, in contrast, attempted to show during Mr. Penna’s cross-

examination that although there had been a potential buyer for the Property, one reason

for the failed sale may have been the “several liens” the Pennas had to disclose to the

realtor. Tr. 235:7-21. Plaintiffs’ counsel objected to the entire line of questioning as

irrelevant “to the facts of this case.” Tr. 239:9-10. The government responded that “it

goes to that [Mr. Penna] had stated that he couldn’t sell his property, couldn’t subdivide

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or do anything with his property due to the contamination, and this is showing a

different alternative reason as to why a property with a potential buyer did not sell.”

Tr. 239:14-19. In rebuttal, Mr. Cuker essentially denied that he had opened the door to

the government’s cross-examination questions, but in any event withdrew his objection,

stating that “I am not going to argue it here. You know, . . . if they want to suggest this

is the reason the property can’t sell, I will go into this with Mr. Penna on redirect

examination.” Tr. 240:10-23.

Continuing with the cross-examination, the government showed Mr. Penna what

the government believed to be the “purchase [offer] for the property . . . in the amount

of $746,000.” Tr. 243:15-18. Mr. Penna readily agreed with that characterization and

testified that the would-be purchaser “backed out” after the Pennas provided

environmental disclosures. Tr. 243:19-244:2; see also Tr. 246:9-12 (Mr. Penna testifying

that “after the offer and after everything that [the buyer] received . . . from us, . . . it was

too complicated for him to get involved with it”); Tr. 247:6-12 (Mr. Penna testifying that

after the realtor provided the would-be buyer with environmental disclosures, “that’s

when we got the response that it’s complicated and he didn’t want to buy it”); Tr. 278:5 -

7 (Mr. Penna testifying that after the would-be buyers “received . . . disclosures on the

issues of the environment, that they didn’t want to go, that it was too complicated for

them”).

As detailed above, see supra Section I.D, due to a discrepancy the Court noticed

among the documents Plaintiffs’ counsel employed during his examination of

Mr. Penna, the Court ordered the parties to meet-and-confer regarding a possible

discovery violation. Tr. 259:1–6. The resulting Stipulation demonstrates that two

critical assertions in the Pennas’ pretrial memorandum were false: (1) the potential

buyers never offered the Pennas $746,000 for their Property; and (2) the potential buyers

never withdrew their purchase offer. Instead, what actually happened is that the

potential buyers made an offer to purchase the Penna Property for $725,000 which

required the Pennas’ acceptance by August 25, 2018, but the Pennas did not sign and

accept that offer in a timely manner. Stip. ¶ 9, 12, 16. More significantly, the parties

stipulated that “[t]he prospective sale of the property did not fail because of

environmental issues.” Id. ¶ 31 (emphasis added).

Given these falsities, the Court has serious concerns regarding whether Plaintiffs’

counsel violated his duty of candor. Indeed, the clear discovery violation, for which

Plaintiffs’ counsel is responsible, exacerbated the impact of both the false assertions of

fact and the erroneous impressions conveyed to the Court.

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Pursuant to Rule 3.3 (“Candor Toward the Tribunal”) of the American Bar

Association’s Model Rules of Professional Conduct: 46

(a) A lawyer shall not knowingly:

(1) make a false statement of fact or law to a tribunal or fail to

correct a false statement of material fact or law previously

made to the tribunal by the lawyer;

. . . or

(3) offer evidence that the lawyer knows to be false. If a

lawyer, the lawyer’s client, or a witness called by the lawyer,

has offered material evidence and the lawyer comes to know

of its falsity, the lawyer shall take reasonable remedial

measures, including, if necessary, disclosure to the

tribunal. . . .

. ..

(c) The duties stated in paragraphs (a) and (b) continue to the

conclusion of the proceeding, and apply even if compliance

requires disclosure of information otherwise protected by

Rule 1.6.

Candor Toward the Tribunal, Ann. Mod. Rules Prof. Cond. § 3.3 (explaining that the Rule

“sets forth the special duties of lawyers as officers of the court to avoid conduct that

undermines the integrity of the adjudicative process”). 47 While “[a] lawyer acting as an

advocate in an adjudicative proceeding has an obligation to present the client’s case

with persuasive force[,] [the] [p]erformance of that duty . . . is qualified by the

advocate’s duty of candor to the tribunal.” Id. “Consequently, although a lawyer in an

adversary proceeding is not required to present an impartial exposition of the law or to

vouch for the evidence submitted in a cause, the lawyer must not allow the tribunal to

be misled by false statements of law or fact or evidence that the lawyer knows to be

46This Model Rule is identical to Rule 3.3 of the Pennsylvania Rules of Professional Conduct, see

http://www.padisciplinaryboard.org/for-attorneys/rules/rule/3/the-rules-of-professional-

conduct.

47 Rule 1.6 “governs the disclosure by a lawyer of information relating to the representation of a

client during the lawyer’s representation of the client.” Confidentiality of Information, Ann. Mod.

Rules Prof. Cond. § 1.6.

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false.” Id.; see also Hanover Ins. Co. v. United States, 146 Fed. Cl. 447, 450 (2019) (noting

“the truism that attorneys must not mislead the court”).

In this case, Mr. Cuker is responsible for the assertions in the pretrial

memorandum and Mr. Penna’s testimony – all of which appear to have been calculated

to lead the Court to conclude (erroneously) that while an offer was made to the Pennas

to purchase their Property for substantial value, that potential sale was tanked due to

the environmental disclosures the Pennas provided. In the context of this case, no other

conclusion is reasonable. 48

First, the Court notes that the primary, if not sole, theory of the takings claim

here (in terms of the appropriation-prong of the Ridge Line and Moden tests) – and the

only theory for which Plaintiffs presented a damages calculation of any kind – is that

the Penna Property was worthless because it was not mortgageable and thus not

sellable, an assertion significantly undermined, if not completely eviscerated, due to the

actual facts contained in the Stipulation.

Second, Plaintiffs falsely asserted that “[a]n offer for $746,000 was made . . . and

was then withdrawn” in the context of the appropriation argument in the pretrial

memorandum. Pl. Memo. ¶ 110. Mr. Cuker never corrected the record, but rather

elicited testimony from Mr. Penna that the offer was for $746,000. Tr. 243:15–18. There

is now no dispute that the offer, in fact, was not for $746,000 – it was for $725,000 – and

that the actual offer for the lower amount was never withdrawn. Rather, it lapsed

because the Pennas did not accept it. The Plaintiffs’ erroneous assertions of fact thus

had two consequences (until the Court and the government discovered the truth): they

left the impression that a willing buyer would have valued the Property at an even

higher amount, and that environmental concerns doomed the transaction. Again,

neither of those things are true, something Plaintiffs now admit.

Third, Mr. Cuker’s defense of his actions in both his filings and at trial provides

this Court with more confidence – not less – that his conduct is problematic to say the

48As in many areas of the law, “context is everything” here. Campbell v. Acuff-Rose Music, Inc.,

510 U.S. 569, 589 (1994) (fair use under copyright law); see also Gissin v. Endres, 739 F. Supp. 2d

488, 506 (S.D.N.Y. 2010) (noting that “context is everything” in securities case involving

allegations of false and misleading statements); United States v. Baynes, 369 F. App’x 365, 367 (3d

Cir. 2010) (“context is everything when distinguishing between a threat of death and threats of

violence in general”); Chapman v. Target Corp., 2020 WL 8093566, at *1 (D. Colo. Oct. 20, 2020)

(noting that “context is everything” in deciding whether a party violated Rule 26 of the Federal

Rules of Civil Procedure); Ryan v. Town of Schererville, Ind., 2005 WL 1172614, at *10 (N.D. Ind.

May 4, 2005) (“context is everything” in a sex discrimination case); Gresham v. Meden, 938 F.3d

847, 849 (6th Cir. 2019) (“context is everything in [statutory] interpretation”).

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least. Mr. Cuker asserts that the misstatements in the pretrial memorandum “were

inadvertent” and that “Plaintiffs’ counsel did not knowingly make a false statement of

fact . . . .” Pl. Resp. at 38. He further asserted that he “believes that he mistakenly

included the wrong amount when preparing the Memorandum while working

remotely in the early days of the pandemic . . . and misinterpreted the handwritten

counteroffer . . . as having been the prospective buyer’s offer.” Id. The Court cannot

decide whether these assertions are merely implausible or constitute yet further

misrepresentations. For starters, Mr. Cuker’s pretrial memorandum is consistent with

his pre-pandemic interrogatory responses that reflect a similar theme in asserting that

the would-be buyers “backed out” of the proposed purchase. ECF No. 134-3 at 6

(Response to Interrogatory No. 11). Indeed, as explained above, the consistent, but

ultimately false, narrative Plaintiffs and Mr. Cuker advanced was that the would-be

buyers “backed out” of the transaction only after, and due to, the environmental

disclosures. See Tr. 247:6-12; Tr. 278:5-8.

There are three significant problems with the assertion that the would-be buyers

“backed out” due to environmental concerns: (1) the buyers’ offer expired by its own

terms when the Pennas failed to accept it in a timely manner; (2) “Plaintiffs have no

written evidence showing whether or when [a] counteroffer was actually transmitted. . .

to the prospective buyers or their real estate agent”; and (3) Mr. Cuker himself was

involved in the proposed transaction, insofar as (a) he instructed the Pennas not to sign

the offer,49 and (b) he either participated in preparing the draft counteroffer or, at the

49This fact also raises two separate, additional concerns: (1) whether Mr. Cuker had a conflict of

interest with respect to advising the Pennas regarding the potential purchase of their Property

(because had the transaction proceeded, this takings case would have been all but over), and (2)

whether because the failed transaction was part of Plaintiffs’ case, Mr. Cuker effectively became

a witness when he involved himself in the proposed transaction. See Conflict of Interest: Current

Clients, Ann. Mod. Rules Prof. Cond. § 1.7, cmt. 8 (“Even where there is no direct adverseness, a

conflict of interest exists if there is a significant risk that a lawyer’s ability to consider,

recommend or carry out an appropriate course of action for the client will be materially limited

as a result of the lawyer's other responsibilities or interests.”); Conflict of Interest: Current Clients,

Ann. Mod. Rules Prof. Cond. § 1.7, cmt. 10 (“The lawyer’s own interests should not be

permitted to have an adverse effect on representation of a client.”); Lawyer as Witness, Ann.

Mod. Rules Prof. Cond. § 3.7, cmt. 1 (“Combining the roles of advocate and witness can

prejudice the tribunal and the opposing party and can also involve a conflict of interest between

the lawyer and client.”); see also Lee J. Rohn & Assocs., LLC v. Chapin, 2018 WL 6721388, at *5 (V.I.

Super. Ct. Dec. 18, 2018) (noting that the court was “leery of the ways [the attorney’s] own

pecuniary interest [was] tangled up with the interests of [the party] in the outcome of their

dispute”). The government declines to press this issue, however, and, in the absence of any

additional facts, the Court does as well. Def. 52(c) Mot. at 47–48 (“The United States cannot

identify at this time any harm or prejudice to its interests as a result of Plaintiffs’ counsel’s

possible conflict of interest.”). Instead, the Court focuses – as does the government – on “the

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very least, the realtor expressly sent it to him for his review. Stip. ¶¶ 17, 19–21, and

included exhibits DX 326 (email from realtor noting that she “[r]eceived a call from [the

Pennas’] attorney, he has directed them to sign nothing until he reviews”); DX 329

(realtor noting she is sending to Mr. Cuker “another email with the copy we marked up

including attachments” and instructing that he should “review and make changes, as

you see necessary, to protect your clients Lisa and Frank [Penna]”); DX 330 (marked-up

sales agreement including environment disclosures transmitted to Mr. Cuker). 50

Fourth, Mr. Cuker’s argument during trial provides further support that he may

well have acted with scienter in regard to the misrepresentations. At trial, Mr. Cuker

asserted that his wording was carefully chosen:

We have never contended that this sale fell through because

of environmental issues. All we said was the sale fell through

. . . . [W]e answered interrogatories on this particular issue a

primary prejudice to the United States” – “the nondisclosure of information about the 2018 sale

negotiations and the incomplete production of the documents related to those negotiations.” Id.

at 48.

50 Mr. Cuker inexplicably denied being involved with the putative counteroffer or knowing why

the Pennas did not sign and accept the offer, see Tr. 691:23–692:6. Indeed, he asserted that “[t]he

only communications I had with [the realtor] Ms. Coletti were she sent me the agreements, and,

therefore, I was able to produce them. . . . [O]ther than that, I had no communication with

Ms. Coletti.” Tr. 692:9 - 692:13. There are two striking problems with that statement. The first

is that it undercuts Mr. Cuker’s original assertion to the Court that the documents in question

likely were not produced because they were not responsive to the government’s discovery

requests. Tr. 275:6–9. The second problem is that the cited exhibits demonstrate that

Mr. Cuker’s involvement certainly was substantive; he did not communicate with Ms. Coletti

solely for the purposes of this litigation. Indeed, that much was verified in a later (troubling)

exchange with the Court:

THE COURT: Let’s look at [Stipulation] Exhibit 7, Defendant’s

Exhibit 329. . . . [D]o you recall telling Ms. Coletti that you directed

the Pennas not to sign anything until you had a chance to review?

MR. CUKER: I probably did, yes.

THE COURT: Do you recall it?

MR. CUKER: I think I did. I think I said that I had concerns about

the sale of contaminated real estate, and I needed to make sure they

were protected before any agreement went through. And then

when I got the agreements, I referred the matter over to another

attorney to handle the drafting of the language.

Tr. 754:17-18; 755:1-19. Thus, even when confronted with clear, documentary evidence,

Mr. Cuker was frustratingly evasive.

- 43 -

year ago, and in those answers to interrogatories, what we

said was that we had an offer and the buyer backed out. That

is all we ever said.

. ..

And neither I nor my client ever said that we know it fell

through because of an environmental issue. We are not taking

that position.

Tr. 295:1-15. But, that assertion critically ignores the context in which one of those

assertions was made; to wit, in the pretrial memorandum, in support of the Pennas’ primary

(if not only) takings claim that the property could not be sold due to environmental reasons .

Mr. Cuker seems to contend that because he never used those precise words, he has an

escape hatch. That implied assertion is pure sophistry. Republic Techs. (NA), LLC v. BBK

Tobacco & Foods, LLP, 2018 WL 6067252, at *3 (N.D. Ill. Nov. 20, 2018) (criticizing party

as having “engaged in a tactic that is, in our view, ‘too cute by half’”). Indeed, if

Mr. Cuker did not intend to communicate the false narrative that the proposed

transaction failed due to environment disclosures, why did he raise the transaction at all

in his pretrial memorandum? After all, Mr. Cuker – not the government – put this

subject at issue, both in his pretrial memorandum and in presenting Plaintiffs’ case-in-

chief. In that regard, before the correct and complete facts were known to the

government and the Court, Mr. Cuker doubled down in his redirect examination of Mr.

Penna, specifically eliciting testimony to make it appear that the transaction at issue

failed due to environmental concerns. Tr. 273:19-274:2 (Mr. Cuker asking Mr. Penna

about a putative counteroffer including “the environmental addendum”). 51

Fifth, it was Mr. Cuker’s aforementioned line of questioning of Mr. Penna that, in

part, led to the government’s and the Court’s learning of a possible discovery violation

and, ultimately, to the Stipulation in which the true facts finally came to light. Thus,

when Mr. Cuker asked Mr. Penna about what happened following the alleged

environmental addendum’s having been provided to the would-be purchasers – again,

an asserted fact for which there is no documentary evidence – the government objected

and, in response, the Court raised what turned out to be an appropriate tone of concern:

MS. MINOTT: . . . This is the first time that we are seeing this

document. This has not been produced to the Government.

51As the Court has noted, however, the parties agree that there is no documentary evidence

whatsoever that any counteroffer or any environmental addendum was ever transmitted to the

buyers. Stip. ¶ 28.

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So we would just ask that it be provided to us, if we could . . .

be allowed to look at this material before it’s submitted or

before anything -- because this is the first time we are seeing

this.

THE COURT: Mr. Cuker, if that's the case, there is going to

be a problem.

MR. CUKER: We will certainly send it to them right now.

We thought we had produced it. If not, it may be because it was

not actually responsive to any specific discovery request.

THE COURT: Oh, come on. It’s your [same] exhibit. It’s just

more complete.

Tr. 274:22–275:11 (emphasis added). Mr. Cuker never made any attempt to show that

the government’s discovery requests were inadequate or somehow did not cover the

documents he failed to turn over to the government during discovery.

Sixth, while Mr. Cuker later asserted that his failure to provide to the

government nearly one hundred documents during discovery was inadvertent, 52 the

discovery violation furthered Plaintiffs’ narrative – which ultimately proved false –

surrounding the purchase offer and the Pennas’ having declined to accept it, the latter

pursuant to Mr. Cuker’s direction. The prejudice to the government was well

articulated by its counsel (which the Court quotes at length due to its importance):

MR. SINGER: . . . [W]e did not receive a version of the offer.

PX64 is not the offer. It’s a permutation of a counteroffer that

we have seen no evidence was ever sent to the buyers, and, in

fact, PX64 is what misled the United States -- and, frankly, the

Court -- into believing, during Mr. Penna’s testimony, that

there was a sales contract [that failed] when there was none.

Your Honor may recall that you asked Mr. Penna why

Mr. Penna did not enforce the contract. The reason Mr. Penna

did not enforce the contract is because there was no contract

to enforce. What you’re seeing in PX64 is an internal write-

up by the Pennas of the original sales contract that they

52Tr. 698:6–8 (“I admit, I should have produced the complete agreements, and that was an

inadvertence on our part”).

- 45 -

received. The original sales contract did not have . . . any of

the handwritten text . . . or the stamps that we see . . .

THE COURT: Mr. Singer, I’m looking at Plaintiffs’ version of

– [PX]64 provided to the Court . . . in their exhibit binder, and

my version has the buyers’ signatures, some stamps for

initials without initials, and [other handwritten edits]. . . . So,

I’m sorry, can you now explain – it’s got the counteroffer of

[$746,000], like you said, and [$725,000] is crossed out, and the

counteroffer of [$746,000] is written in. So is your point,

Mr. Singer, that this is a mocked-up version of the

counteroffer but isn’t the offer standing alone?

MR. SINGER: That’s correct, Your Honor.

THE COURT: And you never got th[e] [offer itself]?

MR. SINGER: We never received -- I had never seen the

clean offer, because that was why the Government was

laboring under the [incorrect] assumption that the

handwritten notes that Your Honor sees on page 1 of PX64, it

was our understanding that those were the terms of the

original offer, and it was not until supplemental production

this week that we understood that the original offer did not

have the handwritten text that you see under paragraph 32(a),

and also did not have . . . the strike-out of the word “zoned”

and the addition of “permitted to be used.” Those were all

changes made in the formulation of a counteroffer.

THE COURT: Mr. Singer, when you said supplemental

production, you mean the one essentially ordered by the

Court during trial?

MR. SINGER: Yes. That’s exactly what I’m referring to . . . .

THE COURT: Okay. There was no . . . voluntary production

where someone realized that some documents were missing,

some production, on the Plaintiffs’ side[?]

MR. SINGER: No. That’s correct, Your Honor.

- 46 -

Tr. 699:14-701:17; Def. 52(c) Mot. at 8 (“Plaintiffs’ counsel’s initial revelation was

followed by a staggered production of additional documents that culminated in a

stipulation the parties filed on August 6, 2020 . . .”).

In response to Mr. Singer’s explanation, Mr. Cuker argued that his discovery

failure was harmless because it actually benefited the government insofar as “[t]he

document we produced makes it look like the buyer, with full knowledge of the

environmental problem, offered $746,000.” Tr. 701:21–23; see also Pl. Memo. at 40. But,

as the Court pointed out, “it also makes it look like . . . from the email, that the buyers

backed out before the close date of the . . . acceptance period, when really the

acceptance period had lapsed without the sellers signing the agreement.” Tr. 702:13–17.

In that regard, the Court pressed Mr. Cuker to explain “[w]hat was the point –- what

were you trying to show with paragraph 110 [of the pretrial memorandum]?” Tr.

763:11–12. Mr. Cuker responded: “Well, I’m just giving context of the history . . . . We

simply wanted to present the evidence that didn’t come out that there was an offer and that

the sale did not go through, but we did not say in here that it was withdrawn because of

environmental concerns.” Tr. 763:13–18 (emphasis added). The Court still does not

understand how Mr. Cuker’s reference to “evidence that didn’t come out” addresses the

Court’s concern.

Moreover, Mr. Cuker’s response merely begs the further question of why

Plaintiffs would have any interest in providing “context” or “history” that either is

irrelevant or is beneficial to the government. Admissible trial evidence, by definition, is

that which is probative regarding some element of the case before the Court. Fed. R.

Evid. 401. Thus, the only reasonable answer to the Court’s question is that Mr. Cuker

sought to induce the Court at least to infer that the failed transaction supported

Plaintiffs’ central claim that the Penna Property is not sellable. 53 Put differently still, the

point of the erroneous assertions in the Pennas’ pretrial memorandum – when

considered in context, and in light of the interrogatory responses (executed long before

the pandemic) and Mr. Penna’s subsequent trial testimony – can only be read as

averring the very thing that Mr. Cuker never said in so many words: that the offer was

withdrawn because of environmental concerns. The fact that Mr. Cuker never used that

formulation verbatim is immaterial, particularly where, as here, the evidence necessary

to determine the whole truth was never disclosed to the government until during trial

and, even then, only when ordered to do so by the Court. Raymo v. Sec’y of Health &

Hum. Servs., 2014 WL 1092274, at *16 (Fed. Cl. Feb. 24, 2014) (failure to “tell the whole

53 Thus, the government fairly argued that “certainly the initial production that we got is not

representative of what happened, and . . . we came in not having an understanding of what the

. . . sequence of events were in relation to what’s actually a pretty important issue at trial . . . So

in that sense we were pretty unfairly disadvantaged . . . .” Tr. 435:25–436:9.

- 47 -

truth . . . demonstrate[s] a lack of candor”); In re SoCal Sleep Centers, LLC, 2016 WL

4198534, at *9 n.13 (B.A.P. 9th Cir. Aug. 8, 2016) (noting that the court was “particularly

dismayed by [counsel’s] argument that, despite her ethical duty of candor to the

tribunal, . . . she was free to use her ‘discretion’ to decide when to tell the bankruptcy

court the whole truth, rather than just part of the story. A half-truth is a half-lie”).

In sum, the Court agrees with the government that “Plaintiffs’ production

omitted at least three key documents – the buyer’s original offer, the draft counter-offer,

and the Plaintiffs-signed counteroffer” and thus “never answered the United States’

[interrogatory] questions before introducing these documents at trial.” Def. 52(c) Mot.

at 39-40 (citing and discussing DX328, DX330, and DX332). The Court further agrees

that “[t]hese three documents are critical to evaluating Plaintiffs’ substantiality claims

and Plaintiffs have provided no substantial justification for their failure to produce

them in discovery or at any point prior to trial.” Id. Indeed, Mr. Cuker did not produce

the documents in question until the Court ordered him to do so. Pl. Resp. at 33

(acknowledging supplemental production of documents during trial “[p]ursuant to

court order”). The result is that the government was denied “the opportunity to explore

the significance of these documents in discovery.” Def. 52(c) Mot. at 41.

To be clear, the Court is not criticizing Mr. Cuker for creatively arguing about

what the Court should conclude based upon a proven set of facts, or for arguing about

the significance of those facts within the substantive legal framework applicable in this

takings case (e.g., Ridge Line and Moden) – all of which would constitute zealous

advocacy by counsel. What a lawyer may not do, however, is decide on the conclusion

he or she wants the Court to reach, and then selectively shape and edit the facts – i.e., by

making erroneous factual assertions in briefs and eliciting erroneous testimony at trial –

all while relying upon carefully crafted verbiage to preserve plausible deniability and

failing to disclose documents that would otherwise significantly undermine the desired

conclusion.

In considering whether to issue sanctions here, the Court is mindful of the

rationale underlying the duty of candor, to the extent simple honesty is insufficient:

The duty of candor is an important part of our justice system

for several reasons. First, . . . the duty of candor is an integral

part of ensuring that our system of justice functions properly

because first and foremost an attorney is an officer of the

court, an institution whose purpose is to seek the truth in

order to do justice . . . . Second, the duty of candor is important

to providing clients with an attorney’s “independent

professional judgment” so as to not create unreasonable client

- 48 -

expectations, which when dashed can undermine confidence

in the justice system . . . . Third, the duty of candor helps

promote judicial efficiency and avoid crowding the court’s

docket with frivolous actions.

Bautista v. Star Cruises, 696 F. Supp. 2d 1274, 1281 (S.D. Fla. 2010) (internal citations

omitted). We are particularly cognizant of the following admonition from the United

States Court of Appeals for the Fourth Circuit: “The system can provide no harbor for

clever devices to divert the search, mislead opposing counsel or the court, or cover up

that which is necessary for justice in the end.” United States v. Shaffer Equip. Co., 11 F.3d

450, 457-58 (4th Cir. 1993).

With those principles in mind, and after careful and deliberate consideration, the

Court reluctantly concludes that it cannot ignore Mr. Cuker’s conduct in this case.

Indeed, as much as the Court and the government both wasted an inordinate amount of

time discovering and deciphering facts that should never have been obscured, the Court

is troubled the most, by far, about the impact of Mr. Cuker’s handling of this matter on

the Pennas themselves. Would the sale of the Penna Property have been successful had

the Pennas been counseled differently – i.e., to promptly accept the purchase offer and

to provide any environmental disclosures (if necessary) simultaneously with that

acceptance? Was Mr. Cuker concerned about how a successful sale would impact the

viability of this case that had been pending since 2016 (and did any such concerns create

a conflict)? What is the likelihood that this litigation would have ended differently but

for the Stipulation that Mr. Cuker was all but compelled to negotiate with the

government? If the government had been provided with all of the documentation

during discovery, would a tougher deposition of Mr. Penna (and possibly Plaintiffs’

experts) have convinced the Pennas that they should abandon their case, or, perhaps, at

least modify their takings and damages theories (and/or trial strategy)? Would the

government have improved their chances for at least partial summary judgment and

possibly have avoided the expense of trial imposed on both parties? These are all

questions the answers to which are unknowable, but they illustrate the harm to the

Pennas, at a minimum. The harm to the government and the Court is apparent.

The Court’s authority to impose sanctions given the above findings is clear:

Many courts, including the U.S. Supreme Court, the U.S.

Court of Appeals for the Federal Circuit, and the U.S. Court

of Federal Claims, have held that “[a]ll judicial bodies

inherently have the power to sanction parties, or their

attorneys, for failure to conform to their rules or to respect

their dignity, or for unnecessarily impeding the tribunals'

- 49 -

business.” Tecom, Inc. v. United States, 2006 WL 5616336, *5

(Fed. Cl. May 4, 2006); see also In re Bailey, 182 F.3d 860, 864,

864 n. 4 (Fed. Cir. 1999) (citing inter alia Chambers v. NASCO,

Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991), and

explaining that “[t]he United States Supreme Court and

federal courts of appeals have repeatedly recognized that

regulation of attorney behavior is an inherent power of any

court of law and falls within the discretion of such court”).

Multiservice Joint Venture, LLC v. United States, 85 Fed. Cl. 106, 112 (2008) (explaining

that “[t]his Court’s inherent authority to enter sanctions is embodied in [RCFC 11]

(requiring a reasonable inquiry into statements alleged in papers filed), RCFC 16(f)

(authorizing sanctions for violations of pretrial orders), RCFC 37 (authorizing sanctions

for failure to cooperate during discovery), and 28 U.S.C. § 1927 (allowing the Court to

impose costs upon any attorney who ‘multiplies the proceedings in any case

unreasonably and vexatiously’)”), aff’d, 374 F. App’x 963 (Fed. Cir. 2010); see also RCFC

26(a)(1)(A), RCFC 26(e). “Although the language of RCFC 37(b) would suggest that a

violation of a judicial order is necessary before imposing sanctions, ‘a formal, written

order is not required, where a litigant engages in abusive litigation practices.’”

Multiservice Joint Venture, 85 Fed. Cl. at 112–13 (quoting Dotson v. Bravo, 202 F.R.D. 559,

570 n.68 (N.D. Ill. 2001), aff’d, 321 F.3d 663 (7th Cir. 2003)). Moreover, although the

Court finds that both parties were harmed by the discovery violation, “[t]he Court does

not merely have the inherent authority to sanction conduct designed to harm a party,

but also to sanction conduct that delays and disrupts the judicial process.” Precision

Pine and Timber, Inc. v. United States, 2001 WL 1819224, *4 (Fed. Cl. Mar. 6, 2001).

All of that said, the government declines to press the duty of candor issue, see

Def. 52(c) Mot. at 44, and thus the Court similarly does not reach that issue here. On the

other hand, the government does seek sanctions for the discovery violation. Id. at 49.

The Court agrees with the government that imposition of sanctions is warranted for the

discovery violation,54 and that Mr. Cuker’s overall conduct may be taken into

54The Court agrees with the government that while Mr. Cuker apologizes for the discovery

violation on behalf of Plaintiffs, Mr. Cuker makes no attempt to “demonstrate in their brief why

their failure to disclose all of the documents . . . is not a discovery violation or why their failure

was substantially justified.” Def. Rep. at 23–24. The Court further agrees that Plaintiffs instead

improperly attempt to “place the blame on the United States for failing to ask for something it

did not know existed.” Id. at 24. Indeed, the government correctly explained that “Plaintiffs

had superior knowledge of what transpired during the 2018 negotiations, and they perpetuated

that knowledge gap by failing to answer interrogatory questions, by failing to produce

documents, and by misstating the facts of the negotiations.” Id. Mr. Cuker’s argument that the

government should have policed his work better does not come close to qualifying as a

- 50 -

consideration in fashioning such sanctions. See, e.g., Monsanto Co. v. E.I. Du Pont de

Nemours & Co., 748 F.3d 1189, 1201 (Fed. Cir. 2014) (holding that “the district court

properly exercised its discretion in imposing targeted sanctions by carefully fitting its

sanctions to the conduct that it found to be improper”); see also Adana Investing, Inc. v.

Wells Fargo Bank, N.A., 2017 WL 3668553, at *2 (S.D. Fla. Apr. 10, 2017) (“Based on the

Court’s review of Defendants’ overall conduct throughout litigation, the Court finds

sanctions are warranted.” (emphasis added)); Grethen v. Clarke, 2015 WL 13387681, at *8

(E.D. Va. Nov. 24, 2015) (finding “that the sanction of dismissal is the only appropriate

sanction given Plaintiff’s overall conduct in this litigation” (emphasis added)), aff’d, 672

F. App’x 300 (4th Cir. 2017); Lyell Theatre Corp. v. Loews Corp., 91 F.R.D. 97, 99 (W.D.N.Y.

1981) (“The court should look to the overall conduct of the litigation before imposing any

sanction. . . . ” (emphasis added)), aff’d, 682 F.2d 37 (2d Cir. 1982). Accordingly, the

Court orders Mr. Cuker to reimburse the government for attorney’s fees, costs, and

expenses arising from the time its counsel was forced to spend on: (1) reviewing the

documentation Plaintiffs provided to the government during trial as a result of the

Court’s order to do so; (2) negotiating and preparing the resulting Stipulation to

mitigate any prejudice to the government; and (3) preparing and filing the

government’s responses (in its RCFC 52(c) motion) to the Court’s questions contained in

its August 10, 2020 order. 55

In addition, the Court finds that an adverse inference is warranted. Plaintiffs

seek to avoid the results of the Stipulation, arguing that even though “the sale ‘did not

fail because of environmental issues[,]’” that “does not mean that a sale for $725,000

could have succeeded in spite of environmental issues.” Pl. Resp. at 10 (emphasis in

original). The Court will not permit Plaintiffs to now argue that the Court should infer

that the sale ultimately may have failed anyhow as a result of the contamination. Given

Plaintiffs’ failure to disclose responsive documents consistent with this Court’s

discovery rules, and the resulting Stipulation, the government is entitled to an adverse

inference that the sale did not fail – and would not have failed – due to environmental

concerns. Plaintiffs cannot be permitted to avoid the implication of the Stipulation.

Moreover, such an adverse inference is consistent with Mr. Cuker’s admission that the

documentary evidence produced during discovery “disclosed problems with zoning

and liens which could have caused the deal to fail” – thus undercutting the notion that

substantial justification for the prejudicial discovery violation. Council for Tribal Emp. Rts. v.

United States, 110 Fed. Cl. 244, 250 (2013) (sanctioning the government where it “had no

substantial justification for its categorical refusal to respond . . . [to] discovery requests”).

55Although the Court would be justified in permitting the government to seek costs for specific

depositions that may have been less than fully productive or helpful due to the previously

undisclosed documents, the Court believes that the sanction delineated herein is sufficient to

deter future such conduct and, in the process, to protect the public and the Court.

- 51 -

any contamination somehow was the sole or “but for” cause of the Pennas’ putative

inability to sell their Property. Pl. Resp. at 40.56 To be clear, the Court does not rely

upon the adverse inference in granting the government’s RCFC 52(c) motion, but

nevertheless issues this adverse inference sanction for the sake of the completeness of

the record in this case.

Because Mr. Cuker, “[and] not his client, was responsible for the untimely

discovery . . . ,” Mr. Cuker shall “pay the sanctions himself rather than passing the

sanctions on to his client.” Canvs Corp. v. United States, 104 Fed. Cl. 727, 734 (2012)

(citing cases). “The value of the attorney’s fees will be measured by the reasonable

number of hours worked multiplied by the prevailing market rates, that is ‘those

prevailing in the community for similar services by lawyers of reasonably comparable

skill, experience, and reputation.’” Id. (quoting Pac. Gas & Elec. Co. v. United States, 82

Fed.Cl. 474, 487–88 (2008)); see also Multiservice Joint Venture, 374 F. App’x. at 966. The

sanctions assessed represent the Court’s attempt to compensate the government “for

losses sustained due to [the] discovery violations, . . . and to deter other litigants from

engaging in similar discovery abuses.” SynQor, Inc. v. Artesyn Techs., Inc., 709 F.3d 1365,

1386 (Fed. Cir. 2013) (applying regional circuit law, and noting that “[t]he sanctions

awarded bear a ‘reasonable relationship’ to the harm that occurred, and serve as a

deterrent against similar discovery violations by future litigants” (citing BMW of N. Am.

v. Gore, 517 U.S. 559, 580–81 (1996))); see also K-Con Bldg. Sys., Inc. v. United States, 106

Fed. Cl. 652, 663 (2012) (holding that “the court has even greater discretion to award

costs than it does to award the default sanction because the former is not limited to

discovery violations that lack substantial justification or cause harm to the opposing

party”).

The government and Mr. Cuker shall endeavor to stipulate to the awarded costs,

expenses, attorney’s fees, and a payment schedule (if warranted), and, if they so agree,

shall file a joint statement listing the amount of such items with the court no later than

April 6, 2021. In the event that the government and Mr. Cuker are unable to agree, the

government shall file with the court a bill of their costs, expenses, and attorney’s fees,

together with any necessary explanation or supporting documentation, on or before

April 9, 2021. Mr. Cuker shall then file his response no later than April 23, 2021.

* ** **

56See also Def. Rep. at 5 (“The stipulation removes environmental contamination as a basis for

withdrawal of the 2018 offer, and it undermines Plaintiffs’ and their experts’ claim that the

property could not be sold.”).

- 52 -

The Court has great sympathy for the Pennas’ overall situation. And while no

reasonable property owner would be pleased to learn that their land may be

contaminated with potentially harmful chemicals, Plaintiffs’ evidence simply does not

support the claim that they have suffered a compensable taking. That is particularly

true where, as here, there is almost no evidence demonstrating any actual impact of

PFOS and PFOA on human health, no credible evidence demonstrating that the

Property cannot be sold, and no evidence of negative environmental stigma impacting

the Property’s valuation. Indeed, at least one of Plaintiffs’ exhibits, admitted into

evidence, notes that the “EPA is working to improve its understanding of the

prevalence and toxicity of these chemicals to determine if safe drinking water

regulatory limits are needed” and that “[i]t is not possible to link exposure to PFOS and

PFOA in water to a person’s individual health issues.” PX 29 (emphasis added)

(explaining that “PFOS, PFOA . . . are unregulated contaminants that are being sampled

for the first time in Public Water Systems” (emphasis added)). The Court recognizes

that the science and the regulatory environment may well be evolving towards

Plaintiffs’ view of the contamination, 57 but the evidence presented to the Court during

trial is very far from what is required to recover on their takings claim. At best, on this

record, the Pennas’ “claims against the government are moral, not legal.” Calvin v.

United States, 63 Fed. Cl. 468, 475 (2005).

VII. CONCLUSION

For the above reasons, the Pennas have failed to prove a compensable taking under

the Fifth Amendment and, accordingly, the government’s RCFC 52(c) motion for

judgment on partial findings is GRANTED. Following a determination of fees, costs,

and expenses, an appropriate order will be entered in this matter, instructing the Clerk

to enter judgment for defendant, the United States.

It is so ORDERED.

s/ Matthew H. Solomson

Matthew H. Solomson

Judge

57S. Boxerman, B. Bolen and M. Morales, Cos. Should Brace For More EPA Action On PFAS Under

Biden, Law360.com (Mar.

This text is long and has been trimmed here. Open the source document for the complete record.