Amicus Curiae Brief — Emmerman Et Vir v. City of Highland Park, Illinois

(3) ; ‘Supreme —— us. |

OCT 6 - 2004

No. 04-242

se OFFICE OF THE CLERK

In the

Supreme Court of the United States

=

ESTER P. EMMERMAN AND RONALD Z. EMMERMAN

Petitioners,

Vv.

CITY OF HIGHLAND PARK, ILLINOIS, ET AL.

Respondents.

—¢

On Petition for Writ of Certiorari to the Appellate Court

of Illinois, Second District

ions

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURIAE OF

NATIONAL ASSOCIATION OF HOME BUILDERS IN

SUPPORT OF PETITIONERS ESTER P.

EMMERMAN AND RONALD Z. EMMERMAN

—¢

DUANE J. DESIDERIO DWIGHT H. MERRIAM*

Of Counsel *Counsel of Record

National Association of PATRICK J. SWEENEY

Home Builders Of Counsel

1201 15" Street, NW Robinson & Cole, LLP

Washington, DC 20005 280 Trumbull Street

Telephone: (202) 266-8200 Hartford, Connecticut 06103

Facsimile: (202) 266-8161 Telephone: (860) 275-8200

Facsimile: (860) 275-8299

Counsel for Amicus Curiae National Association of Home Builders

MOTION FOR LEAVE TO

FILE BRIEF AMICUS CURIAE

Pursuant to this Court's Rule 37(b), the National

Association of Home Builders respectfully requests leave of

| the Court to file this brief amicus curiae in support of

Petitioners Ester and Ronald Emmerman. Written consent

for amicus participation in this case was withheld by

Respondent City of Highland Park. Written consent was

granted by counsel of record for Petitioners.

INTEREST OF AMICUS CURIAE

The National Association of Home Builders

("NAHB") represents over 215,000 builder and associate

members throughout the United States. Its members include

people and firms that construct and supply single family

homes as well as apartment, condominium, commercial and

industrial builders, land developers and remodelers. It is the

voice of the American shelter industry. It is, therefore,

concerned with any judicial decision that calls into question

the remedy available to its members under the Fifth

Amendment when land use regulators take private property

for public use without the payment of just compensation.

NAHB, whose members are highly dependent on

land use decisions made by government bodies, has appeared

before this Court as amicus curiae, of counsel, or a party in a

number of cases involving the rights and remedies of

landowners who have been adversely affected by

governmental actions. These include Agins v. City of

Tiburon, 447 U.S. 255 (1980); San Diego Gas & Electric

Co. v. City of San Diego, 450 U.S. 621 (1981); Williamson

County Reg'l Planning Comm'n v. Hamilton Bank, 473 US.

172 (1985); MacDonald, Sommer & Frates v. Yolo County,

477 U.S. 340 (1986); Nollan v. California Coastal

Commission, 483 U.S. 825 (1987); Yee v. City of Escondido,

503 U.S. 519 (1992); Lucas v. South Carolina Coastal

Council, 505 U.S. 1003 (1992); Dolan v. City of Tigard, 512

l

U.S. 374 (1994); Babbitt v. Sweet Home Chapter of

Communities for a Great Or., 515 U.S. 687 (1995); Suitum v.

Tahoe Regional Planning Agency, 520 U.S. 725 (1997); City

of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S.

687 (1999); Solid Waste Agency of N. Cook County v. U.S.

Army Corps of Eng'rs, 531 U.S. 159 (2001); Palazzolo v.

Rhode Island, 533 U.S. 606 (2001); Tahoe-Sierra

Preservation Council, Inc. v. Tahoe Reg'l Planning Agency,

535 U.S. 302 (2002); Borden Ranch P'ship v. U.S. Army

Corps of Eng'rs, 537 U.S. 99 (2002); City of Cuyahoga Falls

v. Buckeye Cmty. Hope Found., 538 U.S. 188 (2003); S. Fla.

Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 124 S. Ct.

1537 (2004).

For these reasons, the motion of National Association

of Home Builders to file a brief amicus curiae should be

granted.

DATED: October, 2004.

Respectfully Submitted,

DUANE J. DESIDERIO DWIGHT H. MERRIAM*

Of Counsel *Counsel of Record

National Association of PATRICK J. SWEENEY

Home Builders Of Counsel

1201 15" Street, NW Robinson & Cole, LLP

Washington, DC 20005 280 Trumbull Street

Telephone: (202) 266-8200 Hartford, Connecticut 06103

Facsimile: (202) 266-8161 Telephone: (860) 275-8200

Facsimile: (860) 275-8299

Counsel for Amicus Curiae National Association of Home Builders

eg —

TABLE OF CONTENTS

I. SUMMARY OF | ]

ON eedactsetesseesciecesclassceecctee. eenseasees......... ]

A. The Relevant Parcel Issue ..........000000000-.00.. Fs

B. This Court’s Relevant Parcel J urisprudence

Has Produced More Questions Than

SUE trnstihnssincscensicechasconsseoinnieaiavarscesec,..... o

1. Conflicting Answers to the Relevant

Parcel Question: Mahon and

ASTD +

rs Making Sense of the Contradiction:

Penn Central and Andrus................. 6

3. Another Change in J urisprudence:

Lucas and Palazzolo 0.0.0.0... 10

is Confusion in This Court’s Relevant Parcel

Jurisprudence Has Caused a Circuit Split .....11

a * Federal Trial Courts Are Also Confused By

the Relevant Parcel Issue.........eeccecccceos---. 16

RNIN ssc sassscsssessszccesssensesiansessossssssessasesace,.. 19

TABLE OF AUTHORITIES :

Anarus v. Allard,

Es ee TD Gets tnentclcababicndaaindaanebitnicaes 8,9, 12

Armstrong v. United States,

a wise ct ancsienniciniiaesieaiccibenidisicibiniiins 10

Ciampitti v. United States,

ee See se Re ee Ss. CPEB renin 15

District Intown Properties Ltd. P'ship v. District of

Columbia, .

198 F.3d 874 (D.C. Cir. 1999) .......... 3, 10, 11, 14, 15, 16

Florida Rock Industries, Inc. v. United States,

MS Fed. CL. Zi Clee, Ci. BGI) vccsissssinicesevnsesssenes 17, 18, 19

Forest Properties, Inc. v. Big Bear Municipal Water

District.,

er ee CA, BO CA, TF Piricvnwisicsaresirsimamirioonics 17, 18

Keystone Bituminous Coal Ass’n v. DeBenedictis,

SP UE. SFO CEFF D siicniccenscavevnsininaiorsce 4, 5, 6, 8,9, 10, 15

Loveladies Harbor, Inc. v. United States,

28 F.3d 1171 (Fed. Cir. 1994).....3, 11, 12, 13, 14, 15, 16

Lucas v. South Carolina Coastal Council,

OR OE, fj renee 1,2, 3, 10, 11, 14, 19

Palazzolo v. Rhode Island,

a Ara Se MD cetaiovinccsnscicneasscarniessdsasnanncineieiannanintenanes 11

Penn Central Transp. Co. v. New York,

GSE US. FOG CIF FE) oscccsneasncsesctnsssersans 6, 7, 8, 9,10, 11, 14

li

Pennsylvania Coal Co. v. Mahon,

BOD IS. FHS (1GTD) oecevversconsererinesenvecnes 1,2, 4, 5, 6, 7, 10

Planned Parenthood v. Casey,

PF ED LOD hccvosccnneimetsdicledtoteus ac. 3, 19

Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional

Planning Agency,

DPD Utes Dy DANAE COED vivcsnnrnninsnszirasaneedct 8

ill

ieee eit iain,

National Association of Home Builders respectfully

submits this brief amicus curiae in support of the petition for

certiorari filed by Petitioners Ester and Ronald Emmerman

on August 19, 2004.!

I. SUMMARY OF ARGUMENT

The case below presents the Court with an opportunity

to clarify an open question in its takings jurisprudence: how

should lower courts define the relevant parcel of land for the

purpose of determining whether a government regulation has

effected a compensable regulatory taking under the Fifth

Amendment. Given the confusion and conflicting views of

this question in the lower courts, the Court should grant the

petition to clarify the manner in which courts should

determine the relevant parcel.

Il. ARGUMENT

In 1992, this Court confronted a landmark property

case and held that a South Carolina beachfront building

restriction amounted to a compensable regulatory taking.

Lucas v. South Carolina Coastal Council, 505 U.S. 1003

(1992). Although the owner of land retained title, the Court

recognized that the “regulation denie[d] all economically

beneficial or productive use of the land,” amounting to the

functional equivalent of a physical taking. Jd. at 1015. This

principle was based upon Justice Holmes’ oft-quoted

assertion that “while property may be regulated to a certain

extent, if the regulation goes too far it will be recognized as a

' In accordance with Rule 37.6, Amicus Curiae confirms that this

brief was not written by counsel for any party in this matter and

that no person or entity made a monetary contribution specifically

for the preparation of this brief.

taking.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

415 (1922). The Lucas Court recognized that “[its] decision

in Mahon offered little insight into when, and under what

circumstances, a given regulation would be seen as going

‘too far,” Lucas, 505 U.S. at 1015, but it did not need to

provide a more precise definition because the trial court

found that the regulation in question “left each of Lucas’

beachfront lots without economic value.” Jd. at 1016 n.7.

The Court held that “on numerous occasions” its decisions

had established that “categorical treatment [is] appropriate

. where regulation denies all economically beneficial or

productive use of land.” Jd. at 1015-16 (emphasis added).

A. The Relevant Parcel Issue

At the same time, the Lucas Court admitted that “the

rhetorical force of our ‘deprivation of all economically

feasible use’ rule is greater than its precision, since the rule

does not make clear the ‘property interest’ against which the

loss of value is to be measured.” Jd. at 1016 n.7. Indeed,

this “relevant parcel” question is a crucial threshold issue for

all takings analyses, but it has received little judicial

attention in comparison to the question of how a regulation

affects the economic uses of a parcel. The relevant parcel is

the denominator in the takings fraction, so any comparison

of before and after values necessarily hinges on a uniform

method of determining the relevant parcel. Otherwise, the

court finds itself in the same position as a grade school child

trying to add fractions with different deneminators: without a

common denominator, the calculation is impossible. As the

Lucas Court recognized, however, the relevant parcel issue

remains “unclear.” Jd. Indeed, “this uncertainty regarding

the composition of the denominator in our ‘deprivation’

fraction has produced inconsistent pronouncements by the

Court,” further muddying the water. Jd.

The Lucas Court was able to sidestep the relevant

parcel question because it was irrelevant to the disposition of

that case: the numerator was zero (because the regulation

denied all economically viable use), so the value of the

takings fraction was the same regardless of the denominator.

Still, the issue looms large, and each passing year sees

greater conflict in takings jurisprudence as lower courts

struggle to make sense of contradictory precedent from this

Court. These courts have criticized Lucas not for its holding

but because this Court missed “a much-heralded opportunity

to clarify how courts were to balance public interest claims

against liberty claims of private property owners...”

Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1178

(Fed. Cir. 1994); see also District Intown Properties Ltd.

P'ship v. District of Columbia, 198 F.3d 874, 887-888 (D.C.

Cir. 1999) (Williams, J., concurring).

To protect and preserve property rights, “[s]tate and

federal courts as well as legislatures throughout the Union

must have guidance as they seek to address this subject in

conformance with the Constitution.” Planned Parenthood v.

Casey, 505 U.S. 833, 845 (1992). This case, by highlighting

the relevant parcel question, provides the Court with an ideal

Opportunity to answer the lower courts’ requests for

guidance and clarify a vexatious issue in property law. A

clear relevant parcel precedent would resolve conflict among

lower courts while advancing the interest of judicial

economy by giving litigants a dependable and reliable

Standard by which to judge their dispute. Therefore, this

Court should grant certiorari.

B. This Court’s Relevant Parcel Jurisprudence Has

Produced More Questions Than Answers

l. Conflicting Answers to the Relevant Parcel Question:

Mahon and Keystone

The first major regulatory taking case was Mahon, in

which Justice Holmes made his famous assertion that a

regulation that “goes too far” violates the Takings Clause.

260 U.S. at 415. In this case, the Pennsylvania Coal

Company appealed an injunction that prevented it from coal

mining that would have caused subsidence on the plaintiffs’

property. Although the plaintiffs owned only the surface

rights to the property, the Kohler Act in Pennsylvania

restricted the company’s ability to exercise its mining rights

under the property by requiring it to leave intact enough

subterranean support to keep the mines from collapsing and

causing subsidence on the surface. The company argued that

the Kohler Act as applied amounted to a taking of the coal

left in the ground as support, violating the Fifth

Amendment’s Takings Clause. Despite the “public interest”

furthered by the Kohler Act, the Court struck it down,

holding that “[t]o make it commercially impracticably to

mine certain coal has very nearly the same effect for

constitutional purposes as appropriating or destroying it.”

Id. at 414. Implicitly, then, the Court reached this decision

by defining the relevant parcel narrowly: the regulation was

invalid because it prohibited all economic use of the “certain

coal” that could not be mined, despite the fact that the

company could still mine other coal on its property.

Over half a century later, this Court considered an

almost-identical question, and it reached the opposite

conclusion. Keystone Bituminous Coal Ass'n _ v.

DeBenedictis, 480 U.S. 470 (1987). Quoting Justice

Holmes’ admission that “the question depends upon the

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particular facts,” Mahon, 260 U.S. at 413, the Keystone

Court ignored the logic of Mahon because now it was

“address[ing] a different set of particular facts’ ...”

Keystone, 480 U.S. at 474. Like Mahon, however, the

central issue in Keystone was whether a Pennsylvania law

requiring coal mining companies to leave enough support in

the ground to prevent subsidence was a regulatory taking.

Unlike Mahon, the Keystone Court found that no

compensable taking. This outcome depended entirely on the

Keystone Court’s definition of the relevant parcel:

The 27 million tons of coal [that must be left

in the ground as support] do not constitute a

separate segment of property for takings law

purposes. Many zoning ordinances place

limits on the property owner’s right to make

profitable use of some segments of his

property. ... There is no basis for treating the

less than 2% of petitioners’ coal as a separate

parcel of property.

Id. at 496-97.

Remarkably, the Court reached this determination

despite its recognition that “Pennsylvania property law is

apparently unique in regarding the support estate as a

separate interest in land that can be conveyed apart from

either the mineral estate or the surface estate.” Jd. at 497-98.

This would seem to strengthen the Mahon argument that

only the support estate should be considered the relevant

parcel, but the Court nevertheless chose to aggregate the

support and mineral estates and consider them together as

one relevant parcel. It explicitly refused to let “the result

turn on whether state law allowed the separate sale of the

segment(s] of property.” Jd. at 498.

In dissent, Chief Justice Rehnquist criticized this

approach. He underlined the contradictions between the

Keystone majority opinion and the Mahon decision, rejecting

the majority’s insistence that the particular facts in Keystone

justified the dramatically different result. See id. at 518-520

(Rehnquist, C. J., dissenting). Although he acknowledged

that defining the relevant parcel was an “admittedly difficult

task,” id. at 514, the Chief Justice insisted that traditionally

the Court “evaluated takings claims by reference to the units

of property defined by state law.” Jd. at 518-19. Under his

reading of the Court’s precedent, “where the estate defined

by state law is both severable and of value in its own right, it

is appropriate to consider the effect of regulation on that

particular property interest.” Jd. at 520. Therefore, Chief

Justice Rehnquist advocated defining the relevant parcel

narrowly, as the Mahon Court had done, and finding that a

compensable taking had occurred.

2. Making Sense of the Contradiction: Penn Central and

Andrus

Although the factual similarities between Keystone

and Mahon highlight this Court’s divergent approaches to

the relevant parcel question, what is most notable about the

decisions is that the Keystone Court took great care to

reaffirm Mahon and cast its decision squarely within the

Mahon precedent. Jd. at 474. Both approaches remain good

law, and lower courts are left to decide whether to define

_ relevant parcel broadly (as in Keystone) or narrowly (as in

Mahon) by attempting to divine the factual differences cited,

but not enumerated, by the Keystone Court.

Indeed, Keystone may best be read as the logical

extension of another regulatory takings case, Penn Central

Transp. Co. v. New York, 438 U.S. 104 (1978), rather than as

a member of the Mahon family. Penn Central involved an

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effort to erect a 55-story tower on top of New York City’s

Grand Central Terminal, which the City had designated a

protected historic landmark. Penn Central, the owner of the

property, sued the City when the Landmarks Preservation

Commission denied permission to build the tower. The

railroad alleged that the ruling deprived it of the use of its air

rights without compensation, violating the Takings Clause.

The Court rejected this approach for several reasons,

one of which was its definition of the relevant parcel.

According to the majority:

“Taking” jurisprudence does not divide a

single parcel into discrete segments and

attempt to determine whether rights in a

particular segment have been entirely

abrogated....[T]his Court focuses rather both

on the character of the action and on the

nature and extent of the interference with

rights in the parcel as a whole — here, the city

tax block designated as the “landmark site.”

Id. at 130-31. It reconciled this broad relevant parcel

determination with Mahon by denying “that full use of air

rights is so bound up with the investment-backed

expectations of appellants that governmental deprivation of

these rights invariably ... constitutes a ‘taking.’” Jd. at 131

n.27.

In so doing, the Court recast the Mahon Court’s

definition of relevant parcel. Although Justice Holmes

explicitly noted that his decision was based on the fact that

the regulation made it “commercially impracticable to mine

certain coal,” Mahon, 260 U.S. at 414 (emphasis added), the

Penn Central majority believed the decision was really based

on the coal company’s expectation that it was buying rights

that could be completely exploited, causing it to pay a higher

7

investment price than it would have paid if the restriction

had been in effect at the time of purchase. Indeed, the Penn

Central Court asserted that Mahon was decided “irrespective

of the impact of the restriction on the value of the parcel as a

whole,” thereby implying that the Mahon Court never

decided the relevant parcel question at all. Penn Central,

438 U.S. at 131 n.27.

Regardless of how Penn Central characterized

Mahon, future courts seized on Penn Central’s sweeping

rejection of efforts to “divide a single parcel into discrete

segments” as the central lesson of the case. See, e.g., Tahoe-

Sierra Preservation Council, Inc. v. Tahoe Regional

Planning Agency, 535 U.S. 302, 326-27 (2002) (“Penn

Central did, however, make it clear that even though

multiple factors are relevant in the analysis of regulatory

takings claims, in such cases we must focus on ‘the parcel as

a whole’.”). However, as Chief Justice Rehnquist later

pointed out, “[t]he Court [in Penn Central] gave no guidance

on how one is to distinguish a ‘discrete segment’ from a

‘single parcel.’” Keystone, 480 U.S. at 517 n.5 (Rehnquist,

C. J., dissenting). In effect, then, the anti-severance principle

from Penn Central is superfluous; of course the Court will

not divide the relevant parcel, but the court still must

determine what the relevant parcel is.

The year after Penn Central, the Court had the

opportunity to clarify its relevant parcel ruling and instead

added more confusion to the jurisprudence. In Andrus v.

Allard, 444 U.S. 51 (1979), the Supreme Court addressed a

challenge to wildlife protection statutes that prevented the

sale and trade of some Native American artifacts because

they included feathers from protected eagles killed long

before the statutes were enacted. Dealers in the artifacts

challenged the law, arguing that the regulation deprived their

property of its value by preventing its sale and trade. The

Court disagreed:

The regulations challenged here do not

compel the surrender of the artifacts, and

there is no physical invasion or restraint upon

them. Rather, a significant restriction has

been imposed on one means of disposing of

the artifacts. But the denial of one traditional

property right does not always amount to a

taking. At least where an owner possesses a

full ‘bundle’ of property rights, the

destruction of one ‘strand’ of the bundle is

not a taking, because the aggregate must be

viewed in its entirety.

Id. at 65-66. Therefore, although it is “undeniable that the

regulations here prevented the most profitable use of

appellees’ property,” the property was not taken because the

regulations did not remove all sticks from the bundle; “for

example, [the dealers] might exhibit the artifacts for an

admissions charge.” Jd at 66. The relevant parcel, it

seemed, was every possible use of the property at issue, and

as long as any potential use remained, the Court would not

find that the regulation had “gone too far.”

Perhaps, then, Keystone can only be understood in

the context of Penn Central and Andrus. F ollowing on the

heels of the strong language in those cases, it stands to

reason that the Court would focus on the profitable uses of

the coal company’s property that remained in their bundle

rather than the sticks that could no longer be exploited. But

the Keystone Court took this analysis a step further, not only

considering the bundle of property rights in the support

estate but also aggregating that (empty) bundle with the (full)

bundle of rights in the mineral estate.

Lower courts have read this progression as evidence

of a presumption of aggregation, which “tends to reduce the

likelihood that courts will order compensation.” District

Intown, 198 F.3d at 885 (Williams, J., concurring). The

danger of such a presumption is that it will eventually butt

heads with the Takings Clause if it is not carefully applied.

As the Penn Central Court recognized, “the ‘Fifth

Amendment’s guarantee ... [is] designed to bar Government

from forcing some people alone to bear public burdens

which, in all fairness and justice, should be borne by the

public as a whole’.” 438 U.S. at 123 (quoting Armstrong v.

United States, 364 U.S. 40, 49 (1960)). Setting the

presumption too strongly against compensation undermines

this purpose by sacrificing “fairness and justice” for judicial

simplicity.

cH Another Change in Jurisprudence: Lucas and

Palazzolo

Recognizing the danger of defining relevant parcel

too broadly, the Lucas Court signaled, in dictum, a retreat

from Penn Central’s strong endorsement of aggregation.

After noting the confusion produced by its relevant parcel

jurisprudence, the Court turned its sights to Penn Central’s

“extreme — and, we think, unsupportable — view of the

relevant calculus.” Lucas, 505 U.S. at 1016 n.7. Again in

dictum, the Court moved toward the approach Chief Justice

Rehnquist advocated in his Keystone dissent, writing that

“the answer to this difficult question [i.e., relevant parcel]

may lie in ... whether and to what degree the State’s law has

accorded legal recognition and protection to the particular

interest in land with respect to which the takings claimant

alleges a diminution in (or elimination of) value.” Jd.

(emphasis added). Unfortunately, this retreat did takings

jurisprudence more harm than good, both because it was

signaled in dictum and because it was poorly defined. As

10

Judge Williams of the D.C. Circuit lamented, although “(t]he

Court arguably evidenced a retreat from this strong position

[taken in Penn Central] ... [it] has not, however, reached

agreement on the scope of this retreat.” District Intown, 198

F.3d at 887-88 (Williams, J., concurring).

Therefore, although the Court has come almost full

circle — from Mahon to Keystone and Penn Central and back

to a Mahon-like, narrow definition of relevant parcel in

Lucas — lower courts are not sure where exactly on the circle

Lucas left them. Indeed, this Court in Palazzolo v. Rhode

Island, 533 U.S. 606 (2001), indicated that it, too, was

unsure of the proper relevant parcel definition after Lucas.

Although the Palazzolo Court avoided the relevant parcel

issue because of procedural matters, in its brief discussion of

“the difficult, persisting question of what is the proper

denominator in the takings fraction,” the Court recognized

the contradictions that developed in its own jurisprudence

following Penn Central: “Some of our cases indicate that the

extent of the deprivation effected by a regulatory action is

measured against the value of the parcel as a whole, but we

have at times expressed discomfort with the logic of this

tule.” Palazzolo, 533 U.S. at 631 (citations omitted). If this

Court cannot decide how to interpret its own decisions, it is

no surprise that lower courts have encountered great

difficulty — as well as vastly different results — in their

attempts to do so.

c. Confusion in This Court’s Relevant Parcel

Jurisprudence Has Caused a Circuit Split

Barely two years after Lucas, the Federal Circuit

Court of Appeals was invited to try to make sense out of this

Court’s relevant parcel jurisprudence in Loveladies. 28 F.3d

1171 (Fed. Cir. 1994). In 1958, Loveladies purchased 250

acres of land located on Long Beach Island, Ocean County,

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New Jersey. /d. at 1174. In 1972, the passage of the Clean

Water Act brought 51 of those acres — which were wetlands

that had yet to be developed — under the control of the Army

Corps of Engineers. Jd. Loveladies also needed permission

from the New Jersey Department of Environmental

Protection to fill 50 of those acres (one had been filled prior

to 1972), and it eventually secured permission from the state

to develop 12.5 of the 51 acres. Jd. Since one of those acres

was already filled, the agreement with the state allowed

Loveladies to fill 11.5 acres. Jd.

Loveladies then applied for permission from the

Army Corps of Engineers to implement the agreement it had

reached with the state. Jd The Corps denied Loveladies’

application, and the company brought suit for a regulatory

taking in the Court of Federal Claims. Jd. The court ruled in

Loveladies’ favor, finding that there was a taking because

the permit denial caused “greater than 99% diminution of

[the land’s] value.” Jd. at 1175. The Government appealed.

The Court of Appeals began its consideration of the

case by framing the question it thought was presented: “The

question at issue here is, when the Government fulfills its

obligation to preserve and protect the public interest, may the

cost of obtaining that public benefit fall solely upon the

affected property owner, or is it to be shared by the

community at large.” Jd The court acknowledged that its

answer to that question hinged on two aspects of “the

Denominator Problem.” Jd. at 1179. First, the court needed

to determine “whether a regulatory taking requires that there

be a denial of essentially a//] remaining economic use, or

whether loss of a substantial part, but not all, of the

economic use may constitute a compensable taking.” Jd. In

other words, the court needed to decide how many sticks

may be taken from the Andrus bundle before a taking occurs.

The precedent, however, was far from clear: “The earlier

12

net a a omnes Att

cases sometimes use language suggesting that [all economic

use must be lost], and sometimes did [sic] not. Lucas itself

contains a discussion that acknowledges both viewpoints.”

Id. at 1179-80.

Recognizing that the answer to the first question

necessarily turned on the relevant parcel issue, the court then

turned to that “key question.” Jd. at 1180. The facts of the

case gave the court the choice of many potential relevant

parcels. The government argued that the relevant parcel was

either the original 250 acres or, alternatively, the 51 acres

that remained undeveloped when the ‘permit was denied.

Loveladies, on the other hand, argued that 38.5 of the 51

acres were “dedicated to the state in return for the NJDEP

permit,” so they should not be considered part of the relevant

parcel. Jd.

The Court of Appeals agreed with Loveladies. It

affirmed the lower court’s determination that the relevant

parcel was only the 12.5 acres that could have been

developed under the state agreement but were rendered

useless by the federal permit denial. Excluding the

contiguous 38.5 acres, although they were part of the original

parcel purchased by Loveladies, was “only logical since

whatever substantial value that land had now belongs to the

State and not to Loveladies.” /d. at 1181. Using this narrow

definition of the relevant parcel, the court returned to the first

question it had posed. It held:

This is not, then, a case of a partial taking,

involving linedrawing between

noncompensable ‘mere diminution’ and

compensable partial taking. Rather, this is a

case in which the owner of the relevant

parcel was deprived of all economically

feasible use.

13

Id. at 1181-82 (citations omitted). Therefore, the court ruled

that Loveladies was entitled to compensation.

Five years later, the D.C. Circuit Court of Appeals

was confronted with a similar issue, and it reached a very

different conclusion. In District Intown, 198 F.3d 874, the

court heard a suit alleging that the District had effected a

regulatory taking by denying building permits on lots that

had recently been designated historic landmarks. In 1961,

District Intown purchased an apartment building and

adjacent landscaped lawns in a single transaction. /d. at 877.

Twenty-seven years later, in 1988, District Intown

subdivided the property into nine lots; one lot contained the

apartment building, and the other eight were lawn lots on

which District Intown planned to build townhouses. Jd. The

following year, the District of Columbia designated all nine

lots historic landmarks, bringing them under the control of

the Historic Preservation Review Board. Jd. The Board then

denied building permit applications by District Intown in

1991 and 1992 because “construction on the lawn would be

incompatible with its historic landmark status.” Jd. at 878.

District Intown filed suit in federal court, alleging an

uncompensated regulatory taking, and it appealed a summary

judgment entered against it.

On appeal, the court recognized that “[uJnder both

Lucas and Penn Central ... we must first define what

constitutes the relevant parcel before we can evaluate the

regulation’s effect on that parcel.” Jd. at 880. This question,

in turn, boiled down to whether the lot containing the

apartment building should be considered part of the relevant

parcel. If not, the unbuildable lawn lots would have suffered

an almost complete diminution in value. If so, however, the

nine-lot parcel would retain significant value because of the

apartment building.

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The court held that all nine lots together formed the

relevant parcel. Jd. at 877. It reached this decision by

inquiring “how both the property owner and the government

treat (and have treated) the property,” id at 880, and it

endorsed a four-factor analysis of the issue. The district

court had considered “the degree of contiguity, the dates of

acquisition, the extent to which the parcel has been treated as

a single unit, and the extent to which the restricted lots

benefit the unregulated lot,” and it found that all four

weighed in favor of treating the nine lots as one unit. Jd

(citing Ciampitti v. United States, 22 Cl. Ct. 310, 318 (Ci. Ct.

1991)). Aside from “[t]he intentional act of subdivision,”

neither court found any evidence that the property was

treated separately by the company in acquiring, maintaining

and managing it. Jd Therefore, the Court of Appeals

affirmed the decision to treat all nine lots as one relevant

parcel, and it likewise affirmed the ruling that there was no

compensable taking.

The fact that the courts reached different outcomes in

District Intown and Loveladies is not troubling in itself

because the Supreme Court has repeatedly recognized that

takings cases require “essentially ad-hoc, factual inquiries.”

Keystone, 480 U.S. at 495. Still, the lower courts’

discussions of the relevant parcel issue reveal vastly different

understandings of the state of the law. This leaves open the

distinct possibility that both cases would have come out

differently if they had been litigated in the other court. For

example, the District Intown court justified treating all nine

lots as one parcel on the following grounds:

The lots are spacially and functionally

contiguous. District Intown purchased the

property as a whole in 1961 and treated it as

a single indivisible property for more than

25 years. District Intown presented no

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evidence that, even after subdivision, it

treated the lawn lots separately from Lot

106, the lot that contains the apartment

building...

District Intown, 198 F.3d at 880. However, the same can be

said of the property in Loveladies: the land at issue was

“spacially and functionally contiguous,” purchased together,

and managed jointly for more than 25 years. The only

difference between any of the lots in the 250 acres was that

some of them were filled and sold before the Clean Water

Act was passed and others were not. Similarly, one of the

nine District Intown lots was developed before the parcel

was designated a historic landmark, while the others were

not. The Loveladies court conceptually severed the lots

based on when they were developed, but the District Intown

court found that factor irrelevant.

Therefore, it appears that the District Intown court

ignored the factors that underlay the Loveladies decision, and

the Loveladies court discounted the considerations that

underpinned District Intown. This conflict in the circuits

will not resolve itself, and it is up to this Court to articulate a

clear theory to guide all the circuits in their relevant parcel

jurisprudence.

D. Federal Trial Courts Are Also Confused By the

Relevant Parcel Issue

Not surprisingly, the uncertainty about the relevant

parcel evident in the opinions of the Supreme Court and

Courts of Appeals has been magnified as lower courts have

struggled with the same issues. Two cases should be

sufficient to illustrate this point. Both cases considered

allegations of regulatory takings after permit denials by the

Army Corps of Engineers. Both were decided in the late

1990s by the same court, the United States Court of Federal

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Claims. Despite these similarities, the outcomes of the cases

were very different.

In 1997, the court decided Forest Properties, Inc. v.

Big Bear Municipal Water District. 39 Fed. Cl. 56 (Fed. Cl.

1997). That case involved the denial of a dredge and fill

permit for 9.4 acres of lakebottom property adjoining 53

upland acres under the same ownership. Although the court

cited the same four factors later cited by the Federal Circuit

in District Intown, it discounted evidence of “the different

dates upon which the upland property was acquired and the

option rights [to purchase the lakebottom property] were

transferred, the separate consideration that was paid for the

upland property, and the option rights.” Forest Properties,

39 Fed. Cl. at 73. Indeed, it observed that “[t]his court must

be wary of focusing solely on the particular facts of a

transaction.” Jd. The court, instead, “should focus on how

the economic expectations of the claimant, with respect to

the parcel at issue, have shaped the owner’s actual and

projected use of the property.” Jd In the end, the court

found that “FPI’s economic intentions were to utilize the

lakebottom acreage and the upland parcel in conjunction

with each other as one income-producing unit.” Jd. at 74.

Therefore, it chose to treat all 62 acres as the relevant parcel,

and it found that the permit denial caused a mere diminution

in value, not a compensable taking.

Two years later, the court was again invited to

address an alleged regulatory taking. Florida Rock

Industries, Inc. v. United States, 45 Fed. Cl. 21 (Fed. Cl.

1999). This time, the Corps denied a permit to mine

limestone on land Florida Rock had purchased for that

purpose just before the Clean Water Act Amendments

passed in 1972. First, Florida Rock applied for a permit to

mine the entire 1,560 acre parcel, and this application was

denied because “the Corps indicated it would only consider

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applications covering mining needs sufficient to satisfy a

three year period.” Jd. at 25. Then, Florida Rock again

applied for a mining permit, this time only for the 98 acres it

could mine in three years. This application was also denied.

Id.

In considering Florida Rock’s taking claim, the Court

of Federal Claims determined that the relevant parcel was the

98 acres for which the permit had been denied. Jd. at 33. It

refused to entertain the notion that Florida Rock’s inability to

mine 6 percent of its wholly-owned contiguous property

merely diminished the value of the entire lot. Instead, the

court observed that “[rjegulations often require courts to

look at entire parcels to determine their impact, but that does

not mean property only exists in the form of the entire

parcel.” Jd. at 43. Finding that “[t]he frustration of Florida

Rock’s reasonable investment-backed expectations is beyond

doubt ... [and] absolute,” the court ruled that the 98 acres at

issue had been taken by regulation and Florida Rock was

entitled to just compensation. /d. at 41.

It is difficult to square this decision with Forest

Properties. The court in Florida Rock was willing to sever

98 wetland acres from 1,462 contiguous and

indistinguishable wetland acres owned by the same company

and intended for the same purpose, but the Forest Properties

court refused to sever 9.4 lakebottom acres from 53 upland

acres that were purchased separately. Both Florida Rock and

Forest Properties purchased the land in question as an

investment with expectations that it could be exploited

profitably. Both saw their expectations frustrated by the

denial of federal permits. Only one received compensation.

The confusion and contradiction in the relevant parcel

jurisprudence evidenced by these two opinions is

representative of the struggle faced by lower courts

nationwide in trying to make sense of the “partial theories

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and broken concepts” that litter “the landscape of taking

law.” Florida Rock, 45 Fed. Cl. at 23.

Il. CONCLUSION

The same year that Lucas was decided, this Court

famously remarked that “[l]iberty finds no refuge in a

jurisprudence of doubt.” Casey, 505 U.S. at 844. This Court

should grant the Emmermans’ petition for certiorari to

clarify the difficult issue of relevant parcel for litigants and

courts across the country.

DATED: October, 2004.

Respectfully submitted,

DUANE J. DESIDERIO DWIGHT H. MERRIAM*

Of Counsel *Counsel of Record

National Association of PATRICK J. SWEENEY

Home Builders Of Counsel

1201 15" Street, NW Robinson & Cole, LLP

Washington, DC 20005_ 280 Trumbull Street

Telephone: (202) 266-8200 Hartford, Connecticut 06103

Facsimile: (202) 266-8161 Telephone: (860) 275-8200

Facsimile: (860) 275-8299

Counsel for Amicus Curiae National Association of Home Builders

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