# Opposition Brief — Volkema v. Michigan

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1998
- **Citation:** 525 U.S. 1040

## Text

2D
nal FILED |

No. 98-388
In the Supreme Court of the United Btates NOV 3 1998
October Term, 1998
QEEICE OF THE CLERK
| | SUPREME COURT, U.S.

RUSSELL H. VOLKEMA and
LOIS J. VOLKEMA,

Petitioners,
Vv.
STATE OF MICHIGAN;
DEPARTMENT OF ENVIRONMENTAL
QUALITY, and RUSSELL HARDING,

Director of Department of Environmental Quality,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE MICHIGAN SUPREME COURT

BRIEF OF RESPONDENTS IN OPPOSITION

FRANK J. KELLEY
Attorney General

Thomas L. Casey
Solicitor General
Counsel of Record

P. O. Box 30212
Lansing, Michigan 48909
(517) 373-1124

. S. Peter Manning
Assistant Attorney General
Attorneys for Respondents

‘

aN
COUNTER-STATEMENT OF QUESTION PRESENTED

When a property owner is denied a permit to fill 4.3
acres of wetland does the Constitution require a court to
focus only on the 6 acres which allegedly cannot be
commercially developed due to that decision in determining
whether a taking has occurred or, consistent with longstanding
takings jurisprudence, should the court consider the entire
undeveloped 24.6 acre parcel of property currently owned by
the property owner?

Be Ry ee ss ES ee Se em ae es a CRIS © LEE eo ib alt! vo es
Fie Ng Sa hd ae ies a 8 bie bd aia Che a hs i aks Baie
~

LIST OF PARTIES

In the courts below, the State of Michigan, the Michigan
Department of Natural Resources (MDNR) and its Director,
Roland Harmes, were listed as respondents. In 1995 the
Michigan Department of Environmental Quality (MDEQ) was
' created and assumed the obligations and authority for the
regulatory scheme under which the permit decision at issue
was rendered. Executive Reorganization Order 1995-18, Mich
Comp. Laws Ann. § 324.99903 (West Supp. 1998). Russell J.
Harding has succeeded Roland Harmes as MDEQ's Director.
Director Harding and the Michigan Department of
Environmental Quality are automatically substituted as
parties. Supreme Court Rule 3.5.3. All three respondents will
be collectively referred to as "MDEQ."

-iii-

TABLE OF CONTENTS
Page

COUNTER-STATEMENT OF QUESTION

EE NE ai cts hinthth daira desandndasbatenniennsicaninines vads terrapins i
a a OE caster ancacs shectagncnaen vapansdcovaphepestesnvsaninannsesice ii
Sp I PIE EEF SR cscgacnccccarsensessencvnsnsceceneccsnseeveneiees Vv
SIEMENS MIEN sinsscsc srenascs banoannasensersusadenssayssedebivasosgecessnes 1
a Tia na saan acest ntemenaiile apesgcesbensevdstosic ints icesecases 1
SR UPIINIIEE, GED EEIE OIA cscccccsssvosccarceccenccacocndecoasccegeocs 1
REASONS FOR DENYING THE WRIT...............ccccceceee 4

I. BECAUSE OF ITS UNIQUE FACTS AND
PROCEDURAL POSTURE THIS IS AN
INAPPROPRIATE CASE TO RESOLVE THE
QUESTION RAISED IN THE PETITION..................... 3

Il. THE DECISION OF THE MICHIGAN COURT OF
APPEALS IS CONSISTENT WITH ESTABLISHED
PRECEDENT OF THIS COURT, AS WELL AS THE
EA FUP MEER PEPE, COIR Seccnsscscccsccnssscescestceessensenens 4

A. The Court Of Appeals Decision ¢o Not Limit
Its Analysis To The Discrete Portion Of The
Property Impacted By The Government Action
Is Consistent With This Court's Longstanding
TEL iasciissbthigslabasnissnsseeserisacseaicedvsesnacee 5

B. Lower Federal Courts Which Have Addressed
The Relevant Parcel Issue Have Reached
Conclusions Consistent With The Michigan
Court Of Appeals And Have Expressly Rejected
The Type Of "Per Se" Rule Advocated By
I Scala ari snchacsitveinnsdonna ced janeasecrevensovesseiess 7

-iv-

Il. PETITIONERS HAVE FAILED TO DEMONSTRATE
ANY COMPELLING NEED TO ADOPT THE RULE
THEY ADVOCATE, AND THE RULE
CONTRAVENES SETTLED TAKINGS DOCTRINE...9

IV. THERE IS NO CONFLICT BETWEEN THE
VARIOUS STATE COURTS OR THE FEDERAL
CIRCUIT COURTS NECESSITATING THE
INVOLVEMENT OF THIS COURT............ccccscecees 11

A. The Oregon Supreme Court's Decision In
Boise Cascade Corp. v Board of Forestry Was
Limited To The Interpretation Of The Oregon
Constitution And Did Not Directly Address
The Relevant Parcel Issue...................ssssssessesesees 11

B. The Holding In Loveladies Harbor Is Not In
Conflict With The Michigan Court Of Appeals
ODER os nse se ciiniygrteinitnind ntefermtpictnnpan aes 13

C. American Savings And Loan Association v.
County of Marin Is Of Dubious Precedential
URIRII acne ssssnensesesiomcanidin nak anooy Uinin Saiegsamiataaes monean’ 14

-y-
INDEX OF AUTHORITIES
Page

Cases
American Savings and Loan Association v County of Marin,

653 F.2d 364 (9th Cir. 1981)............cceeseseees 14, 15, 16
Andrus v. Allard,

ON Fie IND CRED dhewietns dacs dessins bviseeton oiokeiachoseabeb 5
Boise Cascade Corp. v Board of Forestry,

we ee 411 Ce, 1997)....kdniiign nncusn-« 11, 12, 16

Ciampitti v. United States,
ee 0, OO oh inuudaus 8, 9, 16

Concrete Pipe & Products of California, Inc. v.
Construction Laborers Pension Trust,
BO US. GUD CN a dik nis iksiciesiieemserscccrcns 6, 9, 16

Deltona Corp. v. United States,
657 F.2d 1184 (Ct. Cl. 1981),

obt..den. €55 US. 1017 (1982)........c5ciidecresesnci. 8, 16
Dolan v. Tigard,

ee |” SRST Cr alae ie erm 7,9, 16
Forest Properties, Inc. v. United States,

ee Re SA ee Rachid babii chases cdhdeossseengescestapndntocde 7
Gorieb v Fox, )
At a Ri: GR PE ainiitidh. (essential tq.teacermicssneraidreree 10

Jentgen v. United States,
657 F.2d 1210 (Ct. Cl. 1981),
cert. den. 455 U.S. 1017 (1982)....c.ccscsecssesesseessessessecseenes ~

K & K Construction v. Department of Natural Resources,
456 Mich. 570; 575 N.W.2d 531 (1998).......... 1,3, 9,13

-Vi-

Keystone Bituminous Coal Association v. DeBenedictis,

460 US. GO (067). ind Ea 5, 6, 9, 15
Loretto v. Teleprompter Manhattan CATV Corp.,

450-U.G: 410 SIG a La nk. 10
Loveladies Harbor, Inc. v. United States,

28 F.3d 1171 (Fed. Cir. 1994)..........0000 9, 13, 14, 16
Lucas v. South Carolina Coastal Council,

SOS: UG: 20GB 490A vacitiiscrriasirteien dla. deas 6, 7,9
MacLeod v Santa Clara County,

749 F.2d 541 (9th Cir. 1984),

cert. den 472 U.S. 1009 (1985)............ccccccccceseeeees 7,14

Mountain States Legal Foundation v. Hodel,
799 F.2d 1423 (10th Cir. 1986),
cert..dew. 480 U.S. GBT (USBE)sviciisccc cre scsinesinncccodetennd 7

Naegele Outdoor Advertising v City of Durham,
B44 F.2d 172 (4th Cir. 1988)... dccccccccsssccsccccsccescseeseeess 7

Penn Central Transportation Co. v. New York City,
4358 DS. 106 TSF B een cdi 5, 6, 8, 14

Tabb Lakes, Ltd. v. United States,
10 F.3d 796 (Fed. Cir. 1993)............cccccecccees 8, 9, 16

Volkema v. Department of Natural Resources,
214 Mich. App. 66; 542 N.W.2d 282 (1995),

lv. app. den. (Jue 9, 1998)........cccccsereerseeeees 1, 2, 4, 14
Volkema v. Department of Natural Resources,

ET RO Te Rr tents sees crncasneecincarscnsivetasaniel 1, 4, 13
Zealy v. City of Waukesha,

548 N.W.2d 528 (Wis. 1996).........cccccccceessesseeeeeees 7

Zilber v. Town of lage
692 F. Supp. 1195 (N.D. Cal. 1988).............ccceeeees 15

Se 8s ae ee ane ee ee ee Le ee ie ee el ~
a S eh ether, o's . -

-vii-

Statutes
Clean Water Act, 33 U.S.C. § 1251 et SG.......cccccessesseseeeeenes 7
Clean Water Act, 33 U.S.C. § 1344... cccccccccscsceeseeeneeees 13
Executive Reorganization Order 1995-18,

Mich. Comp. Laws Ann. §324,99903 ........cccessssesee ii
Goemaere-Anderson Wetland Protection Act,

Mich. Comp. Laws Ann. § 281.701 et $€q.......00000e0e 2
Natural Resources and Environmental Protection Act,

Mich. Comp. Laws Ann. § 324.30301 et Seq............000+ 2
Constitution

Oregon Constitution, Article I, section 18............0s0000 11

adn
OPINIONS BELOW

Petitioners’ Application for Leave to —— to the
Michigan Supreme Court was denied in an Order dated June 9,

1998. Volkema v. Department of Natural Resources, 457 Mich.

884 (1998). The application for leave to appeal had been held

in abeyance pending the Michigan Supreme Court's decision in

K & K Construction v. rtment of Natural Resources, 456
Mich. 570; 575 N.W.2d 531 (1998), cert. den. ss ~*U.S.
(1998).

The Michigan Court of Ps decision in the
underlying case is reported as Volkema v. Department of
Natural Resources, 214 Mich. App. 66; 542 N.W.2d 282 (1995).
The various state Court of Claims opinions are not published.

The pertinent orders and opinions are reproduced as

Appendices A-E to the Petition.! Respondents have not
attached these documents to this brief and will reference
Petitioners’ Appendices as required.

JURISDICTION

Respondents do not dispute Petitioners’ statement
concerning the jurisdiction of the Court.

STATEMENT OF THE CASE

Respondents, the State of Michigan, the Michigan
Department of Environmental Quality and Russell Harding,
Director of the Michigan Department of Environmental
Quality ("“MDEQ"), will primarily rely on the recitation of facts
contained in the Michigan Court of Appeals opinion in the
ype | case. 214 Mich. App. at 66-67; Petitioners’
Appendix B, pp. 1-2. This concise, two- paragraph narration
adequately presents the factual background in this case for
purposes of addressing the issue raised by Petitioners.

However, two areas of potentiai confusion should be
clarified. The first involves the nature of the government
action at issue which, contrary to Petitioners’ rhetoric, was

I Petitioners cite to an “A ix F’ in their Petition. However, there was no

Appendix F appended to Respondents’ copy of the Petition.

-2-

solely the denial of Petitioners’ permit application to fill an
area of wetland under the former Goemaere-Anderson
Wetland Protection Act ("WPA"), Mich. Comp. Laws Ann. §

281.701 et seq (West 1979),2 for purposes of a proposed
commercial development. Trial Exhibits E and F; Petitioners’
Appendix B, p. 2. Nothing in the government's decision on
that application requires that Petitioners allow the government
or the general public to enter their propery: that they take any
affirmative action to maintain the we , or that they utilize
the property in any particular way. Petitioners’ persistent
characterization of the government action in this matter as

iring that a portion of their property be "pressed into
public use or service," "devoted exclusively to public use" or
dedicated for use exclusively as a wetlands preserve" (see,
ef Petition, pp. 4, 5, 6, 16, 19, 25, and 26), raises the specter
of permanent government invasion, public easements, or
affirmative deed restrictions none of which occurred in this
case.

Additionally, the Court of Appeals statement that,
“approximately half of that land [Petitioners' 50 acres of
property] already had been developed before the enactment of

the Wetland Protection Act"3 is erroneous. The WPA was
enacted in 1979 and became effective in October of 1980. The
testimony of Mr. Volkema at trial established tnat 26 of the 50
acres were sold between August of 1981 and August of 1987,
in four separate transactions, for a total vf $1.987 million.
November 9, 1992 Trial Transcript, pp. 21-24. On the basis of
this erroneous determination, the Court of Appeals excluded

the 26 acres from its takings analysis.4 The MDEQ cross-
appealed in the Court of Appeals and sought application for
leave to appeal as a cross-appellant in the Supreme Court in
order to chall the lower courts’ exclusion of the 26 acres of
the original 50 acre parcel owned by the Volkemas in
determining the relevant parcel. The application for leave to

2 The Wetland Protection Act has since been recodified as Part 303 of the

Natural Resources and Environmental Protection Act ("NREPA"), Mich.
Comp. Laws Ann. § 324.30301 et seq (West Supp. 1998) without substantive

3 214 Mich. App. at 73-74; Petitioners’ Appendix B-7.

4 The trial court had also excluded the 26 acres without detailed
explanation. June 18, 1992 Opinion and Order.

2.

appeal as cross-appellant was denied by the Michigan
Supreme Court in the same order denying petitioners’
application. Petitioners’ Appendix A-1.

REASONS FOR DENYING THE WRIT
I.

BECAUSE OF ITS UNIQUE FACTS AND
PROCEDURAL POSTURE THIS IS AN
INAPPROPRIATE CASE TO RESOLVE THE
QUESTION RAISED IN THE PETITION.

MDEQ wishes to highlight an important aspect of the
procedural background in this matter not fully addressed by
Petitioners. Petitioners purport to be seeking issuance of a
writ of certiorari to review the Michigan Court of Appeals
decision in this case. Specifically, Petitioners seek review of
the opinion as it concerns the determination of the relevant
parcel in a regulatory takings case. Petition, p. 1. However,
the Michigan Court of Appeals opinion is not the controlling
authority on that issue in the State of Michigan. Rather, the
test to be applied by the courts in Michigan is governed by the
Michigan Supreme Court's opinion in K & K Construction,

supra.> The Order of the Michigan Supreme Court disposing
of Petitioners’ Application for Leave to Appeal in the
underlying case makes it clear that the analysis of the
Michigan Court of Appeals is not controlling to the extent it is
inconsistent with K & K Construction:

The application is again considered, and it is
DENIED, because we are not persuaded that
the yoga presented should be reviewed by
this Court. The result reached by the Court of
Appeals is correct pursuant to this Court's
decision in K & K Construction, Inc., supra. The
Court of Appeals’ analysis, particularly its
reliance on Loveladies Harbor, Inc. v. United

2 The Petition for a Writ of Certiorari in K & K Construction, Inc. v.
Department of Natural Resources and Michigan, No. 97-1957, was recently
denied by this Court in an order dated Oc 5, 1998. That Petition, also
authored by the Pacific op Foundation, similarly sought to have this Court
address the relevant parcel issue.

-4-

States, 28 F 3d 1171 (1994), is disavowed
insofar as it is inconsistent with this Court's

decision in K & K Construction.®

Petitioners seek to have this Court review the decision of
the Michigan Court of Appeals for the purpose of arguing for
the adoption of a new "partial categorical taking" rule,
Petition, p. 7, but this case is an inappropriate vehicle for
exploring any such new principle for several reasons. First, the
Michigan itae. Court has severely limited any precedential
authority of the Court of Appeals opinion by expressly
disavowing, at least in part, its analysis. Petitioners are
seeking review of a result, not a rationale. Second, Petitioners
rely on a dissenting opinion in the Michigan Court of Appeals.
Petition, p. 27. Third, Petitioners have failed to demonstrate
any tenable legal authority or policy basis for the new "per se"
rule they advocate. Fourth, the alleged confiicts between
opinions they rely upon are illusory. The petition should be
denied.

Il.

THE DECISION OF THE MICHIGAN COURT OF
APPEALS IS CONSISTENT WITH ESTABLISHED
PRECEDENT OF THIS COURT, AS WELL AS THE

LOWER FEDERAL COURTS.

Petitioners essentially acknowledge that the rule they
propose is not supported by existing legal authority. Petition,
p. 27. The rule Petitioners would have this Court adopt is the
view of the dissenting judge in the Michigan Court of Appeals
below that, "[A] taking occurs where a regulation precludes the
use of an identifiable, discrete piece of property, even if that
property forms only a portion of a larger parcel." 214 Mich.
App. at 80; Petitioners’ Appendix B-13. Such a rule would
represent a radical departure from this Court's established
takings jurisprudence and would fundamentally alter the
playing field for regulators and private parties. By
comparison, the decision of the Court of Appeals represents a

6 457 Mich. 884; Petitioners’ Appendix A.

"mainstream" analysis of the relevant parcel issue” which is
consistent with a long line of decisions from this Court and the
emerging rule in the lower federal courts.

A. The Court Of Appeals Decision To Not
Limit Its Analysis To The Discrete
Portion Of The Property Impacted By
The Government Action Is Consistent
With This Court's Longstanding
Precedent.

The genesis of the modern "parcel-as-a-whole" or "non-
segmentation" doctrine is Penn Central Transportation Co. v New
York City, 438 U.S. 104 (1978), wherein this Court dismissed
the argument that the “air rights" impacted by a landmarks
ordinance were taken "irrespective of the value of the
remainder of their parcel. . . ." 438 U.S. at 130. Instead this
Court held that Taking’ jurisprudence does not divide a single
parcel into discrete segments and attempt to determine
whether rights in a Legros segment have been entirely
abrogated." Id. See also, Andrus v. Allard, 444 U.S. 51, 65-66
(1979) ("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 as a whole").

To the extent there was any ambiguity concerning the
scope of this rule, in Keystone Bituminous Coal Association v.
DeBenedictis, 480 U.S. 470 (1987), this Court made it clear that
even if it was alleged that discrete portions of a claimant's
property were taken in their entirety, as opposed to "strands"
or rights in a piece of property, the focus would still not be
limited to the impacted areas. 480 U.S. at 498-502. In
Keystone, an identifiable 27 million tons of coal were required
to be left in place as a result of apes ma Subsidence Act
and, consequently, would have no value to the claimant. Id. at
498. The claimants accordingly sought to "narrowly define
certain segments of their property and assert that, when so
defined, the Subsidence Act denies them economically viable
use.” Id. at 496. In rejecting this strategy, the Court made it
clear that this rule did not simply apply to vertical rights in

7 As discussed, supra, MDEQ believes the entire 50-acre parcel, which was
still undeveloped when the WPA was enacted, should have been included in
the relevant parcel.

-6-

land, e.g., air or mineral rights, but also — horizontally:
— zoning ordinances place limits on the property owner's
ght to make sie use of some segments of lis property. A
imamate that a building occupy no more than a specified
percentage of the lot on which it is located could be
characterized as a ta of the vacant area as readily as the
requirement that coal pillars be left in place. Similarly, under
petitioners’ theory one could always argue that a setback
ordinance requiring that no structure be built within a certain
distance from the property line constitutes a taking because
the footage represents a distinct segment of property for takings

law purposes.8

Petitioners assert that the language in footnote 7 of the
opinion in Lucas v. South Carolina Coastal Council, 505 U.S.

1003 (1992),9 opened the door to revision of the rule
established in Penn Central and Keystone. Petition, pp. 6 and
27. However, whatever may have been the import of that
language, this Court has not subsequently indicated that it
was prepared to contemplate a rule such as that proposed by
Petitioners. To the contrary, in Concrete Pipe and Products of
California Inc. v. Construction Laborers Pension Trust, 508 U.S.
602, 644 (1993), the Court emphatically disavowed any
intention to adopt such a rule:

[W]e rejected this analysis years ago in Penn
Central Transportation Co. v. New York City, 438
U.S. 104, 130-131 (1978), where we held that a
claimant's parcel of property could not first be
divided into what was taken and what was left
for the purpose of demonstrating the taking of
the former to be complete and hence
compensable. To the extent that any portion of
property is taken, that portion is always taken in its
entirety; the relevant question, however, is whether
the property taken is all, or only a portion of the

parcel in question.10

8.480 U.S. at 498 (emphasis added).
9 505 U.S. at 1016 n. 7.
10 Emphasis added.

Moreover, in a case involving the required dedication of
a portion of real oe ek to the government, Dolan v Tigard,
512 U.S. 374, 384 n. 5 (1994), this Court, citing Lucas, opined,
“There can be no argument that the permit conditions would
deprive petitioner of ‘economically beneficial us[e]' of her
he ond as she currently operates a retail store on the lot.
titioner assuredly is able to derive some economic use from
her property.” (Emphasis in the original).

B. Lower Federal Courts Which Have
Addressed The Relevant Parcel Issue
Have Reached Conclusions Consistent
With The Michigan Court Of Appeals
And Have Expressly Rejected The Typ.
Of “Per Se" Rule Advocated
Petitioners.

y

In Section III, infra, the only three cases which Petitiorers
have identified as being in conflict with the Michigan Court of
Appeals are specifically addressed. Even a cursory analysis
of those cases demonstrates that there is no serious conflict in
principle created by the opinions in those cases. Moreover, it
is clear that a number of federal circuit and state courts, which
have directly addressed the relevant parcel issue, reject the
notion that discrete portions of a larger property must be
viewed separately in measuring the im AN a government
regulation. See, e.g., MacLeod v. Santa , 749 F.2d
541, 547 (9th Cir. 1984), cert. den. ‘72. U 51 1 (1985);
Mountain States Legal Foundation v. Hodel, 799 F.2d 1423, 1430
(10th Cir. 1986), cert. den. 480 U.S. 951 (1986) (citing MacLeod,
supra); Naegele Outdoor Advertising v. City of Durham, 844 F.2d
172, 176 (4th Cir. 1988); Forest Properties, Inc. v. United States,
39 Fed. Cl. 56, 74 (1997); Zealy v. City of Waukesha, 548
N.W.2d 528, 533 (Wis. 1996).

In addition to these cases, and of particular relevance to
the underlying case, are a series of takings cases based on
actions taken by the federal government under the Clean
Water Act ("CWA"), 33 U.S.C. § 1251 et seq. These cases are
significant because they involve the same kind of government
action which is the subject of the Petitioners’ takings claim, 1.e.,
permit denials for wetland fill. Importantly, all of these cases
repudiate the existence of any legal authority or public interest

-8-

justification for the Petitioners’ proposed per se rule requiring
that discrete portions of affected property be parsed out from
a larger whole.

Deltona Corp. v. United States, 657 F.2d 1184 (Ct. Cl.
1981), cert. den. 455 U.S. 1017 (1982); Jentgen v. United States,
657 F.2d 1210 (Ct. Cl. 1981), cert. den. 455 U.S. 1017 (1982);
Ciampitti v. United States, 22 Cl. Ct. 310 (1991); and Tabb
Lakes, Ltd. v. United States, 10 F.3d 796 (Fed. Cir. 1993), each
involved the application of § 404 of the CWA to property that
contained both wetland and upland. In none of these cases
did the courts consider the denial of a permit to fill a wetland
an, “attempt to carve out a discrete portion of the owner's

property and require it to be devoted to some public use",!1
mandating compensation for those specific wetland areas.

The discussion of the relevant parcel issue in Ciampitti
and Tabb Lakes is particularly instructive. Tabb Lakes involved
a temporary taking claim er “ the improper assertion of
jurisdiction by the Army Co Engineers.!2 In responding
to the claimant's argument that ioe use of certain areas of the
property had been taken the court held:

Clearly, the quantum of land to be considered is
not each individual lot containing wetlands or
even the combined area of wetlands. If that
were true, the Corps' protection of wetlands via
a permit system would, ipso facto constitute a
taking in every case where it exercises its

statutory authority.13
Similarly, in Ciampitti the Court of Claims reasoned:

In the case of a landowner who owns koth
wetlands and adjacent uplands, it would
clearly be unrealistic to focus exclusively on the
wetlands, and ignore whatever rights might
remain in the uplands. If a governmental entity

11 See, e.g., Petition, p. 16.
12 10. F.3d at 799. .
13 Jd. at 802.

-9-

required a buffer, for example, around a
housing development, a court would not
entertain a separate claim for the land
dedicated to the buffer. It would no doubt take
into consideration the extent to which the whole

parcel could be developed. !4

These cases are directly applicable to the situation
presented in the underlying case where Petitioners argue that
they should be compensated for the discrete area impacted by
the regulation regardless of the large area of developable land
remaining on their property. These cases reaffirm the doctrine
established in Keystone and Penn Central, supra, which reject
such claims. se

Il.

PETITIONERS HAS FAILED TO DEMONSTRATE ANY
COMPELLING NEED TO ADOPT THE RULE THEY
ADVOCATE, AND THE RULE CONTRAVENES
SETTLED TAKINGS DOCTRINE.

As discussed above, despite the opportunity to opine on
the subject after Lucas, in Concrete Pipe and Dolan, supra, this
Court has not indicated any intention to create a em rule
for “partial categorical takings" as proposed by Petitioners.
Moreover, the federal circuit has directly addressed the issue,

and rejected the pronnays: such a rule in Tabb Lakes, supra.15
In fact, the emerging rule for defining the relevant parcel, as
represented by cases like Loveladies Harbor, Inc. v. United
States, 28 F.3d 1171 (Fed. Cir. 1994), Ciampitti, and K & K
Construction, supra, is a fact-based inquiry designed to
"identify the parcel as realistically and fairly as possible."!®
Such a rule is consistent with traditional takings analysis
which has relied on ad hoc, factual inquiries and is based on
the fundamental underpinning of fairness.

Undaunted, Petitioners seek to demonstrate the need for
imposition of a bright-line rule in the context of this case.

14 22 Ct. Cl. at 318.
15 As discussed in Section IILB., infra, Loveladies is not to the contrary.
16 See, e.¢., Ciampitti, 22 Ct. Cl. at 319.

-10-

However, Petitioners have failed to do so, in large part
because their arguments are based on mischaracterization of
the government action at issue and the application of
inapposite jurisprudential principles.

As noted in MDEQ's statement of the case, Petitioners
take — ins to characterize the permit denial at issue as a
physical taking with the obvious aim of shoehorning this case
into the analysis employed in Loretto v. Teleprompter
Manhattan CATV Corp., 458 U.S. 419 (1982), and its progeny,
where the determination of the relevant parcel is irrelevant.
However, the record clearly discloses that this is not a
physical takings case because there has been no physical
pig oo nor is there we support for Petitioners’ assertion
that MDEQ has “exerci complete dominion and control."

Despite Petitioners’ characterization to the contrary,!7 the
fundamental underpinning of Loretto is the loss of the right to

exclude others,!8 which is simply not at issue in this case.

Unlike a physical taking, the restriction in this case is
precisely analogous to setbacks, buffer zones, height
restrictions, septic requirements, etc., which preclude
development of specific areas or segments of property, and
control where and how property is utilized. Such restrictions
have long been upheld despite the significant use limitations
they impose, and the cases have been decided by reference to

the whole property and the uses that remain.!9 An exception
such as that proposed by Petitioners, based on the
"independent economic viability" of the discrete portion of
property subject to the regulation, would turn traditional
parcel analysis on its head. Such micro-examination of areas
or segments of property impacted by regulation, without
reference to the larger whole, is antithetical to the parcel-as-a-
whole principle established by this Court because it places the

focus on what was taken without any point of reference.20

17 Petition, p.17. ("Although usually classified as a ‘physical invasion’ case,
Loretto is reese Papen characterized as one in which the state dictated the
specific use to w part of Mrs. Loretto's property would be devoted.”)

18 458 US. at 435.
19 See, ¢.¢., Gorieb v Fox, 274 US. 603 (1927).

20 it is significant that, to MDEQ's knowledge, this “test” has never been
applied by a court.

-l]1-

Petitioners have failed to demonstrate any compelling
reason to alter established takings jurisprudence and create a
new rule to accommodate their taking claim. This is not a
physical takings case and there is nothing to distinguish the
permit denial at issue from any of a range of legitimate
government actions which impact the use of a portion of a
larger property. Accordingly, there is no reason to analyze
this case, or others like it, any differently.

IV.

THERE IS NO CONFLICT BETWEEN THE
VARIOUS STATE COURTS OR THE FEDERAL
CIRCUIT COURTS NECESSITATING THE
INVOLVEMENT OF THIS COURT.

Recognizing that this Court must reserve its oversight to
cases of significant jurisprudential importance, Petitioners
seek to create a conflict worthy of this Court's attention. This
effort fails, not only because the conflict constructed by
Petitioners, one state court out of fifty and two federal circuit
courts, would be insignificant, but, more importantly, because
the conflict is illusory.

A. The Oregon Supreme Court's Decision In
Boise Cascade Corp. v Board of Forestry
Was Limited To The Interpretation Of
The Oregon Constitution And Did Not
Directly Address The Relevant Parcel
Issue.

Petitioners argue that in Boise Cascade Corp. v Board of
Forestry, 935 P.2d 411 (Ore. 1997), the Oregon Supreme Court,
“arrived at precisely the opposite conclusion from the court
below on the application of I constitutional law." Petition,
p. 20 (emphasis added). Further, that “the Oregon Supreme
Court (correctly) applied the Takings Clause in a manner
completely contrary to the doctrine of the Michigan court
below. Petition, p. 21 (emphasis added). This
characterization of the holding in Boise Cascade is simply not
accurate. Although the claimant in that case brought its claims

-12-

under the Oregon2! and United States Constitutions, the
decision of the on Supreme Court was expressly limited
to the state constitution:

In order to determine whether the complaint
states a claim for relief, we must first discern
what is required to establish a "takings" claim

under Oregon law. 13

13 This Court considers state constitutional
claims before considering federal constitutional
claims. State v Kennedy, 295 Or. 260, 262, 666
P.2d 1316 (1983); Sterling v. Cupp, 290 Or. 611,
614, 625 P.2d 123 (1981).

It is also significant that the limited issue before the court
was whether the claimanis allegations in that case were
adequate to survive a dismissal motion based on the failure to
state a claim, "Assuming the truth of all well-pleaded facts
alleged in the complaint and giving plaintiff the benefit of all
favorable inferences that may be drawn from those facts. . . ."
Boise Cascade at 420. Among the allegations cited by the court
was the somewhat unfocused allegation that, "Apart from the
the subject merchantable timber, the underlyin Sept forest
land has no separate economic value until the timber has been
logged." Id. n. 14 (emphasis in the original). Moreover, there is
no direct discussion of the relevant parcel issue.

The premise of Petitioners’ conflict argument is, “It is
antithetical to our constitutional form of government that
rights secured under the Fifth Amendment should be a
in some states but not in others." Petition, p. 21. Although
true as a general principle, Petitioners’ reliance on the Oregon
Supreme Court's decision in Boise Cascade does not support
this premise because that decision was based on the Oregon
Constitution and did not determinatively decide the relevant

parcel issue.

21 Oregon Constitution, Article I, section 18.

-13- ‘

B. The Holding In Loveladies Harbor Is Not
In Conflict With The Michigan Court Of
Appeals Opinion.

Petitioners assert that the holding in Loveladies Harbor,
Inc. v. United States, 28 F.3d 1171 (Fed. Cir. 1994), "stands in
stark contrast to the approach of the Michigan courts in the

present case." Petition, P. 23.22 This alleged conflict is
apparently based on the Petitioners’ view that Loveladies is
supportive of the new "partial categorical takings" rule they
advocate because the court "focus[ed] . . . on the property
actually carved out for dedication to a public use by the
operation of land use regulations, ...." Id.

Loveladies involved a permit to fill wetlands on a 250-
acre parcel, which had originally been purchased in 1958, and
199 acres of which had been developed and sold prior to

enactment of the relevant regulation.23 28 F.3d at 1173-1174.
Of the remaining 51 acres, 38.5 acres had been dedicated to
the State of New Jersey in ays for a state permit to
develop the remaining 12.5 acres. Id. When the applicant
then applied to the federal government for a permit to develop
the 12.5 acres, the state strenuously objected to the permit and
the federal government ultimately denied it. Id.

It was based on this distinctive set of facts that the
Federal Circuit determined that the relevant parcel was the
12.5 acres and that a taking had occurred because no
development could take place in light of the permit denial. Id.
at 1181. It is not the case that the Federal Circuit simply
focused on the 12.5 acres for which the permit was sought and

22 This assertion is somewhat ironic in that the Court of Appeals relied upon
Loveladies in excluding (albeit erroneously) over half of the Petitioners’
original 50-acre parcel from its takings analysis. It is also ironic that
Loveladies is often cited for a “flexible,” fact- approach to determination
of the relevant parcel which is arguably similar to the “inherent[ly] factual

inquiry” outlined by the Michi reme Court in K & K Construction,
supra. 456 Mich. at 580. Al the fas ton Court "disavowed"
the Court of A Is reliance on Loveladies (see, 457 Mich. 884; Petitioners’

Appendix A) this was likely in large part due to the erroneous factual basis
for the Court of A Is determination that 26 acres of the 50-acre eaey
should be excl from the relevant parcel. In fact, Loveladies is cited wit
approval by the Michigan Supreme Court in outlining various factors of
importance in determining the relevant parcel. 456 Mich. at 585 n. 10.

23 Section 404 of the Clean Water Act, 33 U.S.C. § 1344.

-14-

denied, without any further analysis. Accordingly, the
Michigan Court of Appeals properly distinguished the facts of
the underlying case, where Petitioners still owned 24.6 acres of

roperty and could develop 18.6 acres of that parcel,24 from
veladies where 199 acres had been sold before the enactment

of the relevant regulation25 and prior to the permit
application 38.5 acres “for all practical purposes had been

promised to New Jersey in exchange for the NJDEP permit."26

The Michigan Court of Appeals decision was entirely
consistent with Loveladies and, in fact, the Court relied on
Loveladies in excluding 26 acres of Petitioners’ property from
the relevant parcel. Thus, Loveladies does not provide any
basis for Petitioners’ conflict argument.

C. American Savings And Loan Association v.
County of Marin Is Of Dubious
Precedential Value.

The final case cited by Petitioner as presenting a conflict
with the Michigan Court of Appeal's determination in the
instant action is American Savings And Loan Association v.
County of Marin, 653 F.2d 364 (9th Cir. 1981).

The primary reason American Savings and Loan does not
support Petitioners’ conflict argument is that two subsequent
decisions in the Ninth Circuit call into question its continuing

validity. In MacLeod v. Santa Clara County, supra,27 a pane! of
the Ninth Circuit Court of Appeals took a position contrary to
the holding petitioner has attributed to the American Savings
and Loan panel. Relying on Penn Central the panel held that
government action which denied the use of a portion of a
claimant's property did not necessarily result in a taking:

The Supreme Court has long since rejected any
contention that denial of the use of a portion of
a parcel of property is so bound up with the

24 214 Mich. App. at 74; Petitioners’ Appendix B-7.

25 28 F.3d at 1174.

26 id. at 1181.

27 749 F.2d 541 (9th Cir. 1984); cert. den. 472 US. 1009 (1985).

-15-

investment-backed expectations of a claimant
that government deprivation of the right to use
a portion of the property in issue invariably
constitutes a taking, irrespective of the impact
of the restriction on the value of the parce as a

whole.28

Subsequently, in Zilber v. Town of Moraga, 692 F.Supp.
1195 (N.D. Cal. 1988), the District Court for the Northern
District of California rejected an argument based on American
Savings and Loan because the court determined it was likely
not still good law in light of this Court's subsequent decision in

Keystone, supra:

In Keystone, the Supreme Court essentially
rejected the American Savings court's notion that
segments of property may be analyzed
separately if a "nonuniform regulation" affects
various segments differently.29

These two subsequent decisions from the Ninth Circuit
strongly indicate that American Savings and Loan is no longer
law in that Circuit. At a minimum, they call into question
Petitioners’ assertion that a conflict exists between the
Michigan courts and the Ninth Circuit and that any such
conflict warrants review by this Court.

28 id. at 547.
29 692 F. Supp. at 1205.

-16-

CONCLUSION

The underlying opinion of the Michigan Court of
Appeals, on which Petitioners base their request for certiorari,
does not represent the law in Michigan concerning the proper
determination of the relevant parcel in a takings case. It
would seem incongruous for this Court to review an
intermediate appellate court decision of limited precedential
value.

Moreover, the decision of the Michigan Court of Appeals
clearly falls within the parameters established by this Court
for determination of the relevant parcel, arguably erring on the
conservative side by excluding half of the property owned by
Petswoners. Keystone, Concrete Pipe, and Dolan establish that
this Court will not simply focus on the area, right, or thing
alleged to have been taken without considering the potential
larger whole against which to measure the economic impact of
a government action. This interpretation is confirmed by
numerous federal cases specifically dealing with the takings
implications of wetlands regulations. See, Deltona, Ciampitti,
ana Tabb Lakes, supra. The various policy arguments proffered
by Petitioner in an attempt to counter the lack of legal
authority for their position are inapposite and do not justify
deviation from an established body of law.

Similarly, the asserted conflict with the Oregon Supreme
Court, the Federal Circuit and the Ninth Circuit is not
supported by the cases themselves. Boise Cascade, supra, was
decided based on takings principles contained in the C ~egon
Constitution and did not squarely address the relevant parce!
issue. There is no y sna with the Federal Circuit because the

~ Michigan Court of Appeals relied upon Loveladies, in part, and
p.uperly distinguis od the underlyi api from the distinctive
circumstances present in that case. Finally, American Savings
and Loan is likely no longer of any precedential value in the
Ninth Circuit.

-17-

Based on the foregoing this Petition presents no issues
worthy of consideration by this Court. Accordingly, MDEQ
respectfully submits that the Petition should be denied.

Respectfully submitted,

FRANK J. KELLEY
Attorney General

Thomas L. Casey
Solicitor General
Counsel of Record

P. O. Box 30212
Lansing, Michigan 48909
(517) 373-1124

S. Peter
Assistant Attorney General
Attorneys for Respondents

November, 1998

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_1534%3A2. Public record. Not legal advice.