Petition for Writ of Certiorari — Brace v. United States, 81 Fed. Cl. 1658 (2008) (No. 07-916)

Supreme Court, U.S.

@ FILED

wv — 07-916JAN 7- 2008

INTHE OFFICE OF THE CLERK

Supreme Court of the United

States

ROBERT BRACE,

Petitioner

Vv.

THE UNITED STATES,

Respondent

On Petition For Writ of Certioran

To The United States Court of Appeals for the

Federal Circuit

PETITION FOR WRIT OF CERTIORARI

RICHARD A. LANZILLO, ESQ.

Counsel of Record

NEAL R. DEVLIN, ESQ.

KNOX, MCLAUGHLIN,

GORNALL, & SENNETT, P.C.

120 West Tenth Street

Ene, PA 16501

(814) 459-2800

BRIEF INTRODUCTORY STATEMENT

On June 25, 1996, after losing an enforcement

action brought by the Government and exhausting

all avenues of appeal, Robert Brace acquiesced to the

Government’s demands to “restore” his property

entered into a Consent Order. The terms of that

Consent Order required that Brace, among other

acts, place fill and structures on his property for the

purpose of “restoring” that property to the condition

that existed in 1984 — a point in time when Brace’s

property was dry. After complying with the Consent

Order, Brace’s previously dry property began to flood

to the point where, at the time of trial, a large pond

was consistently present.

QUESTIONS PRESENTED FOR REVIEW

1. Whether the Court of Appeals erred in

concluding that the Consent Order to which

Robert Brace acquiesced could not, regardless of

its effect on Brace’s property, cause a Fifth

Amendment taking.

2. Whether the Court of Appeals erred in

concluding that the Government’s forced

placement of a check dam and fill on Brace’s

property did not constitute a physical taking.

3. Whether the Court of Appeals erred in

concluding that two legally and factually distinct

parcels constituted the relevant parcel for the

regulatory takings analysis when, during earlier

enforcement proceedings, the Government.

successfully argued that Brace was not entitled

to consider both parcels in applying the

exceptions to the Clean Water Act.

(i)

LIST OF PARTIES

Petitioner:

Robert Brace

Respondent:

United States of America

(ii)

TABLE OF CONTENTS

Brief Introductory Statement.......00.000000....000..ccccceceeeeee i

Questions Presented for Review ..................0000..000cccee. i

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Appendix Table of Contents .........................ccseseeceees iv

Table of Authorities ........ Gado sepasuuapeomnadenapdararasammiociatn Vv

Citations to Opinions and Orders Entered

ee I i sscctetnigrnic tanta erences eer vii

Concise Statement of the Basis for

PT LT Ae Le La eT I Tat viii

Constitutional Provisions Involved........................... 1x

Concise Statement of the Case....................00ccecccce sees 1

I ss cc utes oceania ana 10

A. The Consent Decree was the Result of

Required Acquiescence and, Therefore,

can Support a Taking. .........0....0....00..000. ..10

B. The Lower Courts’ Decision Conflicts

with this Court’s Precedent in Finding

that the Government’s Physical

Occupation of Brace’s Property did not

Constitute a Compensable Taking............. 17

(1i1)

C. The Court of Appeals’ Decision did not

Follow this Court’s Precedent in Defining

the Relevant Parcel for the Regulatory

Te oii le Sauce ccnwhivann 24

APPENDIX TABLE OF CONTENTS

Order from the United States Court of Appeals

For the Federal Circuit (Dated October 10, 2007) ...1

Opinion and Order of the United States Court of

Federal Claims (Dated August 4, 2006)...................4

Opinion of the US Court of Appeals for the Third

Circuit in the Enforcement Action

(Dated November 22, 1994).................cc ccc cc eeee eee 78

(iv)

TABLE OF AUTHORITIES

Federal Cases

Brace v. United States,

BT Wes ee at CE Pa OEE} ovis ccc ccncccccsscescncsncons vil

Brace v. United States,

Fae Br CE viv neciecececaccseccatanecsceaccsecesssecs Vii

Brown v. Legal Found. of Washington,

OO a, I EE ci ccssncncccacasanasadavascoenendsnsnavecas 17

FCC v. Florida Power Corp.,

MD Ee. IE cin cacsnisicdccpncedccdacccanosssasaces 10, 11

Hendler v. United States,

952 F.2d 1364 (Fed. Cir. 1991).................... passim

Kaiser Aetna v. United States,

RO rk Be I vikvncitinnaca cbc denn uncsncsdoncvasedisauens 19

Keystone Bitumimous Coal Ass'n v.

DeBenedictis, 480 U.S. 470 (1987).............00.0008. 26

Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982) ........4....0....0000000. passim

Loveladies Harbor, Inc. v. United States,

SRF Sa 2471 Cred. Car. FOOD... 5 ccccccccccccccccccss 26

Lucas v. South Carolina Coastal Council,

ee I a es oN alee 26

Palm Beach Isle Associates v. United

States, 208 F.3d 1374 (Fed. Cir. 2000)............... 27

Pennsylvania Coal Co. v. Mahon,

SIN EF, Fe CD vo iancisicankennacendacesacscuses 25, 26, 27

Ridgeline, Inc. v. United States,

SOG FO WE FOr CI ai vivcaiccssesscicccccccceicenes 19

(v)

Scogin v. United States,

33 Fed.Cl. 568 (Fed. Cl. 1995)................. 14, 15, 16

United States v. Brace,

41 F.3d 117 (3d Cir. 1994), cert. denied,

ee I III escnacdes.cencsonccsnccacsanseccssasonnans 28

Walcek v. United States,

I i NT IE Bo vcsisasenscnccccscsnnssscrensassnaccmuese 25

Federal Statutes

28 U.S.C . § 1254(1)............ sesauameetuaen: ae Vili

I I 25s ce nadsnbedantonsnacseneseneasenen Vili

IE Io 5 sn cscadaskbngabewndennebheenen Vili

Se eas ae STE BOE Ri ssiccconccnecaseucsesccdsnnvecscodseucuees 27

Other Authorities

U.S. Const. amend. V...... eabddpusscansuvaaemunanaananeenninn ix, 17

(v1)

CITATIONS TO OPINIONS AND ORDERS

ENTERED IN THIS CASE

Opinion and Order of the United States Court of

Federal Claims:

Brace v. United States, 72 Fed. Cl. 337 (2006).

Opinion and Order of the United States Court of

Appeals for the Federal Circuit:

Brace v. United States, 2007 WL 2947319 (C.A.Fed.)

(vii)

CONCISE STATEMENT OF THE BASIS FOR

JURISDICTION

This Court has jurisdiction over the decision of

the October 10, 2007 Order of the United States

Court of Appeals for the Federal Circuit (the “Court

of Appeals”) pursuant to 28 U.S.C . § 1254(1). The

Court of Appeals had jurisdiction over the August 4,

2006 final order of the United States Court of

Federal Claims (the “Trial Court”) pursuant to 28

U.S.C. § 1295.. The Trial Court had jurisdiction over

this takings claim pursuant to 28 U.S.C. § 1491.

CONSTITUTIONAL PROVISIONS INVOLVED

“(Nlor shall private property be taken for public use,

without just compensation.” U.S. Const. amend. V

(ix)

CONCISE STATEMENT OF THE CASE

Robert Brace (“Brace”) commenced this action

in 1998 after a previous legal dispute between Brace

and the United States of America (the “United

States”), acting through the Environmental

Protection Agency (“EPA”). The action concluded

with the entry of a consent decree mandating the

placement of certain materials and structures on a

58-acre farm Brace had purchased in 1975 (the

“Murphy Farm”).

Brace’s Purchase and Use of the Murphy Farm

Prior to the 1940s, the Murphy Farm was

owned by individuals unrelated to Brace’s family.

(Fed. Cir. App. 150'). During the 1940s, Brace’s

father purchased the farm and began using it as

pastureland for his dairy cattle. (Fed. Cir. App. 153).

The Brace family had been farmers in Erie County,

Pennsylvania since at least the 1930s. (Fed. Cir.

App. 23). Prior to his purchase of the Murphy Farm,

Brace’s father had owned what is referred to as the

Homestead Farm. (Fed. Cir. App. 149, 152). The

Homestead Farm is the farm on which Brace was

raised and was used by Brace’s father for crop

farming. (Fed. Cir. App. 153). Brace’s father owned

this farm at all relevant times, both before and after

his purchase of the Murphy Farm, except for a brief

period during the Great Depression. (Fed. Cir. App.

149, 152). The Homestead and Murphy Farms are

1“Fed. Cir. App.” refers to Brace’s appendix submitted

to the Court of Appeals for the Federal Circuit. Brace is citing

to and relying on this Appendix pursuant to Sup. “+ R. 12(7)

legally distinct parcels, separated by a township

road, that have been used by both Brace and his

father for distinct farming purposes.

In 1975, Brace’s parents concluded that they

could no longer operate their dairy farming operation

on the Murphy Farm in a sufficiently profitable

manner. (Fed. Cir App. 153). As a result, they

decided to sell both the Homestead and Murphy

Farms. (Fed. Cir. App. 150, 153). Brace did not

want the Homestead Farm to be sold outside his

family. (Fed. Cir. App. 153). While dairy farming on

the Murphy Farm and crop farming on the

Homestead Farm was not profitable, Brace believed

he could make the Murphy Farm profitable if he

used it for row crops. (Fed. Cir. App. 159). With

these as his personal and business goals, Brace

purchased the Murphy and Homestead Farms from

his parents for a total price of $170,000. (Fed. Cir.

App. 150, 153, 176-177). This was the value at which

Brace’s parents had the two farms appraised. (Fed.

Cir. App. 153-154).

Brace’s Operation of the Murphy Farm and the

Government’s Assistance in Constructing

Necessary Drainage on the Farm.

Shortly after purchasing the Murphy Farm,

Brace began the process of converting the farm from

pastureland to land appropriate for growing row

crops. (Fed. Cir. App. 159). Like almost every other

farmer in Erie County, Brace had to construct a

drainage system on the Murphy Farm in order to use

it for row crop farming. (Fed. Cir-App. 101). At the

time Brace purchased the farm, he was aware that a

more substantial drainage system would be required

to make the farm productive. (Fed. Cir. App. 157-

160).

Brace was also aware that his father had

begun the process of utilizing government assistance

in constructing a drainage system on the Murphy

Farm. (Fed. Cir. App. 23, 798-820). In or around

1961, the Agricuitural Stabilization and

Conservation Service (“ASCS”) and the Soil

Conservation Service (“SCS”), both agencies within

the United States Department of Agriculture,

developed a drainage plan that involved the

placement of underground drainage tile on the

Murphy Farm and surrounding land. (Fed. Cir. App.

105-107, 787-797). Brace’s father had begun

implementing this plan, and Brace continued it after

purchasing the Murphy Farm. (Id.; Fed. Cir. App.

23) Working with his local ASCS office and the SCS,

Brace continued the construction of the drainage

system developed by the ASCS and SCS in order to

convert the Murphy Farm into an “effective and

productive farming business.” (Fed. Cir. App. 23).

Between 1977 and 1984, Brace engaged in four

separate projects to provide drainage to the Murphy

Farm. (Fed. Cir. App. 787-820; 106-109, 119-124,

163-164). Each of these projects was either initiated

by or done in coordination with the ASCS and SCS.

(Id.) All tolled, Brace laid over 11,000 feet of pipe,

tile and waterways. (Id.)

Murphy Farm’s Condition by 1979

By 1979, Brace’s work on the drainage system

resulted in the Murphy Farm being dry, except for

times of excessive rainfall. (Fed. Cir. App. 23-24).

By 1986, Brace’s drainage work was complete and he

began growing crops on the Murphy Farm. (Fed. Cir.

App. 24). The drainage system that led to this

condition on the Murphy Farm was installed by

Brace in concert with and with assistance from the

ASCS and SCS. (Fed. Cir. App. 787-820). Brace

received thousands of dollars of financial assistance

from these agencies to lay the necessary

underground tile and worked with both agencies,

specifically the technically sophisticated SCS, in

designing and constructing the drainage system to

achieve the dry condition that was present on the

Murphy Farm in 1979. (id.) At trial, the former

head of the ASCS’s Erie office, Joseph Burawa,

testified that he personally worked with Brace on

this drainage project. (Fed. Cir. App. 106-108). He

also testified that these types of drainage systems

were common in Erie County. (Fed. Cir. App. 101).

The ASCS’s program that provided financial and

technical assistance to farms to plan and construct

such systems was, according to Burawa, the ASCS’s

most popular program in the 1970s and 1980s. (Id.)

The EPA’s Notice of Violations

Between 1987 and 1988, the EPA issued three

administrative orders and an administrative

complaint (collectively, the “1988 Administrative

Complaint”) in which it notified Brace of its position

that his activities associated with constructing and

using the drainage system on the Murphy Farm

violated the Clean Water Act. (Fed. Cir. App. 24).

At trial, Brace offered unrebutted testimony that this

was the first notice he received that his farming of

the Murphy Farm and the drainage system he

installed with the assistance and guidance of the

ASCS and SCS might violate the CWA. (Fed. Cir.

App. 164-165).

In fact, between 1975 and 1987, the

applicability of the CWA to drainage systems

installed on farms was far from clear. The ASCS and

SCS took the position, until 1984, that the

construction and operation of drainage systems, like

the system installed on the Murphy Farm, did not

violate the CWA. (Fed. Cir. App. 76-77). In addition

to Burawa’s testimony on this point, this fact is also

established by the ASCS’s request, in 1984, that

Brace conduct maintenance on a portion of the

drainage system located on the Murphy Farm. (Fed.

Cir. App. 124, 275, 307-308, and 817-820.

The Enforcement Action

In 1990, the United States filed suit against

Brace in an attempt to assess civil penalties against

him and force him to “restore” the wetlands on the

Murphy Farm that it believed had been adversely

affected by his drainage system (the “Enforcement

Action”). (Fed. Cir. App. 888-892). Brace

successfully defended that action before the United

States District Court for the Western District of

Pennsylvania. (App. 822). However, that court’s

decision was reversed by the United States Court of

Appeals for the Third Circuit (the “Third Circuit”),

which found that certain exceptions to the Clean

Water Act’s (*CWA’s”) regulations did not apply and,

therefore, Brace’s maintenance and operation of the

2“App.” refers to Brace’s Appendix submitted with this

Petition.

drainage system in 1987 and 1988 constituted a

violation of the CWA. (App. 108). Specifically, the

Third Circuit held that, in determining whether

Brace’s drainage activities between 1985 and 1987

qualified under the CWA’s normal farming

operations exemption, the only area that could be

considered was the 30-acre regulated site. Therefore,

the Third Circuit would not consider the on-going

farming activities that occurred on the Homestead

Farm and the upland portions of the Murphy Farm

in applying the “established farming operation”

exemption. (App. 94-97). The Third Circuit

remanded this case to the district court to

enter judgment in favor of the United

States and to assess upon further

proceedings appropriate penalties for

defendants’ violations of the permit

requirements, and to assess what, if

any, penalties are appropriate for

violations of the EPA administrative

orders. address the remedial measures

necessary to correct the violation.

(App. 108).

The United States Supreme Court denied Brace’s

petition for a writ of certiorari.

The Consent Decree

On remand, the EPA provided Brace with a

proposed consent decree (the “Consent Decree”) that

would resolve the Enforcement Action. Realizing

that the Third Circuit’s opinion would require him to

engage in significant remedial measures regarding

the Murphy Farm and subject him to the possibility

of substantial civil penalties, on June 25, 1996, Brace

acquiesced to the terms submitted by the EPA and

the United States District Court for the Western

District of Pennsylvania entered the Consent Decree

as an order of court. (Fed. Cir. App. 168). Under the

terms of the Consent Decree, Brace was required to

engage in the following relevant actions:

1. refrain from “discharging any pollutants

(including dredged or fill material) into the

approximately 30 acre wetland site [on the

Murphy Farm] .. ., unless such discharge

is in compliance with the CWA;

2. “perform restoration in accordance with the

wetlands restoration plan”

3. “record this Consent Decree in the

applicable land records office.”

(Fed. Cir. App. 893-900).

The Consent Decree was expressly designed to

restore the Murphy Farm to the condition that

existed in 1984. (Fed. Cir. App. 616). The facts are

clear and unrebutted that, beginning in 1979 and

continuing through the execution of the Consent

Decree, a period of time that includes 1984, the

Murphy Farm was consistently dry, except for

periods of excessive rainfall.

In order to comply with the Consent Decree,

Brace proceeded to remove miles of tile and

disassemble the drainage system that he, in

coordination with the ASCS and SCS, had

constructed over a period of twenty years. (Fed. Cir.

App. 168-169). Removal of this drainage system

resulted in the Murphy Farm becoming unsuitable

for farming. (Fed. Cir. App. 121, 291-296). The

“restoration” actions that Brace was required to

undertake included the construction of a “check dam”

on the Murphy Farm. (Fed. Cir. App. 893-900). The

check dam, together with the removal of literally

miles of drainage tile and waterways, resulted in

regular flooding of the Murphy Farm, a condition

that had not occurred since at least 1979. (Fed. Cir.

App. 171, 291-293). By the time the Trial Court

conducted a view of the property, the “the water

table on [Brace’s] property ha[d] risen, indeed, so

much, as to create a large pond on the lower half of

the property.” (App. 17).

Further, the “upland” portions of the Murphy

Farm that were not part of the 30-acre site referred

to in the Consent Decree were rendered unusable by

the Decree. Brace is not permitted to engage in any

action that would cause the discharge of any

pollutant, including fill, into the wetlands on the

Murphy Farm. The unrebutted testimony at trial

established that once the drainage system was

removed, the upland portions of the farm became

highly errodible. (Fed. Cir. App. 301-302). Asa

result, Brace cannot farm these areas without

exposing himself to substantial risk that, either

through erosion or other migration of soils or water,

pollutants associated with raising farm crops could

enter the 30-acre site. (Id.; Fed. Cir. App. 529-532,

543-547, 596, 636, 730-731). If that were to occur,

Brace would be subject to possible injunctive action

and civil penalties and contempt under the Consent

Decree. (Fed. Cir. App. 893-900).

ARGUMENT

A. The Consent Decree was the Result of

Required Acquiescence and, Therefore,

can Support a Taking.

The Trial Court and Court of Appeals® failed

to properly apply this Court’s previous holdings

regarding the type of government conduct that can

result in a taking. The misapplication of this law led

those Lower Courts to conclude that that the

Consent Decree, by its very nature and regardless of

the effect it had on Brace’s property, could not cause

a compensable taking.

This Court has clearly held that the

touchstone of whether a given action or requirement

can constitute a taking is whether that action was

the result of “required acquiescence.” FCC v. Florida

Power Corp., 480 U.S. 245, 252 (1987). “This

element of required acquiescence is at the heart of

the concept of occupation.” Id. Based on this

straight-forward rule, this Court has held that a

state law requiring landowners to permit cable

television companies to install cable television

equipment on their property constitutes a taking

Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419, 440 (1982). However, a taking has not

°Because the Court of Appeals affirmed the Trial

Court’s judgment based on the Trial Court’s opinion, both the

Trial Court and Court of Appeals will be referred to as the

“Lower Courts”, when referring to their analysis and reasoning

and the substance of the opinion upon which both of their

decisions was based.

occurred when a landowner invites a commercial

tenant to rent space on the landowner’s property

and, by extending this invitation, subjects itself to

federal statutes that regulated the rent the

landowner can charge. Florida Power Corp., 480

U.S. at 252-53. It is this distinction between the

invited commercial tenant and the “interloper with a

government license” that exemplifies the required

acquiescence standard. Id.

Brace did not choose to engage in any action

that subjected him to heightened government

regulation -- the CWA applies to the Murphy Farm

regardless of the use to which Brace puts that farm.

Further, Brace did not invite the EPA to place fill

and structures on his property. Instead, the EPA

took the position that, as applied to Brace’s property,

the CWA required Brace to take certain remedial]

actions to comply with the CWA. Based on this

position, the EPA issued the 1988 Administrative

Complaint and sought to require Brace to change the

physical layout of his property, remove drainage tile,

add fill and install a check dam. Brace disagreed

with the EPA’s legal position and resisted its

attempt to force him to engage in this conduct on his

property.

As a result of Brace’s resistance, the EPA

began the Enforcement Action in an attempt to force

Brace to comply with its demands. Brace mounted a

vigorous defense to this action; won at the trial level;

lost before the Third Circuit; and was denied review

by this Court. At that procedural stage, Brace was

left to face a remand to the district court for the sole

purpose of determining the appropriate penalties —

the Third Circuit had concluded that he violated the

11

CWA and had directed the district court to enter

judgment in favor of the United States. (App. 108).

Thus, Brace had lost this legal battle, with no

avenues for review. At this point, and only at this

point, did Brace acquiesce to the EPA’s remedial

demands and agreed to engage in the “restoration”

activities the EPA presented.

While paying lip service to the required

acquiescence standard applied by this Court, the

Lower Courts concluded that “it would be hard to

fathom how a consent decree could meet the

requirements for a taking.” (App. 58). The Lower

Courts did not rely on the specific facts of this case,

nor did they properly consider the compulsion that

Brace faced after losing before the Third Circuit and

having no avenue of appeal or reconsideration.

Instead, the Lower Court’s simply concluded that,

because consent orders are, by definition, part

agreement, they are too voluntary to constitute a

taking.

This holding is not a proper application of

concept of required acquiescence. This can be seen

by assuming that Brace had not resisted the EPA’s

enforcement efforts but, instead, immediately

acquiesced in the restoration efforts they requested.

Had that occurred, no enforcement action would have

been filed and no consent decree would exist. In such

a situation, Brace would have engaged in the

restoration actions proposed by the EPA and had

been left with his property in the precise situation in

which it exists today.

Factually, this hypothetical circumstance

would be indistinguishable to the facts addressed by

12

this Court in Loretto. In Loretto, the property owner

did not resist the placement of cable television

equipment on her building and, instead, brought suit

seeking damages and injunctive relief based on that

physical occupation. Loretto, 458 U.S. at 424. In

Loretto, this Court concluded that the placement of

the cable television equipment on the plaintiffs

property pursuant to statutory authority was the

result of required acquiescence and could constitute

a taking. Applying this precedent to Brace’s

situation leads to the unavoidable conclusion that

had he simply acquiesced prior to the Enforcement

Action a taking would have occurred. Like the

plaintiff in Loretto, Brace was required to place

physical structures (i.e. the check dam and fill) on

his property pursuant to statutory authority (i.e. the

CWA).

Thus, it is only because of Brace’s resistance to

the EPA’s attempt to force a physical intrusion on

this property that the Consent Decree came into

existence. The Lower Courts’ concluded that this

resistance on Brace’s part, and the subsequent

Consent Decree, made the physical intrusion

voluntary. This conclusion results in Brace being

deprived of his just compensation because he resisted

the Government’s intrusion on his property; a result

that turns the required acquiescence standard on its

head. Brace, far more that the plaintiff in Loretto

was “required” to engage in the actions he took. He

was required by the EPA and, eventually, by the

Third Circuit through its direction to the district

court to enter judgment in favor of the EPA. Brace,

unlike many property owners, fought the

Governments attempt to take his property. The

Lower Courts’ conclusion that, through this fight

Brace lost his Fifth Amendment right to just

compensation is antithical to this Court’s precedent.

While this Court has never addressed the

issue of whether a consent order can cause a

compensable taking, at least one district court ca se

has properly applied the required acquiescence

standard to this type of situation. In Scogin v.

United States, 33 Fed.Cl. 568, 570-71 (Fed. Cl. 1995),

the EPA sought access to the plaintiffs land under

the authority granted by CERCLA. Between 1988

and August 1990, the plaintiff entered into multiple

agreements with the EPA to allow the EPA access to

his land to conduct certain monitoring and other

activities on his property. Id. After August 1990,

however, the plaintiff was unwilling to allow the

EPA any additional access to his property. Id.

Consequently, on June 18, 1991, the EPA issued an

administrative order requiring the plaintiff to grant

the EPA access to his property. Id. at 571. The

plaintiff did not comply with this order and, instead,

sought to fight it in court. Id. The EPA then filed an

enforcement action and, on December 17, 1992, the

district court ordered the plaintiff to allow the EPA

access to his property or face civil penalties (the

“1992 Access Order”). Id. at 572. After the district

court issued this order, the plaintiff entered into a

lease with the EPA’s primary contractor under which

the plaintiff agreed to allow the contractor access to

his property in exchange for a rental payment of

$2,000 per month. Id. at 573-74. The plaintiff then

sued the Government, arguing, in part, that the

EPA’s access of his property after the 1992 Access

Order constituted a taking. Id. at 574.

Taking a position identical to its argument in

this case, the Government in Scogin argued,

[That plaintiff was not obligated by the

district court’s access order to enter into

a lease agreement with a government

contractor. According to defendant,

having chosen to enter into the lease,

and having negotiated the terms of the

lease, including the compensation to be

paid, plaintiff cannot now be heard

complaining that the Government has

worked a taking by physically occupying

his land.

Id. at 579.

The claims court did not agree, finding that

consideration of the 1992 Access Order was essential

to properly understanding the effect of the post-1992

Access Order lease. “Although plaintiffs decision to

enter into the lease was voluntary, the lease does not

represent plaintiffs consent to the use and

occupation of his property, because the access order

already had deprived plaintiff of the power to

consent.” Id. Proceeding in this analysis in a

manner directly on point with the present case, the

court stated, “A material distinction exists between a

consent form freely entered into and a lease

agreement entered into that contemplates activities

on plaintiffs property which, but for the district

court’s access order, plaintiff would not have

allowed.” id. (emphasis added). The Court

concluded that, consistent with Supreme Court

precedent, required acquiescence was the key to

determining whether an agreement could form the

15

basis of a taking. Based on the 1992 Access Order,

the court held, “In this case the district court order

authorized a mandatory physical occupation of

plaintiffs property. Government compulsion was

present.” Id.

The facts of Scogin are indistinguishable from

the facts in the present case. Like the plaintiff in

Scogin, Brace attempted to resist the EPA’s efforts to

physically occupy his property. Like the plaintiff in

Scogin, Brace failed in this effort and was then

subject to a court order finding that EPA occupation

was required. To address this order, Brace took the

same approach the plaintiff in Scogin took — he

struck the best deal he could under the

circumstances. For Brace, that deal took the form of

the Consent Decree. It is beyond dispute that, but

for the Third Circuit’s decision, Brace would not have

allowed the EPA to force the several “restoration”

activities mandated by the Consent Decree. As in

Scogin, government compulsion was present and led

directly to the Consent Decree. Because of this, the

Consent Decree was the result of required

acquiescence.

It is necessary that this Court correct the

Lower Courts’ incorrect application of this Court’s

prior precedent regarding required acquiescence.

Allowing that precedent to remain will deprive those

individuals who choose to resist government

intrusions on their property, only to lose in those

efforts, of their constitutional right to just

compensation for the takings that result.

B. The Lower Courts’ Decision Conflicts

with this Court’s Precedent in Finding

that the Government’s Physical

Occupation of Brace’s Property did not

Constitute a Compensable Taking.

The Government’s physical occupation of the

Murphy Farm constitutes a taking for which just

compensation is due under the Fifth Amendment.

Specifically, under the authority of the CWA, the

Government required that Brace: (1) install a “check

dam” to cause the land to flood; (2) place substantial

amounts of fill in existing or created ditches; and (3)

execute and record an instrument binding all future

owners to maintain the physical intrusion required

by the Consent Decree. (Fed. Cir. App. 893-900)

The unambiguous language of the Fifth

Amendment provides: “{[Nlor shall private property

be taken for public use, without just compensation.”

U.S. Const. amend. V. When the Government,

exercising its supreme power of eminent domain,

physically takes land, the Constitution guarantees

payment of just compensation for the land taken.

Brown v. Legal Found. of Washington, 538 U.S. 216,

233-34 (2003).

In Loretto, this Court addressed a case where

government action required the owner of a private

apartment building to allow the installation of cable

television cables and boxes on the roof of his

building. 458 U.S. at 426. The Court held this

permanent, physical occupation of a portion of the

plaintiffs roof constituted a physical taking. Id. at

438. Regardless of the reasons for placement, or the

degree to which placement interfered with the

17

plaintiffs use of his property, the act of permanently

affixing an object to the plaintiffs roof “took” the

rights he previously had in his property to “possess,

use and dispose of it.” Id. at 435. This Court

explained:

[tlo the extent that the government

permanently occupies physical property,

it effectively destroys each of these

rights. First, the owner has no right to

possess the occupied space himself, and

also has no power to exclude the

occupier from possession and use of the

space .. . Second, the permanent

physical occupation of property forever

denies the owner any power to control

the use of the property; he not only

cannot exclude others, but can make no

nonpossessory use of the property . . .

Finally, even though the owner may

retain bare legal right to dispose of the

occupied space by transfer or sale, the

permanent occupation of that space by a

stranger will ordinarily empty the nght

of any value, since the purchaser will

also be unable to make any use of the

property.

Id. at 435-36.

The Court concluded that the placement of the

cable television cables and boxes on the plaintiffs

roof destroyed each of these property rights and,

therefore, constituted a physical taking. Id. at 438.

18

Relying on this Court’s clear precedent, other

courts have similarly held that any permanent,

physical occupation on land constitutes a physical

taking. “It is well established that the government

may not take an easement without just

compensation.” Ridgeline, Inc. v. United States, 346

F.3d at 1352 (2003). See also Kaiser Aetna v. United

States, 444 U.S. 164, 179-80 (1979) (“even if the

Government physically invades only an easement in

property, it must nonetheless pay just

compensation”). In Hendler v. United States, 952

F.2d 1364, 1374-75 (Fed. Cir. 1991), property owners

brought action against the EPA alleging that EPA’s

entry onto their land, installation of groundwater

wells and monitoring activities were a “taking” of

property under the Fifth Amendment. Hendler, 952

F.2d at 1374-75. The Federal Circuit overruled the

denial of the plaintiffs’ motion for summary

judgment on the issue of a physical taking. The court

held that the EPA’s installation of monitoring wells

constituted a physical taking stating, “There is

nothing temporary about the wells the Government

installed on the plaintiffs property... these

surveillance wells are at least as ‘permanent’ in this

sense as the CATV equipment in Loretto, which

comprised only a few cables attached by screws and

nails and a box attached by bolts.” Id. (citing Loretto,

458 U.S. 419 (1982)). In reaching this conclusion, the

court “emphasize[d] that the issue is not whether

the Government had the right to impose itself

and its activities on the plaintiffs” and stated “[a]

physical occupation of private property by the

government which is adjudged to be of a permanent

nature is a taking, and that is true without

regard to whether the action achieves an

19

important public benefit or has only a minimal

economic impact on the owner.” Id. (emphasis

added).

1. Brace has Suffered a Physical

Taking Identical to the Takings in

Loretto and Hendler I and the

Lower Courts’ Decision to the

Contrary Conflicts with These

Decisions

By means of the Consent Decree, the

Government ordered Brace to excavate trenches,

destroy drainage tile, fill two drainage ditches and

install a check dam. These actions resulted in the

creation of a pond on the Murphy Farm. This pond

had never before existed on the property. This action

constitutes a classic physical invasion of property

that is legally indistinguishable from the physical

invasions of the plaintiffs’ properties in Hendler ]

and Loretto. In Hendler I, the Government

physically took the plaintiffs property by installing

wells on the property. In Loretto, the Government’s

physical invasion sufficient to constitute a taking

was the placement of cable television boxes and

cables on the roof of an apartment complex. In both

cases, and clearly identified in Loretto, the Courts

looked to whether the Government’s action (1)

prevented the plaintiff from physically occupying

portions of his property, or barred others from

occupying those portions; (2) denied the plaintiff the

authority to control the occupied space; and (3)

essentially eviscerated the plaintiffs ability to

dispose of or sell his property to another without the

burden of the government’s forced occupancy.

20

Here, the Government required Brace to place

substantial amounts of fill in existing and newly

created ditches, and to install a check dam in

“unnamed Tributary A.” The Government required

these actions to change the hydrologic regime of the

30-acre wetlands site on the property. These actions

created a pond on the property. These changes were

not temporary in nature. They were required to be

completed with the utmost urgency (within 90 days if

possible) and to remain indefinitely. (Fed. Cir. App.

893-900). These requirements, in and of themselves,

constituted a physical taking for which Brace is

entitled to just compensation. They (1) deprived him

of occupancy of the entire 30-acre parcel and, ata

minimum, of the former ditches that the Government

required Brace to fill with soil and the area upon

which the Government required Brace to construct

the check dam; (2) denied Brace the authority to

contro] these areas; and (3) placed a permanent, and

recorded cloud over Brace’s ownership of the Murphy

Farm by requiring any future owner of that property

to maintain these physical intrusions.

These several physical invasions also resulted

in another physical occupation -- the permanent

invasion of the Murphy Farm by both ground and

surface water. (Fed. Cir. App. 170, 392-94). The

express purpose of the Consent Decree is to “restore

the hydrologic regime to the U-shaped,

approximately 30-acre wetlands adjacent to Elk

Creek.” (Fed. Cir. App. 899). To do this, the

Government required not only the removal of a

drainage system that took a decade to construct and

incorporated miles of various drainage mechanisms,

it also required the installation of a check dam. The

21

check dam was not something that existed on the

Murphy Farm prior to Brace’s purchase. It wasa

physical structure measuring 1 % feet high, 4 feet

long and equal in width to the “tributary bottom.”

Its purpose was to trap water on the Murphy Farm

that otherwise would flow over the Murphy Farm

and into Elk Creek. (Fed. Cir. App. 899-900).

The Lower Courts concluded that these

various physical invasions did not constitute physical

takings but, rather, were subject only to analysis as

potential regulatory takings. While the Consent

Decree also constitutes a regulatory taking, the

Lower Courts’ conclusion on this point is incorrect for

at least two reasons. First, Loretto and Hendler I

make no mention of whether a physical occupation

was caused by the enforcement of a regulation or

some other government action. Instead, those cases

clearly establish that any permanent physical

occupation by the Government of private property is

a taking. Loretto, 458 U.S. at 435-36. This is such a

case, with the Government forcing Brace to place

physical structures and material on his property and

keep them there indefinitely.

Second, the Government is not simply

regulating how Brace may use his property.

Through the Consent Decree, the Government has

ordered Brace to install physical structures

previously not present on the Murphy Farm and, in

so doing, to create a pond that previously did not

exist. This portion of the Consent Decree is not a

regulation of use, it is a mandatory command to

place tangible objects on Brace’s property for the

benefit of the public as a whole. This is a

paradigmatic physical taking. The fact that it was

22

ordered by the EPA and affected farm land does not

undermine its physical nature.

The Lower Courts’ discussion of the “non-

sequiter” of treating the denial of a permit and

restoration requirements differently is an incorrect

analysis under Loretto and an incorrect application

of the CWA as it relates to this case. As to Loretto, it

does not include any element addressing why the

physical occupation occurred. The Federal Circuit

has been clear in its position that such issues are

irrelevant when analyzing a physical taking. “A

physical occupation of private property by the

government which is adjudged to be of a permanent

nature is a taking, and that is true without

regard to whether the action achieves an

important public benefit or has only a minimal

economic impact on the owner.” Hendler, 952 F.2d

1374-75 (emphasis added). Thus, the Lower Courts’

analysis on this point is simply not relevant to the

question of whether the Government’s action

constituted a physical taking.

Further, the Lower Courts’ argument flows

from a misapplication of the CWA and a lack of

regard for what the Government achieved under the

Consent Decree. Between 1975 and 1984, when

Brace installed the drainage system at issue, the

CWA did not require that Brace seek any permits.

(Fed. Cir. App. 76-77). In fact, the ASCS and SCS

assisted Brace in constructing and paying for the

drainage system. The ASCS and SCS never

intimated or believed that Brace required any permit

under the CWA to engage in this activity. Thus, for

the Lower Courts to analyze Brace’s situation as a

permitting case is simply not accurate. Further, the

23

Consent Decree did not “restore” the property to its

condition in 1984, as an EPA representative testified

was the intent of the Consent Decree. It did not

restore the property in any way. The Consent Decree

mandated the placement of fill and structures on the

Murphy Farm that were never before seen and

certainly not present in 1984. These mandated

actions resulted in the creation of a pond that, based

on the unrebutted evidence at trial, did not

previously exist on the Murphy Farm.

Like the wells in Hendler I and the CATV

equipment in Loretto, the check dam and fill

material used to plug surface ditches constituted

physical takings, and the flooding these changes

created also resulted in an additional, permanent

invasion that constitutes a physical taking. As this

Court has made clear, even a minor physical

alteration of property constitutes a physical invasion

sufficient to give rise to a claim for just

compensation. See Loretto, 458 U.S. at 435. The

Lower Courts’ decision conflicts with this well-

established legal principle and with Hendler I.

Based on these conflicts, which are premised on the

Lower Courts’ misapplication of this Court’s physical

takings analysis, this Court should exercise its

discretion to review this case.

C. The Court of Appeals’ Decision did not

Follow this Court’s Precedent in Defining

the Relevant Parcel for the Regulatory

Takings Analysis.

The linchpin in each of the Government’s

categorical and regulatory takings arguments at

trial, and the foundation upon which the Lower

24

Courts’ analysis on these points is built, is the

definition of the “parcel as a whole.” This analysis,

however, engages in the precise type of manipulation

that the “parcel as a whole” inquiry is designed to

prevent. This case presents a striking example of

the relevant parcel question being manipulated by

the Government to, in the first instance, be able to

take the property interest it sought and then, after

achieving this taking, avoid having to pay just

compensation for that interest.

The concept of a “parcel as a whole” in takings

cases developed to address attempts to circumscribe

total parcels of property to make their “relevant”

portions co-terminus with the reach of the

government regulation. This so-called “denominator”

question was intended to prevent an artificial

alteration in the size of the parcel at issue to serve

either side in litigation. See e.g., Walcek v. United

States, 49 Fed. Cl. 248, 259 (2001).

While clear that the parcel as a whole question

is designed to avoid artificially defining the relevant

parcel in takings cases, this Court’s precedent has

been inconsistent on the application of that test to

different factual situations. For instance, in

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414

(1922), this Court struck down a statute because it

made it “commercially impracticable to mine certain

coal.” The Court did not look to whether other coal

on the plaintiffs property could be mined. Instead, it

focused on the coal that was affected by the

reguiation and found that regulation to violate the

Takings Clause because it had the same effect of

“appropriating or destroying” the affected coal.

Sixty-five years later, this Court faced a similar

25

question in Keystone Bitumimous Coal Ass’n v.

DeBenedictis, 480 U.S. 470, 496-97 (1987). There,

the Court had to determine whether a regulation

affecting the plaintiffs ability to mine coal

constituted a taking. Despite relying on Mahon, and

specifically reaffirming that decision, the Court

looked to other coal on the property that remained

available to mine and found that sufficient economic

value remained to avoid a regulatory taking. Id. at

497-98.

While these decisions have left this important

law unsettled, later Supreme Court cases have

provided additional support for the approach taken

in Mahon. In Lucas v. South Carolina Coastal

Council, 505 U.S. 1003, 1016 n.7 (1993), the Court

indicated that the proper focus in defining the

relevant parcel is to look at “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.”

The principal case from this Federal Circuit

has also supported defining the relevant parce] based

on the portion of land that has been regulated. In

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

1171, 1180 (Fed. Cir. 1994), this Court had to

determine what portion of a developer’s holdings

were the relevant parcel. The developer had

originally purchased 250 acres of property. In 1982,

it sold 199 acres, and continued to own 51 acres. On

May 5, 1982, the Army Corps of Engineers denied

the plaintiffs request for a fill permit under the

CWA, which the developer needed to develop 12.5 of

their remaining 51 acres. Addressing the

26

denominator question, the Court held that the 12.5

acres of affected land constituted the relevant parcel.

See also Palm Beach Isle Associates v. United States,

208 F.3d 1374 (Fed. Cir. 2000).

The holdings in these cases, defining the

relevant parcel as the regulated land, are consistent

with Mahon and represent the most reasonable and

equitable approach to the denominator problem. By

defining the relevant parcel as that land which has

been regulated, the Court avoids any manipulation

by the government or the claimant in an attempt to

change the “denominator” to affect the overall

economic impact of the regulation. Further, the

result of this analysis focuses on what has been

taken from the claimants. This is particularly true

in this case.

The question of what is the relevant parcel in

this case was a key question in both the Enforcement

Action and this present suit. In the Enforcement

Action, Brace argued, and the district court accepted,

that his actions on the Murphy Farm were exempt

from regulation under the CWA because they were

part of an “established (i.e. on-going) farming

operation.” 33 C.F.R. § 323.4(a)(1)(i). However, on

appeal, the Third Circuit disagreed with this

conclusion and found that Brace’s activities on the

Murphy Farm did not qualify for this exemption.

Importantly, in analyzing this point, the Third

Circuit held that the district court misinterpreted

the meaning of the “established farming operation”

requirement because it examined the rejationship of

the site in question to the rest of the land owned by

Brace, including other land on the Murphy Farm and

the Homestead Farm, in determining whether land

27

was being brought into farming use. The Court

stated:

We cannot agree with this interpretation of

the statute’s requirement. The regulations

provide that, ‘activities which bring an

area into farming .. . use are not part of an

established operation.’ The regulations do

not specify the precise area to which we

should look in determining whether there

is an established farming operation. There

are no minimum limits placed on the “area”

being brought into farming use. Thus, we

read the regulations to provide that an

exemption is available only to activities

that are part of an ‘established farming

operation’ at the site. A proper ‘contextual

review of its total activities’ only requires

us to analyze whether such activities are

‘established and continuing’ on the thirty-

acre wetland site itself.

United States v. Brace, 41 F.3d 117 (3d Cir. 1994),

cert. denied, 515 U.S. 1158 (1995) (internal citations

omitted) (App. 96). By taking this position, the

Government and Third Circuit did not allow Brace to

reap the benefits of including the other acreage on

the Murphy Farm or the Homestead Farm in this

analysis.

In this action, however, the Government has

thus far successfully argued that both the Murphy

and Homestead Farms must be included as the

relevant parcel. This argument is a perfect

illustration of the gaming of the relevant parcel

analysis that can occur when it is defined as

28

anything other than the regulated parcel. While

Brace was not able to consider his activities on the

Homestead Farm or upland portions of the Murphy

Farm for purposes of determining whether he

qualified for an exemption under the CWA, he has

been required to included the economic benefit of

those activities, and the land on which they are

performed, to determine whether the Government’s

conduct constitutes a regulatory or categorical

taking. This analysis is nothing more than a “bait

and switch” game being engaged in by the

Government to avoid its constitutional obligation to

pay Brace just compensation for the property

interest it has taken. By allowing the Government to

successfully engage in this gaming of the analysis,

the Lower Courts have misapplied this Court’s

precedent, violated precedent from the court of

appeals for the federal circuit, and exploited the

ability to manipulate the multi-factored approach

this Court has taken to this question. This Court

should grant review of this case to correct this result

in this case, properly define the relevant parcel as

the 30 acre regulated parcel, and announce a bright

line test defining the relevant parcel for takings

analysis as a the parcel being regulated.

RICHARD A. LANZILLO, ESQ.

Counsel of Record

NEAL R. DEVLIN, ESQ.

KNOX, MCLAUGHLIN, GORNALL, & SENNETT, P.C.

120 West Tenth Street

Erie, PA 16501

(814) 459-2800

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