Petition for Writ of Certiorari — Marks v. United States, 118 S. Ct. 852 (1998) (No. 97-652)

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97 652 0Cl 14 1997

No. ___gegice OF THE CLERK

In The

Supreme Court of the United States

October Term, 1997

LAWRENCE MARKS; SUN BANK/MIAMI, N.A. and

EDWARD A. MOSS, as personal representatives of the

estate of Eugene Marks; MORRIS S. MARLIN, as personal

representative of the estate of Paul Marks;

HERMAN MARKS; IRENE O. MARKS, individually and

as personal representative of the estate of Stanley Marks;

MARKS DEVELOPMENT, INC.; and ISLAND IN THE

SUN CONDOMINIUMS OF KEY WEST FLORIDA, INC.,

Petitioners,

THE UNITED STATES,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

PETITION FOR WRIT OF CERTIORARI

Jor. D. Eaton

Counsel of Record

PopuHurst OrsECK JOSEFSBERG EATON

MeEaApow OuIN & Perwin, P.A.

City National Bank Building,

Suite 800

25 West Flager Street

Miami, Florida 33130-1780

(305) 358-2800

Attorney for Petitioners

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

The petitioners were plaintiffs in a Tucker Act claim

seeking compensation from the United States under the

Fifth Amendment for a temporary taking of a 52-acre

parcel of real property. They suffered an adverse sum-

mary judgment on the ground that the taking was not

compensable. Because approximately three acres of the

parcel were below the mean high water line (MHWL) and

the remainder of the parcel was above the MHWL, differ-

ent legal considerations were applied to the two portions

of the property. The questions presented are:

1. In a Takings Clause claim, with respect to property

below the MHWL, is the government's “navigational ser-

vitude” absolute when asserted, not “in aid of naviga-

tion,” but solely in aid of environmental protection?

2. In a Takings Clause claim, with respect to property

above the MHWL, is a property owner properly denied

compensation for “the value of the use of the land”

during a period of temporary taking simply because the

property has increased in value during the period of

taking and is sold for a profit after the taking ceases?

Although those are the principal questions presented,

the petitioners’ claim for compensation for the temporary

taking of the property above the MHWL was rejected for

two additional reasons below. To ensure that the case can

be disposed of in its entirety here, a third question is

presented which need only be reached if review of the

first two is accepted:

QUESTIONS PRESENTED - Continued

3. Did the trial court err in concluding (1) that the

petitioners had only a tort claim, not a Tucker Act claim,

and (2) that the government's temporary taking did not

interfere with any reasonable investment-backed expecta-

tions in development of the property?

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TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .....-..---s+eeeeseeeeees i

TABLE OF AUTHORITIES .........----+-eeeeeeeees iv

OPINIONS BELOW........--::eeeeeeeseereeeeeenes 1

JURISDICTION .......0-- se ce cree eee ener eeceeees 1

CONSTITUTIONAL PROVISION INVOLVED....... 1

STATEMENT OF THE CASE........--++sseeeeeeees 2

REASONS FOR GRANTING THE PETITION ....... 12

1. The lower courts’ conclusion that the govern-

ment’s “navigational servitude” is absolute con-

flicts with a decision of this Court........----- 12

2. The lower courts’ conclusion that the temporary

taking was not compensable because the plaintiffs’

property increased in value during the period of

taking and was sold for a profit after the taking

ceased conflicts with decisions of this Court and

with a decision of the Eleventh Circuit.........-. 15

3. The remaining reasons given by the trial court for

rejecting the plaintiffs’ claim for compensation

with respect to the property above the MHWL are

plainly indefensible .........--+-++++++srrrrere: 22

CONCLUSION 2... ccc cece cnc cncereccccnerencecccces a4

P< > 2 ai errr ir ere ee ee la

TABLE OF AUTHORITIES

Page

Cases

First English Evangelical Lutheran Church of Glendale

v. County of Los Angeles, California, 482 U.S. 304

(WOE 46 ov ivadts sins casi vbisic 19, 20

Florida Rock Industries, Inc. v. United States, 791

F.2d 893 (Fed. Cir. 1986), cert. denied, 479 US.

ed ee nes Se per rearG te a ue ee 14

Kaiser Aetna v. United States, 444 U.S. 164 (1979). .13, 14

Kimball Laundry Co. v. United States, 338 U.S. 1

fas ee Oe ee pe NRE Gm 16, 17, 18, 19, 20

Laney v. United States, 661 F.2d 145, 228 Ct. Cl. 519

GRU ic Vi cicciuet bred Se ee 14

Marks v. United States, 34 Fed. Cl. 387 (1995), aff'd,

116 Foe TAS (ed. Ce Te. 2

Nemmers v. City of Dubuque, 764 F.2d 502 (8th Cir.

APP d VRS ea. Walls. Spee eee eobeL as Hela cut 21

Owen v. United States, 851 F2d 1404 (Fed. Cir.

RNR abn o «Rd ER AROS TA Es Rs 14

United States v. Context-Marks Corp., 729 F.2d 1294

PER Re BO a ca pk bbc es bie eae ei 9

Wheeler v. City of Pleasant Grove, 833 F.2d 267 (11th

MoM PND Sb hein oAGk oe dey Khveinae cies cack ik 20, 21

Yuba Natural Resources, Inc. v. United States, 821

Pie We A Oe BE os 6s Se oo ohh vee cc. 19

Yuba Natural Resources, Inc. v. United States, 904

Pie Aare AP POO ies Sc ce OE 19

TABLE OF AUTHORITIES —- Continued

Page

STATUTES

2B USC. & 125461)... cc ciccarvaeccccvenvecseeveccen’s 1

Tucker Act, 28 U.S.C. § 1491... 0... cece cceccccecees 2

§ 10 of the Rivers and Harbors Act of 1899, 33

fe cay 2 RA rr rr ry roger eee ry tees 4

a ee ee ee 5a +.

PETITION FOR WRIT OF CERTIORARI

The petitioners respectfully pray that a writ of cer-

tiorari issue to review the judgment of the United States

Court of Appeals for the Federal Circuit in this case.

OPINIONS BELOW

The opinion of the Court of Federal Claims (App.

la-53a) is reported at 32 Fed. Cl. 387. The Court of

Appeals for the Federal Circuit wrote no opinion; its per

curiam affirmance (App. 54a-55a) is reported at 116 F.3d

1496.

JURISDICTION

The Court of Appeals entered its judgment on May

15, 1997 (App. 54a-55a). The petitioners’ timely petition

for rehearing and suggestion for rehearing en banc was

denied July 16, 1997 (App. 56a-58a). The jurisdiction of

this Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION INVOLVED

The Fifth Amendment, United States Constitution,

provides in relevant part: “ ... nor shall private property

be taken for public use, without just compensation.”

STATEMENT OF THE CASE

This proceeding arises from an action brought in the

United States Court of Federal Claims pursuant to the

Tucker Act, 28 U.S.C. § 1491, in which the petitioners,

plaintiffs below, sought compensation from the United

States under the Fifth Amendment for a temporary taking

of real property located in Key West, Florida. The action

was disposed of adversely to the plaintiffs on cross-

motions for summary judgment (after an inexplicably-

long six year delay) when the trial court ruled that, for

various reasons, the facts failed to demonstrate that a

compensable temporary taking of the plaintiffs’ property

had occurred. The trial court explained this ruling (and

several others not in issue here) at considerable length in

a published decision: Marks v. United States, 34 Fed. Cl.

387 (1995), aff'd, 116 F.3d 1496 (Fed. Cir. 1997) (App.

la-53a). The United States Court of Appeals for the Fed-

eral Circuit affirmed, without Opinion (App. 54a-55a).

The facts which follow will be drawn principally

from two sources: (1) the facts recited in the trial court’s

decision; and (2) the facts recited in the 1982 “Memoran-

dum Opinion Containing Findings of Fact and Conclu-

sions of Law” entered by the United States District Court

for the Southern District of Florida, which disposed of the

bulk of the underlying dispute between the plaintiffs and

the government which gave rise to the temporary taking

claim in issue here, and from which the trial court

derived most of the facts recited in its decision (App.

59a-94a).

Key West, Florida, is an island city, approximately

five square miles in size. In 1970, this tiny island had a

population of nearly 30,000. Its land is therefore precious,

and because it is a low-lying island, much of its land is

wetlands. Prior to 1973, its wetlands were filled and

developed without regulation by either the state or fed-

eral governments. There was extensive development,

both residential and commercial, in the area surrounding

the relatively small parcel in issue here - none of which

had ever been regulated by any governmental entity

except the City. In fact, much of the land surrounding the

parcel in issue here, as well as land on several nearby

islands, had been filled and developed by the federal

government itself.

It was against this background that, in June, 1972, the

plaintiffs (and predecessors in interest) purchased a 52-

acre tract known as Parcel 38 (and an easement over an

adjacent tract to the east, Parcel 34, to provide roadway

access to Parcel 38, and the right to purchase the fee in

that strip in the future), with the intent of developing it

as a multi-unit apartment complex and marina, in accor-

dance with the Master Plan of the City of Key West and

its applicable zoning regulations. Because of the nature of

the property, it could not be developed or used for any

economically viable purpose unless it were first filled

(App. 102a-105a).

At the time the property was purchased, it was stat-

utorily exempt from state requirements for dredge and

fill permits; the state did not require water quality certi-

fication for such a project; the federal government did not

assert jurisdiction over any property above the mean high

water line (MHWL); and the federal government, histori-

cally, had never exercised its jurisdiction below the

MHWL in this area. On November 1, 1972, the plaintiffs

obtained from the City of Key West the only dredge and

fill permit which was required, and they were assured at

the time by an official of the City that no federal permit

was required. Filling of the property commenced shortly

thereafter, and by the end of December, 1972, at a cost of

approximately $50,000.00, a perimeter berm (which cov-

ered about three acres, or less than six percent of the

property) had been constructed on Parcel 38.

On January 24, 1973, the Army Corps of Engineers

asserted its jurisdiction under § 10 of the Rivers and

Harbors Act of 1899, 33 U.S.C. § 403 - the first time any

such action had been taken in the area in the 73 years that

the Act had been on the books - and ordered the plain-

tiffs to cease and desist all filling below the MHWL. The

plaintiffs complied with the order and ceased all filling

activity. This order was followed by a letter dated April 9,

1973, in which the Corps demanded that the plaintiffs

remove all fill which had been placed below the MHWL.

Although neither the order nor the letter required

removal of the fill placed above the MHWL, and therefore

did not purport to prevent further development of the

property above the MHWL, the Corps was unable to tell

the plaintiffs the location of the MHWL; indeed, it had

neither the requisite scientific evidence nor any of the

data needed to locate that elusive line in December, 1972.

To proceed with the project in the face of this uncertainty

would therefore risk further violation of the now-asserted

law, a potentially expensive gamble which no prudent

businessman would take, so the plaintiffs ceased all

development of the property pending resolution of the

Corps’ intervening demand.

The government then initiated a criminal proceeding

against one of the corporate plaintiffs in the United States

District Court for the Southern District of Florida, which

was resolved in August, 1973, by stipulation between the

parties, a plea of nolo contendere, and a de minimis fine of

$500.00. The stipulation recited that the Corps historically

had not exercised its jurisdiction below the MHWL in the

area of the fill; that the filling had taken place in the

belief that a fill permit was not required, and in good

faith reliance upon a City official’s assurance that no

federal permit was required; that all filling had ceased

immediately upon receipt of the cease and desist order;

that the public interest issues implicated by the criminal

charge would best be handled by processing an applica-

tion for an after-the-fact permit; and that the Corps

would consider the public interest factors implicated by

the application as analogous to those considered in a

similar application for a permit to fill property in the

same area, which the Corps had granted in March, 1973.

At the hearing held on the plea and stipulation, the

presiding United States District Court judge, the Honor-

able William O. Mehrtens, who could not fairly be

accused of being “soft” on environmental or ecological

matters, stated that the property had no use other than as

a breeding ground for mosquitoes; that the property

ought to be filled and developed to meet the needs of the

growing City; and that the Corps ought to issue a permit

to allow its development.

An application for an after-the-fact permit had been

submitted in July, 1973, approximately a month before the

hearing on the criminal charge. In connection with this

application, the parties had agreed upon a compromise

location for the MHWL, numerous changes had been

made to the development plans at the Corps’ request, and

the Corps had assured the plaintiffs that a permit would

be issued (App. 102a-105a). Unfortunately, although the

State of Florida had not required water quality certifica-

tion in December, 1972, when the perimeter berm was

completed, at the time the application was submitted the

state was requiring water quality certification, and the

Corps therefore required the plaintiffs to obtain certifica-

tion from the state before it would issue the permit (id.).

The plaintiffs applied for water quality certification,

which was denied in April, 1974. Because of this denial -

and for that reason alone, and without consideration of

the merits of the application otherwise — the Corps

denied the plaintiffs’ application for an after-the-fact per-

mit, and once again ordered removal of all fill below the

compromise MHWL.

In an effort to salvage their now thoroughly

obstructed project, the plaintiffs appealed the denial of

water quality certification to the appropriate state agency.

While this appeal was pending in 1975, the Corps

approved a nearly identical filling project which had been

undertaken by others on the contiguous parcel adjacent

on the east, Parcel 34 (which contained the access road to

Parcel 38), allowing only partial restoration of this parcel

by means of mere breaks in the perimeter berm. The

Corps continued to insist that the plaintiffs effect total

restoration of the adjacent Parcel 38, however, by remov-

ing all the fill placed below the MHWL. In the same time

frame, the Corps revised its wetlands policy, and by

regulations issued in 1975 it began exercising jurisdiction

over and requiring permits for development of property

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above the MHWL as weil - a permit which could not be

obtained by the plaintiffs because of the state’s 1974

denial of water quality certification. The plaintiffs there-

after exhausted their state administrative and judicial

remedies with respect to water quality certification, with-

out success.

In 1977, notwithstanding its inconsistent agreement

to only partial restoration of Parcel 34 in 1975, the Corps

once again ordered the plaintiffs to remove all fill placed

below the compromise MHWL on Parcel 38. Believing

that they were being treated unfairly by the government,

and unable to afford the $90,000.00 cost of removing all

the fill, the plaintiffs did not comply. As a result, in

October, 1980, the government brought an enforcement

action in the United States District Court for the Southern

District of Florida, seeking a permanent injunction requir-

ing the plaintiffs to remove all of the fill material placed

below the MHWL on Parcel 38. The State of Florida

intervened in the action on the government's side. The

plaintiffs answered, and because they had been sued

despite their prior agreement on a compromise MHWL

and the Corps’ prior assurances that a permit would be

issued based on the compromise, they denied that any fill

had been placed below the MHWL and demanded that

the government now meet its burden of proving the

location of that line.

Relying upon equitable principles concerning resto-

ration previously established by federal decisional law,

the plaintiffs also proposed that only a partial restoration

of the property below the MHWL, similar to the partial

restoration which the Corps had approved for the adja-

cent parcel in 1975, be ordered. The plaintiffs also coun-

terclaimed against the government and the state, seeking

injunctive relief from prospective permitting of Parcel 38

above the MHWL. A claim for damages was also asserted

against the government, seeking compensation under the

Fifth Amendment for the taking effected by the Corps’

actions. At the government’s request, this claim was dis-

missed without adjudication on the ground that the

plaintiffs’ exclusive remedy for the alleged taking was an

action in the Court of Federal Claims under the Tucker

Act. During the course of this litigation, the plaintiffs

applied once again for an after-the-fact permit, but the

Corps refused to consider the application on its merits on

the ground that the litigation was pending.

Following a bench trial, the Honorable Sidney M.

Aronovitz entered the “Memorandum Opinion Contain-

ing Findings of Fact and Conclusions of Law” from which

we have borrowed most of the facts here (App. 59a-94a).

In a nutshell, the Court found that the issuance of the

cease and desist order in 1973, at a time when the Corps

was unable to determine the location of the MHWL, was

the principal cause of the plaintiffs’ inability to develop

the property thereafter, either below or above the MHWL;

that the government had failed to prove the location of

the MHWL at trial; and that the location of the MHWL

would be fixed by the Court at the compromise MHWL

previously agreed upon by the parties in connection with

the abortive permitting process to which the Corps had

subjected the plaintiffs. The Court also concluded that the

government’s demand for full restoration of Parcel 38 by

removal of all the fill below the MHWL at a cost of

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$90,000.00 was inequitable, and it ordered only partial

restoration of the property by allowing the plaintiffs to

include breaks in the perimeter berm below the MHWL,

as the Corps had allowed on the adjacent parcel, at a cost

of only $5,000.00 to $6,000.00.

The Court also observed that, had the Corps not

intervened in 1973 without knowing the location of the

MHWL, the property would have been filled above the

MHWL before the state began requiring water quality

certification and before the Corps revised its wetlands

policy in 1975, and it would therefore have been “grand-

fathered and exempt” from these permitting require-

ments. And because of this conclusion (and observing

that it would be “patently unfair” to do otherwise), the

Court enjoined both the government and the state from

requiring prospective permitting of the property above

the MHWL. As a result of these rulings, the plaintiffs

were restored to the conditions existing in December,

1972, and they were permitted (conditioned upon partial

restoration below the MHWL) to fill and develop the

property above the MHWL without permits - i. e., to

finish what they had begun in 1972, but had been pre-

vented from doing by the Corps for a period of nearly 10

years. Still intent upon stopping development of the

property altogether, the government appealed the deci-

sion to the United States Court of Appeals for the Elev-

enth Circuit, which rejected the government's challenges

and affirmed the decision in March, 1984. United States v.

Context-Marks Corp., 729 F.2d 1294 (11th Cir. 1984) (App.

95a-101a).

In 1986, when the plaintiffs began filling and widen-

ing the access road across Parcel 34 in order to enable

development of Parcel 38, the Corps intervened once

again by threatening the bulldozer operators with jail and

fines if they did not cease and desist. The plaintiffs filed a

motion to enforce the mandate in the prior litigation,

which was heard by Judge Aronovitz. The government

acknowledged that a 30-foot strip of Parcel 34 had been

involved in the prior litigation and was therefore exempt

from permitting requirements, but insisted that the plain-

tiffs were not entitled to widen the road beyond 30 feet

without obtaining a permit.

Judge Aronovitz denied the motion to enforce on the

ground that the full width of the road was not encom-

passed within his prior decision, but the motion was

denied without prejudice to the plaintiffs to bring a sepa-

rate action for relief from the Corps’ latest obstructive

tactic. In a concluding footnote, Judge Aronovitz

observed:

This litigation and its predecessor administra-

tive proceedings commenced over sixteen [sic]

(16) years ago and has proceeded through state

courts to the Florida Supreme Court, as well as

in the United States District Court up to the

level of the Eleventh Circuit. Although this

Court deems itself without subject matter juris-

diction with regard to the Motion, it cannot help

but observe that the subject matter is not new

and a reasonable determination could be made

by the United States without the requirement of

a further permit application and without any

precedent being set by such an expedited

administrative determination. The position of

the government in refusing to consider the wid-

ening of the road to conform to the sixty (60')

foot strip is indeed arbitrary and capricious.

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When the Corps failed to heed the rather pointed

message in this footnote, a subsequent federal action was

filed by the plaintiffs, but its details are not material to

the issues presented here. Suffice it to say that, probably

as a result of the footnote quoted above and perhaps

because of developments in the subsequent action, the

Corps finally “decided to back off,” and the development

of the property begun in 1972 was finally allowed to

proceed. An economically viable use of Parcel 38 was

thereby restored. Frustrated by the 16-year delay in their

plans, however, the plaintiffs decided not to proceed, and

they sold a majority of Parcel 38 to other developers in

1989 (and donated a portion of the property to the City).

They then filed the instant action, seeking compensation

for the damages caused them by the temporary taking

effected by the Corps’ actions between 1973 and the date

that economically viable use of the property was restored.

The trial court gave four principal reasons for grant-

ing the government’s motion for summary judgment.

With respect to the portion of Parcel 38 below the MHWL,

it held that the government's “navigational servitude”

was absolute and supreme, and that a taking of this

portion of the property was therefore noncompensable as

a matter of law (App. 31a-33a). With respect to the por-

tion of Parcel 38 (and the access strip on Parcel 34) above

the MHWL (which were not subject to the government's

“navigational servitude”), it held that the plaintiffs failed

to demonstrate that they were deprived of all economi-

cally viable use of the property by the Corps’ actions, for

the principal reason that the property was ultimately

rendered developable by Judge Aronovitz’s decision, and

“as of September 18, 1989, plaintiffs sold the majority of

Parcel 38 for millions of dollars. The consideration

received from this sale alone demonstrates the remaining

economic viability of the property” (App. 51a). It also

concluded (1) that the Corps’ actions were not within its

authority, and that the plaintiffs therefore had only a tort

claim, not a Tucker Act claim; and (2) that the Corps’

actions did not interfere with any reasonable investment-

backed expectations. The latter two conclusions were

plainly indefensible on the facts, so the government

devoted the bulk of its defense in the Court of Appeals to

the first two rulings. The Court of Appeals affirmed the

summary judgment, without opinion.

REASONS FOR GRANTING THE PETITION

1. The lower courts’ conclusion that the government’s

“navigational servitude” is absolute conflicts with a

decision of this Court.

The trial court concluded that the government’s

“navigational servitude” is absolute, and that the Corps

could therefore “take” the portion of Parcel 38 below the

MHWL with impunity, and without any obligation to pay

just compensation for the taking. Numerous decisions

were cited in support of this conclusion, and we cannot

deny that they contain language which appears to make

the government’s “navigational servitude” rather abso-

lute. However, there is a distinction between those cases

and this one which the trial court failed to detect. In the

cases relied upon by the trial court, the government's

“navigational servitude” was asserted “in aid of naviga-

tion.” In the instant case, the government's “navigational

servitude” was not asserted “in aid of navigation”; it was

asserted solely in aid of environmental protection. We

respectfully submit that, in this entirely different context,

the government's “navigational servitude” is not abso-

lute, and that just compensation is due for a taking of

property below the MHWL for purely environmental rea-

sons.

Despite the absolute language in many of its prior

decisions, this Court made it clear in Kaiser Aetna v.

United States, 444 U.S. 164, 172, 177-78 (1979), that it “has

never held that the navigational servitude creates a blan-

ket exception to the Takings Clause”; that the “naviga-

tional servitude . . . exists by virtue of the Commerce

Clause in navigable streams [and] gives rise to an author-

ity in the Government to assure that such streams retain

their capacity to serve as continuous highways for the

purpose of navigation in interstate commerce”; that an

assertion of the servitude “in aid of navigation” is there-

fore typically noncompensable; but that an assertion of

the servitude for other reasons, like creating a public

right of access to a navigable pond for recreational pur-

poses, “goes so far beyond ordinary regulation or

improvement for navigation as to amount to a [compens-

able] taking. ...” In our judgment, if the exercise of the

navigational servitude in the name of “public access for

recreation” can result in a compensable taking, as it did

in Kaiser Aetna, then exercise of the servitude to preserve

the public’s interest in the environment ought to result in

a compensable taking as well. We respectfully submit that

the conflict is undeniable, and we urge the Court to

resolve the conflict.

Because all Takings Clause claims against the United

States must be brought in the Court of Federal Claims

and reviewed only in the Court of Appeals for the Fed-

eral Circuit, we cannot direct the Court to any inter-

circuit conflicts on the point. But the fact that no inter-

circuit conflict can ever develop on this point convinces

us that an intra-circuit conflict can at least call for an

exercise of this Court’s supervisory power. We therefore

note that the Court of Claims concluded shortly after

Kaiser Aetna that the government’s servitude was not

absolute, and that the denial of all access to an island

“with the purpose and effect of preventing all economic

use and holding it as a scenic preserve without paying for

it” might be a compensable taking. Laney v. United States,

661 F2d 145, 149, 228 Ct. Cl. 519 (1981). And, more

recently, the Court of Appeals for the Federal Circuit has

twice recognized that, after Kaiser Aetna, the servitude is

no longer absolute, and that compensation might be

recoverable in regulatory taking cases notwithstanding

the servitude. See Florida Rock Industries, Inc. v. United

States, 791 F.2d 893, 900 (Fed. Cir. 1986), cert. denied, 479

U.S. 1053 (1987); Owen v. United States, 851 F.2d 1404, 1416

(Fed. Cir. 1988) (en banc). The disposition of the plain-

tiffs’ claim below was inconsistent with these decisions,

and we urge the Court to accept review to ensure that the

important constitutional right of which the plaintiffs were

deprived is consistently applied by the only courts given

any jurisdiction to protect that right.

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2. The lower courts’ conclusion that the temporary tak-

ing was not compensable because the plaintiffs’

property increased in value during the period of

taking and was sold for a profit after the taking

ceased conflicts with decisions of this Court and

with a decision of the Eleventh Circuit.

The trial court also concluded that the plaintiffs

failed to demonstrate that they were deprived of all eco-

nomically viable use of the property above the MHWL by

the Corps’ actions for the principal reason that the prop-

erty increased in value during the period of taking (as

most real property will), that it was ultimately rendered

developable by Judge Aronovitz’s decision, and that it

was sold for a profit after the taking ceased. This was a

rather astonishing conclusion, we think, since the plain-

tiffs had filed affidavits proving that, unless the property

were allowed to be filled, it could not be developed or

used for any economically viable purpose at all during

the period of the taking (App. 102a-105a). And the fact

that the plaintiffs plainly were deprived of all economi-

cally viable use of the property during the more than a

decade before the federal courts finally ordered the gov-

ernment to permit its development is, we respectfully

submit, not even an arguably debatable proposition.

The government recognized as much. It therefore

approached the problem from a somewhat different direc-

tion. Instead of gainsaying the undeniable fact that the

Corps’ actions had deprived the property of all economi-

cally viable use for at least a decade, it focused on the

measure of damages to be applied to the temporary tak-

ing claim, and made what amounted to a “no harm, no

foul” argument. Suggesting that the measure of the plain-

tiffs’ damages was the difference between the market

values of the property at the commencement and at the

conclusion of the taking, it pointed out that the property

had been purchased rather cheaply in 1972, that it had

increased in value during the period of the taking, and

that it had been solid for a substantial profit in the late

1980's — and it argued that the Corps’ actions during the

more than a decade in which the property could not be

developed caused the plaintiffs no damages. Therefore,

the argument went, the plaintiffs had suffered no compen-

sable temporary taking for which the Fifth Amendment

required the payment of compensation. The trial court

failed to recognize that a temporary taking involves con-

siderations far different than a permanent taking, and it

accepted the argument and explicitly bottomed its grant

of summary judgment on it. At oral argument of the

cause below, the government effectively placed all of its

eggs in this basket.

Most respectfully, the government's contention that

no compensable temporary taking occurs when the prop-

erty increases in value during the period of a temporary

taking was dead wrong. The trial court cited no authority

for its holding to that effect, and the government has

never cited a single authority supporting it. The reason

no such authority has been cited is that none exists. In

fact, the contention was squarely rejected by this Court in

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949). In

that case, the government effected a temporary physical

taking of a laundry plant during World War II. Following -

return of the plant to its owners after the war, litigation

ensued over the amount of compensation which was due

Baki xt

BRE BOB

for the temporary taking. Because the value of the busi-

ness had decreased considerably during the taking, the

owners contended that their compensation should be

measured by the difference between the market values of

the business on the date of the taking and on the date of

return. The trial court disagreed and awarded the owners

the “rental value” of the business during the period of

taking. The Eight Circuit affirmed.

On certiorari, this Court rejected the owners’ position

once again, explaining in pertinent part as follows:

.. . We agree with both lower courts, therefore,

that the proper measure of compensation is the

rental that probably could have been obtained,

and so this Court has held in the two recent

cases dealing with temporary takings. [Citations

omitted]. Indeed, if the difference between the mar-

ket value of the fee on the date of taking and that on

the date of return were taken to be the measure, there

might frequently be situations in which the owner

would receive no compensation whatever because the

market value of the property had not decreased dur-

ing the period of the taker’s occupancy.

338 U.S. at 6-7 (emphasis supplied).

Of course, the position upon which the government

staked its case for summary judgment below - that no

compensable taking occurred because the market value of

the plaintiffs’ property after its return was greater than

its market value on the date of the taking - was simply

the negative of the emphasized portion of this quotation.

It was therefore precisely the position which this Court

rejected in Kimball Laundry as being the proper measure of

damages in a temporary taking case. And when this

Court more recently extended its prior jurisprudence in

the area of physical takings to apply to regulatory takings

(like the one in issue here) as well, it relied explicitly

upon Kimball Laundry, and it was careful to define the

measure of damages, as it had in Kimball Laundry, to “the

value of the use of the land”:

These cases [including Kimball Laundry] reflect

the fact that “temporary” takings which, as here,

deny a landowner all use of his property, are not

different in kind from permanent takings, for

which the Constitution clearly requires compen-

sation. . .. The United States has been required

to pay compensation for leasehold interests of

shorter duration than this. The value of the

leasehold interest in property for a period of

years may be substantial, and the burden on the

property owner in extinguishing such an inter-

est for a period of years may be great

indeed... .

Where this burden results from governmental

action that amounted to a taking, the Just Com-

pensation Clause of the Fifth Amendment

requires that the government pay the landowner

for the value of the use of the land during this

period. . . . Invalidation of the ordinance or its

successor ordinance after this period of time,

though converting the taking into a “tempor-

ary” one, is not a sufficient remedy to meet the

demands of the Just Compensation Clause.

Here we must assume that the Los Angeles

County ordinance has denied appellant all use

of its property for a considerable period of

years, and we hold that invalidation of the ordi-

nance without payment of fair value for the use of

ich a kai a Ai RG A lt:

aii isisisiecvsissie, isaian asset cat eda Sc,

the property during this period of time would be a

constitutionally insufficient remedy... .

First English Evangelical Lutheran Church of Glendale v.

County of Los Angeles, California, 482 U.S. 304, 318-19,

321-22 (1987) (emphasis supplied).

The teachings of Kimball Laundry and First Lutheran

Church have been followed by the Federal Circuit in

circumstances legally indistinguishable from the instant

case. See Yuba Natural Resources, Inc. v. United States, 821

F.2d 638 (Fed. Cir. 1987). And in a subsequent decision in

the same case, the Federal Circuit relied once again upon

Kimball Laundry and First Lutheran Church; rejected once

again a contention that the measure of damages for a

temporary taking should be determined by the difference

in market values on the date of the taking and the date of

the return; and reiterated once again the point which

neither the trial court nor the government has acknowl-

edged or understood in this case:

Normally, the proper measure of just compensa-

tion for the government’s permanent taking of

private property is “the fair market value of

[the] property at the time of the taking.” . . . In

the case of a temporary taking, however, since

the property is returned to the owner when the

taking ends, the just compensation to which the

owner is entitled is the value of the use of the

property during the temporary taking, i. e., the

amount which the owner lost as a result of the

taking.

Yuba Natural Resources, Inc. v. United States, 904 F.2d 1577,

1580-81 (Fed. Cir. 1990) (emphasis supplied).

The Eleventh Circuit has also applied the teachings

of Kimball Laundry and First Lutheran Church to the type of

problem presented in this case. In Wheeler v, City of Pleas-

ant Grove, 833 F.2d 267 (11th Cir. 1987), much like in the

instant case, a trial court was confronted with a tempor-

ary regulatory taking which halted the development of a

120-unit apartment complex. It held, as the trial court

held in the instant case, that no compensable temporary

taking had occurred because the Property had increased

in value from $160,000.00 to $210,000.00 during the

period of temporary taking. The defendant-municipality

defended this ruling on appeal with Precisely the same

argument which the government made in the instant

case.

Relying upon Kimball Laundry and First Lutheran

Church, the Eleventh Circuit rejected the argument and

reversed the ruling:

In the case of a temporary regulatory taking, the

landowner’s loss takes the form of an injury to

the property’s potential for Producing income or

an expected profit... . The landowner’s com-

pensable interest, therefore, is the return on the

portion of fair market value that is lost as a

result of the regulatory restriction. Accordingly,

the landowner should be awarded the market

rate return computed over the Period of the

temporary taking on the difference between the

property’s fair market value without the regula-

tory restriction and its fair market value with

the restriction. . . .

.. +. [T]he district court plainly applied an incor-

rect measure of damages. The court concluded

Si ugh ate

that the [plaintiff] had suffered no compensable

loss because the property’s value after the lifting

of the regulatory restriction was greater than its

value before the restriction came into effect. The

district court’s analysis fails to account for their

loss as measured by the formula we set forth

above, that is, the loss in income-producing

potential suffered over the sixteen months that

Ordinance No. 216 was in effect. On remand, the

district court must determine the amount of that

loss.

833 F.2d at 271. For a similar, consistent decision, see

Nemmers v. City of Dubuque, 764 F.2d 502, 504-85 (8th Cir.

1985).

Most respecitully, the fact that the plaintiffs’ property

increased in value during the more than a decade in

which it was undeniably rendered useless by the Corps’

regulatory actions, and the fact that the property was sold

for a profit after its use as developable property was

restored by the federal courts, were not legitimate reasons

for declaring that the plaintiffs suffered no compensable

temporary taking of their property. The Fifth Amendment

plainly mandates instead that the plaintiffs be compen-

sated for “the value of the use of the land” during the

more than a decade that they were deprived of its use.

The lower courts failed to recognize the difference

between a permanent taking and a temporary taking in

this case, and the plaintiffs were plainly deprived of their

constitutional right to just compensation in the process.

We respectfully urge the Court to accept review to resolve

the conflicts.

3. The remaining reasons given by the trial court for

rejecting the plaintiffs’ claim for compensation with

respect to the property above the MHWL are plainly

indefensible.

Because the government is likely to argue that review

should be denied because the lower courts’ decisions rest

on alternative grounds, we should briefly address the

principal additional reasons given by the trial court for

denying the plaintiffs’ claim for compensation with

respect to the property above the MHWL. In our judg-

ment, they are plainly indefensible.

For example, the trial court concluded that the Corps’

actions were not within its authority, and that the plain-

tiffs therefore had only a tort claim, not a Tucker Act

claim. Most respectfully, the Corps plainly had jurisdic-

tion over the property below the MHWL in 1973 and its

actions at the outset were plainly “authorized” — and it

hardly lies in the government’s mouth to contend other-

wise here, since it obtained both a criminal conviction

and an injunction ordering partial restoration of the prop-

erty as a result of its assertion of jurisdiction over the

property below the MHWL. To be sure, because neither

the Corps nor the plaintiffs had any idea of the location

of the MHWL, the plaintiffs ceased all development of the

Property, both below and above the unknown MHWL,

until this line could be determined and the Corps’

demands sorted out through the judicial Process. And as

Judge Aronovitz explicitly found, this was perfectly

appropriate conduct under the circumstances, since no

reasonably prudent businessman would have gambled

additional time, labor, and money on further develop-

ment of the property in the face of this critical uncer-

tainty, much less risk an additional violation of the

criminal law.

The fact that development of the property above the

MHWL became infeasible was therefore simply a conse-

quence of the Corps’ fully-authorized assertion of juris-

diction over the property below the unknown MHWL in

1973; it was not the result of any “unauthorized” asser-

tion of jurisdiction by the Corps over the property above

the MHWL - and the trial court was plainly confused in

concluding otherwise. The temporary taking of the plain-

tiffs’ property, both below and above the MHWL, was

caused solely by the Corps’ authorized assertion of juris-

diction in 1973, and that is the only conduct upon which

the trial court’s Tucker Act jurisdiction depended. We

should also note that the government did not even bother

to defend this indefensible ruling in the Court of

Appeals, either in its brief or at oral argument, so it

should be hard pressed to defend it here.

The trial court also concluded that the Corps’ actions

did not interfere with any reasonable investment-backed

expectations in development of the property above the

MHWL. This conclusion is plainly indefensible because

the plaintiffs purchased the property in order to fill and

develop it in accordance with the Master Plan of the City

of Key West; the Corps’ actions prevented the property

from being filled and developed for more than a decade;

and the federal courts ultimately ordered the government

to permit the filling and development of the property

above the MHWL, exactly as initially planned. Most

respectfully, now that the federal courts have determined

that the property above the MHWL can be filled and

developed exactly as planned when it was purchased, it

is simply impossible that another federal court can legit-

imately declare that the plaintiffs had no reasonable

expectations that the property could be filled and devel-

oped when it was purchased.

The plaintiffs were plainly deprived of their constitu-

tional right to just compensation below, and we respect-

fully urge the Court to grant review to the end that this

important right be restored to the plaintiffs, and to sim-

ilarly situated future claimants, by its proper enforce-

ment.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

Joe. D. Eaton, Esq.

Counsel of Record

PopuHurst, ORSECK, JOSEFSBERG,

Eaton, Meapow, OLIN &

Perwin, P.A.

25 West Flagler Street

Suite 800

Miami, Florida 33130

(305) 358-2800

Fax (305) 358-2382

Counsel for Petitioners

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RMD RO hh ACE

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A Ga Tee saat a ae

Lawrence MARKS, et al., Plaintiffs,

UNITED STATES, Defendant.

No. 506-89L.

United States Court of Federal! Claims.

Nov. 6, 1995.

Robert L. Parks, Anderson, Moss, Parks & Russo,

P.A., Miami, Florida, attorney of record, for plaintiffs.

Dorothy R. Burakreis, General Litigation Section,

Land and Natural Resources Division, Department of

Justice, Washington, D.C., with whom were the Assistant

Attorney General, attorneys of record, for defendant; Wil-

liam Baxter, Assistant District Counsel, Jacksonville Dis-

trict, of counsel.

OPINION

HORN, Judge.

The above-captioned case is presently before this

court on defendant’s motion to dismiss for lack of juris-

diction, pursuant to Rule 12(b)(1) of the Rules of the

United States Court of Federal Claims (RCFC) and 28

U.S.C. § 1500 (1988 & Supp.1993), as well as on defen-

dant’s motion for summary judgment and plaintiffs’

cross-motion for partial summary judgment, both pur-

suant to RCFC 56.! Plaintiffs in this action seek compen-

sation from the United States Army Corps of Engineers

| Following enactment of the Court of Federal Claims

Technical and Procedural Improvements Act of 1992, Pub.L. No.

102-572, the United States Claims Court was renamed the

(“the Corps”) for an alleged temporary taking of wet-

lands located in Key West, Florida. In their complaint,

plaintiffs allege that “the Army Corps’ improper exercise

of jurisdiction over the subject parcels constitutes a tem-

porary taking since the imposition of the cease and desist

order in January, 1973 and has continued to date.” Defen-

dant denies liability, initially claiming a lack of jurisdic-

tion. In the alternative, defendant argues that plaintiffs’

taking claim is unsupported in both fact and law.

FACTUAL BACKGROUND

The property in dispute consists of two adjacent par-

cels of land in Key West, Florida, near the Key West

airport, known as Parcel 34 and Parcel 38.2 The property

is bounded on the north by the Riviera Canal, a man-

made waterway subject to tidal fluctuation and connected

United States Court of Federal Claims. In accordance with

General Order 33 issued by the United States Court of Federal!

comparing defendant's “Proposed Findings of Uncontroverted

hain

to the Atlantic Ocean and Cow Key Channel. Riviera

Canal is a navigable body of water which is connected to

the Atlantic Ocean. Parcel 38 consists of approximately 52

acres, the northern portion of which is a low lying, salt

marsh area subject to tidal fluctuations. Parcel 34 consists

of a 60 foot strip of property, which connects Roosevelt

Boulevard on the east to Parcel 38 on the west, and is the

only ingress and egress to Parcel 38. On June 13, 1972,

plaintiff, Lawrence Marks, on behalf of himself and his

uncles, Herman, Paul, Eugene and Stanley Marks pur-

chased an undivided one-half interest in Parcel 38 from

Osnardo Drago and Joaquin Pijuan, and also purchased

whatever interest the sellers had in Parcel 34. Fee simple

title to the access strip, known as Parcel 34, was not

acquired until April 29, 1980.

In November 1972, the City of Key West enacted

rezoning Ordinance No. 72-37, which permitted construc-

tion of four-story apartment complexes and amended the

maximum density to allow 22 units per acre. Plaintiffs in

this case intended to build and develop the property at

issue in accordance with that ordinance. On November

21, 1973, Lawrence, Herman, Paul, Eugene and Stanley

Marks, and Osnardo Drago entered into an agreement

with Context Industries regarding the sale and develop-

ment of Parcel 38, and entered into a supplemental agree-

ment on December 12, 1973. Shortly thereafter, on

December 28, 1973, the parties signed a final agreement,

which transferred Parcel 38 to a new company, Context-

Marks Corporation, which was organized for the specific

purpose of developing the property.3 On May 12, 1980, as

* Later, by deed, dated April 29, 1980, Context-Marks

acquired Parcel 34 for $6,000.00.

a result of the settlement of a mortgage foreclosure action

on the property, Carlos, et al. v. Context-Marks, et al., No.

75-1025-CA-09, Fla. 16th Cir.Ct., Context-Marks Corpora-

tion became Marks Development, Inc. Subsequently, on

December 27, 1984, Marks Development, Inc. conveyed a

10% undivided interest in Parcel 38, and in whatever

interest existed in Parcel 34, to Herman, Paul, Eugene and

Stanley Marks, and a 60% interest to Lawrence Marks.

Plaintiff, Island in the Sun Condominiums of Key

West, Florida, Inc. (“Island in the Sun”), filed its articles

of incorporation on December 29, 1972. Island in the Sun

was formed for the purpose of developing and construct-

ing condominiums on Parcel 38, however, Island in the

Sun, originally, did not hold ownership interest in the

property. Later, on June 26, 1986, the Marks plaintiffs

conveyed all of their interest in Parcel 34 to plaintiff

Island in the Sun, which then conveyed that interest to

the City of Key West.

On or about November 1, 1972, in anticipation_of

developing Parcel 38 as a multi-unit apartment complex

and marina, and in accordance with the Master Plan of

the City of Key West and its applicable zoning regula-

tions, plaintiffs applied for and received a dredge and fill

permit from the City of Key West. Plaintiffs began their

fill operation on Parcel 38 in November and December of

1972. A perimeter berm was completed during December,

1972. Dredging and filling activity, therefore, commenced

without a permit from the Corps having been issued. At

the time the fill operation on the property was com-

menced, the Randall Act, Florida Statute 253.135(2),

which exempted property within Key West from state

requirements for dredge and fill permits, was in full force

bine hy Coie Re eran

PRI eR Re a a

RS iia a wlelai ee

and effect. Also, at the time the fill operation was com-

menced in November and December of 1972, neither the

State of Florida nor the Corps generally asserted jurisdic-

tion over any property above the mean high water line,‘

and neither the federal government nor the State of Flor-

ida had been requiring permits to fill below the mean

high water line in this area.

On January 24, 1973, the Army Corps of Engineers

issued a cease and desist order by telegram concerning

the placement of fill on Parcel 38. The telegram addressed

to Thompson P. Carlos, counsel to the plaintiffs, stated:

1. IT Is OUR UNDERSTANDING THAT YOU

REPRESENT MESSRS LAWRENCE M MARKS,

OSNARDO DRAGO AND JOAQUINA [sic] C

PI[UAN WHO ARE ENGAGED IN PLACING

FILL IN THE NAVIGABLE WATERS OF THE

UNITED STATES ADJACENT TO THE RIVIERA

CANAL AND JUST NORTH OF KEY WEST

INTERNATIONAL AIRPORT, KEY WEST,

MONROE COUNTY, FLORIDA.

4 Mean high water was defined in the opinion (Case No.

79-2323-Civ-SMA), issued by the United States District Court

for the Southern District of Florida on January 15, 1982, as

follows: Mean high water is a term used to designate the

arithmetic average of the height above mean sea level of all high

tides over a period of 18.6 years. Mean high water at a given

geographic location is determined by the establishment of

interim tide stations and measuring short term simultaneous

differences between readings at those stations and the reading

at the operating stations which were established more than 19

years prior to the current measurements. By applying known

constants for the 19 year station to the shorter term stations, the

equivalent of a 19 year value is interpolated.

2. SECTION 10 OF THE RIVER AND HARBOR

ACT OF 3 MARCH 1899 (33 USC 403) PRO-

HIBITS SUCH WORK UNLESS IT IS PROPERLY

AUTHORIZED BY A DEPARTMENT OF THE

ARMY PERMIT.

3. THERE IS NO RECORD OF A DEPART-

MENT OF THE ARMY PERMIT BEING ISSUED

FOR THIS WORK.

44. [SIC] ACCORDINGLY, YOU ARE HEREBY

ADVISED THAT YOUR CLIENTS SHOULD

CEASE AND DESIST ALL UNAUTHORIZED

WORK BELOW THE MEAN HIGH WATER

LINE IMMEDIATELY. FURTHER OPERATIONS

MAY SUBJECT THEM TO MULTIPLE COUNT

PROSECUTION.

This telegram was followed by a letter, dated April 9,

1973, from the Corps ordering removal of the fill. The

letter stated, in pertinent part:

Since a Department of the Army permit has not

been issued for the placement of this fill, you

are directed to notify your clients, Messrs. Law-

rence M. Marks, Osnardo Drago and Joaquin C.

Pijuan, to remove all fill placed below the mean

high water line in the navigable waters of the

United States. You are further directed to com-

plete the removal of this fill by 22 May 1973.

This fill material should be removed in such a

manner as to insure that the original elevation is

obtained. Let us caution you that removal of

additional material, that material not placed as

fill, would be considered by this office to be an

additional violation of 33 U.S.C. 403. Also, the

fill material that is removed should not be

placed below the mean high water line in an

area that is not properly authorized by a Depart-

ment of the Army permit.

Although the cease and desist order specifically refer-

enced work below the mean high water line, it did not

preclude filling above the mean high water line.

Upon receipt of the cease and desist order, plaintiffs

stopped all fill activity. Thereafter, plaintiffs and the

United States government entered into a stipulation in a

criminal information proceeding in the United States Dis-

trict Court for the Southern District of Florida, Case No.

73-509-Cr-WM, charging unauthorized filling of Parcel

38, and that Island in the Sun was the party responsible

for the alleged infractions. On August 16, 1973, Island in

the Sun plead nolo contendere to the criminal informa-

tion and the corporation received a $500.00 fine. At the

time of the cease and desist order, the parties had not yet

agreed upon a compromise. However, the parties ulti-

mately agreed upon a compromise mean high water line.

Thereafter, Charles Netter, acting on behalf of the

plaintiffs, submitted an after-the-fact application for a

permit to dredge and fill below the mean high water line,

dated June 14, 1973, and revised July 31, 1973. The pro-

posed work included maintaining existing fill which had

been illegally placed without a permit below the mean

high water line, as well as completing the proposed

marina project. Island in the Sun also applied to the State

of Florida for water quality certification. The State of

Florida denied that application on April 2, 1974, stating

that “the project as proposed will have definite long-term

adverse effects on the water quality of the Class III waters

of the immediate waterway area, Cow Key Channel and

will be contrary to policy of the Board of the Department

of Pollution Control.” Because state certification was a

prerequisite to the issuance of a permit under either 33

U.S.C. § 403 (1972) or 33 U.S.C. § 1341 (1972), the Corps

denied the corporation’s permit application to dredge the

marina on July 11, 1974. At that time, plaintiffs were

ordered by the Corps to “remove all fill placed in the area

agreed upon as below mean high water” by September,

1974.

Plaintiffs appealed the permit denial within the state

agency, and in January 1976, the Secretary of the Florida

Department of Environmental Protection Regulation

issued a final order denying water quality certification

and the state permits. The state action was upheld on

administrative appeal. Plaintiffs then appealed the denial

to the Florida state courts. On October 10, 1977, the

Florida Supreme Court denied a petition for certiorari

and upheld the state court’s May 3, 1977 decision deny-

ing certification. Island-in-the-Sun Condominium of Key

West, Inc. v. Governor & Cabinet, 345 So.2d 831

(Fla.Dist.Ct.App.), cert. denied, 352 So.2d 172 (Fla.1977).

On October 26, 1977, and again on November 14,

1977, after plaintiffs had exhausted all administrative and

judicial remedies, the Corps reiterated its order to remove

the fill from below the compromise mean high water line

on Parcel 38. When plaintiffs failed to comply, the Corps

brought an enforcement action on October 21, 1980, seek-

ing a permanent injunction and requiring Marks Devel-

opment, Inc. to remove approximately 20,000 cubic yards

of fill material from navigable waters of the United States

allegedly placed below the mean high water line on the

Parcel 38 property. The Florida State Department of Envi-

ronmental Regulation intervened in the district court

action for the sole purpose of supporting the claims of the

federal government, not to assert any independent

Cpe ae ante eee ee =

claims. In August 1980, the defendants in the district

court case (plaintiffs in the instant case), Case No.

79-2323-Civ-SMA, asserted numerous affirmative

defenses and counterclaims, including a request for com-

pensation due to an alleged taking.

Following a trial, in a memorandum opinion, the

district court dismissed the taking claims against the

United States, as well as against the State of Florida. The

district court issued a memorandum opinion which

stated that because of the inability of the Corps to dispos-

itively determine the location of the mean high water line

in January, 1973, the developers were “unable to proceed

with the project for fear that additional impermissible

filling would take place.” The district court, ultimately,

adopted the demarcation of the mean high water line

which had been previously agreed upon by the parties.

The district court found:

The original cease and desist order did not pre-

clude filling of property above the mean high

water line since the Corps did not exercise juris-

diction over land above the mean high water

line. Had not the Corps intervened in the subject

property by issuing its cease and desist order at

a time when there was no precise determination

of the mean high water line, then the property

filled above the mean high water line would

have been grandfathered in and exempt from

the Corps’ subsequent 1975 wetlands policy.

The United States District Court specifically declined

to adopt the argument presented by the Corps that defen-

dants (plaintiffs in the instant case) should be subject to

the retroactive application of the Corp’s revised wetlands

policy, which would require a § 403 permit for property

10a

above the mean high water line in addition to property

below the mean high water line. \ccordingly, the district

court enjoined the United States and the State of Florida

from imposing any permit requirements on Parcel 38

property above the mean high water line, as delineated in

the previously agreed upon compromise between the par-

ties. The court further concluded that the defendants

(plaintiffs in the instant case) should be free to fill and

develop the property, subject to compliance with the

applicable City of Key West, Florida requirements. The

court, however, conditioned the filling and development

activity on the partial restoration by defendants (plain-

tiffs in the instant case) of the area below the compromise

mean high water line, thus granting, in part, the govern-

ment’s request for restoration. Specifically, the court

ordered the defendants (plaintiffs in the instant case) to

restore tidal fluctuations to impounded areas and to pro-

mote the free flow of aquatic organisms, by means of

breaks in the berms already constructed below the mean

high water line. The decision of the district court regard-

ing Parcel 38 was affirmed by the United States Court of

Appeals for the Eleventh Circuit. United States v. Marks

Dev, Inc., No. 79-2323-Civ-SMA (S.D.Fla. Jan. 15, 1982),

aff'd sub nom. United States v. Context-Marks Corp., 729 F.2d

1294 (11th Cir.1984).

Plaintiffs acquired full title to Parcel 34, the property

immediately adjacent to Parcel 38, on April 29, 1980, and

filling activity on Parcel 34 began in 1986. The filling on

Parcel 34 was incidental to the widening and paving of an

existing road, the sole access to Parcel 38. Again, the

Corps threatened plaintiffs with a cease and desist order,

this time with respect to the filling of the sixty (60) foot

Le ee a

lla

wide strip of road situated on Parcel 34, which connected

Roosevelt Boulevard on the east to Parcel 38 on the west.

Plaintiffs challenged the Corps’ action in the United

States District Court for the Southern District of Florida

by filing a motion to enforce the mandate in the prior

Parcel 38 litigation.5 The district court denied the plain-

tiffs’ motion to enforce the mandate, without prejudice to

the filing of a separate and independent action in any

court of competent jurisdiction, including the United

States District Court for the Southern District of Florida,

or to seeking administrative relief. In support of its

denial, the United States District Court concluded that

because the full width of the roadway in Parcel 34 was

not encompassed within the scope of the complaint,

counterclaim, memorandum opinion, final judgment

and/or Eleventh Circuit opinion, which all dealt only

with Parcel 38, the district court lacked subject matter

jurisdiction to enforce the mandate regarding activity on

Parcel 34.

On November 4, 1988, plaintiffs sought relief in the

United States District Court for the Southern District of

Florida (Case No. 88-10081-CIV-King). The plaintiffs

asked for declaratory and injunctive relief to determine

the legality and constitutionality of the government

actions. Plaintiffs also claimed damages in excess of

> The record reflects that on June 26, 1986, after the filing of

the motion to enforce the mandate, but prior to the court’s

disposition of the case, Lawrence, Herman, Paul, Eugene and

Stanley Marks conveyed all of their interests in Parcel 34 to

Island in the Sun. Island in the Sun subsequently conveyed

Parcel 34 to the City of Key West.

12a

$10,000.00 for the loss and use of their property, com-

mencing with the imposition of the cease and desist order

in January, 1973, based upon an alleged temporary taking

of Parcels 34 and 38 by the Corps. The plaintiffs alleged

that the improper requirement to seek a permit on Parcel

34 amounted to a violation of the Fifth Amendment to the

Constitution, and prevented plaintiffs all economically

feasible and reasonable beneficial use of their property,

both Parcels 38 and 34.

Although the original complaint in the district court

was comprised of five counts, only count I of the com-

plaint remained pending before the district court as of the

date of filing the above-captioned case in the United

States Court of Federal Claims on September 18, 1989.6

Plaintiffs had voluntarily dismissed count II in the dis-

trict court on April 8, 1989. Subsequently, counts III, IV

and V also had been dismissed by the district court on

August 11, 1989. The remaining count, count I of plain-

tiffs’ November 4, 1988 district court complaint, was

titled COUNT I, COMPLAINT FOR DECLARATORY

AND INJUNCTIVE RELIEF. Count I, paragraph 32, of the

1988 district court complaint specifically seeks declara-

tory, injunctive and other relief to determine the legality

and constitutionality of actions respecting “all of plain-

tiff’s property within the city limits of Rey West....*

Furthermore, paragraph 31 realleges those allegations

contained in paragraphs one through twenty-six of the

case, count I, was dismissed by stipulation on April 12, 1990,

although that action was taken following the filing of the action

in the United States Court of Federal Claims.

13a

complaint, paragraphs that on at least twelve separate

instances reference both Parcels 34 and 38. Consequently,

the allegations in the relevant district court action cover

both Parcels 34 and 38.

In the United States Court of Federal Claims, plain-

tiffs stated their request as a “Temporary Taking Against

the Army Corps,” also regarding both Parcels 34 and 38.

Plaintiffs have not asked for injunctive or declaratory

relief in this court. In response, defendant has filed a

motion for summary judgment on Parcels 34 and 38, and

plaintiffs have filed an opposition to defendant’s motion

for summary judgment, together with a cross-motion for

partial summary judgment.’ At the oral argument in this

court, the defendant raised for the first time the issue of

this court’s jurisdiction, based on the impact of 28 U.S.C.

§ 1500, following the decision in the United States Court

of Appeals for the Federal Circuit’s en banc opinion in

UNR Industries v. United States, 962 F.2d 1013

(Fed.Cir.1992), and the subsequent appeal of the case to

the United States Supreme Court under the name Keene

Corp. v. United States.8 This court ordered further

7 Although plaintiffs have titled their pleading a “Motion

for Partial Summary Judgment,” they appear to raise taking

issues, which, if decided in their favor, could dispose of the

whole case.

8 UNR Industries involved a claim brought by Asbestos

manufacturers against the United States to recover

indemnification for liability to shipyard workers. The United

States Claims Court granted the government’s motion to

dismiss in part, Keene Corp. v. United States, 17 Cl.Ct. 146 (1989).

The United States Court of Appeals for the Federal Circuit,

reversed, 911 F.2d 654 (Fed.Cir.1990), and rehearing en banc was

granted, 926 F.2d 1109 (Fed.Cir.1991). Upon rehearing, the full

l4a

briefings addressing the impact of the above precedential

decisions on the instant case. In response, the defendant

filed a motion to dismiss claiming a lack of jurisdiction

based on the pendency of another pending claim in the

federal district court, pursuant to 28 U.S.C. § 1500. There-

fore, currently pending before this court are defendant's

motion to dismiss, pursuant to 28 U.S.C. § 1500, defen-

dant’s motion for summary judgment, and plaintiffs’

cross-motion for partial summary judgment.

DISCUSSION

When considering a motion to dismiss, the court may

consider all relevant evidence in order to resolve any

disputes as to the truth of the jurisdictional facts alleged

in the complaint. Reynolds v. Army & Air Force Exch. Serv.,

846 F.2d 746, 747 (Fed.Cir.1988). The court is required to

decide any disputed facts which are relevant to the issue

of jurisdiction. Id.

The basic standards for weighing the evidence pre-

sented by the parties when evaluating a motion to dis-

miss for lack of jurisdiction in the instant case, pursuant

to RCFC 12(b)(1), have been articulated by the United

States Supreme Court and the United States Court of

Appeals for the Federal Circuit as follows: “in passing on

a motion to dismiss, whether on the ground of lack of

court affirmed. UNR Indus. v. United States, 962 F.2d 1013

(Fed.Cir.1992). The United States Supreme Court granted

certiorari on October 19, 1992, 506 U.S. 939, 113 S.Ct. 373, 121

L.Ed.2d 285 (1992), and affirmed the opinion of the Claims

Court. Keene Corp. v. United States, 508 U.S. 200, 113 S.Ct. 2035,

124 L.Ed.2d 118 (1993).

AS le eR tg

15a

jurisdiction over the subject matter or for failure to state a

cause of action, the allegations of the complaint should be

construed favorably to the pleader.” Scheuer v. Rhodes, 416

U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974);

accord Hamlet v. United States, 873 F.2d 1414, 1416

(Fed.Cir.1989).9 In rendering a decision, the court must

presume that the undisputed factual allegations included

in the complaint by plaintiffs are true. Reynolds v. Army &

Air Force Exch. Serv., 846 F.2d at 746; Miree v. DeKalb

County, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 2492 n. 2, 53

L.Ed.2d 557 (1977).

The burden of establishing jurisdiction is on the

plaintiffs. McNutt v. General Motors Acceptance Corp., 298

U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Pasco

Enterprises v. United States, 13 Cl.Ct. 302, 305 (1987);

Metzger, Shadyac & Schwartz v. United States, 10 Cl.Ct. 107,

109 (1986). The court should not grant a motion to dis-

miss “unless it appears beyond doubt that the plaintiff

can prove no set of facts in support of his claim which

would entitle him to relief.” Conley v. Gibson, 355 U.S. 41,

45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Moreover,

“conclusory allegations unsupported by any factual

assertions will not withstand a motion to dismiss.” Briscoe

v. LaHue, 663 F.2d 713, 723 (7th Cir.1981).

® In general, the rules of this court are closely patterned on

the Federal Rules of Civil Procedure. Therefore, precedent

under the Federal Rules of Civil Procedure is relevant to

interpreting the rules of this court, including RCFC 56. See Jay v.

Sec'y DHHS, 998 F.2d 979, 982 (Fed.Cir.1993); Imperial Van Lines

int'l Inc. v. United States, 821 F.2d 634, 637 (Fed.Cir.1987);

Lichtefeld-Massaro, Inc. v. United States, 17 Cl.Ct. 67, 70 (1989).

l6a

Defendant has moved to dismiss the above-captioned

case, arguing that the pendency of claims in another court

as of September 18, 1989, the date of filing the complaint

in the United States Court of Federal Claims, prevents

this court from exercising jurisdiction over the above-

captioned case, pursuant to 28 U.S.C. § 1500. Defendant

argues that the district court complaint filed by these

plaintiffs, in November, 1988, was stil! pending at the

time the instant suit was filed on September 18, 1989,

thus depriving this court of jurisdiction. The statute, 28

U.S.C. § 1500, provides as follows:

Pendency of claims in other courts.

The United States Court of Federal Claims shall

not have jurisdiction of any claim for or in

respect to which the plaintiff or his assignee has

pending in any other court any suit or process

against the United States or any person who, at

the time when the cause of action alleged in

such suit or process arose, was, in respect

thereto, acting or professing to act, directly or

indirectly under the authority of the United

States.

28 U.S.C. § 1500.

Congress has been given authority, pursuant to the

Constitution of the United States, to define the jurisdic-

tion of the courts. See Keene Corp. v. United States, 508 U.S.

200, 207-08, 113 S.Ct. 2035, 2040, 124 L.Ed.2d 118 (1993).

Moreover, “[t]he limits upon federal jurisdiction, whether

imposed by the Constitution or by Congress, must be

neither disregarded nor evaded.” Owen Equipment & Erec-

tion Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57

L.Ed.2d 274 (1978).

CU Natieabiey ee Mie fags GS ue et alee

17a

According to the United States Court of Appeals for

the Federal Circuit, the purpose of section 1500 is to

“force an election where both forums could grant the

same relief, arising from the same operative facts.” Johns-

Manville Corp. v. United States, 855 F.2d 1556, 1564

(Fed.Cir.1988), cert. denied, 489 U.S. 1066, 109 S.Ct. 1342,

103 L.Ed.2d 811 (1989). Otherwise stated, “[t]he purpose

of section 1500 is to prohibit the filing and prosecution of

the same claims against the United States in two courts at

the same time.” Id. at 1562. In the Supreme Court decision

in Keene Corp. v. United States, the Court commented on

the difficulty of applying 28 U.S.C. § 1500:

The statutory notion of comparable claims is

more elusive. By precluding jurisdiction over

the claim of a plaintiff with a suit pending in

another court ‘for or in respect to’ the same

claim, § 1500 requires a comparison between the

claims raised in the Court of Federal Claims and

in the other lawsuit. The exact nature of the

things to be compared is not illuminated, how-

ever by the awkward formulation of § 1500.

Keene Corp. v. United States, 508 U.S. at 210, 113 S.Ct. at

2041.

Prior to the Keene case, the United States Court of

Appeals for the Federal Circuit had offered guidance

regarding how courts should interpret the term “claim”

in the context of 28 U.S.C. § 1500, when it wrote:

Both the decision in British American [British

American Tobacco Co. v. United States, 89 Ct.Cl.

438, 1939 WL 4266 (1939), cert. denied, 310 U.S.

627, 60 S.Ct. 974, 84 L.Ed. 1398 (1940) ] and the

decision in Los Angeles [Los Angeles Shipbuilding

& Drydock Corp. v. United States, 152 F.Supp. 236,

18a

138 Ct.Cl. 648 (1957) ] are explicit in their inter-

pretation of the term ‘claim’ in section 1500.

Both reject the argument that ‘claim’ is based on

legal theories. Both hold ‘claim’ to be defined by

the facts. British American specifically applied

this interpretation to a case involving tort and

contract theories, the same theories raised in the

instant appeal. A contrary interpretation would

defeat the intent of Congress and would allow a

plaintiff to bring duplicative actions on the same

operative facts. ‘The possibility of inconsistent

judicial resolution of similar legal issues would

then exist and the dual proceedings could result

in unfair burden to the defendant, and unneces-

sary crowding of this court’s docket and general

administrative chaos.’ City of Santa Clara v.

United States, 215 Ct.Cl. 890, 893 [1977 WL 9595]

(1977). Accordingly, we construe the term

‘claim’ in 28 U.S.C. § 1500 to be defined by the

operative facts alleged, not the legal theories

raised.

Johns-Manville Corp. v. United States, at 1562. This basic

approach was confirmed by the Supreme Court in Keene

Corporation v. United States, 508 U.S. at 212-14, 113 S.Ct. at

2043.

Subsequently, in UNR Industries v. United States, also

interpreting 28 U.S.C. § 1500, the federal circuit

addressed the chronological issues raised by section 1500,

as follows:

1) if the same claim is pending in another court

at the time the complaint is filed in the Claims

Court, the Claims Court has no jurisdiction,

regardless of when an objection is raised or

acted on; 2) if the same claim is filed in another

court after the complaint is filed in the Claims

19a

Court, the Claims Court is by that action

divested of jurisdiction, regardless of when the

court memorializes the fact by order of dis-

missal; and 3) if the same claim has been finally

disposed of by another court before the com-

plaint is filed in the Claims Court, ordinary

rules of res judicata and available defenses

apply.

UNR Indus. v. United States, 962 F.2d at 1021. In Keene

Corp. v. United States, the Supreme Court reiterated the

concepts outlined in UNR Industries v. United States, and

stated that when applying the jurisdictional bar imposed

by 28 U.S.C. § 1500, this court must adhere to the long-

standing principle that “the jurisdiction of the Court

depends upon the state of things at the time of the action

brought.” Keene Corp. v. United States, 508 U.S. at 207, 113

S.Ct. at 2040 (citing Mollan v. Torrance, 22 U.S. (9 Wheat.)

537, 539, 6 L.Ed. 154 (1824) (Marshall, C.J.)).

In Keene Corp. v. United States, the Supreme Court

further refined the manner in which two pending cases

should be analyzed regarding the application of section

1500, as follows:

These precedents demonstrate that under the

immediate predecessor of § 1500, the compari-

son of the two cases for purposes of possible

dismissal would turn on whether the plaintiff’s

other suit was based on substantially the same

operative facts as the Court of Claims action, at

least if there was some overlap in the relief

requested.6 [Citations omitted. ]

Id. at 212, 113 S.Ct. at 2042-43. In footnote 6 to the above

quote, however, the court stated:

ee SS

20a

6. Because the issue is not presented on the

facts of this case, we need not decide whether

two actions based on the same operative facts,

but seeking completely different relief, would

implicate § 1500. Cf. Casman v. United States, 135

Ct.Cl. 647 (1956); Boston Five Cents Savings Bank,

FSB v. United States, 864 F.2d 137 (CA Fed.1988).

Id. at 212, 113 S.Ct. at 2043. The unanswered scenario

identified by the Supreme Court in footnote 6 of the Keene

case presents precisely the facts of the instant case.

More recently, the United States Court of Appeals for

the Federal Circuit in Loveladies Harbor, Inc. v. United

States seems to have resolved the dispute of whether two

cases, in two separate courts, presenting the same facts,

but requesting different relief, trigger section 1500.

For the Court of Federal Claims to be precluded

from hearing a claim under § 1500, the claim

pending in another court must arise from the

same operative facts, and must seek the same

relief. We know of no case arising from the same

operative facts in which § 1500 has been held to

bar jurisdiction over a claim praying for relief

distinctly different from that sought in a pend-

ing proceeding.

Loveladies Harbor, Inc. v. United States, 27 F.3d 1545, 1551

(Fed.Cir.1994). Not only are the words “the same opera-

tive facts” and “the same relief” emphasized in the circuit

court’s language, but the two phrases also are connected

by the words “and must.”

Thus, pursuant to the language of 28 U.S.C. § 1500,

and recent case law interpreting that provision, it is clear

that this court may not exercise jurisdiction over an

21a

action if, at the time of its filing, the same plaintiffs have

already filed another action in another court based on the

same operative facts and requesting the same relief. 28

U.S.C. § 1500; Loveladies Harbor, Inc. v. United States, 27

F.3d 1545, 1551 (Fed.Cir.1994); see also UNR Indus. v.

United States, 962 F.2d 1013, 1021 (Fed.Cir.1992), aff'd sub

nom. Keene Corp. v. United States, 508 U.S. at 208-14, 113

S.Ct. at 2041-43. However, if the relief requested is differ-

ent, 28 U.S.C. § 1500 is not implicated. Loveladies Harbor,

Inc. v. United States, 27 F.3d at 1551.

Applying the concepts outlined in UNR Industries v.

United States, Keene Corp. v. United States and Loveladies

Harbor, Inc. v. United States, in order to determine if the

section 1500 jurisdictional bar applies to the instant case,

this court must examine whether or not a comparable

claim against the United States was pending in another

court at the time of filing in this court. The fact that count

I of the district court action filed on November 4, 1988,

was the only court still pending at the time the instant

action was filed is not disputed by the parties. Defendant,

in its motion to dismiss, notes that a “district court com-

plaint filed in November, 1988, was still pending at the

time this suit was filed on September 18, 1989.” Plaintiffs,

in their memorandum in opposition to defendant's

motion to dismiss for lack of jurisdiction, also concede

that “[a]s of September 12[sic], 1989, the filing date of this

case, Plaintiffs’ only pending claim against the United

States was a request [count I] for declaratory relief. Marks

v. United States Army Corps of Engineers, No. 88-10081-Civ-

KING (S.D.Fla.).” Therefore, the existence of a pending

case requesting declaratory relief against the “United

States or any person... at the time when the cause of

22a

action alleged in such suit or process arose... . ,” pur-

suant to 28 U.S.C. § 1500, is not disputed by the parties in

the suit pending in this court.

Consequently, the court must address the subsidiary

issue, whether the claim pending in the United States

District Court for the Southern District of Florida, Case

No. 88-10081-Civ-KING (S.D.Fla.), was “for or in respect

to” the same claim as that pending before this court. In

this court, the plaintiffs have filed a one count complaint.

Count I of the complaint in the above-captioned case, in

its entirety, reads:

TEMPORARY TAKING AGAINST THE ARMY CORPS

Plaintiffs reallege paragraphs numbered 1 through 29

and further state:

30. At all times material, Defendant Army

Corps improperly exercised jurisdiction over

Plaintiffs’ property.

31. Notwithstanding the fact that the Army

Corps was acting outside of its jurisdiction, a

cease and desist order was sent to Plaintiffs in

January, 1973, preventing Plaintiffs from further

developing the subject parcels and has contin-

ued a pattern of conduct to deny Plaintiffs their

property rights.

32. The Army Corps’ improper exercise of

jurisdiction over the subject parcels constitutes a

temporary taking since the imposition of the

cease and desist order in January, 1973 and has

continued to date.

33. As a direct and proximate result of the

Army Corps’ temporary taking of the parcels,

23a

Plaintiffs have been denied all economically fea-

sible use and all reasonable beneficial use of

their property in violation of the just compensa-

tion clause of the Fifth Amendment of the

United States Constitution.

WHEREFORE, Plaintiffs demand judgment

against the Defendant, The United States, for

damages, costs and any other relief that this

Court deems appropriate.

It also is important to note that count I of the complaint

in this court is the same as count V in the pending district

court action (No. 88-10081-Civ-KING (S.D.Fla.)), which

was dismissed by thai court on August 11, 1989, prior to

the September 18, 1989 filing in this court.

By comparison, count I, the sole remaining count in

the district court complaint (Case No. 88-10081-Civ-KING

(S.D.Fla.)) at the time of plaintiffs’ filing of the case in this

court, was the claim for declaratory and injunctive relief,

as follows:

COUNT I

COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF

31. The allegations contained in paragraphs

numbered 1 through 26 are reaileged.

32. This is a claim for declaratory, injunctive

and other relief to determine the legality and

constitutionality of certain actions of the United

States including asserting jurisdiction through

the army corps over all of plaintiff’s property

within the city limits of Key West, Florida under

33 U.S.C. §§ 403, 1311(a) and 1344, and thereby

preventing use of said property.

24a

33. This Court has jurisdiction over the subject

matter of this action pursuant to 28 U.S.C.

§ 1346(a)(2).

34. Based in part on the principle of res judi-

cata, the Corps of Engineers is required to abide

by the regulations in effect during December of

1972 and January of 1973, and therefore should

be enjoined from requiring permitting of the

property on Parcel 34, above the compromise

mean high water line.

35. The plaintiffs are not required to exhaust

any existing federal or state administrative

remedies since resort to such remedies would be

futile. Defendant’s agents and representatives

have repeatedly stated that a dredge and fill

permit will not be issued, and thus the plaintiffs

are forced to seek judicial relief.

WHEREFORE, plaintiffs request that:

1. The Court declare the defendant without

authority to require permitting for the property

in question (Parcel 34) and enjoin any further

interference in reference to the dredge and fill

and paving and use of said property.

2. The Court grant plaintiffs any other relief as

may be just and necessary.

3. Plaintiffs demand a jury trial on all issues

triable as a matter of right by a jury and imposi-

tion of costs and attorneys’ fees.

It is quite clear from the complaints filed in both

courts that on September 18, 1989, the type of relief

sought in the two complaints is distinguishable. The com-

plaint filed in the United States Court of Federal Claims

seeks money damages for an alleged taking in violation

25a

of the Fifth Amendment to the Constitution, in addition

to costs and any other appropriate relief. Count I of the

complaint pending in the district court at the time of the

filing of the instant complaint, however, sought declara-

tory and injunctive relief, in addition to any other relief

as may be just and necessary.'° The catch all phrases,

which request costs and any other appropriate relief or

any other relief which may be just and necessary, do not

change the nature of the two claims, one, a request for

compensation due to an alleged improper taking under

Amendment V to the Constitution, in this court and the

other, a request for declaratory and injunctive relief, in

the district court. Clearly, the two types of relief are

different, thus diminishing the effect of a section 1500

claim. It is the opinion of this court, therefore, that 28

U.S.C. § 1500 does not act to divest this court of jurisdic-

tion of the above captioned cause of action. Defendant's

10 The court notes that in the earlier related action brought

in the United States District Court for the Southern District of

Florida, Case No. 79-2323-Civ-SMA, the district court judge

wrote: That portion of the Motion to Dismiss addressed to the

MARKS Defendants’ [plaintiffs in the instant case]

Counterclaim against the UNITED STATES seeking to have a

‘Taking’ or inverse condemnation declared and payment

thereon is GRANTED without adjudication. The Court of

Claims is the proper court to determine the issue of whether the

denial of permits constitutes a ‘Taking’ of the property without

just compensation and to determine any relief properly granted

under the Tucker Act. 28 U.S.C. § 1491. The UNITED STATES as

sovereign is immune from any suit except as it consents to be

sued. U.S. v. Testane [sic], 424 U.S. 392, 399 [96 S.Ct. 948, 953, 47

L.Ed.2d 114] (1976). The mere fact that the ‘Taking’ claim is

asserted in a Counterclaim does not alter the aforegoing.

26a

motion to dismiss for lack of subject matter jurisdiction

is, hereby, DENIED.

The court, therefore, proceeds to examine the merits

of the parties’ cross-motions for summary judgment.

Plaintiffs allege that as a matter of law they have been

subjected to a temporary regulatory taking under the

Fifth Amendment. In support, plaintiffs argue that the

actions of defendant rendered Parcels 34 and 38 virtually

idle over a 10-year period, thus depriving the owners of

all economically viable use of the property, for which

they, allegedly, are entitled to just compensation.

Defendant has proposed multiple arguments in its

motion for summary judgment as to why plaintiffs’

claims for compensation based upon a Fifth Amendment

taking must fail. Defendant asserts the following: (1) any

allegation by the plaintiffs of a taking of Parcel 38 prop-

erty below the mean high water line is noncompensable

because it falls within the government's navigational ser-

vitude; (2) defendant's articulation of a “mere assertion”

of jurisdiction over the remaining portion of Parcel 38 by

the Corps does not amount to a temporary taking under

the Fifth Amendment; (3) no taking could have occurred

because the State of Florida had refused to issue a water

quality certificate, and, therefore, the denial of the permit

by the Corps was “without prejudice” to plaintiffs; (4)

plaintiff’s claim of a taking of the portion of Parcel 38

above the mean high water line failed to ripen because

plaintiffs failed to exhaust their administrative remedies;

and (5) plaintiffs failed to comply with the applicable

statutes of limitations, in effect, divesting this court of

jurisdiction to adjudicate the taking claim. Also, with

regard to Parcel 34, defendant argues that any claim

Fst alata trees as ei Bei

27a

regarding Parcel 34 must fail because such claims were

not ripe at the time of filing.

Summary judgment in this court should be granted

only when there is no genuine issue as to any material

fact and the moving party is entitled to judgment as a

matter of law. Rule 56 of this court is patterned on Rule

56 of the Federal Rules of Civil Procedure (Fed.R.Civ.P.)

and is similar in language and effect. Both rules provide

that summary judgment “shall be rendered forthwith if

the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any mate-

rial fact and that the moving party is entitled to a judg-

ment as a matter of law.”

Rule 56(c) of the Rules of the United States Court of

Federal Claims (RCFC) provides that in order for a

motion for summary judgment to be granted, the moving

party bears the burden of demonstrating that there are no

genuine issues of material fact and that the moving party

is entitled to judgment as a matter of law. Adickes v. S.H.

Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26

L.Ed.2d 142 (1970); Creppel v. United States, 41 F.3d 627,

630-31 (Fed.Cir.1994); Meyers v. Asics Corp., 974 F.2d 1304,

1306 (Fed.Cir.1992); Rust Communications Group v. United

States, 20 Cl.Ct. 392, 394 (1990); Lima Surgical Assocs., Inc.

Voluntary Employees’ Beneficiary Ass'n Plan Trust v. United

States, 20 Cl.Ct. 674, 679 (1990), aff'd, 944 F2d 885

(Fed.Cir.1991). Disputes over facts which are not outcome

determinative under the governing law will not preclude

the entry of summary judgment. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202

28a

(1986). Summary judgment, however, will not be granted

if “the dispute about a material fact is ‘genuine,’ that is, if

the evidence is such that a reasonable jury [trier of fact]

could return a verdict for the non moving party.” Id.; see

also Uniq Computer Corp. v. United States, 20 Cl.Ct. 222,

228-29 (1990).

When reaching a summary judgment determination,

the judge’s function is not to weigh the evidence, but to

determine whether there is a genuine issue for trial.

Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S.Ct. at

2510; see, e.g., Cloutier v. United States, 19 CL.Ct. 326, 328

(1990), aff’d without op., 937 F.2d 622 (Fed.Cir.1991). The

judge must determine whether the evidence presents a

disagreement sufficient to require submission to fact find-

ing, or whether the issues presented are so one-sided that

one party must prevail as a matter of law. Anderson v.

Liberty Lobby, Inc., 477 U.S. at 250-52, 106 S.Ct. at 2511-12.

When the record could not lead a rational trier of fact to

find for the nonmoving party, there is no genuine issue

for trial, and the motion must be granted. Matsushita Elec.

Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106

S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Stated otherwise,

if the nonmoving party cannot present the evidence to

support its case under any scenario, then there should be

no need for the parties to undertake the time and expense

of a trial, and the moving party should prevail without

further proceedings.

If, however, the nonmoving party produces sufficient

evidence to raise a question as to the outcome of the case,

then the motion for summary judgment should be denied.

Any doubt over factual issues must be resolved in favor

of the party opposing summary judgment, to whom the

29a

benefit of all presumptions and inferences runs. Id.; see

also Litton Industrial Products, Inc. v. Solid State Systems

Corp., 755 F.2d 158, 163 (Fed.Cir.1985); H.F. Allen Orchards

v. United States, 749 F.2d 1571, 1574 (Fed.Cir.1984), cert.

denied, 474 U.S. 818, 106 S.Ct. 64, 88 L.Ed.2d 52 (1985).

Moreover, in the instant case, the court recognizes the

“fact intensive” nature of Fifth Amendment taking cases

which cautions “against precipitous grant of summary

judgment.” Yuba Goldfields, Inc. v. United States, 723 F.2d

884, 887 (Fed.Cir.1983).

The initial burden on the party moving for summary

judgment, to produce evidence showing the absence of a

genuine issue of material fact, may be discharged if the

moving party can demonstrate that there is an absence of

evidence to support the nonmoving party’s case. Celotex

Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91

L.Ed.2d 265 (1986); see also Lima Surgical Assocs., 20 Cl.Ct.

at 679. If the moving party makes such a showing, the

burden then shifts to the nonmoving party to demon-

strate that a genuine factual dispute exists by presenting

evidence which establishes the existence of an element of

its case upon which it bears the burden of proof. Celotex

Corp. v. Catrett, 477 U.S. at 322, 106 S.Ct. at 2552; Lima

Surgical Assocs., 20 Cl.Ct. at 679.

Pursuant to Rule 56, the motion for summary judg-

ment may succeed, whether or not accompanied by affi-

davits and/or other documentary evidence in addition to

the pleadings already on file. Celotex Corp. v. Catrett, 477

U.S. at 324, 106 S.Ct. at 2553. Generally, however, in order

to prevail, the nonmoving party will need to go beyond

the pleadings, by use of evidence such as affidavits,

depositions, answers to interrogatories and admissions,

30a

in order to demonstrate that a genuine issue for trial

exists. Id.

In the above-captioned case, the fact that both the

parties argue in favor of summary judgment and allege

an absence of genuine issues of material fact, however,

does not relieve the court of its responsibility to deter-

mine the appropriateness of summary disposition in the

particular case. Prineville Sawmill Co. v. United States, 859

F.2d 905, 911 (Fed.Cir.1988) (citing Mingus Constructors,

Inc. v. United States, 812 F.2d 1387, 1391 (Fed.Cir.1987)).

“{S]imply because both parties moved for summary judg-

ment, it does not follow that summary judgment should

be granted one or the other.” LewRon Television, Inc. v.

D.H. Overmyer Leasing Co., 401 F.2d 689, 692 (4th

Cir.1968), cert. denied, 393 U.S. 1083, 89 S.Ct. 866, 21

L.Ed.2d 776 (1969); see also Levine v. Fairleigh Dickinson

Univ., 646 F.2d 825, 833 (3d Cir.1981); Home Ins. Co. v.

Aetna Cas. & Sur. Co., 528 F.2d 1388, 1390 (2d Cir.1976);

Ishida v. United States, 31 Fed.Cl. 280, 284 (1994). Cross-

motions are no more than a claim by each party that it

alone is entitled to summary judgment. The making of

such inherently contradictory claims, however, does not

establish that if one is rejected the other is necessarily

justified. Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d

Cir.1968); Bataco Indus., Inc. v. United States, 29 Fed.Cl.

318, 322 (1993), aff'd 31 F.3d 1176 (Fed.Cir.1994). The court

must evaluate each party’s motion on its own merit,

taking care to draw all reasonable inferences against the

party whose motion is under consideration. Mingus Con-

structors, Inc., 812 F.2d at 1391. After an examination of

the record in this case, the proposed contentions of fact

submitted by both parties, and the factual findings of

3la

other courts in related litigation, submitted as part of the

record, this court has determined that no genuine mate-

rial facts exist and, therefore, this case is ripe for sum-

mary disposition.

For its first argument in favor of summary judgment,

defendant asserts that any claim of a taking by the plain-

tiffs of Parcel 38 property below the mean high water line

is noncompensable. Defendant contends that land within

the navigational servitude is subject to the exclusive con-

trol of the United States and, therefore, not the proper

subject of a taking claim."

The navigable waters of the United States have long

been considered “public property” and have thus been

under the exclusive control of the federal government

pursuant to the Commerce Clause of the United States

Constitution. U.S. Const. art. I, § 8, cl. 3; United States v.

Rands, 389 U.S. 121, 122-23, 88 S.Ct. 265, 266-67, 19

L.Ed.2d 329 (1967); Gilman v. Philadelphia, 70 U.S. (3 Wall)

713, 724-25, 18 L.Ed. 96 (1866); Gibbons v. Ogden, 22 U.S. (9

Wheat.) 1, 6 L.Ed. 23 (1824); Owen v. United States, 851

F.2d 1404, 1408 (Fed.Cir.1988); Confederated Tribes of Col-

ville Reservation v. United States, 20 Cl.Ct. 31, 40 (1990).

This power to regulate confers upon the United

States a ‘dominant servitude,’ (citation omitted)

which extends to the entire stream and the

't Parcel 38 is the same portion which was involved in the

enforcement action filed in the United States District Court for

the Southern District of Florida, Case No. 79-2323-Civ-SMA.

That enforcement action sought to have the property owners

(plaintiffs in this case) remove fill material from navigable

waters deposited below the mean high water line on Parcel 38.

32a

stream bed below the ordinary high-water mark.

The proper exercise of this power is not an

invasion of any private property rights in the

stream or the lands underlying it, for the dam-

age sustained does not result from taking prop-

erty from riparian owners within the meaning of

the Fifth Amendment but from the lawful exer-

cise of a power to which the interests of riparian

owners have always been subject.

United States v. Rands, 389 U.S. at 123, 88 S.Ct. at 267;

Federal Power Com. v. Niagara Mohawk Power Corp., 347

U.S. 239, 249, 74 S.Ct. 487, 493, 98 L.Ed. 666 (1954); Owen

v. United States, 851 F.2d at 1408; Coastal Petroleum Co. v.

United States, 207 Ct.Cl. 701, 707-708, 524 F.2d 1206, 1210

(1975), cert. denied, 456 U.S. 915, 102 S.Ct. 1770, 72

L.Ed.2d 174 (1982); Weatherford v. United States, 606 F.2d

851, 852 (9th Cir.1979). Indeed, it is well settled in the

United States Court of Appeals for the Federal Circuit

that, in light of the dominant interest in preserving the

public right of navigation, the authority of the United

States over navigable waters is “supreme.” Confederated

Tribes of Colville Reservation v. United States, 964 F.2d 1102,

1108 (Fed.Cir.1992) (citing Gordon v. United States, 211

Ct.Cl. 310, 311, 546 F.2d 430 (1976), cert. denied, 430 U.S.

930, 97 S.Ct. 1549, 51 L.Ed.2d 774 (1977)); Goose Creek

Hunting Club, Inc. v. United States, 207 Ct.Cl. 323, 331, 518

F.2d 579, 583 (1975); Sherrill v. United States, 180 Ct.Cl.

914, 917, 381 F.2d 744, 745-46 (1967); Marret v. United

States, 82 Ct.Cl. 1, 12, 1935 WL 2216 (1935), cert. denied,

299 U.S. 545, 57 S.Ct. 8, 81 L.Ed. 401 (1936). Furthermore,

“the determination of the necessity for a given improve-

ment of navigable capacity, and the character and extent

of it, is for Congress alone.” United States v. Chicago, M.,

33a

S.P. & P.R.R., 312 US. 592, 596, 61 §.Ct. 772, 775, 85 L.Ed.

1064 (1941); Owen v. United States, 851 F.2d at 1408. Thus,

upon the determination of Congress to improve or pre-

serve navigation, the navigational servitude defines the

appropriate boundaries within which the United States

can assert its power to supersede private ownership

interest without creating an obligation to pay just com-

pensation under the eminent domain clause of the Fifth

Amendment. Owen v. United States, 851 F.2d at 1408.

Therefore, that portion of plaintiffs’ claim before this

court, arising from filling areas of Parcel 38 below the

mean high water line, which is located within the naviga-

tional servitude, and which was the subject of the 1973

cease and desist order issued pursuant to section 10 of

the River and Harbor Act of 1899, 33 U.S.C. § 403, creates

no obligation on the part of the government to compen-

sate plaintiffs pursuant to the taking provision of the

Fifth Amendment to the United States Constitution. That

portion of defendant’s motion for summary judgment

which argues that there can be no taking of the area of

Parcel 38 below the mean high water line, within naviga-

tional servitude, is, therefore, GRANTED.

The court next addresses defendant's second through

fifth arguments on summary judgment, all of which

address whether plaintiffs can establish a taking of that

portion of Parcel 38 determined to be above the mean

high water line and/or of Parcel 34. For its second argu-

ment, defendant alleges that its actions in the above-

captioned case amount to a “mere assertion” of jurisdic-

tion, which cannot constitute a Fifth Amendment taking

unless a permit had been sought and denied. See Wil-

liamson County Regional Planning Com. v. Hamilton Bank of

34a

Johnson City, 473 U.S. 172, 186-90, 105 S.Ct. 3108, 3116-18,

87 L.Ed.2d 126 (1985); Conant v. United States, 12 Cl.Ct.

689, 691 (1987). Defendant further argues that: “Mere

issuance of a cease and desist order or assertion of the

Corps’ regulatory jurisdiction does not constitute a tak-

ing.” In support, defendant cites to United States v. River-

side Bayview Homes, Inc., 474 U.S. 121, 106 S.Ct. 455, 88

L.Ed.2d 419 (1985) and Hodel v. Virginia Surface Mining &

Reclamation Ass‘n, 452 U.S. 264, 101 S.Ct. 2352, 69 L.Ed.2d

1 (1981).

First, defendant’s theory that a Fifth Amendment

taking does not occur unless a permit has been sought

and denied would not even apply to the areas of Parcels

38 and 34 found to be above the mean high water line

because they are outside the jurisdiction of the United

States and, therefore, are not subject to the requirement

that a permit must be sought. Moreover, the portion of

Parcel 38 below the mean high water line has been dis-

posed of above, as being within the navigational servi-

tude of the United States.

Second, the extensive record before this court indi-

cates that defendant’s conduct in this case amounts to

much more than a “mere assertion” of jurisdiction. The

record reflects substantial and repeated activity by the

Corps, dating back to the cease and desist order in 1973,

which prohibited plaintiff from the filling, not only areas

of Parcel 38 ultimately determined by the courts to be

below the mean high water line and subject to United

States exclusive jurisdiction, but also areas ultimately

determined to be above the mean high water line in both

Parcels 34 and 38. The criminal information, Case No.

73-509-Cr-WM, brought against the plaintiffs in the

PR oe ct -

Sted rs seas A

35a

United States District Court for the Southern District of

Florida and the ensuing enforcement actions in which the

Corps sought to compel removal of the fill and restora-

tion of Parcels 34 and 38 both above and below the mean

high water line, reflects much more than a “mere asser-

tion” of jurisdiction. Indeed it was not until 1984, approx-

imately eleven years after the initial cease and desist

order was issued by the government, when the United

States Court of Appeals for the Eleventh Circuit affirmed

the opinion of the district court judge, that the mean high

water line was defined with finality, United States v. Marks

Dev., Inc., No. 79-2323-Civ-SMA (S.D.Fla. Jan. 15, 1982),

aff'd sub nom. United States v. Context-Marks Corp., 729 F.2d

1294 (11th Cir.1984). However, although defendant’s

activity clearly amounts to more than a “mere assertion”

of jurisdiction over the property, such a determination

does not necessarily mean that an unconstitutional taking

has occurred under the facts and circumstances of the

case.

Third, defendant contends that because the State of

Florida refused to issue a water quality certificate to the

plaintiffs after reviewing the merits of the application, the

subsequent denial of the permit by the Corps, based on

the State’s denial, was “without prejudice,” thus giving

rise to no taking claim against the defendant. In support

of this contention, defendant asserts that section 401 of

the Federal Water Pollution Control Act (“The Clean

Water Act”), 33 U.S.C. § 1341(a)(1), provides that “[nJo

license or permit shall be granted if certification has been

denied by the State... . ” Defendant, however, fails to

mention in its pleadings that, in the “Findings of Fact”

made in the memorandum opinion issued by Judge

36a

Aronovitz, the court found that at the time the State of

Florida did not require certification for a project, such as

the one projected for Parcel 38:

32. According to John Adams, the Army Corps

of Engineers has never considered Island in the

Sun’s dredge and fill permits on its merits. The

Corps’ denial of Island in the Sun’s previous

application was based on the State of Florida’s

denial of a water quality certification. At the

time of the fill placement Florida possessed a

water quality certification program but the state

did not require certification for a project such as

the one instituted on Parcel 38.

Although § 1341 of the Clean Water Act makes reference

to state law, the defendant should not be allowed to rely

on an argument that if there is no state permit require-

ment, federal law precludes the review of the permitting

process. Like Judge Aronovitz in the district court, this

court rejects defendant’s reasoning and finds that given

the facts of the above-captioned case, the denial of a

permit by the Corps should not be dismissed summarily,

but should be subject to judicial review.

Fourth, defendant claims that any taking claimed by

plaintiffs regarding the portion of Parcel 38 above the

mean high water line failed to ripen because plaintiffs

failed to exhaust their administrative remedies by seek-

ing a permit for the filling of the portion of Parcel 38

above the mean high water line. This court notes that the

issue of ripeness was unambiguously decided in the

opinion of United States District Court for the Southern

District of Florida on defendant’s motion to dismiss in

Case No. 79-2323-Civ-SMA, as follows:

‘, ¢ é & Nol tetas “ i

ri Weta, la i SRA HRCA. HATE RARE NEIL OR Batiste

37a

Plaintiff raises an issue with regard to exhaus-

tion of administrative remedies by the MARKS

Defendants for issuance of prospective permits

for development of the land which may not

necessarily include dredging and/or filling for

purposes such as a boat basin, or for permit

requests for future dredging and filling or

development in other areas of Parcel 38. This

argument normally would have considerable

persuasion with the Court as to why the Motion

to Dismiss should be granted as to any prospec-

tive requested uses or permits not heretofore

submitted and not involved in the original

Agency action. However, Defendants argue, and

at oral argument counsel for Plaintiff acknowl-

edged, that no future permit would be issued

for any portion of Parcel 38 unless or until the

original dredge and fill had been restored as

requested in the complaint. Under such circum-

stances Defendants argue that to require them to

exhaust administrative remedies would be a

futile act. The Court agrees.

In general, a plaintiff is not entitled to seek judicial

review before following the prescribed administrative

remedies. Hodel v. Virginia Surface Mining & Reclamation

Ass'n, 452 U.S. at 297, 101 S.Ct. at 2371; Burlington N.R.R.

v. United States, 752 F.2d 627, 630 (Fed.Cir.1985); Conant v.

United States, 12 Cl.Ct. at 692. Evidence of the futility of

such exhaustion, however, cures any resulting defect in

the ripeness of the controversy, thus allowing this court

to exert its jurisdiction. Bendure v. United States, 213 Ct.Cl.

633, 641, 554 F.2d 427, 431 (1977); Cienega Gardens v.

United States, 33 Fed.Cl. 196, 207 (1995); see also Formanek

v. United States, 18 Cl.Ct. 785, 790-93 (1989); Beure-Co. v.

United States, 16 Cl.Ct. 42, 51-52 (1988); Loveladies Harbor,

38a

Inc. v. United States, 15 Cl.Ct. 381, 385-87 (1988); Parkview

Corp. v. Department of Army, Corps of Engineers, 490

F.Supp. 1278, 1282 (E.D.Wis.1980). Evidence of such futil-

ity is clearly evident in the record with respect to Parcels

34 and 38 in the instant case, and is memorialized in the

opinion of the United States District Court for the South-

ern District of Florida in Case No. 79-2323-Civ-SMA. Like

the district court, this court finds that defendant should

not be allowed to reargue the exhaustion theory.

Fifth, defendant asserts, as an affirmative defense,

that the statute of limitations has run as to the only taking

claim which was arguably ripe for review, the denial of

the permit to fill below the mean high water line.

Although defendant is correct in pointing out that the

Tucker Act waives sovereign immunity for suits in the

Court of Federal Claims “filed within six years after such

claim first accrues,” 28 U.S.C. § 2501 (1988), defendant is

incorrect in its determination of the date from which the

statutory six year period should be calculated.

Defendant cites authority to the effect that the statute

of limitations begins to run on the date of denial of a

permit. See United States v. Riverside Bayview Homes, 474

U.S. 121, 106 S.Ct. 455, 88 L.Ed.2d 419; Conant v. United

States, 12 Cl.Ct. 689; United States v. Byrd, 609 F.2d 1204

(7th Cir.1979). This precedent, however, is inapplicable to

the instant case. The instant case alleges a temporary

taking, the duration of which was unknown until issu-

ance of the decision of the United States Court of Appeals

for the Eleventh Circuit in 1984. United States v. Context-

Marks Corp., 729 F.2d 1294 (11th Cir.1984). It would be

unfair to start the running of the statute of limitations

from a date prior to final resolution by the courts of

ae Dhue at Ruel deed oe, Las seed ine dee ~ le ot

39a

plaintiffs’ interest in the property at issue. This issue was

addressed by the Court of Claims in Oro Fino Consol.

Mines, Inc. v. United States, 118 Ct.Cl. 18, 92 F.Supp. 1016

(1950):

Under the circumstances, it would be unfair if

the statute had started running against plaintiff

at a time when there was no way of knowing the

duration of the interest taken. While not exactly

like the case at bar, the [United States v.] Dickin-

son [331 U.S. 745, 67 S.Ct. 1382, 91 L.Ed. 1789

(1947)] case is pertinent because it recognized

that the statute of limitations in taking cases

does not necessarily begin to run at the first

moment that the plaintiff could have brought

suit. It was held in the Dickinson case that an

aggrieved owner need not bring suit until the

consequences of the taking “have so manifested

themselves that a final account may be struck.”

118 Ct.Cl. at 22, 92 FSupp. at 1018. In the case at bar, the

consequences, particularly the duration of the alleged

taking, “manifested themselves” in 1984, when the Elev-

enth Circuit issued its opinion. United States v. Context-

Marks Corp., 729 F.2d 1294 (11th Cir.1984). The court,

therefore, rejects defendant’s affirmative defense with

respect to the statute of limitations.

Next, the court must address the merits of the tempo-

rary regulatory taking claim raised by plaintiffs. It is well

settled in law that the taking of private property for

public use must result in the payment of compensation

under the Fifth Amendment to the United States Consti-

tution. The Fifth Amendment provides: “nor shall private

40a

property be taken for public use without just compensa-

tion.” U.S. Const. amend. V. The purpose of this constitu-

tional guarantee is to prevent the “[glovernment from

forcing some people alone to bear public burdens which,

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

as a whole.” Armstrong v. United States, 364 U.S. 40, 49, 80

S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960). The question

raised by the plaintiffs is whether they have been sub-

jected to a temporary regulatory taking by government

action and, therefore, whether they are entitled to com-

pensation by the government. The ultimate determination

of when “fairness and justice” require compensation,

however, must be made based on the particular circum-

stances of each case. Lucas v. South Carolina Coastal Coun-

cil, 505 U.S. 1003, __, 112 S.Ct. 2886, 2922, 120 L.Ed.2d

798, 812 (1992); Connolly v. Pension Ben. Guaranty Corp.,

475 U.S. 211, 224, 106 S.Ct. 1018, 1025, 89 L.Ed.2d 166

(1986); Penn Central Transportation Co. v. New York City,

438 U.S. 104, 124, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631

(1978); United States v. Central Eureka Mining Co., 357 U.S.

155, 168, 78 S.Ct. 1097, 1104, 2 L.Ed.2d 1228 (1958); Lan-

genegger v. United States, 756 F.2d 1565, 1570 (Fed.Cir.),

cert. denied, 474 U.S. 824, 106 S.Ct. 78, 88 L.Ed.2d 64

(1985); Skip Kirchdorfer, Inc. v. United States, 26 Cl1.Ct. 666,

672-73 (1992).

“Property is taken in the constitutional sense when

inroads are made upon an owner’s use of it to an extent

that, as between private parties, a servitude has been

acquired either by agreement or in course of time.”

United States v. Dickinson, 331 U.S. 745, 748, 67 S.Ct. 1382,

1384, 91 L.Ed. 1789 (1947). In determining whether there

has been a taking, it is not essential for the government to

ee ae Pen i et te cig ti es

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4la

have taken property for its own use. Hawaii Housing

Authority v. Midkiff, 467 U.S. 229, 244, 104 S.Ct. 2321, 2331,

81 L.Ed.2d 186 (1984); Langenegger v. United States, 756

F.2d at 1570. A taking can occur whether or not the

government takes physical possession of the property,

and also can occur simply when the government by its

actions deprives the owner of all or most of its interest in

the property. Aris Gloves, Inc. v. United States, 190 Ct.Cl.

367, 374, 420 F.2d 1386, 1391 (1970). Thus, the United

States may be held responsible for a taking even when its

action is not the final direct cause of the property loss or

damage. Langenegger, 756 F.2d at 1570.

Moreover, courts have recognized that just compen-

sation is required for a “temporary” taking under the

Fifth Amendment. First English Evangelical Lutheran

Church v. County of Los Angeles, 482 U.S. 304, 107 S.Ct.

2378, 96 L.Ed.2d 250 (1987). The court in First Lutheran

Church stated that “ ‘temporary’ takings which .. . deny

a landowner all use of his property, are not different in

kind from permanent takings, for which the Constitution

clearly requires compensation.” Id. at 318, 107 S.Ct. at

2388. The Court in First Lutheran Church summarized the

Constitutional right to compensation for a temporary tak-

ing as follows:

Consideration of the compensation question

must begin with direct reference to the language

of the Fifth Amendment, which provides in rele-

vant part “private property [shall not] be taken

for public use, without just compensation.” As

its language indicates, and as the Court has

frequently noted, this provision does not pro-

hibit the taking of private property, but instead

places a condition on the exercise of that power.

42a

See Williamson County, 473 U.S., at 194 [105 S.Ct.

at 3120]; Hodel v. Virginia Surface Mining & Recla-

mation Ass’n, Inc., 452 U.S. 264, 297, n. 40 [101

S.Ct. 2352, 2371, n. 40, 69 L.Ed.2d 1] (1981);

Hurley v. Kincaid, 285 U.S. 95, 104 [52 S.Ct. 267,

269, 76 L.Ed. 637] (1932); Monongahela Navigation

Co. v. United States, 148 U.S. 312, 336 [13 S.Ct.

622, 630, 37 L.Ed. 463] (1893); United States v.

Jones, 109 U.S. 513, 518 [3 S.Ct. 346, 349, 27 L.Ed.

1015] (1883). This basic understanding of the

Amendment makes clear that it is designed not

to limit the governmental interference with

property rights per se, but rather to secure com-

pensation in the event of otherwise proper inter-

ference amounting to a taking. Thus,

government action that works a taking of prop-

erty rights necessarily implicates the “constitu-

tional obligation to pay just compensation.”

Armstrong v. United States, 364 U.S. 40, 49 [80

S.Ct. 1563, 1569, 4 L.Ed.2d 1554] (1960).

First Lutheran Church, 482 U.S. at 314-15, 107 S.Ct. at

2385-86.

In determining whether a temporary regulatory tak-

ing has occurred, this court should examine three factors,

repeatedly set forth by the United States Supreme Court

and the United States Court of Appeals for the Federal

Circuit: (1) the character of the governmental action; (2)

the economic impact of the regulation on the claimant,

and; (3) the extent to which the regulation has interfered

with reasonable investment backed expectations. Keystone

Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 495,

107 S.Ct. 1232, 1247, 94 L.Ed.2d 472 (1987); Kaiser Aetna v.

United States, 444 U.S. 164, 175, 100 S.Ct. 383, 390, 62

L.Ed.2d 332 (1979); Connolly v. Pension Ben. Guaranty

43a

Corp., 475 U.S. at 224-25, 106 S.Ct. at 1025; Creppel v.

United States, 41 F.3d 627, 631 (Fed.Cir.1994); Florida Rock

Indus., Inc. v. United States, 791 F.2d 893, 901

(Fed.Cir.1986), cert. denied, 479 US. 1053, 107 S.Ct. 926, 93

L.Ed.2d 978 (1987); Loveladies Harbor, Inc. v. United States,

15 Cl.Ct. at 391. Otherwise stated, the Court in Penn

Central Transportation Co. v. New York City, 438 U.S. 104,

124, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631 (1978), wrote:

Manin habs

In engaging in these essentially ad hoc, factual

inquiries, the Court’s decisions have identified

several factors that have particular significance.

The economic impact of the regulation on the

claimant and, particularly, the extent to which

the regulation has interfered with distinct

investment-backed expectations are, of course,

relevant considerations. [citation omitted]. So,

too, is the character of the governmental action.

A “taking” may more readily be found when the

interference with property can be characterized

as a physical invasion by government, see, [sic]

e.g., United States v. Causby, 328 U.S. 256 [66 S.Ct.

1062, 90 L.Ed. 1206] (1946), than when interfer-

ence arises from some public program adjusting

the benefits and burdens of economic life to

promote the common good:

Regarding the first factor, the character of the gov-

ernment action, the Supreme Court summarized the cur-

rent judicial approach and its origin, as follows:

‘Harmful or noxious use’ analysis was, in other

words, simply the progenitor of our more con-

temporary statements that “land-use regulation

does not effect a taking if it ‘substantially

44a

advance[s] legitimate state interests’... .” [Cita-

tions omitted.]

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

1023-24, 112 S.Ct. 2886, 2897, 120 L.Ed.2d 798, 818 (1992).

Subsequently, the United States Court of Appeals for the

Federal Circuit wrote: “Courts must inquire into the

degree of harm created by the claimant's prohibited activ-

ity, its social value and location, and the ease with which

any harm stemming from it could be prevented.” Creppel

v. United States, 41 F.3d at 631.

Under the second enunciated factor, the economic

impact of the regulation, plaintiffs bear the burden of

demonstrating that the governmental actions denied the

plaintiff of all “economically viable use of his land.”

Nollan v. California Coastal Com., 483 U.S. 825, 834, 107

S.Ct. 3141, 3147, 97 L.Ed.2d 677 (1987); Agins v. Tiburon,

447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106

(1980). In the Lucas case, the court stated this principle as

follows:

We think, in short, that there are good reasons

for our frequently expressed belief that when

the owner of real property has been called upon

to sacrifice all economically beneficial uses in

the name of the common good, that is, to leave

his property economically idle, he has suffered a

taking.

Lucas v. South Carolina Coastal Council, 505 U.S. at 1019,

112 S.Ct. at 2895, 120 L.Ed.2d at 815 (footnote omitted).

Finally, the third articulated factor, the extent to

which the regulation has interfered with reasonable

investment backed expectations, “limits recovery to

owners who can demonstrate that they bought their

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45a

property in reliance on the non-existence of the chal-

lenged regulation. One who buys with knowledge of a

restraint assumes the risk of economic loss.” Creppel v.

United States, 41 F.3d at 632. According to the Supreme

Court, “[a]s we have said on numerous occasions, the

Fifth Amendment is violated when land use regulation

‘does not substantially advance legitimate state interests

or denies an owner economically viable use of his land.’ ”

Lucas v. South Carolina Coastal Council, 505 U.S. at 1016,

112 S.Ct. at 2893, 120 L.Ed.2d at 813 (citing Agins v.

Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106).

In the present case, plaintiffs have claimed a tempo-

rary taking as a matter of law, alleging that the govern-

ment actions in this case rendered their property virtually

worthless for over ten years, thus depriving the owners

of all economically viable use of the property during that

period. Plaintiffs contend that “[t]he Property, situated on

Florida wetlands, could not be developed or otherwise

built upon until it was dredged and filled,” and that

defendant's refusal to grant the necessary permit stripped

plaintiffs of all use of the land. On the other hand, defen-

dant contends that “[i]f there has been an interference

with plaintiffs’ ability to use or develop their wetlands

property, compensation must be denied so long as there

are valuable economic rights remaining in the property as

a whole.”

First, when examining the character of the govern-

ment action in the above-captioned case, this court

acknowledges that the cease and desist order, as well as

the permit requirements imposed by the government, did

impact on the plaintiffs’ stated intention to construct a

multi-unit apartment complex and marina on Parcels 38

46a

and 34. However, the regulatory permit requirements and

the issuance by the government of the cease and desist

order do not, per se, amount to a regulatory taking,

unless the regulatory action goes “too far.” Tabb Lakes,

Ltd. v. United States, 10 F.3d 796, 800 (Fed.Cir.1993).

“(While property may be regulated to a certain extent, if

regulation goes too far it will be recognized as a taking.”

767 Third Ave. Assoc. v. United States, 48 F.3d 1575, 1580

(Fed.Cir.1995) (citing Pennsylvania Coal Co. v. Mahon, 260

U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922)). As stated by

the Supreme Court in United States v. Riverside Bayview

Homes, Inc., 474 U.S. 121, 126-27, 106 S.Ct. 455, 458-59, 88

L.Ed.2d 419 (1985):

Moreover, we have made it quite clear that the

mere assertion of regulatory jurisdiction by a

governmental body does not constitute a regula-

tory taking. .. . A requirement that a person

obtain a permit before engaging in a certain use

of his or her property does not itself “take” the

property in any sense: after all, the very exis-

tence of a permit system implies that permission

may be granted, leaving the landowner free to

use the property as desired. Moreover, even if

the permit is denied, there may be other viable

uses available to the owner. Only when a permit

is denied and the effect of the denial is to pre-

vent “economically viable” use of the land in

question can it be said that a taking has

occurred.

Plaintiffs rely heavily on portions of Judge

Aronovitz’ memorandum opinion in the district court

case (Case No. 79-2323-Civ-SMA) to establish their ver-

sion of the character of the government action as a denial

47a

of plaintiffs’ complete use of their property. To be sure,

Judge Aronovitz wrote:

In light of the Corps’ inability to dispositively

determine the location of the mean high water

line in January of 1973, the developers of the

project were unable to proceed with the project

for fear that additional impermissible filling

would take place.

And, he further stated:

The government has argued that the [plaintiffs]

... Were free in January, 1973 to continue devel-

opment above the mean high water line since

the cease and desist order only addressed land

below the mean high water line demarcation.

Unfortunately, however, the government was

unable to inform [Plaintiffs] ... where that

elusive line might be, so the government was

inviting [plaintiffs] ... to risk the possibility of

continuing to be in violation of the law. This

Court does not believe that this course of action

was a feasible alternative or that any reasonably

prudent businessman would gamble on the loss

of additional time, labor and money.

Judge Aronovitz, however, concluded that:

Accordingly, this Court orders that the United

States of America and the State of Florida are

enjoined from requiring prospective permitting

of the property on Parcel 38, south of the com-

promise mean high water line. The [plaintiffs]

... Shall be free to fill and develop the property

subject to compliance with all applicable City of

Key West requirements and all applicable rules

and regulations setting the placement, location,

height, density and method or manner of fill;

48a

conditioned further, that the Marks [plaintiffs]

_. and/or Island in the Sun and/or their suc-

cessors/assigns cause partial restoration of the

area below the compromise mean high water

line as ordered herein.

Plaintiffs fail to realize that although Judge

Aronovitz found that the government actions might have

acted as a hindrance to plaintiffs’ intended use of the

property, he also concluded, with certain conditions, that

plaintiffs are “free to fill and develop the property subject

to compliance with all applicable rules and regulations

setting the placement, location, height, density and

method or manner of fill... .” Moreover, in his opinion,

Judge Aronovitz did not reach or address whether or not

the cease and desist order or the permit requirements

amounted to a taking. In sum, plaintiffs’ reliance on the

findings of Judge Aronovitz is misplaced. The district

court findings do not support plaintiffs’ claim that the

character of the government action denied plaintiffs all

economically beneficial uses of Parcels 34 and 38.

Further, in order to assert a Fifth Amendment taking

claim pursuant to the Tucker Act, 28 U.S.C. § 1491, a

“claimant must concede the validity of the government

action which is the basis of the taking claim to bring suit

under the Tucker Act, 28 U.S.C. § 1491.” Tabb Lakes, Ltd. v.

United States, 10 F.3d at 802, see also Florida Rock Indus.,

Inc. v. United States, 791 F.2d 893, 899 (Fed.Cir.1986), cert.

denied, 479 U.S. 1053, 107 S.Ct. 926, 93 L.Ed.2d 978 (1987).

In other words, to assert a taking claim, the government

must have had the authority to regulate the proposed

activity. The rationale is that:

a Sag Sn ae aC lesan hai Ti aa

Soller eS TS Sethe 8S et CDS ROLE ADEA TIO NI - wf

49a

[A] Tucker Act suit does not lie for an executive

taking not authorized by Congress, expressly or

by implication. NBH Land Co. v. United States,

576 F.2d 317, 319, 217 Ct.Cl. 41 (1978); see South-

ern Cal. Fin. Corp. v. United States, 634 F.2d 521,

523, 225 Ct.Cl. 104 (1980), cert. denied, 451 U.S.

937, 101 S.Ct. 2016, 68 L.Ed.2d 324 (1981)

(“[B]efore a compensable taking can be found by

the court, there must be some congressional

authorization, express or implied, for the partic-

ular taking claimed.”).

Tabb Lakes, Ltd. v. United States, 10 F.3d at 802.

In the instant case, the government actions relating to

that portion of Parcel 38 above the mean high water line

were found by the district court to have been

unauthorized. Judge Aronovitz found that the issuance of

the cease and desist order by the Corps directed to activ-

ity on Parcel 38 as a whole, without first having defined

the mean high water line, had the effect of exercising

jurisdiction over portions of the land above the mean

high water line which were not within the control of the

United States government. As stated by Judge Aronovitz,

“the government failed to produce the requisite scientific

evidence or data needed to indicate that it could exactly

locate the mean high water line for December of 1972.”

Furthermore, Judge Aronovitz stated: “Had the Corps not

intervened in January 1973, without locating the mean

high water line the land above the mean high water line

could have been developed, and once done, it would

have been grandfathered and exempt from the Corps’

revised wetlands policy.” After adopting the compromise

mean high water line adopted by the parties, the judge

found that the government did not have the authority to

50a

assert jurisdiction over that portion of the land above the

mean high water line and enjoined both the United States

and the State of Florida from imposing any permit

requirements on Parcel 38 above the mean high water

line.

Consequently, the instant plaintiffs are in no position

to concede the validity of the government actions in order

to maintain a Tucker Act taking claim. Although the error

by the Corps in asserting its jurisdiction over the portion

of Parcel 38 above the mean high water line possibly

might have given rise to due process claim, it does not

satisfy the necessary elements to give rise to a taking

claim. Tabb Lakes, Ltd. v. United States, 10 F.3d at 803.

There also is sufficient evidence in the instant case to

demonstrate that there was a legitimate state interest in

preserving the quality of water within the area of plain-

tiffs’ land. Judge Aronovitz described the property as

follows: “Parcel 38 contains some wetlands which do

perform environmental functions. There are mangroves,

turtlegrass and salicornia thereon which produce an

organic food source known as detritus. These wetlands

can serve as a habitat for aquatic organisms and the birds

which feed on them.” Moreover, the government stated

that: “the project as proposed will have definite long-

term adverse effects on the water quality of the Class III

waters of the immediate waterway area, Cow Key Chan-

nel and will be contrary to policy of the Board of the

Department of Pollution Control.” Therefore, the evi-

dence presented demonstrates that the land at issue

serves an important function to the immediate environ-

ment and the proposed activity could adversely affect

Seat hse Vue R a Dery 5

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5la

that property. Such evidence is conclusive of a legitimate

state interest.

Plaintiffs also have not met their burden under the

second test for establishing a taking claim, that the gov-

ernmental actions left the plaintiffs’ land devoid of all

economic viability. Plaintiffs conceded in their responses

to defendant's first set of interrogatories that “[w]ith the

exception of the second fill project which commenced in

June, 1986, no attempt has been made to develop any part

of Parcels 34 and 38.” Moreover, Lawrence Marks admit-

ted that in addition to the ongoing litigation, plaintiffs

did not fill the property above the mean high water line

after 1973, before the date of the new wetlands regula-

tions, because he did not have the money, and there was

no money to proceed to development because of a reces-

sion from 1973 to 1976. Further, it is undisputed that as of

September 18, 1989, plaintiffs sold the majority of Parcel

38 for millions of dollars. The consideration received

from this sale alone demonstrates the remaining eco-

nomic viability of the property. Therefore, plaintiffs have

failed to demonstrate the type of economic impact result-

ing from the regulation and the government actions, nec-

essary to demonstrate that the land was void of all

economic viability to the extent that a court could find an

unconstitutional taking.

Finally, plaintiffs have failed to demonstrate that reg-

ulatory and government actions interfered with the rea-

sonable investment backed expectations of the plaintiffs.

As discussed above, this factor “limits recovery to owners

who can demonstrate that they bought their property in

reliance on the non-existence of the challenged regula-

tion.” Creppel v. United States, 41 F.3d at 632. It is not

52a

sufficient to suggest that, although a regulation existed,

which plaintiffs should have or did know about, the

government authorities had not been in the practice of

enforcing the regulation. Moreover, the record, as dis-

cussed immediately above, demonstrates that plaintiffs

still profited from their investment as a result of the sale

of the property. Certainly, the taking clause in the Consti-

tution should not be construed to provide reimbursement

to investors for unrealized expectations, or for poor

investment decisions.

In sum, even giving plaintiffs the benefit of every

reasonable doubt, plaintiffs in this case have failed on

summary judgment to meet their burden of proof to

present facts, beyond the allegations in the complaint,

sufficient to prevail on any of the three factors necessary

to demonstrate a valid Fifth Amendment temporary regu-

latory taking claim, or to demonstrate that a genuine

issue of material fact exists, sufficient to defeat defen-

dant’s motion for summary judgment. In the instant case,

the facts have been flushed out in numerous federal

courts and in administrative bodies. This court believes

that if sufficient facts had been available to bolster plain-

tiffs’ case, they would have been presented to this court.

The character of the government action, while per-

haps a hindrance to plaintiffs’ preferred, intended use of

the land, did not reach the level of an unconstitutional

taking. Moreover, while the government actions may

have had an economic impact, temporary or otherwise,

on the plaintiffs’ planned investment in the land at issue,

and the land ultimately may not have been used for

plaintiffs’ intended purposes, that impact did not leave

plaintiffs’ land devoid of all economically viable use. In

53a

fact, in his October 23, 1986 opinion, Judge Aronovitz of

the district court appears to have anticipated future

development of the land at issue. Judge Aronovitz set

conditions for future development of the land, including

that the plaintiffs should not be required to apply for

retroactive permits, which suggests that he believed that

future development of Parcels 34 and 38 remained a

viable option. The defendant also has demonstrated that

the government actions were undertaken with a legiti-

mate state interest in mind. Moreover, regarding those

portions of plaintiffs’ land above the mean high water

line, a compensable taking claim cannot lie based on

actions undertaken by government officials without

authority.

CONCLUSION

After an exhaustive review of the record in the

instant case, the court DENIES defendant's motion to

dismiss and GRANTS defendant’s motion for summary

judgment. Plaintiff’s cross-motion for summary judgment

is accordingly DENIED. The clerk of the court is, there-

fore, ORDERED to enter judgment in favor of the defen-

dant.

IT IS SO ORDERED.

54a

NOTE: Pursuant to Fed. Cir. R. 47.6, this dis-

position is not citable as precedent. It is a

public record. The disposition will appear in

tables published periodically.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

96-5055

LAWRENCE MARKS;

SUN BANK/MIAMI, N.A. and EDWARD A. MOSS,

as personal representatives of the estate of Eugene Marks;

MORRIS S. MARLIN, as personal representative

of the estate of Paul Marks;

HERMAN MARKS;

IRENE O. MARKS, individually and as personal

representative of the estate of Stanley Marks;

MARKS DEVELOPMENT, INC.; and

ISLAND IN THE SUN CONDOMINIUMS

OF KEY WEST FLORIDA, INC.,

Plaintiffs-Appellants,

THE UNITED STATES,

Defendant-Appellee.

Judgment

ON APPEAL from the UNITED STATES COURT

OF FEDERAL CLAIMS

in CASE NO(S). 506-89L

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED: AFFIRMED.

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55a

Per curiam (PLAGER, Circuit Judge, SMITH, Senior

Circuit Judge, and LOURIE, Circuit Judge). See Fed. Cir. R.

36.

ENTERED BY ORDER

OF THE COURT

DATED MAY 15 1997 /s/ Jan Horbaly/illegible

Jan Horbaly, Clerk

COSTS: AGainst, Appellants.

PRINTING $480.85

TOTAL $480.85

ISSUED AS A MANDATE: July 23, 1997

(Filed May 15, 1997)

56a

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

96-5055

LAWRENCE MARKS;

SUN BANK/MIAMI, N.A. and EDWARD A. MOSS,

as personal representatives of the estate of Eugene Marks;

MORRIS S. MARLIN, as personal representative

of the estate of Paul Marks;

HERMAN MARKS;

IRENE O. MARKS, individually and as personal

representative of the estate of Stanley Marks;

MARKS DEVELOPMENT, INC.; and

ISLAND IN THE SUN CONDOMINIUMS

OF KEY WEST FLORIDA, INC.,

Plaintiffs-Appellants,

THE UNITED STATES,

Defendant-Appellee.

ORDER

57a

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

ORDER

A combined petition for rehearing and suggestion for

rehearing in banc having been filed by the APPELLANT,

and the petition for rehearing having been referred to the

panel that heard the appeal, and thereafter the suggestion

for rehearing in banc having been referred to the circuit

judges who are in regular active service,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for rehearing be, and the

same hereby is, DENIED and it is further

ORDERED that the suggestion for rehearing in banc

be, and the same hereby is, DECLINED.

The mandate of the court will issue on July 23, 1997.

FOR THE COURT,

JAN HORBALY, CLERK

Dated: July 16, 1997

By /s/ Alex Van Veen

Alex Van Veen

Staff Law Clerk

cc: JOEL D. EATON

JEFFREY C. DOBBINS

MARKS V US, 96-5055

(CFC — 506-89L)

(Filed Jul. 16, 1997)

58a

i i i i i i Bi a Bi i i BB Be BB a Be Re BB BB ee he Be he Be he he

Note: Pursuant to Fed. Cir. R. 47.6, this order is not

citable as precedent. It is a public record.

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59a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 79-2323-Civ-SMA

UNITED STATES OF AMERICA,

Plaintiff,

STATE OF FLORIDA MEMORANDUM

DEPARTMENT OF OPINION

ENVIRONMENTAL CONTAINING

REGULATION, FINDINGS OF

or FACT AND

Bisa ucoit CONCLUSIONS

: OF LAW

vs.

AR DEV (ee Se

ore Gouna Bagh

Individually and as Trustee;

OSNARDO DRAGO, Individually

and as Trustee; LAWRENCE M.

MARKS, Individually and as

Trustee; EUGENE MARKS, an

individual; HERMAN MARKS,

an individual; STANLEY

MARKS, an individual; PAUL

MARKS, an individual; ISLAND

IN THE SUN CONDOMINIUMS

OF KEY WEST, FLORIDA, INC.,

and CHARLEY TOPPINO AND

SONS, INC.,

Defendants.

THIS CAUSE was heard by the Court in Key West,

Florida, from September 1 through September 4, 1981.

Considerable testimony was adduced, numerous exhibits

60a

received into evidence, oral argument was heard and

post-trial briefs have been received from the parties. Prior

to commencement of trial the Court inspected the subject

site in the company of counsel for the respective parties

and walked the area of Parcel 38, including the berms and

generally visited the surrounding sites. After considering

the totality of the aforegoing and upon a review of the

entire court record and proceedings herein, this Court

herewith makes its Findings of Fact and Conclusions of

Law.

Nature of the Action

The United States of America seeks a permanent

injunction requiring Defendants to remove approximately

20,000 cubic yards of fill material from navigable waters

of the United States allegedly placed below the mean high

water line on property known as Parcel 38 of Plat Book 4,

Page 69, Key West, Monroe County, Florida.’ This fill

material was deposited on Parcel 38 in December, 1972,

by Defendants Lawrence Marks, Juaquin Pijuan, Osnardo

Drago, Eugene Marks, Paul Marks, Stanley Marks, Her-

man Marks, Marks Development, Inc., and Island in the

Sun Condominiums of Key West, Florida, Inc. (collec-

tively referred to as the “Marks Defendants”), and Char-

ley Toppino and Sons, Inc. (hereinafter referred to as

“Toppino”). Plaintiff contends that this was an

unathorized [sic] deposit of fill in violation of Section 10

1 The State of Florida Department of Environmental

Regulation intervened a plaintiff for the limited purpose of

supporting the claims of the federal government. It did not

press any independent claims for violation of state laws.

PS ER wee CE AAS VR uae were EE feat Se oe

eee hd ep sae REE

6la

of the Rivers and Harbors Act of 1899, 33 U.S.C. § 403 and

§ 301(a) of the Federal Water Pollution Control Act

Amendments of 1972, 33 U.S.C. § 1311(a), commonly

known as the Clean Water Act.

Defendants contended that the Plaintiff could not

prove that the fill material was placed below the mean

high water line as it existed in 1972 and also asserted

affirmative defenses of statute of limitations, laches and

estoppel.

The Marks Defendants asserted a counterclaim

against the United States of America and Plaintiff-Inter-

venor, the State of Florida Department of Environmental

Regulation, seeking injunctive relief from prospective

permitting of the property on Parcel 38 above the mean

high water line. The Marks Defendants also proposed an

alternative plan regarding restoration of the subject prop-

erty, in the event that the Court found some restoration

necessary.

Findings of Fact

1. On June 13, 1972, Lawrence Marks purchased a

'/2 undivided interest in Parcel 38 in Key West, Florida

(“the property”), on behalf of himself and his uncles,

Eugene, Paul, Stanley and Herman Marks (collectively

called “Marks Brothers”). As of the same date, Osnardo

Drago and Joaquin Pijuan each owned a '/s undivided

interest in the property, as trustees.

2. Parcel 38 is in a tidal area adjacent to the Key

West Airport, within the boundaries of the City of Key

West, Florida, and enclosed by Roosevelt Boulevard,

62a

although the entire parcel is not subject to tidal fluctua-

tions. The property abuts the Riviera Canal on the north,

a man-made waterway subject to the ebb and flow of the

tide, and therefore the northern portion of the property is

subject to tidal fluctuations, being a low-lying, inland,

salt marsh area. The property is characterized by a preva-

lence of wetland vegetation, including mangrove trees

and a variety of seagrasses. On the southern portion of

the property there are areas of uplands. Parcel 38 is

roughly rectangular and consists of approximately 52

acres, with its northern boundary running 900 feet along

Riviera Canal and its western boundary approximately

2400 feet in length. In the southwest area there is and

intrusion by an extension of an abandoned runway from

the nearby Key West International Airport and one or

more of 4 or 5 abandoned, former Navy concrete blimp

pads.

3. Presently, title to the property is vested in Marks

Development, Inc., which is owned 60% by Lawrence

Marks and 40% by the Marks Brothers. The company’s

sole asset is Parcel 38.

4. Pursuant to an intention to develop said property

as a multi-unit apartment complex and marina, in accord

with the Master Plan of the City of Key West and its

applicable zoning regulations, Defendants applied for

and received, on or about November 1, 1972, a dredge

and fill permit from the City of Key West.

5. At the time the fill operation was commenced in

November and December of 1972, the Randall Act [FS.

253.135(3)] was in full force and effect and this Act

63a

exempted property within Key West from state require-

ments for dredge and fill permits.

6. At the time the fill operation was commenced in

November and December of 1972, the Department of

Army Corps of Engineers did not assert jurisdiction over

any property above the mean high water line. The Corps

of Engineers historically had not exercised its full juris-

diction in the area of the fill, within Roosevelt Boulevard,

and had not been requiring permits to fill below the mean

high water line in this area.

7. In 1972, Mr. Osnardo Drago, a representative of

Island in the Sun Condominiums of Key West, Florida,

Inc. (hereinafter “Island in the Sun”), contacted Defen-

dant Toppino to inquire about the costs for renting cer-

tain types of equipment and buying fill material from

Toppino. Mr. Drago and representatives of Toppino

arrived at a stated amount of money to be paid for the

rental of equipment and the purchase of fill material.

8. The agreement between Mr. cago and Toppino

was as follows: the equipment was rented for an agreed

amount of money per day and the fill material was to be

sold for an agreed amount per truckload; the price of the

fill material per truckload included delivery of the mate-

rial to the project site; the price of the equipment rental

per day included the salary for the operator of the equip-

ment.

9. Subsequent to the contact between Mr. Drago and

Toppino, Mr. Lawrence M. Marks, another representative

of Island in the Sun discussed the agreement with Frank

P. Toppino, president of Toppino, and indicated his

approval of it.

64a

10. Mr. Drago and Mr. Marks, as representatives of

Island in the Sun, instructed Frank P. Toppino as to where

the fill material was to be spread or placed, and Mr.

Toppino, in turn, instructed the equipment operator. The

instructions were to spread or place the fill along flag

markers as a road (berm). The flag markers were placed

at the project site by Phillips & Trice, Inc.

11. The equipment operator spread or placed the fill

material at the project site according to the instructions of

Mr. Drago and Mr. Marks. Toppino did not have any

responsibility for, or control over, where the fill material

was placed at the project site. The equipment operator

spread or placed the fill material at the project site

according to the instructions of Mr. Drago and Mr. Marks.

___ 12. The only agreement between Mr. Drago and Mr.

Marks, as representatives of Island in the Sun, and Top-—

pino was for the rental of certain equipment and the sale

of fill material.

13. In January, 1973, Toppino was paid $50,395.97

by check drawn on account of Island in the Sun for the

rental of the equipment and the sale of fill material used

at the project site.

14. The filling took place during December, 1972,

when the fill operation was begun and a perimiter berm

completed, during the period when the Randall Act was

still in effect.

15. On January 24, 1973, the Corps of Engineers sent

a cease and desist telegram to Thomas Carlos concerning

the placement of fill on the property. This telegram was

65a

followed by letter dated April 9, 1973, from the Corps of

Engineers concerning the filling.

16. The United States government entered into a

stipulation in a criminal information proceeding in the

U.S. District Court, Southern District of Florida, charging

unauthorized filling and that Island in the Sun was the

party responsible for any alleged infractions. That stipu-

lation was presented to U.S. District Judge W. O.

Mehrtens in the case of United States v. Island In the Sun

Condominiums of Key West, Florida, Inc., Case No. 73-509-

Cr-WM.

17. On August 16, 1973, Island in the Sun plead nolo

contendere to the criminal information. A stipulation was

signed by the attorney for defendant corporation and the

Assistant United States Attorney. The corporation was

fined $500.00.

18. An application for a permit to dredge a marina

in the area bounded by the fill was submitted by Charles

Netter on behalf of the corporation in July, 1973. This

application was considered by all parties to be an after-

the-fact permit application. The corporation also applied

to the State of Florida for water quality certification.

Lawrence Marks, as trustee, and Thomas Carlos, as

trustee, as property owners, designated Charles Netter,

Esquire as agent to apply for all necessary permits. Victor

Stosik, an associate in Mr. Netter’s firm, handled most

correspondence with the Corps of Engineers. Lawrence

Marks was aware that Mr. Stosik was representing Island

in the Sun and did not object to such representation. In

66a

1974, the State of Florida denied water quality certifica-

tion, and based upon that denial, the Corps of Engineers

denied the corporation’s permit application.

19. The State of Florida held an administrative hear-

ing on the permit application on April 4, 1975, and on

January 27, 1976, the Secretary of the Florida Department

of Environmental Protection Regulation issued a final

order denying water quality certification and the permit.

That order was affirmed by the Board of Trustees of the

Internal Improvement Trust Fund on August 9, 1976. The

First District Court of appeals for Florida upheld the

state’s action on May 3, 1977, and on October 10, 1977, the

Florida Supreme Court denied a writ of certiorari.

20. The Defendant Marks Development, Inc. filed

an application for an after-the-fact permit concerning the

fill which is disputed here with the Corps of Army Engi-

neers. On August 13, 1981, the United States Corps of

Army Engineers refused to consider that permit on the

ground that this litigation was pending.

21. The area covered by the berms in question either

above or below the mean high water line is in doubt.

However, evidence has been introduced showing it to be

abou‘ three acres. This represents less than 10 percent of

the total acreage of Parcel 38. This is the area that was

filled in December, 1972.

22. The corporation known as Island in the Sun

Condominiums of Key West, Florida, Inc., is a bona fide

Florida corporation.

67a

23. There is extensive development, both commer-

cial land residential, within the area enclosed by Roos-

evelt Boulevard. According to the testimony of Charles

Schneppel, an Army Corps biologist, and Frank Toppino,

a forty-year resident of Key West and the area’s main

source of fill materials, there has never been a major

restoration action within the area encompassed by Roos-

evelt Boulevard. In addition, Mr. Toppino testified that at

the time the fill was placed on Parcel 38 he was aware of

no state or federal permit requirements.

24. At the time the fill was physically placed on the

subject property neither the State of Florida nc- the

United States government required a permit for the filling

or property above the mean high water line.

25. Prior to proceeding with the fill operation,

Island in the Sun received a city permit for the project

and it received assurances from Charles Aguero, an offi-

cial of the City of Key West, that this permit was the only

permit required. The projected development of Parcel 38

fully complied with the requirements and the purposes of

the Master Plan for the City of Key West.

26. The fill tickets that were issued by Charley Top-

pino & Sons at the fill site indicate that all filling was

completed by December 31, 1972. Upon receipt of the

Corps cease and desist order, Island in the Sun promptly

stopped all fill activity and complied with every Corps

directive throughout the eight and one-half year period.

27. At the time that the cease and desist order was

issued, the Corps was unable to make a definitive deter-

mination as to the location of the mean high water line.

The first time that a professional surveyor attempted to

‘a

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determine the location of the mean high water line was in

November of 1978, and this survey was commissioned by

Context Industries.

28. The original cease and desist order did not pre-

clude filling of property above the mean high water line

since the Corps did not exercise jurisdiction over land

above the mean high water line. Had not the Corps

intervened in the subject property by issuing its cease

and desist order at a time when there was no precise

determination of the mean high water line, then the prop-

erty filled above the mean high water line would have

been grandfathered in and exempt from the Corps’ subse-

quent 1975 wetlands policy.

29. During correspondence between the respective

parties in this action, it was agreed that there would be a

compromise and accepted mean high water line. This

compromise mean high water line was indicated

diagramatically in a letter sent by John Adams (Chief of

the Regulatory Review Board for the Army Corps of

Engineers). Mr. Adams confirmed the Corps agreement to

the location of this compromise mean high water line

during his trial testimony.

30. The Corps’ demand for a total restoration of

Parcel 38 by means of removing the existing fill is incon-

sistent with the Corps agreement to the placement of

three narrow breaks in the berm located on Parcel 34, the

property which is directly adjacent and contiguous to the

eastern boundary of Parcel 38. The Corps agreed to par-

tial restoration of Parcel 34 in 1975 and the Corps file

indicates that Corps biologist, Victor Anderson, agreed

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that the limited restoration would foster the Corps’ eco-

logical and biological objectives in this essentially inland

marsh area.

31. In light of the Corps’ inability to dispositively

determine the location of the mean high water line in

January of 1973, the developers of the project were unable

to proceed with the project for fear that additional imper-

missible filling would take place.

32. According to John Adams, the Army Corps of

Engineers has never considered Island in the Sun’s

dredge and fill permits on its merits. The Corps’ denial of

Island in the Sun’s previous application was based on the

Siate of Florida’s denial of a water quality certification.

At the time of the fill placement Florida possessed a

water quality certification program but the state did not

require certification for a project such as the one insti-

tuted on Parcel 38.

33. Tidal fluctuations and the free exchange of

aquatic organisms can be restored to the land north of the

south berm without requiring complete restoration via

the removal of all existing fill.

34. Testimony has been heard indicating that total

restoration, including the removal of all fil] materials,

would cost approximately ninety thousand ($90,000) dol-

lars, whereas the free-flow of tidal waters, which would

permit the free exchange of nutrients, planktonic and free

swimming organisms between the Riviera Canal and the

impounded area, could be accomplished for as little as

five thousand to six thousand ($5,000-$6,000) dollars.

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35. Some of the trial testimony indicated that it was

very probable that many mangroves growing on the edge

of and on the berms would be destroyed by the use of a

backhoe and other heavy machinery needed to effectuate

a total fill removal.

36. Mean high water is a term used to designate the

arithmetic average of the height above mean sea level of

all high tides over a period of approximately 18.6 years.

Mean high water at a given geographic location is deter-

mined by the establishment of interim tidal stations and

measuring short term simultaneous differences between

the readings at those stations and the readings at the

operating stations which were established more than 19

years prior to the current measurements. By applying

known constants for the 19 year station to the shorter

term stations, the equivalent of a 19 year value is interpo-

lated.

37. Parcel 38 contains some wetlands which do per-

form environmental functions. There are mangroves, tur-

tle grass and salicornia thereon which produce an organic

food source known as detritus. These wet!ands can serve

as a habitat for aquatic organisms and the birds which

feed on them.

The Island of Key West

38. From the various aerial photographs, surveys

and maps introduced into evidence such as Plaintiff’s

Exhibit 4, it can be ascertained that the City of Key West

is an island city. It is approximately 1'/2 miles in its

north/south diameter stretching from the Atlantic Ocean

to the Gulf of Mexico, and approximately 3 to 3'/2 miles

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wide along the east/west axis. Land is precious. When it

expires, there is no more. According to Plaintiff’s Exhibit

6, which is the U.S. Coast and Geodetic Survey for 1935,

at page 2, the population of Key West in 1935 was 13,000

people heavily concentrated in the northwesterly portion

of the island. The Court takes judicial notice that the 1970

U.S. census relating to this city which has existed for

more than 100 years as a municipality (and one of only

three (3) in Monroe County, Florida), states a population

of 29,300. Plaintiff’s Exhibit 6 and Plaintiff’s Exhibit 7 (the

Geodetic Survey for the year 1943), show the steady

growth of habitation eastward on the island and the

construction of Roosevelt Boulevard encompassing the

eastern side of the island.

39. Plaintiff's Exhibits 6, 7, 26, 28 and 65, all refer to

and show man-made creations. West of Parcel 38, within

the so-called salt pond area (the descriptive term used to

generally describe the nature and character or condition

of the area), is an abandoned government missile base.

Who built it and who filled in the land? The Plaintiff -

United States of America. Intruding into and just south/

southwest of Parcel 38 is the runway and 4 or 5 aban-

doned, concrete blimp pads. Who placed them there and

dug up the mangroves to do that? The Plaintiff — United

States of America. Who build Roosevelt Boulevard and

dug up the area for filling the boulevard, as well as the

mangroves that were displaced in the process and the

animal life/fish life and habitat disturbance? The Plaintiff

~ United States of America. Who filled in such Keys as

Dredgers Key and Fleming Key (see Plaintiff’s Exhibit 2

Page 2, et seq.) as United States Naval reservations? These

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entire man-made islands were dug and filled and man-

groves displaced with consequential ecological impact by

the Plaintiff United States of America.

40. There is nothing inherently wrong with any of

the aforegoing projects by the United States of America

and it should not be deemed that the Court is condemn-

ing any of the aforegoing. To the contrary, each individ-

ual project was necessary in the public interest — but

nevertheless, it does go to the equities when a different

standard is sought to be applied where a private situation

is involved.

41. The historical lack of exercise of jurisdiction by

the United States within the area encompassed by Roos-

evelt Boulevard is thus expressed in Defendants’ Exhibit

1 — the 1973 Stipulation between the United States of

America and Island in the Sun in the criminal proceeding,

to-wit:

4. The fill was placed by the Defendant corpo-

ration during December, 1972 after obtaining an

appropriate fill permit from the City of Key

West. The Corps of Engineers historically had

not exercised its full jurisdiction in the area of

the fill. The filling of land enclosed by Roosevelt

Boulevard has taken place in the apparent belief

that the Corps of Engineers fill permits were not

required. It appears that the Defendant corpora-

tion proceeded in good faith on a representation

from the City of Key West, that no Federal per-

mit was required. This position and belief is

evinced by the advice received by the Defendant

corporation from a City of Key West official

upon app

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