# Petition for Writ of Certiorari — Good v. United States, 120 S. Ct. 1554 (2000) (No. 99-881) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0443%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2000 ## Text —Bupreme Court, U.S. ee F I L. KD No.9 99 881 NOV 241999 . OCT Ur fr Gach IN THE Siew Court of the United States LLoyp A. Goon, Jr., Petitioner, Vv. UNITED STATES, Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Federal Circuit PETITION FOR A WRIT OF CERTIORARI E. BARRETT PRETTYMAN, JR.* JOHN G. ROBERTS, JR. H. CHRISTOPHER BARTOLOMUCCI HOGAN & HARTSON L.L.P. 555 Thirteenth Street, N.W. Washington, D.C. 20004 (202) 637-5685 RICHARD R. NAGEOTTE NAGEOTTE, NAGEOTTE & NAGEOTTE 385 Garrisonville Road Suite 201 & 202 Stafford, Virginia 22554 (540) 659-5050 * Counsel of Record Counsel for Petitioner WILSON-EPES PRINTING Co., INC. - (202) 789-0096 - WASHINGTON, D.C. 20001 QUESTIONS PRESENTED 1. Whether the Federal Circuit erred in holding— contrary to Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), and in conflict with the decisions of many other federal courts of appeals and state appel- late courts—that a government regulation depriving a property owner of all economically viable use of his land does not result in a per se or categorical taking under Lucas unless the property owner can also prove “reason- able, investment-backed expectations.” 2. Whether the Federal Circuit erred in holding that a property owner who is denied federal permission to develop his property because of the presence of endan- gered species lacks a reasonable expectation of developing the property—even though he purchased it prior to enact- ment of the Endangered Species Act and the listing of the species in question—because he should have been aware that “the growing consciousness of and sensitivity toward environmental issues” would ultimately change “the regu- latory climate” so as to bar his planned development. (i) TABLE OF CONTENTS QUESTIONS PRESENTED ........0.20..... ssadiainisahaiceen URGE GEE AT NEI ccs voineeneesansentccnatecnntandomstacts ETERS I SR ARN STO JURISDICTION |... 0... talsenibaieedsacedbemiehs seiataaadeiecicate REASONS FOR GRANTING THE WRIT I. Il. III. CONCLUSION THE FEDERAL CIRCUIT’S DECISION IS CONTRARY TO LUCAS AND CONFLICTS WITH THE DECISIONS OF OTHER FED- ERAL AND STATE APPELLATE COURTS... A. The Federal Circuit Misconstrued The Cate- gorical Rule Of Liacas B. The Federal Circuit’s Decision Conflicts With The Decisions Of Numerous Other Federal And State Appellate Courts ......0000000000. THE FEDERAL CIRCUIT’S HOLDING THAT GOOD LACKED REASONABLE, INVEST- MENT-BACKED EXPECTATIONS CANNOT BE RECONCILED WITH THIS COURT’S TAKINGS CASES, OTHER APPELLATE COURT DECISIONS, OR THE FACTS OF a SIRES PRR Set eh ore ace THERE ARE COMPELLING REASONS TO GRANT CERTIORARI IN THIS CASE TERROR OO OEE HEE HERE HEE EE EHEEEEEEEEOSEOOSEEEEEEEEEEESSOH OSE OEES 12 20 25 28 iv TABLE OF CONTENTS—Continued APPENDICES Page A. Opinion of the United States Court of Appeals for the Federal Circuit (August 31, 1999) la B. Opinion of the United States Court of Federal Claims (August 22, 1997) ; ao 16a v TABLE OF AUTHORITIES Cases Page Adams Outdoor Adver. vy. City of East Lansing, 591 N.W.2d 404 (Mich. Ct. App. 1998) ............... 15 Anchorage v. Sandberg, 861 P.2d 554 (Alaska | NaN na EME EE EMME SPR ie are Re ge 16 Babbitt v. Youpee, 519 U.S. 234 2: , BAeSpeeee Peay, 1! Bormann V. Board of Supervisors, 584 N.W.2d 309 (lowa 1998), cert. denied, 119 S. Ct. 1096 Do Fe REGIE egy FILL IN SAE SOIT CPR 16 Central Colo. Water Conservancy Dist. v. . Simpson, Our fn aoe Ges. FO a 16 Chioffi v. City of Winooski, 676 A.2d 786 (Vt. ee AN IO TERI SO IS LET ECON OS Ne 14 City of Miami v. Keshbro, Inc., 717 So. od 601 (Fla. Dist. Ct. App. 1998), review granted, 729 So.2d 392 (Fila. 1999) ............... EOE RT Te ONO CaM 15 Clay County v. Harley & Susie Bogue, Inc., 988 S.W.2d 102 (Mo. Ct. App. 1999) _..... sauanileasmeateie 17 Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d 1422 (9th Cir. 1996), aff'd, SO Ue Ge CHI inickechci 12-13 Dodd v. Hood River County, 136 F.: sd 1219 (9th Cir.), cert. denied, 119 S. Ct. 278 (1998) ......... 12 Eastern Enterprises v. Apfel, 118 S. Ct. 2131 CREE aticnzinn, sinictibnsaaedia chil eh ies ata poet Neer 26, 2 Hodel v. Irving, 481 U.S. 704 (1987) . jini idl AS 12 FIC Homes of Blackstone, Inc. v. Conservation Comm’n of Blackstone, 673 N.E.2d 61 (Mass. App. Ct. 1996), rev. denied, 676 N.E.2d 55 jk 5 SMEAR OT epee ED ny ee oe 17, 25 Florida Rock Indus., Ine. v. United States, Fed. Cl. 1999 WL 692836 (Aug. 31, TEE osibe en es .. 22-23 Gil v. Inland Wetlands & Watercourses Agency, S96 A.2d 1868 (Comm. 1901) -.c.......sccccccc.cc.-0c...... 24 Guimont v. City of Seattle, 896 P.2d 70, 81 (Wash. Ct. App.), rev. denied, 904 P.2d 1157 (Wash. BUIED seetinticnsssustingitaaicieee somes 17 K&K Constr., Ine. V. Department of Natural Re- sources, 575 N.W.2d 531 (Mich.), cert. denied, 550 @ Ge OP Cie ki 15 vi TABLE OF AUTHORITIES—Continued Page Kavanau v. Santa Monica Rent Control Bd., 941 P.2d 851, 860 (Cal. 1997), cert. denied, 118 S. Ct. BEC (1998) ............cecececeescnseereeerecessesarncesnrerensnsacnanes 16 Loretto v. Teleprompter Manhattan CATV Corp., ABS U.S. 419 (1982) ...........--ccecceeeeeeceeseeeeneeesesesenens 8, 11 Loveladies Harbor, Inc. v. United States, 28 F.3d 1171 (Fed. Cir. 1994) ............. Seer ee Se A 6, 14-15 Lucas Vv. South Carolina Coastal Council, 505 U.S. 1003 (1992) ........-.-..-..s-cecsscsnccses-nseesncnnsosenenennanenasoes passim Lucas Vv. South Carolina Coastal Council, 404 S.E.2d 895 (S.C. 1991), rev'd, 505 U.S. 1003 (19GB) ....-.-.....--s.ososcecesecnseensensennnrsnnnsensnasnnsnanscesenssserss 10 McQueen v. South Carolina Coastal Council, 496 S.E.2d 643 (S.C. Ct. App. 1998), cert. granted (S.C. Mar. 18, 1999) ...........------s---e-esesrecsesete 14-15 Nollan v. California Coastal Comm'n, 483 U.S. 825 (10BT) iccceececcisosnsosscnscudssasensvnncsanstannensnonstenssaceussnawasssss 21-22 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978). .........-...-...---scec0----n00s can 5 eas passim Steinbergh v. City of Cambridge, 604 N.E.2d 1269 (Mass. 1992), cert. denied, 508 U.S. 909 (19938).. 11, 17, 24 Stevens v. City of Canon Beach, 510 U.S. 1207 (1904) nnn. nencccececccscssensesnecsosesenseenenensenennenss penal nee 27 Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg’l Planning Agency, 34 F. Supp.2d 1226 (D. Nev. 19080) .:......-;........- iste 13 United States v. Riverside Bayview Homes, Inc., ATA U.S. 121 (1985) .......-..-----:---eceeeeesessertesteseesetens 22 Vatalaro v. Department of Envtl. Regulation, 601 So.2d 1223 (Fla. Dist. Ct. App.), rev. denied, 613 So.2d 3 (Fila. 1992) ..........-.---------- de epee ea 24 Woodbury Place Partners Vv. City of Woodbury, 492 N.W.2d 258 (Minn. Ct. App. 1992), review de- nied (Minn.), cert. denied, 508 U.S. 960 (29BB) ana ccn ence ences coensnensnensstasnssasccneresetnessenannbasannnnsass 11 Constitutional Provisions, Statutes and Rules Takings Clause, U.S. Const., Meseeeth F cccsievcvncenonnh 2 28 U.S.C. § 1254 (1) .....-...---.0----00+2-- Saeren PA aE ations 1 28 U.S.C. § 1295 (a) (3) ...-------------ecceeceeeeeeeeseeesseceteeerts 1 scent vii TABLE OF AUTHORITIES—Continued Page Endangered Species Act, 16 U.S.C. §§ 1531 et seq... 4 Tucker Act, 28 U.S.C. § 1491 (a) (1) 000... 27 Bs Ta Ts TD cass es aeadleceakadigchensceadaks aeRO ak TE ODE 25 | EEE Rarer We mrere Rui eRe oe IN a 26 Other Authorities Abraham, Windfalls or Windmills: The Right of a Property Owner to Challenge Land Use Reg- ulations, 13 J. Land Use & Envtl. L. 161 (1997). 26 Callies, Regulatory Takings and the Supreme Court, 28 Stetson L. Rev. 523 (1999) 18, 26 Comment, A Constitutionally Valid Justification for the Enactment of No-Growth Ordinances, 19 a es Bas CE a i 26 Federal Appeals Court Rules Against Developer in Precedent-Setting Property Rights Case, DOJ Press Release (Sept. 2, 1999) .....0 2, 26 W. Fischel, REGULATORY TAKINGS: Law, Eco- NOMICS, AND POLITICS (1995) 18 Freilich, Garvin & Martin, Regulatory Takings: Factoring Partial Deprivations Into the Taking Equation, in TAKINGS: LAND-DEVELOPMENT CONDITIONS AND REGULATORY TAKINGS AFTER DOLLAN AND LucASs (D. Callies ed. 1996)... 18 Gardner, Banking on Entrepreneurs: Wetlands, Mitigation Banking, and Takings, 81 Iowa L. I 19 Hetzel & Gough, Assessing the Impact of Dolan v. City of Tigard on Local Governments’ Land-Use Powers, in TAKINGS: LAND-DEVELOPMENT COoN- DITIONS AND REGULATORY TAKINGS AFTER DOL- LAN AND LuCAS (D. Callies ed. 1996) _........ 13 18 D. Lucas, LUCAS vs. THE GREEN MACHINE (1995). 19-20 Mandelker, Investment-Backed Expectations in Taking Law, 27 Urb. Law. 215 (1995) 19 Ogle, The Ongoing Struggle Between Private Prop- erty Rights and Wetlands Regulation: Recent Developments and Proposed Solutions, 64 U. ee ee es Ee COE ee ee 19 viii TABLE OF AUTHORITIES—Continued Oswald, Cornering the Quark: Investment-Backed Expectations and Economically Viable Uses in Takings Analysis, 70 Wash. L. Rev. 91 (1995).. Ward, Lucas v. South Carolina Coastal Council: A Categorical Rule in the Muddle of Takings Analysis, 61 UMKC L. Rev. 165 (1992) Washburn, “Reasonable Investment-Backed Ex- pectations” As a Faclor in Defining Property Interest, 49 Wash. U. J. Urb. & Contemp. L. 63 REIN nccesnctinet Page nN a | 19 19 IN THE Supreme Court of the United States No. 99- ——— Lioyp A. Goon, Jr., Petitioner, Vv. UNITED STATES, Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Federal Circuit PETITION FOR A WRIT OF CERTIORARI Petitioner Lloyd A. Good, Jr., respectfully petitions this Court for a writ of certiorari to review the judgment of the Court of Appeals for the Federal Circuit in this case. OPINIONS BELOW The opinion of the Federal Circuit is reported at 189 F.3d 1355 and reprinted in the appendix hereto (“App.”) at la. The opinion of the Court of Federal Claims is reported at 39 Fed. Cl. 81 and reprinted at 16a. JURISDICTION The judgment of the Federal Circuit was entered on August 31, 1999. App. la. The jurisdiction of the Fed- eral Circuit was based on 28 U.S.C. § 1295(a)(3). The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). 2 CONSTITUTIONAL PROVISION INVOLVED The Takings Clause of the Fifth Amendment to the United States Constitution provides: “[NJor shall pri- vate property be taken for public use without just compensation.” INTRODUCTION In this case, the Federal Circuit rendered what the Department of Justice has called “a significant environ- mental ruling” that “sets an important precedent.” F ederal Appeals Court Rules Against Developer in Precedent- Setting Property Rights Case, DOJ Press Release (Sept. 2, 1999). The court held that the categorical rule of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) —that a taking occurs, without more, when a regulation deprives a property owner of all economically viable use of his land—is not categorical after all. Instead, a prop- erty owner who has suffered even a total deprivation must also show that he had reasonable, investment-backed expectations—a_ factor considered in ordinary takings cases. That holding is both contrary to Lucas and in con- flict with the decisions of numerous other courts. The Federal Circuit also held that petitioner, who was denied a permit to build on his property because of the discovery of two endangered species, lacked such reason- able expectations as a matter of law, even though he bought the property before the enactment of the Endan- gered Species Act and the placing of the species on the endangered list. The court held that in light of “the growing consciousness of and sensitivity toward environ- mental issues,” petitioner should have foreseen that “the regulatory climate” would in the future bar his proposed development. Thus, the Federal Circuit held that, even if petitioner suffered a deprivation of all economically viable use of his property. and even though he purchased that property prior to the enactment of the statute that barred 3. his plans, he was not entitled to compensation. The deci- sion below plainly warrants this Court’s review. STATEMENT OF THE CASE 1. In 1973, petitioner Lloyd A. Good, Jr., and his mother purchased 40 acres of undeveloped land in the Florida keys known as “Sugarloaf Shores” for approxi- mately $93,000. Good invested an equivalent amount in the land over the years trying to develop the property. Good first took steps to develop the property in 1980, when he hired a land planning and development firm. App. 2a, 20a-21a. In March 1981, Good submitted a permit application to the United States Army Corps of Engineers (“Corps”). Good proposed filling or excavating approximately 13 acres of salt marsh to develop a 54-lot subdivision and a 48-slip marina. The Corps granted the requested permit in May 1983. The Corps also issued Good a modified permit in January 1984. Under both permits, all work had to be completed within five years. App. 2a-3a. Good also pursued the necessary state and county approvals and received permits from the Florida Depart- ment of Environmental Regulation and the Monroe County Commission in 1983 and 1984. respectively. At this point, in mid-1984, Good had received federal, state, and county approval to develop his property. App. 3a. In September 1984, however, the Florida Department of Community Affairs appealed the county’s approval to ‘the Florida Land and Water Adjudicatory Commission (“FLAWAC”), which, in 1986, ordered the county to review the project under a more stringent standard. Good filed suit against FLAWAC. challenging its order as an 1 Sugarloaf Shores was included in a rrouy of properties the Goods purchased for $2 million. Good inheritéd his mother’s 30° interest in the property upon her death in A975. App. 20a & n.2. 4 uncompensated taking and an unreasonable exercise of police power. That suit was settled in 1987. The action therefore returned to the county which, in November 1989, once again granted preliminary approval of Good's plans. App. 4a-Sa. The FLAWAC proceedings and litigation consumed most of the five-year limit on Good's permit from the Corps. The Corps, however, granted Good a new permit in October 1988 allowing substantially the same develop- ment. In July 1990, out of caution that final county approval of his plans for 54 lots and 48 slips might be denied, Good submitted a second permit application to the Corps for a scaled-down development consisting of only 16 homes, a canal, and a tennis court. App. 5a-6a. Subsequent to the issuance of Good’s 1988 permit, however, the Lower Keys marsh rabbit was listed as an endangered species under the Endangered Species Act, 16 U.S.C. §$§ 1531 et seg. The Corps therefore consulted with the Fish and Wildlife Service (“FWS”) to ensure that the requested new permit would not jeopardize the marsh rabbit. App. 6a. In February 1991, the FWS issued a biological opinion in which it concluded that the project proposed in Good's 1990 permit application would not jeopardize the marsh rabbit but nevertheless recommended that the permit be denied. Shortly after the FWS issued its opinion, the silver rice rat was also listed as an endangered species. In December 1991 FWS issued a second biological opin- ion concluding that both the 1988 and 1990 plans would jeopardize the marsh rabbit as well as the silver rice rat. The new opinion recommended that the Corps deny Good’s 1990 permit application and modify the 1988 permit along lines suggested by FWS. App. 6a-7a. In March 1994, the Corps denied Good's 1990 permit application based on the threat to the endangered rabbit FI 5 and rat. It also informed Good that his 1988 permit had expired. App. 7a. 2. In July 1994, Good filed suit in the Court of Fed- eral Claims alleging that the Corps’ denial of his 1990 Xermit application violated the Takings Clause of the Fifth Amendment. He argued that the Corps’ “denial of iis 1990 permit application pursuant to the Endangered Species Act (‘ESA’) of 1973, 16 U.S.C. 88 1531-1543 ‘1994), deprived his property of all economic value, and that his claim therefore falls squarely within the per se lakings rule of Lucas * * *.” App. 16a-17a. He argued ‘in the alternative that even if his claim does not fall within the Lucas per se rule, he had reasonable investment- backed expectations in his development plans. and there- fore can demonstrate a taking under Penn Central Trans- portation Co. v. New York, 438 U.S. 104 (1978).” App. 17a. The Court of Federal Claims recognized that Penn Central “identified three factors to consider in analyzing 1 regulatory takings claim: the character of the govern- nent action, the economic impact of the regulation, and the extent to which the regulation interferes with reason- able, investment-backed expectations.” App. 43a. The Court of Federal Claims also recognized that in Lucas this Court had articulated a “per se rule” that “a regula- lion depriving property of all economic value would give tise to a taking without considering the other Penn Central factors.” App. 44a. Nevertheless, the Court of Federal Claims granted summary judgment in favor of the govern- ment, holding that the 1990 permit denial did not consti- tute a taking under the per se rule of Lucas or the multi- factor analysis of Penn Central. App. 18a. 6 3. a. The Federal Circuit affirmed.” Significantly, the court did not dispute Good’s contention that he had been deprived of all economically viable use of his property. App. 9a. Instead, the court held, as a matter of law, that even such a total deprivation is insufficient to establish a per se taking under Lucas. The Federal Circuit stated that “[rJeasonable, invest- ment-backed expectations are an element of every regula- tory takings case.” App. 10a (emphasis added) (citing Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1179 (Fed. Cir. 1994)). Good had argued that no such showing need be made to establish a categorical taking under Lucas, but the Federal Circuit disagreed, saying that “we agree with the Loveladies Harbor court that the Supreme Court in Lucas did not mean to eliminate the requirement for reasonable, investment-backed expecta- tions to establish a taking.” App. 10a. The Federal Cir- cuit explained: It is true that the Court in Lucas set out what it called a “categorical” taking “where regulation denies all economically beneficial or productive use of land.” 505 U.S. at 1015. The Lucas Court. however, clari- fied that by “categorical” it meant those “categories of regulatory action [that are] compensable without case-specific inquiry into the public interest advanced in support of the restraint.” Id. (emphasis added). A Lucas-type taking, therefore, is categorical only in the sense that the courts do not balance the impor- tance of the public interest advanced by the regula- tion against the regulation’s imposition on private 2 Since the Court of Federal Claims ruled on a motion for sum- mary judgment, the Federal Circuit correctly recognized that it had to view the facts in the light most favorable to Good and could affirm only if the government were entitled to judgment as a matter of law. App. 8a. ee eens ricenrereanenaeaaienilieaaneeieemn i 7 property rights. [App. 10a-11a (emphasis and brack- ets added by the Federal Circuit).] b. Good “alternatively argue[d] that he had reason- able, investment-backed expectations of building a residen- tial subdivision on his property.” App. 1la (emphasis in original). He contended that “since the ESA [Endangered Species Act] did not exist when he bought his land, he could not have expected to be denied a permit based on its provisions.” App. 12a. The Federal Circuit. however, held that Good’s “lack of reasonable, investment-backed expectations defeats his takings claim as a matter of law.” App. 15a.° While conceding that Good’s “position is not entirely unreasonable,” the Federal Circuit said that “we must ultimately reject it” in “view of the regulatory climate that existed when [Good] acquired the subject property.” App. 12a. The Federal Circuit explained that, although the ESA had not yet been enacted when Good purchased the property in 1973, between that year and 1980—when Good first took steps to develop the property—‘“public concern about the environment resulted in numerous laws and regulations affecting land development” and this “ris- ing environmental awareness translated into ever-tightening land use regulations.” App. 13a, 14a. Good, said the court, must “be presumed to have been aware of the greater general concern for environmental matters during the period of 1973 to 1980.” App. 14a. The Federal Circuit thus concluded that “TiJn light of the growing consciousness of and sensivitivity toward en- vironmental issues, [Good] must also have been aware 3 Good signed a contract to purchase the property on April 18, 1973, and closed on the property on October 8, 1973. App. 20a. The ESA was enacted in December 1973. App. 13a. The marsh rabbit and silver rice rat were not placed on the endangered species list until 1990 and 1991, respectively. App. 6a-7a. 8 that standards could change to his detriment, and that regulatory approval could become harder to get.” App. 15a. In other words, the Federal Circuit held that, even though the ESA had not yet come into existence when Good purchased his property, and even though the two protected species on his property had not yet been listed as endangered, Good lacked a reasonable expectation of building on the land—as a matter of law—because he should have foreseen that the wave of environmentalism in the 1970s would resu!t in laws and regulations preclud- ing him from developing his property. REASONS FOR GRANTING THE WRIT I. THE FEDERAL CIRCUITS DECISION IS CON- TRARY TO LUCAS AND CONFLICTS WITH THE DECISIONS OF OTHER FEDERAL AND STATE APPELLATE COURTS. In this case, the Federal Circuit squarely held that a regulation depriving a property owner of all economically viable use of his property is not a categorical taking under Lucas; the property owner must also satisfy the reasonable, investment-backed expectations prong of the Penn Central test. As shown below, that holding is con- trary to the per se rule of Lucas and conflicts with numer- ous other federal and state appellate court decisions, as well as critical commentary. A. The Federal Circuit Misconstrued The Categorical Rule Of Lucas. 1. In Lucas, this Court explained that there are two types of takings cases “in which we have found categorical treatment appropriate.” 505 U.S. at 1015. “The first encompasses regulations that compel the property owner to suffer a physical ‘invasion’ of his property.” /d. (citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)). The second is “where regulation denies all economically beneficial or productive use of 9 land.” Jd. Lucas involved the second category—the “ “total taking.’ Jd. at 1030. The Court explained that, without more, “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.” 7d. at 1019 (emphasis in original). The Court made clear that the “ ‘total taking’ inquiry” (id. at 1030) is a per se rule. Cases involving deprivations of all economic value, said the Court, are subject to “categorical formulation” and obviate the need for “case-specific inquiry.” Jd. at 1019 n.8, 1015. See id. at 1026 (“our categorical rule lis] that total regulatory takings must be compensated” ).° The Federal Circuit’s holding that a deprivation of all economically viable use, by itself, is not enough to estab- lish a per se taking is a blatantly incorrect misreading of Lucas. In Lucas this Court specifically contrasted its “categorical formulation” with “takings analysis gener- ally.” in which the extent of a property owner’s reason- able, investment-backed expectations is a relevant factor. Id. at 1019 n.8 (citing Penn Central). When a property owner suffers less than a total deprivation, the multi-factor Penn Central test—including the expectations factor—ap- plies. That factor is not considered in a Lucas-type case.® 4The Court recognized a single exception to the per se rule. A regulation that renders property valueless is not a taking if the regulation merely prohibits uses of property that were already im- permissible under “background principles of the State’s law of prop- erty and nuisance.” 505 U.S. at 1029. 5 See also Lucas, 505 U.S. at 1046-47 (Blackmun, J., dissenting) (“From now on, there is a categorical rule finding these regulations to be a taking unless the use they prohibit is a background common- Jaw nuisance or property principle.”); id. at 1067 (Stevens, J., dis- senting) (referring to the Court’s ‘per se rule for total regulatory takings’); id. at 1076 (statement of Souter, J.) (‘the concept of total (and, in the Court’s view, categorically compensable) taking’’). 6In Lucas, the South Carolina Supreme Court, while concluding (wrongly) that regulations depriving all economic value do not 10 2. The Federal Circuit seized upon this Court’s state- ment that there are two “ ‘categories of regulatory action [that are] compensable without case-specific inquiry into the public interest advanced in support of the restraint.’ ” App. 10a-1la (quoting Lucas, 505 U.S. at 1015) (em- phasis and brackets added by the Federal Circuit). Based on this, the Federal Circuit held that “[a] Lucas-type taking, therefore, is categorical only in the sense that the courts do not balance the importance of the public inter- est advanced by the regulation against the regulation’s imposition on private property rights.” App. lla. But the Federal Circuit overlooked the context in which the statement was made. In Lucas, the South Carolina Su- preme Court had rejected David Lucas’ takings claim on the ground that the State had an important public pur- pose in preserving its beaches. See 505 U.S. at 1009-10, 1020-22. Thus, the point of this Court’s statement was that the South Carolina Supreme Court had erred in holding that the public interest behind a regulation can defeat a takings claim when the regulation deprives all economically viable use of property. See id. at 1031 (“We emphasize that to win its case South Carolina must do more than proffer the legislature’s declaration that the uses Lucas desires are inconsistent with the puble in- terest”). This Court surely did not mean to say that considera- tion of the public interest is the only factor otherwise necessarily result in a taking, conceded that “[i]f Lucas can demon- strate a deprival of all economically viable use of his land, there is no need to weigh factors such as the economic impact of the regula- tion and/or the regulation’s interference with investment backed expectations. Such a showing by Lucas would by necessity weigh these factors in his favor.” Lucas v. South Carolina Coastal Coun- cil, 404 S.E.2d 895, 900 n3. (S.C. 1991), rev’d, 505 U.S. 1003 (1992). The views of the Federal Circuit are thus even more ex- treme than those of the South Carolina Supreme Court rejected in Lucas. ——EEEE aa a0 11 relevant to takings analysis that is omitted in a Lucas case. The Court cited that factor only as an example. See Stein- bergh v. City of Cambridge, 604 N.E.2d 1269, 1273 (Mass. 1992) (deprivation of all economic value is a taking under Lucas “without regard to other considera- tions, such as the public interest sought to be advanced”) (emphasis added), cert. denied, 508 U.S. 909 (1993): Woodbury Place Partners v. City of Woodbury, 492 N.W.2d 258, 260 (Minn. Ct. App. 1992) (Lucas “rec- ognized two categories of regulatory action that constitute compensable takings without a case-specific inquiry or balancing of public and private interests’) (emphasis added), review denied (Minn.), cert. denied, 508 US. 960 (1993).7 3. It is clear that consideration of investment-backed expectations plays no role in the other category of per se takings. In Loretto, this Court held that a permanent physical occupation of property “is a taking without re- gard to other factors that a court might ordinarily exam- ine.” 458 U.S. at 432. And the Court contrasted this per se rule with the “ordinar[y] ad hoc inquiry” in which “the extent to which fa regulation] interferes with in- vestment-backed expectations” is relevant. Jd. Thus, the Court held the physical invasion at issue (a New York law requiring property owners to permit the installation of cable television lines) was a taking despite the New York Court of Appeals’ ruling that the law did “not in- terfere with any reasonable investment-backed expecta- tions.” Jd. at 425 (emphasis added). It would be odd indeed for expectations to be relevant to one kind of categorical takings analysis but not to the other, espe- cially since one of the reasons for the Lucas rule is that “total deprivation of beneficial uses is, from the land- 7 See also Babbitt v. Youpee, 519 U.S. 234, 243 n.8 (1997) (dis- tinguishing the Penn Central test from “the more stringent analysis employed in Lucas’’). 12 owner's point of view, the equivalent of a physical appro- priation.” 505 U.S. at 1017 (emphasis added)? B. The Federal Circuit’s Decision Conflicts With The Decisions Of Numerous Other Federal And State Appellate Courts. 1. The Federal Circuit's reading of Lucas squarely conflicts with that of the Ninth Circuit. In Dodd v. Hood River County, 136 F.3d 1219, 1228 (9th Cir.), cert. denied, 119 S. Ci. 278 (1998), the Ninth Circuit held as follows: In Lucas, the Supreme Court held that there is a categorical taking when a regulation prohibits all economically beneficial use of land, and no balanc- ing of other factors commonly analyzed in takings law—reasonable investment backed expectations and legitimate government interest—would be necessary. The Ninth Circuit went on to say that the Penn Central test is used when “there has been no categorical taking” and the “government regulation prohibits something less than all economically beneficial use.” Jd. In Del Monte Dunes at Monterey, Ltd. v. City of Mon- terey, 95 F.3d 1422 (9th Cir. 1996), aff'd, 526 U.S. 687 (1999), the City denied Del Monte a permit to develop its ocean-front property into a residential complex. The Ninth Circuit held that the jury properly “found the City liable for a taking because it denied Del Monte all eco- nomically viable use of its property.” 95 F.3d at 1432. The court noted that “compensation is required where regulations ‘leave the owner of land without economically beneficial or productive options for its use.’” Jd. (quot- 8 The Federal Circuit’s view that “[r]easonable, investment- backed expectations are an element of every regulatory takings case,” App. 10a (emphasis added), is demonstrably incorrect. See, e.g., Hodel v. Irving, 481 U.S. 704, 715 (1987) (finding a taking even though presence of such expectations was “dubious”’). EO 13 ing Lucas, 505 U.S. at 1018). In contrast, said the court, “where an owner is denied only some economically viable uses, a taking may still have occurred where gOov- ernment action has a sufficient economic impact and in- terferes with distinct investment-backed expectations.” Id. (emphasis added). In keeping with this distinction, the Ninth Circuit affirmed the judgment that Del Monte had been deprived of all economically viable use—and hence suffered a taking—without considering whether Del Monte had reasonable, investment-backed expectations. See id. at 1432-34. Tahoe-Sierra Preservation Council, Inc. v. Tahoe Re- gional Planning Agency, 34 F. Supp.2d 1226 (D. Nev. 1999), involved a takings challenge to regulations re- Stricting development around Lake Tahoe. In keeping with the Ninth Circuit’s precedents and understanding of Lucas, the court observed that if the regulations deprived the property owners of some, but not all. economically viable use of their land, the three Penn Central factors must be considered—but that if all economically viable use is denied, this “would constitute what have been re- ferred to as ‘categorical’ takings with no further inquiry necessary.” Id. at 1240 (emphasis added). Under this framework, the court first held that “consideration of the Penn Central factors clearly leads to the conclusion that there was no taking. Given the temporary nature of the regulations at issue here, we cannot say that the plaintiffs’ reasonable, investment-backed expectations were unduly interfered with.” Id. The court went on to hold. however, that a categorical taking under Lucas had occurred be- cause the regulations “did in fact deny the plaintiffs all economically viable use of their land.” Jd. at 1245. The conflict between Tahoe-Sierra and the decision below thus could not be more direct. Under the Federal Circuit’s rule, the property owners’ lack of reasonable, investment- 14 backed expectations would have caused their Lucas claim to fail. In Chioffi v. City of Winooski, 676 A.2d 786 (Vt. 1996), the plaintiff property owner was denied a permit to reconstruct a building destroyed by fire. The Vermont Supreme Court held that the “plaintitf! must show a denial of all economically beneficial use to prevail.” /d. at 790. This was so, the court explained, because the “plaintiff had no ‘distinct investment-backed expectations’ in re- storing” the building. /d. (quoting Penn Central). Since “[a|ny expectation of a three-unit residential development was no longer ‘reasonable,’ * * * only the total denial of all economically beneficial use would, under the circum- stances, create a taking.” Jd. (quoting Lucas). Thus, un- like the court below, the Vermont Supreme Court recog- nized that a Lucas claim is viable even in the absence of reasonable, investment-backed expectations. In McQueen v. South Carolina Coastal Council, 496 S.E.2d 643 (S.C. Ct. App. 1998), cert. granted (S.C. Mar. 18, 1999), the property owner was denied permis- sion to develop two beachfront lots in Myrtle Beach. Con- cluding that “the case at bar epitomizes a remarkable similitude to Lucas,” id. at 648, the South Carolina Court of Appeals held that “McQueen has suffered a textbook taking” under Lucas because “the Coastal Council’s de- nial of McQueen’s permit applications for the two lots deprives him of all economically beneficial use of the land.” /d. at 650. Notably, McQueen’s expectations played no part in the court’s decision, a point made clear by a dissenting judge who, relying on the same Federal Cir- cuit case cited by the court below in this case, would have held there was no taking because McQueen lacked reason- able, investment-backed expectations. See id. at 652 (Connor, J., concurring in part & dissenting in part).® 9 Judge Connor wrote that in Loveladies Harbor, “the Federal Circuit of the United States Court of Appeals, interpreting Lucas ee 15 In Adams Outdoor Advertising v. City of East Lansing, S91 N.W.2d 404 (Mich. Ct. App. 1998), it was held that the City’s sign code, which made unlawful and re- quired removal of Adams’ rooftop billboards, “denfied] Adams all economically beneficial use of its property” and thus “constituted a categorical taking.” Jd. at 411, 412. The Michigan Court of Appeals quoted and fol- lowed the Michigan Supreme Court's instruction that, in cases involving a “ ‘categorical taking, a revicwing court need not apply a case-specific analysis, and the owner should automatically recover for a taking of his prop- erty.” Jd. at 411 (quoting K & K Constr., Inc. v. De- partment of Natural Resources, 575 N.W.2d 531, 535 (Mich.), cert. denied, 119 S. Ct. 60 (1998)). Only in non-categorical cases does the court consider “ ‘the ex- tent by which the regulation has interfered with distinct. investment-backed expectations.’” /d. (quoting K & K Constr., 575 N.W.2d at 539-540). Thus, the Adams Out- door Advertising court held that there had been a cate- gorical taking without any considération of such ex- pectations. In City of Miami v. Keshbro, Inc., 717 So.2d 601 (Fla. Dist. Ct. App. 1998), review granted, 729 So.2d 392 (Fla. 1999), property owners challenged the City’s clo- sure of their motel. The Florida District Court of Ap- peals held that “Lucas provides the controlling principles” because the City’s action “denied the owners all econom- ically beneficial uses of the property.” /d. at 604. And in light of the entire history of regulatory takings, held courts must consider whether or not the property owner had distinct ‘investment- backed expectations’ in determining whether or not a regulatory taking had occurred. * * * Under a Lucas and Loveladies Harbor analysis, I do not believe the state has taken McQueen's property. * * * McQueen took no actions to protect his investment, and there- fore failed to show he had ‘investment-backed expectations’ under Lucas and Loveladies Harbor.” 496 S.E.2d at 652 (citations omitted). 16 the court rejected the City’s argument that the Penn Cen- tral test—including consideration of “the extent to which the regulation interferes with distinct investment-backed expectations,” id. at 603—should be applied. The court held that “[i]n this case, however, we are not faced with the Penn Central test as the owners here have * * * been deprived of all economic uses of the Stardust Motel, thus ; Lucas applies.” Id. at 603-604. Numerous other state appellate and supreme courts have also recognized that the Penn Central factors—in- | cluding whether the property owner had reasonable in- vestment-backed expectations—are to be considered in a partial takings case, but not in a Lucas case involving deprivation of ail economic value. See Anchorage v. Sandberg, 861 P.2d 554, 557 (Alaska 1993) (“cases where a regulation denies a landowner of all economically feasible use of the property” are “per se takings” under Lucas; in non-categorical cases, “courts must engage in a case-specific inquiry to deter~ine whether governmental action effects a taking”); Kavanau v. Santa Monica Rent Control Bd., 941 P.2d 851, 860 (Cal. 1997) (“When a regulation * * * does not deprive the property owner of all economic use of the property, a reviewing court must evaluate the regulation in light of the ‘factors’ * * * in Penn Central’), cert. denied, 118 S. Ct. 856 (1998): Central Colo. Water Conservancy Dist. v. Simpson, 877 P.2d 335, 346-347 (Colo. 1994) (under Lucas, “regu- lations that effectively deny all economically beneficial use of land” are “prima facie takings’; “When a chal- lenged regulation does not * * * render the property eco- nomically useless, the Court has adopted a factually based approach that encompasses such factors as * * * inter- ference with reasonable investment-backed expectations”); Bormann Vv. Board of Supervisors, 584 N.W.2d 309, 316 (Iowa 1998) (“There are two categories of state action that must be compensated without any further inquiry eT Se. — — — . . _—_—a=EI=IC~O 17 into additional factors”; “in all other cases” a court “en- gages in a case-by-case examination” of the Penn Central factors) (emphasis in Original), cert. denied, 119 S. Ct. 1096 (1999); Steinbergh v. City of Cambridge, 604 N.E.2d at 1274 (Mass. 1992) (“If the governmental reg- ulation neither results in a physical invasion of the prop- erty nor deprives a landowner of all economically bene- ficial use of land, there may nevertheless be a regulatory taking based, in part, on * * * the extent to which the regulation has interfered with a property owner’s distinct investment-backed expectations.”); FIC Homes of Black- stone, Inc. v. Conservation Comm'n of Blackstone, 673 N.E.2d 61, 67 (Mass. App. Ct. 1996) (“As provided by Lucas * * * if application of the wetlands by-law de- prived the plaintiffs of all economically beneficial use of their property, a per se taking would have been effected”: “If, however, the regulation has resulted in less than a total loss of the economic value of the plaintiffs’ property, the question * * * must be analyzed under pre-Lucas prin- ciples requiring the consideration of several interrelated factors [including] * * * reasonable, investments-backed expectations”), rev. denied, 676 N.E.2d 55 (Mass. 1997); Clay County v. Harley & Susie Bogue, Inc., 988 S.W.2d 102, 106-107 (Mo. Ct. App. 1999) (under Lucas “a property owner is entitled to compensation for a regula- tory taking without a ‘case specific inquiry’”; if a case “does not fall into either of thef] two per se taking cate- gories, courts are to undertake a factual inquiry” under Penn Central); Guimont v. City of Seattle, 896 P.2d 70. 76 (Wash. Ct. App.) (“If a property owner can estab- lish a per se violation and the government cannot rebut the claim, a taking has occurred. No further analysis is required, and the owner is entitled to ‘categorical treat- ment’ and must receive just compensation under the Fifth Amendment.”), rev. denied, 904 P.2d 1157 (Wash. 1995). a 18 2. The Federal Circuit’s reading of Lucas is also in- consistent with the scholarly commentary upon the deci- sion. For example, Professor David Callies has recently written that “[t]he principle rule from Lucas is, of course, that when a regulation takes all economically beneficial use from an owner’s land, it is a taking under the Fifth Amendment without further investigation” (unless the nuisance exception applies). Callies, Regulatory Takings and the Supreme Court, 28 Stetson L. Rev. 523, 552 (1999) (emphasis added). He noted that although the Lucas Court did not reject the relevance of the “ ‘frustra- tion of investment-backed expectations’ standard” in all takings cases, “the Court chose not to apply [it] in Lucas because it characterized the regulatory taking as total.” Id. at 548. He concluded that “[t]he Lucas rule is cate- gorical, or per se. * * * What the investment-backed expectations were of the owner when the property was acquired is in all probability irrelevant. That's a part of the partial takings analysis.” Jd. at 575. Professor Callies is by no means alone in his reading of Lucas. See W. Fischel, REGULATORY TAKINGS: Law, ECONOMICS, AND Po .itics 61 (1995) (when “regulation leaves an owner without any economic value, the case-by- case balancing of Penn Central is to be discarded”); Freilich, Garvin & Martin, Regulatory Takings: Factor- ing Partial Deprivations Into the Taking Equation, in TAKINGS: LAND-DEVELOPMENT CONDITIONS AND REGU- LATORY TAKINGS AFTER DOLLAN AND Lucas 183 n.44 (D. Callies ed. 1996) (Lucas “giv[es] landowners two bites at the takings apple. First the landowner can seek to establish entitlement to a liability determination under the new categorical rule * * * and, if unsuccessful, may still present a takings claim under the traditional multifactor test of Penn Central”); Hetzel & Gough, Assessing the Impact of Dolan v. City of Tigard on Local Governments’ Land-Use Powers, in TAKINGS, supra, at 228 (“When the 19 governmental action is not * * * a complete deprivation of all economically viable use, the cases will be decided by analyzing the economic impact of the regulation and the extent to which the regulation has interfered with dis- tinct investment-backed expectations.”); Washburn, “Rea- sonable Investment-Backed Expectations” As a Factor in Defining Property Interest, 49 Wash. U. J. Urb. & Con- temp. L. 63, 93 n.214 (1996) (“Justice Scalia’s cate- gorical formulation does not depend on inquiry into the interference with investment-backed expectations. Justice Scalia reserved that inquiry for non-categorical cases.”); Gardner, Banking on Entrepreneurs: Wetlands, Mitiga- tion Banking, and Takings, 81 Iowa L. Rev. 527, 543 (1996) (“If the permit denial allows the landowner no use of the property, thereby destroying the property’s value, categorical treatment is appropriate and the denial constitutes a taking per se. There is no need to consider any other factors; the landowner is entitled to just com- pensation.”); Mandelker, Investment-Backed Expectations in Taking Law, 27 Urb. Law. 215, 224 (1995) (Lucas’ “holding clearly means courts are not to apply the Penn Central balancing test if a land-use regulation is a taking per se.”); Ogle, The Ongoing S. ruggle Between Private Property Rights and Wetlands Regulation: Recent De- velopments and Proposed Solutions, 64 U. Colo. L. Rev. 573, 583 (1993) (“Any discussion of the landowner’s investment-backed expectations was conspicuously absent from the body of the [Lucas] opinion. Justice Scalia * * * did not include the factor as part of his categorical ‘total takings’ rule.”); Ward, Lucas v. South Carolina Coastal Council: A Categorical Rule in the Muddle of Takings Analysis, 61 UMKC L. Rev. 165, 165 (1992) (the Lucas “total deprivation rule adds a second categorical rule to takings analysis where inquiry into the three traditional takings factors is not necessary”) 1° 1” The plaintiff in Lucas also understood this Court’s opinion to mean that “when a regulation takes all economic value, that con- ESS 20 | Il. THE FEDERAL CIRCUIT’S HOLDING THAT GOOD LACKED REASONABLE, INVESTMENT-BACKED EXPECTATIONS CANNOT BE RECONCILED WITH THIS COURT’S TAKINGS CASES, OTHER APPEL- LATE COURT DECISIONS, OR THE FACTS OF THIS CASE. Even if this Court disagrees with our interpretation of Lucas, it should review the Federal Circuit’s holding that, as a matter of law, Good lacked a reasonable expectation of receiving a permit to develop his property—even though he purchased it prior to the enactment of the En- dangered Species Act and the listing of the two species— because he should have been aware that “the growing consciousness of and sensitivity toward environmental is- sues” would ultimately change “the regulatory climate” so as to bar his planned development. App. 15a, 12a. 1. To see the error and effect of the Federal Circuit's decision, the Court need look no further than Lucas. Under the Federal Circuit’s approach, David Lucas’ tak- ings challenge surely would have failed. Lucas purchased two beachfront lots in Charleston County, South Caro- lina in 1986. He was denied a permit to build homes on those lots based on the South Carolina Beachfront Man- agement Act of 1988. Although Lucas purchased his lots prior to the Beachfront Management Act, it is clear that his takings claim would not have survived the Federal Circuit’s mode of analysis. This Court’s own opinion notes that “South Carolina’s expressed interest in inten- sively managing development activities in the so-called ‘coastal zone’ dates from 1977 when, in the aftermath of Congress’ passage of the federal Coastal Zone Manage- ment Act of 1972, the legislature enacted a Coastal Zone stitutes a unique category of taking, and requires compensation from the regulating body without meeting any other tests.” David Lucas, LUCAS VS. THE GREEN MACHINE 232 (1995) (emphasis added). ee 21 Management Act of its own.” 505 U.S. at 1007 (cita- tions omitted). See also id. at 1074 (Stevens, J., dis- senting) (“South Carolina’s Act is best understood as part of a national effort to protect the coastline, one initiated by the federal Coastal Zone Management Act of 1972.”); id. at 1037-38 (Blackmun, J., dissenting) (noting that in 1986 South Carolina formed a “Blue Ribbon Commission on Beachfront Management”). Thus, it could have been said in Lucas, just as easily as the Federal Circuit said here, that “[i]n light of the growing consciousness and of sensitivity toward environmental issues. Appellant must also have been aware that standards could change to his detriment, and that regulatory approval would become harder to get.” App. 15a. The Federal Circuit's approach also would have re- quired a different outcome in Nollan v. California Coastal Commission, 483 U.S. 825 (1987). In Nollan, this Court held that the California Coastal Council could not, con- sistent with the Takings Clause. condition its grant of a permit to the Nollans to rebuild their beachfront house on their agreement to grant the public an easement across their property. Justice Brennan dissented on the ground that, “[w]ith respect to appellants’ investment-backed ex- pectations, appellants can make no reasonable claim to any expectation of being able to exclude members of the public from crossing the edge of their property to gain access to the ocean.” Jd. at 857. Justice Brennan ob- served that the Nollans “were aware that stringent regu- lation of development along the California coast had been in place since at least 1976. The specific deed restriction to which the Commission sought to subject them had been imposed since 1979 on all 43 shoreline new development projects in the” area. Jd. at 859. Thus. the Nollans “were on notice that new developments would be ap- proved only if provisions were made for lateral beach 22 access.” Id. at 860. See also id. at 866 (Blackmun, J., dissenting). This Court, however, rejected the dissenters’ analysis and held that the Nollans’ rights were not “altered be- cause they acquired the land well after the Commission had begun to implement its policy.” Jd. at 833-834 n.2. The Court explained that “[s]o long as the Commission could not have deprived the prior owners of the easement without compensating them, the prior owners must be un- derstood to have transferred their full property rights in conveying the lot.” /d. 2. In this case, the Federal Circuit’s conclusion that Good lacked reasonable, investment-backed expectations —as a matter of law, no less—is simply insupportable. Good’s permit was denied based on the Endangered Spe- cies Act and the presence of two endangered species on his property, yet Good purchased the property in 1973, cight months prior to enactment of the ESA, and some 17 years before the marsh rabbit was listed as endangered in 1990. (The silver rice rat was listed the next year.)™ Good’s actual notice of, or ability to foresee, what the reeulatery regime might be in the future after he pur- chased the property is not relevant to the reasonability of his expectation of developing the property. See Nollan, 483 US. at 833-834 n.2.12 But even if it were, Good did not 11 The fact that Good had to obtain various permits prior to developing his property does not mean that his expectations were unreasonable. On the contrary, “the very existence of a permit system implies that permission may be granted, leaving the land- owner free to use the property as desired.” United States v. River- side Bayview Homes, Inc., 474 U.S. 121, 127 (1985). 120n the same day the Federal Circuit decided this case, the Court of Federal Claims held in Florida Rock Industries, Inc. V. United States, Fed. Cl. , 1999 WL 692836 (Aug. 31, 1999), that the Army Corps of Engineers’ denial of a permit to mine lime- stone pursuant to the Clean Water Act was a taking. Holding that 23 —and could not—know or predict that he would be de- nied permission to develop his property based on a statute not yet enacted and the presence of species only later determined to be endangered.}3 When Good purchased the property, he had a reason- able expectation of obtaining government approval of his development plans under the existing regulatory scheme. Indeed, the record reflects that he nearly succeeded in securing every permit he needed. As the Federal Circuit noted, by mid-1984 “Good had received federal, state, and county approval to develop the property.” App. 3a. The Army Corps of Engineers granted Good no fewer than three permits or permit modifications between 1983 and 1988. App. 3a, Sa. Thus, the Federal Circuit’s con- clusion that Good “could not have had a reasonable ex- pectation that he would obtain approval” to develop his property is refuted by the actual events in this case. App. 12a.14 3. The Federal Circuit’s holding that Good lacked rea- sonable, investment-backed expectations despite having “Florida Rock’s reasonable, investment-hacked expectations were frustrated,” the court explained that “[t]he Clean Water Act was passed after Florida Rock already owned the land” and thus “the Clean Water Act could not have put Florida Rock on notice that its property might be taken from it so as to destroy investment-backed expectations.” Jd. at *21 (emphasis added). 13 Even if it could somehow be said that Good should have fore- seen the passage of the Endangered Species Act, he would also have had to foresee an event 17 years down the road, because that is when the ESA first had legal effect against him upon the listing of an endangered species found on his property. 14 That Good in his purchase contract “acknowledged both the necessity and difficulty of obtaining regulatory approval” does not mean that his expectations were unreasonable. App. 13a. If cer- tainy were the standard, no developer could ever demonstrate rea- sonable expectations. Furthermore, the reason cited for that diffi- culty had nothing to do with endangered species. 24 purchased prior to the enactment of the ESA conflicts with Gil v. Inland Wetlands and Watercourses Agency, 593 A.2d 1368 (Conn. 1991). There, the property owner was “denied his fourth application for a building permit because of the perceived adverse impact that the proposed development would have had on the wetlands portion of his property.” Jd. at 1369. And although “the property was classified, at the time of purchase * * * as wetlands subject to the authority of the agency,” id. at 1370, the Connecticut Supreme Court held that the property owner had a reasonable, investment-backed expectation that he could build upon his lot. See id. at 1372-74. The decision below also conflicts with Vatalaro V. Department of Environmental Regulation, 601 So.2d 1223 (Fla. Dist. Ct. App.), rev. denied, 613 So.2d 3 (Fla. 1992). In that case, the property owners claimed that state wetlands protection legislation deprived them “of all economically viable or reasonable uses” of their property, but the trial court granted summary judgment against them on the ground that the State’s denial of rer- mission to build on the land “did not frustrate a reason- able and distinct investment backed expectation.” 60] So.2d at 1224. The Florida District Court of Appeals, however, reversed and held that “fijn the case at bar. all economically viable use of the property has been taken.” Id. at 1229. And the court rejected the argument that the property owners lacked reasonable expectations be- cause they “purchased their property after the enactment of the Warren S. Henderson Wetlands Protection Act of 1984.” Id. (emphasis added). The facts of Gil and Vatalaro thus go beyond those here, since Good purchased his property before the enactment of the Endangered Species Act.?° 15 Cf. Steinbergh, 604 N.E.2d at 1274 (“The challenged rerulation did not interfere with the plaintiffs’ investment-backed expectations. 25 The implications of the Federal Circuit’s decision in this case are far-reaching. Under the decision below, anyone who purchased property prior to the wave of environmental legislation enacted in the 1970s can be denied the right to build on his land—without just com- pensation. Similarly, no one who purchases property today can be sure that he will be compensated should his currently-lawful development plans be barred by future legislation. As Professor Lynda Oswald has written, the approach taken by the Federal Circuit in this case “leads to perverse outcomes”: If we accept the premise that enactment of one piece of legislation puts a property owner “on notice” that more restrictive regulations might be enacted in the future as well, we find ourselves faced with a reductio ad absurdum—the existence of the first regulation will defeat any claims the owner might have regard- ing the sanctity of the property interest in the future. By merely enacting one regulation (even a relatively non-intrusive one that is clearly a legitimate exercise of the police power), the government opens a path for eventual, incremental taking of the entire prop- erty interest without payment of compensation. [Os- wald, Cornering the Quark: Investment-Backed Ex- pectations and Economically Viable Uses in Takings Analysis, 70 Wash. L. Rev. 91, 114 (1995).] Ill. THERE ARE COMPELLING REASONS TO GRANT CERTIORARI IN THIS CASE. A number of “compelling reasons” support the grant of certiorari in this case. S. Ct. R. 10. First, as discussed above, there is a square conflict between the decision They acquired the property when the regulation was already in effect.”) ; FIC Homes of Blackstone, 673 N.E.2d at 70 (“When FIC purchased the property in 1992, the Blackstone wetlands by-law was already in effect * * * FIC therefore had no reasonable expectation that it could build’). 26 below and numerous other federal and state appellate decisions. Second, that stark conflict is over the correct reading of this Court’s opinion in Lucas, an issue only this Court can resolve. Third, the dispute over what showing is necessary to establish a categorical or per se taking under Lucas is unquestionably “an important federal question,” id. 10(a), recurring in the law on a regular basis. As the Justice Department said in its own press release, this is a “sig- nificant” and “precedent-setting” case. Fourth, the Federal Circuit is but one of a number of courts that are deeply confused about—if not openly hostile to—the total taking rule of Lucas.® “Cases at- tempting to decide when a regulation becomes a taking are among the most litigated and perplexing in current law.” Eastern Enterprises v. Apfel, 118 S. Ct. 2131, 2155 (1998) (Kennedy, J., concurring in the judgment and dissenting in part). This case presents the Court with an opportunity to clarify this important area of law. Fifth, it is extremely significant that the decision below was rendered by the Federal Circuit, which has exclusive 16 See Callies, 28 Stetson L. Rev. at 551 (“A survey of state and federal decisions reveals * * * [t|he standard for total takings is often confused with the standard for partial takings. In some in- stances, state courts appear to ignore the holding in Lucas alto- yether.”); id. at 556, 557 (“As clear as Lucas appears to be with respect to total takings, many courts are having an inordinately difficult time applying the standard. * * * [T]here is some purpose- ful ignoring of the per se rule by some state and federal courts.) ; Abraham, Windfalls or Windmills: The Right of a Property Owner to Challenge Land Use Regulations, 13 J. Land Use & Envtl. L. 161, 163 (1997) (“a number of courts are not applying the Lucas and Nollan holdings.” ) ; Comment, A Constitutionally Valid Justification for the Enactment of No-Growth Ordinances, 19 U. Haw. L. Rev. 93, 142 (1997) (“Some lower courts * * * have shown a genuine reluctance to follow the categorical path created by Justice Scalia in Lucas.”). 27 jurisdiction over appeals from the Court of Federal Claims, which, pursuant to the Tucker Act, 28 U.S.C. § 1491 (a)(1), has exclusive jurisdiction over all takings cases against the United States exceeding $10,000. See Eastern Enterprises, 118 S. Ct. at 2144 (plurality opinion) .7 Thus, the Federal Circuit’s erroneous decision will control every substantial takings case brought against the federal government. Finally, although either one of the holdings at issue in the two questions presented in this case would, standing alone, warrant review by this Court, the combination of the two holdings makes the need for review imperative. It may be no exaggeration to say that the effect of the decision below is to render this Court’s “opinion in Lucas * * * a nullity” in the Federal Circuit. Stevens v. City of Cannon Beach, 510 U.S. 1207, 1211 (1994) (Scalia, J., joined by O’Connor, J., dissenting from the denial of certiorari). Under the Federal Circuit’s first holding, a property owner whose land has been deprived of all economic value does not have a Lucas claim unless he can also prove that he had reasonable, investment-backed expecta- tions. And under the court’s second holding, a property owner will be held to lack such expectations—even if nothing barred his proposed development on the day he purchased the land—if the development is contrary to some future law or as yet unpromulgated regulation. The combined effect of the two holdings may well be to make successful Lucas claims even rarer than the marsh rabbit or the silver rice rat. 17 The exclusive jurisdiction of the Court of Federal Claims and the Federal Circuit over most takings cases against the federal gov- ernment explains why the conflicting decisions discussed herein mainly come from state appellate courts. 28 CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be granted. Respectfully submitted, E. BARRETT PRETTYMAN, JR.* JOHN G. ROBERTS, JR. H. CHRISTOPHER BARTOLOMUCCI HOGAN & HARTSON L.L.P. 555 Thirteenth Street, N.W. Washington, D.C. 20004 (202) 637-5685 PRL APOE AD RPL BOG M aN tithe ceTUAt Seooresbscsons ogee 8 RICHARD R. NAGEOTTE NAGEOTTE, NAGEOTTE & NAGEOTTE 385 Garrisonville Road Suite 201 & 202 Stafford, Virginia 22554 (540) 659-5050 * Counsel of Record Counsel for Petitioner APPENDICES la APPENDIX A UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT 97-5138 Lioyp A. Goon, Jr., Plaintiff-A ppellant, Vv. UNITED STATES, Defendant-A ppellee. DECIDED: August 31, 1999 Before NEWMAN, Circuit Judge, SMITH, Senior Circuit Judge, and GAJARSA, Circuit Judge. SMITH, Senior Circuit Judge. This is a regulatory takings case. Lloyd A. Good, Jr. sued the federal government on the basis that it effectively took his property without just compensation when the U.S. Army Corps of Engineers denied him permission to dredge and fill on land he owns in the Florida Keys. The U.S. Court of Federal Claims granted summary judgment to the United States. Lloyd A. Good, Jr. v. United States, 39 Fed. Cl. 81 (1997). We affirm. 2a Facts Lloyd A. Good, Jr. (“Good”) and his mother pur- chased a forty-acre tract of undeveloped land on Lower Sugarloaf Key, Florida, in 1973, as part of a much larger real estate purchase. The tract, known as Sugar- loaf Shores, consists of thirty-two acres of wetlands (a combination of salt marsh and freshwater marsh) and eight acres of uplands. The sales contract for the land stated that: The Buyers recognize that certain of the lands cov- ered by this contract may be below the mean high tide line and that as of today there are certain prob- lems in connection with the obtaining of State and Federal permission for dredging and filling opera- tions. Good’s efforts to develop the property began in 1980, when he hired Keycology, Inc., a land planning and de- velopment firm, to obtain the federal, state, and county permits necessary to develop Sugarloaf Shores into a resi- dential subdivision. In their contract, Good and Key- cology acknowledged that “obtaining said permits is at best difficult and by no means assured.” Good submitted his first permit application to the U.S. Army Corps of Engineers (“Corps”) in March 1981. The Corps permit was required for dredging and filling navi- gable waters of the United States, including wetlands adjacent to navigable waters, under the Rivers and Har- bors Act of 1899? and under § 404 of the Clean Water 1 Good became the sole owner of the property on his mother’s death in 1975. 233 U.S.C. § 403 (1994). ‘aii 3a Act.’ Good proposed filling 7.4 acres of salt marsh and excavating another 5.4 acres of salt marsh in order to create a 54-lot subdivision and a 48-slip marina. The Corps granted the requested permit in May 1983. Good modified the permit in response to county environmental concerns and the modified permit was issued January 6, 1984. Under both permits, the authorized work had to be completed within five years. See 33 CFR § 325.6 (1998). Good and Keycology were also pursuing the required State and county permits. In February 1983, the state Department of Environmental Regulation issued a permit for the requested dredging and filling. The state permit was conditioned, however, on Good obtaining county approval for the project. On May 10, 1983, Good applied for county approval of the dredge-and-fill proposal that had been approved by the federal and state permits. The county determined that the plan was a “major development” subject to a more stringent environmental review than under standard pro- cedures. After Good appealed the “major development” determination, the County Commission ordered the county to process the permit application under standard review procedures. The county granted Good’s permit on July 13, 1984. At this point, Good had received federal, state. and county approval to develop the property. Florida law, however, presented one more hurdle, in the form of the Environmental Land and Water Management Act, FLa. STAT. ANN. §§ 380.012 to 380.12 (West 1997). The Act created a statutory regime for regulating development 3 Pub. L. No. 92-500 § 2, 86 Stat. 884 (Oct. 18, 1972), amending the Federal Water Pollution Control Act (codified as amended at 33 U.S.C. § 1344 (1994)). 4a in Areas of Critical State Concern, including the entire Florida Keys.* Under the Act, the Florida Department of Community Affairs (“DCA”) reviews local land develop- ment orders in Areas of Critical State Concern and may appeal those orders to the Florida Land and Water Ad- judicatory Commission (“FLAWAC”).> See Fia. STAT. ANN. § 380.07 (West 1997). On September 10, 1984, the DCA appealed the county’s approval of Good’s dredge- and-fill project. FLAWAC held that the county had erred in subjecting Good’s plan only to the standard review, and on May 29, 1986 ordered the county to review the project as a “major development.” Making matters worse for Good, the county in the meantime had adopted a new land use plan and new de- velopment regulations. The new regulations prohibited dredging to provide access to docks, prohibited filling of salt marsh for building sites, and limited filling of salt marsh to 10% of the salt marsh on a parcel. Monror County, FLA. Cope, art. II, § 9.5-345 (1986). Since Good’s plan involved dredging to provide boat ac- cess between the proposed marina and Upper Sugarloaf Sound, and required filling roughly 25% of the parcel’s salt marsh to provide building sites, Good’s project would not have been allowed under the new regulations. Good filed suit in state court, alleging that the state had taken his property without just compensation and that FLAWAC’s order was an unreasonable exercise of police 4 The Keys were designated an Area of Critical State Concern in 1977. Although the Florida Supreme Court later held the Act’s procedure for designating Areas of Critical State Concern to be unconstitutional, see Askew v. Cross Key Waterways, 372 So. 2d 913, 918 (Fla. 1978), the Florida Legislature formally so designated the Keys in the Florida Keys Protection Act of 1979, FLA. STAT. ANN. § 380.0552 (West 1997). 5 FLAWAC is composed of the Governor and Cabinet of the State of Florida. FLA. STAT. ANN. §§ 14.202, 380.07 (West 1997 ). 5a power. That suit was settled on October 22, 1987. The consent decree provided that Good’s application would be evaluated under the repealed major development review standard but that any future development of Sugarloaf Shores would be subject to later-enacted land use regu- lations. Good’s efforts to get state and county approval for his project had used up most of the five-year time limit on the federal permits issued in 1983 and 1984. Good there- fore requested that the Corps extend the time limits of the permits. The Corps denied Good’s request to reissue the permits without changes, but granted a new permit allowing substantially the same development on October 17, 1988. The county gave preliminary approval to Good’s plan on November 9, 1989. Final county approval, however, was subject to fifteen conditions, the most significant of which was approval of the project by the South Florida Water Management District ( SFWMD). Good filed an application with SWFMD. A few months later, SFWMD notified Good that its staff recommended denying the application, based on “the unmitigated loss of wetlands, the loss of habitat for the endangered species within them [i.e., the state-listed mud turtle and Lower Keys marsh rabbit] and the lack of reasonable assurance that future unmitigated wetlands destruction will not oc- cur due to the lack of the above-requested dedication.” In view of this negative review, Good requested that his application be removed from SFWMD’s agenda. He never reactivated the application or otherwise obtained SEWMD approval for his project. Apparently despairing of ever obtaining approval for his 54-lot plan, Good submitted a new, scaled-down plan 6a to the Corps in July 1990. In his 1990 permit applica- tion, Good proposed building only sixteen homes, together with a canal and tennis court. Although the new plan greatly reduced the overall number of houses, it located all of them in the wetlands area. The overall wetlands loss, therefore, was only reduced from 10.53 acres to 10.17 acres. Between the time the Corps issued Good’s 1988 permit and the time he applied for the 1990 permit, the Lower Keys marsh rabbit was listed as an endangered species under the Endangered Species Act (“ESA”). See 16 U.S.C. § 1533 (1994); 55 Fed. Reg. 25,588 (June 21, 1990). The Corps was therefore required to consult with the Fish and Wildlife Service (“FWS”) to insure that issuing the requested permit would not place the continued existence of the species in jeopardy. See 16 U.S.C. § 1536 (a)(2) (1994). Under this so-called “section 7 consultation,” FWS prepared a biological opinion as to whether the proposed permit would put the rabbit in jeopardy. In its biological opinion, issued February 19, 1991, FWS concluded that the project proposed in Good’s 1990 permit application would not jeopardize the continued existence of the marsh rabbit. Nevertheless, it recommended denial of the permit based on the development’s overall environmental impact.® The FWS biological opinion also instructed the Corps to notify Good not to proceed under his 1988 permit. The 1988 permit had been issued before the marsh rabbit was listed as an endangered species and proposed a differ- ent project than the 1990 permit application. Therefore, 6 FWS made its recommendation pursuant to the Fish and Wild- life Coordination Act of 1934, 16 U.S.C. §§ 662-666 (1994). The Corps was not required to follow this recommendation. | 7a the FWS “no jeopardy” finding did not apply to the earlier permit, and development pursuant to the 1988 permit could violate the ESA. On May 14, 1991, the Corps notified FWS that Good intended to proceed with the project allowed by the 1988 permit. The Corps also noted that it did not believe the project would jeopardize the marsh rabbit, but noted that the silver rice rat had been listed as an endangered species subsequent to the FWS biological opinion on the 1990 permit application. See 56 Fed. Reg. 19,809 (April 30, 1991). In response, FWS initiated consultation under the ESA and notified the Corps that it would prepare a new biolog- ical opinion evaluating the effect of Good’s 1988 plan on both endangered species. On December 18. 1991, FWS released its new biological opinion, concluding that both the 1988 and 1990 plans jeopardized the continued exist- ence of both the Lower Keys marsh rabbit and the silver rice rat." FWS recommended that the Corps deny the 1990 application and modify the 1988 permit to include FWS’s “reasonable and prudent alternatives,” which in- cluded locating all homesites in upland areas and limiting water access to a single communal dock. The Corps denied Good’s 1990 permit application on March 17, 1994. At the same time, the Corps notified Good that his 1988 permit had expired. The Corps based its denial on the threat that either project posed to the endangered rat and rabbit. Proceedings in the Court of Federal Claims On July 11, 1994, Good filed suit. alleging that the Corps’ denial of his permit worked an uncompensated 7 FWS had earlier concluded that the 1990 plan did not place the marsh rabbit in jeopardy, but changed its mind in view of informa- tion showing further decline in the marsh rabbit population. 8a taking in violation of the Fifth Amendment. On cross- motions for summary judgment, the Court of Federal Claims granted summary judgment in favor of the govern- ment. The court held that the Corps’ denial of Good's permit did not constitute a “per se” taking under Lucas vy. South Carolina Coastal Council, 505 U.S. 1003 (1992), because the ESA did not require that the property be left in its natural state and because the government had shown that the property retained value, either for development or for sale of transferrable development rights (TDRs), after the permit denial. The court found that Good had not presented sufficient evidence to show a reasonable dispute over the value of the property and rejected Good’s legal challenge to the use of TDRs in the value calculation. The court also held that there had been no taking under the ad hoc analysis of Penn Central Transporta- tion Co. v. New York City, 438 U.S. 104, 124 (1978). The court held that Good lacked reasonable, investment- backed expectations since federal and state regulations imposed significant restrictions on his ability to develop his property both at the time he purchased it and at the time he began to develop it. Finding the lack of reason- able expectations determinative, the court held that no taking had occurred. Jurisdiction and Standard of Review This court has jurisdiction over an appeal from a final judgment of the Court of Federal Claims. See 28 U.S.C. § 1295(a)(3) (1994). We review a grant of summary judgment completely and independently, construing the facts in the light most favorable to the non-moving party. Summary judgment is appropriate only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See State of Montana v. United States, 124 F.3d 1269, 1273 (Fed. Cir. 1997). 9a Analysis The Fifth Amendment to the United States Constitution provides that private property shall not “be taken for public use, without just compensation.” U.S. Const. amend. V. The government can “take” private property by either physical invasion or regulatory imposition. See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982); Lucas, 505 U.S. 1003. Appellant in this case alleges a regulatory taking. It has long been recognized that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). The Supreme Court has set out “several factors that have particular significance” in determining whether a regulation effects a taking. Penn Central, 438 U.S. at 124. These factors are (1) the character of the government action, (2) the extent to which the regulation interferes with distinct, investment-backed expectations, and (3) the economic impact of the regulation. See id. See also Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1179 (Fed. Cir. 1994); Florida Rock Inds., Inc. v. United States, 18 F.3d 1560, 1567 (Fed. Cir. 1994); Creppel v. United States, 41 F.3d 627, 632 (Fed. Cir. 1994). Because we find the expectations factor dispositive, we will not further discuss the character of the government action or the economic impact of the regulation. Reasonable, Investment-backed Expectations For any regulatory takings claim to succeed, the claim- ant must show that the government’s regulatory restraint interfered with his investmént-backed expectations in a manner that requires the government to compensate him. See Loveladies Harbor, 28 F.3d at 1179. The require- 10a ment of investment-backed expectations “limits recovery to owners who can demonstrate that they bought their property in reliance on the non-existence of the challenged regulation.” Creppel, 41 F.3d at 632. These expectations must be reasonable. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005-1006 (1984). Reasonable, investment-backed expectations are an ele- ment of every regulatory takings case. See Loveladies Harbor, 28 F.3d at 1179. See also id. at 1177 (“In legal terms, the owner who bought with knowledge of the re- straint could be said to have no reliance interest, or to have assumed the risk of any economic loss. In economic terms, it could be said that the market had already dis- counted for the risk, so that a purchaser could not show a loss in his investment attributable to it.”); Creppel, 41 F.3d at 632 (“One who buys with knowledge of a re- straint assumes the risk of economic loss.”). Good argues that the Supreme Court has eliminated the requirement for reasonable, investment-backed expec- tations, at least in cases where the challenged regulation eliminates virtually all of the economic value of the land- owner’s property. In support, Appellant cites Lucas, 505 U.S. at 1015, and argues that Loveladies Harbor should be reversed as contrary to Lucas. However, we agree with the Loveladies Harbor court that the Supreme Court in Lucas did not mean to elim- inate the requirement for reasonable, investment-backed expectations to establish a taking. It is true that the Court in Lucas set out what it called a “categorical” taking “where regulation denies all economically beneficial or productive use of land.” 505 U.S. at 1015. The Lucas Court. however. clarified that by “categorical” it meant those “categories of regulatory action [that are] compensa- ble without case-specific inquiry into the public interest lla advanced in support of the restraint.” Id. (emphasis added). A Lucas-type taking, therefore, is categorical only in the sense that the courts do not balance the importance of the public interest advanced by the regulation against the regulation’s imposition on private property rights. See Loveladies Harbor, 28 F.3d at 1179. The Lucas Court did not hold that the denial of all economically beneficial or productive use of land elimi- nates the requirement that the landowner have reasonable, investment-backed expectations of developing his land. In Lucas, there was no question of whether the plaintiff had satisfied that criterion. See id. at 1006-1007 (“In 1986, petitioner David H. Lucas paid $975,000 for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to build single- family homes. In 1988, however, the South Carolina Legislature enacted the Beachfront Management Act. S.C. Code Ann. § 48-39-250 et seq. (Supp. 1990), which had the direct effect of barring petitioner from erecting any permanent habitable structures on his two parcels.”). In addition, it is common sense that “[o]ne who buys with knowledge of a restraint assumes the risk of eco- nomic loss. In such a case, the owner presumably paid a discounted price for the property. Compensating him for a ‘taking’ would confer a windfall.” Creppel, 41 F.3d at 632 (citations omitted). Appellant alternatively argues that he had reasonable, investment-backed expectations of building a residential subdivision on his property. Appellant reasons that the permit requirements of the Rivers and Harbors Act and the Clean Water Act are irrelevant to his reasonable expectations at the time he purchased the subject property, 12a because he obtained the federal dredge-and-fill permits required by those acts three times, and was only denied a permit, based on the provisions of the Endangered Species Act (“ESA”), when two endangered species were found on his property. Therefore, since the ESA did not exist when he bought his land, he could not have expected to be denied a permit based on its provisions. Appellant’s position is not entirely unreasonable, but we must ultimately reject it. In view of the regulatory climate that existed when Appellant acquired the subject prop- erty, Appellant could not have had a reasonable expecta- tion that he would obtain approval to fill ten acres of wetlands in order to develop the land. In 1973, when Appellant purchased the subject land, federal law required that a permit be obtained from the Army Corps of Engineers in order to dredge or fill in wetlands adjacent to a navigable waterway. Even in 1973, the Corps had been considering environmental criteria in its permitting decisions for a number of years. See Del- tona Corp. v. United States, 657 F.2d 1184, 1187 (Ct. Cl. 1981) (“[O]n December 18, 1968, in response to a grow- ing national concern for environmental values and related federal legislation, the Corps [announced that it] would consider the following additional factors in reviewing per- mit applications: fish and wildlife, conservation, pollution, aesthetics, ecology, and the general public interest.”). See also id. at 1190 (“[S]ince the late 1960’s the regula- tory jurisdiction of the Army Corps of Engineers has sub- stantially expanded pursuant to § 404 of the [Clean Water Act] and—under the spur of steadily evolving legislation— the Corps has greatly added to the substantive criteria governing the issuance of dredge and fill permits.”). By 1973, the Corps had denied dredge-and-fill permits solely on environmental grounds. See, e.g., Zabel v. Tabb, 430 F.2d 199 (Sth Cir. 1970). 13a In addition to the federal regulations, development of the subject land required approval by both the state of Florida and Monroe County. See the discussion of Good’s permit application process, supra. At the time he bought the subject parcel, Appellant acknowledged both the necessity and the difficulty of ob- taining regulatory approval. The sales contract specifically stated that “[t]he Buyers recognize that . . . as of today there are certain problems in connection with the obtain- ing of State and Federal permission for dredging and filing operations.” Appellant thus had both constructive and actual knowledge that either state or federal regulations could ultimately prevent him from building on the prop- erty. Despite his knowledge of the difficult regulatory path ahead, Appellant took no steps to obtain the required regulatory approval for seven years. During this period, public concern about the environ- ment resulted in numerous laws and regulations affecting land development. For example: * In December 1973, the Endangered Species Act was enacted. 16 U.S.C. § 1531 et seq. (1994). The ESA prohibited federal actions that would be “likely to jeopardize the continued existence of any endan- gered species,” 16 U.S.C. § 1536(a)(2), and made it unlawful to “take” (i.e., kill, harass, ete.) any endangered animal. See 16 U.S.C. §§ 1532(19), 1538(a)(1)(B). * In 1975, the Corps of Engineers issued regulations broadening its interpretation of its § 404 authority to regulate dredging and filling in wetlands. See United States v. Riverside Bayview Homes, 474 U.S. 121, 123-124 (1985). In 1977, the Corps further broad- ened its definition of wetlands subject to § 404’s permit requirements. See id. l4a * Also in 1977, Florida enacted its own Endangered and Threatened Species Act, Fra. Stat. ANN. S 372.072 (West 1997), further emphasizing the public concern for Florida’s environment. In 1979, the Florida Keys Protection Act was enacted, desig- nating the Keys an Arca of Critical State Concern. Fra. Stat. ANN. § 380.0552 (West 1997). Thus, rising environmental awareness translated into ever-tightening land use regulations. Surely Appellant was not oblivious to this trend. The picture emerges, then, of Appellant in 1973 ac- knowledging the difficulty of obtaining approval for his project, then waiting seven years, watching as the applica- ble regulations got more stringent, before taking any steps to obtain the required approval. When in 1980 he finally retained a land development firm to seck the required permits, he acknowledged that “obtaining said permits 1s at best difficult and by no means assured.” While Appellant's prolonged inaction does not bar his takines claim, it reduces his ability to fairly claim sur- prise when his permit application was denied. Appellant was aware at the time of purchase of the need for regula- tory approval to develop his land. He must also be pre- sumed to have been aware of the greater general concern for environmental matters during the period of 1973 to 1980. As our predecessor court stated on similar facts: “(When Deltona acquired the property in 1964, it knew that the development it contemplated could take place only if it obtained the necessary permits from the Corps of Engineers. Although at that time Deltona had every reason to believe that those permits would be forthcoming when it subsequently sought them, it also must have been aware that the standards and conditions governing the issuance of permits could change. Deltona had no assur- 15a ance that the permits would issue, but only an expecta- tion.” Deltona, 657 F.2d at 1193. Here, as in Deltona, Appellant “must have been aware that the standards and conditions governing the issuance of permits could change.” /d. In light of the growing consciousness of and sensitivity toward environmental issues, Appellant must also have been aware that stand- ards could change to his detriment, and that regulatory approval could become harder to get. We therefore conclude that Appellant lacked a reason- able, investment-backed expectation that he would obtain tue regulatory approval needed to develop the property at issue here. We have previously held that the govern- ment is entitled to summary judgment on a regulatory takings claim where the plaintiffs lacked reasonable, in- vestment-backed expectations, even where the challenged government action “substantially reduc[ed] the value of plaintiffs’ property.” Avenal v. United States, 100 F.3d 933, 937 (Fed. Cir. 1996). Here, too, Appellant’s lack of reasonable, investment-backed expectations defeats his takings claim as a matter of law. Conclusion Appellant lacked the reasonable, investment-backed ex- pectations that are necessary to establish that a govern- ment action effects a regulatory taking. Therefore, we : affirm the grant of summary judgment to the United States. AFFIRMED. 16a APPENDIX B IN THE UNITED STATES COURT OF FEDERAL CLAIMS No. 94-442L (Filed August 22, 1997) LiLoyp A. Goon, JR., Plaintiff, V. Tue UNITED STATES, Defendant. OPINION MEROW, Judge. Plaintiff Lloyd A. Good Jr. alleges that the U.S. Army Corps of Engineers (“Corps”) denial of his 1990 permit application to dredge and fill wetlands and access navi- gable waters gave rise to a taking under the Fifth Amendment of the U.S. Constitution entitling him to $2.500,000.00 in just compensation. This matter is now before the court on cross-motions for summary judgment on liability. The principal issues raised in those motions is whether the federal denial deprived plaintiff's property of all economic value and, if not, whether that denial interfered with reasonable investment-backed expectations. Plaintiff claims that the Corps denial of his 1990 per- mit application pursuant to the Endangered Species Act 17a (“ESA”) of 1973, 16 U.S.C. §§ 1531-1543 (1994), de- prived his property of all economic value, and that his claim therefore falls squarely within the per se takings rule of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Plaintiff advances two main arguments in support of this Lucas claim. First, plaintiff maintains that even if development would not violate the ESA, develop- ment pursuant to U.S. Fish and Wildlife Service (“FWS”) recommendations would not be economically viable, and therefore has the same effect as an outright prohibition on development. Plaintiff argues in the alternative that even if his claim does not fall within the Lucas per se rule, he had reason- able investment-backed expectations in his development plans, and therefore can deronstrate a taking under Penn Central Transportation Co. v. New York, 438 U.S. 104 (1978). Defendant contends that plaintiff's claim fails under the Lucas “antecedent inquiry” which requires that plaintiff demonstrate title to the right claimed to have been taken. In particular, defendant argues that plaintiff could not derive any economically viable use from_ his property without obtaining access to navigable waters of the United States. Defendant maintains that since the federal naviga- tional servitude reserves that right to the federal govern- ment, the only economically relevant property interest at issue here belonged to the federal government, not the plaintiff. Defendant also maintains that plaintiff's claim fails under this inquiry because he did not acquire a vested right in his development plans under Florida law. Defendant argues in the alternative that the federal re- strictions do not have any effect on the value of plaintiff's property because plaintiff cannot show a “reasonable probability” that such development would be permitted 18a under state and county law. Thus, defendant concludes, plaintiff can neither demonstrate that the federal denial caused any economic impact, nor frustrated reasonable investment-backed expectations under Penn Central. It is decided that no taking occurred in this case. As discussed more fully below, although plaintiff has a prop- erty interest that is the proper subject of a takings claim, that claim does not fall within the Lucas per se rule. Contrary to plaintiff's contention, the ESA does not re- quire that his property be left in its natural state. Further, the EWS restrictions on development imposed pursuant to the ESA do not deprive plaintiff's property of all economic value. The property retains value both for de- velopment, or for the sale of transferable development rights. Plaintiff's claim also fails under Penn Central because the Corps denial did not interfere with reasonable invest- ment-backed expectations. At the time of plaintiff's initial 1973 investment in his property, both the federal and state regulatory regimes at issue here imposed significant development restrictions on plaintiff's use of that property. Although plaintiff would otherwise be constructively charged with knowledge of those restrictions, plaintiff ex- plicitly acknowledged those restrictions, and their poten- tial to thwart development, in his contract for the pur- chase of the property. Later, when plaintiff began to invest in preparing the property for development in 1980, the regulatory regime had been further strengthened. Again, plaintiff acknowledged those restrictions, and their potential to thwart development, in the contract making his first major investment in that development. Land development at both points in time was a highly regulated business, and plaintiff's sought uses for his prop- erty were subject to restriction or prohibition under this 19a regulatory regime. While plaintiff was free to assume the investment risks involved after considering that regime, the Fifth Amendment does not require the federal govern- ment to act as his surety should that investment prove to be ill-taken. Accordingly, defendant’s motion for sum- mary judgment is granted. Plaintiff’s motion for summary judgment is denied. FACTS “Sugarloaf Shores,” the 40 acre property at issue in this case, is located on Lower Sugarloaf Key, Monroe County (“the county”), Florida. Approximately half of the county hosts a portion of Everglades National Park, established in 1947 to protect the marshes of the Ever- glades. The remaining half of the county consists of the Florida Keys, a string of islands off the southern tip of Florida designated in 1979 as a state area of critical en- vironmental concern. Lower Sugarloaf Key is located approximately 15 miles northeast of Key West, the county seat and the employment center of the Keys. Sugarloaf Shores consists of a total of 32 acres of wetlands, approximately 26 acres of which are locally rare salt marsh fringed with mangrove trees and 6 acres of which are freshwater sawgrass marsh.! These salt and freshwater wetlands are separated by 8 acres of upland located in the southwest corner of the property. Much of the property is periodically submerged by the tide from Upper Sugarloaf Sound. a navigable water of the United States and an Outstanding Florida Water. The property provides habitat for several endangered species, including 1“The term wetlands means those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do sup- port, a prevalence of vegetation typically adapted for life in satu- rated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.” 33 C.F.R. § 328.3(b) (1996). 20a the Lower Keys marsh rabbit, the mud turtle and the silver rice rat. On April 18, 1973, plaintiff entered into a contract to purchase Sugarloaf Shores and several other properties on Lower Sugarloaf Key and nearby Saddlebunch Key. In that contract, plaintiff acknowledged that: The Buyers recognize that certain of the lands cov- ered by this Contract may be below the mean high tide line and that as of today there are certain prob- lems in connection with the obtaining of State and Federal permission for dredging and filling opera- tions. Pif. Summ. J. Ex. 1 at 7. On October 8, 1973, plaintiff acquired Sugarloaf Shores and these other properties for a total cost of $2 million.? Plaintiff estimates that his basis in Sugarloaf Shores is $92,718.78, and alleges that he has spent approximately this amount in his effort to develop the property. The record reveals that the bulk of this investment took place after 1980.3 Pif. Summ. 5, x: A. 2 Plaintiff and his mother acquired Sugarloaf Shores together with a nearby motel area and marina known as Sugarloaf Lodge, parcels adjacent to the motel, additional parcels on Lower Sugarloaf Key, as well as property on Saddlebunch Key, which was subse- quently developed as a recreational vehicle park. Plaintiff inherited his mother’s 30°/ interest in Sugarloaf Shores, together with her interest in these other properties, upon her death in 1975. Photographs of Sugarloaf Shores presented at a hearing before this court on November 20, 1996, revealed that none of the other properties involved in the 1973 transaction were adjacent to Sugar- loaf Shores. Defendant has not contended that these other prop- erties should be considered in this takings claim. 3 Plaintiff claims $3,800.00 in expenditures for the purchase fill and consulting services prior to 1974, but has only provided docu- 2la In October 1980, plaintiff hired Keycology, a land planning and development firm, to obtain the county, State and federal permits necessary to proceed with the development of Sugarloaf Shores. According to that agree- ment, plaintiff sought to obtain the permits necessary to prepare the property for development, and then sell the property to another party for actual development.* The agreement specifically provided that Keycology would be paid a fixed fee of $24,000.00 for its good faith effort to obtain those permits within two years, and an additional fee should those permits issue. The agreement further provided that the additional fee would be equal to one-third of the value that Sugarloaf Shores was in- creased above its undeveloped value. Plaintiff and Key- cology set that undeveloped value at $350,000.00, and acknowledged that the property would be worth much more if the necessary permits for development could be obtained. Although Sugarloaf Shores was zoned for single family residential use and platted for a 76-lot development with canals, plaintiff and Keycology acknowledged that “obtaining said permits is at best difficult and by no means assured... .” Def. Summ. J. Ex. 33. mentation for $2,900.00 of these expenditures. Between 1982 and 1990, plaintiff claims $60,743.70 in expenditures for consulting serv- ices and permits, but has only provided documentation for $56,439.48. Plaintiff also claims $36,013.25 in legal fees, real estate taxes and mortgage interest for the period from 1973 to 1994. 4In July 1989, plaintiff contracted to sell Sugarloaf Shores to Patch Communications for $1,000,000.00. The deal was made ex- pressly contingent upon plaintiff's ability to secure final major development approval from the county for improvements to Sugar- joaf Shores. This agreement was canceled by its own terms a year later when plaintiff failed to obtain that approval within the time limit provided for in the contract. Plf. Summ. J. Ex. 53. 22a 1. Early Federal Permits Plaintiff, through Keycology, submitted his first permit application to the Corps in March 1981, as required by the Rivers and Harbors Act (“RHA”) of 1899, 33 U.S.C. § 403 (1994), and the Clean Water Act (“CWA”) of 1972, 33 U.S.C. § 1344 (1994), for the dredging and filling of navigable waters of the United States.5 That permit was granted by the Corps in May 1983, and authorized plain- tiff to fill approximately 7.4 acres of salt marsh and exca- vate another 5.4 acres of salt marsh.® In effect, the permit provided plaintiff with the federal authorizations necessary for his plan to prepare Sugarloaf Shores for a 54-lot resi- dential subdivision, complete with a 48-slip marina pro- viding deep water access to Upper Sugarioaf Sound. Based upon the environmental concerns of the county, plaintiff subsequently requested permission from the Corps to modify this permit. The Corps processed this request as a new permit, and issued that permit on January 6, 1984.7 Consistent with Corps regulations, both v. .acse permits required that the work authorized by the permit be com- pleted within five years. See 33 C.F.R. § 325.6 (1996). As those deadlines approached, however, plaintiff con- tinued to experience difficulty obtaining the required state and county authorizations for his plan. In response to plaintiff's request that it extend his federal permits based upon these difficulties, the Corps gave the plaintiff two limited extensions while it considered whether plaintiff's 1983 and 1984 permits should be extended without change. The extensions maintained the validity of those 5 For work requiring a permit under both the RHA and the CWA, Corps regulations provide for the filing of a single permit application. 23 C.F.R. pt. 325, Appendix A. 6 Permit No. 81J-1101. 7 Permit No. 83G-2076. 23a permits, but prohibited plaintiff from commencing work until the Corps finished its evaluation.® In the interval between the issuance of plaintiff's original permits and his request to modify those permits as the five year deadline approached, the Corps had re- vised its regulations to clarify environmental review stand- ards and explicitly recognize the value of rare wetland types. See, e.g., Final Regulations for Controlling Certain Activities in Waters of the United States, 49 Fed. Reg. 39,478 (1984) (clarifying import of environmental permit review standards); Final Rule for Regulatory Programs of the Corps of Engineers, 51 Fed. Reg. 41,206 (1986) (impacts to rare local wetland types should be avoided). Based upon these changes, the Corps exercised its author- ity to deny plaintiff's request to reissue his existing permits without change,® and instead processed his request as a new permit application. The Corps granted plaintiff a new permit on October 17, 1988.1° While authorizing plaintiff to prepare Sugar- 8 Although plaintiff repeatedly characterizes the Corps treat- ment of his extension and modification requests as unreasonable, the record does not support this characterization. In his own corre- spondence with the Corps, plaintiff notes that these requests were based upon his inability to obtain the necessary state and county authorizations during the five year life of the federal permits. PIf. Summ. J. Ex. 46. Although the Corps had no legal obligation to grant those requests, see 33 C.F.R. § 325.6(d), it timely granted two extensions to plaintiff while it conducted the review required of it by law. ® The regulations provide the Corps with the authority to modify, revoke or suspend any permit based upon, among other things, a change in circumstances, any objections to the activity authorized by the permit which were not considered previously, any changes in the statutory or regulatory authorities and the extent of in- vestment the permittee has taken in reliance upon the permit. 33 C.F.R. § 325.7(a). 10 Permit No. 87IPV-20805. 24a loaf Shores for substantially the same development plan called for in his original proposal, it limited the fill for residences built in the salt marsh to 40 by 40 foot build- ing pads. This modification reduced the overall wetland losses of plaintiff's proposal from 12.8 acres to 10.53 acres. The permit was set to expire on October 17, 1993. II]. State and County Permits At the same time that Keycology initiated the applica- tion process with the Corps, it began to pursue the state and county authorizations necessary to effect plaintiff's plan. This effort resulted in the issuance of a state dredge and fill permit on February 10, 1983. The commence- ment of work authorized by that state permit, however, was conditioned upon plaintiff obtaining the necessary county approvals. On May 10, 1983, plaintiff sought county approval of the dredge and fill proposal approved by the federal and state permits. Upon reviewing plaintiffs plan, the county determined the plan was a “major development” under the county land use statute then in effect, and accordingly ordered that it be evaluated pursuant to that statute’s “major development review” process. See Monroe County Code, Fla. (“MCC”) ch. 6, art. VII (1985) (superseded 1986). This process required, among other things, a more regirous environmental review than that required by the standard development approval procedure. See, e.g., MCC § 6-223(c)(1) (purpose of major development review to ensure development proceeds in harmony with natural ecology and environmental resources of county). § 6-225 (requiring the submission of an environmental designation survey of property proposed for development), § 6-229 (requiring the submission of a community impact statement detailing the impact of development on public services and environmental quality ). 25a At the time that plaintiff sought county development approval, however, a moratorium on the issuance of major development approvals was in effect.1! Although plaintiff’s proposal was a “major development,” !* he appealed this determination to the Monroe County Board of Adjust- ment. After the Board of Adjustment refused plaintiff's request to have his proposal processed pursuant to stand- ard development review, plaintiff appealed to the Monroe County Commission. Without providing a rationale, the County Commission reversed the decision of the Board of Adjustment, and ordered the county to process plain- tiff's dredge and fill application according to the standard review procedures. Processing plaintiff's proposal according to these stand- ard procedures, the county granted plaintiff a dredge and fill permit on July 13, 1984. On September 7, 1984, the county also granted plaintiff's application to amend the plat of Sugarloaf Shores to comport with the federal and State permits that had already been issued. On September 10, 1984, the Florida Department of Community Affairs (“DCA”) appealed both of these ap- provals to the Florida Land and Water Adjudicatory 11 Moratoria were instituted by the county beginning at least az early as February 1982, and were intended to ensure that county review of development plans not already in the major development review pipeline would be adjudged pursuant to the new county land use and public facilities plans then in preparation. Monroe County Ordinance No. 025-1988 (prohibiting the issuance of major devel- opment approvals except in limited circumstances and referencing prior moratoria). See also Monroe County Ordinance No. 015-1983. 12“A major development project shall be any existing and/or activity or use which reflects one or more of the following identified characteristics . . . (1) A subdivision as identified in the county plat filing ordinance and which contains five (5) acres or more land and/or water area.” MCC § 622. 26a Commission (“FLAWAC”).! Rejecting plaintiff's claim that he had a vested right under Florida law to pursue his development plan notwithstanding the requirements of the major review process, FLAWAC found that: In 1973, Lloyd Good was familiar with regulatory restrictions on the use of wetland areas. As a Phila- delphia attorney, he had practiced in wetland areas in New Jersey . .. and. . . knew that the concept of deadend canals at that time was not feasible. He had decided to amend the original plat (and change the development plan) even before he purchased Sugarloaf Shores . . . because he believed that under existing environmental laws the platted deadend canals would not be permitted. Def. Summ. J. Ex. 2. FLAWAC went on to hold that the county had erred when it failed to subject plaintiff's proposals to major development review, and ordered the county to evaluate plaintiff's proposals pursuant to that review process.t That order was entered on May 29, 1986. 13 The DCA is Florida’s land use planning agency. Among other things, the DCA recommends geographic areas for designation as Areas of Critical State Concern, reviews local development orders in those areas, and may appeal those development orders. See Florida Environmental Land and Water Management Act of 1972, Fla. Stat. §§ 186.001-.911, 380.012-.12 (1983 & Supp. 1984). 14 DCA appeals are first reviewed by a hearing officer of the Divi- sion of Administrative Hearings of the Florida Department of Administration, Fla. Stat. § 120.57(1) (1983), who is empowered to make recommended findings of fact and concluusions of law. FLAWAC, which consists of the Governor and the Cabinet of the State of Florida, considers those findings and conclusions in arriv- ing at a final order. Fla. Stat. §§ 120.57(1), 380.07. FLAWAC’s final order specifically adopted the hearing officer’s findings of fact and conclusions of law. Def. Summ. J. Ex. 3. 27a While the DCA appeal was pending before FLAWAC, the county adopted a new comprehensive land use plan and new development regulations. Both the plan and regulations became effective July 29, 1986, two months after FLAWAC entered its order in the DCA appeal. While the major development statute established a pro- cedurally rigorous environmental review, the new develop- ment authorities replaced procedure with substantive en- vironmental standards of proscriptive import. The new authorities not only prohibited dredging to provide access for docking facilities, Monroe County 1986 Compre- hensive Plan, Volume II at 205, but also prohibited the filling of salt marsh except where necessary to provide access to a parcel. Even fill for that purpose was limited to 10 percent of the overall salt marsh on a parcel. Mon- roe County Code, Fla. art. IT § 9.5-345 (1986) (“land development regulations” or “LDRs”). All of plaintiffs different development proposals in- volved dredging to provide access to Upper Sugarloaf Sound, and the filling of salt marsh for the purpose of providing residential housing. Accordingly, because of the impact these new authorities would have on his develop- ment plans, it became critical for plaintiff to secure county review under the repealed major development. statute. Claiming that he could not secure that review per FLAWAC’s order, plaintiff filed suit in state court. In that suit, plaintiff alleged that the state had taken his Property entitling him to just compensation, and that FLAWAC’s order was an unreasonable exercise of police power which violated his due process rights. Plaintiff settled the case by stipulation on October 22. 1987. The stipulation provided that plaintiff was entitled to have his applications for dredge and fill and plat amend- ments adjudged according to the repealed major develop- 28a ment review statute. The stipulation also provided, how- ever, that plaintiff's “future development relative to Sugar- loaf Shores . . . shall be governed by those provisions in effect as of the date of application for such future develop- ment.” Plf. Summ. J. Ex. 41. On June 23, 1989, plaintiff submitted his major devel- opment review application to the county, and received preliminary approval of his application on November 9, 1989. The major development review statute provided that this preliminary approval would lapse unless a proper final development review application were submitted within one year of the preliminary approval.” The pre- liminary approval notified plaintiff of several conditions he would be required to satisfy in order to secure final major development approval.’"® Among those conditions was the requirement that plaintiff obtain a surface water management permit from South Florida Water Manage- ment District (“SFWMD"). Plaintiff filed an application with SFWMD on Novem- ber 13, 1989. On May 31, 1990, SFWMD notified plaintiff that its staff recommended denial of his applica- 15 The statute defined a final development plan as a development plan that “conforms substantially to an approved preliminary de- velopment plan including all special conditions attached to the preliminary development plan approval.” MCC © 6-222 (1985). The county resolution providing plaintif! with preliminary development approval similarly notes that the county “will consider an aryplion tion for final approval upon submission of a proper application and evidence that the conditions listed above have been met.” Pif Summ. J. Ex. 56. 16 Most of the conditions prescribed measures that would lessen the environmental impact of plaintiff's plan. The conditions ad- dressed, for example, the preservation of wetlands not directly af- fected by development, the protection of endangered wildlife, and the maintenance of existing mangrove trees. Monroe County Plan- ning Commission Zoning Board, Resolution 18 ( Nov. 9, 1989). ey 29a tion. SFWMD staff noted that plaintiff had declined to alter his plans to mitigate impacts to wetlands, and had declined to place deed restrictions and conservation ease- ments on those wetlands that would not be directly im- pacted by development. The staff also noted that the property provided habitat for the Lower Keys marsh rabbit and the mud turtle, two state-listed endangered species. Based upon these considerations, the staff concluded that they could not: provide a favorable environmental review for this project due to the unmitigated loss of wetlands, the loss of habitat for the endangered species within them and the lack of reasonable assurance that future un- mitigated wetlands destruction will not occur due to the lack of the above-requested dedication. Def. Summ. J. Ex. 8A. In the face of this negative review, plaintiff requested that his application be removed from SFWMD’s agenda. On September 17, 1991, plaintiff requested that SFWMD indefinitely table his application while he pursued a new permit from the Corps. After that time, plaintiff never reactivated his application. He did not otherwise obtain SFWMD approval for any development plan for Sugar- loaf Shores. Although plaintiffs preliminary development plan ap- proval expressly required him to obtain the SFWMD permit in order to secure final development approval, plaintiff filed for final development approval without the SFWMD permit on March 7. 1990. PIf. Summ. J. Ex. 58. In its review of his final development submission, the county planning staff noted that plaintiff had not met the SFWMD condition and several of the other conditions set forth in the preliminary development approval. Based 30a upon these inadequacies, the staff found that plaintiff's application was not a satisfactory final development sub- mission, and did not therefore toll the one-year time limit plaintiff was required to meet in order to prevent his preliminary approval from becoming invalid. Pif. Summ. J. Ex. 65. Plaintiff filed for an extension of this time limit to maintain the validity of that preliminary approval. While the county extended that time limit to May 9, 1991, plaintiff did not make any further application for final development approval. This failure caused plaintiff's preliminary development approval to lapse.!7 Accordingly, under the terms of his October 22, 1987 stipulation, plain- tifl’s future applications for development were subject to the law in effect at the time of application. The law at the time included the Monroe County 1986 Compre- hensive Plan and its restriction on dredging, and the LDR restrictions on the filling of salt marsh. III. The 1990 Federal Permit Application On June 14. 1990, plaintiff informed the Corps that because of state and county concerns with his develonment plan he was exploring a new plan for Sugarloaf Shores, and requested a conference with Corps personnel. Plaintiff subsequently submitted a new application to the Corps that reflected plaintiffs new plan to build 16 single family residences all within wetlands, along with a boat canal and tennis court. Although plaintiff's 1990 plan reduced the density of residential development compared to his 1988 proposal. overall wetland losses were only reduced from 10.53 to 10.17 acres. And, although the marina was 17 Although plaintiff implies throughout his filines with this court that he had obtained the necessary county approvals for his project, the record nonetheless clearly indicates that plaintiff did not obtain such approvals. 3la eliminated in the 1990 plan, plaintiff proposed to dredge a canal which would provide the residential lots with pro- tected mooring and water access to Upper Sugarloaf Sound. The 1988 Corps permit was still valid at the time of plaintiff's 1990 application. In the interval between the issuance of plaintiff's 1988 Corps permit and his application for the new permit in 1990, the Lower Keys marsh rabbit was listed as an en- dangered species under the ESA. 16 U.S.C. § 1533; En- dangered and Threatened Wildlife and Plants; Endangered Status for the Lower Keys Rabbit, 55 Fed. Reg. 25,588 (June 21, 1990) (codified at 50 C.F.R. pt. 17)28 The marsh rabbit was known to inhabit Sugarloaf Shores, and its listing as an endangered species placed obligations upon the Corps and the FWS in the 1990 permit review that they did not have when the earlier Corps permits were considered. In particular, the FWS took on a more sig- nificant role in the Corps permitting decision. During the consideration of the early permit applica- tions, the FWS played a limited role in the Corps permitting decision pursuant to the Fish and Wildlife Coordination Act (““FWCA”) of 1934. 16 U.S.C. §§ 662- 666 (1994). FWCA requires federal agencies proposing to alter any body of water to first consult with the FWS concerning the fish and wildlife impacts of the proposed action. 16 U.S.C. § 662(a). Although the agency en- gaged in the permitting action should give serious con- sideration to FWS recommendations, the agency is not required to follow those recommendations. See, e.¢., Sierra Club v. Alexander, 484 F. Supp. 455 (N.D.N-Y. 1980) (Corps may issue wetlands permit in face of FWS 18 “The term ‘endangered species’ means anv species which is in danger of extinction throughout all or a significant portion of its range....” 16 U.S.C. § 1532(6). 32a objection raised in the context of FWCA consultation), aff'd, 633 F.2d 206 (2d Cir. 1980). By contrast with its FWCA role, the ESA guarantees the FWS greater influence over the ultimate permitting decision where an endangered species may be affected by the federal action, and guarantees that species much grcater protection.” First, pursuant to section 9 of the ESA, the marsh rabbit’s endangered status made it illegal to “take” (e.g., kill, harm, harass) an individual marsh rabbit. 16 U.S.C. $$ 1532(19), 1538(a)(1)(B). This take prohibition applies to any person and any act that kills or injures endangered wildlife, including significant habitat modification which has this effect. 50 C.F.R. ~ 17.3 (1996): see also Babbitt v. Sweet Home, 515 U.S. 687 (1995). A person found to have knowingly violated this prohibition faces both civil and criminal penalties. 16 U.S.C. § 1540(a)-(b).”° Second, pursuant to section 7 of the ESA, the marsh rabbit's endangered status also obliged the Corps, after consulting with the FWS, to insure that the issuance of the wetlands permit would not place the continued exist- ence of the species in jeopardy. The ESA consultation section specifically provides: 19 See qenerally Michael J. Bean, The Evolution of National Wild- life Law (1997). 29 Ry permit, however, the FWS may allow an otherwise pro- hibited take to oceur so long as “such taking is incidental to. and not the purpose of, the carrying out of an otherwise lawful ac- tivity.” 16 U.S.C 15239(a)(1)(B). An applicant for a so-called “incidental take permit” must submit a conservation plan to the FWS delineating the steps that will be taken to minimize and mitigate impacts toe the species. The permit application and eon- servation plan are subject to public comment, and may he re- voked if the terms are not complied with by the applicant. See 16 U.S.C. § 1539(a)(2) a, 33a Each federal agency shall, in consultation with and with the assistance of the. . . [FWS], insure that any action authorized, funded, or carried out by such agency . .. is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modi- fication of [critical] habitat of such species 16 U.S.C. § 1536(a)(2). In the context of a section 7 consultation, the FWS will Prepare a biological opmion to determine whether the federal action will cause jeopardy. The FWS will reach a jeopardy finding if it determines that the federal action “reasonably would be expected, | directly or indirectly, to reduce appreciably the likelihood | of both the survival and recovery of a listed species in the wild by reducing the reproduction, numbers, or distrj- bution of that species.” 50 C.E.R. § 402.02 (1996). If the FWS reaches a jeopardy finding, it will attempt to develop reasonable and prudent alternatives (“RPAs” or “development alternatives”) to the proposed plan that weuld avoid causing jeopardy. 16 U.S.C. § 1536(b) (3) (A).?! If the FWS identifies development alternatives that would avoid jeopardy, but would nonetheless result in the take of one or more individuals of the species, the FWS may permit that take. effectively exempting the ac- 21 F WS regulations define RPAs as: alternative actions identified during formal consultation that can be implemented in a manner consistent with the intended purpose of the action, that can he implemented consistent with the scope of the Federal agency’s leyal authority and jurisdic- tion, that is economically and technologically feasible, and that the Director fof the FWS] believes would avoid the likelihood of jeopardizing the continued existence of listed species or resulting in the destruction or adverse modification of critical habitat. 50 C.F.R. 8 402.09 34a tion from section 9. 16 U.S.C. § 1536(b)(4), (0); 50 C.F.R. § 402.14(i)(5). Although the Corps retains the ultimate authority under the ESA to decide whether to require th [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0443%3A1. Public record. Not legal advice.