Petition for Writ of Certiorari — Cris Realms, Inc. v. United States

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, ‘¢ Court, U.S,

Q) LED

90 704 ocr, 3 o.2n99

No. | QFEICE QE THE CLERK

In The

Supreme Court of the United States

LAND, ET AL.; CRIS REALMS INC.; RONALD J. ISAAC;

BETTY PERRIN ISAAC; and

CRISTINA INVESTMENT CORPORATION,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

Davip C. Logs Mack E. BARHAM

MOoLAISON, LOEB, Rosert E. ARCENEAUX*

GREENBERG & ZELENKA, LLP Travis L. BourGEo!s

230 Huey P. Long Avenue BarHam & ArcENEAUX, PLC

Gretna, LA 70053 Poydras Center, Suite 2700

Tel: (504) 366-4336 650 Poydras Street

New Orleans, LA 70130-6101

Tel: (504) 525-4400

Attorneys for Petitioners

Cris Realms, Inc., Ronald J]. Isaac, et ux, and

Cristina Inv. Corp.

“Counsel of Record

Spr

—— ee a ne

QUESTIONS PRESENTED

Must a landowner prove “bad faith” to recover just

‘compensation when the market value of his property

has been diminished as a result of the project for

which his property has been condemned?

Is a determination that the Court of Claim lacks juris-

diction to hear an inverse condemnation claim res

judicata on the jurisdiction of a district court to deter-

mine the actual date of taking of the property made

the subject of the direct condemnation claim by the

United States?

Does the appellate court have jurisdiction to make a

de novo determination of facts when the district court

has not ruled upon the issue?

CERTIFICATE OF INTERESTED PARTIES

Parties

(A) The United States of America

(B) Cris Realms, Inc.

(D) Ronald J. Isaac, et ux.

Corporate Information

(A) Cris Realms, Inc.

(i) Cris Realms, Inc. has no parent corpora-

tion.

(ii) Cris Realms, Inc. has no publicly held

stock.

(B) Cristina Investment Corp.

(i) Cristina Investment Corp. has no parent

corporation.

(ii) Cristina Investment Corp. has no publicly

held stock.

Law firms

(A) The United States of America (represented

below by)

(i) Glenn K. Schreiber, Hale Boggs Federal

Building, 501 Magazine Street, Room 205,

New Orleans, Louisiana 70130;

Donald F. Rosendorf, P.O. Box 561, Ben

Franklin Station, Washington DC 20044;

CERTIFICATE OF INTERESTED PARTIES - Continued

(B)

(C)

(D)

(E)

John Smeltzer, U.S. Department of Justice,

P.O. Box 23795-L’Enfant Plaza, Washington,

D.C. 20026.

Cris Realms, Inc.

(i) Barham & Arceneaux, PLC

Cristina Investment Corp.

(i) Barham & Arceneaux, PLC

Ronald J. Isaac, et ux.

(i) Molaison Colvin Greenberg Zelenka Morris

& Loeb, LLP

Perrin Butler (Cris Realms, Inc.)

(i) Barbee & Stern

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED 2. ccccccccccessccccccaces i

CERTIFICATE OF INTERESTED PARTIES .......... ii

FARR GE GONG ab i oie cecsvedaescecdoccness iv

TABLE OF AUTIOORITIOS 20.0... cccccsscsccccsecce Vv

CITATION OF THE LOWER COURT OPINIONS... 1

STATEMENT OF JURISDICTION................++. 1

CONSTITUTIONAL PROVISIONS.................- 2

ee Cs inv inh abnd baste vesveibisiaas 2

STATERGENT OF THE CAGB soc. c ccc cccccesscceses 3

REASONS FOR GRANTING CERTIORARI ......... 14

I. The Court of Appeals’ interpretation of the

“scope of the project” rule is contrary to well-

established law applying the Just Compensation

CD sivnvccsecobsnccscsccsccettaaayesecbaren 14

II. The Court of Appeals’ decision is directly con-

trary to this Court’s ruling limiting appellate

PORNO 6 0.6.6.6 6.n050 50 i pstdnncandostekencwens 18

III. The Court of Appeals’ decision is in conflict

with numerous decisions which recognize that

the district court has concurrent jurisdiction to

determine the date of taking in a condemnation

MEINE oc cccdccvpecotventdadsssntscksgsabessens 21

CE AMIOG bodes odnininesdsanthemacaavadubitan 28

pS ROR re BaP MERTEN Re App. 1

TABLE OF AUTHORITIES

WN oy cous ceavivscassadin 26,

Stephenson v. United States, 33 Fed.Cl. 63 (Fed.Cl.,

1994), mandamus denied, 66 F.3d 345 (Fed. Cir.

Ws nc vce cdcacaddndencesthedvinkensekdanpeuseres

Page

Cases

Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir.

WOOD inns cbdicvceswdenensetenegaphusetaskevens 18, 19

Bayou des Familles v. United States, 130 F.3d 1034

COR, COC TOG s co ciacccctaciviscnevsusncedtesecenas 26

_ Block v. North Dakota, ex rel. Bd. of Univ. and School

Lands, 461 U.S. 273, 103 S.Ct. 1811, 75 L.Ed.2d

Et. . OPPOrisrT Per rorT err rT Cite re rere 24

Click v. Copeland, 970 F.2d 106 (5th Cir. 1992)........ 20

First Interstate Bank v. United States, 61 F.3d 876

Cat, Cie, TOT vctnacccdstceanapescceseeasnaianne 19

Georgia-Pacific Corp. v. United States, 568 F.2d 1316

(Ct. Cl. 1978), cert. denied, 439 U.S. 820, 99 S.Ct.

64, 5B L.Bd.2d 111 (1978) .......ccccccccsccccccoes 22

Hensley v. West, 212 F.3d 1255 (Fed. Cir. 2000)....... 19

Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 106

S.Ct. 1527, 89 L.Ed.2d 739 (1986).............-.+5- 18

Martin v. Bedell, 955 F.2d 1029 (5th Cir. 1992), cert.

denied, 506 U.S. 915, 113 S.Ct. 323, 121 L.Ed.2d

DED COGN ss onda ccd uccdcncetcssdnd Pigg pentewe tun 19

Nilson v. City of Moss Point, 701 F.2d 556 (5th Cir.

OEP P Rn rrrerirrerc re ore Te rrr ee ere 26

TABLE OF AUTHORITIES - Continued

Page

Sociano v. United States, 352 U.S. 270, 77 S.Ct. 269,

2 LBABe BOS (IGG). cc cccccccecccccccccssicscosas 25

United States v. 12.18 Acres of Land in Jefferson

County, Kansas, 623 F.2d 131 (10th Cir. 1980)...... 17

United States v. 49.01 Acres of Land, 669 F.2d 1364

(2th, Cie. 290G). cccccccccccccesscccscosccsoveccsa 17

United States v. 320 Acres of Land, 605 F.2d 762 (Sth

Cie, BOGDP c0ccncnndseusnccebansncntacheccnseseusan 16

United States v. 422,978 Square Feet of Land, 445

RDA BOSD COGa Gok TIVE s occ ccccecccsecsscnceness 23

United States v. Daim, 494 U.S. 569, 110 S.Ct. 1361

(IDDED . cncccccccocncovecocsshcnteceaseusuapouweess 24

United States v. Dow, 357 U.S. 17, 78 S.Ct. 1039, 2

RE Pee ee 22

United States v. Ledford, 202 F.3d 283 (10th Cir.

1999); 1999 WIL. 1DGGESS 2. cccccccccscccccccccccess 23

United States v. Meadow Brook Club, 259 F.2d 41 (2d

Che. BODED occcuccccdeccscvetéveceneveucueun 13, 14, 16

United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87

ee Ff: PPO 15, 16, 17

United States v. Mottaz, 476 U.S. 834, 106 S.Ct.

2224, 90 L.Ed.2d 841 (1986)..............0eeeeeees 24

United States v. Reynolds, 397 U.S. 14, 90 S.Ct. 803,

ZS L.ED TB ROPE Po 0 ac ccccccesssccess 15, 16, 17, 19

vii

TABLE OF AUTHORITIES —- Continued

EOS 0 6e6ecsedcecesstcetnckakcneesaunsdébacbederen 20

West Jefferson Levee Dist. v. Coast Quality Const.

Corp., 640 So.2d 1258 (La. 1994), cert. denied, 513

U.S. 1083, 115 S.Ct. 736, 130 L.Ed.2d 639 (1995) ..... 9

Se eee SE oncutecsn dostidaadubabctbddeodses 16

a I eee 2

OTHER

1 Orgel, Valuation Under Eminent Domain, § 105, at

GF Ge GD o 0 beck cbc sve dericdctbsccskcticseesecss 17

TO THE HONORABLE CHIEF JUSTICE AND

THE ASSOCIATE JUSTICES OF THE SUPREME

COURT OF THE UNITED STATES:

MAY IT PLEASE THE COURT.

Petitioners, Cris Realms, Inc., Cristina Investment

Corp., and Ronald J. Isaac, et ux., respectfully pray that a

Writ of Certiorari issue to review the Opinion and Judg-

ment of the Untied States Court of Appeals for the Fifth

Circuit entered in this matter on May 31, 2000.

CITATION OF THE LOWER COURT OPINIONS

The United States District Court judgment in this

case, entered on October 28, 1998, in Docket No. 94-3327

CW/94-3519 & 94-3541, Eastern District of Louisiana, is

unreported. It is reproduced in the Appendix attached

hereto at App. 2. The district court’s written reasons for

ruling, entered on October 7, 1998, is reproduced as App.

The decision rendered by the United States Court of

Appeals for the Fifth Circuit on May 31, 2000, in Docket

No. 99-30187, is reported at 213 F.3d 830. It is reproduced

as App. 1.

STATEMENT OF JURISDICTION

This is an appeal from a judgment rendered by

United States District Court for the Eastern District of

Louisiana on October 28, 1998. Jurisdiction in the district

court was based on 28 U.S.C. § 1331 and 1345. Plaintiffs

Cris Realms, Inc., Cristina Investment Corp., and Ronald

J. Isaac, et ux., appealed that decision on December 28,

1998. The jurisdiction of the Court of Appeals was based

on 28 U.S.C. § 1291. The United’ States of America also

filed a notice of appeal on February 19, 1999.

The United States Court of Appeals for the Fifth

Circuit reversed the decision of the District Court on May

31, 2000. Appellants Cris Realms, Inc., Cristina Invest-

ment Corp., and Ronald J. Isaac, et ux., timely petitioned

for rehearing on June 14, 2000. The Court of Appeals

denied the petition for rehearing on June 31, 2000.

CONSTITUTIONAL PROVISIONS

No person shall be . . . deprived of life, liberty,

or property, without due process of law; nor

shall private property be taken for public use,

without just compensation.

U. S. Const. amend. V.

RECORD CITATIONS

Citation to the Appendix attached hereto are demar-

cated as “App. __.” Citations to the record before the

lower courts are demarcated as “R. Vol.__, at __” refer-

ring to the record on appeal, at the specified volume and

specified page.

STATEMENT OF THE CASE

This is a condemnation proceeding involving certain

parcels of land in Jefferson Parish, Louisiana, which are

being acquired for inclusion in the Jean Lafitte National

Historical Park. The land at issue was originally pur-

chased by Bayou des Familles Development Corporation

(“BDF”) for the purpose of developing residential subdi-

visions on the West Bank of the Mississippi River in

Jefferson Parish. In 1972, BDF acquired 2182.62 acres of

land for $7,161,200, at an average of approximately $3,000

per acre. See, District Court’s Written Reasons for Judg-

ment, App. 3, at 28 (contained in R. Vol. 5. at 1079-1098).

Ultimately, defendant Cristina Investment Corp. acquired

97.02 acres from BDF of which 69.04 are the subject of this

suit. Id., at 27-28. Cris Realms, Inc. acquired an undivided

interest in 25 acres in BDF land, of which 2.61 are the

subject of this suit, id., and Mr. and Mrs. Isaac acquired

101 acres of the BDF property, of which 56.32 are subject

to this condemnation. Id. These parties are referred to

collectively as “defendants” or “the landowners.”

After preparing a master plan for the development of

the property and obtaining the necessary parish permits,

BDF built a pumping station, a sewerage treatment plant,

a potable water line, and began building a levee. See App.

3, at 28-29; Pre-Trial Order, Uncontested Facts, No. 9; R.

Vol. 4 at 843. BDF began its levee after obtaining permis-

sion from the Jefferson Parish authorities, although it did

not have a 404 permit from the U.S. Corps of Engineers.

App. 3, at 28-29. All this was done pursuant to contrac-

tual obligations it had with future purchasers, such as

Cristina and the Isaacs to construct a levee enclosing the

properties it had sold, as well as its remaining property,

and build a sewerage treatment facility, a potable water

line and drainage pump station to service the property.

See App. 3, at 28-29, Pre-Trial Order, Uncontested Facts,

No. 5; R. Vol. 4 at 843.

BDF was ready, willing and able to fulfill these obli-

gations, see R. Vol. 10, at 33 (Rosenblum test.); R. Vol. 11,

at 75-76 (Krebs test.), until it was stopped by the Army

Corps of Engineers. The levee BDF was building, which

was by now ninety percent complete, was along the then-

preferred alignment proposed by the Corps for part of a

larger levee project, the West Bank Hurricane Protection

Levee. Along that alignment, the levee would have pro-

tected the property from storm surges and allowed it to

be drained, thereby making it suitable for development.

See Pre-Trial Order, Uncontested Facts, No. 10; R. Vol. 4 at

844. In August of 1972, Congress appropriated funds to

study the feasibility of creating what was to become the

Jean Lafitte National Park. See Pre-Trial Order, Uncon-

tested Facts, No. 11; R. Vol. 4 at 844.

On October 9, 1973 the Permit Branch of the New

Orleans district of the Corps became aware that BDF was

conducting dredge and fill operations which might be

subject to the permitting requirements of the Rivers and

Harbors Act and the Clean Water Act (“CWA”). On Octo-

ber 10, 1973, the District Engineer wrote to BDF advising

that work on the levee should cease immediately pending

a determination as to whether a permit was required.

BDF, however, did not wait for that final determination

‘ut cr atinued with its operations, insisting that no permit

was necessary. See Pre-Trial Order, Uncontested Facts,

No. 12; R. Vol. 4 at 844. On January 15, 1974, when

construction of BDF’s levee was ninety percent complete,

the Corps issued a cease and desist order prohibiting

further development of the property without a permit

under § 404 of the CWA. See App. 3, at 29; Pre-Trial

Order, Uncontested Facts, No. 13; R. Vol. 4 at 845. In

February 1975, the United States obtained injunctive

relief against BDF, preventing further levee construction.

See United States v. Bayou des Familles Development Corp.,

No. 75-536 (E.D. La.). BDF sought an after-the-fact 404

permit in 1975. See App. 3, at 29-30; Pre-Trial Order,

Uncontested Facts, No. 15; R. Vol. 4 at 845. However, no

action on that permit occurred for many years, and what

happened in the interim forms the crux of the case.

On November 10, 1978, Congress authorized creation

of the Jean Lafitte National Historical Park (the “Park”),

comprising an 8,600-acre “core area” and an 11,400-acre

“park protection zone” (“PPZ”). The enabling statute

authorized the Department of the Interior (“DOI”) to

revise the boundaries of the PPZ with the consent of

Jefferson Parish. The statute also authorized DOI to

acquire property in the PPZ, but only if state and local

authorities fail to enact or enforce reguiations governing

the use of properties within the PPZ pursuant to guide-

lines to be developed by DOI. The PPZ encompassed

approximately 1,000 acres of the property purchased by

BDF in 1972. See Pre-Trial Order, Uncontested Facts, No.

16; R. Vol. 4 at 845-46.

The Park, through its director and other United

States government officials, mobilized the environmental

forces and successfully blocked action on the BDF permit.

Its objective was clear — if the hurricane protection levee

was ultimately located and built so as to leave the BDF

property unprotected, that property would be de facto

“reserved” for the Park, such that when the Park eventu-

ally wanted title to it, it could be acquired for little or no

money since the property would have no economic value.

This plan was outlined in a memorandum written by the

Park Superintendent. See Defendants’ Exhibit 6.15 (Isse-

nogle memorandum re use of 404 permitting process to

reserve land for the Park). Stili, the government would

not formally file an expropriation action until October 31,

1994.

The Army Corps of Engineers was fully aware of the

relevance of its decision on the levee alignment to the

future of the Park. Even though in the late 1970’s govern-

mental regulation of the environment was still in its

infancy and would not have customarily produced the

kind of scrupulous micro-managing of wetlands that

exists today, see Sands, R. Vol. 13, at 27-28, the Corps

delayed action on the BDF permit for many years. It

“studied” the issue, although it is clear that the “study”

did not involve the BDF levee or development per se, but

was more concerned with the broader question of locat-

ing the hurricane protection levee, which in turn was an

inquiry, formed in large part, if not exclusively, by the

Park. See Sands, R. Vol. 13, at 30-32, 48-49, 60-65; Defen-

dants’ Exhibit 5.10 (letter from Charles Decker re interde-

pendence of decisions as to Park and BDF permit

application).

Finally, on September 17, 1979, four years after its

filing, the Corps denied BDF’s after-the-fact permit appli-

cation. But, that denial was not a “final” determination as

to the fate of the BDF property. General Tom Sands, the

then commander of the Corps of Engineers who ulti-

mately made this decision, denied the permit because at

that time no decision had been made on the hurricane

protection levee alignment, because the Park itself was

uncertain. See Sands, R. Vol. 13, at 28; Gagliano, R. Vol.

10, 121. His decision was more properly viewed as a

deferral of action, reserving all options to the Corps to

facilitate future wetlands concerns; the main one being

the Park. Id., at 32. The district court (in the instant

action) would later find that “[t]he evidence clearly estab- -

lished a reasonable probability that the landowners

would have obtained the permits necessary for develop-

ment absent the park project,” App. 3, at 34 (citing to the

testimony of General Sands, Mr. Gagliano and Mr.

Krebbs), and that “the landowners have carried their

burden in establishing a ‘reasonable probability’ that as

of the date of trial they could have obtained the necessary

permits... .” App. 3. at 42.

Even the Parish of Jefferson entered the picture, and

attempted to convince the Corps to approve a hurricane

protection levee alignment along the alignment proposed

by BDF. On June 4, 1980, the Parish adopted a resolution

endorsing a levee alignment which followed the BDF

levee on those reaches affecting the property and urging

the Corps to proceed with the construction of that levee

as a purely local project as opposed to a private project

undertaken by BDF. See Defendants’ Exhibit 4.6. On Octo-

ber 7, 1980, after BDF indicated its willingness to donate

the right-of-way for a levee along their original align-

ment, the Parish applied to the Corps for its own § 404

permit to build the levee along that alignment. See Pre-

Trial Order, Uncontested Facts, No. 20; R. Vol. 4 at 847.

On November 20, 1980, the Corps acknowledged the

Parish’s concerns about right-of-way costs and advised

the Parish that its permit application “might receive

favorable consideration” if the levee incorporated certain

water control structures. The Parish amended its permit

application accordingly. See Pre-Trial Order, Uncontested

Facts, No. 21; R. Vol. 4 at 847.

In connection with the Parish’s permit application, in

February, 1984 the Corps prepared a Draft Environmental

Impact Statement (“Draft EIS”) in which seven alternate

levee alignments were considered in addition to the no-

build alternative, but in those reaches affecting the Prop-

erty, only two possible locations for the levee were con-

sidered: (1) the original Corps/BDF alignment, which the

Corps by then designated “Alignment D,” and (2) an

alternate alignment, designated “Alternate Alignment

Modified E” (“Alignment E”), which would place most of

the subject property on the unprotected side of the levee.

See Pre-Trial Order, Uncontested Facts, No. 22; R. Vol. 4 at

847-48. The Corps denied the Parish’s permit application

on June 18, 1984, and instead offered the Parish a permit

for construction of a levee along Alignment E (Pre-Trial

Order, Uncontested Facts, No. 23; R. Vol. 4 at 848), which

would preserve the BDF property for the Park.

A public outcry for action on the levee project caused

the Parish to yield to the Corps and accept the permit for

the levee along Alternative E. On September 11, 1985, the

Parish passed a resolution accepting a permit for the

construction of a levee along the Corps’ proposed align-

ment, Alignment E, notifying the Corps that the West

Jefferson Levee District (the “Levee District”) should be

the recipient of the permit. See Pre-Trial Order, Uncon-

tested Facts, No. 24; R. Vol. 4 at 848. On February 25,

1986, the Corps granted the Levee District a § 404 permit

for construction of a levee along Alignment E. See Pre-

Trial Order, Uncontested Facts, No- 25; R. Vol. 4 at 848.

Due to cost, the project was converted to a federal project

and the Assistant Secretary of the Army (Civil Works)

approved a feasibility report for construction of a levee

along Alignment E tentatively on October 11, 1988 and

finally on March 28, 1989. See Pre-Trial Order, Uncon-

tested Facts, No. 26; R. Vol. 4 at 848. The Levee was

subsequently constructed along Alignment E. See Pre-

Trial Order, Uncontested Facts, No. 27; R. Vol. 4 at 849.

The end result and impact of the final levee align-

ment, which did not occur until December 18, 1990, when

the Corps entered into a binding agreement with the West

Jefferson Levee District for levee construction, was that

the subject properties have been rendered undevelopable.

The district court found that the “extensive historical

documentation supplied as exhibits by the landowners

established that the Corps of Engineers’ decision to deny

both the BDF and the Parish’s permit was motivated

primarily by the influence of the park.” App. 3 at 38.

Indeed, “the park project was the primary motivating factor

in the denial of the section 10 and 404 permits, and in the

location of the hurricane protection levee,” App. 3, at 42

(citing to twelve documents and an earlier decision of the

Louisiana Supreme Court) (emphasis added), and that

* West Jefferson Levee Dist. v. Coast Quality Const. Corp., 640

So.2d 1258, 1281 (La. 1994), cert. denied, 513 U.S. 1083, 115 S.Ct.

736, 130 L.Ed.2d 639 (1995) (“it is absolutely clear from the

the landowners could have developed their property “but

for the Jean Lafitte National Park project.” Id. at 42.

This is because the Levee was always viewed by all

concerned, including the Corps of Engineers and the

Jefferson Parish government authorities, as the “growth/

no growth” demarcation. See Evans, R. Vol. 11, at 16;

Sands, R. Vol. 13, at 13; Krebbs, R. Vol. 11, at 87. The

district court found it “undisputed” that the levee config-

uration determined the line of development, “and there-

fore, the subject properties were undevelopable as of the

date of the final levee alignment on December 18, 1990.”

App. 3, at 33-34. As such, the court determined that the

landowners were entitled to have their land valued at the

highest and best use which was for commercial and resi-

dential development. Id. at 42.

But, it was not until October 31, 1994 that the govern-

ment filed the instant expropriation proceeding, identify-

ing three tracts of land that it intended to condemn for

inclusion in the park.2 The defendant landowners

answered the complaint, arguing that the United States’

conduct regarding the manipulation of the Hurricane

record .. . that BDF’s application for Sec. 404 and 10 permits was

denied by the Corps in 1979 because of the ramifications

resulting from the inclusion of landowners’ land in the Jean

Lafitte park protection zone”).

2 Tract 107-22 (also known as Parcels K-3 and K-4) is owned

by defendant Cristina Investment Corporation, and measures

69.04 acres. Tract No. 107-24 (also known as Parcel 1-C), is

owned by the Isaacs, and measures 56.32 acres. Tract No. 107-37

(also known as Parcel O), is owned by Cris Realms, Inc., and

measures 2.61 acres. See Pre-Trial Order, Uncontested Facts, No.

1, 2, 4; R. Vol. 4 at 842-43.

eae

Protection Levee for Park purposes over the years consti-

tuted a taking of their property such as to require a

judgment of liability against the United States in the

amount of the market value the property would enjoy but

for the improper influence of the Park. It was stipulated

by the parties that any judgment as to fair market value

would be as of April 15, 1996, subject to a 6% annual

increase through date of trial. In addition, and due to the

government's interference and delay, the landowners

requested reimbursement for taxes paid prior to the con-

demnation and for an award of pre-judgment interest.

Trial took place on March 17-26, 1998. On October 7,

1998, the district court entered Written Reasons for its

Judgment, App. 3, and signed a Judgment reflecting these

findings on October 28, 1998. App. 2 (R. Vol. 5. at

1071-73). As noted above, the district court found that the

the park project was “the primary motivating factor” in

the denial of the BDF section 10 and 404 permits, and in

the location of the hurricane protection levee, and that

the landowners could have developed their property “but

for the Jean Lafitte National Park project.” App. 3, at

38-42. Applying the “scope of the project rule” the district

court discounted the negative effect of the park and levee

on the property at issue and awarded the landowners the

market value of their land taken, pursuant to a Pre-Trial

stipulation as to the value of the property, if it were

“developable,” in the amount of $16,079 per-acre. The

court also awarded severance damages based on the stip-

ulated post-taking value of $300 per acre, if the land was

unpermitable and undevelopable. The district court

denied the landowners’ request for reimbursement of

taxes paid, for pre-judgment interest and for severance

damages for their land taken, located under the West

Jefferson Hurricane and Flood Protection Levee -

On December 28, 1999, the landowners filed their

notice of appeal. R. Vol. 7 at 17223-24. The landowners

appealed the three latter rulings, namely, the court failure

to award a reimbursement of taxes, the court's failure to

award pre-judgment interest, and the denial of severance

damages for the land in “the levee right of way.” The

Government subsequently filed its own Notice of Appeal

and was designated “Cross-Appellant.”

The Fifth Circuit Court of Appeals rendered its opin-

ion on May 31, 2000, reversing the decision of the district

court. See Court of Appeal Opinion, attached as App. 1.

Employing both the clearly erroneous and de novo stan-

dards of review, and adopting the government's argu-

ment, the Court of Appeals held that the district court

erred in employing the scope of the project rule to the

case at issue. That is, the government’s condemnation

action did not “breathe new life” into the landowners’

otherwise untimely Tucker Act inverse condemnation

claim against the government; that the court of federal

claims’ dismissal of the landowners’ earlier Tucker Act

claim (as untimely) was res judicata on the instant action;

and accordingly, the landowners were only entitled to

just compensation equal to the market value of their land

3 The Government filed a motion to amend the judgment

under Fed. Rule Proc. 52(b), wherein it requested a total

reconsideration of the judgment. That motion was denied on

December 23, 1998. R. Vol. 7 at 1727. Also, the landowners

moved for an award of attorney fees, which motion was denied,

without prejudice, as premature given the instant appeal.

as of the date of the condemnation action, not at the time

of the denial of the BDF permits. Id.

The Court of Appeals’ finding that the scope of the

Project rule could not apply was based solely upon its

conclusion that at the time the Corps’s denied the BDF

permit application in 1979 it could not have anticipated

that its actions would drive down the price of the Land-

owner's land in connection with the Park project:

... [t}he government's action that reduced the

value of the Landowners’ property (the denial

of the permit application) pre-dated any con-

crete plans to purchase that property; and as in

[United States v. Meadow Brook Club, 259 F.2d 41

(2d Cir. 1958)] there is no evidence that the

Government's motive in denying the permit

application was to drive down the value of the

Landowners’ property.

App. 1, at 13. The Court of Appeals reached its decision

by extending Meadow Brook to the instant action, saddling

the landowners with a specific burden to establish “bad

faith” in the government's motives. Id., and n. 1. The

district court never expressly considered whether or not

the government was in “bad faith,” since that issue was

not preserved by the Government in the Pre-Trial Order

for trial, though the Government clearly had notice of the

landowner’s intention to assert the scope of the project

rule in seeking increased compensation. However, the

Court of Appeals refused to remand the case to the dis-

trict court on this issue, finding that such a remand was

not “warranted.” “If any evidence of bad faith existed,

the plaintiffs had every incentive to present it at trial.”

Id., at 13, n. 1.

The Court of Appeals also refused to accept the land-

owners’ argument that the Government had waived its

sovereign immunity as to “just compensation” by filing

the instant condemnation action and requesting the court

to determine the true value of compensation that should

be paid to the landowners. Id., at 13-20. The Court of

Appeals did so because iit could not “square [the land-

owners’ argument] with any temporal limiting principle,”

referring to the Tucker Act’s six year statute of limita-

tions, and secondly, because of its determination that the

Government had not waived sovereign immunity. Id.

The landowners applied for a rehearing in the Court

of Appeals, which application was denied on July 31,

2000. See App. 4. The Court of Appeals’ mandate issued

on August 30, 2000.

REASONS FOR GRANTING CERTIORARI

I. The Court of Appeals’ interpretation of the “scope

of the project” rule is contrary to well-established

law applying the Just Compensation Clause.

Relying on United States v. Meadow Brook Club, 259

F.2d 41 (2d Cir. 1958), the Court of Appeals below held

that the “scope of the project” rule could not apply unless ~

there was a showing of “bad faith” - that the Corps

denial of the BDF levee permit application was intended

to “drive down the price of Landowners’s property

and .. . [thus] facilitate the National Park Service’s even-

tual acquisition of the land.” App. 1, at 13. The panel then

applied this legal standard, and concluded that “there is

no evidence that the Government's motive in denying the

permit application was to drive down the value of the

Landowner’s property,” and consequently found as a fact

that there was no “bad faith” because “the primary pur-

pose in denying the permit was to protect the Park’s

ecosystem.” id.4 That decision is in error, and must be

reversed.

Until the decision below, “bad faith” had never been

considered an indispensable element of the “scope of the

project” rule. The rule was first announced in the land-

mark case of United States v. Miller, 317 U.S. 369, 377, 63

S.Ct. 276, 281, 87 L.Ed. 336 (1943). In that decision the

rule was confined to instances in which the United States

was asked to pay for enhanced value caused by the pro-

ject. It was not until 1970, in United States v. Reynolds, 397

U.S. 14, 21, 90 S.Ct. 803, 807, 25 L.Ed.2d 12 (1970), that

this Court recognized that the rule applied not only to

* The Court of Appeals also premised its reversal upon the

finding that at the time of the permit denial, the U.S. had no

definite plans to acquire the property, since the congressional

statute only authorized purchase of land within the “core” zone,

and purchase of land within the Park Protection Zone (PPZ) if

state or local government allowed development. App. 1 at 12-13.

With all due respect to the lower court, this conclusion is utterly

impossible to reconcile with United States v. Reynolds, 397 U.S.

14, 90 S.Ct. 803, 25 L.Ed.2d 12 (1970), which specifically rejected

the notion that such definitive plans were a necessary

component of the scope of the project rule. The appropriate test

“does not require a showing that the land ultimately taken was

actually specified in the original plans for the project. It need

only be shown that during the planning or original construction

it became evident that land so situated would probably be

needed for the public use.” 397 U.S. at 21; 90 S.Ct. at 807. Here,

the land was included in the PPZ, as that area was designated

when the Park was formed.

enhanced values but diminished values resulting from the

project as well. Miller/Reynolds was codified by the Con-

gress in 42 U.S.C. § 4651(3):

Any decrease or increase in the fair market

value of real property prior to the date of valua-

tion caused by the public improvement for

which such property is acquired, or by the like-

lihood that the property would be acquired for

such improvement, other than that due to physi-

cal deterioration within the reasonable control

of the owner, will be disregarded in determining

the compensation for the property.

Meadow Brook was decided in 1958, after Miller’s rule

regarding “enhanced value,” but before this Court’s deci-

sion in Reynolds regarding “diminished value,” and cer-

tainly before 42 U.S.C. 4651(3), which now embodies the

applicable rule. Nothing in Reynolds, 42 U.S.C. 4651(3),

nor the Fifth Circuit’s decision in United States v. 320

Acres of Land, 605 F.2d 762 (5th Cir. 1979), adds a “bad

faith” requirement. There has never been a case which

allows the Government to reap the windfall of suppress-

ing the value of land as a result of its commencement of a

project, and then years later reap the benefit of that

decreased value when it actually takes the land, even if

the result is purely unintentional. Such would be utterly

inconsistent with the public policy behind the Miller/

Reynolds rule. “It would be manifestly unjust to permit a

public authority to depreciate property values by a

threat . . . (of the construction of a government project)

and then to take advantage of this depression in the price

which it must pay for the property” when eventually

condemned. 1 Orgel, Valuation Under Eminent Domain,

§ 105, at 447 (2d ed.).5

The decision of the Court of Appeals below adding

“bad faith” as a prerequisite to the application of the

scope of the project rule should be reviewed. The implica-

tions of the Court of Appeals’ decision are far-reaching,

and threaten to eviscerate the Just Compensation Clause

by allowing the government to manipulate land values

through the regulatory process so long as they do not do

so for the express and only purpose of avoiding the Just

Compensation Clause. As the district court found, the

evidence overwhelmingly established that the BDF levee

permit was denied to facilitate the Park, who now seeks

to acquire the property at the bargain value directly

caused by the permit denial. This blueprint can, and no

doubt will, be followed in future circumstances should

5 The error of the Court of Appeals’ opinion is magnified

by its rationale - a desire to impose a “temporary limiting

principal” upon the scope of the project rule. See App. 1, at

14-16. The purpose of the Miller/Reynolds rule is to delimit the

issue of compensation from purely “temporal” considerations.

Miller/Reynolds recognizes that governmental projects take

many years to accomplish (indeed _here, the Levee Alignment

took more than twenty years to resolve!). United States v. 49.01

Acres of Land, 669 F.2d 1364, 1367 (10th Cir. 1986). For this

reason, courts applying the Miller/Reynolds rule had resisted the

temptation to read a “temporal” litmus test until the rule.

Instead, the rule demands that its application focus solely upon

the relationship to the enhancement or diminution in value to

the project at issue, regardless of the time between the

commencement of that project and the ultimate condemnation.

See e.g., United States v. 12.18 Acres of Land in Jefferson County,

Kansas, 623 F.2d 131, 133 (10th Cir. 1980) (“The period of time

involved is long, but the method was apparent.”).

the opportunity arise. This Court has paid particular

attention to the Just Compensation Clause, as it should,

since the power of the government to wrest private prop-

erty from a private citizen is one of the most awesome

and intrusive of the governmental functions. Allowing

the decision below to stand rewards the clever and crafty

fashion in which that power was abused. “Bad faith” has

no place in a Just Compensation Clause analysis, as this

Court’s decisions have made plain.

II. The Court of Appeals’ decision is directly contrary

to this Court’s ruling limiting appellate jurisdic-

tion.

In Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 106

S.Ct. 1527, 89 L.Ed.2d 739 (1986). This Court reversed the

Ninth Circuit’s decision to supply a missing but crucial

finding that the appellate court had felt comfortable

entering because it viewed the matter as one of law. The

Court held that where the district court “failed to make

findings of fact essential or proper resolution of the legal

question,” the appellate court “should have remanded to

the District Court to make those findings. “[I]t should not

have simply made factual findings on its own.” 475 U.S.

at 714, 106 S.Ct. at 1530. This was so even though, accord-

ing to Justice Stevens in dissent, in that case the appellate

record contained “sufficient undisputed facts.” 475 U.S.

at 716, 106 S.Ct. at 1530-31 (Stevens, J. dissenting).

In Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1336 n.

15 (5th Cir. 1995), the lower court correctly summarized

the Icicle holding as follows: “appellate court fact-finding

is not allowed even for determination of de novo question

of law; proper procedure is to remand for correct fact

finding.”® See also Martin v. Bedell, 955 F.2d 1029, 1035 (5th

Cir. 1992), cert. denied, 506 U.S. 915, 113 S.Ct. 323, 121

L.Ed.2d 243 (1992), citing Icicle as holding that the appel-

late court’s review of a district court’s determination of

an issue is “limited to its findings of fact... .”

The Supreme Court has held that when a court

of appeals reviews a district court decision, it

may remand if it believes the district court

failed to make findings of fact essential to the

decision; it may set aside findings of fact it

, determines to be clearly erroneous; or it may

reverse incorrect judgments of law based on

proper factual findings; “[b]ut it should not sim-

ply [make] factual findings on its own”

Hensley v. West, 212 F.3d 1255, 1263 (Fed. Cir. 2000),

quoting Icicle, and citing First Interstate Bank v. United

States, 61 F.3d 876, 882 (Fed. Cir. 1995).

Regardless of whether the Court of Appeals viewed

the record of this case as wholly lacking of any evidence

of “bad faith,” remand was in order.” Lacking any consti-

tutional power to engage in fact finding, the Court of

that its review was akin to that appropriate for consideration of

a 12(b)(6) or summary judgment motion. The suit was reinstated

without a remand on that issue, but the case was remanded for

further proceedings.

? While it is true that the question of whether a particular

project is within the scope of the project for which it is being

condemned is one of law and not fact, see Reynolds, supra, the

issue of whether or not the United States was in “bad faith” is

certainly properly addressed to the finder of fact.

“[D]eterminations regarding motivation and intent depend on

complicated inferences from the evidence and are therefore

Appeals was obliged to remand this case for the district

court to pronounce the facts. It is then up to the district

court, in the sound exercise of its discretion, to determine

whether the evidence should be reopened, or whether a

factual finding should be made on the basis of the record

as it was made under the erroneous legal assumption

held by all parties and the district court.®

Here, no “motivation” questions were asked of the

expert witnesses, who were also fact witnesses to the

extent that they were first hand participants in the Corps’

levee alignment, because “motivation” was not an issue

that was to be tried. The Pre-Trial Order did not list “bad

faith” as a contested issue, and the United States never

peculiarly within the province of the factfinder.” Walther v. Lone

Star Gas Co., 952 F.2d 119, 125 (Sth Cir. 1992). See e.g., Click v.

Copeland, 970 F.2d 106, 114 (Sth Cir. 1992) (“Sheriff Copeland’s

evidence of his motivation for transferring plaintiffs, along with

the plaintiffs’ evidence that supports a contrary inference, is

fodder for the jury.”).

8 This record contains ample evidence allowing any fact

finder to infer that the intention of the Corps, at the time of its

decisions as opposed to its post-hoc justification of ecosystem

protection, was to manipulate levee alignment to ensure that the

lands at issue were deprived of any development potential

precisely so that they might remain available for the park.

Utterly missing from the Court of Appeals’ contrary conclusion

is any recognition of the undisputed fact that at the time when

the decisions at issue by the Corps were made, an entirely

different regulatory environment existed, and the Corps did not

construe its mission, or its powers, as broadly as the witnesses

who offered after the fact explanations at trial. See Landowners

Reply Brief and Cross-Appellee Brief, at 20-22. Any attempt to

determine motivation cannot be divorced from consideration of

the regulatory environment in existence at the time.

asserted that it was the landowners’ duty to prove “bad

faith.” With all due respect, the Court of Appeals over-

stepped its permissible bounds by depriving the district

court of the right to adjudicate the “bad faith” issue

either on the basis of the record as it exists or on the basis

of additional evidence if the district court believes such is

appropriate. Of course, the Court of Appeals’ ultimate

plenary power is preserved by its subsequent review of

any such determinations. But, in the first instance, this

adjudication must be made by the district court, assum-

ing of course that “bad faith” is the determinative issue in

this case.

III. The Court of Appeals’ decision is in conflict with

numerous decisions which recognize that the dis-

trict court has concurrent jurisdiction to determine

the date of taking in a condemnation action.

In finding that res judicata applied, the lower court

confused a Tucker Act claim, which is subject to a time

limitation, to a claim for just compensation under the

Fourth Amendment, which is not subject to any time

limitation. The Tucker Act is not necessary for a land-

owner to obtain just compensation when the government

takes his property; it is only a necessary procedural stat-

ute when a taking occurs in the absence of a formal

condemnation of the property. When the Court of Claims

dismisses a Tucker Act claim on the basis of untimeliness,

it holds nothing more than it lacks the jurisdiction to hear

the claim, since the statute of limitations of the Tucker

Act is jurisdictional. That dismissal has no res judicata

effect on the merits of the dismissed claim, although in

most cases the dismissal is dispositive because no other

court has jurisdiction to hear the claim.

Thus, the proper inquiry in this case is not whether

the Court of Claims’ earlier dismissal is res judicata, but

instead whether the district court had the jurisdiction to

hear the claims that the United States contends are noth-

ing but Tucker Act inverse condemnation claims asserted

in a district court by reconventional demand. That ques-

tion has been definitively answered by the jurisprudence.

The date of taking in the defense of a condemnation

proceeding may predate the date of filing of the claim (or

the date the United States says that it took the property),

and district courts have the jurisdiction to make such a

determination, even if doing so affords the same relief

that might have been sought via the Tucker Act in the

Court of Claims. See United States v. Dow, 357 U.S. 17, 78

S.Ct. 1039, 2 L.Ed.2d 1109 (1958) (the date of taking may

pre-date the government's filing of a condemnation suit,

and the court hearing the condemnation suit was free to

fashion compensation accordingly); Stephenson v. United

States, 33 Fed.Cl. 63, 74 (Fed.Cl., 1994), mandamus denied,

66 F.3d 345 (Fed. Cir. 1995) (a “district court has the

authority to decide compensation as of the date of the

actual taking, even if the taking occurred prior to the

filing of the declaration [of taking], and to award the

value of the taken property to the owners at the time of

the taking”), and Georgia-Pacific Corp. v. United States, 568

F.2d 1316, 1319-21 (Ct. Cl. 1978), cert. denied, 439 U.S. 820,

99 S.Ct. 84, 58 L.Ed.2d 111 (1978) (court has the authority

in a condemnation suit filed by the government to deter-

mine the actual date of filing, which may pre-date the

filing-of the condemnation suit, and to value the property

as of the date of taking).? See also, United States v. Ledford,

202 F.3d 283 (10th Cir. 1999); 1999 WL 1244495.10

The Court of Appeals rejected this line of jurispru-

dence, and instead relied upon the Circuit Court decision

in United States v. 422,978 Square Feet of Land, 445 F.2d

1180 (9th Cir. 1971), to support its res judicata holding.

App. 1 at 17-21. But, that case is not applicable, and its

limited holding should not be expanded and applied to

the facts of this case because there is a critical difference.

In 422,978 Square Feet, the United States did not seek to

have the court determine the value of the land it sought

to condemn, as the United States actively did here.

Instead, the United States claimed that its condemnation

was pursuant to a bona fide navigational servitude, under

which servitude the United States did not have to pay

just compensation; the suit was only a method to confirm

ownership in the United States, and “only a method of

adjudicating the contention of the United States that the

State was not entitled to compensation.” 455 F.2d at 1188.

Since that case did not concern a true condemnation nor

° The Court of Appeals attempted to distinguish this line of

cases on the grounds that the landowners could have asserted a

timely Tucker Act claim, or that the federal district court

hearing the “counterclaim” had concurrent jurisdiction. This

attempt to distinguish hinges entirely upon the erroneous view

that a Court of Claims dismissal has some res judicata effect on

the Fourth Amendment right to just compensation, and ignores

the fact that a Court of Claims dismissal means nothing more

than the Court of Claims lacks jurisdiction to hear a Tucker Act

suit.

10 This case was not designated for publication, but is

directly relevant to the issue at bar; it was also cited to the Court

of Appeals, below, as pertinent and instructive.

did the government submit to the court's jurisdiction and

request it to determine just compensation, as it did here,"

the case is clearly distinguishable, and should not have

been applied.

On separate grounds, res judicata cannot apply here

since the Court of Claims (Tucker Act) action was dis-

missed for want of jurisdiction. The United States, as a

sovereign, is immune from suit. When it consents to be

sued, through some statutorily provided action such as a

Tucker Act claim, the terms of its consent to waive its

immunity define the court’s jurisdiction over the claim.

United States v. Daim, 494 U.S. 569, 608, 110 S.Ct. 1361,

1368 (1990). A “statute of limitations requiring that a suit

against the government be brought within a certain time

period is one of those terms.” Id. (citing to United States v.

Mottaz, 476 U.S. 834, 841, 106 S.Ct. 2224, 2229, 90 L.Ed.2d

841 (1986) and Block v. North Dakota, ex rel. Bd. of Univ. and

School Lands, 461 U.S. 273, 287, 103 S.Ct. 1811, 1819, 75

L.Ed.2d 840 (1983) (“When waiver legislation contains a

statute of limitations, the limitations provision constitutes

a condition on the waiver of sovereign immunity.”)).

The dismissal in the Court of Claims was granted

upon the government’s Summary Judgment Motion

11 See Complaint, at 1 (“This is an action . . . for the taking

of property under the power of eminent domain and for the

ascertainment and award of just compensation to the owners

and parties in interest.”), and 2 (“WHEREFORE, plaintiff

demands judgement that the property be condemned and that

just compensation for that taking be ascertained and awarded,

and for such other relief as may be lawful and proper.”).

under Fed. R. Civ. Pro. 56 on jurisdictional grounds,)2 the

Court of Claims treating the motion as a Motion to Dis-

miss under Fed. R. Civ. Pro. 12(b):

While the defendant has captioned its motion as

one for summary judgment . . . it will be treated

as a motion to dismiss. . . . The Defendant

argues that the claims are time barred, i.e., the

court lacks subject matter jurisdiction to enter-

tain the suit. Such jurisdictional challenges

are properly raised by a motion to dismiss-

- not a motion for summary judgment. . . .

Alternatively, defendant argues that [the] com-

plaint does not “state a takings claim against the

United States,” . . . but does not rely on evidence

outside the pleadings. This should also be

treated as a motion to dismiss.

12 The government argued in the instant appeal that the

Court of Claims suit was dismissed “on the merits by a court of

competent jurisdiction.” U.S. Brief, at 31. But this was not the

position it took in the Court of Claims. There, the U.S. sought to

have plaintiff’s suit dismissed by means of a Summary

Judgment Motion under Fed. R. Civ. Pro. 56 on jurisdictional

grounds: “The government now moves to dismiss based upon

jurisdictional grounds - state of limitations grounds - and

failure to state a claim.” U.S. Motion for Summary Judgment, at

3. Attached as Exhibit 1 to the Landowner’s Post-Argument

Brief, below. In the Court of Claims, the government recognized

that: “Timeliness under the six-year statute [of limitations

provided by the Tucker Act] is a jurisdictional prerequisite to

suit,” citing Sociano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1

L.Ed.2d 306 (1957), and other cases. Id. at 15. They further

argued that: “The plaintiffs have the burden of establishing that

this Court has jurisdiction to adjudicate their claims. . . . In this

case, plaintiffs have not met this burden.” Id. at 16.

Court of Claims Opinion, February 23, 1996, at 1, n.1.

Attached as Exhibit 2 to the Landowner’s Post-Argument

Brief, below. The Court finally concluded that because

“plaintiffs filed suit beyond the jurisdictional limits set by

28 U.S.C. § 2501” their suit must be dismissed. Id. at 8, 10.

The Landowners appealed that decision, and the

Court of Federal Claims affirmed. Bayou des Familles v.

United States, 130 F.3d 1034, 1040, n.7 (Fed. Cir. 1997)

(“We conclude that the trial court could properly treat the

Government's motion as a motion to dismiss under RCFC

12(b) - whether viewed as a bar to the grant of a remedy

or as a bar to the court’s exercise of jurisdiction over the

cause, the result is the same.”). Since the Court of Claims

dismissed the suit on the grounds of untimeliness, which

was a jurisdictional ground, the jurisdiction of the Court

of Claims never attached, and thus its decision cannot be

res judicata on the instant suit. See Nilson v. City of Moss

Point, 701 F.2d 556, 562 (Sth Cir. 1983) (“dismissals for

want of jurisdiction are not decisions of the merits, while

those based on limitations are on the merits” for res

judicata purposes.”).'> For res judicata to apply, a deter-

mination on the merits must have been reached by a

court of competent jurisdiction. Id. at 559; Republic Supply

Co. v. Shoaf, 815 F.2d 1046, 1051 (5th Cir. 1987). Further-

more, for res judicata to apply, “the same cause of action

13 Likewise, the instant action is not one which the

landowners could have asserted at the time of their Tucker Act

claim (in considering all possible claims that the landowners

“could have been brought” at the time, or which are forever

barred by res judicata), since the instant suit is a direct

condemnation by the United States Government. See, ¢.g.,

Nilson, supra. 701 F.2d at 562-63.

must be involved in both cases,” Shoaf, 815 F.2d at 1051,

and here, the same claim is not asserted; this is the

government's voluntarily filed condemnation suit; not a

second attempt by the landowners to assert a cause of

action for appropriation.

The Court of Appeals voiced concerns regarding the

“temporal limiting principles” behind actions under the

Tucker Act. App. 1 at 14-16. Certainly, there are principles

of finality in litigation, which is why statutes of limitation

are created. But, allowing a landowner to defend a con-

demnation claim by challenging the date of taking does

not disturb any repose that the United States is legit-

imately entitled to receive. If the United States never

condemns the land, the Tucker Act's statute of limitation

gives it repose. But, when the United States actively

places value at issue, what right does it have to assert

that the Fourth Amendment right to just compensation to

the full extent of the loss is tempered by some time

limitation?

Finally, the landowners do not expand the “scope” of

the government's petition by claiming compensation for

more land than the government actually took. Instead,

they merely do what is permissible; to demand just com-

pensation for the taking. To allow the government to limit

the “scope” of its damages does nothing but obliterate the

Just Compensation Clause of the United States Constitu-

tion, for it allows the government to limit the amount of

compensation it will pay, which is exactly what the gov-

ernment is trying to do in this case.

ere

CONCLUSION

This Court should grant certiorari because of the

grave implication of the decision below on the correct

and proper application of the Due Process Clause.

Respectfully submitted,

Davip C. Logs Mack E. BARHAM

MOoLaIson COLVIN Rosert E. ARCENEAUX

GREENBERG ZELENKA Travis L. BourGEots

Morris & Logs, LLP BARHAM & ARCENEAUx, PLC

230 Huey P. Long Avenue Poydras Center, Suite 2700

Gretna, LA 70053 650 Poydras Street

Tel: (504) 366-4336 New Orleans, LA 70130-6101

Tel: (504) 525-4400

Attorneys for Petitioners

Cris Realms, Inc., Ronald J. Isaac, et ux, and

Cristina Inv. Corp.

APPENDIX

Opinion, United States Court of Appeals for

the Fifth Circuit, entered May 31, 2000..... App. 1

Judgment Determining Compensation, United

States District Court, Eastern District of Loui-

siana, entered October 28, 1998............. App. 24

District Court Reasons for Judgment, entered

et | a ee. Sree rerr re rrrer se App. 27

Denial of Petition for Rehearing, United States

Court of Appeals for the Fifth Circuit, entered

FOE Bag BE 6 ava eens ctesscsnsedescesanesss App. 46

App. 1

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 99-30187

UNITED STATES OF AMERICA;

Plaintiff-Appellee-Cross-Appellant,

LAND, ET AL.,

Defendants

CRIS REALMS, INC.,

Claimant-Appellant-Cross-Appellee,

UNITED STATES OF AMERICA;

Plaintiff-Appellee-Cross-Appellant,

LAND; ET AL.,

Defendants,

RONALD J. ISAAC, ET UX: BETTY PERRIN ISAAC,

Defendants-Appellants-Cross-Appellees,

UNITED STATES OF AMERICA;

Plaintiff-Appellee-Cross-Appellant,

LAND; ET AL.,

Defendants

CRISTINA INVESTMENT CORPORATION;

Defendant-Appellant-Cross-Appellee.

App. 2

Appeals from the United States District Court for the

Eastern District of Louisiana

Before DAVIS, CYNTHIA HOLCOMB HALL,’ and

SMITH, Circuit Judges. CYNTHIA HOLCOMB HALL,

Circuit Judge:

To resolve the instant case we must determine

whether a landowner’s damages in a condemnation suit

can be adjusted to reflect a prior regulatory taking by the

Government where the landowner’s efforts to be com-

pensated for that regulatory taking via a separate inverse

condemnation suit have already failed. We answer that

question in the negative, holding that a landowner who

has lost an inverse condemnation claim may not use the

compensation phase of subsequent condemnation pro-

ceedings to make an “end run” around res judicata and

the Tucker Act’s statute of limitations. We affirm in part,

reverse in part, and remand for further proceedings.

The United States filed the instant condemnation suit

to acquire the land in question in 1994. But in order to

understand the unusual nature of this case it is necessary

to recount a sequence of events that began more than two

decades earlier. In August of that 1972, Congress appro-

priated funds to study the feasibility of creating a

national park in the Barataria Marsh, a wetlands area

* Senior Circuit Judge, U.S. Court of Appeals, Ninth

Circuit, sitting by designation.

EAA ORIE PNA CE OEP STR TE LC RN RE ET GT TUES Tee eee

Sia , ar Pere ne Vie 7 ‘ . ae e | o oc . oa

App. 3

located along the Mississippi River. That same month, the

Bayou Des Familles Development Corporation (“BDF”)

acquired 2,182.62 acres of land in the marsh. BDF planned

to develop residential communities on the land, so it

subdivided and sold the land to various parties. Among

those who presently own land formerly owned by BDF

are the three Appellants-Cross-Appellees in this case:

Cris Realms, Inc., Ronald J. and Betty Perrin Isaac, and

Cristina Investment Corporation (collectively “Land-

owners”).

In order to make the larger property suitable for

residential development, BDF planned to construct a

levee, which would allow for drainage of the wetlands

and protect the property from storm surges. BDF began

construction of the levee without obtaining construction

permits from the Army Corps of Engineers (“Corps”). In

October of 1973, the Corps advised BDF to cease work on

the levee pending a determination by the Corps of

whether the permits were required by 33 U.S.C. § 1344

and 33 U.S.C. § 403. BDF proceeded with the levee con-

struction anyway, prompting the Corps to issue a cease

and desist order in January of 1974, after 90 percent of the

levee had been completed. BDF was subsequently fined

$25,000 and required to obtain the requisite permits from

the Corps before continuing construction. BDF filed a

permit application in April of 1975 and a draft environ-

mental impact statement in June of 1975.

The Corps indicated an inclination to deny BDF’s

permit application in December of 1975, citing, inter alia,

strong opposition from the Environmental Protection

Agency, the National Marine Fisheries Service, the U.S.

Fish and Wildlife Service, the State Parks and Recreation

App. 4

Commission, and the State Planning Office. The Corps

noted concerns expressed in BDF’s environmental impact

statement that draining the land for development would

decimate the habitat of many species of wildlife, includ-

ing that of an endangered alligator. Over the next several

years, BDF’s permit application remained in a state of

limbo because of uncertainty concerning the construction

of a nearby hurricane-protection levee and the status of

the proposed national park in the Barataria Marsh.

Finally, in 1979, after Congress created Jean Lafitte Park

in the marsh area, the Corps denied BDF’s permit appli-

cation. In denying the permit, the Corps pointed to sev-

eral aforementioned general environmental concerns

along with fears that the levee would adversely impact

the new Park. The Corps also noted public and govern-

mental agency opposition to the construction of the levee.

The congressional legislation creating Jean Lafitte

Park established a 8,600-acre “core area,” which would

comprise the park itself, and a 11,400-acre “park protec-

tion zone.” The statute authorized the Department of the

Interior to acquire land within the park protection zone,

but only if state and local authorities failed to enact or

enforce protective regulations governing the use of land

within the zone. All three of the parcels subject to con-

demnation in this case fell within the park protection

zone.

On November 2, 1979, BDF filed suit in federal dis-

trict court to enjoin the Corps’ denial of the permit appli-

cation. See Bayou des Familles Dev. Corp. v. United States

Corps of Eng’rs, 541 F. Supp. 1025 (E.D. La. 1982). In this

App. 5

suit, BDF alleged, inter alia, that the permit denial consti-

tuted an uncompensated taking. The district court dis-

missed this claim for lack of jurisdiction, noting that the

Court of Claims would have exclusive jurisdiction over

such a claim under the Tucker Act, 28 U.S.C. § 1491. See

id. at 1042.

BDF filed an inverse condemnation suit in the United

States Claims Court on July 25, 1991.1 That suit was

joined by Landowners Ronald and Betty Isaacs. The court

dismissed the suit as time-barred by the Tucker Act's six-

year statute of limitations. See Bayou des Familles Dev.

Corp. v. United States, 130 F.3d 1034, 1037 (Fed. Cir. 1997).

The Federal Circuit affirmed on this basis, holding that

any takings claim had become ripe in 1979, and therefore

must have been filed by 1985. See id. at 1040. The other

Landowners in this case filed an inverse condemnation

suit on February 21, 1995, and that suit was similarly

dismissed as time-barred. See Cristina Inv. Corp. v. United

States, 40 Fed. Cl. 571, 579-80 (1998), appeal dismissed, 155

F.3d 570 (Fed. Cir. 1998).

Related litigation proceeded in the Louisiana state

courts as well. In 1986 Jefferson Parish sought and

obtained permission from the Corps to build a hurricane-

protection levee, proposing a location that differed from

that proposed by BDF. BDF and Landowners refused to

provide land for the Corps-approved levee, which would

have left most of Landowners’ land on the unprotected

1 In 1982 the United States Claims Court became the

successor to the United States Court of Claims’s original

jurisdiction. In 1992 the United States Claims Court became the

United States Court of Federal Claims.

App. 6

side of the levee (and hence, unsuitable for residential

development). Accordingly, the West Jefferson Levee Dis-

trict filed condemnation suits against Landowners, seek-

ing to acquire (for $500 per acre) 16.16 acres from

Landowner Cris Realms, Inc., 19.56 acres from Land-

owner Cristina Investment Corp., and 44.96 acres from

Landowners the Isaacs. Landowners sought much higher

compensation for their land, arguing that the District

should pay them what their land would be worth were it

suitable for development. The trial court agreed and a

court of appeals affirmed. The Louisiana Supreme Court

reversed, holding that Landowners were unable to

develop their property because of “the property’s loca-

tion inside of the park protection zone of Jean Lafitte

Park and because of the growing national policy toward

the more stringent preservation of wetlands.” West Jeffer-

son Levee Dist. v. Bayou Des Familles Dev. Corp., 640 So.2d

1258, 1284 (La. 1994). The court remanded for a recalcula-

tion of damages based on the undevelopable value of the

land.

Pursuant to 16 U.S.C. § 230a(c), the Federal Govern-

ment could only acquire land in the park protection zone

if the parish governments proved unwilling to enact

land-use regulations that would adequately protect the

ecosystem of the Park’s core. In 1994, after unsuccessfully

attempting to convince Jefferson Parish to enact such

land-use regulations, the National Park Service filed con-

demnation complaints seeking to acquire the “park pro-

tection zone” properties at issue in this case. The Park

Service valued the property at approximately $300 per

acre, based on the land being unsuitable for residential

development. Landowners insisted that they should be

Ce Wh NR AE NRL OE APT TE GHG

App. 7

compensated for the value of the land based on an

assumption that all the land would be suitable for such

development. This assumption yielded an appraisal of

approximately $16,000 per acre.

After a bench trial, the district court sided with Land-

owners on the valuation question, determining that Land-

owners were entitled to receive compensation based upon

the value-of the land if suitable for development. The

court determined that because the Government's actions

in denying the permit rendered the condemned property

unsuitable for development, the Government was liable

for what that land would have been worth had the levee

been built at the location proposed by BDF.

The district court also refused to award severance

damages for property that was in the right of way of the

(approved) hurricane-protection levee, and which had

been condemned by the state Levee District. But the

district court did award Landowners severance damages

to compensate them for the purportedly reduced value of

land on the protected side of the hurricane-protection

levee. The district court ordered such damages sua

sponte. The district court denied Landowners’ request for

prejudgment interest and reimbursement of taxes paid

between the alleged actual interference with their enjoy-

ment of the property and Landowners’ receipt of com-

pensation.

Landowners appealed the denial of prejudgment

interest and reimbursement for taxes paid. Landowners

also appealed the district court’s refusal to award sever-

ance damages for land in the hurricane-protection levee’s

right of way. The Government cross-appealed the district

App. 8

court’s decision to base compensation on the value of the

condemned land if suitable for development and the dis-

trict court’s award of severance damages for the ostens-

ible reduction in value of the land on the protected side

of the hurricane-protection levee.

We review the district court’s factual findings for

clear error and its legal conclusions de novo. See United

States v. 50.822 Acres of Land, 950 F.2d 1165, 1168 (5th Cir.

1992). The district court’s valuation methodology “must

be based upon principles that reflect sound reasoning.”

Margate Shipping Co. v. M/V JA Oregon, 143 F.3d 976, 990

(5th Cir. 1998).

Ill.

We first address our attention to the primary issue

raised in the Government's cross-appeal. It is undisputed

that on the date the Government condemned their land,

the Landowners could no longer have prevailed in an

inverse condemnation suit to recover damages resulting

from the Corps’ refusal to allow BDF to construct a levee

at its desired location. Such a suit would have been

precluded by res judicata and time-barred under the

Tucker Act, 28 U.S.C. § 2501. See Bayou des Familles Dev.

Corp., 130 F.3d at 1040; Cristina Inv. Corp., 40 Fed. Cl. at

579-80; see also Mathis v. Laird, 457 F.2d 926, 927 (5th Cir.

1972) (holding a dismissal on statute of limitations

grounds to be a decision on the merits for the purposes of

res judicata). Nevertheless, the district court essentially

App. 9

concluded that the Government’s condemnation proceed-

ing breathed new life into the Landowners’ expired

inverse condemnation claims. Specifically, because one

federal instrumentality (the Corps) had denied the levee

construction permit, and another federal instrumentality

(the National Park Service) had condemned the land, the

condemnation suit provided the Landowners with a sec-

ond opportunity to obtain the aamages they sought in

their earlier Tucker Act suits. The district court’s neces-

sary calculation of damages due in the condemnation suit

would become the method by which the Landowners

would get what they were otherwise no longer entitled to

receive. We believe the district court erred in reaching

that conclusion.

The district court relied on the scope-of-the-project

rule in determining that the Government could be liable

for the earlier permit denial. In United States v. 320.0 Acres

of Land, 605 F.2d 762 (5th Cir. 1979), we succinctly articu-

lated the scope-of-the-project rule:

If the condemned land was probably within the

scope of the governmental project for which it is

being condemned at the time the Government

became committed to that project, then the

owner is not entitled to any increment in value

occasioned by the Government’s undertaking

the project.

Id. at 781-82. As we made clear at the time, the sc »pe-

of-the-project rule is also applicable to “depreciations in

value . . . attributable to the Government project for

which property is taken.” Id. at 787 n.32; see also 42 U.S.C.

§ 4651(3) (codifying the scope-of-the-project rule with

respect to any “decrease or increase in the fair market

—

;

App. 10

value of real property prior to the date of valuation

caused by the public improvement for which such prop-

erty is acquired”). Thus, in some instances where the

government initiates a project that drives down the value

of neighboring lands, if the government subsequently

condemns those lands, it will have to pay the landowners

the lands’ (higher) pre-project value. For example, sup-

pose the government fully intends to build a five square-

mile landfill in what is presently a residential neighbor-

hood. The government initially condemns one square

mile and re-zones it for landfill use. Presumably, such an

action would lower the value of adjoining lands. The

government could then pay less for the additional four

square miles than what it would have had to pay if it had

condemned the five square miles in one fell swoop. The

scope-of-the-project rule dictates that the compensation

due from such a piecemeal condemnation will be the

same as it would have been had the condemnation

occurred all at once. Where it applies, the scope-of-the-

project rule could theoretically allow a landowner to

recover at the compensation stage of a condemnation suit

what he would no longer be able to recover via a Tucker

Act inverse condemnation suit.

In 320 Acres we pointed to three factors relevant in

determining whether to apply the scope-of-the-project

rule: (1) Whether it was foreseeable that the project

would be enlarged to include the later-condemned prop-

erty; (2) The length of time between the initiation of the

project and the condemnation of the later-condemned

property; and (3) The nature of governmental representa-

tions about the final borders of the project at the time that

project was originally announced. See 320 Acres, 605 F.2d

App. 11

at 791-92. In applying those factors to that case, we indi-

cated that an 18-year lapse of time between the initiation

of the project and the condemnation of the land in ques-

tion might be so long as to render the scope-of-the-project

rule inapplicable to the later condemnations. See id. at

797. We further held that a mere government authoriza-

tion to purchase land, unaccompanied by an allocation of

funds for that purpose, “hardly evinces a firm commit-

ment [to subsequent condemnations], especially when the

Government has permitted certain lands within

numerous other National Parks to remain privately

owned.” Id.

In United States v. Meadow Brook Club, 259 F.2d 41 (2d

Cir. 1958), the Second Circuit articulated a further consid-

eration that is instructive in helping us determine

whether the scope-of-the-project rule applies to the

instant case. In Meadow Brook the United States filed a

complaint seeking to condemn certain parcels in order to

enlarge an airfield. The court confronted a valuation dis-

pute over whether compensation should be based on the

land in question being re-zoned for industrial use or its

present (lower-value) residential use. Meadow Brook had

applied for a re-zoning, but that application had been

opposed successfully by the Air Force on the ground that

industrial development on the land in question would

create flight hazards for planes landing at the airfield. Id.

at 46. The court held that absent a showing that “the

government's sole motive in resisting the change in zon-

ing was to depress the market value of the property

which it then intended to condemn,” it would not exclude

the Air Force’s opposition to the re-zoning as a factor

App. 12

suggesting that the land should be valued based on resi-

dential zoning. Id. at 45. Where the record contained no

allegation of bad faith by the government, it was inap-

propriate to allow the landowners to benefit from an

improbable prospective re-zoning, even if the govern-

ment’s action was the primary obstacle to the re-zoning.

Applying these considerations to the facts at issue

here, we hold that the scope-of-the-project rule is inappli-

cable. As a threshold matter, we must define the “project”

and its initiation date. For scope-of-the-project purposes,

the relevant project is the establishment of Jean Lafitte

National Park. Congress created that Park in 1978. Recall

that Congress did not initially authorize, the National

Park Service to buy Landowners’ property, or any other

property in the 11,400-acre park protection zone. Rather,

such purchases would only be authorized if the relevant

state and local government agencies failed to enact land-

use regulations that would adequately protect the Park’s

core.

In order for the scope-of-the-project rule to apply to

the instant case, the record would have to show that

when the Corps denied BDF’s permit application in 1979,

it anticipated that the denial would drive down the price

of Landowners’ property and that this would facilitate

the National Park Service’s eventual acquisition of the

land. We believe the record belies any such conclusion. To

the contrary, it is clear that at the time the Corps denied

the BDF’s permit application, there were no concrete

plans to purchase any land in the park protection zone.

Those plans to acquire lands did not begin until 1986, and

the Government did not file condemnation complaints

against Landowners’ property until 1994. Thus, there was

App. 13

a sixteen-year lapse between the initiation of the project

in question and the acquisition of Landowners’ property;

the Government action that reduced the value of Land-

owners’ property (the denial of the permit application)

pre-dated any concrete plans to purchase that property;

and, as in Meadow Brook, there is no evidence that the

Government’s motive in denying the permit application

was to drive down the value of Landowners’ property.!

Rather, the record clearly indicates that the Corps’ pri-

mary purpose in denying the permit was to protect the

Park’s ecosystem. On these facts, compensation should be

based on the value of the land at the time of the condem-

nation, regardless of prior Government actions that ren-

dered the land less valuable than it might have been in

the absence of prior Government activities. It was error

for the district court to value Landowners’ property as if

the proposed BDF levee kad been completed.

At oral argument and in supplemental briefing,

Landowners presented an additional theory supporting

the district court’s valuation determination. Landowners

assert that although their inverse condemnation suits to

recover compensation for the Corps’ denial of the levee

permit were dismissed by the Federal Circuit as time-

barred, these decisions do not preclude them from recov-

ering the same damages in the present condemnation

litigation. Landowners argue that a government condem-

nation action waives sovereign immunity as to all com-

pensation issues relating to property identified in the

* No remand on the bad-faith question is warranted. If any

evidence of bad faith existed, the plaintiffs had every incentive

to present it at trial.

ee srs

Vs eaten

App. 14

condemnation complaint. There are several reasons why

we reject Landowners’ effort to re-litigate an expired

inverse condemnation suit “via the back door.”

A fundamental reason for rejecting Landowners’

novel theory is our inability to square it with any tempo-

ral limiting principle. If the federal government were to

have built a dam in 1900, and this dam lowered property

values for nearby landowners, the landowners would be

able to recover damages for this alleged taking if the

federal government decided in the year 2000 that it ought

to condemn their land. Property law will not bear con-

tinuing governmental liability of that nature. The federal

government and federal courts need not revisit every

possible ancient inverse condemnation claim when they

decide to condemn a piece of property. The animating

principles behind the Tucker Act’s six-year statute of

limitations are consistent with venerable property rules

that stress the importance of finality, clarity of title, and

the extinguishment of claims by owners who sleep on

their rights. See generally Hohri v. United States, 586 F.

Supp. 769, 786 (D.D.C. 1984) (“The length of [the Tucker

Act’s] statute of limitations is a product of a legislative

weighing of competing claims of fairness - the need of

plaintiffs for a reasonable amount of time within which to

present their claims, and the right of defendants to be

free of stale claims. Statutes of limitations also protect

both the Court and the defendant from cases where the

loss of evidence - by death or disappearance of wit-

nesses, fading memories, or disappearance of documents

— may frustrate the search for truth.”), adopted after the

Supreme Court vacated and remanded on other grounds by

847 F.2d 779 (Fed. Cir. 1988); Thomas W. Merrill, Property

App. 15

Rules, Liability Rules, and Adverse Possession, 79 Nw. U.L.

Rev. 1122, 1128-33 (1984) (describing the necessity of

adjudicating claims before evidence has been lost, the

desirability of quieting titles, the interest in discouraging

owners from sleeping on their rights, and third party

reliance interests as the traditional justifications for trans-

ferring title to an adverse possessor after the statute of

limitations has run); Carol M. Rose, Canons of Property

Talk, or, Blackstone’s Anxiety, 108 Yale L.J. 601, 604-12

(1998) (discussing Blackstone’s consequentialist motiva-

tions for treating existing distributions of property as

beyond question despite his own doubts about whether

“current claimants really have any solid foundation for

the things they claim”). To grant property owners an

unlimited right to litigate (or re-litigate) any claims that

the government previously interfered with their property

rights would also run aground of the rule that a property

owners’ right to receive just compensation is not abso-

lute, but depends on his compliance with the law’s unam-

biguous procedures for obtaining such compensation. See

Bay View, Inc. v. Ahtna, Inc., 105 F.3d 1281, 1285 (9th Cir.

1997) (“The simple fact is that we have no jurisdiction to

address the merits of takings claims where Congress has

provided a means for paying compensation for any tak-

ing that might have occurred.”). As the Supreme Court

had noted, “taking claims against the Federal Govern-

ment are premature until the property owner has availed

itself of the process provided by the Tucker Act.” Wil-

liamson County Regional Planning Comm’n v. Hamilton

Bank, 473 U.S. 172, 195 (1985). After the property owner

has availed itself of that process and been denied com-

pensation, further litigation must allege that the process

App. 16

for receiving compensation, the Tucker Act in this case, is

not a “reasonable, certain and adequate provision” for

obtaining compensation or that the adequate procedures

were not followed. See City of Monterey v. Del Monte

Dunes, 526 U.S. 687, 710 (1999); Williamson County, 473

U.S. at 194. Quite sensibly, Landowners do not argue that

the Tucker Act is a constitutionally inadequate means for

obtaining compensation. The Federal Circuit’s dismissals

of Landowners’ Tucker Act claims are therefore res judi-

cata.

Second, Landowners’ argument that the federal gov-

ernment waives sovereign immunity as to all possible

inverse condemnation counterclaims involving the same

land when it files a condemnation suit is inconsistent

with the Supreme Court’s clearly-articulated decisions

holding that waivers of sovereign immunity must be

narrowly construed. See, e.g., Department of the Army v.

Blue Fox, Inc., 525 U.S. 255, 261 (1999) (“We have fre-

quently held, however, that a waiver of sovereign immu-

nity is to be strictly construed, in terms of its scope, in

favor of the sovereign. Such a waiver must also be

‘unequivocally expressed in the statutory text.’ ”) (cita-

tions omitted); see also Narramore v. United States, 960 F.2d

1048, 1051 (Fed. Cir. 1992) (“The condemnation statutes

do not waive sovereign immunity for property owners to

institute counterclaims or suits seeking damages for tak-

ings beyond the scope of the Government's filing.”).

Landowners do not point us to any text in the federal

condemnation statutes or rules that permit a landowner

to recover compensation for prior regulatory takings that

reduced the value of the property in question. The Gov-

ernment’s sovereign immunity therefore defeats a claim

App. 17

alleging that Landowners’ compensation in condemna-

tion should be adjusted upward to reflect what the land

would have been worth in the absence of a prior regula-

tory taking.

Confronting an analogous set of circumstances, the

Ninth Circuit reached a result consistent with the one we

reach today. In United States v. 422,978 Square Feet of Land,

445 F.2d 1180 (9th Cir. 1971), the court considered a case

in which the federal government took physical possession

of submerged lands owned by California in 1940. In 1955,

the federal government filed a condemnation suit to

obtain title to the land already in its possession. The

government then sought dismissal of its condemnation

complaint with prejudice to the state’s ability to recover

compensation in light of California’s failure to sue within

the Tucker Act’s six-year statute of limitations. California

argued that, notwithstanding the statute of limitations, it

was still entitled to receive compensation for the value of

the submerged land in light of the federal government's

condemnation suit. The Ninth Circuit rejected this argu-

ment, holding “that the running of the Tucker Act period

of limitations precluded the State from recovering in the

condemnation proceedings.” Id. at 1188. Thus, where a

landowner could have successfully sought compensation

under the Tucker Act but failed to do so, the initiation of

government condemnation proceedings to acquire that

same land did not create a second opportunity to recover

compensation for the government’s prior inverse con-

demnation via the compensation-determination process.

In arguing to the contrary, Landowners rely heavily

on a footnote in a recent decision by a judge on the Court

App. 18

of Federal Claims. Construing Narramore, that court

wrote:

The statement in Narramore v. United States, 960

F.2d 1048, 1050 (Fed. Cir. 1992) that condemna-

tion statutes do not waive the government's

immunity from property owners’ “counter-

claims” clearly does not prohibit a defendant

from alleging an earlier date of taking or a

greater compensation amount than deposited

with the court at the time of the declaration.

Stephenson v. United States, 33 Fed. Cl. 63, 75 n.21

(1994). Whatever the merits of this footnote, the Stephen-

son decision certainly does not contemplate the situation

at hand, where Landowners have already had their sepa-

rate inverse condemnation suits dismissed as time-

barred. See id. at 81 (“Indz2ed, the federal courts of

appeals uniformly have held that a district court lacks

jurisdiction to entertain a true counterclaim in a condem-

nation proceeding, that is, a separate freestanding claim

that otherwise could be asserted independently in

another proceeding [in the Court of Federal Claims].”).

Landowners provide us with no reason why the Court of

Federal Claims could not have considered their Tucker

Act claims had they been timely filed.

Landowners also cite Georgia-Pacific Corp. v. United

States, 568 F.2d 1316 (Ct. Cl. 1978), where the Court of

Claims confronted “what should be done when a claim-

ant brings suit in this court for an inverse condemnation

of land interests, and not long thereafter the Government

files a District Court condemnation action involving the

very same interests but asserting a later taking-date.” Id.

at 1318. The court held that the district court had the

App. 19

authority to determine which of the two parties’ pro-

posed date of taking was correct and to value the prop-

erty as of that date. See id. at 1319. The court also

suspended any further Tucker Act proceedings pending

the district court’s determination of the taking date.? In

Georgia-Pacific, unlike in the instant case, the property

owners’ inverse condemnation suit would have been

timely under the Tucker Act. Thus, in making a deter-

mination as to which of two competent courts should

adjudicate a common question at issue in two separate

lawsuits, the court deferred to the district court. Absent

the viability of both the inverse condemnation and con-

demnation suits, we do not read the Georgia-Pacific deci-

sion as allowing a district court to consider the equivalent

of a time-barred and jurisdictionally barred Tucker Act

counterclaim. The court implied as much in its extended

discussion of the unusual procedural posture of that dis-

pute:

The condemnation proceeding covers several

parties in addition to Georgia-Pacific. We thus

2 As the Georgia-Pacific court made clear, the Court of

Claims was not transferring the litigation to the district court,

only suspending “further proceedings in this litigation until the

District Court had decided when the date of taking occurred, or

has refused to inquire whether a time prior to March 5, 1976, is

the correct one.” 568 F.2d at 1319. After the district court made

its determination with respect to the common issue in the two

suits, the inverse condemnation aspects of the suit would have

been adjudicated by the Court of Claims alone. In the case at

bar, the Court of Federal Claims is similarly the only court with

jurisdiction to consider the inverse condemnation claim, but res

judicata and the Tucker Act’s statute of limitations now deprive

it of the authority to do so.

App. 20

have only part of the eminent domain litigation

in this court. . . . The nub of it is that only the

District Court is in a position to decide all

phases of the litigation in the event Georgia-

Pacific’s claim of an early taking should be

rejected.

Moreover, a single tribunal is better able

than two or more independent courts to direct

and handle variant and alternative claims all

bearing on the same situation. Sometimes such

unified treatment is precluded by jurisdictional

statutes, but where it is not — as we think is true

of this instance - it is ordinarily better to cen-

tralize the proceedings in the tribunal which has

the widest scope to handle all the parts of what

is in commonsense one unified piece of litiga-

tion.

Id. at 1321. These considerations simply are not

implicated where one tribunal has already dismissed a

claim as time-barred and the district court confronts an

effort to resuscitate a claim arising out of the very same

governmental action. The judicial efficiency consider-

ations that warranted a stay of Court of Claims proceed-

ings pending a district court determination in Georgia-

Pacific here warrant a district court’s refusal to revisit the

facts underlying Landowners’ already adjudicated

inverse condemnation claims.

In light of Landowners’ failure to pursue their Tucker

Act remedies in a timely manner, they may not argue in

the condemnation proceedings that they should be com-

pensated based on the value of their property as if

App. 21

suitable for residential development. On remand, the

district court should determine the value of Landowners’

property in its current, unsuitable for development, state.

IV.

The Government also argues that the district court

erred by awarding severance damages to Landowners

Cris Realms and Cristina Investment for damage to prop-

erty on the protected side of the hurricane-protection

levee. We agree.

Although Landowners did not request such sever-

ance damages below, the district court awarded damages

to compensate them for the partition of their land that

occurred as a result of the construction of the hurricane-

protection levee. The hurricane-protection levee ran

through Landowners’ property, presumably making it

more difficult to travel from one side of the property to

the other. The district court apparently concluded that

but for the Corps’ denial of the BDF levee permit applica-

tion, the hurricane-protection levee would nut have been

built, so Landowners’ property would not have been

partitioned.

3 For the same reasons, we affirm the district court’s

determinations that Landowners are entitled to neither

reimbursement of taxes paid on the properties since the date of

the alleged inverse condemnation nor prejudgment interest.

Landowners’ proper remedy for recovering such damages were

Tucker Act inverse condemnation suits. Because such suits have

already been dismissed as untimely by the Federal Circuit, res

judicata and a lack of jurisdiction bar us from revisiting those

claims for damages.

App. 22

Any severance damages resulting from the construc-

tion of the levee are not compensable in the present

proceedings because they were not caused by the Gov-

ernment’s condemnation of the properties in the instant

suit. Landowners’ opportunity to acquire severance dam-

ages as a result of the hurricane levee came and went in

the state court condemnation litigation that culminated in

West Jefferson Levee Dist. v. Bayou Des Familles Dev. Corp.,

640 So.2d 1258, 1284 (La. 1994). It was, after all, the state

government, not the federal government, that built the

hurricane-protection levee. Landowners’ argument that

severance damages are due because the Corps’ refusal to

permit the BDF levee resulted in the hurricane-protection

levee’s placement is unpersuasive for the reasons stated

above.

Landowners also appeal one of the district court’s

rulings with respect to severance damages. The district

court denied Landowners’ request for severance damages

to lands underneath the hurricane levee. Although that

land has been condemned by the State of Louisiana, and

Landowners received payment from Louisiana for those

lands, Landowners sought severance damages for value

allegedly taken by the United States prior to Louisiana’s

expropriation. The district court held that because “the

land underlying the levee had been expropriated by the

West Jefferson Levee District before the condemnation

proceedings herein, landowners are not entitled to sever-

ance damages on that portion.” This reasoning was

sound. See United States v. Dow, 357 U.S. 17, 20-21 (1958)

(holding that only the owner on the date of the taking is

App. 23

entitled to receive just compensation.). For the aforemen-

tioned reasons, Landowners can only recover severance

damages resulting from the condemnation itself, not from

any prior Government action. Thus, if the condemnation

caused any severance damages to the land underneath

the levee, the State of Louisiana, which owned that land

at the time of the condemnation, would be the proper

recovering party.

VI.

For the foregoing reasons, we AFFIRM in part,

REVERSE in part, and remand for a recalculation of just

compensation consistent with this opinion.

App. 24

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

UNITED STATES OF * CIVIL ACTION

AMERICA * NO. 94-3327

v. * C/W 94-3519 & 94-3540

2.61 ACRES OF LAND, * SECTION: “S”

ETC. .

JUDGMENT DETERMINING COMPENSATION

(Filed Oct. 28, 1999)

For the reasons set forth in the Court’s Reasons for

Judgment relative to the amount of just compensation for

the takings in Tract Nos. 107-37 (“Cris Realms”), 107-22

(“Isaac”) and 107-24 (“Cristina”) in the captioned actions,

entered October 7, 1998.

IT IS ORDERED that there be judgment in favor of

defendants Cris Realms, Inc., et al., and against plaintiff,

the United States of America, in the full and true amount

of ONE HUNDRED SIXTY THREE THOUSAND SIX

HUNDRED SIXTY SIX DOLLARS AND TWENTY CENTS

($163,666.20) as just compensation for the taking of fee

simple title to the lands in Tract No. 107-37 (2.61 acres),

exclusive of minerals and subject to existing easements

for public roads and highways, public utilities, railroads

and pipelines, as well as for severance damages to the

remainder (6.32 acres).

IT Is FURTHER ORDERED that there be judgment in

favor of defendants Ronald J. Isaac, et al., and against

App. 25

plaintiff, the United States of America, in the full and true

amount of ONE MILLION FORTY FOUR THOUSAND

ONE HUNDRED SEVENTY TWO DOLLARS AND

EIGHTY CENTS ($1,044,172.80) as just compensation for

the taking of fee simple title to the lands in Tract No.

107-22 (56.32 acres), exclusive of minerals and subject to

existing easements for public roads and highways, public

utilities, railroads and pipelines.

IT IS FURTHER ORDERED that there be judgment in

favor of defendant, Cristina Investment Corporation, and

against plaintiff, the United States of America, in the full

and true amount of ONE MILLION FOUR HUNDRED

THIRTY THREE THOUSAND FIVE HUNDRED EIGHTY

TWO DOLLARS AND FORTY CENTS ($1,433,582.40) as

just compensation for the taking of fee simple title to the

lands in Tract No. 107-24 (69.04 acres), exclusive of min-

erals and subject to existing easements for public roads

and highways, public utilities, railroads and pipelines, as

well as for severance damages to the remainder (8.42

acres).

IT IS FURTHER ORDERED that title to the estates

described in the Schedules B attached to the complaints

in the captioned proceedings will vest in the United

States upon payment of the foregoing amounts of just

compensation into the registry of the Court at which time

the Court will enter an order vesting such title.

IT IS FURTHER ORDERED that the defendants’

request for attorney fees shall be determined by further

proceedings to be conducted by the magistrate judge.

App. 26

New Orleans, Louisiana, this 28 day of October, 1998.

/s/ Mary Ann Vial Lemmon

UNITED STATES DISTRICT

JUDGE

Approved as to form:

EDDIE J. JORDAN, JR.

UNITED STATES ATTORNEY

/s/ Glenn K. Schreiber

GLENN K. SCHREIBER

Assistant United States Attorney

COUNSEL FOR PLAINTIFF,

UNITED STATES OF AMERICA

/s/ David C. Loeb by REA

David C. Loeb (Bar No. 8660)

Molaison, Price & Loeb, LLP

COUNSEL FOR DEFENDANTS

RONALD J. ISAAC, ET AL.

/s/ Robert E. Arceneaux

Robert E. Arceneaux (Bar No. 1199)

Barham & Arceneaux

COUNSEL FOR DEFENDANTS

CRISTINA INVESTMENT CORP. and

CRIS-REALMS INC., ET AL.

/and/

/s/ Robert C. Stern by REA

Robert C. Stern (Bar No. 12454)

COUNSEL FOR DEFENDANT,

PERRIN CHARLES BUTLER

App. 27

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

UNITED STATES CIVIL ACTION

VERSUS NO. 94-3327

2.61 ACRES OF LAND SECTION “S”

REASONS FOR JUDGMENT

(Filed Oct. 6, 1998)

The United States, through the National Park Service,

filed a complaint on October 31, 1994, pursuant to Rule

71A of the Federal Rules of Civil Procedure, condemning

three separate tracts of land for inclusion in the Jean

Lafitte National Historic Park, Tract Numbers 107-22,

107-24, and 107-37, which measure 56.32 acres, 69.04

acres, and 2.61 acres, respectively. The condemned land is

located on the West Bank of the Mississippi River in the

Parish of Jefferson, approximately midway between New

Orleans and Barataria, Louisiana.

The owners of the condemned land do not object to

the condemnation itself, but dispute the amount of just

compensation to which they are entitled pursuant to the

Fifth Amendment of the United States Constitution.

Accordingly, the owners filed Notices of Appearance pur-

suant to Rule 71A(e) of the Federal Rules of Civil Pro-

cedure. The landowners moved for summary judgment,

this Court denied that motion, and the case proceeded to

trial before the Court without a jury.

Historically, in 1972, Bayou des Familles Develop-

ment Corporation (“BDF”), a real estate investment com-

pany formed by a group of landowners to develop

App. 28

residential subdivisions along the west bank of the Mis-

sissippi River in the Parish of Jefferson, acquired 2182.62

acres of land, including the land which is the subject of

this condemnation suit, for $7,161,200, an average of

about $3,000 per acre. Immediately thereafter, BDF sold

101 acres each to Charalex Lands, Incorporated, which

later became the Coast Quality Construction Company, to

Ronald J. Isaac and his wife Betty Jane Perrin, and to

Regent Development Corporation. Ultimately, Cristina

Investment Corporation acquired 97.02 acres, consisting

of parcel K-3 acquired on August 17, 1977, and parcel K-4,

acquired on March 7, 1978, 69.04 acres of which are

subject to this condemnation proceeding (Tract Number

107-24). Cris Realms, Inc. acquired parcel O, containing

25 acres on May 1, 1987, 2.61 acres of which are subject to

this condemnation proceeding (Tract Number 107-37). Mr.

and Mrs. Isaac acquired parcel 1-C, containing 101.26

acres on September 23, 1972, 56.32 acres of which are

subject to this condemnation proceeding (Tract Number

107-22). The present owners are referred to herein collec-

tively as “landowners.”

The residential development plans included the

building of a canal, a levee, a pumping station to drain

the land, and the blocking of waterways which ran

through the property.! Within one year of acquiring the

1 Specifically, BDF’s residential development plan called

for the blocking of Bayou Boeuf, a natural waterway connecting

the Bayou Segnette Waterway and the Gulf Intercoastal

Waterway, and the blocking of Kenta Canal, a man-made

waterway which extended through BDF’s property into Bayou

Barataria. Both Kenta Canal and Bayou Boeuf connect to the

Gulf of Mexico and therefore, are subject to tidal influence.

App. 29

land and receiving permission from the Parish of Jeffer-

son, but without any United States Corps of Engineers

(“Corps”) permit, BDF began construction of a levee and

canal system in order to make the property suitable for

residential construction.2 The levee BDF undertook to

construct followed the contours of one of several levee

lines proposed by the Corps for the construction of a

flood control and hurricane protection project.

In January 1974, after BDF’s levee was 90% complete,

the Corps issued a cease and desist order to BDF, based

on the Corps’ determination that BDF needed federal

permits for construction of the levee and canal projects,

pursuant to Section 404 of the Federal Water Pollution

Control Act Amendments, 33 U.S.C. §§ 1251 to 1387

(renamed the Clean Water Act in 1977). In February 1975,

the United States filed an enforcement action against BDF

in the United States District Court for the Eastern District

of Louisiana in which the government alleged that BIDF

had violated Section 10 of the Rivers and Harbors Appro-

priations Act of 1899 (“RHAA”), 33 U.S.C. § 403. The

court issued a final judgment in that case in favor of the

United States, requiring BDF to pay $25,000.00 in civil

penalties and to submit an “after-the-fact” application to

the Corps for the requisite federal permits. United States

v. Bayou Des Familles Dev. Corp., No. 75-536 (E.D. La.).

On April 7, 1975, BDF submitted its “after-the-fact”

application for federal permits to construct the levee. On

2 In July of 1973, BDF entered into a contract for

construction of a sewage treatment plant and a pumping

station. On August 16, 1973, BDF entered into a contract for the

construction of a levee.

App. 30

April 28, 1975, the Corps published a public notice of

BDF’s “proposed” project, announcing the Corps’ deter-

mination that an environmental impact statement was

required as part of the permit process. More than four

years later, on September 17, 1979, the Corps denied

BDF’s “after-the-fact” application.

On November 2, 1979, BDF filed suit in the United

States District Court for the Eastern District of Louisiana,

seeking to enjoin the Corps from denying the “after-the-

fact” permit and from recommending the building of a

flood control and hurricane protection levee in a location

which differed from that of BDF’s levee project. On April

20, 1982, the court declined to grant the injunctive relief

sought by BDF and determined the BDF’s claim that the

denial of the permit constituted an uncompensated taking

pursuant to the Fifth Amendment of the United States

constitution must be brought before the United States

Court of Claims, which had exclusive jurisdiction over

the matter under Section 1491(a) (1) of Title 28 of the

United States Code. Bayou Des Familles Dev. Corp. v.

United States, 541 F. Supp. 1025 (E.D. La. 1982). On

appeal, the United States Court of Appeals for the Fifth

Circuit affirmed the trial court in an unpublished opin-

ion, and the United States Supreme Court denied BDF’s

petition for a writ of certiorari. Bayou Des Familles Dev.

Corp. v. United States Corps of Engineers, 104 S.Ct. 1413

(1984).

In 1986, the Corps granted the West Jefferson Levee

District a permit to build a hurricane protection levee in a

location which substantially differed from that of BDF’s

original levee project. Although BDF and the landowners

were willing to donate land for the hurricane protection

App. 31

levee if it were built on BDF’s original levee location

(Alignment D), they were not willing to donate land for

the hurricane protection levee on the location approved

by the Corps (Alignment E). Therefore, the West Jefferson

Levee District filed an expropriation suit in state court in

order to expropriate the land necessary for building the

hurricane protection levee on Alignment E.

In the levee expropriation case, the trial court deter-

mined that the land condemned should be valued as if it

were developable at the time expropriated. The trial court

also awarded severance damages, finding that the land

left unprotected by the location of the hurricane protec-

tion levee was rendered undevelopable; delay damages

arising out of the extended duration of the levee align-

ment selection process; and attorney’s fees. The Louisiana

Court of Appeal for the Fifth Circuit amended the awards

for delay damages and attorney’s fees, but otherwise

affirmed the trial court. The Supreme Court of Louisiana

reversed the court of appeal’s decision, holding that the

owners failed to carry their burden of proving that their

inability to obtain the permits was caused by the hurri-

cane protection levee project itself and specifically found

the inability to obtain the permits was caused by the park

project. West Jefferson Levee District v. Bayou Des Familles

Dev. Corp., 640 So.2d 1258 (1994). This case was remanded

to the lower court for a determination of just compensa-

tion for the land underlying the levee as undevelopable

wetland.

During the pendency of the Louisiana litigation, on

July 25, 1991, BDF filed suit against the United States in

the Court of Federa! Claims, alleging that the Corps’

denial of BDF’s “after-the-fact” application for permits to

App. 32

build the ninety-percent complete levee constituted a tak-

ing of their property without compensation in violation

of the Fifth Amendment to the United States Constitu-

tion. The Court of Federal Claims dismissed BDF’s suit as

time-barred, and on appeal, the United States Court of

Appeals for the Federal Circuit affirmed that dismissal.

Bayou Des Familles Dev. Corp. v. United States, 130 F.3d

1034 (1997).

Landowners whose property is condemned for gov-

ernmental use are protected by the “Takings Clause” of

the Fifth Amendment to the United States Constitution,

which provides, “[NJor shall private property be taken

for public use, without just compensation.” A landowner

is entitled to receive the fair market value of land taken

by the government. United States v. 320 Acres of Land, 605

F.2d 762, 781 (5th Cir. 1979). The fair market value of the

land being taken is determined at the time the land ir

taken and in accordance with the “highest and best use”

for which the land is suitable. Id. at 781, 818-20. More-

over, the value of the land may be neither increased nor

decreased by the fact of the taking itself, pursuant to the

“scope of the project rule.” See Almota Farmers Elevator &

Warehouse Co. v. United States, 93 S.Ct. 791, 796 (1973).

Section 4651(3) of Title 42 of the United States Code,

which sets forth the guidelines to be used by the heads of

federal agencies in determining the value of acquired

property, codifies the “scope of the project rule,” provid-

ing in part:

Any decrease or increase in the fair market

value of real property prior to the date of valua-

tion caused by the public improvement for

App. 33

which such property is acquired, or by the like-

lihood that the property would be acquired for

such improvement, other than that due to physi-

cal deterioration within the reasonable control

of the owner, will be disregarded in determining

the compensation for the property.

Under the scope of the project rule, the government

may not use the impact of a proposed project to devalue

the property it seeks to acquire for the project. Nor may

the government keep the value of property that it seeks to

acquire artificially low by denying the owner of that

property peruuts needed to develop the property. How-

ever, a landowner must demonstrate a “reasonable possi-

bility” that, absent the regulatory restriction, permits

would be issued or that rezoning would occur which

would free the property for use otherwise precluded by

the regulatory restriction. United States v. 320 Acres of

Land, 505 F.2d 762, 819 (5th Cir. 1979).

In the present case, the parties entered into a stipula-

tion that the fair market value of the subject tracts as of

April 15, 1996, was approximately $16,000 per acre, sub-

est and best use to be for commercial and residential

development, and that the fair market value of the subject

tracts as of April 15, 1996, was $300 per acre, assuming

their highest and best use to be unpermittable wetlands.3

It is undisputed that the configuration of the levee deter-

mined the growth/no growth line of development, and

therefore the subject properties were undevelopable as of

3 Pre-trial order, page 17.

App. 34

the date of the final levee alignment on December 18,

1990.

The landowners argue that, had their land been

included within the levee’s protection, the highest and

best use of the land would be for residential or commer-

cial development and, because the levee alignment was

substantially motivated by the park project, the devalu-

ing influence of the levee alignment must be excluded in

the valuation of the property for these condemnation

proceedings. Because the Park is a wetlands preserve,

landowners assert it is impossible to sever the issue of

wetlands preservation from the creation of the Park. On

the other hand, the government argues that because of

the significant adverse impact the proposed BDF project

would have had on the ecological balance of the Barataria

Basin and the Louisiana Gulf fisheries industry, and

because of the landowners’ inability to justify the adverse

impact on high quality wetlands affected by the BDF

project, it is unlikely, even absent the creation of the Jean

Lafitte Park, the permits could have been obtained.

The evidence clearly established a reasonable possi-

bility that the landowners would have obtained the per-

mits necessary for development absent the park project.

Particularly, General Thomas A. Sands, the District Engi-

neer for the Corps of Engineers in New Orleans District

from 1978-1981, who ultimately denied the BDF request

for an after-the-fact permit, testified:

Q: The factor which was controlling of the

location of the Bayou Des Familles levee as of

1975 was the Park?

se mew.

App. 35

A: The location of the park had a major impact

on where that levee would be aligned.

Q: If the BDF levee had been permitted, would

it have had an effect on the eventual location of

the Federal Westbank Hurricane Protection

Levee?

A: It certainly would have.

Q: It would have been determinative, would it

not?

A: Yes, I would say that it would.

Q: Of the factors [that lead to the BDF permit

denial], do you think that there was any factor

as important as the park?

A: Once again, the Park itself was sort of a

focal point for decision making processes in this

area at this particular point in time. So, if I were

listing the facts that are there, I would say that I

would list the location of the park because it

was there, as number 1.

Other experts reached the same conclusion on the

basis of the historical record development patterns, the

history in the surrounding area and the physical charac-

teristics of the subject tracts. Dr. Sherwood Gagliano, an

expert in the field of geography, geology and exviron-

mental permits, whose opinion this Court expressly

accepts, testified:

Q: If the park and its park protection zone did

not exist and had not been a factor in the BDF

404 permit process, in your opinion, would that

permit have been granted?

App. 36

A: The BDF permit?

Q: Yes.

A: Yes, it would have.

Q: Ifthe park and park protection zone did not

exist, had not been a factor in the Parish’s 404

permit process, for alignment D, would that per-

mit had been granted?

A: Yes, it would have.

Q: Was the park and its park protection zone

the major factor which required the rejection of

the BDF and the Parish 404 permits?

A: Yes, I think the record clearly reflects that.

Q: In your opinion, is there any factor other

than the park and the Park Protection Zone

which require the selection of Alignment E?

A: No.

Q: Was the denial of the BDF permit and the

parish 404 permit, essential to overcome the

eventual construction of Alignment E. By that I

mean, was it necessary to prevent construction

of the levee on the BDF alignment and the align-

ment D right-of-way?

A: Yes, it was.

Q: In order to preserve that opportunity to

place that levee in its current location, the Par-

ish and the BDF permits had to be denied?

App. 37

A: Yes.

Q: Do you consider the denial of the BDF 404

permit, the creation of the park and the park

protection zone and the selection of Alignment

E to be multiple phases of the same project?

A: Yes.

Q: Now that alignment E has been selected, is

there any possibility that a 404 permit would be

issued to BDF or the current property owners

for the unprotected remainder of the property?

A: No.

Mr. Joseph Krebbs, an expert civil engineer with

expertise in environmental permits for residential subdi-

visions, also testified to the impact of the Park on the BDF

permit application:

Q: Were you involved in the BDF permit appli-

cation?

A: Yes, I was.

Q: Do you have an opinion with regard to the

effect that the creation of the Park had on the

permit action on the BDF permit?

A: Yes, I do.

Q: What is that opinion, sir?

A: The opinion is that had it not been for the

park and the park protection zone, the permit

would have been granted.

Q: Do you think that this was also the case

with regard to the permit application for a levee

alignment shown as Alignment D that was filed

by the Parish of Jefferson?

A: Yes I think so.

App. 38

The extensive historical documentation supplied as

exhibits by the landowners established that the Corps of

Engineers decision to deny both the BDF and the Parish’s

permit was motivated primarily by the influence of the

park. That documentation includes:

1. A letter dated June 12, 1972 from the U.S. Com-

mittee on Environmental Development to Colonel Hunt,

District Engineer, outlining specific requests with refer-

ence to conditions and characteristics that pertain to the

Parish of Jefferson:

That the general area designated as the pro-

posed Jean Lafitte National Park (see map 1)

have no permits issued for petroleum and or

other mining operations. Also that no levee,

dikes, canals or other structures be permitted or

allowed . . . That no permits be granted that

would in any way engender the sites

. . . deemed significant in Jefferson Parish.

2. A Corps of Engineers latter dated 3/21/73, stat-

ing that at a July 24, 1972, public hearing, “[p]Jarticularly

at issue was the compatibility of the possible hurricane

protection plans and the proposed Jean Lafitte National

Cultural Park.”

3. A Corps of Engineers letter dated 6/28/73 to the

Jefferson Parish Clerk, stating in part, “we will attempt to

determine a levee alignment that would provide the

needed hurricane protection and yet be compatible with

the plan for the proposed park.”

4. A Corps of Engineers letter dated 5/13/74 to the

National Park Service, discussing coordination of Levee

and Park projects:

App. 39

{[a]t a public meeting held in connection with

these studies on 24 July 1972, we were made

aware that proposals under consideration for

the Jean Lafitte National Park presented poten-

tial conflicts with the proposals for hurricane

protection.

5. A Corps of Engineers letter dated 7/25/74 to

Senator J. Bennett Johnston, stating that because of the

park project, the “Chief of Engineers has neither the

authority nor the funds to construct the proposed hurri-

cane protection levees on the west bank of Jefferson Par-

ish.”

6. A Corps of Engineers letter dated 9/10/74 to

Representative Lindy Boggs stating:

[t]he location of the proposed park is an important con-

sideration in our study of hurricane protection measures

for the West Bank of the Mississippi River in the vicinity

of New Orleans. Moreover, depending on the type of

park recommended, it may be necessary to exclude the

park, except for the developed areas requiring protection,

from the planned protective works.

7. A letter dated 11/19/75 from the State Park Com-

mission, opposing the permit to BDF due to development

of the Park project.

8. A letter dated 4/11/79 from the National Park

Service to the Corps of Engineers, objecting to the grant-

ing of a § 404 permit to BDF:

Please note that the levee, canals and pumping

station lying between points L and M in the plan

accompanying the public notice are within the

“core” area of the authorized Jean LaFitte

App. 40

National Historical Park. Similarly, the southern

portion of the levee along the line L to K is in

the National Park. The length involved here is

from point L northeastward to approximately

the Ross Canal. With a few exceptions, none of

which suggest a permissive position toward the

destruction or alteration of wetlands, the “core”

area will be protected to the same degree all

National Parks enjoy. This has the effect of pre-

cluding the construction, or in this instance

reconstruction to make effective, any levees

within the “core” of the park. Most of the

remainder of the levee and canal system is

located in the “Park Protection Zone” which has

the purpose of protecting fresh water flows into

the “core” area . . . The project proposed in the

permit application would inevitably impact the

water resources of the “core” area of the Park,

and on that basis we object to the issuance of an

“after-the-fact” permit and lament the damage

already experienced.

9. A letter dated 4/19/79, from the Corps of Engi-

neers, informing the BDF that its permit would probably

be denied due to the impact on the park:

Reference is made to your application dated 4

April 1975 for an after-the-fact permit for a

levee system in Jefferson Parish . . . The impacts

of the levee project on the park . . . cause us to

believe that your request for a permit will be

denied.

10. A letter to James J. Donelon, Jefferson Parish

Council President, dated 9/17/79, from the Corps of

Engineers, stating that the BDF permit and future align-

ment of the levee is dependent on park boundaries.

App. 41

11. A letter dated 9/02/83 from Superintendent

James L. Isenogle to Colonel Lee, regarding the effect of

BDF levee alignment on the park stating:

Specifically we are concerned about the possible

future use of an alignment used previously by

the Bayou des Familles Corporation and located

in the Park Protection Zone of the Park. The

existing levee, although never completed or

closed, has interfered with surface water flow

from the Park Protection Zone into the Core

area. ... Certainly the construction of a new

and a permanent levee on the Bayou des Fami-

lles Corporation alignment would result in the

permanent loss of much of the natural surface

water flow in the Park unit.

For these reasons, we will oppose the construc-

tion of new levees on, or near the alignment of

the Bayou des Familles Corporation levees, and

plan to seek the dismantling of protion of the

existing levee at the appropriate time.

12. A resolution dated 5/09/84, by Jefferson Parish,

rejecting the Corp of Engineers’ Draft Land Protection

Pian for the Park and finding these guidelines “unduly

restrict{ed] and limit[ed] the rights of property owners on

the West Bank without compensation. .. . ”

In addition, the Supreme Court of Louisiana, in West

Jefferson Levee District v. Coast Quality Construction Corp.,

640 So.2d 1258, 1279 (1994), found that the park was the

determinative factor in the ultimate decision to deny the

BDF permit:

App. 42

[I]t is absolutely clear from the record, and

indeed the landowners’ own expert in the per-

mitting process, Dr. Sherwood Gagliano, so tes-

tified, that BDF’s application for § 404 and § 10

permits was denied by the Corps of Engineers in

1979 decause of the ramifications resulting from

the inclusion of landowners’ land in the Jean

Lafitte park protection zone, and that BDF

would have been unable to obtain such permits

at any time after 1979, for the same reason. The

record unequivocally shows BDF’s permit appli-

cation was denied by the Corps because of polit-

ical pressure on the Corps to preserve the

landowners’ wetlands property as undeveloped

and unpermitted wetlands because of its inclu-

sion in the park protection zone of Jean Lafitte.

The Court finds that the Park project was the primary

motivating factor in the denial of the Section 10 and 404

permits, and in the location of the hurricane protection

levee. Applying the scope of the project rule, this court

determines that the landowners have carried their burden

of establishing a “reasonable possibility” that as of the

date of trial they could have obtained the necessary per-

mits for commercial and residential development but for

the Jean Lafitte National Park project. The landowne:xs

are therefore entitled to have their land valued with the

highest and best use for commercial and residential

development.

The stipulation that the market value of the land is

$16,000, assuming the highest and best use is commercial

and residential development, implicitly decides that such

development is economically feasible. During the course

of the trial, the court allowed the government to present

App. 43

evidence with supported its position on the develop-

ment’s lack of economic feasibility. Likewise, landowners

presented evidence to show that development was eco-

nomically feasible. However, any evidence of feasibility

was unnecessary because the stipulated value of $16,000

per acre as commercial and residential development

could not be determined without an underlying analysis

of economic feasibility.

The validity of the stipulation is bolstered partic-

ularly by the expert testimony of landowner’s expert, Dr.

Wade R. Ragas, who determined the highest and best use

of the subject property is for commercial and residential

development, and reached a market value, as of April 15,

1996, of $16,079 per acre for the Realms and Cristina

tracts, and $15,700 per acre for the Isaac tract, almost

identical to the stipulated market value. Additionally,

Patrick J. Egan, an expert appraiser and executive vice-

president and partner in the real estate firm of Latter &

Blum, testified on behalf of the government as to the

suitability for development of the subject tracts. Mr. Egan

admitted, assuming that the subject properties were

leveed and drained, that he was in agreement with Dr.

Ragas’ estimation of value.

“As I think I stated, if you assume that this land

is ready for development and has been drained,

has been leveed and is at the required elevation

to support development, I would agree with

[the values established by Dr. Ragas].”

The government's stipulation to a market value of

$16,000 per acre, is conditioned only upon a finding that

the highest and best use was for residential and commer-

cial development. Although the government now

App. 44

attempts to renounce the stipulation, the evidence,

viewed as a whole and in light to the scope of the project

rule, supports the stipulated amount.

In addition to being entitled to receive market value

for land “when the government has physically acquired

through its eminent domain powers a portion of a distinct

tract of property, ‘the compensation to be awarded

includes not only the market value of that part of the

tract appropriated, but the damage to the remainder

resulting from the taking, embracing, of course, injury

due to the use to which the part appropriated is to be

developed.’ ” United States v. 14.38 Acres of Land, 80 F.3d

1074 (5th Cir. 1996), quoting, United States v. Grizzard, 31

S. Ct. 162, 163 (1911). The landowners also assert a claim

for severance damages for the difference between the

total acreage owned by them and the condemned prop-

erty. Because the land underlying the levee had been

expropriated by the West Jefferson Levee District before

the condemnation proceedings herein, landowners are

not entitled to severance damages on that portion. How-

ever, on the property not expropriated by West Jefferson

Levee District nor condemned in these proceedings, land-

owners have established they suffered severance dam-

ages resulting from the taking. “The proper measure of

damages in such a case is the difference between the

value of the parent tract before the taking and its value

after the taking.” Id. at 1077.

The landowners are therefore entitled to compensa-

tion for severance damage of $16,679 per acre before the

taking value, minus the $300 per acre after the taking

value. The Cristina owners are entitled to severance dam-

ages on 8.42 acres, and the Realms owners are entitled to

App. 45

severance damages on 6.32 acres. Because all of the Isaac

property was taken either by the levee expropriation or

by this condemnation for the park project, the Isaacs are

not entitled to severance damages.

Finally, the landowners’ request for reimbursement

of taxes paid between the alleged actual interference with

their enjoyment of the property and the time compensa-

tion is paid, and for prejudgment interest is denied.

Landowner’s request for attorneys’ fees is referred to

magistrate judge for a hearing.

The government is instructed to prepare judgments

consistent with this ruling.

New Orleans, Louisiana this 6th day of October, 1998.

/s/ Mary Ann Vial Lemmon

MARY ANN VIAL LEMMON

UNITED STATES DISTRICT

JUDGE

App. 46

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 99-30187

UNITED STATES OF AMERICA

Plaintiff -— Appellee-Cross-Appellant

LAND; ET AL

Defendants

CRIS REALMS INC

Claimant — Appellant-Cross-Appellee

UNITED STATES OF AMERICA

Plaintiff — Appellee-Cross-Appellant

LAND; ET AL

Defendants

RONALD J ISAAC, Et Ux; BETTY PERRIN ISAAC

Defendants — Appellants-Cross-Appellees

UNITED STATES OF AMERICA

Plaintiff - Appellee-Cross-Appellant

LAND; ET AL

Defendants

CRISTINA INVESTMENT CORPORATION

Defendant — Appellant-Cross-Appellee

App. 47

Appeals from the United States District Court

for the Eastern District of Louisiana, New Orleans

ON PETITION FOR REHEARING

(Filed Jul. 31, 2000)

Before DAVIS, CYNTHIA HOLCOMB HALL,’ and

SMITH, Circuit Judges. PER CURIAM:

IT IS ORDERED that the petition for rehearing is

Denied.

ENTERED FOR THE COURT:

/s/ W. Eugene Davis

United States Circuit Judge

*Senior Circuit Judge, U.S. Court of Appeals, Ninth Circuit,

sitting by designation.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.