# Opposition Brief — Cris Realms, Inc. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 904

## Text

®
IS | > 201
No. 00-704 FEB

Sn the Supreme Court of the Gnited States —

CRIS REALMS, INC., ET AL., PETITIONERS
v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

BARBARA D. UNDERWOOD
Acting Solicitor General
Counsel of Record

JOHN CRUDEN
Deputy Assistant Attorney
General

DONALD ROSENDORF

JOHN A. BRYSON

JOHN L. SMELTZER
Attorneys

Department of Justice
Washington, DC 20530-0001
(202) 514-2217

QUESTIONS PRESENTED

The United States filed complaints in condemnation
against three parcels of land in Louisiana, for inclusion
in the Jean, Lafitte National Historical Park and Pre-
serve. The questions presented are:

1, Whether the court of appeals correctly applied
the scope-of-the-project rule in determining the proper
market value of the lands for purposes of calculating
just compensation.

2. Whether the court of appeals erred in ruling that
the landowners could not use the present condemnation
action brought by the United States as a vehicle for
reviving a time-barred takings claim against the United
States based on an Army Corps of Engineers wetland
permitting decision made years earlier.

(I)

TABLE OF CONTENTS

Opinions below

Jurisdiction

Statement

TABLE OF AUTHORITIES

- Cases:

Almota Farmers Elevator & Warehouse Co. v.
United States, 409 U.S. 470 (1973)

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

130 F.3d 1034 (Fed. Cir. 1997)
Bayou Des Familles Dev. Corp. v. United States
Corps of Eng’rs, 541 F. Supp. 1025 (E.D. La.

1982)

~ Block v. North Dakota, 461 U.S. 273 (1983) .........

Cristina Inv. Corp. v. United States, 40 Fed. Cl.

571, appeal dismissed, 155 F.3d 570 (Fed. Cir. 1998) ......

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

1316 (Ct. Cl.), cert. denied, 439 U.S. 820 (1978) ...

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

(1986)

Irwin v. Department of Veterans Affairs, 498 U.S.

89 (1990)

Kerr v. South Park Comm’rs, 117 U.S. 379 (1886) ..........

Kirby Forest Indus., Inc. v. United States,
467 U.S. 1 (1984)

Narramore v. United States, 960 F 2d 1048 (Fed.

Cir. 1992)

Olson v. United States, 292 U.S. 246 (1934)

Plaut v. Spendthrift Farms, Inc., 514 US. 211
(1995)

Shoemaker v. United States, 147 U.S. 282 (1893)

(IIT)

Cases—Continued: Page
Stephenson v. United States, 33 Fed. Cl. 63

(1994) 22, 23
United States v. Dalm, 494 U.S. 596 (1990) 23
United States v. Dow, 357 U.S. 17 (1958)... 21, 22, 23
United States v. 564.54 Acres of Land, 441 US.

506 (1979) 13
United States v. 422,978 Square Feet of Land,

445 F.2d 1180 (9th Cir. 1971) 25
United States v. Meadow Brook Club, 259 F.2d

41 (2d Cir.), cert. denied, 358 U.S. 921 (1958) .........-.-us00 10, 14
United States v. Miller, 317 U.S. 369 (1949) ............. 13, 14, 16
United States v. Mitchell, 445 U.S. 535 (1980) ...........0000+ 23, 24
United States v. Oppenheimer, 242 U.S. 85 (1916) .......... 21
United States v. Reynolds, 397 U.S. 14 (1970) ........cesecse0e 13, 14
United States v. Shaw, 309 U.S. 495 (1940) 23
United States v. 62.50 Acres of Land, 953 F.2d

886 (5th Cir. 1992) 20
United States v. 320.0 Acres of Land, 605 F.2d 762

(5th Cir. 1979) 13, 14
United States v. United States Fid. & Guar. Co., 309

U.S. 506 (1940) 23
United States v. Virginia Elec. & Power Co.,

365 U.S. 624 (1961) 14

Constitution, statutes and rule:
U.S. Const. Amend. V ' 7,20
Clean Water Act of 1977, 33 U.S.C. 1251 et seg.:

§ 404, 33 U.S.C. 1344 3

§ 404(b), 33 U.S.C. 1344(b) 19
Flood Control Act of 1971, 33 U.S.C. 701 4
Rivers and Harbors Appropriations Act of 1899 § 10,

33 U.S.C. 403 3
Tucker Act:

28 U.S.C. 1491 7,22

28 U.S.C. 2501 : 8

Statutes and rule: Page
SD CEI G. TD crciinssitaitncnanstiasiuniaicnnsstiisianiisiconatinanginninianichoiiidanins

5

16 U.S.C. 230a(a) ; : 5
OD Eas NE cisarcerscsscctninetnicciii 5
5

5

16 U.S.C. 230a(c) ....... me ‘
rs MD saccntitecicinnatsctnasbatitniscnins
Fed. R. Civ. P.:
IN TAI iniheisnhcsicihiestbacihiecdi thiamin tilt aiis 2
I CIID chenitsisinectssiteciinidinnicieinieantientabinnsiueiusiinkibaniniieniididie 22

Miscellaneous:

40 Fed. Reg. (1975):

p. 31,320 sihcscieictebiomiiaaia a cate T cari 19
Te SORES PES ES SE rlaeae ee EEN EL TEES 19

Jn the Supreme Court of the United States

No. 00-704
CRIS REALMS, INC., ET AL., PETITIONERS
v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES EN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-23) is
reported at 213 F.3d 830. The opinion of the district
court (Pet. App. 27-45) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on
May 31, 2000. A petition for rehearing was denied on
July 31, 2000. Pet. App. 46. The petition for a writ of
certiorari was filed on October 30, 2000 (a Monday).
The jurisdiction of this Court is invoked under 28
U.S.C. 1254(1).

(1)

STATEMENT

The United States brought this condemnation action
to acquire three parcels of land in Jefferson Parish,
Louisiana, for an expansion of the Jean Lafitte National
Historical Park (Jean Lafitte Park). The only dispute in
this case concerns the just compensation to be paid for
each parcel. Although petitioners conceded that the
market value of their lands at the time they were
condemned was limited to their use as non-permitted
wetlands, petitioners argued that the lands should be
appraised as ready for development because, years
earlier, the U.S. Army Corps of Engineers had denied
permits that, if granted, would have made development
feasible. The district court agreed. The court of ap-
peals reversed, finding that the district court had mis-
applied established doctrines of valuation.

1. This case began with complaints in condemnation
filed in October and November 1994 against three
parcels of land, including 2.61 acres of land owned by
petitioner Cris Realms, Inc.; 56.32 acres of land owned
by petitioners Ronald J. and Betty Perrin Isaac; and
69.04 acres of land owned by petitioner Cristina Invest-
ment Corporation. The United States has not taken
physical possession of those lands. Rather, the United
States filed complaints under Federal Rule of Civil
Procedure 71A to establish the amount of compensation
that the United States would have to pay to acquire
title. See Kirby Forest Indus., Inc. v. United States,
467 U.S. 1, 4 (1984). The lands are all wetlands lying in
the Barataria Marsh, on the unprotected side of a flood
control levee. Gov’t C.A. Br. 3-4. There is no dispute
that the lands are not suitable for development in their
present condition. |

3

In nevertheless seeking to have those lands valued as
suitable and ready for development, petitioners asked
the district court to look back to the history of a failed
private development project that began more than 20
years before the complaints in condemnation were filed.
All three parcels subject to condemnation were once
part of a larger parcel (more than 2000 acres in size)
owned by the Bayou Des Familles Development Cor-
poration (BDF). Pet. App. 3. BDF acquired the prop-
erty in August 1972 for a residential development
project. In accordance with its development plan, BDF
subdivided and sold portions of the property to peti-
tioners Mr. & Mrs. Isaac in 1972, to petitioner Cristina
Development Corporation in 1977 and 1978, and to peti-
tioner Cris Realms, Inc., in 1987. Ibid.

As part of the development plan, BDF began con-
struction of a levee to allow the wetlands to be drained
and to protect the property from storm surges. Pet.
App. 3. BDF began that construction—which involved
the discharge of fill material into wetlands and the
obstruction of navigable canals—without obtaining a
permit from the Army Corps of Engineers under Sec-
tion 10 of the Rivers and Harbors Appropriations Act
of 1899, 33 U.S.C. 403, or Section 404 of the Clean
Water Act of 1977, 33 U.S.C. 13844. Gov’t C.A. Br. 8-9;
Pet. App. 3. In October 1973, the Corps advised BDF
to cease work on the levee, pending a determination as
to whether permits were required. BDF refused to halt
construction, insisting that permits were not necessary.
In January 1974, the Corps issued a cease and desist
order. Ultimately, BDF was fined $25,000 and ordered
to obtain permits from the Corps before continuing the
work. Pet. App. 3.

BDF submitted an application in April 1975, and a
draft environmental impact statement (EIS) in June

4

1975. Pet. App. 3. The draft EIS revealed significant
environmental concerns. Among other things, it noted
that draining the land for development would “result in
the total and complete alteration of the presently pro-
ductive natural marsh and swamp habitats,” would
eliminate habitat for many wildlife species, including a
rare and endangered species (the American Alligator),
and would adversely affect “surrounding wetland pro-
ductivity” by reducing the “normal flow of nutrients
and minerals” to adjacent areas. Gov’t C.A. Br. 10. The
draft EIS also reported that the project would decrease
water quality in surrounding wetlands through the
introduction of “oils, trash, chemical fertilizers, insecti-
cides, and other deleterious substances” in storm-water
runoff. Jd. at 10-11; see Pet. App. 4. In December 1975,
Charles Decker, Chief of the Regulatory Functions
Branch of the New Orleans District of the Corps of
Engineers, wrote a memorandum to his supervisors
stating that “all comments on the * * * application
and draft EIS have been received,” and that “strong
opposition has been expressed by EPA, NMFS [the
National Marine Fisheries Service], USFWS [the
United States Fish and Wildlife Service], the State
Parks and Recreation Commission, and the State Plan-
ning Office.” Gov’t C.A. Br. 10; see Pet. App. 3. Decker
concluded that “in our opinion, there is sufficient
information available now to support a recommendation
for denial without preparing the final EIS.” Gov’t C.A.
Br. 10.

For several reasons, however, the Corps delayed
its decision on BDF’s permit application. A separate
branch of the Corps was studying proposals for the
construction of a larger, hurricane-protection levee,
under the Flood Control Act of 1917, 33 U.S.C. 701, to
protect existing developments on the west bank of

5

Jefferson Parish. One of the proposals under considera-
tion included construction along the alignment of the
unfinished BDF levee. Also, in August 1972, Congress
had appropriated funds to study the feasibility of
creating the Jean Lafitte Park in the Barataria Marsh.
Uncertainty over the location and boundaries of the
Park caused delays in the Corps’ study of possible
alignments for the hurricane-protection levee. Gov't
C.A. Br. 11-12.

Congress authorized creation of the Jean Lafitte
Park on November 10, 1978. See 16 U.S.C. 230; Pet.
App. 4. The enabling legislation identified a block of
approximately 20,000 acres of Barataria Marsh as the
site for the Park itself and a surrounding “park pro-
tection zone.” Ibid. The legislation authorized the Park
Service to acquire up to 8600 acres of designated land
for the Park. See 16 U.S.C. 230a(a). The legislation
directed the Park Service to protect the remaining
area, the “park protection zone,” by establishing land-
use guidelines to be adopted and enforced by state and
local governments. 16 U.S.C. 230a(b). The purpose of
the guidelines was to preserve and protect (a) fresh
water drainage from the protection zone into the Park,
(b) vegetative cover, (c) the “integrity of ecological and
biological systems,” and (d) water and air quality. 16
U.S.C. 230a(c). The legislation authorized the Park
Service to acquire land in the protection or buffer zone
only for those enumerated purposes and only if state
and local governments failed to adopt protective land-
use guidelines. 16 U.S.C. 230a(e). Approximately 1000
acres of the land in the BDF development project, in-
cluding all three properties subject to condemnation in
this case, fell within the park protection zone. Pet.-
App. 4.

nee en ee ee

6

The Corps denied the BDF permit application by
letter dated September 21, 1979. In the accompanying
findings of. fact, the Corps of Engineers concluded
that: (1) the project (residential development) was not
“water or wetland dependent”; (2) there were nearby
“nonwetland” alternative sites for such development;
(3) the project would have “major adverse environ-
mental impacts” (including the destruction of 2300 acres
of valuable fish and wildlife habitat); (4) the project
would have “major adverse impacts on Jean Lafitte
National Park” (including the degradation of water
quality in the Park); (5) “approval of the project would
not be in concert with national policies on development
of floodplains and preservation of wetlands”; and (6) the
adverse impacts were sufficiently significant to justify
permit denial without preparation of a final environ-
mental impact statement. Gov’t C.A. Br. 14-15. The
Corps also found that there was significant public op-
position to the project, and that although some local
government agencies, including the Jefferson Parish
Council and the Jefferson Parish Planning Commission,
expressed support, the Louisiana State Planning Office
and the State Parks and Recreation Commission sub-
mitted letters in opposition. Jd. at 14-15; Pet. App. 3-4.

2. On November 2, 1979, BDF filed suit in federal
district court challenging the Corps’ denial of its permit
application. See Bayou Des Familles Dev. Corp. v.
United States Corps of Eng’rs, 541 F. Supp. 1025 (E.D.
La. 1982). The district court sustained the Corps’ deci-
sion. The court concluded that “comments from the
public and from other federal agencies relating to the
env ronmental effects of the proposed work” were “(olf
key concern” to the Corps, and the court explained that,
under applicable regulations, the Corps was required to
consider the “ecological consequences” of the project

Sl

7

and could “properly deny a permit on ecological
grounds.” Jd. at 1038. BDF argued that the permit
denial resulted in an uncompensated taking of its
property in violation of the Fifth Amendment to the
Constitution. The court dismissed that claim for lack of
jurisdiction, because the exclusive remedy for such an
uncompensated taking is an action for compensation in
the Court of Claims (now the Court of Federal Claims).
Id. at 1042 (citing the Tucker Act, 28 U.S.C. 1491).
Following dismissal of that suit, BDF did not immedi-
ately file suit in the Court of Claims. Instead, BDF
turned to Jefferson Parish. Under the federal Flood
Control Act, municipalities are responsible for obtain-
ing rights-of-way for federally funded flood control
projects. BDF offered to donate land to Jefferson
Parish for the federal hurricane-protection levee, if the
Parish would pursue construction along BDF’s original
levee alignment (designated “alignment D” in previous
studies). Following the public review process, the
Corps denied the Parish’s permit application for con-
struction along alignment D. However, it offered the
Parish a permit for construction along “modified align-
ment E,” an alignment that followed the wetlands/
uplands interface and that—unlike alignment D—
minimized adverse impacts on the wetlands. Gov't C.A.
Br. 20. The Corps found, among other things, that the
wetlands of the Barataria estuary were “very impor-
tant to fisheries production” and “one of the best such
areas in the world.” Ibid. Although the Corps noted
impacts on the Jean Lafitte Park, it did not mention the
Park in its official findings or conclusion. Jd: at 20-21.
The Parish Council did not seek review of the Corps’
decision, and instead decided to proceed with construc-
tion along alignment E. Jd. at 21. The Parish then con-
demned some of the land owned by petitioners to build

aaa iT

8

the levee. After considerable litigation in state court,
petitioners were awarded compensation based on the
value of the land as undevelopable wetlands. Pet. App.
6. The three parcels at issue in this case lie outside of
the constructed levee, and were not subject to the state
condemnation action.

- BDF then, in 1991, filed a takings case in the Court of
Federal Claims, joined by the Isaacs petitioners. See
Bayou Des Familles Dev. Corp. v. United States, 130
F.3d 1034 (Fed. Cir. 1997). The court dismissed the suit
as time-barred under the applicable six-year statute of
limitations (28 U.S.C. 2501), and the court of appeals
affirmed. 130 F.3d at 1037. BDF and the Isaacs argued
that the alleged taking was not final until 1986, when
the Corps granted Jefferson Parish a permit to build a
federal hurricane-protection levee on a location that
left their land unprotected. Jd. at 1039. The Federal
Circuit disagreed, holding that the takings claim
ripened in 1979, when the Corps denied BDF’s permit
application. Jd. at 1040. Petitioners Cristina Invest-
ment and Cris Realms filed an even later takings case,
with the same result. Cristina Inv. Corp. v. United
States, 40 Fed. Cl. 571, 579-580, appeal dismissed, 155
F.3d 570 (Fed. Cir. 1998) (Table).

Meanwhile, pursuant to the directive in Section
230a(b) of the enabling legislation for the Jean Lafitte
Park, the National Park Service developed proposed
land-use guidelines for property in the park protection
zone and submitted the guidelines to Jefferson Parish.
Gov’t C.A. Br. 22. The Parish rejected the proposal in
1984, primarily because the Park Service would not
indemnify the Parish for any liability arising out of the
guidelines’ enforcement. After negotiations failed to
produce an agreement, the Park Service initiated plans
in 1986 to acquire land in the protection zone, under the

9

authority of 16 U.S.C. 230a(c), which authorizes acquisi-
tion upon the failure of local government to promulgate
land-use guidelines. See Gov't C.A. Br. 22-23.

3. In 1994, the United States filed complaints in con-
demnation to acquire the properties at issue in this
case. At trial, the primary disagreement between the
United States and petitioners was over the methodol-
ogy for appraising the properties. The government’s
_ appraiser looked to sales of comparable wetlands prop-
erties that had not been (and were unlikely to be)
permitted for residential development. He testified
that the subject properties were worth approximately
$300 per acre. Gov’t C.A. Br. 23; Pet. App. 6. Peti-
tioners’ appraiser, in contrast, looked to the value of
non-wetlands properties that were ready for develop-
ment. He thus based his valuation on the market price
that the subject properties would have had if: (1) the
Corps had granted BDF’s permit application; (2) BDF
had completed its levee and other infrastructure im-
provements; and (3) the federal hurricane-protection
levee had been built over the BDF levee. Gov't C.A.
Br. 23-24. Petitioners’ appraiser opined that the sub-
ject properties were worth approximately $16,000 per
acre. Pet. App. 7.

The district court accepted the landowners’ appraisal,
Pet. App. 42, and awarded compensation accordingly,
id. at 24-25. The court found that establishment of the
Park had indirectly affected the value of the land
through the regulatory actions of the Corps of En-
gineers. In particular, the court found that the Park
was the “primary motivating factor” in the Corps’
denial of permits for the BDF levee alignment, and that
there was a “reasonable possibility” that petitioners
could have obtained necessary development permits
“but for” the Park. Id. at 42. Based on those findings,

10

the court held that petitioners were entitled to have
their land valued as though the highest and best use
were for “commercial and residential” development.
Ibid.

4, The court of appeals reversed. Pet. App. 1-23.
The court first considered the application to this case of
the “scope of the project” rule, which provides that if
the land that is subject to condemnation was within the
scope of the project for which it is being condemned at
the time the government became committed to the
project, any increase or decrease in the value of the
condemned land attributable to the project should not
be taken into account in valuing the land. See id. at 9.
In previous cases, the court of appeals explained, it had
considered three factors when determining whether
later acquisitions fell within the scope of the original
project: (1) whether enlargement of the project was
foreseeable; (2) the length of time between initiation of
the project and its enlargement; and (3) the nature of
governmental representations about the final borders
of the project. Jd. at 10. The court of appeals further
explained that, in United States v. Meadow Brook Club,
259 F.2d 41, cert. denied, 358 U.S. 921 (1958), the
Second Circuit had “articulated a further consideration
that is instructive” in this context, which is whether the
government’s motive for pre-acquisition regulatory
efforts was “to depress the market value of the prop-
erty which it then intended to condemn.” Pet. App. 11.

Applying those factors to this case, the court of
appeals found that the scope-of-the-project rule did not
justify valuing petitioners’ land as if it were ready for
development. The pertinent project, the court ex-
plained, was the acquisition of land for Jean Lafitte
Park. Although the Park was created in 1978, there
was no evidence that the government contemplated

11

buying—or that Congress had authorized the Park
Service to buy—petitioners’ land until much later. Pet.
App. 12. In fact, when the Corps denied BDF’s permit
application in 1979, “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 [petitioners’] property until 1994.” Ibid. Thus,
the court of appeals concluded:

[TJhere was a sixteen-year lapse between the initia-
tion of the project [Jean Lafitte Park] and the
acquisition of [petitioners’] property; the Govern-
ment action that reduced the value of [petitioners’]
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 [peti-
tioners’] property. Rather, the record clearly indi-
cates that the Corps’ primary 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 condemnation,
regardless of prior Government actions that ren-
dered the land less valuable than it might have been
in the absence of prior Government activities.

Id. at 13 (footnote omitted).

The court of appeals also rejected an additional
theory presented by petitioners. Although the United
States has not yet sought or taken physical possession
of petitioners’ properties, petitioners argued: (a) that
the filing of this action vested the district court with
jurisdiction to determine the date of taking, (b) that the
district court could invoke that authority to find that

12

the taking in this case actually occurred in 1979, when
the Corps denied the BDF permit application, and
(c) that the district court could award compensation
from that date. The court of appeals rejected that
theory. Pet. App. 13-21. While recognizing the possi-
bility that a district court might in some situations have
jurisdiction in a direct condemnation action to award
compensation based on a taking date prior to the date
of the declared taking, the court of appeals observed
that petitioners’ argument for allowing the court in the
condemnation action to go back in time was subject to
no “temporal limiting principle.” Jd. at 14. Without
deciding what the result might be in other circum-
stances, the court of appeals held that where, as here,
an inverse condemnation claim based on an alleged
prior regulatory taking has been brought in a court of
competent jurisdiction and dismissed as time-barred,
that dismissal is res judicata and the claim cannot be
“resuscitate[d]” in a later direct condemnation action.
Id. at 15-20.

ARGUMENT

The court of appeals correctly concluded that peti-
tioners are entitled to compensation based on the
current value of their land, rather than on the hypo-
thetical value the land would have had if it had not been
subject to the legitimate permit denial more than 20
years ago that petitioners had unsuccessfully chal-
lenged in two different lawsuits. The court of appeals’
fact-specific decision, moreover, does not conflict with
any decision of this Court or of any other court of
appeals. Accordingly, further review is not warranted.

1. Under established principles of eminent domain,
the “just compensation” for land acquired by condemna-
tion is generally the “fair market value of the property

13

United States v. 564.54 Acres of Land, 441 U.S. 506,
511-513 (1979)). In other words, the government is
required to pay the owner “what a willing buyer would
pay in cash toa willing seller at the time of the taking.”
Ibid. (quoting United States v. Miller, 317 U.S. 369, 374
(1943) (citation and internal quotation marks omitted)).
Because markets generally value land in terms of both
current and potential use, courts ordinarily must deter-
mine fair market value in light of the “highest and most
profitable use,” or most economically profitable use,
that the land will support. Olson v. United States, 292
U.S. 246, 255 (1934). In so doing, however, courts must
take into account any “inherent physical characteris-
tics” limiting use of the land, and any “regulatory
restrictions applicable to the property and the proposed
use.” United States v. 320.0 Acres of Land, 605 F.2d
762, 818 (5th Cir. 1979), A court may not, for example,
consider a use prohibited by zoning rules or other regu-
lations, unless the landowner can establish a “reason-
able possibility” that the prohibition will be lifted and
the use allowed. Jd. at 819. Further, courts must also
consider value attributable to neighboring land uses,
including uses related to public improvements. As a
general rule, such influences are to be considered when
the government condemns land, just as they would be
considered by willing buyers and sellers in a market
transaction. See United States v. Reynolds, 397 U.S.
14, 16 (1970); see also Miller, 317 U.S. at 376.

This Court, however, has recognized that the effect
of government activities in some instances should not
be considered when determining market value. For
example, if a parcel’s fair market value on the date of
acquisition has been increased by the acquisition itself

14

or in anticipation of the acquisition, the evidence of such
value must be excluded. See Miller, 317 U.S. at 377.
That rule originated in two earlier opinions, Shoemaker
v. United States, 147 U.S. 282 (1893), and Kerr v.
South Park Commissioners, 117 U.S. 379 (1886), both
of which involved condemnation of land for parks. In
those cases, the Court upheld instructions directing the
finder of fact to disregard the value of land sold in the
immediate vicinity of the proposed parks after the
projects were announced. See Shoemaker, 147 U.S. at
303-305; Kerr, 117 U.S. at 385-387. The Court reasoned
that those sales did not reflect fair market value, but
instead included “conjectural or speculative values,
based upon the anticipated effect of the proceedings
under which the condemnation is had.” See Shoemaker,
147 U.S. at 305 (citing Kerr, 117 U.S. at 380). Likewise,
this Court has more recently held that a reduction in
property value caused by the “threat” of condemnation
must not be considered in setting just compensation.
See United States v. Virginia Elec. & Power Co., 365
U.S. 624, 636 (1961); see also Almota Farmers Elevator
& Warehouse Co. v. United States, 409 U.S. 470, 477
(1973).

The principle just described has come to be known as
the “scope of the project” rule. See Miller, 317 U.S. at
377; 320.0 Acres, 605 F.2d at 785. Under that rule, the
measure of just compensation in a condemnation pro-
ceeding must not be “reduced or increased” because of
an “alteration in market value” attributable to the
“public project that makes the condemnation neces-
sary.” Reynolds, 397 U.S. at 16. In United States v.
Meadow Brook Club, 259 F.2d 41, cert. denied, 358 U.S.
921 (1958), the Second Circuit considered the appli-
cation of that principle where the pre-condemnation
action that affected the value of the land was not earlier

15

acquisition of property for the project but rather land-
use regulation. Meadow Brook involved action by the
Air Force to condemn land to enlarge an airfield. Jd. at
43. Before condemnation, a representative of the Air
Force had appeared before a local zoning board to
oppose the landowner’s request to change the prop-
erty’s zoning from residential to industrial. Jd. at 44.
The issue before the Second Circuit was whether the
district court could consider that opposition when
determining the “probability of rezoning (as a factor
entering into the ultimate calculation of value).” Jd. at
45. The Second Circuit held that the Air Force’s
opposition could be considered, in light of evidence that
the Air Force’s position was “based in large part on the
fear of flight hazards,” a concern independent of any
interest in acquiring the land. The court stated that if
the Air Force had acted in “bad faith” —.e., if its “sole
motive” in opposing the zoning change had been to
“depress the market value of the property which it
then intended to condemn”—then the impact of its
opposition on land value would have been excluded. Jd.
at 45-46.

a. Petitioners first argue that the court of appeals
erred in making “bad faith” an indispensable element
that must be shown before the scope-of-the-project rule
can apply. Pet. 14-18. The difficulty with that con-
tention is that the court of appeals did not hold that bad
faith is an indispensable element or that a party seeking
application of the scope-of-the-project rule always must
show bad faith. To the contrary, in this case, the
court of appeals recited three other factors previously
identified as relevant by the Fifth Circuit, Pet. App. 10,
and then identified what petitioners label “bad faith” as
“a further consideration that is instructive” in cases,
like this one, in which land-use regulation (here, the

16

Corps’ permit denial) allegedly affected land values
before the government moved to acquire it, id. at 11.
Moreover, i in concluding that the Corps’ permit denial
in 1979 did not bring the condemnation actions
-commenced in 1994 within the scope of the original
project, the court of appeals considered all of the factors
it had previously identified as relevant, including
the foreseeability of the later condemnation when the
government first regulated the land in a manner that
reduced its value, the length of time between the regu-
lation and the later condemnation, and governmental
representations regarding the scope of the project. See
id. at 12-13. The court merely concluded that, under
the circumstances of this case, in which consideration of
those other factors did not bring this condemnation
action within the scope-of-the-project rule, that rule
would not apply unless the record showed “that when
the Corps denied BDF’s permit application in 1979, it
anticipated that the denial would drive down the price
of [petitioners’] property and that this would facilitate
the * * * eventual acquisition of the land.” Jd. at 12.
That holding is fully consistent with this Court’s
decisions. As we have explained, the Court developed
the scope-of-the-project rule in a case involving direct
effects on market value caused by a series of condem-
nations of adjacent lands. See Miller, 317 U.S. at 377.
The Court held that if the later-acquired lands were
part of the initial commitment to acquire lands for the
project, any increase in value in the interim could be
attributed to “speculating * * * due to the Govern-
ment’s activities.” Jbid. In contrast, if the lands were
“merely adjacent lands” that the government later de-
cided to acquire as part of a subsequent commitment to
enlarge the original improvement, any value added in
the interim by virtue of the adjacent lands’ proximity to

17

the existing improvement would be an element of
market value for which the landowner was entitled to
compensation. bid.

Similarly, under Meadow Brook and the Fifth Cir-
cuit’s decision here, if the government previously in-
voked a regulatory process as part of its acquisition
process (in order to depress land values to facilitate
acquisition), the effects of those actions on land values
are to be excluded from the determination of just
compensation. 259 F.2d at 45. On the other hand, if the
government invoked a regulatory process to further
legitimate government interests independent of the
later acquisition, the regulatory actions are properly
considered part of the existing landscape against which
fair market value is to be determined. Jd. at 46. Here,
as in Meadow Brook, the court found that the prior
regulation was undertaken for reasons independent of
the land acquisition and that the effect of that valid
prior regulation on the value of the land therefore
should be taken into account in determining just
compensation in the condemnation action. That fact-
bound application of the general scope-of-the-project
principle of Miller to the circumstances of this case
presents no issue warranting review by this Court.

b. Alternatively, petitioners argue that the court of
appeals engaged in improper de novo fact-finding in
conflict with Icicle Seafoods, Inc. v. Worthington, 475
U.S. 709 (1986), by declining to remand the “bad faith”
issue to the district court. Pet. 18-21. But petitioners’
brief on the merits in the court of appeals never asked
for a remand, and the claim of error they now assert is
wholly fact-bound. The court of appeals merely deter-
mined that there was insufficient evidence to show that
the denial of BDF’s permit application was undertaken
for the purpose of depressing land values to facilitate

18

acquisition. Especially in light of the presumption of
regularity that accompanies agency action—and the
fact that petitioners had already challenged the
agency’s decision under the Administrative Procedure
Act and lost—the court of appeals’ decision was correct
and presents no issue warranting review by this Court.’

The Corps of Engineers denied BDF’s permit appli-
cation upon written findings of fact supported by
an administrative record. In its findings, the Corps
determined that completion of the BDF levee would
result in the destruction of a large area of important
wetlands, thereby causing major adverse environ-
mental impacts that could not be justified, given the
availability of alternative sites for development. See
p. 6, supra. The Corps also determined that the BDF
levee would have adverse impacts on Jean Lafitte Park,

1 Petitioners assert (Pet. 6) that the Park Service had an
ulterior motive for the position it took before the Corps of Engi-
neers. The Park Service’s memorandum, however, does not say
what petitioners claim it says. It merely notes that some land-
owners might be demanding the right to develop their lands in
order to force the government to exercise its power of eminent
domain, and that the government should not allow its hand to be so
forced. Gov’t C.A. Br. 47-48. Far from evidencing a desire to

acquire the land, the memorandum thus exhibits a desire to avoid _

that result. Moreover, the Park Service’s comments to the Corps
do not even hint at a secret plan or desire to acquire the lands later
on, and nothing in the record suggests that the Corps’ decision to
deny the permit application was influenced by anything but
legitimate regulatory concerns. Indeed, when petitioners chal-
lenged the Corps’ permit denial in district court under the APA,
the district court held that the Corps had properly analyzed
the environmental concerns and correctly denied the permit on
ecological grounds. See Bayou Des Familles Dev. Corp., 541
F. Supp. at 1038. Petitioners cannot now collaterally attack that
determination in the context of a new action brought decades later.

19

because the draining and polluting of wetlands outside
the Park would damage water quality and water flows
into the Park. Ibid. Whether the Corps would have
denied the permit for ecological reasons, absent the
concern for protecting the Park, was disputed at trial,
as petitioners point out.? But that is not the relevant
question in this context. The relevant question is
whether the permit was denied for the purpose of
devaluing the lands to facilitate their acquisition, 1.¢.,
whether, but for plans to acquire the lands later on, the
permits would have been granted. In this case, the
need to preserve wetlands in the area of the BDF
development project, and the need to protect water
flows into Jean Lafitte Park, were both legitimate
grounds for denying BDF’s permit application, and
both of those reasons were independent of whether the
government might later acquire the land being
regulated. Petitioner never proved nor offered to
prove at trial in this case, or in their prior APA action,
that the Corps’ statement of reasons was a pretext for
devaluing the land so as to facilitate its later acquisi-
tion. See Pet. App. 13 n. 1.3

2 The district court found that the Park was the “primary moti-
vating factor” in the Corps’ denial of the BDF permit. Pet. App.
42. On appeal, the United States argued that that finding was
clearly erroneous, in light of the regulations governing permit
applications under Section 404(b) of the Clean Water Act of 1977
(33 U.S.C. 1344(b)), which emphasized wetlands impacts and re-
quired BDF to prove that there was “no practicable” alternative
site for development, other than the wetlands in question. See
Gov't C.A. Br. 51-57 (addressing 40 Fed. Reg. 31,320 (1975) (Corps’
regulations), and 40 Fed. Reg. at 41,292 (EPA regulations)). The
court of appeals did not reach that question. _

® As noted by the court of appeals (Pet. App. 13 n.1), petitioners
had every incentive to present such evidence at trial. Although
the precise question in Meadow Brook was not presented to the

20

For the foregoing reasons, this case is not at all like
Icicle Seafoods. That case involved the standard of
review applicable to trial court decisions under the Fair
Labor Standards Act of 1988. 475 U.S. at 710-712.
Although some courts of appeals had read this Court’s
decisions to allow de novo appellate review of certain
factual questions, the Court held that de novo review
was not appropriate. This case, by contrast, does not
involve a question of de novo review of factual issues.
The court of appeals simply determined that the record
did not contain sufficient evidence to support a judg-
ment for one of the parties. That is the sort of decision
that courts of appeals regularly and properly make.

2. Finally, petitioners argue (Pet. 21-27) that the
court of appeals erred in rejecting their attempt to
resuscitate their time-barred taking claims. As noted
above (see p. 8, supra), petitioners previously filed suits
under the Tucker Act in which they asserted that the
1979 permit denial resulted in a taking of their property
for which compensation was due under the Fifth
Amendment. The Federal Circuit and the Court of
Federal Claims held that those suits were time-barred.
Bayou Des Familles Dev. Corp. v. United States, 130
F.3d 1034 (1997); Cristina Inv. Corp. v. United States,
40 Fed. Cl. 571 (1998). Because the judgments in those
actions operate as adjudications on the merits, see

district court in this case, petitioners did present evidence and
argument regarding the motives of the Corps and the Park
Service. Petitioners have failed to identify any material deficiency
in the factual record that could be corrected on remand. Further,
contrary to petitioners’ assertion (Pet. 20-21), it was not the
United States’ obligation to identify and advance a theory sup-
porting petitioners’ claim of highest and best use. That burden
rested with them. See United States v. 62.50 Acres of Land, 953
F.2d 886, 890 (5th Cir. 1992).

21

Plaut v. Spendthrift Farms, Inc., 514 U.S. 211, 228
(1995); United States v. Oppenheimer, 242 U.S. 85, 87-
88 (1916), petitioners are now foreclosed from seeking
compensation for the 1979 permit denials in later
lawsuits, including this one. Thus, quite aside from the
limitations imposed by the scope-of-the-project rule
discussed above, the doctrine of res judicata now limits
petitioners to seeking compensation only for those
events that took place after they filed their time-barred
taking claims.

Petitioners argue that res judicata does not apply
here. In particular, they argue that this Court’s de-
cision in United States v. Dow, 357 U.S. 17 (1958),
stands for the proposition that district courts always
have jurisdiction in direct condemnation actions to
award compensation for prior takings, notwithstanding
otherwise applicable jurisdictional limits, statutes of
limitations, or prior litigation involving an inverse con-
demnation claim. Pet. 21-27. Dow, however, does not
support that contention. In Dow, the United States
filed a complaint in condemnation for an easement, took
possession of the easement under a court order, and
then filed a formal declaration of taking for the
easement. 357 U.S. at 18-19. Between the date on
which the United States took possession and the date
on which it filed the declaration of taking, the under-
lying tract was conveyed. Id. at 19. Because claims
- against the United States cannot be assigned, this
Court had to determine on which of the two dates the
taking occurred, in order to determine which private
party (the seller or purchaser) was entitled to com-
pensation. Jd. at 20. The Court held that the taking
occurred when the United States entered into posses-
sion under the court order. Jd. at 22-27. That ruling
recognized that when the United States files a com-

22

plaint in condemnation, the district court has authority
to grant possession on the complaint and to order
compensation for the possession, even though a formal
declaration of taking has yet to be filed. See also Fed.
R. Civ. P. 71A(i)(3) (authorizing district court to award
compensation for interests taken by United States after
filing complaint).

Dow did not address the effect that an earlier
judgment has in later litigation. And it certainly does
not hold that an earlier judgment that a claim for just
compensation based on certain events is time-barred
loses its preclusive effect in later litigation over the
amount of compensation due for a subsequent taking.
The two trial court rulings relying on Dow cited by
petitioners—Georgia-Pacific Corp. v. United States,
568 F.2d 1316 (Ct. Cl.), cert. denied, 439 U.S. 820
(1978), and Stephenson v. United States, 33 Fed. Cl. 63
(1994)—are inapposite for the same reason.‘

4 Georgia-Pacific involved parallel condemnation actions: an
inverse condemnation action filed in the Court of Claims and a
later direct condemnation action filed by the United States in dis-
trict court. See 568 F.2d at 1318. Under the Tucker Act, the Court
of Claims had exclusive jurisdiction over the inverse condemnation
claim. See 28 U.S.C. 1491. Nevertheless, for reasons of judicial
economy, the Court of Claims declined to entertain the claim, in
deference to the later-filed proceedings in district court. See
Georgia-Pac., 568 F.2d at 1319. The Court of Claims reasoned that
the district court could resolve all compensation issues—.e., those
related to both the direct condemnation and the alleged inverse
condemnation—because, under Dow, the district court had
jurisdiction to determine the date of taking and award com-
pensation from that date. Jd. at 1322. In Stephenson, the Court of
Federal Claims followed Georgia-Pacific on similar facts. See 33
Fed. Cl. at 63.

Even if those two trial court decisions were correct (and we do
. not believe they were), neither addressed the preclusive effect of a

23

Finally, petitioners assert (Pet. 24-27) that res
judicata does not apply because the previous decisions
in the Tucker Act suits were not “on the merits.”
Although judgments on statute-of-limitations grounds
are generally considered to be on the merits for res
judicata purposes, petitioners contend that that rule
does not apply to judgments applying the Tucker Act’s
statute of limitations, because in that setting the
statute of limitations restricts the scope of the waiver
of sovereign immunity and thus is jurisdictional. Pet.
24, That contention is without merit. It is true that,
when conditions are placed on a waiver of sovereign
immunity, those conditions necessarily “define [a]

judgment regarding an alleged taking on later litigation regarding
a later taking. Moreover, in our view, those decisions mistakenly
relied on Dow for the proposition that a district court may exercise
jurisdiction over an inverse condemnation claim that is within the
exclusive jurisdiction of the Court of Federal Claims, if those
claims are alleged in response to a direct condemnation action
instituted by the United States. Dow did not address that juris-
dictional issue. In Dow, the “prior” taking was not an alleged in-
verse condemnation prior to the direct condemnation, but rather a
physical taking that occurred under court order in the direct
condemnation action itself. See 357 U.S. at 22-27. That distinction
is fundamental. As sovereign, the United States is immune from
suit, except as it consents to be sued. United States v. Dalm, 494
U.S. 596, 608 (1990); United States v. Mitchell, 445 U.S. 535, 538
(1980). Only Congress can waive the United States’ sovereign
immunity, Block v. North Dakota, 461 U.S. 273 (1983), and such
waivers “cannot be implied but must be unequivocally expressed.”
Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95 (1990).
Consequently, the United States does not, simply by filing its own
action, waive sovereign immunity to a counterclaim that is subject
to the exclusive jurisdiction of another court. See United States v.
Shaw, 309 U.S. 495 (1940); United States v. United States Fid. &
Guar. Co., 309 U.S. 506, 512-515 (1940); Narramore v. United
States, 960 F.2d 1048, 1050 (Fed. Cir. 1992).

24

court’s jurisdiction to entertain the suit,” and thus are
in that important sense “jurisdictional.” United States
v. Mitchell, 445 U.S. 585, 538 (1980). But it does
not follow that a judgment on statute-of-limitations
grounds in a Tucker Act suit does not also have the
effect of judgments on such grounds generally, insofar
as the doctrine of res judicata is concerned. Indeed, it
would be an odd result if the special jurisdictional
nature of statutes of limitation in suits against the
United States, which affords the government added
protection not available to private parties against the
assertion of untimely claims, had the effect of depriving
the United States of even the usual preclusive effect of
a judgment on statute-of-limitations grounds.

- Petitioners also claim that the Tucker Act statute of
limitations is inapplicable to their request for compen-
sation based on the alleged 1979 regulatory taking, be-
cause that request is not in the nature of a counter-
claim, but simply part of the compensation due for the
proposed acquisition of title at issue in the present case.
Under that theory, however, petitioners’ regulatory
takings claim could never be time-barred, and could
always spring back to life if made in response to a direct
condemnation action. As the court of appeals observed,
that notion is at odds with this Court’s holdings that
waivers of sovereign immunity must be narrowly con-
strued. Pet. App. 16. Further, it is at odds with exist-
ing precedent that holds that a direct condemnation
action filed by the United States does not revive a
party’s right to compensation for an inverse condem-
nation that was lost under the statute of limitations.
See United States v. 422,978 Square Feet of Land, 445

25

F.2d 1180, 1188 (9th Cir. 1971). The court of appeals’
refusal to adopt petitioners’ novel legal theory there-
fore does not warrant review by this Court.

5 Petitioners’ attempts to distinguish 422,978 Square Feet (Pet.
23-24) are unpersuasive. In that case, the United States filed
a complaint in condemnation against submerged lands in San
Francisco Bay. The United States had taken physical possession
of those lands years earlier. 445 F.2d at 1181-1183. The United
States urged two distinct reasons why no compensation was owed
to the State of California: (1) the land was subject to a navigational
servitude; and (2) the State had failed to file a timely inverse con-
demnation action under the Tucker Act. Jd. at 1184-1188. Con-
trary to petitioners’ suggestion (Pet. 23- 24), the two issues were
not interdependent. On the latter issue, the court of appeals ruled
that the United States’ complaint in condemnation was not itself a
taking, but simply a method of adjudicating rights to compen-
sation. 445 U.S. at 1188. Because the property in question had
already been taken, and because the State had failed to file a
timely action seeking compensation for that taking under the
Tucker Act, the State’s right to compensation was lost. The court
of appeals held that the United States did not lose the ability to
raise the statute of limitations against the inverse condemnation
claim simply because it had filed a direct condemnation action.
Ibid. It follows a fortiori that petitioners’ regulatory takings claim
is barred, because here there is a prior judgment holding that the
inverse condemnation action is time-barred.

26

CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.

BARBARA D. UNDERWOOD
Acting Solicitor General
JOHN CRUDEN
Deputy Assistant Attorney
General

‘ DONALD ROSENDORF
JOHN A. BRYSON
JOHN L. SMELTZER

Attorneys

FEBRUARY 2001

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1269%3A2. Public record. Not legal advice.