Takings 101 the Fifth Amendment Provides, “Nor Shall Pri- of All Economically Beneficial Use
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Legal Reporter for the National Sea Grant College Program The Volume 7:1, April, 2008 Takings 101 The Fifth Amendment provides, “nor shall pri- of all economically beneficial use. For instance, vate property be taken for public use, without in Lucas v. South Carolina Coastal Council, the just compensation.” Courts will generally find a court found that a zoning ordinance prohibiting right to compensation when the government 1) all development on a property owner’s land directly appropriates private property; 2) physi- resulted in a regulatory taking.4 cally occupies private property; and 3) imposes If the regulation merely decreases the value a regulatory constraint on the use of property so of the property, it will not necessarily result in a severe as to deprive an owner of all economical- taking. The court will perform a multi-factor ly beneficial use. balancing test outlined in Penn Central The first and second categories might also Transportation Co. v. New York City5 to determine be called “eminent domain” or “condemna- whether or not there has been a taking. The fac- tion.” Eminent domain is “the inherent power tors include: 1) the extent to which the regula- of a governmental entity to take privately owned tion interferes with investment-backed expecta- property, especially land, and convert it to pub- tions; 2) the economic impact of the regulation lic use, subject to reasonable compensation for on the claimant; and 3) the character of the gov- the taking.”1 Condemnation is “to determine ernment’s interest, or the social goals being pro- and declare that certain property is assigned to moted by the government. public use.”2 Inverse condemnation is “an In this edition of The SandBar, we have action brought by a property owner for compen- focused on various takings issues. The cases range sation from a governmental entity that has from more “traditional” takings cases involving taken the owner’s property without bringing land use regulations to more novel cases, includ- formal condemnation proceedings.”3 ing a case in which fishermen alleged a taking An example of a physical taking is the when their fishing licenses were rendered useless Loretto v. Teleprompter Manhattan CATV by an area being designated as a national wildlife Corporation case. In Loretto, the government refuge. Please enjoy and feel free to contact us required landlords to allow installation of cable with any questions or comments. television in their rental properties. In that instance, the government gave itself the right to Endnotes occupy a portion of the private property without 1. BLACK’S LAW DICTIONARY 233 (2d Pocket ed. paying for the privilege. 2001). The third category of takings is considered a 2. Id. at 123-124. regulatory taking. As noted above, mere regula- 3. Id. at 124. tion of property is not enough for a court to find 4. 505 U.S. 1003 (1992). a taking. The regulation must deprive an owner 5. 438 US 104 (U.S. 1978). Table of Contents Regulatory Takings Issue Takings 101 Court Finds Terra Bowling . 1 Court Finds Regulatory Taking of Developer’s Regulatory Taking Property Sarah Spigener . 2 of Developer’s Court Dismisses Commercial Fishing License Claims Property Surya Gunasekara . .3 Bailey v. United States, 2007 WL 2317493 (Ct. Rolling Beach Easement not a Taking Fed. Cls. Aug. 10, 2007) Joseph Rosenblum . 5 Court Denies Regulatory Taking in Designated Sarah Spigener, 3L, University of Mississippi Port Area School of Law Alicia Schaffner . 7 The Court of Federal Claims held that a private Landowners Prevail in Beach Access Case property owner may seek compensation for a Lynda Lancaster . .9 regulatory taking of property at any time the Court Rejects Condemnation of Private regulation continues to be enforced, even if the Property under Salmon Recovery Act regulation existed prior to the purchase of the Sara Wilkinson . 12 property or a previous owner had been awarded compensation for the same regulatory taking. Restriction on Water Use Not a Per Se Taking Terra Bowling . 14 Background In 1989, Gary Bailey bought land bordering the Permit to Remove Sand Is an Imminent Injury to Beachgoers Lake of the Woods in Minnesota. Bailey initial- Margaret Enfinger . 16 ly planned to build a marina or a harbor on the property, so he applied to the United States Corps Liable for Shoreline Erosion on Army Corps of Engineers (Corps) for a dredg- Lake Michigan ing permit. In 1990, the Corps approved the Terra Bowling . 18 permit; however, Bailey never began the pro- ject. Three years later, the Corps informed Protecting Your Copyrighted Works Will Wilkins . 21 Bailey that he would need a different permit to complete the project because the property was Coast to Coast . 23 located in a wetlands area and suggested that Bailey hire a consultant to designate which por- tions of his property were wetlands. Bailey did not take any action until late 1996 when he applied to Lake of the Woods County to have 13.2 acres of his property along the lakeshore platted as a subdivision. As a con- dition of approval from the county, Bailey had See Regulatory Taking, page 11 Page 2 Regulatory Takings Issue Volume 7, No. 1 The SandBar Court Dismisses Commercial Fishing License Claims Palmyra Pac. Seafoods, L.L.C. v. United States, 80 which included the right to convey an exclusive Fed. Cl. 228 (2008). license for a commercial fishing operation on Palmyra and use of the former base infrastruc- Surya Gunasekara M.R.L.S., 1L, University of ture. These license rights were then assigned by Mississippi School of Law PDC to Palmyra Pacific Enterprises, L.L.C. (PPE). On November 17, 2000, PDC and the When the United States closed Palmyra Atoll to Fullard-Leo family gave written consent for commercial fishing, several fishing licensees PPE to assign their license rights to PPE brought suit alleging a Fifth Amendment taking Limited Partnership (PPELP) and granted claim. The Unites States Court of Federal PPELP permission to sublicense its rights to Claims held that there was a frustration of pur- Palmyra Pacific Seafoods, L.L.C. (PPS). Fol- pose but no taking of tangible property interests lowing this agreement PPS made substantial under the Fifth Amendment and subsequently investments on Palmyra in preparation for granted the United States’ Rule 12(b)(6) motion developing a commercial fishing operation. to dismiss for failure to state a claim. On January 18, 2001 the tidal lands, sub- merged lands, and waters out to 12 nautical Background miles surrounding Palmyra and Kingman Reef Palmyra Atoll (Palmyra) and Kingman Reef are were designated as a National Wildlife Refuge United States territories located approximately by order of the Secretary of the Interior. Six 1,000 nautical miles south of Hawaii. They are days later the Department of Interior “surrounded by a 200 nautical mile United (Interior) closed Palmyra and Kingman Reef to States Exclusive Economic Zone (EEZ) that commercial fishing. In 2003 and 2006, The excludes foreign fishing vessels.”1 During World Nature Conservancy conveyed portions of its War II the United States Navy established a holdings on Palmyra to Interior to be included base on Palmyra, which consisted of an airstrip, in the refuge. dock, harbor, and base camp. The Navy held the See Commercial Fishing, page 4 Kingman Reef until August 25, Photograph of Palmyra Island courtesy of NOAA’s National Climatic Data Center. 2000, when it was transferred to the Department of the Interior. However, after World War II, the Fullard-Leo family defeated the United States in the Supreme Court to establish quiet title of Palmyra.2 The Fullard-Leo family held title to the emergent land of Palmyra until late 2000, when the family sold the atoll to The Nature Conservancy. Prior to the sale, the Fullard-Leo family assigned rights to Palmyra De- velopment Co., Inc. (PDC), Volume 7, No. 1 The SandBar Regulatory Takings Issue Page 3 Commercial Fishing, from page 3 The plaintiffs PPS, PPE, and PPELP, Fifth Amendment. The United States argued alleged that the refuge designations prohibiting that the plaintiffs only held licenses, which are public access and commercial fishing on not cognizable Fifth Amendment property inter- Palmyra and Kingman Reef left their various ests. The court determined that this case hinged licenses, sublicenses, facility improvements, on the issue of whether the plaintiff actually pos- and fishing operations worthless. As a result, sessed a protected property interest. the plaintiffs argued that the government’s In its analysis, the court relied on Colvin action constituted a taking of valuable property Cattle Co. v. United States, where the plaintiff interests for public use without just compensa- alleged that the government had taken property tion in violation of the Fifth Amendment. interests in ranch and water rights after cancel- ing on a long term grazing contract on an adja- Motion to Dismiss Claim cent pasture.5 In Colvin Cattle, the federal cir- The United States moved to dismiss under Rule cuit court found that despite the possible loss in 12(b)(6) for failure to state a claim upon which value of the ranch from losing the grazing lease, relief may be granted. The United States there had not been a taking because the loss did argued that the plaintiffs’ licenses were not cog- not occur from government restrictions on a nizable property interests under the Fifth protected property interest. Amendment, but mere licenses, and thus not The court found the facts in Colvin Cattle to subject to the takings clause. The takings be analogous with the case at bar. Here, the clause of the Fifth Amendment protects prop- plaintiffs had no property interest in the tidal erty interests by stating that private property lands, submerged lands, or surrounding waters.