The Federal Circuit of Appeals issued its opinion in Lost Tree Village Corp. v. United States, a regulatory takings case, on June 1, 2015. Our Owners’ Counsel colleague Robert Thomas beat us to the punch (of course), and provided an excellent case synopsis in his Inverse Condemnation blog, available here. In brief, the Court of Claims held that the government’s denial of a permit to fill 4.99 acres of wetlands constituted a per se regulatory taking under Lucas v South Carolina Coastal Commission, 505 U.S. 1003 (1992), and that there was a regulatory taking under Penn Central v. New York City, 438 U.S. 104 (1978). The Circuit Court affirmed the Lucas Taking, and found that it was unnecessary to reach the trial court’s alternate holding.
The U.S. Army Corps of Engineers denied the permit application in 2004, and the owner sued alleging that the property was worth $4.8 million with a permit and $25,000 without a permit. The government did not genuinely dispute the owner’s valuation, but argued that the relevant parcel included other lands owned by Lost Tree, which argument was successful before the Circuit Court ruled on the first appeal that the relevant parcel was the 4.99 parcel. On remand, the trial court found that the permit denial resulted in a loss in value of of 99.4%. The question presented was thus “whether residual value from non-economic uses precludes application of Lucas and requires application of Penn Central’s balancing test.” The Circuit Court agreed with the government that “a Lucas taking is rare” but concluded that Lost Tree was an example of the breed, however rare. The Court also rejected the government’s argument that sale – even for nominal consideration – was an economic use that precluded application of Lucas’ per se taking doctrine.
In affirming, the Circuit Court also relied on (and perhaps resurrected) Loveladies Harbor, Inc. v. United States, 28 F. 3rd 1171 (Fed Cir. 1994) a case which concerned Bayfront property on Long Beach Island. There, the Federal Court also found a categorical Lucas taking of 12.5 acres of Barnegat Bayfront property caused by the Army Corps (and DEP’s) denial of a fill permit.
We’ll keep an eye out for the petition for certiorari.