ELR Citation: 44 ELR 20257
No(s). 14-376C (Fed. Cl. Nov 21, 2014)

The Federal Claims Court denied a motion to dismiss a wetlands mitigation bank's breach of contract claim against the government. A family formed the bank to manage two tracts of valuable land in Alaska that the family wanted to sell as a preserved natural resource to developers who were required to compensate for the impact their developments elsewhere would have on other natural resources. The company and the U.S. Army Corps of Engineers signed a mitigation banking instrument that allowed the company to sell wetland mitigation credits. The bank then sold some credits to the Alaska Department of Transportation in connection with a railroad extension project, but the Corps then unilaterally reduced the number of wetland mitigation credits available from the bank from 151.81 to 16.92. A railroad that was also interested in purchasing credits from the bank purchased the remaining 16.92 credits, but it had to secure the remaining credits from another bank located in a different service area. According to the bank, its inability to sell the full complement of credits resulted in a loss of $12 million. The bank then filed suit and the government filed a motion to dismiss, arguing that the mitigation banking instrument was not a contract. It claimed that the Corps has nothing to exchange in consideration for its approval of the mitigation banking instrument. But the court disagreed. In exchange for the bank's promise to preserve the land, the Corps agreed to award the bank mitigation credits that it could sell to third parties. The bank's complaint alleged negotiation, mutual intent to contract, bargained for exchange of consideration, and a memorialized final instrument setting forth the terms of the bargain. The complaint therefore alleges sufficient facts to establish the existence of a contract.