ELR Citation: ELR 21516
No(s). 96-5100 (Fed. Cir. Jul 31, 1997)

The court upholds a trial court determination that a use prohibition issued by the U.S. Army Corps of Engineers under Federal Water Pollution Control Act §404 constitutes a mere diminution in value of a real estate developer's land and does not constitute a compensable categorical taking. The court, however, vacates the trial court's partial regulatory takings judgment. The court first upholds the trial court's finding that all 27 lots of the development constituted the relevant parcel for calculating the proportional loss in value. The developer financed, purchased, and developed all 27 lots as a whole, and each of the 12 restricted lots does not separately constitute an independent and divisible parcel. In order to constitute a categorical taking, the government's enforcement of a regulation must deny the owner all economically viable use. Here, the court finds that based on the determination that all 27 lots constituted the parcel as a whole for calculating the proportional loss in value, the trial court correctly determined that the developer has not lost all economic use of the entire parcel. The developer maintained the use of 15 of the 27 lots. If the developer had been able to sell all 27 lots, it would have grossed $1.48 million. In reality, the developer grossed $1.07 million on the 15 remaining lots. The court also holds that the trial court prematurely reached the determination that a compensable partial taking had not occurred. The trial court found that the economic impact felt by the developer was insignificant; however, it did not make any finding on the second and third factors used for determining whether a compensable regulatory taking has occurred. Without the benefit of these findings, the court cannot properly balance the economic impact of the regulation against its interference with the developer's investment-backed expectations and the propriety of the government's actions.

Counsel for Plaintiff
Keith A. Rosenberg
Meyer, Faller, Weisman & Rosenberg
4400 Jenifer St. NW, Ste. 380, Washington DC 20015
(202) 362-1100

Counsel for Defendant
Larry Liebesman
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Mayer and Schall, JJ.