ELR Citation: ELR 20626
No(s). 266-82L (Cl. Ct. May 6, 1985)

The court holds that denial of a Federal Water Pollution Control Act (FWPCA) §404 permit for activity associated with plaintiff's limestone mining constitutes a taking by depriving plaintiff of all economically viable uses of its land.The court finds that denial of the permit renders rock mining commercially impossible.

The court proceeds to dismiss five arguments launched by defendant that plaintiff should nevertheless be denied recovery. The court first rejects the argument that no taking should be found because plaintiff retains valuable incidents of ownership, including the rights to use the land as is, to control access to it, and to dispose of it. These rights retain no practical economic value after the permit denial. Also, holding the land in the hope that it will eventually become available for productive use can not be considered a viable economic activity.

Second, the court holds that a taking has occurred even though plaintiff's land retains market value. A residual market in which speculators gamble that property will become productive invariably develops for commercially useless land. If the existence of such a market could defeat a takings claim, no regulatory taking could ever be proved.

Third, the court rejects the argument that the government may not be charged with the loss resulting from the prohibition of rock mining because that use if dependent on the consent of the government through the §404 permit process for its value. Acceptance of this theory would make the compensation clause an empty promise, since almost all economic activity is subject to federal regulation.

Fourth, the court addresses several police power arguments. Defendant first argues that compensation need not be paid when the prohibited activity has been found by Congress to be detrimental to the public welfare. The court rejects this application of the disfavored "noxious use" doctrine, that an exercise of the police power can never be a taking. Again, the compensation clause would be meaningless if the government could define away property rights by pronouncing them contrary to the public welfare. Defendant next urges that the noxious use doctrine continues to apply when the prohibited use would cause pollution. While the government might conceivably avoid compensation on this theory, defendant has failed to prove any serious adverse physical effects on the health, welfare, or property of others. That plaintiff's activity meets the FWPCA's definition of pollution is not persuasive. Also, defendant failed to prove its assertion that the mining operation would cause contamination of the water supply. Defendant's final police power argument is that plaintiff has no right to compensation because its proposed use would deprive the public of the continued enjoyment of the environmental and aesthetic values of the wetlands. The court, however, does not view the public's interest in such values as a servitude on private property, but instead as a widely shared public benefit that must be paid for by all. The property owner's interest must be accommodated when the government prohibits development to maintain environmental values. Drawing on congressional policy in the Water Bank Act, under which the government is authorized to buy wetlands from private landowners only after paying compensation, the court finds that the §404 regulatory scheme inadequately accounted for plaintiff's right to use its property.

Finally, the court holds that the fact that plaintiff's mining operation would involve navigable waters does not insulate the government from paying compensation.

Counsel for Plaintiff
John A. DeVault III, C. Warren Tripp Jr.
Bendell, Dittmar, DeVault, Pillans & Gentry
101 E. Adams St., Jacksonville FL 32202
(904) 353-0211

Counsel for Defendant
Fred A. Disheroon, G. Bunker Henderson, F. Henry Habicht II
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 724-7361