ELR Citation: ELR 20671
No(s). s. 85-2588, -2609 (Fed. Cir. May 14, 1986)

The court holds that the Corps of Engineers' (Corps') denial of a Federal Water Pollution Control Act (FWPCA) §404 permit to mine limestone in Florida is not necessarily a taking of private property requiring just compensation simply because it inhibits the landowner's ability to make a profit.The court first holds that the Claims Court's inquiry into finding that the proposed activity did not constitute a discharge into federal waters under the FWPCA was erroneous. Such a finding means that the Corps was not authorized by the FWPCA to require a permit for the 98 acres for which the permit was denied, and Tucker Act suits in the Claims Court are not available to recover damages for unauthorized acts by government officials. Such inquiry is properly brought before a district court, not the Claims Court. The court holds, however, that by electing a Tucker Act suit in the Claims Court plaintiff has conceded the authority of the Corps to deny the permit. The court also notes that the Claims Court's finding appears improper under the Law of the Case doctrine. The written opinion of the court appeared a year after its ruling from the bench in which it had assumed the permit denial was an authorized Corps action. Although Law of the Case does not apply to usual oral discussion between counsel and the court, an oral ruling recorded carefully in trial transcripts should have the same dignity accorded to it as written findings. Turning to an examination of the takings issue, the court rules that a regulation under the FWPCA can be a taking if the effect of the regulation is sufficiently restrictive on the landowner's ability to make profitable use of the land. The court rules that the owner's investment compared with the market value after the imposition of the regulation may be a factor in such determination. The court then holds that the Claims Court erred in applying its takings determination, a test that evaluated only the immediate use value of the land, and rules that the appropriate test is whether there has been a diminution of the fair market value of the property. Although the permit denial may have precluded the most profitable and immediate use, evidence indicated that willing buyers existed for the property, buyers who may have been willing to speculate that the mining prohibition would some day be lifted. The lower court's exclusive reliance on only plaintiff's expert witness was clear error since after the permit was denied plaintiff received a $4000 per acre offer and frequent inquiries regarding the status of the lot. The county assessed plaintiff's entire 1,560 acres for tax purposes at $4,157,800, a figure that was only slightly reduced by a recent Florida court of appeals decision. Moreover, the Claims Court's analysis improperly turns this case into one to recover for frustration of business expectations, and frustration of performance is not a taking of contract rights. After a lengthy discussion on the factors relevant to a takings determination, the court remands the case for the trial court to reconsider under correct legal standards whether a taking occurred. The court affirms that part of the decision holding that no land in excess of the 98 acres for which a §404 permit was sought was taken.

[The lower court opinion appears at 15 ELR 20626.]

Counsel for Appellant
Fred R. Disheroon
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 724-7361

Counsel for Appellee
John A. DeVault III
Bedell, Dittmar, DeVault, Pillans & Gentry
101 E. Adams St., Jacksonville FL 32202
(904) 353-0211

Counsel for Amicus Curiae
Ronald A. Zumbrun, Sam Kazman
Pacific Legal Foundation
1990 M St. NW, Ste. 550, Washington DC 20036
(202) 466-2686

Before Davis, Cowen, Baldwin, and Bissell, JJ.