The takings jurisprudence of the Court of Federal Claims and the Federal Circuit.

• Author: Coursen, David F.

1. INTRODUCTION

   Through nearly a century and a half of constitutional jurisprudence, the Supreme Court read the straightforward language of the Takings Clause(1) literally(2) and assumed that it "reached only a `direct appropriation' of property ... or the functional equivalent of a `practical ouster of ... possession.'"(3) However, in 1922 the Court concluded that the Takings Clause might also apply when property is regulated without a transfer of ownership, cryptically observing that "while property may be regulated to a certain extent, if the regulation goes too far it will be recognized as a taking."(4)

   The Court has struggled ever since to explain this Delphic aphorism and to identify the point at which regulation has gone "too far" and become a taking. Thus far, however, the Court has provided little practical elucidation beyond vague nostrums to the effect that the Fifth Amendment is "designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."(5) The vagueness of the Court's generalizations may reflect the practical reality that it "is difficult, if not impossible, to discern on an objective, value-free basis,"(6) the point at which property that remains in its owner's possession and retains some value has nevertheless been converted by some form of constitutional alchemy from private to public ownership.

   Not surprisingly, the takings jurisprudence that has evolved in the lower courts has reflected, and in some cases magnified, the Supreme Court's uncertainty about the application of the regulatory takings doctrine. Among lower courts, the Court of Federal Claims (with appeals to the United States Court of Appeals for the Federal Circuit) (CFC/FC) is the sole forum that can award just compensation exceeding ten thousand dollars against the United States,(7) and it has the most active and expansive takings docket within the federal court system. As such, it provides a useful prism through which to view the practical effects of the Supreme Court's assorted pronouncements on takings. Despite some rather idiosyncratic results in individual cases, many of the takings decisions of the CFC/FC implicitly recognize several significant general principles as useful in reaching fair results in takings cases. Accordingly, after a brief review of recent Supreme Court takings decisions, this Article will turn its focus to the decisions of the CFC/FC. Finding little doctrinal coherence, it will then attempt to infer practical rules and principles that the forum has followed, often implicitly, in analyzing takings cases.

2. SUPREME COURT TAKINGS JURISPRUDENCE

   1. General Principles

      Consistent with its fondness for amorphous generalities regarding takings, the Court has concluded that the regulatory takings inquiry generally requires a balancing of the relative weights of the public and private interests implicated by a regulatory decision.(8) The Court has been unable to develop a set formula for conducting this balancing, engaging instead in a series of "essentially ad hoc, factual inquiries."(9) The economic impact of a particular action on a property owner, the extent to which the government action "has interfered with distinct, investment-backed expectations ... [, and] the character of the government action" are factors to which the Court has given particular emphasis.(10)

      An ad hoc approach emphasizes fairness, but by its very nature does not foster consistency or predictability; it can produce different results in cases where the same factors are present, but their relative weights differ, either in fact or in the subjective opinion of a court.(11) Moreover, at least in its application, the balancing approach reflects a deferential view of government regulation, consistent with the underlying assumption that a properly functioning representative democracy is unlikely to go "too far" in imposing regulation. In any event, the balancing approach has demonstrably produced a perverse clarity: when the Court has used a balancing test, it has generally rejected the takings claim.(12)

      Accordingly, findings of regulatory takings were rare, and it was unsettled whether the owner of property taken by regulation was constitutionally entitled to just compensation or might properly be confined to the sole remedy of having the regulatory action invalidated. Thus it was a watershed when, in 1987, the Court found regulatory takings in two cases(13) and in a third case recognized that a temporary regulation could work a taking, and that if it did, invalidation alone might not be an adequate remedy (thus requiring just compensation for a "temporary taking").(14) Subsequently, the Court held that a challenged regulation was not invalid, even if it worked a taking, so long as a just compensation remedy was available, as is the case under the Tucker Act(15) for many federal regulatory actions.(16)

      The primary effect of the 1987 decisions was to underscore the constitutional importance of property rights, without doing much to clarify their nature or scope. The decisions generated an inordinate amount of rumination and rhetoric(17) concerning the meaning of the Takings Clause and created a perception that regulatory actions might produce takings more frequently than had previously been assumed.(18) Indeed, the 1987 takings decisions immediately preceded temporally and causally some surprising lower court takings findings.(19)

   2. Lucas v. South Carolina Coastal Council and Its Aftermath

      Accordingly, the Court's next major takings case generated enormous anticipation, because it implicated an apparent collision of two "absolutes" of takings law: the principle that regulation to protect public health and safety is generally exempt from takings liability,(20) and the principle that regulation that renders property utterly valueless is generally recognized as likely to work a taking.(21) In a broad but only intermittently coherent discussion, Lucas v. South Carolina Coastal Council(22) holds that regulation that makes land valueless works a "categorical" taking.(23) The Court, however, felt impelled to qualify this "absolute" principle by recognizing that, in any event, no taking can occur where the government acts to regulate use that constitutes a nuisance under state law or is otherwise inconsistent with "background principles" of state property law.(24) The Court further pointed out that owners' expectations concerning use of property are limited by the rules and understandings concerning the property in place at the time it is acquired.(25) Finally, the Court cryptically suggested that land is given greater protection than other forms of property.(26)

      Lucas highlights the Court's growing interest in categorical taking rules, which is related to the practical reality that claims usually fail when analyzed under traditional "balancing" analysis. In Lucas the Court identified "at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest" supporting the action.(27) First, as the Court had previously recognized, a permanent physical occupation of property is a "governmental action of such a unique character that it is a taking without regard to other factors that a court might ordinarily examine."(28) Lucas also recognizes as a categorical taking regulation that renders property worthless.(29) To systematize categorical analysis, the Court provided that both types of categorical claims should receive "similar treatment" in a takings analysis, explicitly recognizing that a relevant "background principle" sufficient to defeat a takings claim could have its roots in federal as well as state law.(30)

      The intellectual calisthenics and contortions categorical analysis demands are suggested by the blatant implausibility of the lower court's factual conclusion on which Lucas is predicated: a parcel of beachfront property in a resort area is rendered valueless by a prohibition on the construction of a permanent dwelling.(31) Outside the hothouse environment of takings disputation, common sense suggests that, at a minimum, owners of property adjacent to either of Lucas's beachfront properties would have happily paid a substantial sum to increase their lot size and area of beach frontage and ensure that the adjacent parcel would remain undeveloped, by acquiring one of the Lucas lots. This would hardly obviate the fact of a very severe economic burden, but it defies common sense and constitutes an Orwellian abuse of language to suggest that it renders the property "valueless." Not surprisingly, four Justices specifically adverted to the implausibility of the lower court's factual determination.(32) There is questionable utility in a categorical rule based on land being rendered utterly valueless applicable only to a null set of cases.

      Categorical analysis purports to introduce formal clarity, precision, and predictability to takings law, while admittedly paying less overt attention to fairness. In their application, however, categorical rules obscure more than they illuminate. The clarity they provide is largely illusory; even in announcing the rules, the Court has had to qualify them.(33) Almost from the moment the older of the two categorical rules was announced, in Loretto v. Teleprompter Manhattan CATV Corp.,(34) the Court has been compelled to narrow the rule to avoid its application to demonstrably unsuitable circumstances.(35)

      In addition, categorical rules have had the perverse effect of fostering a mechanistic and formulaic approach to takings analysis. While the Court has been developing and refining categorical rules, applicable in admittedly limited circumstances, it has done little to elucidate standards for the balancing analysis required in most cases.(36) Lower courts have recognized, somewhat plaintively, that "[s]tanding alone [the Penn Central Transportation Co...