Supreme Court Asked to Review Wetland Permit Taking Dismissal

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By Lars-Eric Hedberg

Dec. 23 — The U.S. Court of Appeals for the Federal Circuit incorrectly interpreted a jurisdictional statute when it affirmed the dismissal of a takings claim against the U.S. by operators of a Washington landfill, the operators wrote in their U.S. Supreme Court petition (Res. Invs., Inc. v. United States, U.S., No. 15-802, 12/16/15).

According to the petitioners, the Federal Circuit's interpretation of the jurisdictional bar in Section 1500 of the Tucker Act, which limits the Court of Federal Claims' jurisdiction to certain cases seeking monetary damages against the federal government, runs afoul of supreme court precedent and causes constitutional issues.

Six years after Resource Investments, Inc. and Land Recovery, Inc. applied to the U.S. Army Corps of Engineers for a Section 404 Clean Water Act permit to develop a solid waste landfill in Washington state, the agency denied the application. The companies filed an Administrative Procedure Act lawsuit in the U.S. District Court for the Western District of Washington in 1996 and then filed a takings claim in the Court of Federal Claims in 1998.

Although the U.S. Court of Appeals for the Ninth Circuit determined that the corps did not have jurisdiction, and the companies opened the landfill in 1999, the companies maintained that the agency's extraordinary delay in acting on the permit amounted to a taking of their property without just compensation in violation of the Fifth Amendment.

In 2011, the U.S. Supreme Court ruled that under Section 1500 a plaintiff who has a claim pending in a suit against the U.S., such as one seeking equitable relief in federal district court, cannot then file a claim for monetary damages in the Court of Federal Claims if the claims “are based upon substantially the same operative facts, regardless of the relief sought in each suit” (United States v. Tohono O'odham Nation, 563 U.S. 307, 79 U.S.L.W. 4271, 2011 BL 109773 (2011);2015 WLPM, 2/26/15).

Federal Circuit: Same Operative Facts

Based on this precedent, the Court of Federal Claims granted the government's motion to dismiss the companies' takings claim for lack of subject matter jurisdiction, finding that both cases were based on the denial of their permit.

The Federal Circuit had affirmed in a May 12 opinion. It ruled that the facts n the district court APA claim and the Court of Federal Claims takings claim are the same—the denial of the Section 404 permit and economic loss attributable to the denial. Because the two actions relate to the same transaction—the denial of the permit—Section 1500 bars the later filed Court of Federal Claims case (Res. Invs., Inc. v. United States, 785 F.3d 660, 80 ERC 1768, 2015 BL 137868 (Fed. Cir. 2015); 2015 WLPM, 5/21/15).

Operative Facts Analysis

In their Dec. 16 petition for writ of certiorari, Resource Investments, Inc., and Land Resources, Inc., asked the court whether the Federal Circuit impermissibly broadened the scope of Section 1500 and deviated from settled precedent when it interpreted the Supreme Court’s straightforward “substantially the same operative facts” standard to mean “arising out of the same transaction.”

The companies wrote that although APA and takings claims in this case involve an operative seed fact—the permit—they focus on different issues—the district court case on the corps' jurisdiction and the Court of Federal Claims case on the economic impact of the corps' delay. As such, there will rarely be a substantial overlap of the operative facts for Section 1500 purposes, according to the companies.

“Under the Federal Circuit’s far more expansive transactional test, however, such claims will typically be deemed the same simply because they arose from a common fact,” they wrote. “[T]hat broad reading of the statute will have the effect of barring adjudication of numerous constitutional takings claims,” they wrote.

Constitutional Concerns

They also asked whether Section 1500 should be read to preclude takings claims and, if so, whether such an interpretation would be unconstitutional.

In their petition, the companies distinguished their case from Tohono, which involved tribal trust claims rather than constitutional claims (2015 WLPM, 2/26/15).

They also wrote that in addition to different claims, the Federal Circuit adopted “an exceedingly broad reading of § 1500 that bars adjudication of constitutional takings claims—in this case and every takings case where there is overlap of a single seed fact with an APA action brought by the plaintiff to redress a regulatory wrong.”

Moreover, the Federal Circuit's holding works to deprive property owners of their Fifth Amendment right to just compensation.

Robert M. Loeb, Washington, Mark S. Parris, Daniel D. Syrdal and David Keenan, Seattle, and Marc R. Shapiro, New York, all of Orrick Herrington & Sutcliffe LLP, represent Resource Investments, Inc., and Land Resources, Inc. Loeb is the counsel of record.

To contact the reporter on this story: Lars-Eric Hedberg in Washington at lhedberg@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com