Lost Tree Village Corp. v. United States

United States Court of Federal Claims · Property

PropertyTakingsRegulatory TakingsRelevant ParcelTakings ClauseFifth Amendmentregulatory takingparcel as a whole

Facts

Lost Tree sought a wetlands fill permit from the U.S. Army Corps of Engineers to develop Plat 57, a 4.99-acre tract on Stingaree Point in the John's Island area of Florida. Lost Tree argued that denial of the permit eliminated all economically viable use of Plat 57 and therefore constituted a taking. The evidence showed that although Plat 57 lay within the broader John's Island community, it had not been stubbed for utilities, was not part of any proven overall master development plan, and had been left undeveloped long after development of the rest of the community had largely ended. At the time of the permit application, Lost Tree still owned Plat 55, Plat 57, and scattered unusable wetlands within the community.

Issue

What is the proper relevant parcel for evaluating Lost Tree's regulatory takings claim arising from denial of the Plat 57 permit, and, using that parcel, did the permit denial effect either a categorical taking or a compensable taking under Penn Central?

Rule

In a regulatory takings case, the court must define the relevant parcel using a flexible, fact-specific parcel-as-a-whole approach rather than a bright-line rule. Relevant considerations include contiguity, dates of acquisition, treatment of properties as a single income-producing unit, the extent of any common development scheme, the extent to which regulated lands enhance remaining lands, and whether earlier development had reached completion and closure; temporal facts may matter when they reflect the owner's actual and projected use of the property. Once the parcel is defined, a categorical taking exists only if regulation causes a total loss of value, and otherwise the claim is evaluated under Penn Central by considering economic impact, interference with reasonable investment-backed expectations, and the character of the governmental action.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Blue Heron Land Co. owns a 6-acre marsh tract in Charleston, South Carolina and, at the time it seeks a fill permit, also owns a narrow 200-foot strip connecting that tract to an adjacent 3-acre upland parcel it has long held for later resale. The company never extended utilities to the marsh tract, and the larger surrounding subdivision had otherwise been built out years earlier.

If the permit is denied and Blue Heron claims a total wipeout by defining the parcel as only the 6-acre marsh tract, which is the best analysis?

Explanation. The majority adopted a flexible, fact-specific parcel-as-a-whole approach, not a bright-line rule. Relevant considerations include contiguity, dates of acquisition, treatment as a single income-producing unit, common development scheme, enhancement, and whether earlier development had reached completion and closure. Separate legal parcels can still be treated together where they remain under common ownership, are contiguous or functionally connected, and are held for comparable profit-oriented purposes. (Derived from Lost Tree Village Corp. v. United States (n.d.).)