March 21, 2011

PLF certiorari petition raises questions about background principles of property

By PLF certiorari petition raises questions about background principles of property

Author:  Luke A. Wake

Last week, Pacific Legal Foundation filed a petition for certiorari, asking the Supreme Court to take up an important property rights case. In the filing, PLF represents Ryan Voorhees–a small businessman and owner of a marina that has been rendered nearly entirely useless by EPA actions. He is seeking just compensation for the taking of his property; and following his loss in the Federal Circuit last November, he has turned to PLF for help.

Voorhees had a vision to revitalize Stockton California's downtown with a marine-oriented development project that would have improved an underutilized industrial site. But, his plans were sunk when EPA installed a log boom in the Old Mormon Slough adjacent to his property. The boom was part of EPA's clean up effort for an unrelated site to the south, which Voorhees had nothing to do with. But, the boom now blocks Voorhees' access to and from the navigable waters of the San Joaquin River. Not only does this scuttle his development plans, but it shuts down most of his marina operations. Needless to say, the right of navigation to and from a marina is a tremendously valuable right. But, EPA has taken that right away without paying Voorhees a dime.

Accordingly, Voorhees filed suit in 2006 when the log boom was installed. He asserted that EPA's decision to install the boom constituted a compensable regulatory taking, and that its actual installation of the boom constituted a compensable physical taking. But, both of these claims were shot down in the Court of Federal Claims.

In affirming dismissal of the case, the Federal Circuit held that Voorhees lacked standing to advance a regulatory takings challenge because he acquired the property after EPA had decided to clean up the contaminated site on the south shore. But, this decision squarely contravenes Palazzolo v. Rhode Island, which PLF won in the Supreme Court in 2001. Accordingly, PLF has asked the Supreme Court to review the question of whether a post-enactment purchaser has standing to bring a regulatory takings claim arising from the implementation of preexisting regulations, if the previous owner did not and could not have ripened a takings claim when the regulations were enacted?

This question is all the more timely as the Supreme Court presently has another petition pending which raises a similar question as to whether a post-enactment purchaser can prevail in a takings claim. Recently, in Guggenheim v. City of Goleta, the 9th Circuit held that notice of preexisting regulations is dispositive in the Penn Central balancing test, meaning that property owners cannot recieve compensation for a partial taking if the regulation in question was adopted prior to their acquisition of the property. But, as in the CRV case, the Guggenheim decision contravenes Palazzolo. Palazzolo made clear that takings claims survive the transfer of title from one owner to the next. As the Palazzolo court put it, Government can't put an expiration date on the Takings Clause.

PLF is also asking the Supreme Court to review the Federal Circuit's decision affirming judgment that there was no physical taking in this case. The decision carves out an unprecedented exception to the Supreme Court's physical takings doctrine, which contravenes a long line of precedent and casts a cloud of doctrinal confusion over takings law. 

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