BANKS, et al v. USA

Filing 499

ORDER directing additional briefing on jurisdiction. Opening briefs due 9/7/11. Responsive briefs due 9/21/11. Signed by Chief Judge Emily C. Hewitt. (mm3) Copy to parties.

In the United States Court of Federal Claims
No. 99-4451 L
c/w 99-4452L, 99-4453L, 99-4454L, 99-4455L, 99-4456L, 99-4457L, 99-4458L, 994459L, 99-44510L, 99-44511L, 00-365L, 00-379L, 00-380L, 00-381L, 00-382L, 00383L, 00-384L, 00-385L, 00-386L, 00-387L, 00-388L, 00-389L, 00-390L, 00-391L, 00392L, 00-393L, 00-394L, 00-395L, 00-396L, 00-398L, 00-399L, 00-400L, 00-401L, 051353L, 05-1381L, 06-72L
(E-Filed: August 9, 2011)
________________________________
)
JOHN H. BANKS, ET AL.,
)
)
Plaintiffs,
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99-4451 L
)
v.
)
Takings Claim for Damages for
)
Erosion Along Eastern Shoreline
)
of Lake Michigan South of St. Joseph
THE UNITED STATES,
)
Harbor; Whether Trial Evidence
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Requires Dismissal of Claims for
Defendant.
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Lack of Jurisdiction; Post-Trial Briefing
)
on Jurisdiction Ordered
________________________________ )
)
EUGENE J. FRETT, Individually and )
as Trustee of the Victor J. Horvath
)
and Frances B. Horvath Trust,
)
)
Plaintiff,
)
05-1353 L
)
v.
)
)
THE UNITED STATES,
)
)
Defendant.
)
)
________________________________ )

Mark E. Christensen, Chicago, IL, with whom was John B. Ehret, Olympia Fields, IL,
and Katherine A. Jones, Chicago, IL, for plaintiffs in No. 99-4451 L. Eugene J. Frett,
Chicago, IL, pro se in No. 05-1353 L.
Terry M. Petrie, Environment and Natural Resources Division, United States Department
of Justice, Denver, CO, with whom were Ignacia S. Moreno, Assistant Attorney General,
and Mark S. Barron, Trial Attorney, Environment and Natural Resources Division,
United States Department of Justice, Washington, DC, for defendant. Gary W. Segrest
and Don C. Erwin, Office of Counsel, United States Army Corps of Engineers, Detroit,
MI, of counsel.
ORDER
The court conducted a trial of damages in this matter from April 18 through April
28, 2011. The court addresses here a jurisdictional issue that arose in connection with its
drafting of the trial opinion.
At the outset of this case, defendant moved for dismissal “on the ground that
plaintiffs’ claims are time-barred.” Accrual Op. I, 49 Fed. Cl. at 809 (citation omitted). 1
“The applicable statute of limitations for filing suit in the [United States] Court of Federal
Claims is six years.” Id. (quoting 28 U.S.C. § 2501 (1994)). In its order considering
defendant’s motion to dismiss, the court noted that “the six-year limitations period for
actions against the United States ‘is a jurisdictional requirement attached by Congress’
that must be strictly construed.” Id. (quoting Hopland Band of Pomo Indians v. United
States, 855 F.2d 1573, 1576-77 (Fed. Cir. 1988)).
In their original complaint, 2 plaintiffs alleged “that defendant effected a gradual
taking of their shorefront property through the construction and maintenance of ‘a series
1

The court discusses in this Order the following prior orders and opinions from this case:
Banks v. United States (Liability Op.), Docket Number (Dkt. No.) 245, 78 Fed. Cl. 603, 636
(2007); Banks v. United States (Accrual Op. II), Dkt. No. 200, 76 Fed. Cl. 686, 696 (2007);
Banks v. United States (Accrual Op. I), Docket Number (Dkt. No.) 3, 49 Fed. Cl. 806 (2001).
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After the court denied class certification, the parties filed a notice of additional
plaintiffs--identifying 37 plaintiffs--and filed separate complaints for each plaintiff. Accrual Op.
I, 49 Fed. Cl. at 808 (citations omitted). The individual complaints supplanted the original
complaint and were deemed to have been filed on July 9, 1999, the filing date of the original
complaint. Id. at 808 n.2. Plaintiffs’ counsel has represented that the allegations in all of the
complaints are the same. Id. “Accordingly, for ease of reference and unless otherwise noted, the
court [has referred] to the individual complaint filed by the first named plaintiffs, John and Mary
Banks, when addressing plaintiffs’ claims in this action.” Id. The court continues in this order
its practice of referring to the individual complaint filed by the Banks plaintiffs.
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of 15 jetties along the 200 miles of the eastern coast of Lake Michigan for over 100
years.’” Id. at 810 (citation omitted). Plaintiffs narrowed their claims in the individual
complaints they filed subsequently, focusing on the effect of the jetties at St. Joseph
Harbor. Compl., Dkt. No. 1 ¶¶ 4-7. Although the jetties had been in place at their
current length since 1903--a fact that may have implicated the six-year statute of
limitations for takings claims--plaintiffs alleged that the jetties “continued to exist
without harmful interference to the natural littoral flow of sand and river sediment until
the [Corps] gradually installed sand-tight steel sheet piling during the period of 1950 to
1989,” which installation has “alter[ed] the supply of sand to the lake bed and subaerial
visible beach in front of plaintiffs’ property.” Compl. ¶¶ 6, 7. “When considering a
motion to dismiss, the court must presume that well[-]pleaded factual allegations in the
complaint are true.” Accrual Op. I, 49 Fed. Cl. at 808 (citing, inter alia, Miree v. DeKalb
Cnty., 433 U.S. 25, 27 n.2 (1977)).
Defendant, the court and the United States Court of Appeals for the Federal
Circuit (Federal Circuit) presumed, in accordance with the Miree case, 433 U.S. at 27 n.2,
the truth of plaintiffs’ allegation that encasing the jetties in steel sheet piling made them
impermeable to sand, interfering with the littoral flow of sand and damaging plaintiffs’
properties. Although the jetties reached their current length in 1903, Accrual Op. I, 49
Fed. Cl. at 808, defendant argued “that the takings causes of action accrued, at the latest,
in 1989,” when the government completed its encasement of the jetties in the steel sheet
piling, id. at 811 (citation omitted). The court agreed, concluding that “the time for filing
suit expired in 1995.” 3 Id. at 825. Because plaintiffs did not file suit until 1999, the court
granted defendant’s motion to dismiss. Id. at 825-26. Quoting the Banks plaintiffs’
complaint, the court stated, “Plaintiffs claim that the jetties did not cause ‘harmful
interference to the natural littoral flow of sand and river sediment until the Corps
3

Plaintiffs also argued in their opposition to defendant’s motion to dismiss that they were
unable to bring their claims before the Federal Circuit’s decision in Owen v. United States, 851
F.2d 1404 (Fed. Cir. 1988) (en banc). Accrual Op. I, 49 Fed. Cl. at 812 (citation omitted). Owen
overturned two Federal Circuit decisions which may have precluded plaintiffs’ claims because
they barred “recovery for government-caused erosion outside the bed of [a] navigable stream.”
Owen, 851 F.2d at 1418; see also id. at 1412-15 (discussing the error in Pitman v. United States,
198 Ct. Cl. 82 (1972) and Ballam v. United States, 806 F.2d 1017 (Fed. Cir. 1986)). The earlier
of these two cases, however, was decided in 1972. See Pitman, 198 Ct. Cl. at 82. Accordingly,
any bar to plaintiffs’ claims created by Pitman and Ballam did not exist before 1972. The
Federal Circuit explained in Owen that it was “confronted with an anomaly of its own creation.”
Owen, 851 F.2d at 1418. Under the precedent of the United States Supreme Court (Supreme
Court), the plaintiff in Owen could bring her claims, but under the precedent of the Federal
Circuit, which was also binding on the trial court, she could not. Id. Before Pitman was decided,
no such conflict existed, and the plaintiff would have been able to bring her claims, as would
plaintiffs in this case. See id. at 1418 (“If the only relevant precedent was that of the Supreme
Court, it is certain that the [plaintiff’s] complaint would have withstood the government’s motion
for a judgment on the pleadings.”).
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gradually installed sand-tight steel sheet piling during the period of 1950 to 1989.’” Id. at
808 (citation omitted). The Federal Circuit reversed the court’s dismissal, finding that,
even after the steel sheet piling was installed, mitigation efforts that the government
began in 1970 created uncertainty as to whether any erosion damage caused by the jetties
was “permanent and irreversible.” Banks v. United States, 314 F.3d 1304, 1310 (Fed.
Cir. 2003). The Federal Circuit found that plaintiffs’ claims accrued with the publication
of three Corps reports that concluded that the mitigation was ineffective. Id. The court
determined that, because the last of these reports was published no earlier than January of
2000, plaintiffs’ claims accrued in January of 2000. Accrual Op. II., 76 Fed. Cl. at 696
(citations omitted).
Following the trial of damages, the court concluded that, contrary to the
allegations in plaintiffs’ complaints, the jetties were already impermeable to sand before
they were encased in steel sheet piling. Liability Op., 78 Fed. Cl. at 636 (stating that
“plaintiffs’ own expert witness testified that the piers were impermeable even prior to
their encasement in steel”) (citations omitted). The court discussed the permeability of
the jetties in a section of the opinion that examined the proportion of the erosion of
plaintiffs’ properties caused by the jetties. See id. at 633-36. The court did not discuss
the effect on the court’s jurisdiction of its finding that the jetties were impermeable
before the installation of steel sheet piling. See id. passim. Nor did the court address the
possible accrual of plaintiffs’ claims upon the publication of the 1958 Study, which
“recognized that erosion was attributable to the harbor structures and their maintenance.”
Id. at 621.
Defendant has not filed a motion addressing either the effect of the court’s finding
on the impermeability of the jetties from and after 1903 or the effect of the 1958 Study on
the court’s jurisdiction. However, the court is obligated to raise the issue of its own
jurisdiction sua sponte “if a question thereto exists.” Liberty Mut. Ins. Co. v. Wetzel, 424
U.S. 737, 740 (1976) (citing Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 384
(1884)). The court must consider jurisdictional issues at any point in a case that they
arise. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 93 (1998) (citations omitted).
Plaintiffs bear the burden of establishing subject matter jurisdiction, and the court may
determine whether they have met this burden once they have had an opportunity to be
heard on the matter. Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748
(Fed. Cir. 1988) (citing, inter alia, Local 336, American Federation of Musicians v.
Bonatz, 475 F.2d 433, 437 (3d Cir. 1973)). If the court determines that it lacks subject
matter jurisdiction, it must dismiss the claim. Steel Co., 523 U.S. at 94; Matthews v.
United States, 72 Fed. Cl. 274, 278 (2006); RCFC 12(h)(3).
The court must therefore consider whether, if the installation of steel sheet piling
did not change the erosive effect of the jetties, plaintiffs’ cause of action accrued in 1903,
when the jetties reached their current length, or in 1958, when defendant acknowledged
the erosional impact of “harbor structures.” The Federal Circuit found that the Corps’
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mitigation activities, which “appeared to successfully stave off the damaging effect of the
jetties,” created “justifiable uncertainty” of the permanence of any taking. Banks, 314
F.3d at 1309-10 (citing Applegate v. United States, 25 F.3d 1579, 1582-83 (Fed. Cir.
1994)). The Corps’ mitigation activities, however, did not begin until 1970, Liability
Op., 78 Fed. Cl. at 655, more than 60 years after the claims period would have ended if
plaintiffs’ claims accrued in 1903 and some twelve years after the publication 1958
Study. If the installation of steel sheet piling did not change the erosive effect of the
piers--an action that would have started the running of the statute of limitations in 1989
instead of 1903--the justifiable uncertainty created by the Corps’ mitigation may be
irrelevant to the date of accrual of plaintiffs’ claims. See Mildenberger v. United States,
643 F.3d 938, 948 (Fed. Cir. 2011) (“There is no justifiable uncertainty due to the Corps’
promises before the 1990s because the Corps neither undertook nor committed itself to
any mitigation activities.”). Mitigation efforts that begin after the statute of limitations
has run cannot “resurrect . . . stale takings claims.” Id.
The court therefore directs the parties to brief the following questions:
1. Given the court’s finding after the trial of liability that the jetties were
impermeable to sand before they were encased in steel sheet piling, and given the
Corps’ acknowledgement of the erosional impact of “harbor structures” in the
1958 Study, on what date did plaintiffs’ claims accrue? Does the court possess
subject matter jurisdiction to hear plaintiffs’ claims?
2. Does the Federal Circuit’s determination that plaintiffs’ claims accrued with
the publication of three Corps reports on mitigation constitute the “law of the
case” which may not be disturbed by the court notwithstanding inconsistent
factual findings of the court after trial?
The parties shall, in their briefing, take into account the guidance of the Federal
Circuit that
the law of the case doctrine is a policy not a command even [sic] respecting
a prior appellate decision in the case, and should be applied “as a matter of
sound judicial practice, under which a court generally adheres to a decision
in a prior appeal in the case unless one of three ‘exceptional circumstances’
exists: the evidence on a subsequent trial was substantially different,
controlling authority has since made a contrary decision of the law
applicable to such issues, or the decision was clearly erroneous and would
work a manifest injustice.”
Mendenhall v. Barber-Greene Co., 26 F.3d 1573, 1582 (Fed. Cir. 1994) (quoting Central
Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1580 (Fed. Cir. 1983)); Intergraph
Corp. v. Intel Corp., 253 F.3d 695, 698 (Fed. Cir. 2001) (“Reasons that may warrant
departure from the law of the case . . . include the discovery of new and different material
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evidence that was not presented in the prior action, or an intervening change of
controlling legal authority, or when the prior decision is clearly incorrect and its
preservation would work a manifest injustice.”) (citing Smith Int’l Inc. v. Hughes Tool
Co., 759 F.2d 1572, 1576 (Fed. Cir. 1985)). “A departure from law of the case generally
requires the discovery of new and material evidence not presented in the prior action or
‘an intervening change of controlling legal authority, or [a showing that] the prior
decision is clearly incorrect and its preservation would work a manifest injustice.’” Toro
Co. v. White Consol. Indus., Inc., 383 F.3d 1326, 1336 (Fed. Cir. 2004) (quoting
Intergraph, 253 F.3d at 698). The court has stated that it “will revisit an issue decided by
the Federal Circuit only if changed circumstances in law or evidence make the Federal
Circuit’s decision inapposite.” Accrual Op. II, 76 Fed. Cl. at 696.
The parties shall file opening briefs at or before 5:00 p.m. Eastern Daylight Time
(EDT) on Wednesday, September 7, 2011. The parties shall file responsive briefs at or
before 5:00 p.m. EDT on Wednesday, September 21, 2011.
IT IS SO ORDERED.
s/ Emily C. Hewitt
EMILY C. HEWITT
Chief Judge

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