AMERICOPTERS, LLC v. USA

Filing 42

PUBLISHED OPINION granting 27 Defendant's Motion for Summary Judgment. The Clerk is directed to enter judgment. Signed by Senior Judge Eric G. Bruggink. (mc5)

A M E R I C O P T E R S , LLC v. USA

D o c . 42

In the United States Court of Federal Claims
N o . 08-676 (F ile d : October 28, 2010) ************************ A M E R IC O P T E R S , LLC, Plaintiff, v. T H E UNITED STATES, D e fe n d a n t. ************************ R o g e r J. Marzulla and Nancy G. Marzulla, Washington, D.C., for p la in tif f . A u stin M. Fulk, United States Department of Justice, Civil Division, C o m m e rc ia l Litigation Branch, Washington, D.C., with whom were Tony W e s t, Assistant Attorney General, Jeanne Davidson, Director, and Mark A. M e ln ic k , Assistant Director, for defendant. _________ O P IN IO N _________ B R U G G IN K , Judge. P la in tif f seeks compensation under the Fifth Amendment of the United S ta te s Constitution for the alleged taking of its business due to the actions of the Federal Aviation Administration ("FAA"). Currently before the court are d e f en d a n t's motion for summary judgment and plaintiff's cross-motion for p a rtia l summary judgment on liability, both pursuant to Rule 56 of the Rules o f the United States Court of Federal Claims ("RCFC"). These motions p re se n t the question of whether a Fifth Amendment taking occurs when the a c tio n allegedly causing the taking is within the agency's authority but where, a s here, the individual employees performing the action were not authorized 1 F if th Amendment Taking; authorization; agency a u th o rity; internal delegation o f agency authority; scope of em plo yee's au th o rity; r a ti f i c a ti o n .

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to act. For the reasons explained below, we hold that as a matter of law, the u n d i s p u te d facts do not give rise to a compensable taking. Accordingly, we g ra n t the government's motion for summary judgment. F A C T U A L BACKGROUND 1 In the years leading up to 2002, Americopters, LLC ("Americopters") o p e ra te d a helicopter tour business in Guam. Americopters' helipad was lo c a te d on the roof of a restaurant. In February of 2002, Mr. Clarence Kanae, th e Principal Operations Inspector for the FAA's Flight Standards District O f f ic e in Honolulu, Hawaii, conducted an inspection of Americopters' facility. D u rin g the course of his inspection, he orally identified a number of d e f ic ie n c ie s in Americopters' operation. F o llo w in g this visit, Americopters wrote to Mr. Kanae, listing the im p ro v e m e n ts Americopters planned to make and asking him to confirm and c la rif y the deficiencies he had noted. After several weeks passed without any re sp o n s e , Americopters faxed the letter to Mr. Kanae's Honolulu office. A m e ric o p te rs subsequently re-faxed the letter several times, but received no res p o n se. Four months after the inspection, on July 24, 2002, Americopters r e c e iv e d a letter from Mr. Kanae requiring Americopters to immediately cease u se of its rooftop heliport: T h i s letter is to inform you that the use of the rooftop as a h e lic o p te r-p a d , at Chuck's Steak House, is considered unsafe, an d does not meet the Federal Aviation Administration Advisory C ir c u lar 150-5390-2A Heliport Design requirements. This [ A d v is o ry Circular] is Advisory in nature; however, this office f e e ls that FAR [2 ] 91.13 will apply to this operation if the AC is n o t followed. Therefore, this office is requiring that your

These facts are drawn from the parties' Proposed Findings of U n c o n tro v e rte d Fact and are undisputed unless otherwise noted. Here, the "FAR" refers to the Federal Aviation Regulations, found in T itle 14 of the Code of Federal Regulations, not the similarly abbreviated F e d e ra l Acquisition Regulation. Section 91.13 states that "[n]o person may o p e ra te an aircraft in a careless or reckless manner so as to endanger the life o r property of another." 14 C.F.R. § 91.13 (2010). 2
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c o m p a n y immediately cease use of the Chuck's Steak House r o o f to p for all flight operations. D e f .'s Mot. for Summ. J. Ex. 1. Although written by Mr. Kanae, this letter w a s edited and approved by his supervisor, Don Hamilton, who signed it b e c au s e Mr. Kanae was out of the office. It was Mr. Hamilton, in fact, who a d d e d the final sentence requiring Americopters to cease operating. Although th e FAA is statutorily authorized to promulgate and enforce air safety reg u latio n s, under the FAA's internal organization and policies, neither Mr. K a n a e nor Mr. Hamilton were authorized to issue an order such as this. U p o n receipt of the letter, Americopters relocated its business to what it characterizes as a less favorable location where the volume of customers d e c lin e d dramatically. As a result of the relocation, Americopters alleges that it was forced to sell one of its helicopters at a loss and ultimately to shutter its o p e ra tio n entirely. In response to Mr. Kanae's letter, Americopters' counsel wrote the F A A on August 13, 2002, requesting a rescission of the "cease operations" o rde r, confirmation that improvements it proposed would rectify the helipad's d e f ic ie n c ie s, and 90 days to perform these improvements. In the alternative, th e letter requested a hearing under 14 C.F.R. § 13.20(c). The FAA's Regional C o u n s e l, Monroe Balton, replied on September 19, 2002, denying A m e ric o p te rs ' request for a hearing because no legal enforcement action had b e e n taken against Americopters. The regional office, in effect, disavowed M r. Kanae's letter, noting that under FAA regulations only certain FAA a tto r n e ys have authority to issue "orders of compliance, cease and desist o rd e rs , orders of denials, and other orders." Def.'s Mot. for Summ. J., Ex. 4. " N o such orders were issued with respect to . . . Americopters['] flights using th e Chuck's Steakhouse heliport." Id. Because Mr. Kanae's letter was not "an o rd e r as that term is contemplated by the [FAR] . . . your requests are denied." Id . I ts administrative remedy thus denied, Americopters filed suit in the U n ite d States District Court for the District of Guam in February of 2003, s e e k in g rescission of the alleged FAA orders and arguing that Mr. Kanae's p u rp o rte d order dated June 24, 2002, was a taking of Americopters' property. T h e FAA moved to dismiss the complaint, relying on 49 U.S.C. § 46110 (2 0 0 6 ), which vests jurisdiction to hear challenges to FAA orders in the circuit

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c o u rts of appeal.3 The district court determined that Mr. Kanae's letter was an o rd e r and that § 46110 thus deprived the court of jurisdiction. The district c o u rt also dismissed Americopters' constitutional claim, holding that, although n o t directly preempted by § 46110, it was "inescapably intertwined" with the c la im s being dismissed. A m e ric o p te rs appealed the dismissal to the Court of Appeals for the N in th Circuit, which dismissed its petition for review of the order as untimely b e c a u se it was not filed within the 60-day statutory period.4 The Ninth Circuit d e t e rm in e d that Americopters' constitutional claims, however, were not so intertw in ed with the challenged FAA order to defeat the district court's ju ris d ic tio n . Accordingly, it reversed the dismissal of those claims and r e m a n d e d them to the district court for further proceedings. O n remand to the district court, the FAA moved to dismiss or, in the a lte rn a tiv e , to transfer the case to this court. The district court transferred the c a se here, and Americopters appealed the transfer to the Court of Appeals for th e Federal Circuit. The Federal Circuit upheld the transfer, and on November 1 8 , 2008, Americopters filed an amended complaint alleging that the FAA's a c ti o n s had caused the loss of its business. Early in 2009, the government m o v e d to dismiss the case, arguing that Mr. Kanae was not authorized to issue c e a s e -a n d -d e sis t orders and that an unauthorized government action cannot c o n stitu te a taking. We denied the motion and directed the parties to conduct lim ite d discovery concerning the scope of Mr. Kanae's authority. On March 3 , 2010, the government again moved for summary judgment, arguing that Mr. K a n a e's shutdown order was unauthorized and thus no basis for a takings c la im . Americopters cross-moved for summary judgment as to liability.

Although the FAA had previously argued that Mr. Kanae's letter was n o t a final order, it persuaded the district court that, because the complaint a lle g e d the order was final, the court was required to dismiss the case. On a p p e a l, the Ninth Circuit noted the "procedural limbo or netherworld" into w h ic h the case had fallen, largely as a result of the FAA's inconsistent p o s itio n s regarding the finality of the order at issue. Americopters, LLC v. F e d . Aviation Admin., 441 F.3d 726, 730 (9th Cir. 2006). The relevant jurisdictional statute states in pertinent part that a " p e titio n must be filed not later than 60 days after the order is issued." 49 U .S .C . § 46110(a). 4
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R E G U L A T O R Y BACKGROUND B y statute, the FAA Administrator has power to promulgate regulations d e a lin g with aviation safety, 49 U.S.C. § 106 (2006), and to conduct in v e s tig a tio n s and issue orders necessary to carry out this power, 49 U.S.C. § 40113 (2006). The administrator can delegate the authority to carry out these p o w e rs . 49 U.S.C. § 106. Pursuant to this authority, the FAA has established a n organizational framework, a scheme of safety regulations, and a system for e n f o rc in g them. At the time of the events in this case, the enforcement scheme w a s set forth in FAA Order 2150.3A,5 which spelled out the responsibilities o f various offices and described the roles of particular types of employees. E n f o rc e m e n t of safety regulations is carried out within a chain-ofc o m m a n d based on geographic area. FAA Order 2150.3A § 208(a). At the low est level are field offices, such as that in which Mr. Kanae and Mr. H a m ilto n worked, which are responsible for investigating violations within th e ir territory: F ie ld offices conduct surveillance inspections of persons, a irc ra f t, or operations subject to the regulations to determine c o m p l ia n c e with the regulations and any lack of qualifications, a n d investigate, coordinate, and report violations of all re g u la tio n s which are discovered within the geographical area f o r which they have enforcement responsibility. Id . § 305. These responsibilities are carried out by inspectors such as Mr. K an ae . As an Aviation Safety Inspector and Principal Operations Inspector, h is role is to "gather facts, evidence, and documents, to analyze that in f o rm a tio n , and to make recommendations concerning enforcement actions." Id . § 401. His job is to investigate violations and document his findings in a re p o rt known as an Enforcement Investigation Report ("EIR"). The EIR "is th e means for documenting, assembling, organizing, and presenting all e v id e n c e and other pertinent information obtained during an investigation," id. § 900(a), and includes information about the type of action recommended or ta k e n . Id. § 903(c)(25).

This order has since been superceded by a new version, but is still a v a ila b le for viewing at the FAA's online Regulatory and Guidance Library. S e e http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgOrders.nsf/key/ O rd e r % 2 0 2 1 5 0 .3 A . 5

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In cases of relatively minor violations, inspectors are permitted to take a d m in is tra tiv e enforcement actions. Id. § 1100. Unlike legal enforcement a c tio n s , administrative actions do not charge the operator with a violation but a re merely "intended to bring the incident to the attention of the person in v o lv e d , document corrective action, encourage future compliance with the re g u la tio n s , and provide a source of information for agency use." Id. § 1101. I n s p e c to r s are given discretion in determining when administrative action is a p p ro p r ia te : O n c e the underlying noncompliance is corrected, responsibility f o r selection of the enforcement remedy that best fits the c irc u m s ta n c es begins with FAA personnel who investigated the c a s e . In most cases, they are in the best position to evaluate v a rio u s factors, such as the alleged violator's compliance a ttitu d e and whether an alternative to legal enforcement action m a y be sufficient to achieve compliance. Id . § 204(a)(2). There are two types of administrative enforcement actions: "warning n o tic e s" and "letters of correction." Id. § 1102. A warning notice, as the name w o u ld imply, warns an alleged violator of his error and "requests future c o m p l ia n c e with the regulations." Id. § 1103(a). A letter of correction is s im ila r but is used "when there is agreement with the [violator] that corrective a c tio n acceptable to the FAA has been taken, or will be taken, within a re a so n a b le time." Id. § 1104. A letter of correction "should not be used to f o rw a rd suggestions and recommendations by themselves; its sole purpose is to correct conditions which are in violation of the FAR." Id. § 1104(c). N e ith e r a letter of correction nor a warning notice, however, are considered o r d e r s. A f te r a field office prepares an EIR, it is passed up the chain to the re g io n a l office. Id. §§ 1001-02. EIRs that merely report an administrative e n f o rc e m e n t action are subject to a simple review "for internal purposes." Id. § 1001(b). The only change the regional office may make to such an EIR is to check and, if necessary, correct the citation to the regulation allegedly v io la te d . Id. In contrast, EIRs that recommend legal enforcement action are p ro c e ss e d quite differently. Upon receipt of an EIR recommending legal e n f o rc e m e n t action, the regional division reviews the file to determine that the 6

in v e stig a tio n is adequate, the report is legally and technically correct, and the re c o m m e n d a tio n is appropriate. Id. § 1002(b)(1)(A)-(C). If the regional d ivisio n agrees with the field office's recommendations, it forwards the EIR to the Assistant Chief Counsel.6 Id. § 1002(b)(2). Upon receipt of the EIR, the A s s is ta n t Chief Counsel reviews the file, examining the sufficiency of the ev id en ce and the appropriateness of the sanctions recommended, before re c o m m e n d in g legal enforcement action. Id. § 1002(c). A m o n g the types of legal enforcement actions available to the Assistant C h ie f Counsel are various orders, including cease and desist orders. Such o rd e rs , however, may only be issued by the Chief Counsel, the Deputy Chief C o u n s e l, and each Assistant Chief Counsel and must provide for notice to the a lle g e d violator and an opportunity for a formal hearing before final issuance o f the order. Id. § 1209(b). There is no dispute that, under the FAA's en fo rce m en t scheme and organizational hierarchy, neither Mr. Kanae nor Mr. H a m ilto n had the authority to issue cease and desist orders. D IS C U S S IO N W e have jurisdiction under the Tucker Act, which gives this court e x c lu s iv e jurisdiction over Fifth Amendment takings claims against the United S ta te s for amounts greater than $10,000. See 28 U.S.C. § 1491 (2006); Morris v . United States, 392 F.3d 1372, 1375 (Fed. Cir. 2004) (citing Palm Beach Is le s Assocs. v. United States, 208 F.3d 1374, 1383 n.10 (Fed. Cir. 2000) ("[T ]he Tucker Act provides the Court of Federal Claims exclusive jurisdiction o v er takings claims for amounts greater than $10,000.")). A m e ric o p te rs does not, and cannot, challenge the propriety of the s h u td o w n order here. See Rith Energy, Inc. v. United States, 270 F.3d 1347, 1 3 5 2 (Fed. Cir. 2001) ("[I]n a takings case we assume that the underlying g o v e rn m e n tal action was lawful."); Fla. Rock Indus., Inc. v. United States, 791 F .2 d 893, 899 (Fed Cir. 1986) (holding that plaintiff's election of a Tucker Act s u it, without previously testing the validity of the agency action, assumes the

If the regional division disagrees with some aspect of the EIR's re c o m m e n d a tio n , it may return the EIR to the field office with instructions for f u rth e r investigation, seek the advice of counsel, close the case, or forward the E I R to the Assistant Chief Counsel with comments and recommendations. F A A Order 2150.3A § 1002(b)(3)-(7). 7

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v a lid ity of the action).7 Rather, Americopters' suit must assume the legitimacy o f the agency's action and allege, on that basis, that the FAA's actions caused a taking in violation of the Fifth Amendment. The issue presented by these c ro ss -m o tio n s raises no genuine issues of material fact and is thus appropriate f o r summary judgment. I. T H E APPROPRIATE LEGAL RULE

T h e Fifth Amendment states in pertinent part, "nor shall private p ro p e rty be taken for public use, without just compensation." U.S. Const. a m e n d V. Compensable takings include both physical takings, in which the g o v e rn m en t physically invades or appropriates private property, and regulatory takin g s, in which government regulations unduly burden private property to the p o in t of diminishing its utility or value. See Yee v. City of Escondido, 503 U.S. 5 1 9 , 522-23 (1992); Huntleigh USA Corp. v. United States, 525 F.3d 1370, 1 3 7 8 (Fed. Cir. 2008). Although Americopters' amended complaint does not s p e c if y, its claim here seems best construed as a regulatory taking. See Jan's H e lic o p te r Servs., Inc. v. Fed. Aviation Admin., 525 F.3d 1299, 1301 (Fed. Cir. 2 0 0 8 ) (construing this case and another directly related to it as alleging reg u lato ry takings). T h e sole question presented by the cross-motions is whether Mssrs. K a n a e's and Hamilton's actions were authorized sufficiently for purposes of th e takings clause to form the basis for a compensable taking. "A c o m p e n sa b le taking arises only if the government action in question is a u th o riz e d ." Del-Rio Drilling Programs, Inc., v. United States, 146 F.3d 1358, 1 3 6 2 (Fed. Cir. 1998) (citing United States v. N. Am. Transp. & Trading Co., 2 5 3 U.S. 330, 333 (1920)); Fla. Rock Indus., Inc. v. United States, 791 F.2d 8 9 3 , 898 (Fed. Cir. 1986) ("The Tucker Act suit in the Clams Court is not, h o w e v e r, available to recover damages for unauthorized acts of government o ff ic ials.") (citations omitted).

In contrast, Lion Raisins v. United States, 416 F.3d 1356 (Fed. Cir. 2005), held that a plaintiff may not bring a takings claim to challenge a re g u la to ry action when there is a comprehensive administrative and judicial s c h e m e for challenging the action. We note, however, that in Lion Raisins and its progeny, the administrative and judicial schemes at issue provided for the p o s s ib ility of reimbursement. Apart from this distinction, Lion Raisins's rule w o u ld routinely deprive us of jurisdiction over takings cases. 8

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B oth parties recognize the authority requirement, citing dozens of cases, b u t they disagree over how precisely it is applied on these facts. The g o v e r n m e n t argues that it applies at an individual level: "the action that re su lte d in the alleged taking must have been an action that the Government o f f ic ia l performing it was authorized to perform." Def.'s Mot. for Summ. J. a t 5. Americopters, however, argues that the cases turn on "whether or not the a c t causing the taking was within the authority granted the agency by C o n g re ss ." Pl.'s Resp. and Cross-Mot. at 12 (emphasis added). This d is tin c tio n -- b e tw e e n the agency's authority and that of an individual e m p lo ye e -- is critical here, because the FAA undoubtedly has the authority to re g u la te and even suspend flight operations, but that authority has been d e l e g a te d only to certain employees and not others. T h e issue appears to be novel. Although it is clear that in contract law th e government is not bound by the promises or representations of an in d iv i d u a l government employee who is not authorized to make such promises, se e , e.g., Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947), neither this c o u rt nor the Federal Circuit has directly addressed whether this rule should a p p ly to takings cases. T h e cases cited by the parties include many of the seminal cases in f e d era l takings jurisprudence. The case that is factually most similar to the o n e before us is one not cited by either party: United States v. North American T r a n sp o r ta tio n & Trade Co., 253 U.S. 330, 333 (1920). In that case, an Army G en era l took physical possession of a tract of public land, including plaintiff's m in in g claim, for use as a military post. Id. at 332. Five months later, on the re c o m m e n d a tio n of the Secretary of War, the President officially set aside the la n d for military purposes. Id. The Court concluded that because the General w a s not authorized to take the land, the cause of action did not accrue until the S e c re ta ry's later recommendation effectively ratified the General's action. Id. a t 333. The Court noted that the government is liable only if the individual e f f e c tin g the taking is himself authorized to do so: "In order that the G o v e rn m e n t shall be liable it must appear that the officer who has physically tak e n possession of the property was duly authorized so to do, either directly b y Congress or by the official upon whom Congress conferred the power." Id. N o r th American was decided at a time when takings law was analyzed u n d e r a contract rubric--a taking was viewed as an implied promise to pay. S e e id. at 335 ("The right to bring this suit against the United States in the C o u rt of Claims is not founded upon the Fifth Amendment . . . but upon the e x iste n c e of an implied contract entered into by the United States."); see also 9

S c h illin g e r v. United States, 155 U.S. 163, 167 (1894) ("Some element of c o n t r a c t u a l liability must lie at the foundation of every [Court of Claims] a c tio n ."); United States v. Great Falls Mfg. Co., 112 U.S. 654, 656-57 (1884) ("T h e law will imply a promise to make the required compensation, where p ro p e rty, to which the government asserts no title, is taken, pursuant to an act o f congress, as private property to be applied for public uses."). Beginning in 1 9 3 3 , however, the Supreme Court explicitly recognized that takings claims b ro u g h t under the Tucker Act were founded upon the Fifth Amendment and n o t on an implied contract. Jacobs v. United States, 290 U.S. 13, 16 (1933). D e sp ite this evolution, one of the leading contemporary Federal Circuit cases a d d re s s in g the authority issue, Del-Rio Drilling Programs, Inc., v. United S ta te s, 146 F.3d 1358 (Fed. Cir. 1998), begins its analysis by citing North A m e r ic a n for the proposition that a "compensable taking arises only if the g o v e rn m e n t action in question is authorized." Id. at 1362 (citing North A m e ric a n , 253 U.S. at 333). In Del-Rio, the government had ceded the surface rights of a tract to an In d ia n tribe but retained the mineral rights to itself. Id. at 1360. The Bureau o f Land Management ("BLM") subsequently leased the mineral rights to D e l-R io . Believing that the Tribal Consent Act ("TCA") applied to such m in in g leases, BLM required Del-Rio to obtain a right-of-way from the Indian trib e before mining the land. Id. During the initial years of the lease, the c o n s e n t was granted without incident. Id. In the fifth year, however, the tribe re f u se d to grant the necessary right-of-way, ultimately leading to the lapse of D e l-R io 's leases due to disuse. Id. at 1360-61. T h e pertinent question before the court was whether the BLM officials w h o determined that the TCA applied were authorized to make decisions re g a rd in g the applicability of statutes. Id. at 1362 (considering "whether the g o v e rn m e n t conduct at issue was `authorized,' i.e., whether the alleged in v a sio n of property rights [was] chargeable to the government or [was] an act c o m m itte d by a government agent acting ultra vires"). The court concluded th a t this determination was "within the scope of their statutorily authorized d u tie s" because "[i]t was part of their job to interpret the statutes and re g u la tio n s governing federal mining leases." Id. at 1363. T h e test articulated in Del-Rio is whether the act was within the normal s c o p e of an agent's duties: "agents have the requisite authorization if they act w ith in the general scope of their duties." Id; id. at 1362-63 (quoting Ramirez d e Arellano v. Weinberger, 724 F.2d 143, 151 (D.C. Cir. 1983) (subsequent h is to ry omitted)) ("A Tucker Act remedy lies if a taking occurs while the 10

g o v e r n m e n t officer `is acting within the normal scope of his duties . . . unless C o n g re ss has expressed a positive intent to prevent the taking or to exclude g o v e rn m e n t liability.'") (ellipses in original). The court drew a distinction b e tw e e n conduct that is unauthorized and conduct that is authorized but u n la w f u l for other reasons. Id. at 1362. In that case, BLM plainly had the a u th o rity to regulate mineral leases on Indian lands, and the agents had the a u th o rity to interpret and enforce agency regulations. The agents may have b e e n mistaken in applying the law, but they were acting within the general s c o p e of their duties to interpret the law. They were not acting so far beyond th e ir duties as to be acting ultra vires. No assertion was made in Del-Rio that only higher level officials had th e requisite authority. Thus it was unnecessary for the court to closely parse th e particular powers of the BLM agents involved. We think the thrust of the c o u rt's holding, however, dictates that the powers of the particular government a c to rs are relevant. In takings cases, the ultimate constitutional issue is w h e th e r the United States should be bound to purchase the property in q u e stio n . Particular individuals could well be acting ultra vires in purporting to exercise powers well within the agency's statutory authority. For example, if the night watchman for the local BLM office had presumed to notify the r a n c h e r s in Del-Rio that the company should obtain Indian consents, that e m p l o ye e would be acting beyond the scope of his authority, whether or not th e ranchers knew of his real position at the agency. The fact that other BLM o f f ic ia ls may have been authorized to take the same actions would not bind the a g e n c y, so long as they did not endorse what occurred. Although the facts in the case at hand are not as egregious as our illu s tra tio n , we think the inquiry should be the same: were those particular in d ivid u a l government agents acting within the scope of their authority? The q u e stio n should not be limited to whether the agency could have taken the a c tio n s if it had chosen to do so. We note that the result would be the same in the realm of contracting w ith the government, where promises or representations made by an u n a u th o riz e d individual are not binding on the government. See Trauma Serv. G r o u p v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997); City of El C e n tr o v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990). For this reason, an agent's apparent authority is insufficient to modify a contract. Winter v. C a t h -d r /B a l ti Joint Venture, 497 F.3d 1339, 1344 (Fed. Cir. 2007). As a re su lt, "[a]nyone entering into an agreement with the Government takes the ris k of accurately ascertaining the authority of the agents who purport to act for 11

t h e Government." Trauma Serv., 104 F.3d at 1325. Such authority will be im p lied only where it "is an essential or necessary part of the employee's o c c u p a tio n ," and will not be implied "where an agency's regulations grant c o n tra c tin g authority to other agency employees." BioFunction, LLC v. United S ta te s, 92 Fed. Cl. 167, 172 (2010) (citing SGS-92-X003 v. United States, 74 F ed . Cl. 637, 652 (2007)). T h i s line of contract cases is often traced to Federal Crop Insurance C o rp . v. Merrill, 332 U.S. 380 (1947). In that case, a farmer was told by the lo c a l agent for the government's Federal Crop Insurance program that the p ro g ra m would insure his crop of wheat. Id. at 382. When the crop was s u b s e q u e n tly destroyed, the government insurer refused to pay, noting that the lo c a l agent's assurance had been erroneous. Id. The Court agreed with the a g e n cy, holding that the local agent's representation was not binding on the g o v e rn m e n t. It cautioned that anyone dealing with a government agent takes th e risk that the agent is actually authorized to do or say what he claims: [ A ]n yo n e entering into an arrangement with the Government ta k e s the risk of having accurately ascertained that he who p u rp o rts to act for the Government stays within the bounds of h is authority. The scope of this authority may be explicitly d e f in e d by Congress or be limited by delegated legislation, p ro p erly exercised through the rule-making power. Id . at 384. H e re , plaintiff has not persuaded us that different considerations should ap p ly in the context of takings. In takings, as in contracts, a necessary p re re q u is ite is that the government itself has acted. Hooe v. United States, 218 U .S . 322, 335 (1910) ("The constitutional prohibition against taking private p ro p e rty for public use without just compensation is directed against the g o v e rn m e n t, and not against individual or public officers."). When a federal o f f icia l "assumes to act by virtue alone of his office, and without the authority o f Congress," his acts do not, "in any legal or constitutional sense, represent th e United States, and what he does or omits to do, without the authority of the C o n g re s s , cannot create a claim against the government, `founded upon the C o n s titu tio n .'" Id. A different result, of course, would open the Treasury to takings claims in which the government, qua government, had no intention to act, much less to take property. See Flexfab, LLC v. United States, 424 F.3d 1254, 1260 (Fed. 12

C i r . 2005) (noting that the requirement of actual individual authority in c o n tra c tin g "is firmly grounded in the public policy goal of protecting the p u b lic treasury from depletion by claims brought pursuant to unauthorized g o v e rn m e n t contracts"). "Clearly, federal expenditures would be wholly u n c o n tro lla b le if Government employees could, of their own volition, enter in to contracts obligating the United States." City of El Centro v. United States, 9 2 2 , F.2d 816, 820 (Fed. Cir. 1990). In short, absent ratification by an a u th o riz e d agent, a compensable taking arises only when the action effecting th e taking is within the authority of the particular government employee. II. A P P L IC A T IO N

H a v in g established the appropriate legal rule, application is less p rob lem atic. If Mr. Kanae's July 24, 2002 letter was a cease and desist order, it was plainly unauthorized. As discussed above, inspectors at FAA Field O f f ic e s were tasked with investigating reported violations within their te rrito ry, preparing EIRs documenting their investigations, and, depending on th e severity of the violation, either taking administrative enforcement action o r recommending legal enforcement action to the appropriate officials at the R e g io n a l Office. While Mr. Kanae and Mr. Hamilton were authorized to issue a d m in is tra tiv e enforcement actions, e.g., letters of correction and warning n o t i c e s , they were not authorized to issue cease and desist orders. We think th a t the letter must be read as an order to cease operations: T h i s letter is to inform you that the use of the rooftop as a h e lic o p te r-p a d , at Chuck's Steak House, is considered unsafe, an d does not meet the Federal Aviation Administration Advisory C irc u la r 150-5390-2A Heliport Design requirements. This AC is Advisory in nature; however, this office feels that FAR 91.13 w ill apply to this operation if the AC is not followed. Therefore, th i s office is requiring that your company immediately cease use o f the Chuck's Steak House rooftop for all flight operations. D e f .'s Mot. for Summ. J. Ex. 1. Of the two types of administrative enfo rcem ent actions--letters of correction and warning notices--the letter was c lea rly not the former.8 Mr. Kanae's demand goes far beyond merely

A letter of correction is used to confirm a previous discussion between th e violator and the inspector in which the violator acknowledged the violation an d agreed to the appropriate correction. FAA Order 2150.3A § 1104(a). 13

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d o c u m e n tin g a minor correction previously agreed upon by the parties. Nor is the letter a warning notice. 9 The letter's final sentence makes clear that it w a s a requirement to cease use, not merely a warning or reminder of a prior a g re e m e n t. Its conclusion clearly was an order and was thus beyond the scope o f both Mr. Kanae's and Mr. Hamilton's duties. N o r would it help plaintiff's cause if the letter was, as plaintiff suggests, p u re ly administrative. Indeed, Americopters' immediate reaction, complying w ith the letter's mandate while protesting its merits, indicates that plaintiff too c o n s id e r e d the letter an order. If the letter did not order plaintiff to cease o p e ra tio n s , then plaintiff's actions merely were an unwarranted overreaction. III. R A T IF IC A T IO N

F in ally, Americopters argues that the FAA implicitly ratified Mr. K a n a e 's letter by never disavowing it nor telling Americopters that it could re su m e or continue operations. It further argues that the shutdown order was

Each of the five example letters found in FAA Order 2150.3A includes the f o l lo w in g language: "we have given consideration to all available facts and c o n c lu d e d that the matter does not warrant legal enforcement action. In lieu o f such action we are issuing this letter which will be made a matter of re c o rd ." Id. at Figure 11-3 to 11-7. The example letters likewise all enumerate th e agreed-upon corrective action. Here, in contrast, Mr. Kanae's letter made n o mention of any discussion or agreement nor did it indicate that the letter w a s in lieu of legal action. A warning notice alerts the operator of the violation, requests future c o m p l i a n c e , and "[s]tates that the matter has been corrected and/or does not w a rra n t legal enforcement action." FAA Order 2150.3A § 1103(a). The e x e m p la r warning notice contains language similar to that found in the e x a m p le s of letters of correction: A f te r a discussion with you concerning this [incident], we have c o n c lu d e d that the matter does not warrant legal enforcement a c tio n . In lieu of such action, we are issuing this letter which w ill be made a matter of record for a period of two years, after w h ic h , the record of this matter will be expunged. Id . at Figure 11-1. 14
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ra tif ie d by the FAA Regional Counsel's eventual response to its inquiries and b y the government's legal position taken in the district court. We disagree. R a tif ic a tio n occurs when one with authority learns of an unauthorized a c t by his agent or subordinate and subsequently acquiesces to or affirms that a c t by his conduct. HNV Cent. River Front Corp. v. United States, 32 Fed. Cl. 5 4 7 , 550 (1995) (citing IBJ Schroder Bank & Trust Co. v. Resolution Trust C o r p . , 26 F.3d 370, 375 (2d Cir. 1994)). The ratifying official "must have a u th o rity to ratify, knowledge of a subordinate's unauthorized act, and then m u st confirm, adopt, or acquiesce to the unauthorized action of his s u b o rd in a te ." Cal. Sand & Gravel, Inc. v. United States, 22 Cl. Ct. 19, 27-28 (19 9 0 ). A lth o u g h a question of ratification can involve fact questions, see W in t e r v. Cath-dr/Balti Joint Venture, 497 F.3d 1339, 1347 (Fed. Cir. 2007) (c itin g United States v. Beebe, 180 U.S. 343, 354 (1901)), there are no factual d is a g re e m e n ts here and it is clear from the record that the FAA never ratified th e shutdown order. The September 19, 2002 letter from the FAA's Regional C o u n s el certainly said nothing to adopt or affirm Mr. Kanae's earlier letter. S e e Def.'s Mot. for Summ. J. Ex. 4. Rather, it explicitly listed the types of F A A employees who were authorized to issue cease and desist orders--all of w h o m are attorneys--and noted that no such order was issued to Americopters. L ik e w ise , the government's subsequent arguments before the district court, w h ere litigants are permitted to argue in the alternative, did not ratify Mr. K an ae 's letter. A t no time did the FAA ratify Mr. Kanae's unauthorized letter. A c c o rd in g ly, the action causing the alleged taking was not authorized and, th e re f o re , not compensable. C O N C L U S IO N F o r the reasons stated above, we grant defendant's motion for summary ju d g m e n t and deny plaintiff's cross-motion for partial summary judgment. The c le r k is directed to enter judgment for defendant. No costs.

s / Eric G. Bruggink E ric G. Bruggink Judge

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