MCGUIRE v. USA
Filing
117
UNPUBLISHED OPINION and ORDER. The Clerk is directed to enter judgment in favor of the defendant. Signed by Sr. Judge Bohdan A. Futey. (mp1) Copy to parties.
In the United States Court of Federal Claims
No. 09-380L
(Filed February 22, 2012)
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JERRY McGUIRE,
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Plaintiff,
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v.
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UNITED STATES OF AMERICA
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Defendant.
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David A. Domina, Law Office of Domina Law Group, Omaha, NE,
attorney of record for plaintiff.
Jessica M. Held, U.S. Department of Justice, Environmental and Natural
Resources Division, Washington, D.C., with whom was Bruce K. Trauben and
Assistant Attorney General Ignacia S. Moreno, for defendant.
OPINION & ORDER
Futey, Judge.
This case comes before the Court following a trial held in Phoenix,
Arizona from September 13–15, 2011. Plaintiff Jerry McGuire (“McGuire”)
claims that the government, through the Bureau of Indian Affairs (“BIA”), took
his property without compensation in violation of the Fifth Amendment when it
removed a bridge that crossed a BIA canal and allowed McGuire easy access to
one portion of land that he leased.
I.
Background 1
On January 1, 1995, Jerry McGuire signed a ten-year lease with the
Colorado River Indian Tribes (“CRIT”) for 1,355.76 acres of land in Parker,
Arizona. Allen Anspach, superintendent of the BIA’s Colorado River Agency,
approved the lease on behalf of the BIA. McGuire intended to use the land to
farm alfalfa. 2 Although he had not previously used flood irrigation or leased a
farm from an Indian tribe, 3 he grew up farming around Parker. 4 Rent was set at
$226,411.92 for the first five years. 5
A. The Leased Property and Lateral 19-R
A BIA canal known as Lateral 19-R bisects the leased property into two
parts of nearly equal size. 6 On either side of that canal, the BIA has a right-ofway. 7 The BIA uses this right-of-way to maintain the canal. Obstructions or
debris in the canal can affect the water flow—and thus the success—for numerous
farmers. It is thus critical that BIA be able to access and control their canals.
Mohave Road is the “main thoroughfare” between Parker and Blythe,
California, and it runs parallel to the BIA canal on the canal’s south side. 8
Although the southern portion of McGuire’s leased property directly abuts
Mohave Road, it is necessary to cross the BIA canal in order to access the
northern portion of that property.
Three bridges cross the BIA canal near the leased property and allow
access to the northern portion. The first is at Eighth Avenue, which runs north
from Mohave Road to Levee Road. 9 The second is just to the southwest of the
leased property at Tenth Avenue, which also runs north to Levee Road. 10 The
third and final bridge is just to the northeast of the leased property at Brown Road,
which, like the other two roads, reaches Levee Road. 11 Levee Road traces the
1
The following constitute findings of fact in accordance with Rule 52(a) of the
Rules of the United States Court of Federal Claims (“RCFC”). In citations, “DX”
refers to defendant’s exhibits, “PX” refers to plaintiff’s exhibits, and “Trial Tr.”
refers to the trial transcript.
2
DX1, at 3; Trial Tr. 62:24 (testifying that the planned crop was “[p]rimarily
alfalfa”).
3
Trial Tr. 214:13–17.
4
Id. at 36:5–25.
5
DX1, at 4.
6
Trial Tr. at 36:5–25, 42:22–43:1.
7
25 C.F.R. §171.12 (1999); see also Trial Tr. 399:4–9, 461:1–10.
8
Trial Tr. 32:22.
9
DX38, at 206; Trial Tr. 35:7.
10
DX38, at 206.
11
Id. This bridge is sometimes referred to in testimony as the “FFA Bridge” due
to its proximity to a Future Farmers of America building.
2
Colorado River on the northern border of the property McGuire leased, and
connects to Tenth Avenue, Eighth Avenue, and Brown Road. 12
Of the three bridges mentioned above, the Eighth Avenue Bridge is the
only one that provides direct access to and from the northern and southern
portions of McGuire’s property. The other two bridges require a traveler to either
drive north to Levee Road, which connects to McGuire’s farm via Eighth Avenue,
or along the canal bank roads that run parallel to Lateral 19-R. Ted Henry,
Irrigation System Manager for BIA, testified that farmers used both of these
access routes. 13
B. The Eighth Avenue Bridge
The bridge at Eighth Avenue is located “inside the 19-R Canal, and inside
the BIA right of way,” 14 and the BIA did not believe that the bridge was “part of
Mr. McGuire’s leased premises.” 15 The current bridge was built in 2002, but an
earlier bridge (“the Eighth Avenue Bridge”) sat atop the canal at the same
location for several decades, and is the subject of this lawsuit. 16 The bridge
allows easy access between the northern and southern halves of the leased
property, and McGuire testified that he would not consider the halves
“contiguous” without the bridge. 17 One document drafted on behalf of McGuire
refers to “the bridge separating my client’s leased properties.” 18
The exact date of the Eighth Avenue Bridge’s construction is unknown,
but it had spanned the canal since, at least, the 1970’s. 19 It thus existed at the
outset of McGuire’s lease. 20 The exact provenance of the bridge is also
unknown. 21 One letter from CRIT suggested that the original developer of the
farm may have constructed it.22 As McGuire’s counsel acknowledged, however,
the history of the bridge “has never absolutely been proven.” 23 When McGuire
12
Id.
Trial Tr. 368:10–12 (testifying that “hay equipment [and] hay trucks” used the
Tenth Avenue Bridge), 372:2–3 (testifying that “hay equipment [and] hay trucks”
crossed the Brown Avenue Bridge), 376:20–377:1 (testifying that hay trucks
occasionally drove along canal bank roads), 426:22–427:19 (testifying that it was
the “custom and practice” for people to use Levee Road and other farmers’ farm
roads).
14
Id. at 360:19-20.
15
DX47, at 115:18.
16
Trial Tr. 43:24–44:1.
17
Id. at 34:18–24.
18
DX8, at 37.
19
Trial Tr. 43:24–44:1 (noting that the bridge had been there since “[t]he ‘60s at
least”), 488:24 (noting that the bridge had been there since “the seventies”).
20
Id. at 43:9.
21
See id. at 513:24, 514:5–8.
22
DX2, at 22.
23
Trial Tr. 21:18.
13
3
took possession of the farm, the bridge was made of concrete and wood, with dirt
approaches leading up to it. 24
Many people, including McGuire and BIA employees, used the Eighth
Avenue Bridge throughout the years. 25 The BIA ran dump trucks over the bridge,
and McGuire could not “control the dump truck traffic” even though he believed
some of that traffic damaged the bridge. 26
As an alfalfa farmer, McGuire used large trucks to haul away harvested
alfalfa. 27 At the end of a growing cycle, he stacked baled alfalfa hay on the
northern side of the Eighth Avenue Bridge, and haulers crossed the bridge in
order to pick up and haul away stacked hay. 28 Because McGuire chose to stack
baled hay at this particular location, the Eighth Avenue Bridge provided the
easiest means of access to the stackyard from the southern portion of the
property. 29
C. The Removal of the Bridge
The BIA grew concerned with the safety of the bridge, 30 and Anspach
informed McGuire in 1998 that the bridge would be removed because it was
unsafe. 31 Albert Trimels, the regional road maintenance engineer for the BIA,
24
Id. at 43:12–15.
Id. at 44:8–13.
26
Id. at 83:10–12; see also id. at 83:13–15 (agreeing that “the bridge [was]
accessible for use by BIA”).
27
Id. at 65:21–66:1 (“And then we follow that with a baler and make the bales.
We follow that with a roadsider or a stinger. Now they’re using the big balers. It
picks the bales up, roadsides it next to the field or at a central stack pad, a stack
location, stacks the hay and makes the stacks.”).
28
Id. at 64:16–66:14.
29
Id. at 145:15–18.
30
DX47, at 80:25–81:3.
31
McGuire repeatedly attempts to put into issue the character and actions of
Anspach and others. See Pl.’s Post Trial Opening Br. 3 (“[Anspach’s] actions are
at issue. . . . Anspach did not like [McGuire]”); Trial Tr. 23:17-21 (“So the
unfortunate reality is that the substantial loss sustained by Mr. McGuire for which
he seeks compensation here came about as a result of an action of a condemning
authority incited by a bad judgment by an angry supervisor of the BIA.”). When
suit is brought under the Tucker Act, however, a plaintiff must make the
“concession that the government action was valid.” Hearts Bluff Game Ranch v.
United States, No. 2010-5164, 2012 WL 148692, at *6 (Fed. Cir. Jan. 19, 2012);
see also Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993)
(“[The] claimant must concede the validity of the government action which is the
basis of the taking claim to bring suit under the Tucker Act.”). The validity of the
BIA’s actions and the motivations for it are thus beyond the scope of this Court
and not in issue.
25
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had visited and studied the bridge and concluded that it should be closed. 32
Trimels believed that the bridge was “beyond repair” due to major structural
damage. 33 He also did not notice any signs of “regular maintenance.” 34 In a
March 25, 1999 report, Trimels outlined the problems with the bridge and
formally recommended its closure. 35
After Anspach informed McGuire that the BIA would remove the bridge,
two members of CRIT wrote Anspach concerning the removal. In a December 9,
1998 letter, Chairman Daniel Eddy, Jr., of CRIT wrote that “removal of this
bridge would place a hardship on Mr. McGuire as it would severely limit access
for hay hauling trucks.” 36 Chairman Eddy also wrote, “We are requesting the
removal of the bridge be delayed until we are able to work out a satisfactory
solution to the problem.” 37 In a December 23, 1998 letter, Vice Chairman Russel
Welsh of CRIT wrote that CRIT was “much concerned about the closure of the
bridges that cross irrigation canals.” 38 Anspach wrote CRIT back on December
24, 1998 and said that the “bridge was not built or authorized by the Bureau” and
that it was “unsafe and a potential hazard to anyone that uses it, especially heavy
vehicles.” 39 The BIA planned to remove the bridge during the dry up period in
January 2000. 40 Anspach wrote that McGuire could “reroute existing ground
access methods or . . . develop a new bridge plan that meets project standards as
determined by the Bureau.” 41
The BIA then sent McGuire a series of letters in 1999 informing him of
the unchanged plan to remove the bridge in January 2000. A February 5, 1999
letter from Anspach told McGuire that it was the BIA’s “intent to remove the
unsafe and unauthorized wooden bridge across canal 19R which runs to your
leased lands” and that the removal would occur during January 2000. 42 Anspach
also told McGuire that he could submit “plans, with specifications, for a new
bridge and apply for a crossing permit” and to contact Ted Henry with
questions. 43 An August 25, 1999 letter informed McGuire that “[i]t remains
[BIA’s] intent to remove” the “unsafe and unauthorized wooden bridge” and
again informed him that he would need to “submit the required documentation” to
32
Trial Tr. 838:14–16.
Id. at 836:12–15.
34
Id. at 836:22–24.
35
DX6, at 26–27.
36
DX2, at 22.
37
Id.
38
DX3, at 23.
39
DX4, at 24.
40
Id.
41
Id.
42
DX5, at 25.
43
Id.
33
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obtain a permit for a new bridge. 44 This letter recommended that he speak with
Jeffrey Hinkins, the BIA’s Supervisory General Engineer in the area.
McGuire discussed a replacement bridge with both Hinkins and Henry,
and he recalls proposing that a culvert crossing be used for a new bridge. 45 He
also recalls sketching out a plan for a new bridge in a meeting with Hinkins, 46
although no copy of these plans has been filed with the Court. 47 Henry testified
that he did not receive a formal “written plan[]” from McGuire, but he did think
there could have been “handwrit[ten] drawings on a piece of paper that we did
together in my office.” 48 Henry, however, did not find these plans “sufficient to
go forth and issue a permit on.” 49
McGuire challenged the bridge removal in tribal court in October 1999.
As before this Court, McGuire alleged that removal of the bridge would violate
the lease he had with CRIT. 50 McGuire also complained that the February 5,
1999 letter from Anspach, which notified McGuire of the removal and told him
that he would need to obtain approval for a replacement bridge, “would require
that a new bridge be installed at Plaintiff’s expense.”51 The BIA did not appear in
tribal court, and the parties have not submitted the record of any judgment issued
by that court.
On November 12, 1999, Anspach wrote McGuire that the bridge would be
“immediately close[d] . . . since it is unsafe for use by the motoring public.” 52 He
also reiterated the BIA’s “intent to remove the unsafe and unauthorized wooden
bridge across canal 19R” in January 2000, and again “encourage[d] [McGuire] to
apply for a permit.” 53 The bridge was blockaded in November 1999, and then
removed in January 2000.
Following the November 1999 blockade of the bridge, McGuire continued
to harvest his planted crops, but that task became more arduous. Instead of using
the convenient Eighth Avenue Bridge, he “was hauling [hay] out on gooseneck
trailers around the canal, through the FFA yard, around through the other side and
across Brown Road Bridge.” 54 McGuire did not find this to be a practical way to
operate the farm, 55 and his focus shifted from “prepar[ing] for another year” 56 to
44
DX7, at 36.
Trial Tr. 76:8–12.
46
Id. at 190:3–5.
47
Id. at 191:24.
48
Id. at 437:1–6.
49
Id.
50
DX8, at 40.
51
Id. at 41.
52
DX9, at 49.
53
Id.
54
Trial Tr. 123:10–14.
55
Id. at 123:19.
56
Id. at 123:5–6.
45
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“salvage.” 57 At the time the bridge was blocked, McGuire testified that he “had
about 240 acres of a brand new alfalfa stand on the northwestern portion of the
property,” and, eventually, he was “able to get those 240 acres of alfalfa out of the
northern portion of the property.” 58 To remove the alfalfa, however, he used
small gooseneck trailers, instead of the larger haulers he had previously used. 59
Although he continued to remove and sell previously planted alfalfa in
2000, McGuire did not make his January 2000 lease payment or any subsequent
payments. 60 CRIT demanded payment from him in a July 10, 2000 letter.61
Since he did not make any payments, the lease was terminated in an August 11,
2000 letter. 62 McGuire remained on the farm until July 2000. 63
After McGuire left the property, a new tenant, William Alcaida, leased
it. 64 Although Alcaida’s lease began in January 2001, he farmed without a bridge
at Eighth Avenue until January of 2002, when he built a new bridge with a
concrete culvert crossing. 65 Alcaida applied for and received a permit to
construct this bridge. 66 In order to receive the permit, he submitted paperwork to
the BIA detailing the design and materials for the bridge. 67 The BIA provided
Alcaida with a permit application form, which they created as he was applying for
the permit. 68
D. Procedural History
McGuire filed for Chapter 11 bankruptcy relief in federal district court in
Arizona on June 5, 2001. As part of that bankruptcy case, he brought an inverse
condemnation claim on November 13, 2001 against the government. After the
government moved to dismiss for lack of subject matter jurisdiction, the
bankruptcy court issued a recommendation on December 9, 2002 that it did have
jurisdiction, and the district court adopted this recommendation on July 11, 2003.
A trial was held in bankruptcy court on April 14 and 15, 2005, and the court
recommended that McGuire be awarded $1,132,059.60 in compensation for the
regulatory taking of his property. The district court, however, refused to adopt
these recommendations, and held that McGuire’s claim had never ripened. On
appeal, the Court of Appeals for the Ninth Circuit disagreed, ruling that McGuire
“sufficiently complied with the permitting scheme as practiced by the BIA” and
57
Id. at 123:4.
Id. at 197:7–14.
59
Id. at 123:3–14.
60
Id. at 204:5.
61
DX10, at 50.
62
DX12, at 53; see also Trial Tr. 204:16.
63
Trial Tr. 204:8.
64
DX43.
65
Trial Tr. 442:6.
66
DX 46.
67
Trial Tr. 442:24–443:9.
68
Id. at 443:10–18.
58
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that his claim had thus ripened. McGuire v. United States, 550 F.3d 903, 909
(9th Cir. 2008); see also McGuire v. United States, 97 Fed. Cl. 425, 433–37
(discussing the ripeness of McGuire’s claim and the Ninth Circuit’s analysis of
the issue).
The Ninth Circuit, however, also held that the district court lacked
jurisdiction over the matter, and transferred the case here. 69 In this Court, the
government filed a Motion To Dismiss, Or In The Alternative, Motion For
Summary Judgment on September 3, 2010. The Court granted-in-part and
denied-in-part this motion on February 18, 2011. The Court held that “[i]ssues of
material fact exist as to whether a legally cognizable property interest exists for
purposes of the Fifth Amendment” and as to whether the government committed a
regulatory taking of McGuire’s property. McGuire, 97 Fed. Cl. at 443. The
Court also, however, held that no categorical taking had occurred. Id. Trial was
held in Phoenix, Arizona on September 13–15, 2011.
II.
Analysis
As plaintiff, McGuire has the burden of proving the elements of his case
by a preponderance of the evidence. The government challenges that his
regulatory taking claim is not ripe, that he has not established a legally cognizable
property interest, and that he has not established a taking under Penn Central
Transportation Co. v. City of New York. 438 U.S. 104 (1978). The Court will
discuss each issue in turn.
A. The Court Already Decided to Follow the Ninth Circuit’s Decision
on Ripeness.
In its motion to dismiss, the government argued that McGuire’s claim had
not ripened, but the Court denied the motion, holding that it would follow the law
of the case as established by the Ninth Circuit Court of Appeals. McGuire, 97
Fed. Cl. at 437. After trial, defendant again contends that McGuire’s claim is not
ripe.
Generally, “a claim for a regulatory taking ‘is not ripe until the
government entity charged with implementing the regulations has reached a final
decision regarding the application of the regulations to the property at issue.’”
Morris v. United States, 392 F.3d 1372, 1376 (Fed. Cir. 2004) (quoting
Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 186
69
The Ninth Circuit found that the government had not waived its sovereign
immunity in district court for takings claims like McGuire’s. McGuire, 550 F.3d
at 910–14. In so holding, the Ninth Circuit explicitly disagreed with a Federal
Circuit decision to the contrary. Id. (disagreeing with Quality Tooling, Inc. v.
United States, 47 F.3d 1569 (Fed. Cir. 1995)). The Ninth Circuit thus sent
McGuire’s case to this Court based on a disagreement with an appellate decision
this Court is bound to follow. See McGuire, 97 Fed. Cl. at 428–29 (discussing
Quality Tooling’s application to this case).
8
(1985)). The government argues that McGuire “never submitted a permit
application” 70 and “did not meaningfully pursue a decision” 71 and that a final
decision was thus never reached.
The Ninth Circuit found that McGuire’s claim was ripe. According to that
court, “McGuire took ‘reasonable and necessary steps to allow’ the BIA to
exercise its ‘full discretion in considering development plans for the property.’”
McGuire, 550 F.3d at 910 (quoting Palazzolo v. Rhode Island, 533 U.S. 606,
620–21 (2001)). The court found that “McGuire did everything reasonably within
his power to prevent removal of the bridge and, when those efforts proved
ineffective, to build a new one.” Id. at 909.
After an extensive discussion of the applicability of the law of the case in
the rather uncommon situation of a transfer from an appellate court in a different
circuit, the Court followed the Ninth Circuit’s decision as the law of the case in its
February 18, 2011 opinion. See McGuire, 97 Fed. Cl. at 433–37. The Court
acknowledged then and acknowledges now that “if [it] were called on to look at
this issue anew, it might reach a different decision,” since reasonable minds could
disagree as to the ripeness of McGuire’s claim. Id. at 437. On the one hand, the
government asserts that he “never submitted a permit application” but, as
established at trial, McGuire was never given a permit form 72 because none, in
fact, existed until after his lease was cancelled. 73 On the other hand, McGuire
was informed in a letter on November 12, 1999 that he needed to “apply for a
permit” 74 if he wished to replace the bridge, but he never submitted any
documentation to the BIA after receiving this letter, although he had previously
discussed a replacement bridge with Henry and Hinkins. 75
The Court, however, is not writing on a blank slate. As the Court noted in
its prior opinion, “[A] decision in this case has already been made. A
consequence of the law of the case in transferred cases is that judges must, at
times, follow decisions that they themselves would not have made.” McGuire, 97
Fed. Cl. at 436. The Court stands by its conclusion, and considers McGuire’s
claim to be ripe.
B. Under the Federal Circuit’s Two-Part Test for Takings, McGuire
has not Established a Legally Cognizable Property Interest.
The Federal Circuit uses a two-part test to analyze takings. See
Acceptance Ins. Co., Inc. v. United States, 583 F.3d 849, 854 (Fed. Cir. 2009);
Am. Pelagic Fishing Co. v. United States, 379 F.3d 1363, 1372 (Fed. Cir. 2004).
In the recent Hearts Bluff Game Ranch v. United States decision, the Federal
70
United States’ Opening Post-Trial Br. 28, ECF No. 109.
Id. at 29.
72
Trial Tr. 127:21–22.
73
Id. at 443:10–18.
74
DX9, at 49.
75
Trial Tr. 439:14.
71
9
Circuit emphasized that the first step is not optional. See Hearts Bluff Game
Ranch v. United States, No. 2010-5164, 2012 WL 148692, at *3 (Fed. Cir. Jan.
19, 2012).
Under the first step, a court “determines whether the claimant has
identified a cognizable Fifth Amendment property interest that is asserted to be
the subject of the taking.” Acceptance Ins., 583 F.3d at 854. This step is a
“threshold” matter and “[i]f the claimant fails to demonstrate the existence of a
legally cognizable property interest, the court’s task is at an end.” Am. Pelagic,
379 F.3d at 1372; see also id. at 1383 (noting that without a property right
cognizable under the Fifth Amendment, a “claim is fatally defective”).
If and only if that first step is satisfied, a court asks whether or not the
property interest was actually “taken.” Hearts Bluff, 2012 WL 148692, at *2; see
also Am. Pelagic, 379 F.3d at 1372 (noting that a court “must determine whether
the governmental action at issue amounted to a compensable taking of that
property interest”). In this case, the alleged taking is a regulatory one under the
standards of Penn Central Transportation Co. v. City of New York. 438 U.S. 104
(1978). It is inappropriate for a court to consider the Penn Central factors before
the first part of the test has been satisfied. See Hearts Bluff, 2012 WL 148692, at
*3 (“And it is well settled that we do not reach the second step, evaluation of the
Penn Central factors, without first identifying a cognizable property interest.”).
1. A Claimant Must Have a Property Interest that is
Legally Cognizable Under the Fifth Amendment.
To begin the first step, a court “must identify what, if anything, was the
subject of the alleged taking.” Acceptance Ins., 583 F.3d at 855. The claimant
must point to “a specific interest in property that has been taken.” Kitt v. United
States, 277 F.3d 1330, 1336 (Fed. Cir. 2002). The Fifth Amendment uses the
word “property” in its technical sense to refer to the “bundle of sticks” concept of
property. Am. Pelagic Fishing, 379 F.3d at 1376; see also United States v. Gen.
Motors Corp., 323 U.S. 373, 377–78 (1945) (noting that “property” is not used in
the “vulgar and untechnical sense” to refer to some “physical thing”). It
“denote[s] the group of rights inhering in the citizen’s relation to the physical
thing, [such] as the right to possess, use and dispose of it.” Gen. Motors Corp.,
323 U.S. at 378.
After a claimant identifies the property interest affected by the
government, “the relevant question is whether [that specific] interest is a stick in
the bundle of rights” that the claimant has acquired and that mandates
compensation under the Fifth Amendment. Colvin Cattle Co., Inc. v. United
States, 468 F.3d 803, 806 (Fed. Cir. 2006). To determine whether a claimed
interest amounts to a compensable property right, a court “look[s] for ‘crucial
indicia of a property right,’ such as the ability to sell, assign, transfer, or exclude.”
Hearts Bluff, 2012 WL 148692, at *4 (quoting Conti v. United States, 291 F.3d
1334, 1342 (Fed. Cir. 2002)); see also Am. Pelagic, 379 F.3d at 1376 (“We
determine whether an asserted right is one of the rights in the bundle of sticks of
10
property rights that inheres in a res by looking to ‘existing rules or
understandings’ and ‘background principles’ derived from an independent source
such as state, federal, or common law.”) (quoting Lucas v. S.C. Coastal Council,
505 U.S. 1003, 1030 (1992)). The “‘right to exclude strangers, or for that matter
friends, but especially the government’” is one of the most important indicators of
a property right. Mitchell Arms, Inc. v. United States, 7 F.3d 212, 215 (Fed. Cir.
1993) (quoting Hendler v. United States, 952 F.2d 1364, 1374 (Fed. Cir. 1991)).
If an asserted right “is not a stick in the bundle of rights” that a claimant
has acquired, then the claim must fail. Colvin Cattle, 468 F.3d at 808; see also
M&J Coal Co. v. United States, 47 F.3d 1148, 1154 (Fed. Cir. 1995) (“[A] court
should inquire into the nature of the land owner’s estate to determine whether the
use interest proscribed by the governmental action was part of the owner’s title to
begin with, i.e., whether the land use interest was a ‘stick in the bundle of
property rights’ acquired by the owner.”) (citing Lucas, 505 U.S. at 1027).
2. McGuire Claims that he has Legally Cognizable
Property Interests in Access via Pre-Existing Routes to
his Leasehold, and in a Right to Repair the Eighth
Avenue Bridge.
McGuire asserts two property interests allegedly taken by the government.
First, he states that “he had a property interest in ingress, egress, and access as it
existed at the outset of the Lease.” 76 The only access route relevant to this case is
the Eighth Avenue Bridge. According to McGuire, Paragraph 17 of the lease
gave him this right of access via pre-existing routes. Second, he states that he had
a right to repair or replace that bridge. 77 The question for the Court is whether
McGuire has these interests and whether they have the “crucial indicia” of a
property right. Conti, 291 F.3d at 1342. If he has failed to satisfy his burden on
this issue, his claim is “fatally defective” and cannot proceed. Am. Pelagic, 379
F.3d at 1383.
Before analyzing the claimed interest in pre-existing access routes, the
Court will first discuss a collateral matter raised by McGuire. Finally, the Court
will turn to the asserted interest in a right to repair the bridge.
a. Expectations and Representations do not Create
Legally Cognizable Property Interests.
McGuire expected to continue using the bridge because of the bridge’s
long history and because of what he recalls a BIA official telling him about
ownership of the bridge. The Federal Circuit has held, however, that mere
expectations and representations do not establish a legally cognizable property
interest. Hearts Bluff, 2012 WL 148692, at *6.
76
Pl.’s Post Trial Answer to Def.’s Br. 6, ECF No. 112.
See id. (“He claims a right to access and to replace the removed Bridge with a
safe one. These are the property rights taken without just compensation.”).
77
11
The Eighth Avenue Bridge certainly had a long history. 78 In existence for
at least three decades, McGuire recalled his father using the bridge in the 1960’s
and 1970’s. 79 Perhaps because of this long history, it was in a state of disrepair
by 1999. 80
In keeping with that long history, McGuire expected the bridge to remain,
and expected that his convenient access via that bridge would continue. 81
Expectations as to use, however, do not create a property interest for purposes of
the Fifth Amendment. The Federal Circuit has distinguished “between simply not
being disturbed in the particular use of one’s property and having the right to that
use of the property.” Am. Pelagic, 379 F.3d at 1377. The court stated that this
“right” to a use of the property was required “for there to be a cognizable property
interest sufficient to support a takings claim. . . . In other words, use itself does
not equate to a cognizable property interest for purposes of a takings analysis.”
Id. Similarly, “hopes and expectations of future property use are not in and of
themselves a cognizable property interest.” Hearts Bluff, 2012 WL 148692, at
*6. In this case, McGuire used the bridge to access his property, and enjoyed the
easy access that bridge provided, but that history and the expectations that arose
from it do not in and of themselves give him a right to use it.
McGuire also may have expected to continue using the bridge because of
what he recalls a government official saying to him. A government official’s
representation about ownership, however, does not create a legally cognizable
property interest. McGuire testified that when he took over the lease, Rodney
McVey, acting superintendent of the BIA, told him that the bridge was “his.” 82
McVey, however, testified that he did not recall saying this. 83
Whether or not McVey actually told McGuire that the bridge belonged to
him, that representation standing alone does not create a property interest. The
recent Federal Circuit decision in Hearts Bluff emphasized that “relying on
representations by [government officials] . . . . does not create a compensable
property interest.” Hearts Bluff, 2012 WL 148692, at *6. In that case, a
government official had represented to the claimant that it would likely be given a
permit to make a particular use of its property. Id. Based on these
78
See also Pl.’s Post Trial Opening Br. 26–27, ECF No. 108 (“He leased his
property and invested heavily in it to prepare it for farming based on the long
standing presence of access across the 8th Ave Bridge—a bridge known to have
been the key access to the farm for at least 30 years before the lease
commenced.”).
79
Trial Tr. 43:24–44:1.
80
DX6, at 26–27.
81
See also DX8, at 47 (“Had I known that the bridge would be unilaterally
declared ‘unsafe’ less than halfway through the lease, I would have either not
entered into the lease or negotiated different terms.”).
82
Trial Tr. 71:11–14.
83
Id. at 487:19–488:8.
12
representations, the claimant invested hundreds of thousands of dollars. Id. at 11.
The Federal Circuit found, however, that expectations of future use, even though
they were based on the government’s representations, were “collateral” and did
not create a legally cognizable property interest. Id. at 12.
Thus, whatever McGuire’s expectations, or whatever the representations
made to him by government officials, McGuire still must establish a legally
cognizable property interest grounded in the “traditional hallmarks” of property.
Conti, 291 F.3d at 1341. Representations and hopes as to future use are
“collateral.” Hearts Bluff, 2012 WL 148692, at *6.
b. The Lease Does not Guarantee Access via PreExisting Routes, such as the Eighth Avenue
Bridge.
McGuire asserts that paragraph 17 of the lease gave him a right to access
his leased property via pre-existing routes, specifically via the Eighth Avenue
Bridge. Paragraph 17 provides: “LESSEE shall, at all reasonable times, be
allowed ingress and egress to the leased premises over existing roadways under
the possession and control of LESSOR.” 84 For McGuire to have an access right
from this paragraph, the particular roadway must be “under the possession and
control of LESSOR.” 85 In this case, CRIT is the lessor, but CRIT lacked both
possession and control over the route the government removed. The lease thus
does not convey a right to access the property via the Eighth Avenue Bridge.
The lease and testimony from trial specified that CRIT was the lessor.
McGuire testified as such at trial.86 The lease also refers to CRIT as the lessor. 87
Anspach did sign the lease on behalf of the BIA, but the signature of a BIA
official approving a lease between an Indian tribe and a private party does not
make the government a party to the contract. See Saguaro Chevrolet, Inc. v.
United States, 77 Fed. Cl. 572, 578 (2007) (“[T]he BIA Superintendent’s
approval of the Lease does not create privity of contract between plaintiff and the
United States.”); see also United States v. Algoma Lumber Co., 305 U.S. 415,
421 (1939) (finding that approval by the government of a contract for the sale of
tribal property “does not necessarily involve the assumption of contractual
obligations by the government”).
CRIT lacked control of the bridge. A December 9, 1998 letter to Anspach
from CRIT shows the absence of control, since CRIT asked that “the removal of
the bridge be delayed.” 88 If CRIT indeed controlled the bridge, they would not
need to request a delay in its removal. There was also no evidence presented
84
DX1, at 10.
Id.
86
See Trial Tr. 93:5–8, 210:14–15.
87
DX1, at 3.
88
DX2, at 22.
85
13
showing that CRIT did anything to exert control over the bridge, such as
maintaining it.
McGuire has not presented any evidence to show that CRIT possessed the
bridge, which was located “inside the 19-R Canal, and inside the BIA right of
way.” 89 McGuire’s counsel hypothesized in his opening remarks that if a prior
tenant constructed the bridge and if the prior tenant had a lease similar to
McGuire’s, then the bridge may have become CRIT’s property. 90 This
hypothetical might be enough to survive a motion to dismiss, but McGuire has not
presented any evidence as to the prior tenant or as to CRIT’s historical leasing
practices. Furthermore, some of the evidence submitted suggests that CRIT did
not own the bridge. McGuire, for instance, testified that he was told by Rodney
McVey, a BIA employee, that the bridge “wasn’t the Tribe’s.” 91 McGuire
himself in his opening post-trial brief recognized that “CRIT denied it owned the
bridge,” 92 and a BIA official testified that the bridge was not included in the
premises conveyed by the lease. 93
The lease also makes any interest it confers subject to the government’s
right-of-way. In the second paragraph of the lease, McGuire obtained “the
following described premises together with all rights, privileges, necessary
easements and appurtenances thereto,” but this grant was “subject to any prior,
valid, existing claim or rights-of-way, including the present existing roads.” 94
Thus, even if the lease included the Eighth Avenue Bridge, any use of that bridge
would be subject to the government’s right-of-way.
Finally, even if paragraph 17 did cover the Eighth Avenue Bridge, the
Court notes that McGuire has never presented any evidence as to why paragraph
17’s allowance for “ingress and egress” “at all reasonable times” presents the
“crucial indicia” of a property right. Conti, 291 F.3d at 1342. As the Federal
Circuit has noted, “Not all property interests are legally protected property
rights.” Nw. La. Fish & Game Pres. Comm’n v. United States, 574 F.3d 1386,
1390 (Fed. Cir. 2009). “‘[O]nly those economic [interests] are ‘rights’ which
have the law [in] back of them, and only when they are so recognized may courts
compel others . . . to compensate for their invasion.” Id. (quoting United States v.
Willow River Power Co., 324 U.S. 499, 502 (1945)). Although McGuire asserts
that paragraph 17 includes the bridge, he has not shown why this paragraph’s
allowance for access “at all reasonable times” amounts to a “legally protected
property right[].” Nw. La. Fish, 574 F.3d at 1390.
89
Trial Tr. 360:19–20.
Id. at 21:15–22 (“It was his predecessor’s . . . and under [his predecessor’s]
lease it would have become the CRIT’s bridge if the predecessor’s lease was the
same presumably. The bridge belonged to the Colorado River Indian Tribes.”).
91
Id. at 71:11–14.
92
Pl.’s Post Trial Opening Br. 16, ECF No. 108.
93
DX47, at 115:18.
94
DX1, at 3.
90
14
c. The Pertinent Federal Regulations Only Allow
for Bridges Based on Revocable Permits.
Federal regulations cover BIA canals, and make crossings like the Eighth
Avenue Bridge subject to revocable permits. As McGuire remarked at trial, “BIA
is very protective of their canals.” 95 These regulations are one legal means to
protect the canals and the irrigation system. As discussed below, the Federal
Circuit has found that no legally cognizable property interest exists in uses of
property dependent upon revocable permits. 96
The regulations in place at the time McGuire signed his lease specified
that bridges like the Eighth Avenue Bridge could only exist with permission of
the government:
After a project is completed, additional structures
crossing or encroaching on project canal, lateral or
drain rights-of-way which are needed for private
use may be constructed privately in accordance with
plans approved by the Officer-in-Charge or by the
project. In either case the cost of installing such
structures will not be at the project’s expense. Such
structures will be constructed and maintained under
revocable permits on proper forms issued by the
Officer-in-Charge of the irrigation project to the
party or parties desiring such structures.
25 C.F.R. § 171.9(c) (1999) (emphasis added). Regulations that exist at the time
a claimant acquired the property are part of the background principles that a court
must consider in determining whether or not the claimant had a legally cognizable
property interest. See Am. Pelagic, 379 F.3d at 1379 (“Because it was already in
place by the time [the plaintiff purchased the property], the Magnuson Act was an
‘existing rule’ or ‘background principle[]’ of federal law that inhered in [the
plaintiff’s] title.”) (quoting Lucas, 505 U.S. at 1029–30). Cf. Members of Peanut
Quota Holders Ass’n v. United States, 421 F.3d 1323, 1331 (Fed. Cir. 2005)
(“[A] compensable interest is indicated by the absence of express statutory
language precluding the formation of a property right in combination with the
presence of the right to transfer and the right to exclude.”) (emphasis added).
In this case, McGuire essentially argues that he had a compensable right to
use a bridge that could only be “constructed and maintained under [a] revocable
permit[].” 25 C.F.R. § 171.9(c). This argument is foreclosed by Federal Circuit
95
Trial Tr. 116:20–21.
McGuire has not argued that he had a legally cognizable property interest in a
permit, implied or otherwise, to cross the BIA canal at Eighth Avenue. Any such
argument would be foreclosed by precedent. See, e.g., Am. Pelagic, 379 F.3d at
1374 (“American Pelagic did not and could not possess a property interest in its
fishery permits.”).
96
15
case law, since decisions of the Federal Circuit have made clear that no legally
cognizable property interest exists in uses of property dependent upon revocable
permits.
In Mitchell Arms v. United States, for instance, the government revoked a
permit that the claimant needed to sell its property in the way it had planned for
and preferred. Mitchell Arms, 7 F.3d at 213. There, the claimant contracted with
an overseas company to purchase and import assault rifles; after the government
suspended and eventually revoked the claimant’s permits to import the rifles, the
claimant brought suit and alleged that the government had taken its property. Id.
at 215. The Federal Circuit held that “Mitchell’s expectation of selling the assault
rifles in domestic commerce—the interest affected in this case—was not inherent
in its ownership of the rifles” because that interest was “totally dependent upon
the import permits.” Id. at 217. The Court noted that the “ability to import the
rifles and sell them in the United States was at all times entirely subject to the
exercise of ATF’s regulatory power” and therefore “any expectation which arose
on Mitchell’s part as a result of the import permits did not constitute a property
right protected by the Fifth Amendment.” Id.
In a similar case, American Pelagic Fishing Co. v. United States, the
claimant invested $40 million in a fishing vessel that was meant to fish in the
Exclusive Economic Zone (“EEZ”) of the United States in the Atlantic Ocean.
Am. Pelagic, 379 F.3d at 1366–68. The vessel was required to carry certain
permits that were issues, but then revoked. Id. at 1368–69. Due to the size and
configuration of the vessel, it could not operate profitably without the permits,
and the claimant was forced to sell it. Id. at 1369. The Court of Federal Claims
had found that “[t]he relevant stick in the bundle in this context is the right to use
the Atlantic Star to fish, subject to regulation” and that “the right to use is one of
the group of rights inhering in the citizen’s relation to [a] physical thing” and
concluded that the claimant had a property interest. Id. at 1370 (quoting Am.
Pelagic Fishing Co., L.P. v. United States, 49 Fed. Cl. 36, 46–48 (2001)).
The Federal Circuit in American Pelagic reversed the Court of Federal
Claims’ finding of a legally cognizable property interest. Am. Pelagic, 379 F.3d
at 1383. According to the Federal Circuit, it had to answer this question: “Was
the right to fish for Atlantic mackerel and herring in the EEZ a legally cognizable
property interest such that it was a stick in the bundle of property rights that
American Pelagic acquired as the owner of the Atlantic Star?” Am. Pelagic, 379
F.3d at 1376. The court found that “the ability to fish in the EEZ” was “a matter
of governmental permission, rather than a property right.” Id. at 1380. Thus, “no
right to fish in the EEZ inhered in American Pelagic’s title when it acquired the
Atlantic Star” and “[b]ecause the right to use the vessel to fish in the EEZ was not
inherent in its ownership of the Atlantic Star, American Pelagic did not suffer the
loss of a property interest for purposes of the Takings Clause.” Id. at 1381.
16
The facts of this case are similar to the situations in both Mitchell Arms
and American Pelagic. In all three cases, the claimants invested large amounts of
money into their property, hoping to make certain uses of that property. In
American Pelagic, the claimant hoped to use its fishing vessel, in which it had
invested $40 million, to fish in the EEZ. In Mitchell Arms, the claimant
contracted to import and sell guns. In this case, McGuire improved his farm and
hoped to access one part of his farm via the Eighth Avenue Bridge. In all three
cases, however, the anticipated uses were ones dependent upon government
permits. The claimant in American Pelagic needed permits to fish in the EEZ,
and in Mitchell Arms the claimant needed permits to import its guns. In this case,
McGuire’s expected use of his property was also wholly dependent upon the
government’s permitting scheme, since crossings over BIA canals could only
exist based on “revocable permits.” See also Lemmons v. United States, 496
F.2d 864, 866 (Ct. Cl. 1974) (“The lease drew its vitality, and indeed its very
existence, from a permit issued by the Corps of Engineers. Plaintiff conceded he
could not operate his [business] without the permit.”).
The Federal Circuit has similarly held that claimants are not entitled to
compensation for any increased value that government permits might bring to
their property. In Colvin Cattle Co. v. United States, for instance, the claimant
owned a ranch adjacent to federal grazing land in which the claimant had
stockwatering rights. Colvin Cattle, 468 F.3d at 805–06. For decades, the
claimant also had a lease to graze on that land, but, when the government
canceled the lease, the claimant sued. Id. The Federal Circuit found that the
claimant had no property right to allow its cattle to graze on the nearby land. Id.
at 809. That court held that the ranch “may have lost value” when the
government cancelled the grazing lease, but the claimant could not recover for
this loss because it “has not occurred by virtue of governmental restrictions on a
constitutionally cognizable property interest.” Colvin Cattle, 468 F.3d at 808.
Here, while having to use alternate access routes may have interfered with the
profitability of McGuire’s lease and caused it to lose value, merely losing value,
as in Colvin Cattle, does not mandate compensation.
d. McGuire has not Established a Legally
Cognizable Property Interest in Access via PreExisting Routes.
The Federal Circuit has been clear that a claimant must have a
compensable right to the particular use with which the government interfered.
Lacking that, a claim is “fatally defective.” Am. Pelagic, 379 F.3d at 1383.
McGuire has claimed to have a legally cognizable property interest in
access as it existed at the outset of the lease. The Federal Circuit looks for the
“crucial indicia” of a property right, Conti, 291 F.3d at 1342, and considers
existing regulations to determine whether a claimant has a legally cognizable
property interest. Am. Pelagic, 379 F.3d at 1379. As discussed above, the lease
did not cover use of the bridge at Eighth Avenue, because it only covered
roadways “under the possession and control” of CRIT, which lacked both
17
possession and control of the bridge. Even if the lease did cover the bridge,
McGuire has not presented any evidence that this would amount to a legally
cognizable property interest. An allowance for use of another’s roadways “at all
reasonable times” does not necessarily have the “‘crucial indicia of a property
right,’ such as the ability to sell, assign, transfer, or exclude.” Hearts Bluff, 2012
WL 148692, at *4 (quoting Conti, 291 F.3d at 1342). Furthermore, the
regulations only allowed for bridges like the one at Eighth Avenue if they were
based on revocable permits, and no legally cognizable property interest exists in
uses dependent upon revocable permits. McGuire has also not presented any
evidence that he could exclude, assign, sell, or transfer his interest in access via
pre-existing routes. In fact, McGuire testified that he could not exclude dump
trucks from the bridge. 97
McGuire has cited a few cases that deal with the right of access to land,
but none of those cases are relevant here. He cites a few cases dealing with a total
deprivation of access. See, e.g., Foster v. United States, 607 F.2d 943, 950 (Ct.
Cl. 1979) (finding a taking where the defendant was “[d]enying access 100% of
the time” to an Air Force base, under which plaintiffs owned mineral rights);
Stephenson v. United States, 33 Fed. Cl. 63, 71 (1994) (noting that plaintiffs were
denied “physical access to the surface (by fencing and locked gates)” over their
mineral rights). A total deprivation did not, however, occur here, since McGuire
could still access his property from the north via Levee Road, or from either side
by driving along the canal banks. In fact, he harvested the hay that had been
planted prior to the bridge’s removal. 98 He also cites two cases from the state of
Florida. In the first, the Supreme Court of Florida found that “[a]ccess, as a
property interest, does not include a right to traffic flow even though commercial
property might very well suffer adverse economic effects as a result of reduced
traffic.” Dep’t of Transp. v. Gefen, 636 So.2d 1345, 1346 (Fla. 1994). In the
second case, the Supreme Court of Florida found that “the fact that a portion or
even all of one’s access to an abutting road is destroyed does not constitute a
taking unless, when considered in light of the remaining access to the property, it
can be said that the property owner’s right of access was substantially
diminished.” Palm Beach Cnty. v. Tessler, 538 So.2d 846, 859 (Fla. 1989).
McGuire’s convenient access route over the government canal was removed, but
he has not established that he had a right to access via that one particular point.
McGuire has not shown that a right to access via pre-existing routes is part
of the bundle of rights that he, as lessee, possessed in the farm in Arizona. As in
Mitchell Arms, McGuire’s “financial expectations” may have been “frustrat[ed],”
but mere frustration of expected profit does “not amount to the taking of a
property right protected by the Fifth Amendment.” Mitchell Arms, 7 F.3d at 217.
97
98
Trial Tr. 83:10–12.
Id. at 197:7–14.
18
3. A Claimed Right to Repair or Replace the Bridge at
Eighth Avenue does not Provide a Property Interest for
Fifth Amendment Purposes.
McGuire has also claimed a property interest exists in the right to repair
the bridge, and cites two sources for this right: the lease and the regulations.
At trial, McGuire testified that he was “ready and willing and able” to
construct a new bridge, 99 although not all the evidence submitted to the Court
supports this assertion. In the Tribal Court lawsuit, McGuire had complained that
the government’s removal of the bridge and notice to McGuire of how to obtain
approval for a new bridge “would require that a new bridge be installed at
Plaintiff’s expense.” 100 In an affidavit, he also stated that he considered the lease
breached if “the bridge is removed or if a new bridge is built and I am expected to
pay for all or a portion of the costs.” 101 Furthermore, despite McGuire’s apparent
willingness to repair the bridge, Ted Henry testified that McGuire never “asked if
he ever could repair the bridge,” 102 and Albert Trimels testified that he “didn’t
believe it had been maintained at all” and that there were no “signs of [the bridge]
receiving regular maintenance.” 103
The applicable regulations do not mention even once a right to repair
crossings like the Eighth Avenue Bridge. Under 25 C.F.R. § 171.9(c), which
applies here and is discussed above, structures like that bridge are “maintained
under revocable permits,” but the regulation does not mention any right to repair.
The following paragraph in the regulations, 25 C.F.R. § 171.9(d), does reference
repairing damaged crossings, but this regulation only applies to a “crossing
constructed for and by” the BIA and then transferred to some other entity. The
Eighth Avenue Bridge was not constructed by the BIA, 104 and that paragraph—
and its reference to repairs of damaged crossings—is thus irrelevant to this
dispute. McGuire has cited no other source in the regulations for a right to repair.
McGuire also bases his claim in a right to repair on paragraphs 9 and 10 of
the lease, which relate to improvements on the land. In pertinent part, paragraph
9 provides:
99
Id. at 145:19.
DX8, at 41.
101
Id. at 47.
102
Trial Tr. 435:15–16.
103
Id. at 836:22–24.
104
As noted above, the builder of the bridge is unknown. McGuire has speculated
that it could be a prior tenant, Trial Tr. 21:15–22, and one letter from CRIT
suggested that the original developer of the land had built it. DX2, at 22. In any
event, no party has ever suggested or presented evidence that the BIA built the
bridge, and 25 C.F.R. § 171.9(d) thus does not apply.
100
19
All buildings and improvements . . . shall at the
option of LESSOR, remain on said premises after
the termination of this Lease and shall thereupon
become property of LESSOR. LESSOR shall have
the right to require LESSEE to remove any
damaged
or
unsightly
buildings
and/or
improvements on the leased premises or otherwise
restore the leased premises upon, or within thirty
(30) days after, termination of this Lease, by giving
written notification to LESSEE within at least
ninety (90) days prior to Lease termination. If so
notified, LESSEE, at LESSEE’S sole cost and
expense, shall remove said buildings and/or
improvements and shall restore the premises to the
condition existing at the time this Lease
commenced. 105
Paragraph 10 requires that “improvements placed on the leased premises . . . be
constructed in a good and workmanlike manner” and also requires that the lessee
“maintain the premises and all improvements thereon . . . in good order and
repair.” 106
Although a bridge would generally be considered an “improvement,” these
paragraphs do not cover the Eighth Avenue Bridge. Black’s Law Dictionary
defines an “improvement” as an “addition to real property, whether permanent or
not; esp., one that increases its value or utility.” BLACK’S LAW DICTIONARY 826
(9th ed. 2009). These paragraphs reiterate the normal rule that “improvements to
realty are considered part of the real property[, and] ownership of the
improvements follows title to the land.” Banner v. United States, 238 F.3d 1348,
1356 (Fed. Cir. 2001). Thus, the paragraphs provide that if a lessee constructs an
improvement on the leased premises, the title to that improvement will pass to
CRIT. As discussed above, however, the bridge is located “inside the 19-R
Canal, and inside the BIA right of way.” 107 In testimony at the trial in bankruptcy
court, Allen Anspach also stated that the bridge was “not part of Mr. McGuire’s
leased premises” because it was “part of the BIA right-of-way.” 108 These
paragraphs only cover improvements on “said premises,” and the premises do not
include the 19-R Canal. Furthermore, even if the paragraphs included the bridge
within their grasp and conveyed to McGuire a “right to repair” the bridge, it is
unclear why this right would amount to a compensable property interest.
105
DX1, at 8.
DX1, at 8.
107
Trial Tr. 360:19–20.
108
DX47, at 115:18–24.
106
20
4. No Property Interest for Purposes of the Fifth
Amendment Exists.
The Federal Circuit has recently noted that a court may not conduct a
Penn Central analysis until it finds that the government has interfered with a
legally cognizable property interest. See Hearts Bluff, 2012 WL 148692, at *3.
In this case, McGuire has not established that the government took a stick in the
bundle of rights that he had as lessee.
Merely having some interest in property does not establish a property right
for purposes of the Fifth Amendment. Frequently, in cases before the Court of
Federal Claims and the Federal Circuit, a claimant will own some property, but
still fail to establish a legally cognizable property interest for purposes of the Fifth
Amendment. In Colvin Cattle, the claimant owned property on which he raised
livestock, but nevertheless failed to establish a property interest in the right to
have that cattle graze on nearby land. Colvin Cattle, 468 F.3d at 808. There, the
Federal Circuit noted that the fact that the plaintiff’s “ranch may have lost
value . . . is of no moment because such loss in value has not occurred by virtue of
governmental restrictions on a constitutionally cognizable property interest.” Id.
Here, McGuire leased a farm, but he has not established that he had a right to
access that farm via pre-existing methods, such as the Eighth Avenue Bridge, or
that he had a right to repair the bridge.
The Federal Circuit has noted that “a compensable interest is indicated by
the absence of express statutory language precluding the formation of a property
right in combination with the presence of the right to transfer and the right to
exclude.” Members of Peanut Quota Holders Ass’n, 421 F.3d at 1331. In this
case, the regulations specifically allowed the government to revoke a permit for
bridges like the one at Eighth Avenue. 25 C.F.R. § 171.9(c). McGuire also could
not “‘exclude’” anyone from these claimed interests. Mitchell Arms, 7 F.3d at
215 (quoting Hendler, 952 F.2d 1364). He could also not “transfer” these
interests. Members of Peanut Quota Holders Ass’n, 421 F.3d at 1331. His
claimed interests thus lack the “‘crucial indicia of a property right,’ such as the
ability to sell, assign, transfer, or exclude.” Hearts Bluff, 2012 WL 148692, at *4
(quoting Conti, 291 F.3d at 1342).
C. Since McGuire Has Not Demonstrated that he had a Compensable
Interest in what was Allegedly Taken, a Penn Central Analysis is
Unnecessary.
Demonstration of a compensable interest is an absolute requirement of a
regulatory taking claim. As the Federal Circuit has noted, “[I]f a claimant fails to
demonstrate that the interest allegedly taken constituted a property interest under
the Fifth Amendment, a court need not even consider whether the government
regulation was a taking under the analysis set forth in Penn Central.” Conti, 291
F.3d at 1339. Here, McGuire has extensively discussed Penn Central, but spent
scant time on the necessary first step of the analysis. See also McGuire, 97 Fed.
Cl. at 438 (noting McGuire’s “failure to, even once, discuss this critical first step
21
of a takings analysis in any of his submissions to the Court.”). Since the Court
finds that McGuire has failed to meet his burden of showing a compensable
interest, an analysis of the challenged actions under Penn Central is unnecessary.
III.
Conclusion
For the above-mentioned reasons, the Court finds that the government did
not commit a regulatory taking. The Clerk is directed to enter judgment in favor
of the government.
No costs.
IT IS SO ORDERED.
________s/Bohdan A. Futey__________
BOHDAN A. FUTEY
Judge
22
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