PATTY et al v. USA
REPORTED OPINION denying 7 Motion to Dismiss - Rule 12(b)(1) and (6). Signed by Senior Judge Eric G. Bruggink. (wr) Service on parties made (hw1).
In the United States Court of Federal Claims
(Filed: February 14, 2018)
CRAIG PATTY and
CRAIG THOMAS EXPEDITORS, LLC,
THE UNITED STATES,
Takings Clause; U.S.
Const. amend. V; Inverse
condemnation due to
property damage; Police
Power Exception; Private
property use; Private
Arnold Anderson Vickery, Houston, TX, with whom was Earl Landers
Vickery, for plaintiffs.
Michael Anthony Rodriguez, United States Department of Justice, Civil
Division, Commercial Litigation Branch, Washington, DC, for defendant.
Plaintiffs, Craig Patty and Craig Thomas Expeditors, LLC, own a red
2006 Kenworth T600 truck that sustained damage during a Drug Enforcement
Administration (“DEA”) controlled drug delivery on November 21, 2011.
Plaintiffs filed their complaint on June 16, 2017. They allege that the DEA
effected a Fifth Amendment taking of their personal property without just
compensation when it used plaintiffs’ truck for a DEA operation.
Pending is defendant’s motion to dismiss pursuant to Rules 12(b)(1)
and 12(b)(6) of the Rules of the United States Court of Federal Claims.
Defendant construes the complaint as an assertion that the government’s
conduct was illegal, which, it argues, means that the predicate to a taking claim
is missing. If plaintiffs challenge the legality of the seizure, the claim sounds
in tort, a species of action over which the court admittedly does not have
jurisdiction. In the alternative, defendant contends that it is entitled to
judgment under Rule 12(b)(6) because the assertions of the complaint
demonstrate that the DEA used the truck as an exercise of the police power of
the United States, thereby precluding a taking claim. The motion is fully
briefed, and we held oral argument on February 8, 2018. Because plaintiffs do
not challenge the legality of the government’s action, we deny the
jurisdictional challenge. Because plaintiffs sufficiently allege actions which
are inconsistent with the exercise of police power, we also deny the motion to
dismiss under Rule 12(b)(6).
Mr. Patty and his father formed a trucking company, Craig Thomas
Expeditors, LLC, in July 2011. By September 2011, the growing business
purchased a second truck, a red 2006 Kenworth T600. The LLC hired another
driver, Lawrence Chapa, to drive the truck. At the time the LLC hired Mr.
Chapa, Mr. Patty and the LLC were unaware that Mr. Chapa was, according
to plaintiffs, a DEA confidential informant. During the period from November
1 to November 21, 2011, plaintiffs allege that Mr. Chapa used plaintiffs’ truck
in a law enforcement operation for the High Intensity Drug Trafficking Area
(“HIDTA”) task force without the knowledge or permission of the LLC.
In late November 2011, Mr. Chapa and members of the HIDTA task
force arranged for Mr. Chapa to use plaintiffs’ truck in an operation. Mr.
Chapa would drive plaintiffs’ truck to Rio Grande City, Texas, load the truck
with contraband, and then drive the truck to Houston, Texas, to complete the
transfer to purchasers. HIDTA officers planned to make arrests at the
rendezvous point in Houston. Mr. Chapa did not inform plaintiffs of this plan.
Instead, Mr. Chapa told plaintiffs that he would drive the truck to Houston for
maintenance and repairs.
These facts are drawn from plaintiffs’ complaint and assumed to be correct
for the purpose of ruling on the motion to dismiss.
As planned, Mr. Chapa drove the truck to Rio Grande City and loaded
it. Mr. Chapa drove the truck to Houston, but he did not reach the rendezvous
point. Instead, the truck was intercepted. A firefight ensued and Mr. Chapa
was killed. Plaintiffs’ truck was “wrecked and riddled with bullet holes.” Pls.’
Compl. ¶ 28. After the unsuccessful operation, the government impounded
plaintiffs’ truck and served Mr. Patty with a search warrant.
Plaintiffs allege their truck was out of service for approximately 100
days. The government did not compensate plaintiffs for using or damaging the
truck. Mr. Patty filed an administrative tort claim against the government.
After the requisite period of time had passed, the government informed Mr.
Patty of his right to bring suit against the government under the Federal Tort
Claims Act. Mr. Patty brought a claim in district court, but was unsuccessful.
The district court granted summary judgment to the government under the
Federal Tort Claims Act’s discretionary function exception. Patty v. United
States, No. H-13-3173, 2015 WL 1893584, at *1-2 (S.D. Tex. Apr. 27, 2015).
Mr. Patty appealed to the United States Court of Appeal for the Fifth Circuit.
The Fifth Circuit affirmed the district court. Patty v. United States, 633 F.
App’x 238 (5th Cir. 2016) (unreported). Mr. Patty filed a petition for certiorari
in the Supreme Court of the United States, which the Supreme Court denied.
Patty v. United States, 137 S. Ct. 332 (Oct. 17, 2016). On June 16, 2017, Mr.
Patty turned to the United States Court of Federal Claims, filing this claim for
just compensation for a Fifth Amendment taking.
Plaintiffs allege that by using their truck the government took their
property for public use without just compensation. Defendant first argues that
this court does not have jurisdiction over plaintiffs’ claim because plaintiffs
allege that the DEA operation was unlawful, and thus plaintiffs’ claim is one
for damages from tortious government action rather than for just compensation
under the Fifth Amendment. Defendant is correct that this court does not have
jurisdiction over tort claims, and, if that were the gist of plaintiffs’ claim, it
would be outside the court’s jurisdiction. See Rith Energy, Inc. v. United
States, 270 F.3d 1347, 1352 (Fed. Cir. 2001). Indeed plaintiffs have
unsuccessfully pursued an action under the Federal Tort Claims Act.
Defendant relies in part on the fact that plaintiffs assert that the
agency’s use of their truck was without permission and an unjustified risk to
private property and to the lives of those involved in the LLC. Pls.’ Compl.
¶ ¶ 2, 17, 18, 21. But an assertion of lack of consent to the use is not the same
as an assertion of illegality. More importantly, it is not inconsistent with the
assertion of a taking. Condemnation actions, whether direct or implied,
typically are done over the property owner’s objection. At oral argument and
in their reply brief, plaintiffs are explicit in disavowing an assertion of
illegality. Although some of the damages asserted sound more in tort than
takings, that fine point will be resolved assuming there is liability and we move
on to damages. We have jurisdiction over plaintiffs’ assertion of a taking of
private property without just compensation.
The second prong of defendant’s motion to dismiss is that the facts
asserted demonstrate on their face that the agency was acting within the
government’s inherent police power. The Supreme Court has long taught that
the Takings Clause is not implicated when the government exercises its police
power. See Mugler v. Kansas, 123 U.S. 623 (1887). Yet when analyzing how
far “the police power can be stretched,” the Supreme Court has warned,
“When this seemingly absolute protection is found to be qualified by the police
power, the natural tendency of human nature is to extend the qualification
more and more until at last private property disappears. But that cannot be
accomplished in this way under the Constitution of the United States.”
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).
The distinction between an exercise of the police power and a
constitutional taking has been characterized since Mugler as “whether the
governmental action operates to secure a benefit for or to prevent a harm to the
public.” Morton Thiokol, Inc. v. United States, 4 Cl. Ct. 625, 630 (1984).
When determining whether government action constitutes an exercise of the
police power, the relevant inquiry is the character of the government’s action
in light of the particular facts of the case. Penn Central Transp. Co. v. City of
New York, 438 U.S. 104, 124 (1978).
This case presents the question of whether the government’s use of
plaintiffs’ truck in a controlled drug delivery (which led to the truck being
damaged and impounded) constitutes an exercise of the police power or a
constitutional taking. Because the character of the government’s action in this
case differs from the circumstances involved in cases where the court held that
government action was an exercise of the police power, we hold that plaintiffs
have stated a claim for a constitutional taking and deny defendant’s motion to
To state a taking claim, plaintiffs must demonstrate that they have a
property interest to assert and that the government physically or by regulation
infringed on that interest for public use. Plaintiffs’ complaint asserts a
property interest in the LLC’s red T600 truck. Accepting plaintiffs’ recitation
of facts as true, the government took possession of and used the truck,
depriving plaintiffs of the right to exclude the government from using the
Defendant’s argument regarding public use, however, is
straightforward: when law enforcement officials seize and retain property in
the course of enforcing criminal law, the government exercises its police
power rather than taking property for public use.
Plaintiffs point to a distinction, however, between the cases defendant
cites and their allegations. In the cases defendant relies on, the law
enforcement officials exercised their authority to investigate, arrest, seize,
impound, subject to forfeiture, or otherwise enforce criminal law. The
government’s action uniformly was directed toward property that was related
to the law enforcement activity or was the subject of investigation. In
AmeriSource Corp. v. United States, the United States Attorney seized drugs
to use as evidence against a pharmaceuticals buyer charged with “‘conspiracy,
unlawful distribution of prescription pharmaceuticals, operating an
unregistered drug facility, and conspiracy to commit money laundering.’” 75
Fed. Cl. 743, 744 (2007). In Kam-Almaz v. United States, an ICE agent, who
was acting as a Customs agent with the authority to seize and inspect property
entering the United States, seized the laptop from the subject of an ICE
investigation. 682 F.3d 1364, 1366-67 (Fed. Cir. 2012). In Bennis v.
Michigan, the county prosecutor filed an abatement complaint regarding a
vehicle involved in illegal activity and which constituted a public nuisance
under Michigan law. 516 U.S. 442, 443-44 (1996). In Scope Enterprises, Ltd.
v. United States, which involved a sting operation, the Customs Service
repossessed illegal technology and refused to return the funds to plaintiff that
engaged in the illegal transaction with Customs undercover agents. 18 Cl. Ct.
875 (1989); see also Husband v. United States, 90 Fed. Cl. 29 (2009) (United
States Marshal Service in custodial possession of plaintiff’s ring during his
detention); Alde, S.A. v. United States, 28 Fed. Cl. 26 (1993) (Customs Service
seized an aircraft for failure to request landing rights for the aircraft); JarboeLackey Feedlots, Inc. v. United States, 7 Cl. Ct. 329 (1985) (United States
Marshal seized beef and offal subject to a seizure and condemnation action for
violation of a FDA regulations). In each of these cases, the property was
evidence in an investigation or the object of the law enforcement action. In
none of them did the government simply seize property as a convenience to the
government in pursuing unrelated law enforcement.
If defendant’s position is the law, the police power would swallow
private property whole. Neither plaintiffs nor their truck were the subject of
an investigation,their truck did not belong to a person who was the subject of
an investigation, nor was it related, before the fact, to any violation of
regulation or statute. Plaintiffs emphasize that neither the LCC nor Mr. Patty
had any connection to or dealings with criminal outfits in the state of Texas
and that, had it not been for their driver working with the DEA, their truck
would have never been involved in the operation.2 The government instead
chose to use plaintiffs’ property as a tool to stage a controlled drug delivery.
Plaintiffs contrast instances in which law enforcement officials seized
property related to enforcing criminal law with those in which courts required
the government pay just compensation for appropriating a benefit from a
private property. Plaintiffs point to Textainer Equip. Mgmt. Ltd. v. United
States, 115 Fed. Cl. 708, 717-18 (2014), in which this court held that the
government took plaintiff’s property by “appropriate[ing] [plaintiff’s]
containers for a public benefit in the form of continued military use” after the
government’s lease had expired. The court harkened back to Argent v. United
States, 124 F.3d 1277, 1218 (Fed. Cir. 1997), in which the Federal Circuit held
that “military conduct that appropriates private property for its use is
recognized as giving rise to a taking.” Id. In Argent, the Federal Circuit
The relevant fact is not that plaintiffs were innocent bystanders to the DEA
operation, but rather that the government’s action is disconnected from
exercising the police power in relation to plaintiffs’ property. The Takings
Clause is concerned with “the character of the government action,” and “[t]he
innocence of the property owner does not factor into the determination.”
AmeriSource, 525 F.3d 1149, 1154 (Fed. Cir. 2008) (AmeriSource was not the
subject of the criminal investigation, but the police exercised the police power
by seizing the pharmaceuticals); see also Bennis, 516 U.S. at 443 (wife’s
innocent bystander status to her husband’s illegal behavior in vehicle irrelevant
to takings analysis); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S.
663, 665 (1974) (yacht owner’s innocence in lessee’s possession of controlled
substances while aboard his yacht irrelevant to takings analysis).
“consider[ed] the viability of a takings claim based on frequent flights at low
altitudes over and around the plaintiffs’ property” by the Navy. 124 F.3d at
1282. Despite the Navy flight training not flying directly over plaintiffs’
property, as had been the facts in previous cases, the Federal Circuit reasoned
that plaintiffs alleging “a peculiar burden imposed on landowners surrounding
the site selected for naval training” was sufficient to plead a taking for a public
purpose. Id. at 1283.
The Supreme Court has also recognized a taking for which just
compensation is due when the Army used a private laundry company beyond
ordinary wear and tear, Kimball Laundry Co. v. United States, 338 U.S. 1, 4
(1949), and for operating losses when the federal government seized a coal
mine during a strike, United States v. Pewee Coal Co., 341 U.S. 114 (1951).
When the FBI took over operation of a private business in order to carry out
a sting operation in Janowsky v. United States, 133 F.3d 888, 892 (Fed. Cir.
1998), the Federal Circuit reversed the summary judgment for the government
on the taking claim with instructions to consider the factual issues surrounding
whether plaintiff voluntarily participated in the FBI’s operation. See also Otay
Mesa Prop. L.P. v. United States, 670 F.3d 1358, 1365 (Fed. Cir. 2012)
(holding that “Border Patrol’s blanket easement to install, maintain, and
service sensors on Otay Mesa’s property constituted a permanent physical
taking”); Hendler v. United States, 952 F.2d 1364, 1367 (Fed. Cir. 1991)
(holding that “the Government’s enlistment of plaintiffs’ property, without
plaintiffs’ consent, in the battle against pollution” effected a taking). These
cases suggest that there is a difference between government action that merely
appropriates a benefit from unoffending private property and the government
seizing private property that is a nuisance, caught up in criminal activity, or
somehow related to an investigation.
It is also telling that the Federal Circuit has limited its holdings that law
enforcement officials use the police power to seize and retain property without
implicating the Fifth Amendment to situations in which the property is “to be
used as evidence in a criminal prosecution,” AmeriSource, 525 F.3d at 1153,
or “[w]hen property has been seized pursuant to the criminal laws or subjected
to in rem forfeiture proceedings . . . .” Acadia Tech., Inc. v. United States, 458
F.3d 1327, 1331 (Fed. Cir. 2006). The Federal Circuit indeed noted in
AmeriSource that the ability to seize and retain property to be used as evidence
without implicating the Takings Clause was “not merely for the convenience
of the government,” but rather to ensure that the government could comply
with the rule of law when proving its case. 525 F.3d at 1153 n.4. Similarly, in
Kam-Almaz, the Federal Circuit wrote that the police power necessarily
includes lawful seizures performed pursuant to Customs’ authority to police
the border. 682 F.3d at 1372.
Plaintiffs’ claim bears striking similarities to cases in which the
government has chosen simply to appropriate private property to secure a
benefit for the public. Here, the assertion is that law enforcement officials
used private property as a resource for an operation despite lack of consent of
the property owner. Using the dichotomy of whether the government action
prevented harm to the public or secured a benefit to the public, the
government’s action falls within the latter category: it did not seize the truck
to prevent a harm to the public caused by or related to the truck or anyone
associated with it, but rather the agency chose to use the truck as a resource in
ridding the area of controlled substances and criminal activity. It could just as
easily have rented a truck and furnished it to Mr. Chapa. Plaintiffs’ truck was
not evidence in a criminal prosecution, involved in a police investigation,
seized pursuant to criminal laws, or subject to forfeiture proceedings. If what
the DEA is alleged to have done here were not compensable, then presumably
it could have seized a fleet of trucks or an airplane for the same use.
The Fifth Amendment protection is “designed to bar [the] Government
from forcing some people alone to bear public burdens which, in all fairness
and justice, should be borne by the public as a whole.” Armstrong v. United
States, 364 U.S. 40, 49 (1960). The dispositive fact is that the government
appropriated private property that was not otherwise implicated in criminal
violations to use as a tool in a law enforcement operation. Plaintiffs allege that
the government involuntarily imposed on them an obligation that should have
been shared by the public at large. The use of the truck merely as a
convenience to investigate and hopefully arrest individuals purchasing
controlled substances that threaten the health, welfare, and safety of the public
is sufficient to plead a public purpose. At this stage, we do not judge the
sufficiency of evidence to prove that a taking occurred, but we are not
persuaded that the alleged appropriation here of private property for a
controlled drug delivery falls within an exercise of the police power. Plaintiffs
have stated a claim under the Fifth Amendment.
Because plaintiffs have stated facts sufficient to demonstrate that the
government physically deprived them of property for the duration of the
controlled drug delivery operation, we hold that plaintiffs have stated a claim
for a taking compensable under the Fifth Amendment. We therefore deny
defendant’s motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6).
s/Eric G. Bruggink
Eric G. Bruggink
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