[00:00:00] Speaker 04: 155093 Lostree Village Corporation versus United States. [00:00:28] Speaker 04: I think we're all settled. [00:00:29] Speaker 04: Mr. Littleton, whenever you're ready. [00:00:33] Speaker 01: Good morning, Your Honor. [00:00:33] Speaker 01: May it please the court? [00:00:34] Speaker 01: I'm Matt Littleton, representing the United States. [00:00:37] Speaker 01: This court should reverse the trial court's award of $4.2 million to Lostree for a regulatory taking of Plat 57, a five-acre tract of wetland swamp and submerged lands that Lostree purchased against the backdrop of existing regulatory restrictions. [00:00:56] Speaker 01: I'd like to start first by explaining why this was not a categorical taking under the amendment. [00:01:00] Speaker 04: Can I ask you about that point? [00:01:01] Speaker 04: Because that is a recurring point that comes up in the briefing. [00:01:04] Speaker 04: But it's my reading of Palo Zolo that lost fee is able to recover for lost value even if they didn't buy the property until after the regulatory scheme was enacted. [00:01:16] Speaker 04: Am I misreading that case? [00:01:18] Speaker 01: Palo Zolo stands for the proposition that it is not a categorical bar. [00:01:23] Speaker 01: to a takings claim for if the claimant acquired the property after the regulatory enactment. [00:01:28] Speaker 01: And we're not suggesting that there's a categorical bar. [00:01:31] Speaker 01: What we're first suggesting is that a claimant may not always recover in such circumstances. [00:01:37] Speaker 01: That's the Lucas analysis. [00:01:39] Speaker 01: And then second, under the Penn Central analysis, in the circumstances of this case, we argue that the three Penn Central factors, when considered as a whole, weigh against the finding of a regulatory taking. [00:01:50] Speaker 01: But I'd like to point out, because Your Honor brought up that case, [00:01:54] Speaker 01: that what really the dispute in this case comes down to is an argument that is encapsulated in the dispute between Justice O'Connor's concurrence in that case in Palo Zulu and Justice Scalia's concurrence. [00:02:06] Speaker 01: Justice Scalia's concurrence, which writing only for himself, suggested that it should make no difference whatsoever if a property owner acquired property after the enactment of the regulatory regime. [00:02:19] Speaker 01: Justice O'Connor, however, pointed out that [00:02:22] Speaker 01: that rule would give rise to windfall, such as we have in this case. [00:02:26] Speaker 01: And that view was joined by the four dissenters in Palo Zolo and later enshrined into the majority holding in Tahoe Sierra, which extensively quoted Justice O'Connor's concurrence for that proposition. [00:02:38] Speaker 01: So the suggestion that Lawstream makes that it should make no difference whatsoever that it purchased the property after the regulatory regime has been squarely rejected by the Supreme Court. [00:02:49] Speaker 01: But I want to go back to first explaining why [00:02:52] Speaker 01: Lucas does not apply. [00:02:54] Speaker 02: You're saying that Tahoe Sierra ruled Lucas? [00:02:58] Speaker 01: No, not at all. [00:02:59] Speaker 01: What Tahoe Sierra did was explained what the rule in Lucas meant. [00:03:03] Speaker 02: But Lucas is still just law. [00:03:05] Speaker 01: Absolutely. [00:03:06] Speaker 01: Lucas is good law. [00:03:07] Speaker 01: And what Lucas said, there were two alternative formulations in Lucas. [00:03:11] Speaker 01: One was that it matters that there is total loss in value. [00:03:14] Speaker 01: In Lucas, you had a finding that the court accepted as a predicate finding for its holding that the property was rendered literally valuable. [00:03:22] Speaker 01: i.e. [00:03:22] Speaker 01: zero dollars. [00:03:23] Speaker 01: That's certainly not what we have here. [00:03:25] Speaker 01: The second framing in Lucas was that there was no economically viable use available to the claimant in that case who had bought the property for roughly a million dollars before the regulatory regime was enacted. [00:03:37] Speaker 01: Here what we have is a trial court finding that the property was worth $27,500. [00:03:41] Speaker 04: But you don't read Lucas as requiring 100 percent. [00:03:47] Speaker 01: Well, you certainly don't need to reach that point in this case, because... Well, I think you do, because we're pretty close to 100%. [00:03:54] Speaker 04: Isn't the calculation here 99.4%? [00:03:56] Speaker 01: Under the trial court's finding, yes, and we disagree with that finding, but... Okay, but let's assume we accept that finding. [00:04:02] Speaker 01: Assuming we accept that finding. [00:04:03] Speaker 04: So we're getting very close to whether or not you've got to be 100% or anything less than that. [00:04:08] Speaker 04: It defeats the categorical taking, right? [00:04:12] Speaker 04: So you don't read Lucas as saying you absolutely need 100%, right? [00:04:16] Speaker 01: Your honor, under this court's holding in Cienega Gardens, no percentage diminution in value short of 100% necessarily results in a take-in. [00:04:24] Speaker 02: So we would argue, in fact, that even if it's 99.4... With any residual value here, it's only to preserve the environmental ambiance of the entire development. [00:04:35] Speaker 02: The residual... There's no economic valuable use left in the property. [00:04:41] Speaker 01: I go to Lucas at page 505 US at 1016, where Lucas explained that the question is whether the owner is left with an economically beneficial use. [00:04:51] Speaker 01: And this court has interpreted that in RIF and Maritrans, RIF Energy and Maritrans, to say that in determining whether when a taking is categorical, the owner's opportunity to recoup its investment or better cannot be ignored. [00:05:05] Speaker 01: In this case, the only demonstrated investment that Lostree made in Plat 57 was the $5,370 purchase price. [00:05:12] Speaker 01: Even accounting for inflation, the remaining value in the property is sufficient for Lostree to more than recoup that investment. [00:05:19] Speaker 01: That here is the economically viable use, which certainly was not present in Lucas. [00:05:24] Speaker 02: And I would point out that this court... So let's say that we accept that 100% loss is sufficient under Lucas. [00:05:33] Speaker 02: What about 99.99%? [00:05:37] Speaker 01: Again, your honor, it would depend on the facts in a particular case. [00:05:40] Speaker 01: If the owner had purchased the property for a pittance and was still able to more than recover its investment, then no, that would not be a Lucas taking. [00:05:49] Speaker 01: In this case, again, we focus on the economically viable use of sale, which Lucas itself recognized that sale was an economically viable use. [00:05:57] Speaker 01: This court has repeatedly recognized that. [00:06:01] Speaker 01: In subsequent cases, [00:06:02] Speaker 01: Here, again, the only demonstrated investment in the property was the initial purchase price, and Lost Tree was able to more than recoup that cost, even subject to regulation. [00:06:13] Speaker 01: So that is why, again, I'll encapsulate our position on Lucas. [00:06:18] Speaker 02: Your argument regarding the expected investment in the plant, that relates only to sell, a potential sell of the property and value. [00:06:30] Speaker 02: So are you arguing that we should restrict Lucas to owning value that would result from a sale? [00:06:37] Speaker 02: What about the use of the property? [00:06:41] Speaker 01: Well, again, Lucas applies when all economically beneficial use has been withdrawn from the property. [00:06:49] Speaker 01: There are many possible economically beneficial uses of property. [00:06:53] Speaker 04: All we're pointing out in this case is that there is... But didn't the CFC here find the property had no economically beneficial uses? [00:07:00] Speaker 04: but maintained the value of $27,000? [00:07:02] Speaker 04: The CFC found that. [00:07:04] Speaker 01: The CFC found that, but the CFC did not consider the possibility of sale, which we pointed out in our briefs at that point. [00:07:11] Speaker 01: And the CFC needed to consider the fact that, as this court held in Earth Energy, in determining whether a taking is categorical, the owner's opportunity to recoup its investment cannot be ignored. [00:07:23] Speaker 01: That is because sale is an economically beneficial use. [00:07:26] Speaker 00: Well, can you be sure I understand the government's argument [00:07:29] Speaker 00: Are you saying that there is no taking, there can have been no taking because of all of these circumstances and the expectations, the investment-backed expectations when the property was initially acquired and so on? [00:07:43] Speaker 00: Is that the government's position or is it a matter of valuation? [00:07:48] Speaker 01: Your Honor, our position as to Lucas is that it is not a categorical taking. [00:07:52] Speaker 01: In other words, it is not always a taking. [00:07:56] Speaker 00: So then we go to Penn Central. [00:07:57] Speaker 00: that we get into the Fifth Amendment, whether it's categorical or not. [00:08:02] Speaker 01: Is that right? [00:08:03] Speaker 01: Well, the question is, first of all, in terms of whether it's categorical, is the two alternative framings in Lucas are, is there value left in the property? [00:08:11] Speaker 01: Which, again, the court echoed in Tahoe Sierra, the focus on value. [00:08:15] Speaker 01: And second, is there economically beneficial use? [00:08:17] Speaker 01: Here, there's unquestionably value remaining in the property, and there's economically beneficial use in the form of the ability to sell the property. [00:08:25] Speaker 02: But why is value compared to what? [00:08:27] Speaker 02: I mean, in here the only value is that people get to look out and see the wetlands. [00:08:32] Speaker 02: And I guess if that provides some sort of aesthetic, environmental, it helps the ambiance of the entire resort. [00:08:39] Speaker 02: But what does that do to Lostree? [00:08:42] Speaker 02: There's no value in that to Lostree. [00:08:44] Speaker 01: The only intended use of Plat 57, as this panel found in its earlier opinion, was sale of the property. [00:08:50] Speaker 01: Lostree never intended to use this property for itself. [00:08:53] Speaker 01: This is a development corporation. [00:08:55] Speaker 01: that intends to use the property only for sale. [00:08:58] Speaker 01: Our point is that it could sell the property for more than it's demonstrated in investment, and therefore that is an economically beneficial use. [00:09:07] Speaker 01: Therefore, that takes us out of the Lucas framework. [00:09:09] Speaker 01: I'd like to turn to Penn Central, where we start with the absence of reasonable investment backed expectations. [00:09:16] Speaker 01: As this court noted, and as Law Street openly admits, [00:09:21] Speaker 01: It had no investment-backed expectations for Plat 57 at the time of purchase or for decades thereafter. [00:09:28] Speaker 01: The lost tree is not cited any case that would suggest that its later arising expectations are cognizable under the Penn Central analysis. [00:09:36] Speaker 01: And at any rate, under this Court's decisions in Good, Norman, and elsewhere, those expectations do not count. [00:09:43] Speaker 02: I'm not totally convinced by that argument. [00:09:45] Speaker 02: I understand it. [00:09:46] Speaker 02: But if you have a developer, the developer says, I'm going to develop [00:09:50] Speaker 02: All the acreage except for three and I'm going to leave one for Greenland another for a playground and as they're going through development again close to the end of it Then they decide I'm going to use this remaining acreage to build another home I mean I it just seems to me that a development is a development as a whole. [00:10:12] Speaker 02: Why isn't that the case here? [00:10:14] Speaker 01: Well, again, Lost Tree purchased the property after the enactment of the relevant regulatory regime against the backdrop of needing to get a permit. [00:10:21] Speaker 01: And in this case, this court has held in Norman that when you purchase the property after the enactment of the relevant regulatory regime, it is particularly difficult to establish reasonable investment backed expectations. [00:10:32] Speaker 01: The only evidence that Lost Tree put forward that the trial court credited about developing those expectations was the permit that was granted for Plat 54. [00:10:41] Speaker 01: But as the Corps found in a finding that is binding in this takings case, the Plat 54 decision was, in the Plat 57 decision, the Corps said that we understood as part of the Plat 54 decision that there would not be further wetland development in this community. [00:11:00] Speaker 01: And therefore, there was a practical alternative to Plat 57. [00:11:03] Speaker 01: And so, we're not saying that there is no circumstance in which a developer could show reasonable investment-backed expectations. [00:11:10] Speaker 01: What we're saying is Law Street hasn't shown them here. [00:11:13] Speaker 04: I guess I'm a little unclear. [00:11:16] Speaker 04: Assuming you're arguing that it was against the backdrop of regulations that were already in existence, so you think that matters. [00:11:23] Speaker 04: Is it your view that can't be changed circumstances that would raise what were initially the reasonable backed expectations? [00:11:32] Speaker 01: Our view is not that there can't be changed circumstances. [00:11:35] Speaker 01: Our view is that there are not changed circumstances here. [00:11:38] Speaker 01: Law Street hasn't pointed to anything that would justify change circumstances in light of 2001 developments. [00:11:44] Speaker 01: And again, neither this court nor the Supreme Court has ever considered these later rising expectations. [00:11:50] Speaker 02: But what about the development of wetlands and some of the adjoining developments? [00:11:56] Speaker 01: Again, the development of wetlands and the adjoining developments, each project is considered on its own merits. [00:12:02] Speaker 02: Isn't that a change of circumstance? [00:12:04] Speaker 02: You have a developer who looks across the river and sees that [00:12:08] Speaker 02: that the adjoining development is getting permits to develop wetlands and their expectation changes at that point in time. [00:12:16] Speaker 02: We have some valuable land here. [00:12:18] Speaker 01: Plat 54, when Blostree, its spinoff company, obtained a permit for Plat 54, there was a survey of the surrounding land and it was understood at that time [00:12:30] Speaker 01: According to the Corps, which again, that finding is binding here, that that would be the last piece of development in the community. [00:12:36] Speaker 01: When it turned to Plat 57, the Corps explained that again. [00:12:39] Speaker 01: It said, look, you've had reasonable use of the property or your property as a whole. [00:12:44] Speaker 01: There's a practical alternative, which is the existing lot on Plat 54. [00:12:48] Speaker 01: I would also point out that in addition to being distinct and reasonable, they need to be investment backed. [00:12:54] Speaker 01: And the trial court didn't make any findings as to an investment [00:12:58] Speaker 01: made in the property during that time. [00:13:00] Speaker 01: Wall Street had ignored the property entirely, as this court noted in its earlier opinion. [00:13:06] Speaker 01: And so, as this court said in Cienica Gardens, there needs to be a nexus between the investment and the expectation. [00:13:12] Speaker 01: There was no such nexus here. [00:13:14] Speaker 01: I see that I'm running into my rebuttal time, so I'd like to reserve the remains of it. [00:13:25] Speaker 03: Good morning, Chief General Frost, and may it please the court. [00:13:28] Speaker 03: I'm Jerry Stock, and I represent the House of Three. [00:13:32] Speaker 03: This case is not nearly as complicated as the government would make it. [00:13:37] Speaker 03: In the court's prior decision held that the only relevant property is Plat 57. [00:13:44] Speaker 04: Is it an odd result? [00:13:45] Speaker 04: I mean, what prevents someone [00:13:49] Speaker 04: from buying highly regulated land. [00:13:53] Speaker 04: And let's assume people, normal reasonable people would only place the likelihood of them being able to get a permit at 5%. [00:14:02] Speaker 04: Is that still, when the permit is denied, is then there a takings case and if in fact [00:14:10] Speaker 04: The regulation takes all economically beneficial use. [00:14:13] Speaker 04: They get paid by the government. [00:14:15] Speaker 03: Your Honor, the government threw up that bugaboo as early as Love Ladies, as we explained in a footnote in the prior appeal. [00:14:23] Speaker 03: It's never happened since then. [00:14:24] Speaker 03: It's not this case. [00:14:26] Speaker 03: If there is some kind of abuse like that, the facts will lead to a proper result in that case. [00:14:31] Speaker 03: That's what led the court in Love Ladies to say that it takes a flexible approach to the relevant parcel. [00:14:38] Speaker 04: question and we explained that in a footnote if you if you go back to the love lady's decision where the same parade why is that a boogaboo that nobody could consider how is this case that different from that case I mean there were no expectations at some point late in the game they said let's go try and see if we can get a permit what if we don't I don't know what the chances were that they were going to get [00:15:02] Speaker 04: be successful in that endeavor. [00:15:04] Speaker 04: But let's assume, I don't think it's that much of a stretch to say their chances were at least no better than 50-50. [00:15:09] Speaker 03: Your Honor, it didn't happen here. [00:15:11] Speaker 03: The court's prior decision has already established that this parcel was entirely ignored for 30 years. [00:15:18] Speaker 03: This is not a developer that was lying in wait to take advantage of... That's established in this case already. [00:15:27] Speaker 04: So lying in wait, no one had any basis for thinking [00:15:30] Speaker 04: that they could get a permit or develop this land. [00:15:33] Speaker 04: And now let's assume a reasonable person would say, well, there's a 25% chance that I could get a permit, so I'm going to go for it. [00:15:41] Speaker 04: And then if the permit is denied, the government's going to have to pay me if there's no residual economic use. [00:15:48] Speaker 03: How can one think that there was no basis for a permit? [00:15:53] Speaker 03: 404 permits that have been this entire development. [00:15:56] Speaker 04: What is the standard in your view under the law for the expectations with regard to whether you're going to get a permit to prevent what we all think would be unreasonable unreasonable windfall under certain circumstances? [00:16:08] Speaker 04: What are the odds? [00:16:10] Speaker 04: If the odds are only 10% that you get a permit and then you're denied there's no taking but if the odds are 90% and then you get denied that should be a taking? [00:16:22] Speaker 03: sure I understand the question, but in this case, the trial court found as a fact that Lostree had economic expectations for this parcel that were distinct. [00:16:32] Speaker 03: And this court relied on those expectations as the basis for its prior decision. [00:16:37] Speaker 03: And so to say that they weren't reasonable, that they were reasonable because of prior permits that Lostree had obtained. [00:16:44] Speaker 03: They were reasonable because of the Plat 54 permit for home sites that were obtained. [00:16:49] Speaker 03: They were reasonable because another permit was obtained by another owner inside the community that Lost Tree was aware of and in fact its consultant had worked on. [00:16:58] Speaker 03: This is all in our brief. [00:16:58] Speaker 03: There were a number of factors. [00:17:01] Speaker 03: We had been encouraged, Lost Tree had been encouraged by the state agency, the St. [00:17:04] Speaker 03: John's River Management District, to go find a site-specific parcel to use these mitigation credits for, which is the way the whole thing starts. [00:17:15] Speaker 03: There were a number of factors that the trial court relied on in finding [00:17:19] Speaker 03: distinct economic expectations for Plat 57. [00:17:23] Speaker 00: The problem it seems to me isn't the economic expectations but you all the cases talk about investment back expectations and my understanding is that no investment had been made it was all expectation. [00:17:42] Speaker 03: I think that's not correct your honor. [00:17:44] Speaker 00: What was the investment? [00:17:45] Speaker 03: The investment was in the [00:17:47] Speaker 03: We had applied to the town of Indian River Shores. [00:17:51] Speaker 03: We had obtained preliminary plat approval. [00:17:54] Speaker 03: We had obtained a determination that these were marginal wetlands that had been litigated. [00:18:02] Speaker 03: Some of the adjacent landowners, this is all in the prior decision, the adjacent landowners complained. [00:18:07] Speaker 03: They said it's not marginal wetlands. [00:18:09] Speaker 03: The state court ruled in a final decision that these were marginal wetlands. [00:18:13] Speaker 03: We litigated that. [00:18:15] Speaker 03: We had developed the [00:18:17] Speaker 03: The Mr. Mel Corey had put together a development budget for what was going to be done here. [00:18:24] Speaker 03: And so the planning had been done. [00:18:29] Speaker 03: Every other permit that was needed to put a home site on this parcel had been obtained by lost trade. [00:18:35] Speaker 03: So we were absolutely ready to turn the shovels if this permit had been granted. [00:18:41] Speaker 03: And a lot of preliminary work had been done. [00:18:44] Speaker 03: And on later arising investment fact expectations, [00:18:47] Speaker 03: It leads to anomalies. [00:18:48] Speaker 03: I mean, does that mean inherited property can never be the subject of a regulatory taking? [00:18:54] Speaker 03: Circumstances can change, as Judge Raina said. [00:18:57] Speaker 02: I'm sorry, Your Honor. [00:19:00] Speaker 02: Going back to the application, the permit application process and the different litigation you were talking about, I don't recall that there was an actual number. [00:19:11] Speaker 02: Are you able to tell us exactly what the permitting cost was for you? [00:19:19] Speaker 03: There was no finding about that by the trial court. [00:19:21] Speaker 03: There is in the trial record this budget that Mr. Mulquarrie had put together, which the appraisers relied on. [00:19:27] Speaker 03: I think it's talked about by Judge Leto in his first decision, his first post-trial decision, that Mr. Mulquarrie had put together this development budget, which included, you know, filling the land and clearing the wetlands and, I don't know, putting in footings. [00:19:42] Speaker 03: I mean, I don't remember everything that was in there, but it's about $400,000 or $500,000 of budget for the development. [00:19:47] Speaker 03: But if I may go back, as I started at the outset. [00:19:50] Speaker 02: Let me follow up with another question. [00:19:53] Speaker 02: Under Lucas, what's your view? [00:19:55] Speaker 03: What's the emphasis? [00:19:55] Speaker 02: Are you looking at value or use? [00:19:57] Speaker 03: It's use, Your Honor. [00:19:59] Speaker 03: The government made the same argument in Lucas that, let me take a step back. [00:20:05] Speaker 03: It's use. [00:20:06] Speaker 03: And let me say a couple of things before I get specifically to why I know that about Lucas. [00:20:11] Speaker 03: In this case, this trial court found as a fact that there was no economically viable use, as Judge Prost [00:20:17] Speaker 03: pointed out, both parties appraisers testified that there was no economically viable use. [00:20:26] Speaker 03: The quotes are, I think, revealing. [00:20:32] Speaker 03: Let me see if I can find those. [00:20:34] Speaker 03: Law Street's appraiser, quote, no economic use except at nominal levels related to nuisance value or environmental use. [00:20:41] Speaker 03: That's in the trial court decision A8. [00:20:43] Speaker 03: The government appraiser testified that, quote, the highest and best use without the permit is, quote, a place to go for relaxation to enjoy nature, close quote. [00:20:53] Speaker 03: That's at A1825. [00:20:54] Speaker 03: That's in our briefs. [00:20:56] Speaker 03: Both parties testified there was no economic use. [00:20:59] Speaker 03: The trial court found there was no economic use. [00:21:01] Speaker 02: And the government didn't- Lucas uses the word value. [00:21:04] Speaker 03: Does it- It does, as Mr. Littleton said, in one, quote, formulation. [00:21:10] Speaker 03: But the key to Lucas [00:21:12] Speaker 03: is the lack of economically viable use. [00:21:14] Speaker 03: There's a good discussion of this in the PLF's amicus brief. [00:21:19] Speaker 03: All land has innate value. [00:21:22] Speaker 03: All land has innate value. [00:21:23] Speaker 03: To say it has to be zero would swallow the Lucas rule, because even land that's dedicated for conservation is assessed at positive value for taxation. [00:21:33] Speaker 03: And in any event, the 27.5 finding was a nominal value. [00:21:41] Speaker 04: That would be life on risk. [00:21:42] Speaker 04: The government relies on our opinion in RIF. [00:21:46] Speaker 04: What do you think of, do you think there's anything in RIF that would parallel? [00:21:48] Speaker 03: RIF was a very, RIF, they rely on, the government relies on RIF for this idea that the value today is more than the purchase price 40 years ago. [00:21:58] Speaker 03: That's not the test. [00:21:59] Speaker 03: The test for a taking is the value that was taken by the regulatory action against the value that remains. [00:22:06] Speaker 03: I mean, that's been the law since Keystone at least, or going all the way back, [00:22:10] Speaker 03: That's what this court directed the trial court to do. [00:22:12] Speaker 03: The explicit remand instructions in this case were to, on remand, quote, this is from this court, 707 F. [00:22:20] Speaker 03: 3rd, 1295, on remand, the court first should determine the loss in economic value to Plat 57 suffered by lost trade as a result of the permit denial. [00:22:31] Speaker 03: That's what takings law is all about. [00:22:33] Speaker 03: That's the whole purpose of the relevant parcel inquiry. [00:22:36] Speaker 03: Again, back to Keystone. [00:22:38] Speaker 03: Supreme Court, because our test for regulatory taking requires us to compare the value that has been taken from property with the value that remains in property, one of the critical questions is determining how to define the unit of property whose value is to furnish the denominator of the fraction. [00:22:58] Speaker 03: So once you determine the denominator of the fraction, which is Platts 57, which this court did in this case, the only thing left to do [00:23:07] Speaker 03: is to compare the value that was taken with the value that remains. [00:23:11] Speaker 03: And it's undisputed that it's 99.4% in our position. [00:23:16] Speaker 04: The dispute is whether or not 100%, which even your friend recognizes is not necessarily always the rule. [00:23:23] Speaker 03: Let's talk about the 27.5. [00:23:24] Speaker 03: First of all, if this isn't a taking under Lucas and Penn Central, then those cases have no meaning. [00:23:30] Speaker 03: In Cienega Gardens, this court found as a matter of law that a 96% [00:23:34] Speaker 03: reduction in value was a pencentral taking. [00:23:36] Speaker 03: But let's talk about the 27.5. [00:23:39] Speaker 03: It's a nominal value, not real. [00:23:43] Speaker 03: The R appraiser assumed, he said, you know, I couldn't find any comparables. [00:23:47] Speaker 03: This land is, land like this is not really bought or sold. [00:23:50] Speaker 03: There was no, and so he assumed in his experience, he said, you can see the testimony on our brief. [00:23:56] Speaker 03: In his experience, the nominal value of land is between zero and 1% of its developed value and he assigned [00:24:01] Speaker 03: The trial court uses that word, the assigned value of 27.5. [00:24:05] Speaker 03: It's a nominal value. [00:24:07] Speaker 03: There was absolutely no evidence at all and not even an argument by the government. [00:24:12] Speaker 03: This is not the point I want to make. [00:24:14] Speaker 02: Was there any evidence that somebody would want to buy the property for 27.5? [00:24:18] Speaker 03: The government first raised this argument on appeal that sale is an economically viable use. [00:24:23] Speaker 03: It was never argued in the trial court and the best evidence of that is at A4 from the court of federal claims. [00:24:31] Speaker 03: in Judge Leto's decision, quote, the parties agree that without the permit, Plat 57 has a nominal value not reflective of any economic use, close quote. [00:24:45] Speaker 03: The parties agree on that. [00:24:47] Speaker 03: It was never argued below. [00:24:48] Speaker 03: Sale is not a use. [00:24:50] Speaker 03: And plus, there was never any evidence of sale. [00:24:53] Speaker 03: There was never any argument of sale. [00:24:56] Speaker 03: As the PLF also points out in their amicus brief, in Lucas also, they quote the government's [00:25:01] Speaker 03: Supreme Court brief in Lucas, they argued that, well, this has some use as environmental value and so forth. [00:25:08] Speaker 03: And of course, that didn't forestall the holding in Lucas. [00:25:13] Speaker 03: So back to your question, Judge Rainer, it's use of land. [00:25:17] Speaker 03: The only thing that can be done with this parcel, this is in the middle of a residential community. [00:25:22] Speaker 03: It's zoned for a home site. [00:25:24] Speaker 03: Without this permit, this land will be barren forever. [00:25:28] Speaker 03: There's nothing that can be done with this land. [00:25:30] Speaker 03: If that isn't a lupus taking, then lupus has no meaning. [00:25:35] Speaker 04: It's a categorical taking, and there's no use to go to the tenth central fact. [00:25:39] Speaker 03: No, Your Honor, I argued in the alternative to Judge Leto, and he made findings in the alternative because I foresaw where we are today, which is that the government would be making arguments on both. [00:25:53] Speaker 03: And I think it is appropriate to have alternative findings. [00:25:58] Speaker 03: Lucas ought to carry the day here. [00:25:59] Speaker 03: It really should carry the day. [00:26:01] Speaker 03: If zero is the test for Lucas, zero value, the only Lucas takings will be at hazardous waste sites that have negative value, because all land has some innate value. [00:26:15] Speaker 03: Even in Lucas itself, I think the fact that not in the decision, but the way things played out in Lucas, I think the restriction there was later lifted. [00:26:23] Speaker 03: And Mr. Lucas was actually able to build on, I think, I'm not positive, [00:26:26] Speaker 02: In considering the pin central factors, is it the case that, for example, the reasonable expectation of investment, the argument that the government's making today, has already been made and decided? [00:26:40] Speaker 02: I'm sorry, the reasonable... That the factor dealing with the reasonable expectation of investment, that that's an argument that's being made to us today, but it's an issue that's already been decided. [00:26:51] Speaker 03: The Court of Federal Claims found as a fact that [00:26:55] Speaker 03: Laws treaty had reasonable economic expectations for this parcel. [00:26:59] Speaker 03: This court relied on those distinct expectations as, as one of the crucial components of the decision, the prior decision to say that this is a distinct parcel of property. [00:27:12] Speaker 02: And so- So what do you see as applying here, the law with respect to that issue, the law of the case or the mandate rule? [00:27:20] Speaker 03: Well, I wouldn't limit it to those two. [00:27:21] Speaker 03: I think it's already been decided. [00:27:23] Speaker 03: It's already been relied on by this court. [00:27:25] Speaker 03: And it's, in fact, not clearly erroneous as a matter of fact-finding by the trial court. [00:27:30] Speaker 03: The government hasn't, I don't believe, even argued that it's clearly erroneous. [00:27:34] Speaker 03: There are all these factors that I mentioned earlier today that would have created reasonable expectations. [00:27:40] Speaker 03: And in any event, at the end of the day, Judge Leto said it was a wash. [00:27:45] Speaker 03: He said this factor favors neither party. [00:27:48] Speaker 03: What's crucial here, even under Penn Central, is the overwhelming economic loss [00:27:54] Speaker 03: And that quote from Wingle that's also in our briefs that, quote, the Penn Central Inquiry turns in large part, although not exclusively, upon the magnitude of the regulation's economic impact and the degree to which it interferes with the legitimate property interests of 544 US at 540. [00:28:15] Speaker 03: OK, there is a permitting scheme here. [00:28:17] Speaker 03: Judge Leto recognized that. [00:28:19] Speaker 03: He said, look, they've got distinct expectations. [00:28:21] Speaker 03: I found that after the trial. [00:28:24] Speaker 03: But there was a permitting scheme. [00:28:25] Speaker 03: This factor favors neither party. [00:28:28] Speaker 03: Character factor, he said, lost tree was singled out. [00:28:32] Speaker 03: The trial testimony and his finding was that if another landowner had applied for the same permit, it would have been granted. [00:28:39] Speaker 03: Character factor favors lost tree. [00:28:41] Speaker 03: But the overwhelming factor under Penn Central is the economic impact, which at an absolute minimum is 99.4% wipeout. [00:28:52] Speaker 03: I would submit to you that under the Lucas test, or a position certainly is, that there's no economic use here. [00:28:58] Speaker 03: The trial court found that. [00:28:59] Speaker 03: Both the appraisers testified that. [00:29:02] Speaker 03: And this should be a Lucas taking as well. [00:29:04] Speaker 03: So the trial court should be affirmed. [00:29:06] Speaker 03: Thank you. [00:29:14] Speaker 01: Thank you, Your Honor. [00:29:14] Speaker 01: I have very little time and several points to make. [00:29:17] Speaker 01: First of all, on whether we raised the economically viable use of sale below A3436, the record makes clear that we did. [00:29:25] Speaker 01: Secondly, as to the flexible approach that the court cited in Love Ladies that counsel referred to, what counsel is arguing for here is an inflexible approach under Lucas, in which there would be a categorical taking regardless of the investment made in the property. [00:29:40] Speaker 01: That would make essentially the Just Compensation Clause a guarantor of lost profits for developers like Lost Tree. [00:29:46] Speaker 01: That's inappropriate under both the precedent of the Supreme Court and this Court. [00:29:51] Speaker 01: Third, regarding the supposed investment made in the permitting process, there were no findings made on that point by the trial court. [00:29:57] Speaker 01: I'm not sure exactly what counsel is referring to here. [00:30:00] Speaker 01: There was certainly nothing in Lost Tree's brief. [00:30:03] Speaker 01: regarding proof of investment, Lost Street bears the burden to demonstrate the investment and as this court did in Forest Properties in CBER versus United States, it should hold that Lost Street failed to carry its burden to demonstrate either the economic impact or investment-backed expectations and dismiss the case. [00:30:21] Speaker 02: If you're arguing value, don't you have a burden to show what the value would be if there's actually a sale? [00:30:28] Speaker 01: Well, that was [00:30:29] Speaker 01: a finding of the trial court, which is that the fair market value was $27,500. [00:30:33] Speaker 01: That's what that standard means under the law. [00:30:36] Speaker 01: And so there was this idea that, well, Lostry had never had an offer to purchase the property. [00:30:40] Speaker 01: Well, that's because it was never put up for sale. [00:30:42] Speaker 01: The value as both parties accept. [00:30:44] Speaker 02: That's with the land being undeveloped. [00:30:46] Speaker 01: That's with the land being undeveloped. [00:30:47] Speaker 01: That's right. [00:30:48] Speaker 01: That was a finding of the court. [00:30:50] Speaker 01: And finally, regarding the trial court's findings as to reasonable investment back to expectations, the only thing the trial court relied on [00:30:57] Speaker 01: was number one, the fact that it had gotten permits from another entity. [00:31:00] Speaker 01: And we explained in our brief, Law Street hasn't contested that the standards for granting permits are different for the state and federal in that case. [00:31:10] Speaker 01: And also, the other thing the trial court relied on was the Plat 54 permit, which as explained in my opening argument, did not give rise to a reasonable expectation. [00:31:20] Speaker 01: I'd like to close by saying that what we have in this case, again, is a $4.2 million reward [00:31:27] Speaker 01: for a property purchased for $5,000 and then, according to Law Street, forgotten about for 30 years. [00:31:32] Speaker 01: If this court awards a taking in that circumstance, it goes against, again, the principles of fairness and justice underlying the Just Compensation Clause. [00:31:41] Speaker 01: It goes against Tahoe Sierra, Justice O'Connor's concurrence in Palo Zolo in that case, and we ask that the trial court be reversed. [00:31:49] Speaker 01: Thank you very much.