[00:00:01] Speaker 02:
before us today.

[00:00:01] Speaker 02:
The first case is Banks versus United States.

[00:00:08] Speaker 02:
Mr. Christensen?

[00:00:10] Speaker 02:
Yes, Your Honor.

[00:00:12] Speaker 02:
And you're reserving three minutes of your time for rebuttal.

[00:00:14] Speaker 02:
Is that correct?

[00:00:15] Speaker 02:
That is correct.

[00:00:17] Speaker 02:
OK.

[00:00:17] Speaker 02:
All right.

[00:00:18] Speaker 02:
You may proceed.

[00:00:19] Speaker 02:
Thank you.

[00:00:29] Speaker 04:
May I please the court?

[00:00:31] Speaker 04:
Council.

[00:00:32] Speaker 04:
My name is Mark Christensen.

[00:00:34] Speaker 04:
I'm here on behalf of the 37th plaintiffs in this case.

[00:00:38] Speaker 03:
Mr. Christensen, in the blue brief, you asked us to exclude Dr. Nairn's testimony under a Daubert standard.

[00:00:46] Speaker 03:
Did you raise those arguments before the district court at the time Dr. Nairn testified?

[00:00:53] Speaker 03:
We did.

[00:00:53] Speaker 03:
Where is that?

[00:00:55] Speaker 03:
I couldn't find it.

[00:00:56] Speaker 04:
Well, we did it in two different ways.

[00:00:59] Speaker 04:
Initially, when Dr. Nairn testified in 2007 at the liability trial, we had filed a motion in Lemonade to exclude his testimony.

[00:01:08] Speaker 04:
Under Dalbert?

[00:01:09] Speaker 04:
Under Dalbert.

[00:01:09] Speaker 04:
Uh-huh.

[00:01:10] Speaker 04:
And at page 57 of 78 Federal Circuit, or excuse me, Lexis 318, at page 57 and 58, the court

[00:01:24] Speaker 04:
Addresses the Dahlberg objection, okay, and we I directly have that as being an inadequate analysis under Dahlberg Okay, and we also objected we filed a motion to bar near shore composition Evidence prior to the damages phase and to bar dr. Nairns Testimony areas that that I don't have the specific transfer, okay cited, but it is in our opening brief That we did that I'll take a look

[00:01:53] Speaker 00:
Are those materials in the joint appendix?

[00:01:56] Speaker 04:
They would be in the joint appendix.

[00:01:57] Speaker 00:
Do you have a joint appendix site for us?

[00:02:00] Speaker 04:
Not directly.

[00:02:01] Speaker 04:
In other words, I don't have it off the top of my head.

[00:02:04] Speaker 03:
You can tell us that when you come back up.

[00:02:06] Speaker 03:
Yes.

[00:02:10] Speaker 03:
Let's see.

[00:02:13] Speaker 03:
Let me ask you this.

[00:02:16] Speaker 03:
Can a lakebed's classification as sandy or cohesive

[00:02:22] Speaker 03:
change from one part of the shore to another part of the shore.

[00:02:28] Speaker 03:
Because the 99 report classifies Lake Michigan as cohesive, period.

[00:02:37] Speaker 03:
But it seems that the experts reports sort of breaking into parcels.

[00:02:46] Speaker 04:
I think that it's broken into parcels depending on the availability of a sand cover over the underlying cohesive layer and that what the 99 report establishes is that that protective sand layer was eroded over a hundred years from the jetties such that there was an inadequate layer of sand to protect the cohesive layer.

[00:03:09] Speaker 03:
Walk me through how you arrived at that 60 to 70 percent estimate

[00:03:15] Speaker 03:
of erosion being caused by the core?

[00:03:18] Speaker 03:
We walked through that in two ways.

[00:03:20] Speaker 03:
The first is that... And refer me somewhere, like in your briefs, because I don't have that.

[00:03:27] Speaker 03:
You don't have that?

[00:03:29] Speaker 03:
Okay.

[00:03:29] Speaker 03:
It's clear in your briefs.

[00:03:33] Speaker 04:
In our brief, we do it in two ways.

[00:03:36] Speaker 04:
Dr. Scudder-Maddy's testimony is cited in the brief where he establishes

[00:03:42] Speaker 04:
that the, as a falluvial expert, that the bed load of the sand coming down the river is at least 60 to 65 cubic yards a year, okay?

[00:03:52] Speaker 04:
And that with storm events, it might even be more.

[00:03:55] Speaker 04:
So if you look at the 99 report, the 99 report talks about 110 cubic yards of the littoral drift gross, both north and south.

[00:04:03] Speaker 04:
But it doesn't include the sand from the river.

[00:04:06] Speaker 04:
And so once Scudder-Mackey added the littoral drift to

[00:04:11] Speaker 04:
the bed load that was coming down the river and the sand that was blocked by the jetties.

[00:04:16] Speaker 04:
He said that if you took the 100 percent of erosion that was happening and you subtracted the 25 percent to 30 percent that people thought was literally eroding, he arrived at his 60 to 70 percent figure.

[00:04:34] Speaker 02:
Did the 99 report establish conclusively that the damage is irreversible and permanent?

[00:04:41] Speaker 02:
I think it did.

[00:04:43] Speaker 02:
In the 99 report, they... And that report was used as a basis for the finding of the accrual when the appellants had notice of a permanent taking.

[00:04:55] Speaker 02:
Is that correct?

[00:04:57] Speaker 02:
That is correct.

[00:04:59] Speaker 02:
Right before that time, when the case was appealed on the jurisdiction issue,

[00:05:07] Speaker 02:
Had there already been findings of fact on the different alternative findings that the Court of Federal Claims had already made?

[00:05:13] Speaker 04:
No.

[00:05:16] Speaker 04:
This was appealed twice on the jurisdictional issue, and twice it was mandated that the statute of limitations had not been, or had been, that the lawsuits had been timely filed within the statutory period.

[00:05:30] Speaker 04:
In the court's mandate, it found that the erosion

[00:05:38] Speaker 04:
was permanent from the 96 report.

[00:05:41] Speaker 04:
In the 99 report, they monitored a mitigation program from about 1970 to 1999.

[00:05:48] Speaker 02:
So I'm interested in exploring whether that finding, that establishing of the accrual and jurisdiction, the finding that the damage was irreversible and permanent.

[00:06:06] Speaker 02:
To what extent does that apply over to the liability issue?

[00:06:10] Speaker 04:
Well, we think it was a predicate factual finding in order to, and that the court evaluated facts outside of the complaint.

[00:06:19] Speaker 04:
And that fact was actually at issue by virtue of the government's opposition to it, such that if certain facts on jurisdiction are challenged, if those facts then become necessary and predicate, as the court is aware of the case law,

[00:06:36] Speaker 04:
then in fact those are adjudicated to acts that cannot be re-litigated.

[00:06:41] Speaker 02:
And so that's our, you know, we feel there's two roads to... That's true unless the issues are different in the two inquiries, in the liability inquiry and the jurisdictional inquiry.

[00:06:54] Speaker 02:
If the issues are different, but it seems to me that they may not be different.

[00:06:58] Speaker 04:
I think they're identical.

[00:07:00] Speaker 03:
That argument was made in the last iteration.

[00:07:06] Speaker 04:
It was, but it was not ruled upon.

[00:07:10] Speaker 04:
Rather, the mandate was once again reinstated, and the court was, the Court of Claims was encouraged to reevaluate its merits findings in light of it, and it did not.

[00:07:21] Speaker 02:
And what the Court of Claims did, the way I understand it, and I'm asking, I like both parties to address these questions, what the Court of Federal Claims did said, well,

[00:07:34] Speaker 02:
We're now being asked to go ahead and establish liability, and instead of having a whole new liability inquiry, I'm just going to use one of the alternative findings I've already made.

[00:07:44] Speaker 04:
Is that correct?

[00:07:45] Speaker 04:
That is correct.

[00:07:47] Speaker 04:
That is correct.

[00:07:48] Speaker 02:
And those alternative findings were made pursuant to the 99 report?

[00:07:54] Speaker 04:
Those alternative findings were made based upon Robert Nairn's incompetent and invalid and unscientific expert opinions.

[00:08:01] Speaker 03:
And they were made in despite

[00:08:04] Speaker 03:
language in the mandate, which said, we're not telling you what to do, but.

[00:08:11] Speaker 03:
But.

[00:08:12] Speaker 03:
That is correct.

[00:08:13] Speaker 04:
What Dr. Nairn's report did was it took unverified, unscientific propositional truth and used it to contradict certain truth.

[00:08:23] Speaker 04:
And certain truth is that if you have over 100 years

[00:08:28] Speaker 04:
a blockage of sand and you have an inadequate, by its own admission, an inadequate mitigation program only from 1970 to 1999.

[00:08:36] Speaker 04:
And your own report says that you were over 300,000 cubic yards in deficit in terms of mitigation.

[00:08:44] Speaker 04:
And you admit you're putting it in at the wrong time, in the wrong place, in the wrong size, that for certainty then, there is a, the evidence is uncontradicted that we've had down cutting

[00:08:56] Speaker 04:
cohesive layer has been exposed.

[00:08:58] Speaker 04:
The mitigation has never addressed the historical loss of sand before 1970, from 1970 to 1999.

[00:09:04] Speaker 04:
Let me throw in a question there.

[00:09:06] Speaker 04:
That's certainty.

[00:09:07] Speaker 03:
No, no.

[00:09:08] Speaker 03:
Let me throw in a question.

[00:09:11] Speaker 03:
You argue that you should receive compensation for the value of lost sand.

[00:09:17] Speaker 03:
And you have so much perp.

[00:09:21] Speaker 03:
That is an alternative damage argument.

[00:09:22] Speaker 03:
That is correct.

[00:09:24] Speaker 03:
Did you make that argument at the trial, Corn?

[00:09:26] Speaker 03:
Yes, we did.

[00:09:26] Speaker 03:
OK.

[00:09:28] Speaker 03:
Did you submit evidence on the value of the sand to the trial court?

[00:09:30] Speaker 03:
We did.

[00:09:31] Speaker 03:
We submitted evidence by a witness that had the value, I think, at $0.40 a cubic foot.

[00:09:35] Speaker 03:
Where is that in the record?

[00:09:37] Speaker 03:
You'll find it and give it to me.

[00:09:39] Speaker 03:
I will.

[00:09:39] Speaker 03:
OK.

[00:09:40] Speaker 03:
Because that's another thing I couldn't find.

[00:09:42] Speaker 03:
OK.

[00:09:42] Speaker 03:
That's a fair answer.

[00:09:45] Speaker 02:
If we were to reverse on the law of the case issue, does that

[00:09:51] Speaker 02:
What does that do to the damage it's finding?

[00:09:54] Speaker 02:
Does it upend it in its entirety or just part of it?

[00:09:58] Speaker 04:
Well, the only damage finding that we had was that one property was in a cohesive area, and there was about $2,000 in damages that were awarded.

[00:10:07] Speaker 04:
If you reverse on the law of the case, it knocks out all of the nearshore composition evidence of Dr. Nairn, where he had

[00:10:16] Speaker 04:
And as a result, the damages evidence of Dr. Moore on his endonic damages, as to the value of the land lost, is unrobotted.

[00:10:27] Speaker 04:
And we can have a judgment on that figure.

[00:10:29] Speaker 02:
Would that call for a remand to establish damages?

[00:10:33] Speaker 02:
No, I think it would call for a remand to enter the judgment.

[00:10:36] Speaker 04:
Because there's no contravailing evidence.

[00:10:39] Speaker 00:
Is the damages, I mean, the damages that the court found, which were very minimal,

[00:10:45] Speaker 00:
Those were based on a particular liability finding, right?

[00:10:48] Speaker 00:
And so if a different liability finding is entered, then the court should have the opportunity to reassess damages based on that difference in liability.

[00:10:57] Speaker 04:
I would agree.

[00:10:59] Speaker 04:
So the court found that there was no damages on all the other properties because it said that there was sufficient mitigation.

[00:11:05] Speaker 00:
And that the plaintiffs hadn't proven their damages.

[00:11:09] Speaker 04:
Except for two properties where the plaintiff was entitled to shore protection,

[00:11:15] Speaker 04:
But there had really been no value of lost sand or impairment.

[00:11:20] Speaker 04:
On remand, though, what is the state of the record on remand?

[00:11:24] Speaker 04:
All of the damages evidence comes in through Naird.

[00:11:27] Speaker 04:
And his testimony is then out because it's beyond, because it's based upon a false proposition that there was only 50 cubic yards of sand and that it was entirely mitigated.

[00:11:37] Speaker 04:
So what is left is unrebutted damages evidence of Dr. Moore

[00:11:43] Speaker 04:
of the loss of the fair market value and the value of the sand.

[00:11:46] Speaker 04:
Wait a minute.

[00:11:46] Speaker 04:
Wait a minute.

[00:11:47] Speaker 03:
One of the things you argue is for future additional damages for future shore protection for about $119 million.

[00:11:59] Speaker 03:
And your argument seems to be that you only need to establish it that it would have been sound economy to have made the expenditures to protect the property.

[00:12:11] Speaker 03:
But where did you show that it would be sound economy for the homeowners to spend $119 million on those properties?

[00:12:20] Speaker 04:
Well, that would be an issue of the homeowners, whether they valued the property to protect it.

[00:12:24] Speaker 03:
Yeah, but where is it in the record?

[00:12:27] Speaker 03:
If you're going to argue that, I think you have to argue that to a trial court.

[00:12:33] Speaker 03:
And let it be tested?

[00:12:35] Speaker 04:
Well that would be on the future damages and I would agree with you on the future damages there were three different figures depending on the headland beaches and that's unsettled.

[00:12:41] Speaker 04:
I would agree with you on that.

[00:12:43] Speaker 04:
But each homeowner came in and testified that in fact they wanted to put in shore protection and they valued their property and they wanted to keep it.

[00:12:51] Speaker 04:
So there would be the sudden economy.

[00:12:54] Speaker 04:
I have two and a half minutes left.

[00:12:55] Speaker 02:
Right, you want to reserve that time?

[00:12:57] Speaker 02:
I would.

[00:12:57] Speaker 02:
Okay, thank you.

[00:13:02] Speaker 05:
Mrs. Melcher?

[00:13:04] Speaker 05:
Good morning, Your Honors.

[00:13:05] Speaker 05:
May it please the Court, John Smeltzer, for the United States.

[00:13:08] Speaker 02:
Your Honors, there's two sets of issues that we've touched on here in the liability... Why doesn't the law of the case apply here?

[00:13:14] Speaker 05:
It doesn't apply here, Your Honors, because the issue that was decided in Banks 2 and Banks 4 is not the issue that is before the Court now with respect to liability and damages.

[00:13:25] Speaker 02:
The question in Banks 2... But to establish liability, wouldn't the appellants have to establish that the damages are permanent and irreversible?

[00:13:34] Speaker 05:
They'd have to show a permanent physical taking.

[00:13:36] Speaker 05:
That's correct.

[00:13:37] Speaker 02:
So why is that different then from the accrual showing where they also had to show a permanent physical taking?

[00:13:43] Speaker 05:
Because they didn't need to show a permit.

[00:13:45] Speaker 05:
This court didn't need to find that the reports, the 1996 through 1999 technical reports that were cited in Banks 2 and 4 as providing constructive knowledge of a cause of action were actually accurate as to the plaintiff's properties or were accurate generally.

[00:14:02] Speaker 05:
What was at issue in banks?

[00:14:03] Speaker 05:
That finding was made.

[00:14:05] Speaker 05:
Your Honor, the finding was not made by the Court of Federal Claims.

[00:14:09] Speaker 05:
The Court of Federal Claims in Banks 1 found that the cause of action accrued in 1989, which was the end of the project.

[00:14:15] Speaker 02:
This court on remand said that in order to decide the issue of notice and accrual, we have to first find out if there's decide whether there's been a physical take in it, if it's permanent.

[00:14:28] Speaker 02:
And they addressed that issue.

[00:14:30] Speaker 02:
And that was part of the remand order that went back down.

[00:14:34] Speaker 05:
I would quarrel a little bit with how the court framed the issue that was in Banks 2 and in Banks 4.

[00:14:43] Speaker 05:
And as I said, in Banks 2, what the court was addressing was the finding by the Court of Federal Claims that the claim accrued in 1989.

[00:14:52] Speaker 05:
And what the court found was that was clear error, because in 1989, there was a mitigation program ongoing, and so the court couldn't sort that out.

[00:15:00] Speaker 05:
The court didn't need to, and of course, there was no trial at that point, and there were no findings on trail line composition or erosion at any of the properties.

[00:15:10] Speaker 05:
And at the time, the court didn't need to determine that the technical reports were actually correct as to the plaintiff's properties.

[00:15:17] Speaker 05:
All the court needed to find was- Wait, wait, stop.

[00:15:19] Speaker 05:
Sure.

[00:15:20] Speaker 03:
Sorry.

[00:15:23] Speaker 03:
I want to know, when you say the court erred in framing the issue,

[00:15:32] Speaker 03:
That was in Banks Four?

[00:15:35] Speaker 03:
Right.

[00:15:36] Speaker 03:
OK.

[00:15:36] Speaker 03:
Did you appeal that?

[00:15:39] Speaker 05:
No, I didn't say the court erred in framing the issue in Banks Four.

[00:15:42] Speaker 05:
What I was trying to get at was Judge Reign's description of the holding in Banks Four.

[00:15:47] Speaker 05:
What Banks Four held was it was clear error for the Court of Federal Claims to find that the cause of action accrued in 1952.

[00:15:55] Speaker 05:
Remember, the Court of Federal Claims went backwards, right?

[00:15:59] Speaker 05:
You were on that panel.

[00:16:01] Speaker 05:
And so what you found and what the panel found was that it was clear error to reach backwards.

[00:16:07] Speaker 05:
And the court found that there was no new evidence sufficient for the court to reopen the finding.

[00:16:13] Speaker 05:
And the court determined that there was nothing before the 1996 through 1999 technical reports that provided the constructive knowledge.

[00:16:23] Speaker 05:
But again, the key date for the statute of limitations, Your Honors, is 1993.

[00:16:28] Speaker 00:
Let's see if I understand your position.

[00:16:30] Speaker 00:
I think your position is that for the purposes of accrual, the question was simply whether those letters put the plaintiffs for the first time on notice that the taking might have been permanent and irreversible.

[00:16:44] Speaker 00:
And so that was why it accrued at that point.

[00:16:47] Speaker 00:
On the other hand, for purposes of liability, you're saying the government is free to present evidence showing that those letters were incorrect.

[00:16:55] Speaker 00:
Even if they did provide notice,

[00:16:57] Speaker 00:
you could, for purposes of liability, present Dr. Nairn's testimony to suggest that what was said in those reports wasn't exactly right, and it is reversible.

[00:17:06] Speaker 05:
That's absolutely right, Your Honor, although I would add that the fact that the 1996 through 1999 technical reports gave constructive knowledge was not disputed, as the plaintiff's counsel suggests, because obviously that was within the statute of limitations time period.

[00:17:24] Speaker 05:
The only facts that were disputed vis-a-vis the statute of limitations were the facts prior to 1993, which is the key date for the statute of limitations.

[00:17:31] Speaker 05:
The key question for the statute of limitations were the facts that occurred from 1836, when the harbor was first developed, through 1903, through 1989, or actually through 1993.

[00:17:45] Speaker 05:
Was there facts in that time period that provided a cause of action and knowledge of the cause of action?

[00:17:50] Speaker 03:
Mr. Schmelzer, do you have the record with you?

[00:17:54] Speaker 03:
I have the appendix.

[00:17:56] Speaker 03:
Yes.

[00:17:57] Speaker 03:
Maybe you can help me out.

[00:17:58] Speaker 03:
I'm old and everything's gone, including my eyes.

[00:18:05] Speaker 03:
The key table cited in Niren's sediment budget to support the 30% determination is at 7732 in the appendix.

[00:18:23] Speaker 03:
Your question, Your Honor?

[00:18:28] Speaker 03:
Yeah, can you read me those numbers?

[00:18:30] Speaker 03:
I just cannot for the life of me figure those out.

[00:18:34] Speaker 05:
The same budget, Your Honor, is also presented in the appendix at pages 8279 and 8280.

[00:18:40] Speaker 05:
And unfortunately, the numbers are too small.

[00:18:43] Speaker 05:
But the 30% finding... Small?

[00:18:44] Speaker 03:
They're not small.

[00:18:45] Speaker 03:
I can't see them.

[00:18:47] Speaker 05:
I can't see them either, Your Honor.

[00:18:49] Speaker 05:
I apologize for the...

[00:18:52] Speaker 05:
the small reproduction.

[00:18:54] Speaker 05:
But the 30% figure was law of the case before this was prepared.

[00:18:58] Speaker 05:
The 30% figure comes from an admission in the 1973 report based on a finding at that time that there was 110,000 cubic yards blocked by the jetties in the literal drift.

[00:19:13] Speaker 05:
And we go through the brief.

[00:19:14] Speaker 05:
We explain how the 30% finding came from that admission.

[00:19:17] Speaker 05:
The court found that we had admitted that and made a finding that that's law of the case.

[00:19:21] Speaker 05:
Dr. Nairn, when he presented his settlement budget, explained to the court that he had revised the figure based on the blockage of literal drift, that it's now 50,000, and he had gone through all the numbers, and he had determined that the actual blockage or the percentage but for mitigation would be 25%, not the 30.

[00:19:41] Speaker 03:
And you're saying all these numbers are elsewhere in the record?

[00:19:45] Speaker 05:
Well, they're summarized in this table, but they're presented in

[00:19:48] Speaker 05:
in the course of two multiple-day trials, and of course the Court of Federal Claims... Did Dr. Nairn rely on this table?

[00:19:56] Speaker 05:
This is his summary of his findings, yes.

[00:20:00] Speaker 03:
I'm sorry?

[00:20:01] Speaker 03:
Yeah.

[00:20:01] Speaker 03:
Yes.

[00:20:02] Speaker 03:
So he did.

[00:20:03] Speaker 05:
Yes, absolutely.

[00:20:03] Speaker 05:
He relied on these tables.

[00:20:04] Speaker 05:
He prepared these tables.

[00:20:06] Speaker 05:
The data in the tables was challenged at trial by some of the plaintiff's experts, but the Court of Federal Claims... I guess my question is, how do we know that since

[00:20:17] Speaker 03:
since it is completely and totally illegible.

[00:20:19] Speaker 05:
Well, Your Honor, it wasn't necessarily presented in this size at the Court of Federal Claims.

[00:20:24] Speaker 05:
The Court of Federal Claims is the finder of fact in this case.

[00:20:27] Speaker 03:
I don't care what the Court of Federal Claims had in front of it.

[00:20:29] Speaker 03:
I care about what I have in front of me.

[00:20:33] Speaker 05:
I appreciate that, Your Honor, and all I'm trying to say is that if you look to the very legible

[00:20:39] Speaker 05:
decision by the Court of Federal Claims in Banks 3, the Court of Federal Claims steps through every one of these issues in excruciating detail.

[00:20:47] Speaker 03:
If you tell me that tabulation is elsewhere, I'll look at it.

[00:20:53] Speaker 03:
But don't tell me I can gather the numbers and put them in when

[00:20:59] Speaker 05:
it right the even the column headings are a letter to your honor your your honor ask me a question about thirty percent of the direct answer to that was it's not in this table at all i know but you're coming here and relied on this is a summary uh... but it's right and you know i don't know if the court uh... wishes we could provide a blow-up uh... of this table and provided to the court what i would but what the important thing for the court to remember is a lot of columns here there's a ton of information here on uh...

[00:21:28] Speaker 05:
the blockage of sand by the jetties, the dredging, the sediment provided by the river, the change to the shoreline by other man-made structures.

[00:21:39] Speaker 05:
There's a ton of information in there.

[00:21:40] Speaker 03:
Let me change the subject a little bit, speaking of changes.

[00:21:44] Speaker 03:
Banks alleges on page 53 of the blue brief, and frankly, I found this looking at Burgoyne surprising.

[00:21:55] Speaker 03:
I mean, as a lawyer, I used to cross-examine an awful lot of appraisers.

[00:21:59] Speaker 03:
That his appraisal method for reduction in value of the properties is flawed, quote, because it only used the front footage of the property rather than accounting for the decreased depth of the property.

[00:22:11] Speaker 03:
And in effect, I'm going to draw in the air, but in effect it said, if there's a peninsula sticking out into the water, and people picnic on that and so on, and then it's all eroded.

[00:22:28] Speaker 03:
and instead you have a bay running right up to the house and you no longer have that land, it's okay because the front footage is the same.

[00:22:37] Speaker 03:
Is that correct?

[00:22:38] Speaker 03:
Because that's the way I read it and I worked through it.

[00:22:40] Speaker 05:
That's not entirely correct.

[00:22:42] Speaker 05:
What Mr. Burgoyne determined as part of his appraisal was that if the loss from erosion in lot depth, the landward movement of the shoreline,

[00:22:56] Speaker 05:
if it took away a particular feature that had value that would be represented in the market, then that was considered.

[00:23:04] Speaker 05:
The basic understanding, though, of the appraisal was that the primary indicator of market value for shoreline properties is the width of the lot, your view, your ability to access the lake, and that simply losing a few feet of erosion doesn't necessarily affect the market value.

[00:23:24] Speaker 05:
I would like to come back to a much more fundamental point is the United States did not need to put in any damage evidence whatsoever.

[00:23:32] Speaker 05:
The burden was on the plaintiffs.

[00:23:34] Speaker 05:
The valuation evidence that the plaintiffs put in is not even a valid method for determining what is it taking.

[00:23:42] Speaker 00:
Did it?

[00:23:46] Speaker 00:
determine that that methodology was flawed and not reliable, and therefore it wasn't going to consider it under a Daubert kind of analysis?

[00:23:56] Speaker 00:
Or was it more of a credibility determination?

[00:23:58] Speaker 05:
Are you talking about the damages now?

[00:24:00] Speaker 00:
Yes.

[00:24:01] Speaker 05:
Let's move on to damages.

[00:24:02] Speaker 05:
The Court of Federal Claims dismissed Moore's testimony with respect to damages on a couple of grounds.

[00:24:11] Speaker 05:
The court did find Mr. Burgoyne's testimony to be more credible.

[00:24:16] Speaker 05:
but then also found flaws within the methodology that was used by Dr. Moore.

[00:24:23] Speaker 05:
The principal one that the court pointed to was the fact that Moore's analysis doesn't account for actual physical loss, physical loss from the property, the amount of erosion on the property.

[00:24:35] Speaker 05:
You must remember that the

[00:24:37] Speaker 05:
There is evidence in the record about the movement of the ordinary high water mark with respect to all of these properties from the period of 1950 through the point when they were appraised.

[00:24:47] Speaker 05:
As the findings demonstrate, almost half of the properties actually grew larger than they were in 1950.

[00:24:59] Speaker 00:
Property size grew larger?

[00:25:03] Speaker 05:
There wasn't erosion in terms of the ordinary high water mark.

[00:25:06] Speaker 05:
The ordinary high watermark did not move the landward with respect to 18 of the 40 properties that were looked at.

[00:25:13] Speaker 05:
There was a wide difference in terms of the actual property loss.

[00:25:18] Speaker 05:
And what the plaintiffs did in putting on Dr. Moore is they did an event study of an event that was a supposed announcement, the 1999 technical report that came out in January of 2000, and what they were trying to

[00:25:34] Speaker 05:
determined based on that event analysis was what did this announcement, what impact did that have on the temporary market value of the lots.

[00:25:47] Speaker 05:
And they said there was a uniform, they found that all of the properties actually appreciated from before and after, but they found that the appreciation in the plaintiff's zone was less than in another place.

[00:26:00] Speaker 05:
and therefore they are entitled to millions of dollars as a result of this, but they valued the wrong event.

[00:26:09] Speaker 05:
They didn't value a taking.

[00:26:11] Speaker 05:
They valued just the impact of an announcement.

[00:26:13] Speaker 05:
An announcement isn't a taking.

[00:26:14] Speaker 05:
It has no relationship to the physical loss of the property.

[00:26:18] Speaker 05:
If the government had come in, for example, in January 2000 and had taken a backhoe across the backs of all the plaintiff's properties and had a uniform amount of

[00:26:29] Speaker 05:
property taken and then they you know that would be a fine analysis then they had used a chaotic analysis.

[00:26:33] Speaker 00:
Can I interrupt you for a minute?

[00:26:35] Speaker 00:
Your point is that it's the event that's the problem.

[00:26:37] Speaker 00:
The 1999 report had there been some other event that was identifiable you would be okay with the type of framework.

[00:26:45] Speaker 05:
It can't be any other event.

[00:26:46] Speaker 05:
It has to be the physical taking.

[00:26:48] Speaker 00:
It's got to be the evaluation of the property.

[00:26:51] Speaker 05:
And the other problem is your honor.

[00:26:53] Speaker 00:
Can I ask you a different question?

[00:26:54] Speaker 00:
I want to ask you.

[00:26:55] Speaker 00:
I know that the court credited

[00:26:58] Speaker 00:
the government's expert.

[00:27:01] Speaker 00:
And the government's expert did have some amount of damages, at least for some of the plaintiffs, I think for five of the properties.

[00:27:08] Speaker 00:
But then the Court of Federal Claims awarded zero in damages.

[00:27:14] Speaker 05:
That's based on the liability finding, Your Honor.

[00:27:16] Speaker 00:
Why is that appropriate?

[00:27:17] Speaker 05:
It's based on the liability finding.

[00:27:19] Speaker 05:
It was an alternative finding of damages if there had been

[00:27:26] Speaker 00:
But I thought the liability finding was that there was a taking, the government with the jetties had caused 30% of the erosion.

[00:27:34] Speaker 05:
30% from the time period from 1950 through 1970.

[00:27:37] Speaker 05:
And from the period from 1970 through the point of appraisal, based on the sand budget and the expert testimony that was presented, the Court of Federal Claims found that once the Corps of Engineers changed its practices and didn't take the dredge material,

[00:27:53] Speaker 05:
from the Inner Harbor to Deep Lake, but actually put it on the shoreline south of the property so it was there to nourish the properties, that there was no effect on a sand deficit from the jetties once they changed the practice and they placed the mitigation as it's reverted.

[00:28:11] Speaker 02:
What happens if we reverse on the court in its determination as to whether, on the law of the case,

[00:28:23] Speaker 02:
the issue.

[00:28:25] Speaker 02:
What does that do to the damages findings?

[00:28:28] Speaker 05:
Your Honor, I would think that the court should still, and what we argue in our briefs is that the court should still affirm because the plaintiffs did not present a viable method for evaluating physical loss.

[00:28:41] Speaker 02:
So I'm going to follow up.

[00:28:42] Speaker 02:
And I think Judge Wallach also has a follow-up question.

[00:28:44] Speaker 02:
So you're out of time.

[00:28:46] Speaker 02:
But let me ask you this question now.

[00:28:50] Speaker 02:
I guess this is a yes or no.

[00:28:51] Speaker 02:
Question and I know there's somewhat unfair, but do you agree that the banks for remand?

[00:28:59] Speaker 02:
order of this court had a clear finding as to A permanent taking and that the core failed to mitigate no Okay, may I may I follow up your honor sure quickly?

[00:29:15] Speaker 05:
It's just because that was based entirely on statements from the technical reports.

[00:29:21] Speaker 05:
The technical reports didn't have to be true at that point to show that the claim wasn't time barred.

[00:29:26] Speaker 05:
Because what mattered to the time bar was whether there was constructive knowledge prior to 1993.

[00:29:32] Speaker 05:
There's a ton of evidence in the record, Your Honors, about shoreline composition, about wave energy, about each of the plaintiff's property's losses.

[00:29:43] Speaker 02:
None of that was before the court.

[00:29:45] Speaker 02:
So when the case was remanded, did the Court of Federal Claims undertake a whole new liability inquiry, or did it just adopt one of its alternative findings?

[00:29:56] Speaker 05:
Your Honor, at that point, there had been two separate liability.

[00:29:59] Speaker 05:
It was divided into liability and damages phases.

[00:30:01] Speaker 05:
But at the damages trial, the Court allowed that.

[00:30:03] Speaker 02:
Excuse me.

[00:30:04] Speaker 02:
I was asking, did it undertake a whole new?

[00:30:06] Speaker 02:
No.

[00:30:06] Speaker 02:
It did not.

[00:30:07] Speaker 05:
It did not because there had been.

[00:30:08] Speaker 02:
It reached back and it took one of its alternative findings, correct?

[00:30:13] Speaker 05:
which was based on years of litigation and two separate costs.

[00:30:15] Speaker 02:
And which was also, they were also based on the 99 report, correct?

[00:30:19] Speaker 05:
The liability findings were not based on the 99 report.

[00:30:22] Speaker 05:
Those alternative findings I'm talking about.

[00:30:24] Speaker 05:
Right, they were not based on, the 99,

[00:30:27] Speaker 05:
The 96 through 99 technical reports were part of the evidence before the court.

[00:30:31] Speaker 05:
OK, that's what I'm asking.

[00:30:32] Speaker 05:
But the court didn't find that there was no liability from 1970 through 2000 because of the reports.

[00:30:37] Speaker 05:
What the court found is the reports didn't apply to the coastline.

[00:30:40] Speaker 05:
OK, I have some other questions.

[00:30:42] Speaker 03:
I have one other question.

[00:30:43] Speaker 03:
It may devolve into more.

[00:30:46] Speaker 03:
In the 2007 liability opinion, it appears that the court challenged the 30% erosion liability admission from the 73 report.

[00:30:57] Speaker 03:
And the Court of Federal Claims actually found that 50,000 cubic yard number you proposed was more accurate than the 100,000 cubic yards underlying the 30% valuation.

[00:31:11] Speaker 03:
But the Court of Federal Claims still assessed liability at 30% at the end of that opinion.

[00:31:18] Speaker 01:
That's correct.

[00:31:19] Speaker 03:
And that's the number that you're citing and it's carried through to this opinion.

[00:31:22] Speaker 03:
That's correct.

[00:31:23] Speaker 03:
Is it your understanding that the factual determination of 50,000

[00:31:28] Speaker 03:
cubic yards doesn't affect the liability determination?

[00:31:32] Speaker 03:
No.

[00:31:33] Speaker 03:
It's not your understanding, okay?

[00:31:35] Speaker 03:
So what is your understanding?

[00:31:36] Speaker 05:
The liability determination is based on the SAN budget that was presented by Dr. Nairn.

[00:31:43] Speaker 05:
And as you sort out all the numbers from the chart that I apologize your honor has difficulty reading.

[00:31:48] Speaker 05:
But it's the information that's presented on that... You can't argue that chart.

[00:31:54] Speaker 03:
You can't.

[00:31:55] Speaker 03:
I mean, unless you...

[00:31:57] Speaker 03:
open that page and you read me what these numbers say going across, and I defy you to do it on some of these columns, you can't argue in that chart.

[00:32:11] Speaker 03:
The government has, or the parties, in this case it's a government exhibit, have placed into the record of this court something that is gibberish.

[00:32:22] Speaker 05:
Your Honor, the plaintiffs have never argued, nor did their experts argue, that they couldn't read the numbers on the chart.

[00:32:27] Speaker 05:
They challenged the numbers on the chart for a variety of reasons that the Court of Federal Claims specifically rejected in a very comprehensive and exhausting analysis.

[00:32:36] Speaker 03:
Oh, no, no, no.

[00:32:36] Speaker 03:
You don't understand me.

[00:32:38] Speaker 03:
You're arguing 208.

[00:32:41] Speaker 03:
I'm going to just make this record.

[00:32:44] Speaker 03:
I want you to open to that page.

[00:32:48] Speaker 03:
Yes, Your Honor.

[00:32:51] Speaker 03:
It's 7732.

[00:32:56] Speaker 03:
Thank you, Your Honor.

[00:32:58] Speaker 03:
There appears to be a column, I'm guessing, is nine, because it appears to be next to something that's column Roman numeral eight.

[00:33:10] Speaker 03:
You see that?

[00:33:11] Speaker 03:
It's one, two, three, four, five, six, seven, eight columns over, some of them are subdivided below.

[00:33:25] Speaker 03:
Do you see that one?

[00:33:27] Speaker 03:
And it seems to say zone 2A something.

[00:33:32] Speaker 05:
Yeah.

[00:33:32] Speaker 03:
What are those numbers?

[00:33:35] Speaker 03:
You tell me.

[00:33:38] Speaker 05:
Hello.

[00:33:38] Speaker 05:
Those numbers are not readable on the version of 7732.

[00:33:42] Speaker 05:
Nor in the next column.

[00:33:43] Speaker 05:
The numbers are reproduced at appendix 8279 and 8280.

[00:33:48] Speaker 05:
It's the same chart, and they are readable on that other chart.

[00:33:50] Speaker 02:
Council, sir.

[00:33:52] Speaker 02:
Yes, sir.

[00:33:52] Speaker 02:
Why don't you just submit a new

[00:33:55] Speaker 02:
a copy of this particular page, okay?

[00:33:58] Speaker 02:
One that's led you up.

[00:33:59] Speaker 05:
Yes.

[00:33:59] Speaker 02:
I know we may have to.

[00:34:01] Speaker 02:
Your time is over.

[00:34:02] Speaker 02:
Let's hear now from Mr. Christensen.

[00:34:10] Speaker 03:
You had some information for us, Mr. Christensen?

[00:34:12] Speaker 03:
I do.

[00:34:13] Speaker 04:
At Appendix 1811 and Appendix 89 and Appendix 103, we identified the Nairn Motion and Lemonade.

[00:34:26] Speaker 04:
in addition to the 2007 opinion and the page numbers I gave where the court applied an incorrect methodology to admit that evidence.

[00:34:36] Speaker 04:
At appendix 3532 to 3533, we identify 10 cents a cubic yard for sand.

[00:34:44] Speaker 04:
At appendix 2486 to 89, we have Scudder-Mackey's testimony on the 70% erosion.

[00:34:58] Speaker 03:
Thank you.

[00:35:01] Speaker 04:
The issue is that the 50,000 cubic yards that is relied upon by the underlying court to say there is no liability is a number that's made up out of thin air.

[00:35:14] Speaker 04:
It's inconsistent with the 99 report, which had 110 cubic yards for the gross littoral drift.

[00:35:19] Speaker 04:
That comes out of DX1, which was plaintiff's armenia defendant's expert's report.

[00:35:25] Speaker 04:
It's part of the report that we moved to

[00:35:28] Speaker 04:
bar under Daubert.

[00:35:34] Speaker 04:
The court's ruling, it's difficult to argue to the court what its own mandate meant.

[00:35:40] Speaker 04:
But we think permanent meant permanent.

[00:35:41] Speaker 04:
We don't think there's two different permanents.

[00:35:43] Speaker 04:
And we think irreversible means irreversible.

[00:35:46] Speaker 04:
And the evidence in that report is consistent with the Coastal Engineering Manual, which identifies what a cohesive shore is.

[00:35:54] Speaker 04:
With respect to establishing Dr. Moore's testimony, his methodology was not criticized.

[00:36:01] Speaker 04:
What Dr. Moore did was he took the appraisal value of the homes that was provided by Burgoyne, because that's really what Burgoyne did.

[00:36:11] Speaker 04:
He didn't do a before and after analysis.

[00:36:12] Speaker 04:
He just gave an appraisal value in 2000.

[00:36:15] Speaker 04:
He included in that then a

[00:36:19] Speaker 04:
erosion zone and out of erosion zone evaluation of the increase in value of homes over a period of time, and he plotted it.

[00:36:26] Speaker 04:
And that's how he came up with his 42% difference, of which he had 90% confidence.

[00:36:35] Speaker 04:
Moore's testimony is combined with Dr. Meadow's testimony.

[00:36:39] Speaker 04:
And Dr. Meadow's testimony was that he went property by property by property by property and identified how much

[00:36:46] Speaker 04:
land had been lost above the ordinary high mortar mark with the bluff falling in and then came out with about 1,800,000 cubic yards when you did the sum total.

[00:36:56] Speaker 04:
So there's a correlation between the actual land loss and the diminution in value that's provided by Dr. Moore.

[00:37:02] Speaker 04:
The credibility of these witnesses is beyond dispute that the foundation for that damages testimony is there.

[00:37:10] Speaker 04:
As to the claim by

[00:37:11] Speaker 04:
the government that somehow the ordinary high water mark was pinned further away such that from an aerial view you had a larger land mass, notwithstanding the fact that you had lost volume of sand into the ocean.

[00:37:25] Speaker 04:
Dr. Nairn admitted that he pinned the ordinary high water mark there because people had put shore protection out.

[00:37:30] Speaker 04:
And so the waves were hitting the shore protection and not coming all the way up into the property where the ordinary high water mark normally would have been.

[00:37:39] Speaker 04:
And he admitted to that under cross-examination.

[00:37:41] Speaker 04:
He also admitted that there had been a volume of loss of sand.

[00:37:45] Speaker 02:
I was going to start off my presentation.

[00:37:47] Speaker 02:
Well, you're almost out of time.

[00:37:49] Speaker 02:
Or actually, you're over your time.

[00:37:50] Speaker 02:
I'm sorry.

[00:37:51] Speaker 02:
Could you conclude?

[00:37:53] Speaker 02:
I'll let you give a very brief couple of sentence conclusion.

[00:37:56] Speaker 04:
I can.

[00:37:57] Speaker 04:
And I can hearken back to the Robert Frost poem of 1916.

[00:38:00] Speaker 04:
There are two roads in the yellow wood.

[00:38:03] Speaker 04:
The first road for reversal is that the finding of the court was inconsistent with the mandate.

[00:38:09] Speaker 04:
The second road in the woods is that there was no way Dr. Nairn should have come through the door under Dalbert.

[00:38:15] Speaker 04:
This is not a weight of credibility.

[00:38:17] Speaker 04:
His testimony was made up, inconsistent, not peer reviewed, and should be thrown out.

[00:38:22] Speaker 04:
Once that happens, we now have a liability of finding, and this case gets remanded for the entry of judgment on damages.

[00:38:28] Speaker 02:
That's not the way I read the poem, but you know, it's OK.

[00:38:31] Speaker 02:
All right.

[00:38:34] Speaker 02:
Thank you very much.

[00:38:35] Speaker 02:
We thank all counsel for their arguments.