Regulatory Takings
Implementation of Executive Order on Government Actions Affecting Private Property Use Gao ID: GAO-03-1015 September 19, 2003Each year federal agencies issue numerous proposed or final rules or take other regulatory actions that may potentially affect the use of private property. Some of these actions may result in the property owner being owed just compensation under the Fifth Amendment. In 1988 the President issued Executive Order 12630 on property rights to ensure that government actions affecting the use of private property are undertaken on a well-reasoned basis with due regard for the potential financial impacts imposed on the government. GAO was asked to provide information on the compliance of the Department of Justice and four agencies--the Department of Agriculture, the Army Corps of Engineers, the Environmental Protection Agency, and the Department of the Interior--with the executive order. Specifically, GAO examined the extent to which (1) Justice has updated its guidelines for the order to reflect changes in case law and issued supplemental guidelines for the four agencies, (2) the four agencies have complied with the specific provisions of the executive order, and (3) just compensation awards have been assessed against the four agencies in recent years. We provided the agencies with a draft of this report for comment. They provided technical and editorial suggestions that we incorporated as appropriate.
Justice has not updated the guidelines that it issued in 1988 pursuant to the executive order, but has issued supplemental guidelines for three of the four agencies. The executive order provides that Justice should update the guidelines, as necessary, to reflect fundamental changes in takings case law resulting from Supreme Court decisions. While Justice and some other agency officials said that the changes in the case law since 1988 have not been significant enough to warrant a revision, other agency officials and some legal experts said that fundamental changes have occurred and that the guidelines should be updated. Justice issued supplemental guidelines for three agencies, but not for Agriculture because of unresolved issues such as how to assess the takings implications of denying or limiting permits that allow ranchers to graze livestock on federal lands managed by Agriculture. Although the executive order's requirements have not been amended or revoked since 1988, the four agencies' implementation of some of these requirements has changed over time as a result of subsequent guidance provided by the Office of Management and Budget (OMB). For example, the agencies no longer prepare annual compilations of just compensation awards or account for these awards in their budget documents because OMB issued guidance in 1994 advising agencies that this information was no longer required. According to OMB, this information is not needed because the number and amount of these awards are small and the awards are paid from the Department of the Treasury's Judgment Fund, rather than from the agencies' appropriations. Regarding other requirements, agency officials said that they fully consider the potential takings implications of their regulatory actions, but provided us with limited documentary evidence to support this claim. For example, the agencies provided us with a few examples of takings implications assessments because, agency officials said, these assessments are not always documented in writing or retained on file. In addition, our review of the agencies' rulemakings for selected years that made reference to the executive order revealed that relatively few specified that a takings implication assessment was done and few anticipated significant takings implications. According to Justice, 44 regulatory takings lawsuits brought against the four agencies by property owners were concluded during fiscal years 2000 through 2002, and of these, 14 cases resulted in just compensation awards or settlement payments totaling about $36.5 million. The executive order's requirement for assessing the takings implications of planned actions applied to only three of these cases. The actions associated with the other 11 cases either predated the order's issuance or were otherwise excluded from the order's provisions. The relevant agency assessed the takings potential of its action in only one of the three cases subject to the order's requirements. According to Justice, as of the end of fiscal year 2002, 54 additional regulatory takings lawsuits involving the four agencies were pending resolution.
GAO-03-1015, Regulatory Takings: Implementation of Executive Order on Government Actions Affecting Private Property Use
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Report to the Chairman, Subcommittee on the Constitution, Committee on
the Judiciary, House of Representatives:
September 2003:
REGULATORY TAKINGS:
Implementation of Executive Order on Government Actions Affecting
Private Property Use:
GAO-03-1015:
GAO Highlights:
Highlights of GAO-03-1015, a report to Chairman, Subcommittee on the
Constitution, Committee on the Judiciary, House of Representatives
Why GAO Did This Study:
Each year federal agencies issue numerous proposed or final rules or
take other regulatory actions that may potentially affect the use of
private property. Some of these actions may result in the property
owner being owed just compensation under the Fifth Amendment. In 1988
the President issued Executive Order 12630 on property rights to
ensure that government actions affecting the use of private property
are undertaken on a well-reasoned basis with due regard for the
potential financial impacts imposed on the government.
GAO was asked to provide information on the compliance of the
Department of Justice and four agencies”the Department of Agriculture,
the Army Corps of Engineers, the Environmental Protection Agency, and
the Department of the Interior”with the executive order. Specifically,
GAO examined the extent to which (1) Justice has updated its
guidelines for the order to reflect changes in case law and issued
supplemental guidelines for the four agencies, (2) the four agencies
have complied with the specific provisions of the executive order, and
(3) just compensation awards have been assessed against the four
agencies in recent years.
We provided the agencies with a draft of this report for comment. They
provided technical and editorial suggestions that we incorporated as
appropriate.
What GAO Found:
Justice has not updated the guidelines that it issued in 1988 pursuant
to the executive order, but has issued supplemental guidelines for
three of the four agencies. The executive order provides that Justice
should update the guidelines, as necessary, to reflect fundamental
changes in takings case law resulting from Supreme Court decisions.
While Justice and some other agency officials said that the changes in
the case law since 1988 have not been significant enough to warrant a
revision, other agency officials and some legal experts said that
fundamental changes have occurred and that the guidelines should be
updated. Justice issued supplemental guidelines for three agencies,
but not for Agriculture because of unresolved issues such as how to
assess the takings implications of denying or limiting permits that
allow ranchers to graze livestock on federal lands managed by
Agriculture.
Although the executive order‘s requirements have not been amended or
revoked since 1988, the four agencies‘ implementation of some of these
requirements has changed over time as a result of subsequent guidance
provided by the Office of Management and Budget (OMB). For example,
the agencies no longer prepare annual compilations of just
compensation awards or account for these awards in their budget
documents because OMB issued guidance in 1994 advising agencies that
this information was no longer required. According to OMB, this
information is not needed because the number and amount of these
awards are small and the awards are paid from the Department of the
Treasury‘s Judgment Fund, rather than from the agencies‘
appropriations. Regarding other requirements, agency officials said
that they fully consider the potential takings implications of their
regulatory actions, but provided us with limited documentary evidence
to support this claim. For example, the agencies provided us with a
few examples of takings implications assessments because, agency
officials said, these assessments are not always documented in writing
or retained on file. In addition, our review of the agencies‘
rulemakings for selected years that made reference to the executive
order revealed that relatively few specified that a takings
implication assessment was done and few anticipated significant
takings implications.
According to Justice, 44 regulatory takings lawsuits brought against
the four agencies by property owners were concluded during fiscal
years 2000 through 2002, and of these, 14 cases resulted in just
compensation awards or settlement payments totaling about $36.5
million. The executive order‘s requirement for assessing the takings
implications of planned actions applied to only three of these cases.
The actions associated with the other 11 cases either predated the
order‘s issuance or were otherwise excluded from the order‘s
provisions. The relevant agency assessed the takings potential of its
action in only one of the three cases subject to the order‘s
requirements. According to Justice, as of the end of fiscal year 2002,
54 additional regulatory takings lawsuits involving the four agencies
were pending resolution.
www.gao.gov/cgi-bin/getrpt?GAO-03-1015.
To view the full product, including the scope and methodology, click
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[End of section]
Contents:
Letter:
Results in Brief:
Background:
Justice Has Not Updated Its 1988 Guidelines, but Has Issued
Supplemental Guidelines for Three of the Four Agencies:
Implementation of Key Provisions by the Four Agencies Has Changed Over
the Life of the Executive Order:
Few Awards of Just Compensation Were Made Against the Four Agencies for
Takings Cases Concluded during Fiscal Years 2000 through 2002:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Summary of Significant Supreme Court Regulatory Takings
Cases:
Cases Decided After 1988:
Cases Decided Before 1988:
Appendix III: Proposed and Final Rules That Address the EO, for the
Four Agencies, Calendar Years 1989, 1997, and 2002:
Appendix IV: Regulatory Takings Cases Concluded during Fiscal Years
2000 through 2002 Related to Actions of the Four Agencies:
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Acknowledgments:
Tables :
Table 1: Number of Proposed and Final Rules Addressing the EO for Four
Agencies, Calendar Years 1989, 1997, and 2002:
Table 2: Awards of Just Compensation or Settlement Payments for
Concluded Regulatory Takings Cases for the Four Agencies, Fiscal years
2000 through 2002:
Table 3: Proposed and Final Rules That Address the EO, for the Four
Agencies, Calendar Years 1989, 1997, and 2002:
Table 4: Regulatory Takings Cases Concluded with Payments, for the Four
Agencies, Fiscal Years 2000 through 2002:
Table 5: Regulatory Takings Cases Concluded Without Payments, for the
Four Agencies, Fiscal Years 2000 through 2002:
Abbreviations:
EO: Executive Order 12630:
EPA: U.S. Environmental Protection Agency:
GAO: General Accounting Office:
OMB: Office of Management and Budget:
Letter September 19, 2003:
The Honorable Steve Chabot
Chairman, Subcommittee on the Constitution
Committee on the Judiciary
House of Representatives:
Dear Mr. Chairman:
Each year federal agencies issue numerous proposed or final rules or
take other regulatory actions that may potentially affect the use of
private property. Agencies take these actions to meet a variety of
societal goals, such as protecting the environment, promoting public
health and safety, conserving natural resources, and preserving
historic sites. At the same time, these actions may place restrictions
on the use of private property, such as limiting the development of
land that includes critical wildlife habitat or wetlands needed for
flood control, thereby potentially depriving the landowner of the use
or economic value of the property. In such cases, the property owner
may be owed just compensation under the Fifth Amendment to the
Constitution.
In 1988 the President issued Executive Order 12630 (EO),[Footnote 1]
"Governmental Actions and Interference with Constitutionally Protected
Property Rights," to ensure that government actions are undertaken on a
well-reasoned basis with due regard for the potential financial impacts
imposed on the government by the Just Compensation Clause of the Fifth
Amendment. Specifically, the EO requires executive branch agencies,
among other things, to (1) prepare annual compilations of awards of
just compensation resulting from landowner lawsuits alleging takings,
(2) account for takings awards levied against them in their annual
budget submissions, (3) designate an agency official responsible for
implementing the order, and (4) consider the potential takings
implications of their proposed actions and document significant takings
implications in notices of proposed rulemaking. The EO also requires
the Department of Justice (Justice), specifically the U.S. Attorney
General, to issue general guidelines to provide agencies with a uniform
framework for their implementation of the EO and to issue supplemental
guidelines for each agency, as appropriate, that reflect that agency's
unique responsibilities. In addition, the EO requires the Attorney
General to update the general guidelines, as necessary, to reflect
fundamental changes in takings case law resulting from U.S. Supreme
Court decisions. Furthermore, the EO requires the Office of Management
and Budget (OMB) to ensure that the policies of executive branch
agencies are consistent with the EO's requirements and that just
compensation awards made against the agencies are included in agencies'
budget submissions.
If a landowner believes that a government regulatory action has
resulted in a taking of his or her private property, that landowner may
file a lawsuit seeking just compensation under the Fifth Amendment. In
general, these suits must be brought in the United States Court of
Federal Claims.[Footnote 2] Justice is generally responsible for
litigating these cases on behalf of the government.[Footnote 3] Such
cases, many of which may take years to resolve, may result in a
dismissal, a decision in favor of the government, a settlement payment
made to the landowner, or an award of just compensation. In general,
these awards and settlements are paid from the Department of the
Treasury's Judgment Fund.[Footnote 4] Relative to the thousands of
regulatory actions taken by federal agencies each year, the number of
lawsuits seeking just compensation related to these actions is
small.[Footnote 5]
You asked us to provide information on measures taken by Justice to
implement certain provisions of the EO and the efforts of four
agencies--the Department of Agriculture, the U.S. Army Corps of
Engineers, the Environmental Protection Agency (EPA), and the
Department of the Interior[Footnote 6]--to comply with the EO's
requirements. Specifically, we examined the extent to which (1) Justice
has updated its guidelines to reflect changes in case law and issued
supplemental guidelines for the four agencies, (2) the four agencies
have complied with the specific provisions of the EO, and (3) awards of
just compensation have been assessed by the courts against the four
agencies in recent years and, in these cases, whether the agencies
assessed the potential takings implications of their actions before
implementing them.
To report on the extent to which Justice has updated its guidelines and
issued supplemental guidance for the four agencies, we obtained copies
of these documents and interviewed knowledgeable agency officials. We
also conducted legal research and sought the opinions and reviewed the
publications of other relevant individuals, including representatives
of private property rights and environmental groups and law school
professors, as to whether changes in takings case law since 1988
warranted revisions to the guidelines. To determine the extent of the
four agencies' compliance with specific provisions of the EO, we
interviewed knowledgeable agency officials and reviewed the documents
they provided. We also interviewed OMB and Justice officials regarding
the agencies' compliance with specific provisions, as appropriate. In
addition, we reviewed 375 Federal Register notices published in 1989,
1997, and 2002 relating to regulatory actions of the four agencies and
referencing the EO. These years were selected judgmentally: 1989
represents the first full year under the EO, 1997 represents an
intermediate year, and 2002 represents the most recent full year. In
addition, these years provide 1 year's experience under each of the
past three presidential administrations. We undertook this analysis to
determine if and how the agencies documented their compliance with the
EO. Finally, regarding awards of just compensation made against the
agencies and, in these cases, whether the agencies had assessed the
takings potential of their actions, we obtained from Justice a list of
all regulatory takings cases related to the four agencies that were
concluded during fiscal years 2000 through 2002. We initially sought
this type of data for the full 15-year period since the EO's issuance,
but Justice officials indicated that the full set of data was not
readily available. We then discussed these cases with relevant
officials at the four agencies and analyzed documents they provided. We
also discussed these cases with the Clerk of the U.S. Court of Federal
Claims and officials responsible for administering the Department of
the Treasury's Judgment Fund and reviewed documents they provided.
Results in Brief:
Justice has not updated the general guidelines that it issued pursuant
to the EO in June 1988, but has issued supplemental guidelines for
three of the four agencies. Officials at Justice and two of the four
agencies generally expressed the view that changes in takings case law
related to U.S. Supreme Court decisions since 1988 have not been
significant enough to warrant a revision of the guidelines. Justice
officials also noted that the guidelines are intended to provide a
general framework for agencies to follow in implementing the EO, and
thus do not require frequent revision. However, Interior and
Agriculture officials said that it would be helpful to their staff if
Justice updated a summary of the key aspects of relevant case law
contained in an appendix to the guidelines to reflect significant
developments over the past 15 years. Similarly, some representatives of
property rights groups and law school professors stated that the
guidelines should be updated. In general, they noted that the body of
relevant case law has evolved significantly over the past 15 years. For
example, one law professor, noting the detailed manner in which Justice
discussed takings cases in the original guidelines, said that case law
covering the past 15 years should be thoroughly discussed in the
guidelines as well. Regarding the supplemental guidelines for
individual agencies, although Justice issued final guidelines for three
of the four agencies, it has not issued guidelines for the Department
of Agriculture. According to Justice and Agriculture officials,
Agriculture's guidelines were never completed because the two agencies
disagreed on issues such as how to assess the takings implications of
agency actions related to grazing and special use permits. However,
both Justice and Agriculture officials told us that Agriculture's
compliance with the EO has not been encumbered by the lack of
supplemental guidelines.
Although the executive order's requirements have not been amended or
revoked since 1988, the four agencies' implementation of some of its
key provisions has changed over time because of subsequent guidance
provided by OMB. For example, the agencies no longer prepare annual
compilations of just compensation awards or account for these awards in
their budget documents because OMB issued guidance in 1994 advising
agencies that this information is no longer required. According to OMB,
this information is not needed because the number and amount of these
awards is small, and the awards are paid from the Department of the
Treasury's Judgment Fund, rather than from the agencies'
appropriations. Regarding the EO requirement for a designated official,
the four agencies have each designated an official--typically the chief
counsel, general counsel, or solicitor--to be responsible for ensuring
the agency's compliance with the EO. Finally, although the four
agencies told us that they fully consider the potential takings
implications of their planned regulatory actions, they provided us with
limited documentary evidence to support this claim. Specifically,
agency officials told us that takings implication assessments are not
always documented in writing, and, because of the passage of time,
those assessments that were documented may no longer be on file with
the agency. Similarly, our independent review of 375 Federal Register
notices published in 1989, 1997, and 2002 relating to regulatory
actions of the four agencies and referencing the EO revealed that 50 of
the notices specified that a takings implication assessment was done,
and of these, 10 indicated that the agency anticipated significant
takings. Given the limited nature of the available information, we
could not fully assess the extent to which the EO's requirements for
assessing potential takings were fully considered by the agencies.
According to Justice data, 44 regulatory takings cases brought against
the four agencies were concluded during fiscal years 2000 through 2002.
Of these, the courts decided in favor of the plaintiff in 2 cases,
resulting in awards of just compensation totaling about $4.2 million.
The Justice Department settled in 12 other cases, providing total
payments of about $32.3 million. Of the 14 cases resulting in award or
settlement payments, 10 related to actions of Interior, 3 related to
actions of the Corps of Engineers, and 1 related to an action of
Agriculture. The EO's requirements for assessing the takings
implications of planned regulatory actions applied to only 3 of the 14
cases. For the other 11 cases, the associated regulatory action either
predated the EO's issuance or the matter at hand was otherwise excluded
from the EO's provisions. Based on available evidence, we found that
the relevant agency assessed the takings potential of its action in
only one of the three cases subject to the EO's requirements. As of the
end of fiscal year 2002, Justice reported that 54 additional regulatory
takings cases involving the four agencies were pending resolution.
Background:
The just compensation clause of the Fifth Amendment states "nor shall
private property be taken for public use, without just compensation."
Initially, this clause applied to the government's exercise of its
power of eminent domain. In eminent domain cases, the government
invokes its eminent domain power by filing a condemnation action in
court against a property owner to establish that the taking is for a
public use or purpose, such as the construction of a road or school,
and to have the amount of just compensation due the property owner
determined by the court.[Footnote 7] In such cases, the government
takes title to the property, providing the owner just compensation
based on the fair market value of the property at the time of taking.
In later years, Supreme Court decisions established that regulatory
takings are subject to the just compensation clause as well. In
contrast to the direct taking associated with eminent domain,
regulatory takings arise from the consequences of government regulatory
actions that affect private property. In these cases, the government
does not take action to condemn the property or offer compensation.
Instead, the government effectively takes the property by denying or
limiting the owner's planned use of the property, referred to as an
inverse taking.[Footnote 8] An owner claiming that a government action
has effected a taking and that compensation is owed must initiate suit
against the government to obtain any compensation due.[Footnote 9] The
court awards just compensation to the owner upon concluding that a
taking has occurred.
In 1987, concerned with the number of pending regulatory takings
lawsuits and with court decisions seen as increasing the exposure of
the federal government to liability for such takings, the President's
Task Force on Regulatory Relief began drafting an executive order to
direct executive branch agencies to more carefully consider the takings
implications of their proposed regulations or other actions. According
to a former Assistant Attorney General, this order was needed to
protect public funds by minimizing government intrusion upon private
property rights and to budget for the payment of just compensation when
such intrusions were inevitable. The President issued this order, EO
12630, on March 15, 1988.
According to the EO, actions subject to its provisions include
regulations, proposed regulations, proposed legislation, comments on
proposed legislation, or other policy statements that, if implemented
or enacted, could cause a taking of private property. Such actions may
include rules and regulations that propose or implement licensing,
permitting, or other conditions, requirements or limitations on private
property use. The EO also enumerates agency actions that are not
subject to the order, including the exercise of the power of eminent
domain and law enforcement actions involving seizure, for violations of
law, of property for forfeiture, or as evidence in criminal
proceedings.
Among other things, the EO requires the U.S. Attorney General to issue
guidelines to help agencies evaluate the takings implications of their
proposed actions, and, as necessary, to update these guidelines to
reflect fundamental changes in takings case law resulting from U.S.
Supreme Court decisions. The Attorney General issued these guidelines
on June 30, 1988, to establish a basic, uniform framework for federal
agencies to use in their internal evaluations of the takings
implications of administrative, regulatory, and legislative policies
and actions.[Footnote 10] In addition, the guidelines discuss agency
responsibilities for implementing the EO and the process for preparing
agency-specific supplemental guidelines.
The Attorney General's guidelines provide that agencies should assess
the takings implications of their proposed actions to determine their
potential for a compensable taking and that decision makers should
consider other viable alternatives, when available, to meet statutorily
required objectives while minimizing the potential impact on the public
treasury. In cases where alternatives are not available, the potential
takings implications are to be noted, such as in a notice of proposed
rulemaking. The guidelines also state that takings implication
assessments are internal, predecisional management aids and that they
are not subject to judicial review. In addition, the form and manner of
these assessments are left up to each agency.
The guidelines also include an appendix that provides detailed
information regarding some of the case law surrounding consideration of
whether a taking has occurred and the extent of any potential just
compensation claim. For example, the appendix discusses the Penn
Central Transportation Co. v. City of New York[Footnote 11] case in
which the Supreme Court set out a list of three "influential factors"
for determining whether an alleged regulatory taking should be
compensated: (1) the economic impact of the government action, (2) the
extent to which the government action interfered with reasonable
investment-backed expectations, and (3) the "character" of the
government action. However, the appendix provides a caveat that it is
not intended to be an exhaustive account of relevant case law, adding
that the consideration of the potential takings of an action as well as
the applicable case law will normally require close consultation
between agency program personnel and agency counsel.
In addition to requiring guidelines, the EO requires OMB to ensure that
the policies of executive branch agencies are consistent with the EO's
principles, criteria, and requirements. For example, for proposed
regulatory actions subject to OMB review, agencies are required to
include a discussion summarizing the potential takings implications of
these actions in their submissions to OMB. The EO also requires OMB to
ensure that all takings awards levied against the agencies are properly
accounted for in agencies' budget submissions.
Despite the existence of the EO, some Members of Congress hold the view
that the enforcement of the just compensation clause with respect to
regulatory takings is inadequate and that statutory measures are needed
to reduce the infringement on private property rights resulting from
government regulation and to ensure compensation in the event of such
infringement. For example, a variety of legislation has been proposed
in Congress over the past 10 years to achieve those goals. In general,
according to a study prepared by the Congressional Budget Office, these
bills included measures that would (1) increase the requirements for
analysis and reporting that federal agencies must meet before making
decisions that could restrict the uses of private property, (2) relax
the procedural requirements that must be satisfied before a federal
court will hear the merits of a takings claim, and (3) require that the
budget of an agency whose action triggers a regulatory compensation
claim be the source of any compensation awarded.[Footnote 12] Although
property rights advocates have supported these legislative initiatives,
others, including some environmental groups, have questioned the need
for legislation and voiced the view that the consideration of the
takings potential of an agency action should not impede the
government's ability to protect the environment or provide other
societal benefits.
Justice Has Not Updated Its 1988 Guidelines, but Has Issued
Supplemental Guidelines for Three of the Four Agencies:
Justice has not updated the general guidelines that it issued pursuant
to the EO in June 1988 for evaluating the risk of and avoiding
regulatory takings, but it has issued supplemental guidelines for three
of the four agencies. Officials at Justice and two of the four agencies
said that changes in takings case law related to Supreme Court
decisions made since 1988 have not been significant enough to warrant a
revision of the general guidelines. Justice officials also noted that
because the guidelines provide a general framework for agencies to
follow in implementing the EO, they do not require frequent revision.
However, Interior and Agriculture officials said that it would be
helpful to their staffs if Justice updated a summary of the key aspects
of relevant case law contained in an appendix to the guidelines to
reflect significant developments in the past 15 years. Similarly, some
law professors and representatives of property rights groups noted that
the body of relevant case law has evolved significantly over the past
15 years, requiring an update to the guidelines. Regarding supplemental
guidelines, Justice has issued these guidelines for three of the four
agencies, but has not done so for Agriculture. According to Justice and
Agriculture officials, Agriculture's supplemental guidelines went
through several drafts in the early 1990s, but were never completed
because the two agencies disagreed on issues such as how to assess the
takings implications of changes in grazing and special use
permits.[Footnote 13] However, Justice and Agriculture officials told
us that Agriculture's compliance with the EO has not been encumbered by
the agency's lack of supplemental guidelines.
Agency Officials and Other Experts Differ on the Need to Update the
Guidelines to Reflect Changes in Takings Case Law:
Agency officials and other experts differ on the need to update the
Attorney General's guidelines to reflect changes in regulatory takings
case law since 1988. Justice officials said the guidelines have not
been updated since 1988 because there have been no fundamental changes
in regulatory takings case law, the EO's criterion for an update. They
said that the guidelines, as written, still cover the main issues in
determining the risk of a regulatory taking and that subsequent Supreme
Court decisions have not substantially changed this analysis. For
example, these officials said the three-factor test outlined in the
1978 Penn Central case remains the most important guidance for
analyzing the potential for a taking that is subject to just
compensation. Justice officials also emphasized that the guidelines
address only a general framework for agencies' evaluations of the
takings implications of their proposed actions and thus are not
intended to be an up-to-date, comprehensive primer on all possible
considerations. The guidelines state that the individual agencies must
still conduct their own evaluations, including necessary legal
research, when assessing the takings potential of a proposed regulation
or action.
Two of the four agencies supported Justice's position that the
guidelines do not need to be updated. Officials at the other two
agencies expressed the view that an appendix to the guidelines that
summarizes key regulatory takings case law should be updated. Regarding
agencies that supported Justice's position, Corps of Engineers staff
indicated that based on their review of relevant Supreme Court
decisions since 1988, there has been no fundamental change in the
criteria for assessing potential takings and thus no update to the
Attorney General's guidelines is necessary. Similarly, EPA staff said
that some of the takings cases decided since 1988 gave the appearance
that the Court was changing the three-pronged test set out in the Penn
Central decision. However, these officials noted that more recent cases
have returned to the Penn Central test, thereby removing the need for
updating the Attorney General's guidelines. In contrast, officials at
Interior and Agriculture said that it would be helpful if Justice
updated the summary of key takings cases contained in an appendix to
the guidelines to reflect significant developments in case law over the
past 15 years.
Other legal experts also said that the Attorney General's guidelines
should be updated, noting that regulatory takings case law has not
remained static over the past 15 years. For example, a Congressional
Research Service attorney who has written extensively on the issue of
regulatory takings said that the guidelines should be updated to
reflect more recent Supreme Court decisions. This attorney noted that
while the EO does not define a "fundamental" change regarding the need
for an update, a number of important cases have been decided since the
guidelines were issued. For example, the attorney pointed to the Lucas
v. South Carolina Coastal Council[Footnote 14] decision of 1992
concerning a state ban on the development of beachfront property. This
attorney noted that this case laid out a categorical exception to the
Penn Central test for regulations that deny a property owner all
economically viable use of the owner's lands. The attorney stated that
Lucas made new law in clarifying when, notwithstanding a denial of all
economically viable use, there is no taking.
Similarly, other legal experts concerned with the protection of private
property rights said that there have been significant developments in
regulatory takings case law since 1988. These experts also cited Lucas
and other cases and said that these cases further develop and/or limit
the application of the three-pronged test outlined in the Penn Central
case. These experts said that the mere passage of time and the sheer
number of regulatory takings cases concluded since 1988 argue for
updating the guidelines.
In addition, one of these experts, a law professor who has written and
lectured on the issue of regulatory takings, said that the level of
specificity with which Justice prepared the original guidelines sets a
precedent. This expert explained that there have been many important
changes in regulatory takings case law since 1988 and that the
guidelines should be updated to reflect these changes given the
detailed manner in which the original guidelines were prepared.
At the same time, another legal expert, an attorney from an
environmental research group, indicated that the guidelines might not
require updating. In general, this attorney said that regulatory
takings cases concluded since 1988 reaffirm the three-pronged test in
the Penn Central case. According to this attorney, the Lucas case was
initially thought to be more significant, but more recently it has been
read and interpreted more narrowly by the courts and therefore does not
constitute a fundamental change in the law.[Footnote 15]
Appendix II provides a summary of Supreme Court regulatory takings
cases decided since 1988 that were cited as being important by
officials we contacted or in the relevant literature and that may be
appropriate for inclusion in the guidelines.
Justice Has Issued Supplemental Guidelines for Three of the Four
Agencies:
The Attorney General has issued supplemental guidelines required by the
EO for three of the four agencies--the Corps of Engineers, EPA, and
Interior.[Footnote 16] Although several attempts were made to draft
supplemental guidelines for Agriculture in the early 1990s, the
Attorney General did not finalize and issue these guidelines because of
unresolved issues.[Footnote 17] However, Justice and Agriculture
officials indicated that the latter agency's lack of supplemental
guidelines has not hindered its compliance with the EO.
The EO directed the Attorney General, in consultation with each
executive branch agency, to issue supplemental guidelines for each
agency as appropriate to the specific obligations of that agency. The
Attorney General's guidelines state that the supplement should
prescribe implementing procedures that will aid the agency in
administering its specific programs under the analytical and procedural
framework presented in the EO and the Attorney General's guidelines,
including the preparation of takings implication assessments.
In general, for certain agency actions, the three agencies'
supplemental guidelines include specific categorical exclusions from
the EO's provisions. For example, Interior's guidelines exclude its
nonlegislative actions to which the affected property owners have
consented; regulations or permits authorizing the taking, possession,
transportation, or use of migratory birds or wildlife; biological
opinions issued pursuant to the Endangered Species Act under certain
conditions; listings of certain species under the Endangered Species
Act; and denial of permits to import species into or export species
from the United States. Similarly, the Corps of Engineers' guidelines
exclude its denials "without prejudice" (i.e., the applicant can apply
again) of Clean Water Act section 404 permits, because these denials
are not considered substantive decisions. In addition, EPA's guidelines
exclude its actions related to the transportation, storage, disposal,
registration, distribution, and use of pesticides; protection of public
water systems and underground sources of drinking water; control of
emissions of air pollutants; disposal of hazardous, solid, and medical
waste; and control of actual or threatened releases of hazardous
substances or pollutants or contaminants.
The Attorney General has not issued supplemental guidelines for
Agriculture because Justice and Agriculture could not reach agreement
on how to assess the potential takings implications of the latter
agency's actions related to grazing and special use permits covering
applicants' use of public lands.[Footnote 18] In this regard,
Agriculture officials said that because the agency issues, modifies, or
denies literally thousands of grazing and special use permits every
year, the agency was concerned about the resource implications of
having to do a takings implication assessment in each case. In
addition, in Agriculture's view, the granting of a permit for the use
of public lands does not convey "property rights" to the permit
recipient, and thus agency actions to condition or deny such a permit
do not constitute a potential taking. Accordingly, Agriculture argued
that these permit actions should be excluded from the EO's requirements
or, if not, that the agency be allowed to do a generic takings
implication assessment that would apply to multiple permits.
Agriculture officials indicated that Justice officials did not agree
with these suggestions, and the matter was never resolved. According to
Agriculture officials, this lack of resolution resulted, in part,
because of ongoing litigation against Agriculture alleging a taking
related to the agency's denial of a grazing permit[Footnote 19] and
changing priorities related to the arrival of a new administration in
1993. Despite Agriculture's lack of supplemental guidelines, agency
officials said that their implementation of the EO and the Attorney
General's guidelines has not been encumbered. Justice officials agreed
with this assessment.
Implementation of Key Provisions by the Four Agencies Has Changed Over
the Life of the Executive Order:
Although the EO's requirements have not been amended or revoked since
1988, the four agencies' implementation of some of its key provisions
has changed over time because of subsequent guidance provided by OMB.
For example, the agencies no longer prepare annual compilations of just
compensation awards or account for these awards in their budget
documents because OMB issued guidance in 1994 advising agencies that
this information is no longer required. According to OMB, this
information is not needed because the number and amount of these awards
is small and the awards are paid from the Department of the Treasury's
Judgment Fund, rather than from the agencies' appropriations. Each of
the four agencies has designated an official--typically the chief
counsel, general counsel, or solicitor--to be responsible for ensuring
the agency's compliance with the EO. Finally, the four agencies told us
that they fully consider the potential takings implications of their
planned regulatory actions, but provided us with limited documentary
evidence to support this claim.
Agencies No Longer Prepare and Report Annual Compilations of Just
Compensation Awards or Include Information on These Awards in Their
Annual Budget Submissions:
The EO requires each executive branch agency to submit annually to OMB
and Justice an itemized compilation report of all just compensation
awards entered against the United States for regulatory takings related
to the agencies' activities. The EO also requires that agencies include
information on these awards in their annual budget submissions.
However, at present, the agencies are not complying with these
provisions because of guidance provided by OMB.
Regarding annual compilations of just compensation awards, OMB first
provided guidance on the form and content of compilations in its
Circular A-11, issued in June 1988.[Footnote 20] However, in a
subsequent version of this circular issued in July 1994, OMB advised
agencies that the submission of this information is no longer
necessary.[Footnote 21] According to OMB officials, this information is
not needed because just compensation awards or settlements related to
regulatory takings cases do not affect agency budgets but are paid from
the Department of the Treasury's Judgment Fund. Furthermore, OMB and
Justice officials said that because the number of just compensation
awards and settlements paid by the federal government annually and the
total dollar amount of these payments are relatively small, the overall
budget implications for the government are small. Hence, these
officials said the annual reporting of just compensation awards was
unnecessary. OMB officials offered similar reasons for not requiring
agencies to include information on just compensation awards in their
annual budget documents.
Although OMB no longer requires agencies to comply with these EO
provisions, the provisions remain in the EO. However, OMB and Justice
officials noted that because the provisions of executive orders are not
the equivalent of statutory requirements, not complying with these
provisions does not have the same implications. Instead, executive
orders are policy tools for the executive branch and are subject to
changing interpretation and emphasis with each new administration.
Furthermore, these officials said that the relative lack of regulatory
takings cases and associated just compensation awards each year is an
indication that the EO has succeeded in raising agencies' awareness of
the need to carefully consider the potential takings implications of
their actions, even if subsequent OMB guidance has excused the agencies
from some of the EO's provisions.
The Four Agencies Have Designated Officials to Ensure the Agencies'
Implementation of the EO:
Each of the four agencies has designated an official to be responsible
for ensuring that the agency's actions comply with the EO's
requirements. In general, the responsible official at each agency is
the agency's senior legal official.[Footnote 22] EPA's and Interior's
supplemental guidelines specifically identify the designated official
by title. Concerning Agriculture and the Corps of Engineers, we did not
find written evidence of this designation, although agency officials
assured us that their senior legal official fulfilled this role.
Justice officials indicated that the designated official at each of the
four agencies is effectively performing the compliance assurance and
liaison functions required by the EO. However, as a practical matter,
staff attorneys, in consultation with relevant program officials,
determine the potential takings implications of an agency's planned
actions.
Agencies Report That They Fully Consider the Takings Implications of
Their Planned Actions but Provided Little Evidence to Support This
Claim:
The four agencies said that they fully consider the potential takings
implications of their planned regulatory actions, but provided us with
limited documentary evidence to support this claim. Officials at each
of the four agencies indicated that the requirements of the EO and the
provisions of the Attorney General's guidelines primarily guide their
consideration of the takings potential of agency actions. Officials at
the Corps of Engineers, EPA, and Interior also cited the Attorney
General's supplemental guidelines for each agency as being important,
particularly for identifying agency-specific exclusions to the EO's
provisions. For example, EPA officials indicated that their agency
performs relatively few takings implication assessments because most of
its actions are excluded from the provisions of the EO, as enumerated
in its guidelines. These officials explained that EPA's program
responsibilities generally do not include land management, and in past
lawsuits alleging regulatory takings that involved EPA, another federal
agency usually took the action giving rise to the takings claim, and
EPA typically served as an advisor or consultant to that agency.
Officials at three of the agencies--Agriculture, the Corps of
Engineers, and Interior--also said that their agency has provided
relevant internal guidance. For example, an Agriculture internal
regulation on rulemaking requires implementation of the EO, including
the preparation of takings implication assessments, as
appropriate.[Footnote 23] Similarly, the Corps' Chief Counsel issued
internal guidance in a memo that addresses legal analyses and takings
implication assessments related to wetland and other permit decisions.
For Interior, the agency's departmental manual requires that it assess
the potential takings implications of planned rulemakings before they
are published in the Federal Register.[Footnote 24]
Agencies provided us a few written examples of takings implication
assessments. Agency officials said that these assessments are not
always documented in writing, and, because of the passage of time,
those assessments that were put in writing may no longer be on file.
They also noted that these assessments are internal, predecisional
documents that generally are not subject to the Freedom of Information
Act or judicial review; thus they are not typically retained in a
central file for a rulemaking or other decision, and therefore they are
difficult to locate. For example, the Corps of Engineer's internal
guidance memo states that takings implication assessments should be
removed from the related administrative file once the agency has
concluded a decision on a permit.
In addition, agency officials also noted that they do not maintain a
master file of all takings implication assessments. For example, in
many cases, attorneys assigned to field offices conduct these
assessments. In these cases, agency officials said that headquarters
staff may not have copies. Nevertheless, with the exception of EPA,
each agency provided us with some examples of written takings
implication assessments.[Footnote 25] These assessments varied in form
and the level of detail included.[Footnote 26]
We also had difficulty independently verifying the four agencies'
preparation of takings implication assessments from the information
contained in Federal Register notices related to their proposed and
final rulemakings. Specifically, 375 notices mentioned the EO in 1989,
1997, and 2002, but relatively few provided an indication as to whether
a takings implication assessment was done. Most of these rules included
only a simple statement that the EO was considered and, in general,
that there were no significant takings implications. In contrast, 50
specified that an assessment of the rule's potential for takings
implications was prepared, and of these, 10 noted that the rule had the
potential for "significant" takings implications.[Footnote 27] Table 1
summarizes this information. In addition, appendix III provides more
detailed information on these rules.
Table 1: Number of Proposed and Final Rules Addressing the EO for Four
Agencies, Calendar Years 1989, 1997, and 2002:
Rules that reference the EO; Agriculture: 8; Corps: 3; EPA: 92;
Interior: 272; Total: 375.
Number of these rules that specify that a takings implication
assessment was prepared; Agriculture: 1; Corps: 0; EPA: 0; Interior:
49; Total: 50.
Number of the assessments that found significant takings implications;
Agriculture: 0; Corps: 0; EPA: 0; Interior: 10; Total: 10.
Source: GAO.
Note: GAO's analysis of relevant Federal Register notices.
[End of table]
Given the limited amount of information available from the agencies or
available from the Federal Register notices we reviewed, we could not
fully assess the extent to which the EO's requirements were fully
considered by the agencies.
Few Awards of Just Compensation Were Made Against the Four Agencies for
Takings Cases Concluded during Fiscal Years 2000 through 2002:
According to Justice data, 44 regulatory takings cases brought against
the four agencies were concluded during fiscal years 2000 through
2002.[Footnote 28] Of these cases, the courts decided in favor of the
plaintiff in 2 cases, resulting in awards of just compensation totaling
about $4.2 million. The Justice Department settled in 12 other cases,
providing total payments of about $32.3 million. Of these 14 cases with
awards or settlements payments, 10 related to actions of Interior, 3 to
actions of the Corps of Engineers, and 1 to an action of Agriculture.
However, the EO's requirements for assessing the takings implications
of planned regulatory actions applied to only 3 of these 14 cases. For
the other 11 cases, the associated regulatory action either predated
the EO's issuance or the matter at hand was otherwise excluded from the
EO's provisions. Based on available evidence, we found that the
relevant agency assessed the takings potential of its action in only 1
of the 3 cases subject to the EO's requirements. As of the end of
fiscal year 2002, Justice reported that 54 additional regulatory
takings cases involving the four agencies were pending resolution.
Fourteen Takings Cases Concluded during Fiscal Years 2000 through 2002
Ended with Awards of Just Compensation or Settlement Payments:
Fourteen of 44 regulatory takings cases involving the four agencies and
concluded during fiscal years 2000 through 2002 resulted in government
payments, according to Justice data. The U.S. Court of Federal Claims
awarded payment of just compensation in 2 cases for a sum totaling
about $4.2 million. Justice settled the remaining 12 cases, for a sum
totaling about $32.3 million.[Footnote 29] In general, the cases
settled were concluded with compromise agreements, including stipulated
dismissals or settlement agreements, reached among the litigants and
approved by the applicable court. In these cases, the agreement usually
provides that the parties have agreed to end the case with a payment to
the plaintiff, but no finding that a taking occurred. For example, in
one case concluded in 2001 that alleged a taking of an oil and gas
lease on federal land managed by Interior's Bureau of Land Management,
the litigants negotiated a stipulated dismissal that provided that a
payment of $3 million be made to the plaintiffs. This payment was to
cover all claims made by the plaintiffs in the case. However, the
stipulated dismissal also provided that the final outcome should not be
construed as an admission of liability by the United States government
for a regulatory taking. In addition, the dismissal required that the
plaintiffs surrender their interests in a portion of the lease. In the
2 cases with award payments, the court concluded that a taking had
occurred and thus it awarded just compensation.
Of these 14 cases with awards or settlement payments, the 10 Interior
cases generally dealt with permits related to mining claims on federal
lands managed by that agency or matters related to granting access on
public lands. For example, one case involving mining claims resulted in
the plaintiff receiving a settlement of almost $4 million. In another
case, involving the denial of preferred access to a lake on land
managed by the agency, the plaintiff received a settlement of $100,000.
The three Corps' cases generally related to its denial or issuance with
conditions of wetlands permits for private property. One of these
cases, concerning the filling of a wetland in Florida, resulted in a
settlement payment of $21 million, accounting for more than half of the
total compensation awards and settlement payments related to the 14
cases. The single Agriculture case concerned the title to mineral
rights in a national forest managed by the agency. The plaintiff
received an award of $353,000 in this case. Table 2 provides a breakout
by agency on the number of cases and the amount of the award or
settlement involved. In addition, appendix IV provides detailed
descriptions of the particulars for each case.
Table 2: Awards of Just Compensation or Settlement Payments for
Concluded Regulatory Takings Cases for the Four Agencies, Fiscal years
2000 through 2002:
(Dollars in thousands).
Agriculture; Number of concluded cases: 1;
Number of cases with payments: 1; Just compensation awards: $353;
Settlements: $0; Total: $353.
Corps; Number of concluded cases: 15; Number of cases with payments: 3; (Dollars in
thousands): Just compensation awards: 0;
Settlements: 22,085; Total: 22,085.
EPA; Number of concluded cases: 2; Number of cases with payments: 0;
Just compensation awards: 0; Settlements: 0; Total: 0.
Interior; Number of concluded cases: 26;
Number of cases with payments: 10; Just compensation awards: 3,851;
Settlements: 10,216; Total: 14,067.
Total; Number of concluded cases: 44; Number of cases with payments:
14; Just compensation awards: 4,204; Settlements: $32,301; Total:
$36,505.
Source: GAO.
Note: GAO's analysis of data provided by the Department of Justice's
Environment and Natural Resources Division.
[End of table]
In addition to the cases concluded during fiscal years 2000 through
2002, Justice reported that an additional 54 regulatory takings cases
involving the four agencies were still pending resolution at the end of
fiscal year 2002.[Footnote 30]
Only Three of the Takings Cases Concluded with Awards of Just
Compensation or Settlement Payments Were Subject to the EO:
Based on information provided by the four agencies, only 3 of the 14
cases with payments were subject to the EO's requirement to conduct a
regulatory takings implication assessment. For the other 11 cases, the
agency action involved either predated the EO's issuance or was
otherwise excluded from the EO's requirements.
Of the three cases subject to the EO's requirements, we found evidence
that a regulatory takings implication assessment had been done in only
one instance.[Footnote 31] In that case, the Corps of Engineers denied
a wetlands permit sought by the plaintiff to fill wetlands on the
plaintiff's property in order to develop a commercial medical center.
The plaintiff brought suit alleging a compensable taking had occurred.
In its takings implication assessment, the Corps had concluded that the
permit denial did not constitute a taking because the applicant was
still free to use the property for other purposes that did not involve
filling the wetland. Therefore, the Corps concluded that the permit
denial did not deprive the plaintiff of all viable economic use of the
property. However, the case ended with a stipulated dismissal and a
payment of $880,000 to the plaintiff.
Agency Comments and Our Evaluation:
We provided a draft of this report to Agriculture, the Corps of
Engineers, EPA, Interior, Justice, and OMB for review and comment. With
the exception of OMB, the agencies provided us with technical
corrections and editorial comments that we have incorporated as
appropriate. OMB indicated that it did not have any comments on the
draft. In addition, two of the agencies, Agriculture and EPA, provided
an overall reaction to the report. Agriculture indicated that the
report provides a thorough and reasonable review of the issues
regarding the EO's implementation and that the agency does not disagree
with the information presented. Similarly, EPA indicated that it
generally agreed with the information provided in the report.
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after the date of this letter. We will send copies of this report to
the Attorney General; the Secretary of Agriculture; the Secretary of
the Army; the Administrator, Environmental Protection Agency; the
Secretary of the Interior; the Director, Office of Management and
Budget; and interested congressional committees. We will make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions concerning this report, I can be reached at
202-512-3841 or mittala@gao.gov. Major contributors to this report are
listed in appendix V.
Sincerely yours,
Signed by:
Anu K. Mittal
Acting Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
The Chairman of the House Subcommittee on the Constitution, Committee
on the Judiciary, asked us to provide information on measures taken by
the Department of Justice to implement certain provisions of Executive
Order 12630 (EO) regarding regulatory takings of private property and
the efforts of four agencies--the Department of Agriculture, U.S. Army
Corps of Engineers, Environmental Protection Agency, and the Department
of the Interior[Footnote 32]--to comply with the requirements of the
EO. Specifically, the Chairman asked us to examine the extent to which
(1) Justice has updated its guidelines to implement the EO to reflect
changes in case law and issued supplemental guidelines for the four
agencies, (2) the four agencies have complied with the specific
provisions of the EO, and (3) awards of just compensation have been
assessed against the four agencies by the courts for regulatory takings
in recent years and, in these cases, whether the agencies assessed the
potential takings implications of their actions before implementing
them.
To report on the extent to which Justice has updated its guidelines and
issued supplemental guidance for the four agencies, we obtained copies
of these documents and interviewed knowledgeable agency officials. At
Justice, these officials included attorneys in the agency's Environment
and Natural Resources Division. At the four agencies, these officials
included attorneys in each agency's legal office (i.e., Office of the
Chief Counsel, General Counsel, or Solicitor). We also discussed these
matters with officials of the Office and Management and Budget's Office
of Information and Regulatory Affairs. In addition, we conducted legal
research and sought the opinions and reviewed the publications of other
relevant individuals at the Congressional Research Service; private
property rights groups, including the Defenders of Property Rights;
environmental groups, including the Georgetown Environmental Law and
Policy Institute; and law schools, as to whether changes in takings
case law since 1988 warrant revisions to the guidelines. In the course
of this work, we identified and summarized key regulatory takings cases
heard before the Supreme Court that have been concluded since 1988. Our
work may not have identified all such cases. Furthermore, we do not
take a position as to whether these cases, individually or
collectively, constitute a fundamental change in the body of regulatory
takings case law that would trigger the need to update Justice's
guidelines.
To determine the extent of the four agencies' compliance with specific
provisions of the EO, we interviewed knowledgeable officials in the
legal offices of these agencies and reviewed the documents they
provided. These documents included written takings implication
assessments of the takings potential of proposed regulatory actions. At
each agency we requested examples of these assessments, although we did
not ask the agencies to conduct an exhaustive search of their records
for these assessments because the agencies generally expressed concerns
about the time and resources such a search could require. In addition,
the agencies indicated that assessments are not always written or, if
written, are not always retained in official files. During the course
of our work, we also asked for copies of written assessments associated
with specific regulatory takings cases that were concluded with either
a settlement or just compensation payment. In addition, we obtained
copies of some additional takings implication assessments from Federal
Register notices.
Furthermore, regarding the agencies' compliance with specific
provisions of the EO, we interviewed Justice and OMB Officials, as
appropriate. We also reviewed OMB's Circular A-11, Preparation and
Submission of Budget Estimates, and discussed with OMB officials how
the guidance in that circular has changed over time and affected the
four agencies' compliance with the EO. In addition, we reviewed 375
Federal Register notices of proposed and final regulatory actions
published in 1989, 1997, and 2002 relating to the four agencies and
referencing the EO to determine if and how the agencies documented
their compliance with the EO. These years were selected judgmentally:
1989 represents the first full year under the EO, 1997 represents an
intermediate year, and 2002 represents the most recent full year. These
years also provide 1 year's experience under each of the past three
presidential administrations.
Finally, regarding awards of just compensation made against the
agencies and, in these cases, whether the agencies had assessed the
takings potential of their actions, we obtained from Justice a list of
all takings cases related to the four agencies that were concluded
during fiscal years 2000 through 2002. We initially sought this type of
data for the full 15-year period since the EO's issuance, but Justice
officials indicated that the full set of data was not readily available
and would be very labor intensive to provide. We then discussed these
cases with relevant officials at the four agencies and analyzed
documents they provided. In particular, we focused on cases in which
just compensation awards or settlement payments were made, and, for
these cases, whether the agencies had assessed the potential takings
implications of their actions before implementing them. We also
discussed the cases with the Clerk of the U.S. Court of Federal Claims
and officials responsible for administering the Department of the
Treasury's Judgment Fund and reviewed documents they provided, in part,
to verify the information on the cases with just compensation awards or
settlement payments.
We conducted our work between October 2002 and September 2003 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Summary of Significant Supreme Court Regulatory Takings
Cases:
This appendix summarizes regulatory takings cases decided by the U.S.
Supreme Court since 1988, the year the EO was issued and the Attorney
General promulgated guidelines related to the EO. These cases were
cited as being important to the body of relevant case law by legal
experts in our interviews with them or in various written products they
prepared, including books, law review articles, reports, papers,
speeches, or testimonies. The cases discussed are not intended to be an
exhaustive list of all such cases. In addition, the appendix discusses
certain cases that were decided prior to 1988 because they are
referenced in some of the more recent cases discussed below or are
cited elsewhere in this report.
Cases Decided After 1988:
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning
Agency, 535 U.S. 302 (2002):
Issue: Were two moratoria imposed by the Lake Tahoe Regional Planning
Agency compensable takings?
Background: The Tahoe Regional Planning Agency issued two ordinances
prohibiting all development on vacant lots within residential
subdivisions in the Lake Tahoe Basin for a period of 32 months. A group
of about 400 individual owners brought suit contending that the
ordinances constituted compensable takings. (Subsequent to the
landowners bringing suit in 1984, development moratoria continued to
prohibit use of many of the parcels; however, the Supreme Court was
only asked to address the 32-month moratoria.):
Decision: The Supreme Court held that the temporary moratorium on
development was not a per se or categorical taking. Instead, the
question of whether the Takings Clause of the Fifth Amendment requires
compensation when the government enacts a temporary regulation denying
a property owner any economic use of his property is to be decided by
applying the factors of Penn Central rather than any categorical rule.
The Court also stated that First English Evangelical Lutheran Church v.
County of Los Angeles (discussed below) concerned the question of
whether compensation is an appropriate remedy for a temporary taking,
not whether or when such a taking has occurred.
Palazzolo v. Rhode Island, 533 U.S. 606 (2001):
Issue: Did state denials rejecting developer's proposals to fill in or
build on all or most of a lot, principally consisting of wetlands,
cause a taking?
Background: A landowner made several applications to the state for a
permit to fill 11 acres of wetlands, build 74 houses, or construct a
private beach club. The state denied these applications, but informed
him that he would be allowed to build at least one house on the
property. The landowner estimated that the limitations imposed by the
state equated to a 94 percent diminution in value of the property and
brought suit, arguing for an extension of the Lucas v. South Carolina
Coastal Council (Lucas) test (discussed below) to his situation.
Decision: The Supreme Court rejected extending Lucas to a situation
where there had been less than a complete denial of the economically
viable use of the property. The Court noted that the ability to build a
house on the property was of significant worth. The Court remanded the
case back to state court for evaluation under the Penn Central test.
The Court also ruled that the acquisition of title after the effective
date of the regulation that was the basis for the regulatory takings
claim did not bar the claim.
City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687
(1999):
Issues: Was it proper to submit the determination of a city's liability
for a regulatory taking to a jury and did the rough-proportionality
standard of Dolan v. City of Tigard (Dolan) (discussed below) apply to
challenges based on denial of development?
Background: Del Monte Dunes and its predecessor landowner sought to
develop an oceanfront parcel of land within the jurisdiction of the
city of Monterey. The city, in a series of repeated rejections, denied
proposals to develop the property, each time imposing more rigorous
demands on the developers. The property owner brought a civil rights
suit against the city alleging, among other things, that the rejections
had effected a regulatory taking. The case was tried before a jury,
which ruled in favor of Del Monte Dunes.
Decision: The Supreme Court ruled that the issues of whether the city's
repeated rejections of the property owner's development proposals
deprived the owner of all economically viable use of the owner's
property and whether the city's decision to reject Del Monte Dunes'
development plan was reasonably related to a legitimate public purpose
were factual questions for a jury to resolve. The Court also stated
that the "rough proportionality" standard of Dolan did not apply. Dolan
dealt with situations in which land-use decisions condition approval of
development on the dedication of property to public use. The Court held
that Dolan did not apply to the present case in which the landowner's
challenge was based on denial of development.
Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997):
Issue: Was a landowner's regulatory taking claim ripe for adjudication?
Background: A landowner claimed that the Tahoe Regional Planning Agency
committed a regulatory taking when it determined that the landowner's
undeveloped residential lot near Lake Tahoe was ineligible for
development. However, the planning agency had indicated that the
landowner was entitled to receive certain "Transferable Development
Rights" that she could sell to other landowners with the agency's
approval. The landowner did not seek those rights but instead brought
an action for just compensation for the agency's alleged taking of her
property. In response, the planning agency claimed that the landowner's
takings claim was not ripe because she failed to apply to transfer her
development rights, and thus, the amount of her takings claim could not
be determined.
Decision: The Supreme Court ruled that the planning agency had made a
final decision in determining that the landowner's property was
ineligible for development, and thus, her claim was ripe for
adjudication. The Court reasoned that the valuation of the landowner's
transfer rights is simply an issue of fact about possible market prices
and went to the issue of how much just compensation was owed, not
whether there had been a taking. The Court discussed Agins v. City of
Tiburon (discussed below), in which it held that because the owners who
were challenging ordinances restricting the number of houses they could
build on their property had not submitted a plan for development of
their property, there was no concrete controversy regarding the
application of the specific zoning provisions.
Dolan v. City of Tigard, 512 U.S. 374 (1994):
Issue: The Court stated that it granted certiorari to resolve a
question left open by its decision in Nollan v. California Coastal
Commission (discussed below): What is the required degree of connection
between the exactions imposed by the city and the projected impacts of
the proposed development?
Background: A landowner applied to the city of Tigard for a permit to
redevelop her plumbing and electrical supply store site. As a condition
of granting the landowner's permit application, the city required the
landowner to dedicate a portion of her property as a public greenway to
minimize flooding and to dedicate an additional portion of her land as
a pedestrian/bicycle pathway to reduce traffic congestion, in
accordance with the city's land use plan. The landowner challenged the
dedication requirements on the grounds that they were not related to
the proposed development and, therefore, constituted an uncompensated
taking of her property under the Fifth Amendment.
Decision: The Supreme Court found that preventing flooding and reducing
traffic congestion were legitimate public purposes and that there was a
nexus between the conditions imposed by the city and these purposes.
The Supreme Court then applied a "rough proportionality" test, stating
that the city has the burden of establishing the constitutionality of
its conditions by making an "individualized determination" that the
conditions in question were proportional to the stated purposes. The
Court ruled that the city's dedication requirements constituted an
uncompensated taking of the landowner's property because the city had
failed to show either the need for a public, as opposed to a private,
greenway or that the additional number of vehicle and bicycle trips
generated by the proposed development was reasonably related to the
city's requirement for a dedicated pedestrian/bicycle path.
Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992):
Issue: Is a government regulation of land that completely eliminates
its economic use a compensable taking?
Background: A landowner bought two residential lots on a South Carolina
barrier island, intending to build single-family homes. Subsequently,
the state enacted a statute that barred him from erecting permanent
habitable structures on the land. The landowner filed suit in state
court, claiming that the law caused a taking of his property without
just compensation. The South Carolina trial court found that the
statute rendered the landowner's parcel valueless, and awarded
compensation. The South Carolina Supreme Court reversed the award of
compensation, holding that, under previous U.S. Supreme Court cases,
when a regulation is designed to prevent "harmful or noxious uses" of
property akin to public nuisances, no compensation was due the
landowner, regardless of the regulation's effect on the property's
value.
Decision: The Court reversed the South Carolina Supreme Court's
decision, ruling that the state court erred in applying the "harmful or
noxious" uses principle to decide this case. The Court stated that
regulations that deny the property owner all "economically viable uses
of his land" constitutes a per se, or categorical, regulatory taking
that requires compensation, without inquiring into the public interest
advanced in support of the restraint. However, the Court also noted
that no taking has occurred if the state law simply makes explicit the
limitations on land ownership already existing as a result of the
background principles of a state's law of property and nuisance. The
Supreme Court remanded the case for the South Carolina court to
determine whether these principles would have prohibited the landowner
from building on his property.
Cases Decided Before 1988:
Nollan v. California Coastal Commission, 483 U.S. 825 (1987):
Issue: Was there a nexus between the condition on the requested permit
and a legitimate state government purpose of protecting the public view
of a beach?
Background: The California Coastal Commission demanded a lateral public
easement across the Nollans' beachfront lot in exchange for a permit to
demolish an existing bungalow and replace it with a three-bedroom
house. The public easement was designed to connect two public beaches
that were separated by the Nollan property. The Coastal Commission had
asserted that the public easement condition was imposed to promote the
legitimate state interest of diminishing the "blockage of the view of
the ocean" caused by construction of the larger house.
Decision: The Court found that there had been a taking, as it found no
"essential nexus" between the government's purpose and its condition on
construction that required the property owners to grant an easement
allowing the public access to their beachfront. The Court ruled that
while the Coastal Commission could have required that the Nollans
provide a viewing spot on their property for passersby, there was no
nexus between visual access to the ocean and a permit condition
requiring lateral public access along the Nollans' beachfront lot.
First English Evangelical Lutheran Church v. County of Los Angeles, 482
U.S. 304 (1987):
Issue: Did an interim ordinance prohibiting construction of any
structures in a flood zone cause a temporary taking of property
requiring compensation?
Background: A church purchased a 21-acre parcel of land located in a
canyon along the banks of a river that is a natural drainage channel
for a watershed area. The church operated a campground on the site.
Flooding destroyed the campground and its buildings. In response to the
flooding of the canyon, the County of Los Angeles adopted an interim
ordinance that prohibited construction in an interim flood protection
area, including the site on which the campground had stood. The church
filed suit, seeking just compensation for loss of the use of the
campground.
Decision: The Court ruled that even if a regulation that has been found
to result in a taking is repealed or invalidated the government must
pay just compensation for the interim period that the regulation was in
effect.
Agins v. City of Tiburon, 447 U.S. 255 (1980):
Issue: Did a zoning ordinance limiting the number of houses that
landowners could build on their property cause a taking?
Background: The landowners acquired 5 acres of unimproved land for
residential development in Tiburon, California. Subsequently, the city
adopted two ordinances that modified existing zoning requirements. The
density restrictions under the ordinances permitted the landowners to
build between one and five single-family residences on their 5-acre
tract. The landowners did not seek approval to develop their land, and
instead brought suit for just compensation. The complaint alleged that
their land had greater value than other suburban property in California
due to the scenic views, and that the ordinances destroyed the value of
their property.
Decision: The Court held that the zoning ordinance on its face did not
cause a taking. The court stated that the ordinance was rationally
related to the legitimate public goal of open-space preservation, the
ordinance benefits property owners as well as the public, and the
landowners may still be able to build up to five houses on a lot. The
Court also found that because the landowners had not submitted a plan
for development of their property, there was no concrete controversy
regarding the application of the specific zoning provisions.
Penn Central Transportation Co. v. City of New York, 438 U.S. 104
(1978):
Issue: Did the city's use of a historic preservation ordinance to block
construction of an office tower atop a designated historic landmark
cause a taking?
Background: The Landmark Preservation Commission denied Penn Central
permission to build a multistory office building above Grand Central
Station in New York City. Penn Central alleged the regulation took its
property.
Decision: The Court ruled that there had been no taking of property. In
evaluating the case, the Court set forth a three-pronged test for
determining whether a government regulation has resulted in a taking:
(1) the character of the governmental actions; (2) the economic impact
of the action on the property owner; and (3) the extent to which the
regulation has interfered with the distinct, investment-backed
expectations of the owner.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922):
Issue: Did a state law barring coal mining that might cause subsidence
of overlying land result in a taking of private property in a case
where the mineral estate owner is different from the surface estate
owner?
Background: A coal company conveyed the surface ownership of its
property and retained the right to remove coal from the subsurface.
Subsequently, a state law was enacted, forbidding the mining of coal in
such a way as to cause the subsidence of housing in situations where
the surface and subsurface ownership belong to different parties. As a
result, the coal company was unable to exercise its right to remove the
coal.
Decision: The Court held that a taking occurred. The Court stated
"while property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking." The Court reasoned
that the extent of the taking under the state law--abolishing the right
to mine coal, which it deemed "a very valuable estate"--was great.
Moreover, because the state law applied only where surface and
subsurface land is in different ownership, it benefits a narrow private
interest rather than a broad public one.
[End of section]
Appendix III: Proposed and Final Rules That Address the EO, for the Four
Agencies, Calendar Years 1989, 1997, and 2002:
Table 3: Proposed and Final Rules That Address the EO, for the Four
Agencies, Calendar Years 1989, 1997, and 2002:
Agency: Agriculture;
Year: 1989; Rules that reference the EO: 1; Number
of these rules that specify a takings implication assessment was
prepared: 0; Number of the assessments that found significant takings
potential: 0.
Year: Agency: 1997; Rules that reference the EO: Agency: 5; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 1; Number of the assessments that found significant takings
potential: Agency: 0.
Year: Agency: 2002; Rules that reference the EO: Agency: 2; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 0; Number of the assessments that found significant takings
potential: Agency: 0.
Sub-total: Corps: Rules that reference the EO:
8; Number of these rules that specify a takings implication assessment
was prepared: 1; Number of the assessments that found
significant takings potential: 0.
Agency: Corps;
Year: 1989; Rules that reference the EO: 1; Number of
these rules that specify a takings implication assessment was prepared:
0; Number of the assessments that found significant takings potential:
0.
Year: Agency: 1997; Rules that reference the EO: Agency: 2; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 0; Number of the assessments that found significant takings
potential: Agency: 0.
Year: Agency: 2002; Rules that reference the EO: Agency: 0; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 0; Number of the assessments that found significant takings
potential: Agency: 0.
Sub-total; Rules that reference the EO: 3;
Number of these rules that specify a takings implication assessment was
prepared: 0; Number of the assessments that found
significant takings potential: 0.
Agency: EPA;
Year: 1989; Rules that reference the EO: 0; Number of
these rules that specify a takings implication assessment was prepared:
0; Number of the assessments that found significant takings potential:
0.
Year: Agency: 1997; Rules that reference the EO: Agency: 0; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 0; Number of the assessments that found significant takings
potential: Agency: 0.
Year: Agency: 2002; Rules that reference the EO: Agency: 92; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 0; Number of the assessments that found significant takings
potential: Agency: 0.
Sub-total; Rules that reference the EO:
92; Number of these rules that specify a takings
implication assessment was prepared: 0; Number of the
assessments that found significant takings potential:
0.
Agency: Interior;
Year: 1989; Rules that reference the EO: 15; Number
of these rules that specify a takings implication assessment was
prepared: 0; Number of the assessments that found significant takings
potential: 0.
Year: 1997; Rules that reference the EO: Agency: 62; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 2; Number of the assessments that found significant takings
potential: Agency: 1.
Year: 2002; Rules that reference the EO: Agency: 195; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 47; Number of the assessments that found significant takings
potential: Agency: 9.
Year: Sub-total; Rules that reference the EO:
272; Number of these rules that specify a takings implication
assessment was prepared: 49; Number of the assessments
that found significant takings potential: 10.
Agency: Total; Year: 1989; Rules that reference the EO: 17; Number of
these rules that specify a takings implication assessment was prepared:
0; Number of the assessments that found significant takings potential:
0.
Year: 1997; Rules that reference the EO: Agency: 69; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 3; Number of the assessments that found significant takings
potential: Agency: 1.
Year: 2002; Rules that reference the EO: Agency: 289; Number of
these rules that specify a takings implication assessment was prepared:
Agency: 47; Number of the assessments that found significant takings
potential: Agency: 9.
Total; Rules that reference the EO: 375; Number of these rules that specify a takings
implication assessment was prepared: 50; Number of
the assessments that found significant takings potential: 10.
Source: GAO.
Notes: GAO's analysis of related Federal Register notices.
Regarding EPA rules mentioning the EO in 2002, EPA officials attributed
the significant increase seen that year to the widespread use of a
template that was developed for use in applicable notices of proposed
and final rulemakings. This template states that EPA had complied with
the EO and the Attorney General's supplemental guidelines. Interior
officials were unable to explain the significant increase in the number
of Interior rules mentioning the EO in 2002.
[End of table]
[End of section]
Appendix IV: Regulatory Takings Cases Concluded during Fiscal Years 2000
through 2002 Related to Actions of the Four Agencies:
Table 4: Regulatory Takings Cases Concluded with Payments, for the Four
Agencies, Fiscal Years 2000 through 2002:
Fiscal year and case names: 2000:
James Koconis & Ted G. Koconis v.
United States; Court name and case number: Court of Federal
Claims 94-517L; Agency: Corps of Engineers; Payment type and
amounts: Settlement; $880,000; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act; Was the action subject to the Executive Order 12630?:
Year: Yes; Was a takings implication assessment done by agency?:
Yes.
Fiscal year and case names: Speerex Ltd., et al. v. United
States; Court name and case number: Court of Federal Claims 97-
351L; Agency: Interior; Payment type and amounts:
Settlement; $110,000; Agency action related to the alleged taking:
Year: Anticipated rejection of drilling permits on oil and gas leases;
Was the action subject to the Executive Order 12630?: No--
plaintiff made claim before agency action; Was a takings implication
assessment done by agency?: No.
Fiscal year and case names: W.C. Bell and Davis O. Heniford v.
United States; Court name and case number: Court of Federal
Claims 97-857L; Agency: Corps of Engineers; Payment type and
amounts: Settlement $205,000; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act; Was the action subject to the Executive Order 12630?:
Year: No--excluded under supplemental guidelines; Was a takings
implication assessment done by agency?: No.
Fiscal year and case names: Lake Pleasant Group v. United States;
Court name and case number: Court of Federal Claims 92-848L;
Court of Appeals, Federal Circuit 95-5061; Agency: Interior;
Payment type and amounts: Settlement; $100,000; Agency action
related to the alleged taking: Denial of plaintiff's preferred
access to lake; Was the action subject to the Executive Order 12630?:
Year: No--predated EO; Was a takings implication assessment done by
agency?: No.
2001:
Fiscal year and case names: Del-Rio Drilling Programs, Inc., et
al. v. United States; Court name and case number: Court of
Federal Claims 569-86L (37 Fed. Cl. 157) rev'd, Court of Appeals,
Federal Circuit 97-5055 (146 F.3d 1358); Agency: Interior;
Payment type and amounts: Settlement $300,000; Litigation Costs
$591; Agency action related to the alleged taking: Bureau of
Indian Affairs' failure to grant surface use for oil and gas leases on
Indian lands due to the tribe's lack of consent; Was the action subject
to the Executive Order 12630?: No--predated EO; Was a takings
implication assessment done by agency?: No.
Fiscal year and case names: Arnold E. Howard, et al. v. United
States; Court name and case number: U.S. District Court, District
of Alaska F98-0006CV (JKS); Agency: Interior; Payment type and
amounts: Settlement $838,000; Agency action related to the
alleged taking: (1) Legislative taking of mining claims under §
120 of Pub. L. No. 105-83 or alternatively (2) taking under
implementation of Mining in the Parks Act; Was the action subject to
the Executive Order 12630?: Either (1) No, legislative taking not
covered by EO or; (2) No, plaintiff made claim before final agency
action; Was a takings implication assessment done by agency?: No.
Fiscal year and case names: Devon Energy Corporation, et al. v.
United States; Court name and case number: Court of Federal
Claims 98-665L; Agency: Interior; Payment type and amounts:
Attorney fees $380,000; Agency action related to the alleged taking:
Year: Denial of applications to permit drilling; Was the action subject
to the Executive Order 12630?: Yes[A]; Was a takings implication
assessment done by agency?: No.
Fiscal year and case names: Florida Rock Industries, Inc. v.
United States; Court name and case number: Court of Federal
Claims 266-82L; Agency: Corps of Engineers; Payment type and
amounts: Settlement $21,000,000; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act; Was the action subject to the Executive Order 12630?:
Year: No--predated EO; Was a takings implication assessment done by
agency?: No.
Fiscal year and case names: Shirl Pettro v. United States; Court
name and case number: Court of Federal Claims 96-651L (47 Fed.
Cl. 136); Agency: Agriculture; Payment type and amounts:
Court Order of Just Compensation $74,479; Attorney fees $250,294;
Litigation costs $28,217; Agency action related to the alleged taking:
Year: Temporary denial of access to minerals from national forest due
to dispute over title to mineral rights; Was the action subject to the
Executive Order 12630?: No--legal action not within the scope of
the EO; Was a takings implication assessment done by agency?: No.
Fiscal year and case names: W.A. Moncrief, Jr. et al. v. United
States; Court name and case number: Court of Federal Claims 97-
565L; Agency: Interior; Payment type and amounts:
Settlement $3,000,000; Agency action related to the alleged taking:
Year: Anticipated and actual denial of drilling permits to protect
Lechuguilla Cave; Was the action subject to the Executive Order 12630?:
Year: Yes; Was a takings implication assessment done by agency?:
No.
2002:
Fiscal year and case names: Kantishna Mining Company, et al. v.
Bruce Babbitt, et al.; Court name and case number: U.S. District
Court, District of Alaska 98-00007CV (JKS); Court of Appeals, Ninth
Circuit, 01-35201, 01-35248; Agency: Interior; Payment type and
amounts: Settlement; $872,000; Interest; $528,000; Agency action
related to the alleged taking: (1) Legislative taking of mining
claims under § 120 of Pub. L. No. 105-83 or alternatively (2) taking
under implementation of Mining in the Parks Act; Was the action subject
to the Executive Order 12630?: Either (1) No, legislative taking
not covered by EO or; (2) No, plaintiff made claim before final agency
action; Was a takings implication assessment done by agency?: No.
Fiscal year and case names: John W. Taylor v. United States;
Court name and case number: Court of Federal Claims 99-131L;
Agency: Interior; Payment type and amounts: Settlement;
$175,000; Agency action related to the alleged taking: Delay in
issuing an incidental take permit under § 10 of the Endangered Species
Act; Was the action subject to the Executive Order 12630?: No--
excluded under supplemental guidelines[B]; Was a takings implication
assessment done by agency?: No.
Fiscal year and case names: Board of County Supervisors of Prince
William County, Virginia v. United States; Court name and case number:
Year: Court of Federal Claims 90-364L (47 Fed. Cl. 714); aff'd, Court
of Appeals, Federal Circuit (276 F.3d 1359); Agency: Interior;
Payment type and amounts: Court Order of Just Compensation
$1,153,578; Interest $2,697,534; Agency action related to the alleged
taking: Legislative taking of land under Pub. L. No. 100-647 to
add land to the Manassas National Battlefield Park; Was the action
subject to the Executive Order 12630?: No--excluded for eminent
domain; Was a takings implication assessment done by agency?: No.
Fiscal year and case names: Richard P. Cook, et al. v. United
States; Court name and case number: Court of Federal Claims 94-
344L; Agency: Interior; Payment type and amounts:
Settlement $3,911,838; Agency action related to the alleged taking:
Year: Legislative taking of rights to a patent for mining claims with
the establishment of the Jemez National Recreation Area by 16 U.S.C. §
460jjj; Was the action subject to the Executive Order 12630?: No-
-legislative taking not covered by EO; Was a takings implication
assessment done by agency?: No.
Fiscal year and case names: Totals; Court name and case number:
Year: 14 Cases; Agency: [Empty]; Payment type and amounts:
$36,504,531; Agency action related to the alleged taking: ; Was
the action subject to the Executive Order 12630?: ; Was a
takings implication assessment done by agency?: .
Source: GAO.
Note: GAO analysis of data provided by the Department of Justice's
Environment and Natural Resources Division, counsel or solicitor staff
at the four agencies and from court documents.
[A] While Interior initially reported the EO did not apply to this
case, further examination revealed that the action neither predated nor
was excluded from the EO. Interior commented that while a formal
takings implication assessment was not prepared in this case, there was
a "good faith" discussion of its takings implications within the
department.
[B] While the supplemental guidelines for Interior provide an exclusion
for the issuance of the permit, the EO provides that the duration of
the process shall be "kept to the minimum necessary." GAO makes no
judgment on whether there was undue delay in this case.
[End of table]
Table 5: Regulatory Takings Cases Concluded Without Payments, for the
Four Agencies, Fiscal Years 2000 through 2002:
2000:
Fiscal year and case names: Northwest Explorations Joint Venture
v. Bruce Babbitt; Court name and case number: U.S. District
Court, District of Alaska 99-0643CV; Agency: Interior; Agency
action related to the alleged taking: Taking of mining claims
under Mining in the Parks Act.
Fiscal year and case names: Boise Cascade Corporation v. United
States; Court name and case number: Court of Federal Claims 98-
634L; Agency: Interior; Agency action related to the alleged
taking: District Court injunction against logging spotted owl
habitat without an Endangered Species Act permit.
Fiscal year and case names: Ned Majors v. Dial Companies, Inc.;
Court name and case number: Court of Federal Claims 98-0873;
Agency: Corps of Engineers; Agency action related to the alleged
taking: Decision on a wetlands permit under § 404 of the Clean
Water Act.
Fiscal year and case names: David Clark, et al. v. United States;
Court name and case number: U.S. District Court, District of
Alaska F-99-0045CV; Agency: Interior; Agency action related to
the alleged taking: (1) Legislative taking of mining claims under
§ 120 of Pub. L. No. 105-83 or alternatively (2) taking under
implementation of Mining in the Parks Act.
Fiscal year and case names: Shickrey Anton v. United States;
Court name and case number: Court of Federal Claims 93-447;
Agency: Corps of Engineers; Agency action related to the alleged
taking: Decision on a wetlands permit under § 404 of the Clean
Water Act.
Fiscal year and case names: Lloyd A. Good Jr. v. United States;
Court name and case number: Court of Federal Claims 94-442L (39
Fed. Cl. 81); aff'd, Court of Appeals, Federal Circuit 97-5138 (189
F.3d 1355); cert. denied, U.S. Supreme Court 99-881 (529 U.S. 1053);
Agency: Corps of Engineers; Agency action related to the alleged
taking: Decision on permits under § 10 of the Rivers and Harbors
Act and § 404 of the Clean Water Act.
Fiscal year and case names: Broadwater Farms Joint Venture v.
United States; Court name and case number: Court of Federal
Claims 94-1041L (45 Fed. Cl. 154); Agency: Corps of Engineers;
Agency action related to the alleged taking: Decision on a
wetlands permit under § 404 of the Clean Water Act.
Fiscal year and case names: Lakewood Associates v. United States;
Court name and case number: Court of Federal Claims 97-303L (45
Fed. Cl. 320); Agency: Corps of Engineers; Agency action related
to the alleged taking: Decision on a wetlands permit under § 404
of the Clean Water Act.
Fiscal year and case names: R & Y Inc. and Josef Ressel v. United
States; Court name and case number: Court of Federal Claims 97-
484L; Agency: Corps of Engineers; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act.
Fiscal year and case names: Forest Properties, Inc. v. United
States; Court name and case number: Court of Federal Claims 92-
851L; Agency: Corps of Engineers; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act.
Fiscal year and case names: William J. Smereka, et al. v. Lt.
Colonel Thomas C. Haid; Court name and case number: U.S. District
Court, Eastern District of Michigan 97-070151; Agency: Corps of
Engineers; Agency action related to the alleged taking: Decision
on a wetlands permit under § 404 of the Clean Water Act.
Fiscal year and case names: S&S Development, et al. v. Army Corps
of Engineers; Court name and case number: U.S. District Court,
District of Alaska 98-006; Agency: Corps of Engineers; Agency
action related to the alleged taking: Decision on a wetlands
permit under § 404 of the Clean Water Act.
2001:
Fiscal year and case names: Kenneth Battley v. United States;
Court name and case number: U.S. District Court, District of
Alaska A-99-636CV; Agency: Interior; Agency action related to the
alleged taking: (1) Legislative taking of mining claims under §
120 of Pub. L. No. 105-83 or alternatively (2) taking under
implementation of Mining in the Parks Act.
Fiscal year and case names: James C. Pendleton, et al. v. United
States; Court name and case number: Court of Federal Claims 98-
161L (1 Fed. Cl. 480); Agency: Interior; Agency action related to
the alleged taking: Action by the Office of Surface Mining,
pursuant to the Surface Mining Control and Reclamation Act of 1977.
Fiscal year and case names: James S. Sette v. United States;
Court name and case number: Court of Federal Claims 98-157C;
Agency: Interior; Agency action related to the alleged taking:
Year: Unspecified agency action caused taking of seven unpatented
mining claims.
Fiscal year and case names: Ultimate Sportsbar, Inc. v. United
States; Court name and case number: Court of Federal Claims 98-
0160L; Agency: EPA; Agency action related to the alleged taking:
Year: EPA's action to clean up hazardous materials under Comprehensive
Environmental Response, Compensation and Liability Act and Toxic
Substances Control Act caused the plaintiff to lose its lease.
Fiscal year and case names: Barry Bradshaw, et al. v. United
States; Court name and case number: Court of Federal Claims 98-
0708; Agency: Interior; Agency action related to the alleged
taking: Cancellation and/or termination of Bureau of Land
Management and Forest Service grazing permits.
Fiscal year and case names: M. Alfieri Co., Inc. v. United
States; Court name and case number: Court of Federal Claims 99-
0759; Agency: EPA; Agency action related to the alleged taking:
Year: State of New Jersey's denial of a permit under § 404 of the Clean
Water Act pursuant to the delegation of regulatory authority by EPA to
the state.
Fiscal year and case names: Michael F. Beirne, et al. v. United
States; Court name and case number: Court of Federal Claims 00-
353; Agency: Corps of Engineers; Agency action related to the
alleged taking: Decision on a wetlands permit under § 404 of the
Clean Water Act.
Fiscal year and case names: Joseph M. Foley, et al. v. United
States; Court name and case number: Court of Federal Claims 00-
553C; Agency: Interior; Agency action related to the alleged
taking: Bureau of Land Management invalidated six unpatented
mining claims.
Fiscal year and case names: Eldridge C. Daniel v. United States;
Court name and case number: Court of Federal Claims 97-0397;
Agency: Corps of Engineers; Agency action related to the alleged
taking: Decision on a wetlands permit under § 404 of the Clean
Water Act.
Fiscal year and case names: Karuk Tribe of California v. United
States[A]; Court name and case number: Court of Federal Claims
90-3993; (41 Fed. Cl. 468); aff'd, Court of Appeals, Federal Circuit
(209 F.3d 1366); cert. denied, U.S. Supreme Court (532 U.S. 941);
Agency: Interior; Agency action related to the alleged taking:
Year: Legislation caused taking of reservation lands.
Fiscal year and case names: Gregory T. Banner, et al. v. United
States; Court name and case number: Court of Federal Claims 96-
708L; aff'd, Court of Appeals, Federal Circuit 00-5006 (238 F.3d 1348);
Agency: Interior ; Agency action related to the alleged taking:
Year: Legislation, the Seneca Nation Land Claims Settlement Act, 25
U.S.C. § 1774, prevented renewal of their lease and caused a taking.
2002:
Fiscal year and case names: Larry D. Compton v. Bruce Babbitt;
Court name and case number: U.S. District Court, District of
Alaska A-99-637CV; Agency: Interior; Agency action related to the
alleged taking: (1) Legislative taking of mining claims under §
120 of Pub. L. No. 105-83 or alternatively (2) taking under
implementation of Mining in the Parks Act.
Fiscal year and case names: Northwest Exploration, Inc. v. United
States; Court name and case number: U.S. District Court, District
of Alaska A-99-654CV; Agency: Interior; Agency action related to
the alleged taking: Taking of mining claims by Mining in the
Parks Act.
Fiscal year and case names: Pax Christi Memorial Gardens, et al.
v. United States; Court name and case number: Court of Federal
Claims 00-717; Agency: Corps of Engineers; Agency action related
to the alleged taking: Decision on a wetlands permit under § 404
of the Clean Water Act.
Fiscal year and case names: Last Chance Mining Co., Inc. v.
United States; Court name and case number: Court of Federal
Claims 94-402L; Agency: Interior; Agency action related to the
alleged taking: Application of federal mining laws allegedly
caused taking of 300 unpatented mining claims.
Fiscal year and case names: Kingman Reef Atoll Investments
L.L.C., et al. v. United States; Court name and case number:
Court of Federal Claims 02-140L; Agency: Interior; Agency action
related to the alleged taking: The designation of Kingman Reef as
a national wildlife refuge after transfer from the U.S. Navy.
Fiscal year and case names: Rith Energy, Inc. v. United States;
Court name and case number: Court of Federal Claims 92-480L (44
Fed. Cl. 108); aff'd, Court of Appeals, Federal Circuit (247 F.3d
1355); cert. denied, U.S. Supreme Court (536 U.S. 958); Agency:
Interior; Agency action related to the alleged taking: Suspension
of mining permit and denial of a permit revision under the Surface
Mining Control and Reclamation Act of 1977.
Fiscal year and case names: Eastern Minerals International Inc.,
et al. v. United States; Court name and case number: Court of
Federal Claims 94-1098; rev'd, Court of Appeals, Federal Circuit (271
F.3d 1090); cert. denied, U.S. Supreme Court (535 U.S. 1077); Agency:
Year: Interior; Agency action related to the alleged taking: 2000:
Delay in processing a coal mining permit application under the Surface
Mining Control and Reclamation Act of 1977.
Source: GAO.
Note: GAO's presentation of data provided by the Department of
Justice's Environment and Natural Resources Division, by counsel or
solicitor staff at the agencies, and from court documents.
[A] In this case, litigation costs of $10,169 were awarded to the
United States.
[End of table]
[End of section]
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Anu K. Mittal (202) 512-3841 James R. Jones, Jr. (202) 512-9839:
Acknowledgments:
In addition to the individuals named above, Doreen S. Feldman, James K.
McDowell, Jonathan S. McMurray, John P. Scott, and Timothy W. Wexler
made key contributions to this report. Kathleen A. Gilhooly and Lisa M.
Wilson also made important contributions.
(360275):
FOOTNOTES
[1] 53 Fed. Reg. 8859 (Mar. 18, 1988).
[2] Lawsuits seeking just compensation of $10,000 or less may be
brought in a U.S. District Court.
[3] The Department of Justice represents the U.S. government in
litigation, unless otherwise authorized by law. 28 U.S.C. § 516.
[4] The Judgment Fund, administered by the Department of the Treasury,
is a permanent, indefinite appropriation. The Fund is available for
payment of final judgments, awards, or settlements related to
litigation involving federal agencies, where payment is not otherwise
provided for. 31 U.S.C. § 1304. Because agency appropriations generally
are not available for payments of just compensation awards and
settlements, these payments generally are made from the Judgment Fund.
[5] Regarding the small number of regulatory takings lawsuits filed
relative to the many regulatory actions taken by agencies each year,
the experience of the Corps of Engineers is illustrative. Specifically,
this agency reported that it approved 99.98 percent of the 264,447
permit applications submitted to it by landowners during fiscal years
2000 through 2002. Of the 41 permits denied with prejudice (meaning the
applicant could not resubmit) during these years, only a fraction
resulted in regulatory takings lawsuits. In general, these permit
applications were made under §10 of the Rivers and Harbors Act or §404
of the Clean Water Act. The applications generally related to
landowners' plans to develop or alter a wetland or engage in other
activities that may affect the waters of the United States.
[6] We refer to these agencies as the "four agencies" in subsequent
references.
[7] The use of "condemnation" in this case does not mean the property
is unfit for use. Instead, it refers to the government's action to
declare the property convertible to public use through the exercise of
its power of eminent domain.
[8] In general, an inverse taking has the effect of an affirmative
exercise of the power of eminent domain. An inverse taking is also
referred to as inverse condemnation.
[9] Takings of property effected by government actions may occur in a
number of ways. Examples of such actions include: (1) a government
regulation restricting development, (2) a government requirement that a
landowner provide the public access to private property (such as by
providing public access to a private beachfront), and (3) an agency's
denial of a mineral drilling permit.
[10] Attorney General's Guidelines for the Evaluation of Risk and
Avoidance of Unanticipated Takings, June 30, 1988.
[11] 438 U.S. 104 (1978).
[12] Regulatory Takings And Proposals for Change, Congressional Budget
Office, December 1998.
[13] A grazing permit provides official written permission to a farmer
or rancher to graze a specific number, kind, and class of livestock for
a specified time period on defined federal rangeland, such as
rangelands managed by Agriculture's Forest Service. A special use
permit is a written instrument that grants rights or privileges of
occupancy and use subject to specified terms and conditions on National
Forest land. These permits are granted for a variety of recreational
and commercial purposes. Recreational purposes include hunting,
fishing, rafting, lodging services, the use of lots for vacation
houses, and a variety of special group events. Commercial purposes
include ski area concessions, the use of mountaintops for radio and TV
broadcasting, rights-of-way for pipelines and power lines, and
industrial activities, such as timber processing or mineral
exploration.
[14] 505 U.S. 1003 (1992).
[15] See, e.g., Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Regional Planning Agency, 535 U.S. 302 (2002) and Palazzolo v. Rhode
Island, 533 U.S. 606 (2001).
[16] Justice issued supplemental guidelines for the Corps of Engineers
on January 23, 1989; for Interior on March 29, 1989; and for EPA on
January 14, 1993. According to Justice and agency officials, these
guidelines have not been updated since their original issuance.
[17] An Agriculture official indicated that negotiations with Justice
on a draft of their guidelines were never concluded after the change in
administrations in 1993.
[18] Justice and Agriculture officials also indicated that other issues
may have been unresolved, but because of the passage of time (nearly 10
years) and the purging of older files, they could not identify other
possible reasons why Agriculture's guidelines were not completed.
[19] See Hage v. United States, 51 Fed. Cl. 570 (2002). In Hage, ranch
owners brought suit against the United States, alleging that the
suspension and cancellation of their permits to graze livestock on
federal land constituted a taking of their property interests,
including grazing rights and water usage rights, without just
compensation. The court held that the plaintiffs did not have property
rights in the grazing permits, stating that grazing permits are
licenses, rather than rights. However, the court also stated that, if
by revoking the grazing permits, Interior's Bureau of Land Management
and Agriculture's Forest Service prevented the plaintiffs from
accessing and using their water rights, the agencies may have taken
these rights. The court has not yet resolved the issue of whether the
water rights were taken by the government.
[20] Circular No. A-11: Preparation and Submission of Budget Estimates,
issued by the Director, Office of Management and Budget, June 17, 1988.
This circular, updated annually, provides executive branch agencies
with guidance on the preparation of their budgets and related
justifications.
[21] In general, the agencies had difficulty in documenting their
submission of compilations reports for the period 1989 through 1993
because of the passage of time. For example, Agriculture was able to
provide its report for fiscal year 1990 only, and Interior was able to
provide reports for fiscal years 1989, 1990, and 1992. EPA and the
Corps of Engineers were not able to provide copies of any of their
reports. EPA officials recalled submitting the reports for the first
few years after the EO was implemented. Corps officials could not
determine if reports had been done for years in which just compensation
awards were made. In addition, OMB and Justice, the recipients of these
reports, indicated that they had not retained copies.
[22] At Agriculture and EPA, the designated official is the General
Counsel. At the Corps of Engineers, this official is the Chief Counsel.
At Interior, the designated official is the Solicitor.
[23] Regulatory Decisionmaking Requirements, Departmental Regulation
1512-1, U.S. Department of Agriculture, Mar. 14, 1997.
[24] Departmental Manual, Part 318, Federal Register Documents, U.S.
Department of the Interior, May 14, 1998.
[25] EPA officials indicated that they did not have any written
examples of takings implication assessments prepared by the agency
largely because the agency's actions are generally excluded from the
EO's requirements. Interior officials indicated that they probably
could have provided more examples of written takings implication
assessments, but finding them would have required a significant
investment of their resources and time. For example, they said they
would have had to search files in a number of headquarters and field
offices. In addition, Corps officials emphasized that they prepare very
few takings implication assessments because these assessments are only
needed in cases where the agency plans to deny a permit application,
and, in general, the Corps denies very few of these applications.
[26] Although takings implication assessments are typically considered
internal documents, Interior has chosen to publish some of its written
assessments in the Federal Register or make others publicly available.
For example, its takings implication assessments of regulatory actions
related to use of valid existing rights to conduct surface coal mining
can be found in a proposed rule at 62 Fed. Reg. 4836 (Jan. 31, 1997)
and a final rule at 64 Fed. Reg. 70765 (Dec. 17, 1999). In addition,
instructions for obtaining the takings implication assessments related
to designation of critical habitat can be found in proposed rules at 67
Fed. Reg. 39206 (June 6, 2002) and 67 Fed. Reg. 55064 (Aug. 27, 2002).
[27] According to the Attorney General's guidelines, a significant
takings implication exists when the decision maker concludes that the
proposed action poses a "substantial risk" that a taking of private
property may result or insufficient information is available to assess
whether the action has significant takings consequences. In publishing
a rule, the agency is to state the conclusions of its takings
assessment if any significant implications are anticipated.
[28] The data provided by Justice referred to these 44 cases as
regulatory takings cases. According to information provided by
Interior, at least 9 of the cases, including 4 with award or settlement
payments, were alleged by the property owner to be "legislative"
takings. In legislative takings cases, the potential taking results
directly from an act of Congress. One of these 9 cases (Board of County
Supervisors of Prince William County, Virginia v. United States)
involved the government's taking title to property by exercising its
power of eminent domain.
[29] In addition to the financial remuneration made to the plaintiff,
the award and settlement payment totals may include compensation for
attorney fees, interest, and other litigation costs.
[30] Of the 54 pending cases, 30 involved Interior, 14 involved the
Corps of Engineers, 7 involved Agriculture, and 3 involved EPA.
[31] Two of these three cases related to Interior's actions. In
providing us written information on one of these cases, Interior
initially indicated that the EO did not apply to the case (Devon Energy
Corporation, et al. v. United States) because the agency did not
"reasonably anticipate" that its action would result in takings. As a
result, Interior did not perform a takings implication assessment. In
commenting on a draft of this report, Interior stated that, in
hindsight, it appears that the EO may have applied to this action.
While a formal takings implication assessment was not prepared in this
case, Interior stated there was a "good faith" discussion of its
takings implications within the department. Accordingly, we have
included this case among those subject to the EO's requirements. In the
other case (W.A. Moncrief, Jr. et al. v. United States), although
Interior initially said that the EO's requirements applied, it was
unable to provide evidence that a takings implication assessment was
done. However, Interior officials noted that the record of decision for
the related environmental impact statement discussed the legislative
requirements for negotiating takings compensation for the complete or
partial cancellation of a federal mineral lease with the leaseholder.
In addition, in commenting on a draft of this report, Interior stated
that since Interior's current management did not make the decision on
whether the action was subject to the EO, the agency was unable to
unequivocally state that the EO applied.
[32] We refer to these agencies as the "four agencies" in subsequent
references.
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