What is the "relevant parcel" in a regulatory takings case?


In Lost Tree Village Corporation v. United States, the Federal Circuit addressed this question head on, concluding, to the surprise of no one, that the answer will largely depend upon the unique facts in each case. 

The question arose because the Army Corps of Engineers denied Lost Tree Village Corporation (Lost Tree), a commercial and real estate developer, a permit to fill wetlands on a 4.99 acre plat.  The 4.99 acre plat (Plat 57), along with one other plat (Plat 55) and some scattered wetlands, were holdovers from various properties totaling approximately 1,300 acres that Lost Tree purchased and developed from 1969 through the mid-1990s.  Although Lost Tree constructed a number of residential homes around Plat 57, it was not until 2002 that Lost Tree first considered developing the small plat.  The stated impetus for this development was the receipt of mitigation credits that accrued as a result of improvements made by a neighboring landowner.  Shortly after receiving these mitigation credits, Lost Tree obtained all state and local approvals necessary to fill 2.13 acres of wetland and develop a residential home on the property.  The Army Corps, however, denied the federal permit necessary to commence the construction.  

In the Court of Federal Claims, Lost Tree argued that the relevant parcel for purposes of the takings analysis was just the 4.99 acre plat.  The trial court, however, rejected this argument, finding that the relevant parcel was Plat 57, Plat 55, and the scattered wetlands still owned by Lost Tree.  Applying this relevant parcel analysis, the trial court found that the denial of the federal permit diminished the value of Lost Tree's property by approximately 58.4%, and that this diminution in value was not sufficient to support a takings claim.  Lost Tree appealed.

On appeal, the Federal Circuit noted that although "the definition of the relevant parcel of land is a crucial antecedent that determines the extent of the economic impact wrought by the regulation," the "Supreme Court has not settled the question of how to determine the relevant parcel in regulatory takings cases[.]"  Instead, the Supreme Court has merely provided "some helpful guideposts."  Specifically, the Supreme Court has instructed that the takings analysis must focus "on the parcel as a whole," but the parcel as a whole does not necessarily "extend to all landowner's disparate holdings in the vicinity of the regulated property."  Turning to its own precedent, the Federal Circuit then explained that this requires "a 'flexible approach, designed to account for factual nuances[.]'"  And the critical inquiry is the "economic expectations of the claimant with regard to the property."

Applying this flexible approach, the Federal Circuit found that "Lost Tree did not treat Plat 57 as part of the same economic unit as other land it developed[.]"  Therefore, the trial court erred by aggregating Plat 57, Plat 55, and the scattered wetlands: Plat 57 by itself was the "relevant parcel."  Accordingly, the Federal Circuit reversed the decision and remanded the case back to the trial court to determine the loss suffered by the denial and whether that loss rises to the level of a taking.


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nossaman LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.