Case: 19-1901 Document: 40 Page: 1 Filed: 05/15/2020
United States Court of Appeals
for the Federal Circuit
______________________
BUDDY TAYLOR, DONNA TAYLOR,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2019-1901
______________________
Appeal from the United States Court of Federal Claims
in No. 1:18-cv-01082-TCW, Judge Thomas C. Wheeler.
______________________
Decided: May 15, 2020
______________________
A. BLAIR DUNN, Western Agriculture, Resource and
Business Advocates, LLP, Albuquerque, NM, argued for
plaintiffs-appellants. Also argued by MARSHALL RAY, Law
Offices of Marshall J. Ray, LLC, Albuquerque, NM.
NATHANAEL YALE, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-appellee. Also represented
by JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN, JR.,
LOREN MISHA PREHEIM; MICHAEL CASILLO, Air Force Legal
Operations Agency, Joint Base Andrews, MD.
______________________
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2 TAYLOR v. UNITED STATES
Before PROST, Chief Judge, O’MALLEY and TARANTO,
Circuit Judges.
TARANTO, Circuit Judge.
Buddy and Donna Taylor allege that, after they pur-
chased land near a United States Air Force base in New
Mexico, the Air Force began flying training missions low
over the land. Several years later, the Taylors entered into
an agreement with Wind Energy Prototypes, LLC, giving
the company an exclusive option to obtain an easement it
could use to build and operate structures to collect energy
from wind. The Taylors allege that during the term of the
option, employees of the Air Force informally advised Wind
Energy that the Federal Aviation Administration would
not issue a No Hazard designation for such structures on
the land. Thereafter, Wind Energy, rather than exercising
the option, terminated the contract with the Taylors, a de-
cision that the Taylors acknowledge was permitted by their
contract with Wind Energy.
The Taylors sued the federal government in the Court
of Federal Claims. The complaint is properly understood
as making essentially two claims—that the Air Force’s in-
formal advice to Wind Energy effected a regulatory taking
of the Taylors’ property interest in their contract with
Wind Energy, and that the Air Force’s flyovers effected a
physical taking of their property interest in their land and
associated air space. The trial court dismissed the com-
plaint, concluding that it lacked jurisdiction over the regu-
latory-taking claim and, on the merits, that both taking
claims failed to state a claim on which relief could be
granted. We reverse the jurisdictional ruling but affirm
the dismissal on the merits.
I
The complaint alleges that in 1999 the Taylors pur-
chased a large plot of land near a United States Air Force
base in New Mexico. They use the land to raise stocker
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TAYLOR v. UNITED STATES 3
calves. After the purchase, the complaint says, the Air
Force began flying training missions over the land, some-
times “no more than 20 feet . . . off the deck.” J.A. 28.
In October 2008, the Taylors entered into an agree-
ment with Wind Energy. The agreement, which is at-
tached to the complaint, granted Wind Energy an exclusive
option for an easement, into and on the Taylors’ property,
for “wind resource evaluation, wind energy development,
energy transmission and related wind energy development
uses.” J.A. 38–62. The agreement provided Wind Energy
five years (the “option term”) to exercise the easement op-
tion, during which Wind Energy could terminate the agree-
ment without fee, upon giving the Taylors appropriate
notice. J.A. 38, 49.
In mid-2012, according to the complaint, employees of
the Air Force on the nearby base suggested to Wind Energy
that the Federal Aviation Administration (FAA) would not
issue a “No Hazard” designation for the air space above the
Taylors’ land. J.A. 29–30. The absence of such a designa-
tion, the complaint alleges, is “fatal to the construction of
planned wind turbines because other regulatory agencies
will withhold permits for construction” and “financing be-
comes impracticable.” J.A. 29. On September 11, 2012,
within the option term, Wind Energy exercised its contrac-
tual right to terminate the agreement. J.A. 65. 1
1 Although the complaint contains a passing refer-
ence to “breach” by Wind Energy, J.A. 32, the Taylors ex-
plained during oral argument in this court that they were
not alleging that Wind Energy breached the contract—
which, by its terms, gave Wind Energy a right to terminate
when and as it did, J.A. 49. Oral Argument at 6:40–7:18;
see also J.A. 49. We read the complaint in accordance with
that acknowledgment.
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4 TAYLOR v. UNITED STATES
On July 25, 2018, the Taylors sued the United States
in the Court of Federal Claims. Fairly read, and as under-
stood in the trial court, the complaint makes two claims:
(1) the government effected a regulatory taking of the Tay-
lors’ property interest in its contract with Wind Energy
when Air Force personnel led Wind Energy to terminate
the contract by suggesting that the FAA would not issue a
“No Hazard” designation; (2) the Air Force’s flyovers ef-
fected a physical taking of their property interest in the
land and associated air space. The government filed a mo-
tion to dismiss under Court of Federal Claims Rule 12(b)(1)
for “lack of subject-matter jurisdiction” and under Rule
12(b)(6) for “failure to state a claim upon which relief can
be granted.” The trial court granted the motion and dis-
missed the complaint. Taylor v. United States, 142 Fed. Cl.
464 (2019). The trial court dismissed the regulatory-taking
claim for lack of subject-matter jurisdiction and also for
failure to state a claim. Id. at 470–72. The court dismissed
the physical-taking claim for failure to state a claim. Id.
at 472–73.
The Taylors timely appealed. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(3).
II
We review the dismissal for lack of subject-matter ju-
risdiction de novo. Biltmore Forest Broadcasting FM, Inc.
v. United States, 555 F.3d 1375, 1380 (Fed. Cir. 2009);
Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.
2004). We review the dismissal for a failure to state a claim
on which relief can be granted de novo. Cambridge v.
United States, 558 F.3d 1331, 1335 (Fed. Cir. 2009). The
complaint must allege facts “‘plausibly suggesting (not
merely consistent with)’ a showing of entitlement to relief.”
Palmyra Pacific Seafoods, L.L.C. v. United States, 561 F.3d
1361, 1366–67 (Fed. Cir. 2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 557 (2007)). We accept the well-
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TAYLOR v. UNITED STATES 5
pleaded factual allegations as true. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009).
A
At the outset, we reject the trial court’s holding that
the court lacked subject-matter jurisdiction over the Tay-
lors’ regulatory-taking claim. Taylor, 142 Fed. Cl. at 470–
72. The Tucker Act gives the Court of Federal Claims “ju-
risdiction to render judgment upon any claim against the
United States founded either upon the Constitution, or any
Act of Congress or any regulation of an executive depart-
ment, or upon any express or implied contract with the
United States, or for liquidated or unliquidated damages in
cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The
trial court held that it lacked jurisdiction, despite the ex-
press allegation of a claim founded on the Takings Clause
of the Fifth Amendment to the Constitution, because the
complaint also describes the Air Force actions at issue as
meeting the elements of a state-law tort. Taylor, 142 Fed.
Cl. at 470–72. But we have rejected such a rationale for
denying Tucker Act jurisdiction.
As a substantive-law matter, we have recognized that
“the same operative facts may give rise to both a taking and
a tort.” Moden v. United States, 404 F.3d 1335, 1339 n.1
(Fed. Cir. 2005) (relying on City of Monterey v. Del Monte
Dunes at Monterey, Ltd., 526 U.S. 687, 717 (1999), and
other cases). And in El-Shifa Pharmaceutical Industries
Co. v. United States, we specifically held that Tucker Act
jurisdiction existed over a complaint that asserted a taking
claim notwithstanding that the complaint also character-
ized the same government conduct as tortious. 378 F.3d
1346, 1353–54 (Fed. Cir. 2004). We noted that the com-
plaint invoked the Takings Clause and sought a remedy
under that clause, and we concluded: “That the complaint
suggests the United States may have acted tortiously to-
wards the appellants does not remove it from the jurisdic-
tion of the Court of Federal Claims.” Id. at 1353. We
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6 TAYLOR v. UNITED STATES
explained that, even if the complaint’s tort characterization
made the complaint a “multipurpose” one, “[t]he multipur-
pose nature of the complaint did not deprive the Court of
Federal Claims of jurisdiction to entertain the takings
claim alleged therein.” Id. at 1354. In so ruling, we applied
to a tort-taking overlap the dual-wrong rationale of Del-Rio
Drilling Programs, Inc. v. United States, 146 F.3d 1358,
1363–64 (Fed. Cir. 1998), and Rith Energy, Inc. v. United
States, 247 F.3d 1355, 1365 (Fed. Cir. 2001).
That precedent applies to this case. The Taylors chose
to challenge the alleged Air Force action as a Fifth Amend-
ment taking of their property interest in the Wind Energy
contract. There is “ample precedent for acknowledging a
property interest in contract rights under the Fifth Amend-
ment.” Cienega Gardens v. United States, 331 F.3d 1319,
1329 (Fed. Cir. 2003); see also Lynch v. United States,
292 U.S. 571, 579 (1934) (“The Fifth Amendment com-
mands that property be not taken without making just
compensation. Valid contracts are property, whether the
obligor be a private individual, a municipality, a state, or
the United States.”). That the complaint also indicates
that the Air Force action constituted tortious interference
with a contract does not remove the taking claim from the
jurisdiction of the Court of Federal Claims under the
Tucker Act. 2
2 This case does not involve a situation in which the
conduct alleged is a tort that, as a matter of law, is not a
taking. In this respect, the case differs from the allegations
of patent infringement against the federal government at
issue in Schillinger v. United States, 155 U.S. 163 (1894).
See Golden v. United States, 955 F.3d 981, 986–88
(Fed. Cir. 2020).
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TAYLOR v. UNITED STATES 7
B
The Taylors’ regulatory-taking claim nevertheless fails
on the merits as a matter of law. The Taylors invoke the
standards for a regulatory taking that call for “ad hoc, fac-
tual inquiries into the circumstances of each particular
case.” Connolly v. Pension Benefit Guar. Corp., 475 U.S.
211, 224 (1986). In Penn Central Transportation Co. v. City
of New York, the Supreme Court considered three factors:
(1) “[t]he economic impact of the regulation on the claim-
ant”; (2) “the extent to which the regulation has interfered
with distinct investment-backed expectations”; and (3) “the
character of the government action.” 438 U.S. 104, 124
(1978); see also Ruckelshaus v. Monsanto Co., 467 U.S. 986,
1005 (1984) (considering “reasonable investment-backed
expectations”). We conclude that the Taylors’ regulatory-
taking claim cannot pass muster under those standards,
even without further factual inquiry.
1
The first factor, the economic impact of the regulation
on the Taylors, weighs so strongly against finding a regu-
latory taking that it might be decisive on its own—some-
thing we need not decide because the full three-factor
analysis leads to the same conclusion. As we have noted,
the Taylors acknowledge that Wind Energy’s termination
was not a breach of the agreement it had with the Taylors.
The Taylors thus have not identified Fifth Amendment
property in the form of “contract rights” against their con-
tract counterparty (Wind Energy) that have been taken
from them. Cienega Gardens, 331 F.3d at 1329 (emphasis
added). And they have not identified any takings law that
treats as a protected form of “property” a person’s interest
in the benefits of a contract that the counterparty may
freely terminate (and, here, terminated without any plau-
sible allegation of government coercion). At a minimum, in
resting their regulatory-taking claim entirely on alleged
harm to their contractual relationship, the Taylors’
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8 TAYLOR v. UNITED STATES
complaint contains no allegation of any material harm to a
constitutionally protected aspect of that relationship. 3
2
The second factor, the extent to which the regulation
interferes with the Taylors’ distinct, reasonable invest-
ment-backed expectations, also weighs against finding a
regulatory taking. Although the regulatory-taking claim is
focused entirely on the loss of the hoped-for benefits of the
2008 Wind Energy contract, the complaint states no facts
indicating that the Taylors made any investment specifi-
cally related to that contract. The only investment re-
flected in the complaint is the purchase of the land in 1999.
And even as to that, the complaint does not allege that the
purchase was made with any expectation as to use of the
property for harvesting wind energy. There are no mate-
rial “distinct investment-backed expectation[s].” Penn
Central, 438 U.S. at 124.
Besides lacking support for an inference of investment-
backed expectations regarding wind energy, the Taylors’
claim supports no inference of reasonable expectations as
to freedom from regulatory actions that might adversely af-
fect use of the land for harvesting wind energy. We have
3 The Takings Clause’s focus on particular property
interests is reflected in the longstanding rule that the
clause does not provide for compensation for “consequential
losses.” United States v. General Motors Corp., 323 U.S.
373, 379–80 (1945) (“The rule in [a takings] case is that
compensation for that [property] interest does not include
. . . consequential losses.”); see Mitchell v. United States,
267 U.S. 341, 345 (1925) (“The settled rules of law however,
precluded his considering in that determination conse-
quential damages for losses to their business, or for its de-
struction.”); cf. Monongahela Navigation Corp. v. United
States, 148 U.S. 312, 326 (1893).
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TAYLOR v. UNITED STATES 9
articulated three considerations relevant to that issue:
(a) “whether the plaintiff operated in a ‘highly regulated
industry’”; (b) “whether the plaintiff was aware of the prob-
lem that spawned the regulation at the time it purchased
the allegedly taken property”; and (c) “whether the plaintiff
could have ‘reasonably anticipated’ the possibility of such
regulation in light of the ‘regulatory environment’ at the
time of purchase.” Appolo Fuels, Inc. v. United States,
381 F.3d 1338, 1349 (Fed. Cir. 2004) (quoting Common-
wealth Edison Co. v. United States, 271 F.3d 1327, 1348
(Fed. Cir. 2001) (en banc)); see Reoforce, Inc. v. United
States, 853 F.3d 1249, 1270 (Fed. Cir. 2017). All three con-
siderations weigh against the Taylors.
Airspace used for aircraft is highly regulated. See
49 U.S.C. § 40103(b)(1) (The FAA “shall develop plans and
policy for the use of the navigable airspace and assign by
regulation or order the use of the airspace necessary to en-
sure the safety of aircraft and the efficient use of air-
space.”); see also 49 U.S.C. § 44718(a)(1) (“[T]he Secretary
of Transportation shall require a person to give adequate
public notice . . . of the construction . . . of a structure . . .
when the notice will promote . . . safety in air commerce.”).
Such strict regulation weighs against the Taylors’ claim,
although “[a] property owner does not automatically relin-
quish her Fifth Amendment rights by entering a highly
regulated industry,” Reoforce, 853 F.3d at 1270; see Ruckel-
shaus, 467 U.S. at 990 (finding regulatory taking in an in-
dustry “regulated . . . for nearly 75 years.”). Moreover, at
the time the Taylors contracted with Wind Energy in 2008,
they knew that the Air Force flew “training missions, some-
times no more than 20 feet . . . off the deck.” J.A. 28 ¶ 12.
The FAA regulations regarding hazard designations were
also in place long before the Taylors purchased the prop-
erty in 1999. See, e.g., Flowers Mill Assoc. v. United States,
23 Cl. Ct. 182, 186 (1991) (discussion of FAA No Hazard
designations). When buying the land at issue, located near
an Air Force base, the Taylors should have “reasonably
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10 TAYLOR v. UNITED STATES
anticipated” that the FAA might not issue a No Hazard
designation for their land. Thus, the Taylors’ distinct in-
vestment-backed expectations weigh against finding a reg-
ulatory taking.
3
The third Penn Central factor, the character of the gov-
ernment action, also weighs against finding a regulatory
taking here. The action at issue is not the denial of a No
Hazard designation. Rather, it is Air Force employees’ giv-
ing of information and advice to Wind Energy suggesting
that the FAA would not issue a No Hazard designation. See
J.A. 18, 29–30; see also Oral Argument at 8:52–9:02 (“It’s
not that the FAA gave some sort of presumption of
[whether a No Hazard designation would issue], it’s that
the Air Force said [that] this is not going to be forthcom-
ing.”).
That action falls into no category of government action
we have recognized as supporting a regulatory-taking
claim. It is not even the action of the FAA, which was not
asked by Wind Energy or the Taylors for a No Hazard des-
ignation. The challenged action by Air Force personnel did
not have a “legal effect or impose a direct legal obligation
on any party.” Dimare Fresh, Inc. v. United States,
808 F.3d 1301, 1309 (Fed. Cir. 2015). It was not a form of
coercive government action at all, but at most a form of
“persuasion,” convincing Wind Energy of something assert-
edly relevant to its prospects for having air clearance for
contemplated wind towers. A&D Auto Sales, Inc. v. United
States, 748 F.3d 1142, 1154 (Fed. Cir. 2014) (“The line be-
tween coercion (which may create takings liability) and
persuasion (which does not create takings liability) is
highly fact-specific and hardly simple to determine.”). And
there is no issue here of a withholding of specifically prom-
ised government approval after large investments were
made on the basis of the promise. See United Nuclear Corp.
v. United States, 912 F.2d 1432 (Fed. Cir. 1990).
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TAYLOR v. UNITED STATES 11
The character of the government action counts against
finding a taking. The Taylors cannot deny that the action
was within the “authority” of those who took it; such a de-
nial would defeat their taking claim. 4 The dissemination
of information is a legitimate agency function, especially in
the context of public safety. See Dimare Fresh, 808 F.3d
at 1311. And we have already held that there are good rea-
sons for caution about subjecting agency information dis-
closures, even informal disclosures, to the risk of takings
liability, especially when there are alternative means of
checking harmful disclosures. Id. at 1309–12.
In sum, each of the Penn Central factors weighs
strongly against finding a regulatory taking. Together
they mean that the Taylors’ claim, on the allegations of
their complaint, cannot succeed as a matter of law.
III
A
The complaint in this case also alleges that the govern-
ment’s overflights have effected a physical taking of the
Taylors’ “compensable property interests in the air space
above their fee property.” J.A. 31 ¶ 29. The trial court con-
cluded that the complaint provides legally insufficient
4 A government action cannot be a taking if “the ad-
ministrative agency lacked the authority to regulate the
property it ‘appropriated,’” Dimare Fresh, 808 F.3d at 1308,
or, more generally, if the government actors lacked the “au-
thority” to take the action, Del-Rio Drilling, 146 F.3d
at 1362 (explaining nature of “authority” rule). See United
States v. N. American Transp. & Trading Co., 253 U.S. 330,
333 (1920) (“In order that the government shall be liable it
must appear that the officer who has physically taken pos-
session of the property was duly authorized so to do.”); Fla.
Rock Indus., Inc. v. United States, 791 F.2d 893, 898–99
(Fed. Cir. 1986).
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12 TAYLOR v. UNITED STATES
factual support to survive a motion to dismiss the asserted
physical-taking claim. Taylor, 142 Fed. Cl. at 473. We
agree.
Under United States v. Causby, “[f]lights over private
land are not a taking, unless they are so low and so fre-
quent as to be a direct and immediate interference with the
enjoyment and use of the land.” 328 U.S. 256, 266 (1946).
In applying that standard for finding an imposition of an
“avigation easement,” we have considered (1) whether the
planes flew directly over the claimant’s land; (2) whether
the flights were low and frequent; and (3) whether the
flights directly, immediately, and substantially interfered
with the claimant’s enjoyment and use of the land. Brown
v. United States, 73 F.3d 1100, 1102 (Fed. Cir. 1996). The
Taylors’ complaint sufficiently alleges the first factor, but
not the others.
The Taylors allege that “military aircraft regularly fly
training routes at altitudes below . . . 500 feet [above
ground level] over [the Taylors’] property.” J.A. 30 ¶ 22.
The trial court determined that the Taylors did not “allege
that the flights were frequent enough to state a claim for
an avigation easement.” Taylor, 142 Fed. Cl. at 473. In the
absence of greater specificity, “regularly” is not a factual
allegation that can support an inference of the required fre-
quency. There are no further allegations of how often
flights occur.
Nor have the Taylors provided any factual allegations
of how the flights “directly, immediately, and substantially
interfere” with their quiet enjoyment and use of the land.
The complaint describes the Taylors’ ranch operations as
the “buying and straightening out [of] stocker calves” but
fails to allege how the overflights affect those operations.
J.A. 28 ¶ 8. The complaint simply pleads that the Air Force
“engage[s] in conduct and actions to inversely condemn the
Taylor[s’] compensable property interest in the air space
above their private property and the quiet enjoyment of the
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TAYLOR v. UNITED STATES 13
reminder of their property interests.” Id. ¶ 11; see also
J.A. 33 ¶ 38 (The government’s actions “impaired [the Tay-
lors’] right to use their property interests as they saw fit.”).
These allegations are insufficient because they do no more
than recite “labels and conclusions” and repeat the ele-
ments of the cause of action without providing sufficient
factual information. Iqbal, 556 U.S. at 678 (“A pleading
that offers ‘labels and conclusions’ or ‘a formulaic recitation
of the elements of a cause of action will not do.’” (quoting
Twombly, 550 U.S. at 555)); Twombly, 550 U.S. at 555
(“Factual allegations must be enough to raise a right to re-
lief above the speculative level.”). Therefore, the Taylors
failed to state a claim for a physical taking.
B
The trial court dismissed the Taylors’ physical-taking
claim. Taylor, 142 Fed. Cl. at 474 (“[T]he Court grants the
Government’s Motion to Dismiss as to all [the Taylors’]
claims.” (capitalization altered)). The Taylors argue that
we should vacate the dismissal and remand to allow them
to amend their complaint. The trial court, however, did not
abuse its discretion in dismissing the complaint.
Court of Federal Claims Rule 15(a)—which is identical
in all material respects to Federal Rule of Civil Procedure
15(a)—prescribes when a party may amend its pleadings
before trial. As a matter of course, a party may amend its
pleadings within 21 days after service of the pleading or 21
days after service of a responsive pleading or motion under
Rule 12(b), (e), or (f), whichever is earlier. Ct. Fed. Cl.
R. 15(a)(1). If a party wishes to amend a pleading outside
Rule 15(a)(1), it may do so with either the opposing party’s
written consent or the court’s leave. Ct. Fed. Cl. R. 15(a)(2).
And “[t]he court should freely give leave when justice so
requires.” Id.; see also Foman v. Davis, 371 U.S. 178, 182
(1962) (“In the absence of any apparent or declared reason
. . . the leave sought [under Federal Rule of Civil Procedure
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14 TAYLOR v. UNITED STATES
15(a)] should, as the rules require, be ‘freely given.’” (quot-
ing Fed. R. Civ. P. 15(a))).
At no point during the trial court’s proceedings, how-
ever, did the Taylors seek to invoke any part of Rule 15(a)
to amend their complaint—not on their own, not with the
government’s permission, and not with the court’s permis-
sion, even after the dismissal. We will not find an abuse of
discretion on the part of the trial court with respect to a
request for amendment never made to it.
IV
For the foregoing reasons, we reverse the dismissal for
lack of subject-matter jurisdiction but affirm the dismissal
for failure to state a claim.
The parties shall bear their own costs.
REVERSED IN PART AND AFFIRMED IN PART