Norman v. United States

United States Court of Appeals for the Federal Circuit

05-5039

DON ROGER NORMAN,
ROGER WILLIAM NORMAN,
and
SOUTH MEADOWS
PROPERTIES LIMITED PARTNERSHIP,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

Roger J. Marzulla, Marzulla and Marzulla, of Washington, DC, argued for
plaintiffs-appellants. With him on the brief was Nancie G. Marzulla.

John L. Smeltzer, Attorney, Appellate Section, Environment & Natural Resources
Division, United States Department of Justice, of Washington, DC, argued for
defendant-appellee. With him on the brief were Kelly A. Johnson, Acting Assistant
Attorney General, and Katherine J. Barton, Attorney.

Appealed from: United States Court of Federal Claims

Judge Lynn J. Bush
 United States Court of Appeals for the Federal Circuit

05-5039

DON ROGER NORMAN,
ROGER WILLIAM NORMAN,
and
SOUTH MEADOWS
PROPERTIES LIMITED PARTNERSHIP,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

_____________________________

DECIDED: November 18, 2005
_____________________________

Before MICHEL, Chief Judge, BRYSON, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

Don Norman, Roger Norman, and South Meadows Properties (collectively

"appellants" or "the Normans") appeal two decisions of the United States Court of

Federal Claims. The first, issued April 17, 2003, dismissed the Normans' illegal

exaction claim for lack of jurisdiction. Norman v. United States, 56 Fed. Cl. 255 (2003)

("Norman I"). The second, issued December 10, 2004, dismissed, after a trial on the

merits, the Normans' claim for just compensation under the Fifth Amendment. Norman

v. United States, 63 Fed. Cl. 231 (2004) ("Norman II"). The Court of Federal Claims
issued final judgment on December 14, 2004, and appellants timely filed a notice of

appeal on January 5, 2005. For the reasons set forth below, we affirm.

I. BACKGROUND

The opinion of the Court of Federal Claims described the facts of this case in

exhaustive detail. See Norman II, 63 Fed. Cl. at 234-43. As the trial judge stated, "[t]he

background of this case spans over a decade of land acquisitions, purchases, sales,

development plans, permit applications and issuances, with ever-changing persons,

parties, companies, partnerships and entities involved." Id. at 233. We refer to the trial

court’s findings of fact, which appellants do not challenge, and set forth here only those

facts that are necessary for the resolution of the appeal.

The Normans are real estate developers who, in the late 1980s, planned to

develop commercial and industrial office space in Reno, Nevada, on a 2425-acre

property previously used for ranching and agricultural activities (the "Ranch"). See id. at

234. In 1986, a company called Southmark Corporation purchased the Ranch,

intending to develop it for commercial and residential uses. Southmark prepared a

"master plan" for the development of the property and submitted it to the Reno City

Council for approval. On January 30, 1987, the city council "conditionally approved" the

master plan, identifying 41 conditions that the developer was required to satisfy before

final approval would issue. One of those conditions required the developer to submit to

the council "plans approved by the United States Army Corps of Engineers . . .

delineating wetlands or any other lands the development of which were subject to the

issuance of federal permits." Id.

05-5039 2
 In June of 1988, the Army Corps of Engineers (the "Corps") sent a team of

wetlands experts to "conduct field work necessary to prepare a final wetlands

delineation." Norman II, 63 Fed. Cl. at 235. In the months before that team arrived, the

Normans became interested in purchasing a 470-acre commercial portion of the Ranch

for development as an industrial park, "per the Master Plan" prepared by Southmark.

Id. The Normans "were unwilling, however, to purchase the 470-acre commercial

portion until the Corps completed a final wetlands delineation of the property." Id.

On September 12, 1988, the Corps issued a delineation (the "1988 Delineation"),

prepared pursuant to the 1987 version of the Corps' Wetlands Delineation Manual. The

1988 Delineation identified 28 acres of jurisdictional wetlands on the Ranch property, of

which 17 acres were located on the 470-acre parcel desired by the Normans. Following

completion of the delineation, the Normans acquired the property. Id. At the same

time, Robert Helms purchased the 1800-acre "residential" portion of the Ranch. The

Normans and Helms then entered into an agreement whereby they agreed to develop

their properties consistently with Southmark's Master Plan. The parties do not dispute

that the Normans relied upon the 1988 Delineation in purchasing the 470-acre plot, or

that their reliance was reasonable.

After the 1988 Delineation became public, however, a "storm of controversy"

erupted, as a variety of concerned entities criticized the delineation. Id. at 237. The

Corps then "revoked the 1988 wetlands delineation and conducted a new delineation

under the 1989 version of the Corps' Wetlands Delineation Manual" (the "1991

Delineation"). Id. The new delineation effort began in April of 1991 and ended in

October of 1991.

05-5039 3
 The 1991 Delineation substantially increased the acreage of jurisdictional

wetlands on the subject property, identifying 230 acres of such wetlands. Of the 230

wetland acres, 87 acres were on the "commercial" portion of the parcel owned by the

Normans. This increased the wetlands acreage by 70 acres. See Norman II, 63 Fed.

Cl. at 237.

The revocation of the 1988 Delineation and the issuance of the subsequent 1991

Delineation lie at the heart of appellants' takings claims. The 1991 Delineation allegedly

"forced" the owners of the Ranch property to revise their master development plan to

account for the newly non-developable acreage. Id. at 238. In 1994, following creation

of a new development plan that provided for development in three phases, the Normans

began purchasing smaller properties adjacent to their 470-acre parcel. Later that year,

Helms declared bankruptcy, and they purchased his 1800-acre parcel from his

bankruptcy estate. The Normans then petitioned the City of Reno to re-annex that 1800

acres to the rest of the Ranch property (which had been de-annexed during Helms'

ownership) and sought a master plan amendment to permit the 1800-acre parcel to

constitute Phase III of their development plan. The city granted conditional approval in

1995. As of that date, plaintiffs owned approximately 2280 acres of property intended

for development in the three-phase master plan. See id. at 238-39.

05-5039 4
 In 1995, appellants applied to the Corps for a permit under section 404 of the

Clean Water Act1 (a "404 Permit") enabling them to impact 15 acres of jurisdictional

wetlands and other waters of the United States. As mitigation for the proposed impact,

"plaintiffs proposed to create additional wetlands to ensure no net loss of wetlands

functions and values." Norman II, 63 Fed. Cl. at 239. The Corps accepted the proposal

and issued the permit.

In 1998, appellants submitted another 404 Permit application, this time seeking

permission to impact wetlands throughout the 2280-acre development site. See id. at

239. The Corps responded that because appellants' proposed actions "would result in

significant environmental impacts," the Corps would have to prepare an Environmental

Impact Statement in compliance with the National Environmental Policy Act of 1969,

unless appellants provided "a mitigation plan which clearly reduced the project impacts

to a less than significant level." Id. The Corps also provided a "modified development

alternative," suggesting a development plan with less significant environmental impacts.

Id.

In July of 1999, appellants submitted a revised mitigation proposal that was,

according to the trial court's findings of fact, "a result of a negotiations process between

the Corps and plaintiffs," in which "the parties discussed which areas of property on the

2280-acre Development could be utilized as mitigation wetlands." Id. at 239. The

1
Section 404 of the Clean Water Act, codified at 33 U.S.C. § 1344,
establishes a program for the regulation of fill activities involving waters of the United
States. The "basic premise of the program is that no discharge of dredged or fill
material" into waters of the United States is "permitted if a practicable alternative exists
that is less damaging" to the environment. Environmental Protection Agency, Section
404 of the Clean Water Act: An Overview, http://www.epa.gov/owow/
wetlands/facts/fact10.html (last visited November 4, 2005).

05-5039 5
resulting plan contemplated that "the areas designated . . . for storm drainage could

sufficiently serve as mitigation wetlands due to the hydrology surrounding that area." Id.

at 240. Under the modified development plan, a substantial portion of the mitigation

wetlands would be on lands that would not otherwise have been developed in any case.

The Corps approved the proposal and, on August 31, 1999, issued the Normans

a 404 Permit enabling them to proceed with their development plan (the "1999 Permit").

The 1999 Permit enabled appellants to fill approximately 60 acres of wetlands; in

exchange, it required them to create or restore approximately 195 acres of wetlands as

mitigation. In addition, it required them to "[r]ecord[] the formation of a Corps approved

funding mechanism for the long term maintenance of the mitigation and preserve

areas," and "[r]ecord[] deed restrictions maintaining all mitigation preservation areas as

wetland preserves and wildlife habitat in perpetuity" (the "Deed of Restrictions").

Norman II, 63 Fed. Cl. at 240. In order to comply with the 1999 Permit's requirement

that appellants provide a funding mechanism, appellants elected to transfer title in

220.85 acres2 to South Meadows Association, a non-profit property owners' association

initially controlled by the Normans. Id.

Prior to and following issuance of the 1999 Permit, appellants "continued to sell

the developable parts of the 2280-acre Development to various independent third

parties." Id. at 242. At the time the 1999 Permit actually issued, appellants owned only

716 acres of the original 2280-acre parcel.

2
The Deed of Restrictions, as the trial court noted, imposed restrictions
broader than those stated in the 1999 Permit itself. It called for the setting aside of a
total of 235.14 acres of mitigation wetlands, while the Permit required only 195.
Appellants arrive at the total of 220.85 acres they allege to have been taken by reading
the Permit and the Deed together. See Norman II, 63 Fed. Cl. at 241.

05-5039 6
 The Normans filed the first lawsuit in this matter in 1995, raising breach of

contract and takings claims. The subsequent history of the litigation is lengthy and is

recited in detail in Norman II, 63 Fed. Cl. at 242-43. For our purposes here, the directly

relevant trial court actions occurred beginning in 2003. On April 17 of that year, the

Court of Federal Claims issued an opinion dismissing appellants' illegal exaction

claim—added in an amended complaint filed in 2001—for lack of jurisdiction. On

November 20, 2003, two weeks before trial was scheduled to begin, appellants filed a

motion to retroactively amend their complaint a second time to change the number of

acres allegedly taken to the current 220.85. See Norman II, 63 Fed. Cl. at 243. The

trial court granted that motion on the first day of trial. Trial was held in December of

2003. Following the conclusion of trial, appellants filed their second amended

complaint, subsequent to which the government filed its answer.

Following post-trial briefing, the Court of Federal Claims issued an opinion and

order denying all of appellants' takings claims and ordering the clerk of court to enter

judgment against appellants and dismiss their amended complaint with prejudice. The

clerk entered final judgment, and appellants timely filed their notice of appeal. We have

jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

II. DISCUSSION

In their appeal, the Normans challenge the trial court's rulings on both their

takings claims and their illegal exaction claim. This court reviews the trial court's

findings of facts under the standard of "clear error." Hendler v. United States, 175 F.3d

1374, 1378 (Fed. Cir. 1999). We review the trial court's conclusions of law, including

questions involving jurisdiction, de novo. See McDonnell Douglas Corp. v. United

05-5039 7
States, 323 F.3d 1006, 1012 (Fed. Cir. 2003); Casa de Cambio Comdiv v. United

States, 291 F.3d 1356, 1358 (Fed. Cir. 2002).

A. Significance of the 1991 Delineation

We recognize at the outset a fundamental tension in the Normans' takings claim.

The Normans place heavy weight on the revocation of the 1988 Delineation and

subsequent issuance of the 1991 Delineation, arguing repeatedly that this single

circumstance renders their takings claim "unique" and "sui generis." They argue,

essentially, that because they bought the 470-acre parcel in reliance upon the 1988

Delineation, the subsequent and less favorable re-delineation "culiminated in" a taking

of the 220.85 acres set aside nearly a decade later in accordance with the 1999 Permit.

At the same time, appellants expressly disclaim any allegation that the 1999 Permit, of

itself, effected a taking: they state that they are "not ask[ing] this Court to hold that the

government's routine requirement that a landowner set aside land as mitigation in

exchange for a Section 404 wetland permit"—as occurred in the 1999 Permit—"violates

the Just Compensation Clause." The primary error they allege is that "by limiting its

[takings] analysis solely to the permit, the trial court erred in excluding those very facts

(the Corps' mistake and unlawful redelineation) that make this case uniquely a taking

under the Fifth Amendment."

In other words, the Normans want this court to evaluate the entire sequence of

events from 1988 through 1999 as a single transaction, in which the mitigation set-aside

of 1999 followed ineluctably from the "unprecedented" 1991 Delineation. If we conclude

that those two events were, for purposes of takings analysis, distinct—that the events of

1991 did not, in appellants' words, "directly cause[] the Normans to lose 220.85 acres of

05-5039 8
property in 1999"—then the bulk of their takings claims fail on that ground alone,

because their challenge to the terms of the 1999 Permit is, according to their own

argument, based solely upon the role of the 1991 Delineation in imposing those terms.

We find the Normans' argument unconvincing. The suggestion that Corps action

in 1991 "directly" caused the Normans to lose 220.85 acres of property, most of which

they did not own until 1994, strains the word "directly" well beyond its breaking point.

The revocation and re-delineation that preceded the 1999 Permit by nearly a decade

were but two of dozens of factual predicates leading up to the issuance of the 1999

Permit; others include the voluntary purchase, by appellants, of most of the land

covered by that permit. That the decision to purchase that additional property may have

been influenced, in small or large degree, by the events of 1988-1991 does not render it

involuntary. The causal relationship between the revocation of the 1988 Delineation

and the appellants' alleged loss is simply too attenuated to support the weight the

Normans place upon it.

Because the Normans have disclaimed any challenge to the "routine" mitigation

requirements of the 1999 Permit except insofar as they resulted from the "unique" 1991

Delineation, we believe this conclusion disposes of most of their takings claims without

further analysis. In order to fully respond to the arguments appellants raise, however,

we shall evaluate their claims in greater detail.

B. Physical Takings Claim

In general, this court has analyzed takings claims arising from section 404 permit

issues using the regulatory takings analysis set forth in Penn Central Transportation Co.

v. New York, 438 U.S. 104 (1978). See, e.g., Forest Props., Inc. v. United States, 177

05-5039 9
F.3d 1360, 1364 (Fed. Cir. 1999) (citing cases). Here, however, the Normans insist

that, by its terms, the 1999 Permit effected a physical taking because it required that

they transfer title to the 220.85 acres to a third party. It is axiomatic that "[w]here the

government authorizes a physical occupation of property (or actually takes title) the

Takings Clause generally requires compensation." Yee v. City of Escondido, 503 U.S.

519, 522 (1992). Here, although the Normans did transfer title in the wetland acreage

to a nonprofit association, the record is clear that the title transfer was voluntary, and

not a condition required under the 1999 Permit. According to the parties' joint

stipulation, the Normans transferred title in the wetland acreage to the South Meadows

Association "in order to comply with Condition 9.a" of the 1999 Permit, which required

that the appellants "[r]ecord[] the formation of a Corps approved funding mechanism for

the long term maintenance of the mitigation and preserve areas." Neither the 1999

Permit nor the Deed of Restrictions contained any requirement that title to the affected

acreage be transferred; testimony offered at trial indicated that the funding mechanism

requirement may be satisfied by several methods, and that although conveyance of title

to a conservation group or nonprofit was one such method, the Corps did not require it.3

3
Appellants do not seriously dispute this, relying instead on a passage in
the trial court's opinion that could be read to suggest that the government stipulated that
the conveyance was required. See Norman II, 63 Fed. Cl. at 247 ("[T]he parties
stipulate that the combination of the 1999 Permit and the Deed of Restrictions required
plaintiffs to . . . convey title to the wetlands mitigation acres to a non-profit property
owners association."). It is clear from the trial court's opinion, however, that it in fact
regarded the conveyance as voluntary. See id. ("[T]here was no requirement that the
mitigation and preservation areas on the property be conveyed to a third party. The
requirement was only that a funding mechanism be in place, but not necessarily that
property be conveyed to a third party."). A review of the stipulation confirms that the
government stipulated only that the conveyance in fact occurred "in order to comply
with" the funding requirement—not that the conveyance itself was mandatory.

05-5039 10
 Neither did the Permit "exact" possession of the land. Appellants argue that "the

Normans' loss of exclusive possession . . . constitutes a categorical taking under the

Fifth Amendment," relying for that proposition on Nollan v. California Coastal

Commission, 483 U.S. 825, 831-32 (1987). We note as an initial matter that is not at all

clear that appellants have, in fact, lost "exclusive possession" of the land at issue.

Nollan involved the use of a permit process to exact from a landowner an easement

allowing public access across his land. No such physical intrusion—by government or

the public—occurred here. Appellants have directed us to nothing in the 1999 Permit or

in the Deed of Restrictions that deprives the owners of the land of the right to exclude

others from the 220.85 acres. To the extent that appellants' claim of loss of possession

is predicated on the transfer of title, we have already concluded that that transfer was

voluntary and therefore not a proper basis on which to premise a takings claim.

Because we conclude that no physical invasion occurred here, the Normans'

reliance on cases like United States v. Pueblo of Taos, 207 Ct. Cl. 53 (1975), and Yuba

Natural Resources, Inc. v. United States, 821 F.2d 638 (Fed. Cir. 1987), is misplaced.

Those cases involved government surveys and found takings where, for example, the

United States misidentified a boundary line and took property actually belonging to a

landowner and sold it to a third party. In those cases the survey error led to an actual

transfer of property from its rightful owner to another, or to the outright physical invasion

of the plaintiff's property by the government—events that would constitute classic

takings regardless of the survey error. They stand for nothing more expansive than the

obvious principle that the government cannot, by way of a simple survey error, take title

05-5039 11
to or physically invade private properties in ways that would otherwise be takings,

without payment of just compensation. They are not relevant here.

Even if the government's action could reasonably be characterized as a physical

invasion, the Normans' claim for compensation would fail under the principles set forth

by the Supreme Court in Nollan and in Dolan v. City of Tigard, 512 U.S. 374 (1994).

Those cases involved efforts by government authorities to "exact" from landowners

easements across their property in exchange for the issuance of otherwise legitimate

development permits. See Nollan, 483 U.S. at 829; Dolan, 512 U.S. at 377. The

Supreme Court framed the question at issue as whether, "given . . . that requiring

uncompensated conveyance of the easement outright would violate the Fourteenth

Amendment," requiring it "to be conveyed as a condition for issuing a land-use permit

alters the outcome." Nollan, 483 U.S. at 834. The Court held that the permit issue did

not alter the outcome. Drawing on existing precedent in the land-use regulation area,

the Court stated the general rule that a land-use regulation "does not effect a taking if it

substantially advances legitimate state interests and does not deny an owner

economically viable use of his land." Id. It further provided that in order to avoid

effecting a taking, there must be a "nexus" between the condition imposed and the

"original purpose" of the regulation at issue. Id. at 837; see also Dolan, 512 U.S. at 386

(phrasing the issue as "whether [an] essential nexus exists between the legitimate state

interest and the permit condition exacted" by the government) (internal quotations

omitted). The condition must be "related both in nature and extent to the impact of the

proposed development." Dolan, 512 U.S. at 391.

05-5039 12
 Even if the nexus requirement of the Nollan and Dolan line of exaction cases

were applicable here—and we think it clear that it is not—we would agree with the trial

court's conclusion that an appropriate nexus exists between the set-aside of the 220.85

acres and the regulatory purpose. In the words of the trial court, "[t]he public interest

served by requiring the preservation of wetlands in exchange for the filling and dredging

of other [wet]lands relates directly to the condition imposed. There is no disconnect."

Norman II, 63 Fed. Cl. at 251.

C. Categorical Takings Claim

A "categorical" taking is a regulatory taking in which government action deprives

the landowner of all beneficial use of his property, such that the government action is

the functional equivalent of a physical invasion. See Lucas v. S.C. Coastal Council, 505

U.S. 1003 (1992). The Court of Federal Claims concluded that "there has been no

deprivation of all economically viable use" of the 2280-acre parcel as a whole "by virtue

of the alleged taking of 220.85 acres of wetlands," and that even if "there was absolutely

no use" remaining for those acres, "the percentage decrease in viable use" would be

insufficient to constitute a categorical taking. Norman II, 63 Fed. Cl. at 261.

Assuming, arguendo, that the Normans intend to challenge the terms of the 1999

Permit despite their disavowal of such intent, the question here is whether the 1999

Permit in fact effected a deprivation of all beneficial use. The case law on categorical

takings, and indeed Lucas itself, is clear that only a complete deprivation will constitute

a categorical or "per se" taking. See, e.g., Lucas, 505 U.S. at 1019 n.8; Tahoe-Sierra

Pres. Council v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 324, 330 (describing

categorical taking as an "extraordinary circumstance" and a "narrow exception" to

05-5039 13
regulatory takings principles). Appellants' lumping together of their physical and

categorical takings claims obscures, perhaps willfully, the critical difference between

those claims: a physical taking of any portion of private property will ordinarily result in

compensation, while a regulatory taking becomes "categorical," and therefore requires

compensation, only if the owner is deprived of all beneficial use of the "parcel as a

whole." If the government action does not deprive the owner of all beneficial use of the

entire relevant parcel, then no categorical taking can be shown. See Tahoe-Sierra, 535

U.S. at 330-31; Appolo Fuels, Inc. v. United States, 381 F.3d 1338, 1346 (Fed. Cir.

2004).

Here, the trial court identified the "parcel as a whole" as "the 2280-acre

Development," comprising the properties designated for development in Phases I, II,

and III of the development plan, exclusive of property conveyed to the state for rights-of-

way. Norman II, 63 Fed. Cl. at 259-61. Its analysis is consistent with our precedent in

this area, which states that the critical issue is "the economic expectations of the

claimant with regard to the property," and that "[w]here the developer treats legally

separate parcels as a single economic unit, together they may constitute the relevant

parcel." Forest Props., 177 F.3d at 1365 (citing cases). Here, the record is clear that

the appellants themselves regarded the 2280-acre parcel as a single economic unit.4 In

any case, appellants have not challenged the trial court's analysis of the parcel as a

whole.5 Without an effective challenge to the trial court's identification of the parcel as a

4
In this regard, we note that appellants' own permit application related to
the entire 2280-acre parcel, and not to any subdivision thereof.
5
Appellants devote a few cursory sentences to disputing the trial court's
parcel as a whole analysis, but only in their reply brief. Arguments raised for the first
time in a reply brief are not properly before this court. See, e.g., Novosteel SA v. United

05-5039 14
whole, appellants cannot dispute that court's conclusion that the facts here do not

sustain a categorical takings claim.

D. Regulatory Takings Claim

Having correctly found that there was no categorical taking of plaintiffs' property,

the trial court moved on to "weigh the three factors of the Penn Central ad hoc analysis

to determine whether a regulatory taking" occurred. Norman II, 63 Fed. Cl. at 261. That

analysis requires the court to "balance (1) the extent to which the regulation has

interfered with . . . reasonable investment-backed expectations; (2) the economic impact

of the regulation on the claimant; and (3) the character of the governmental action at

issue." Id. (citing Penn Cent. Transp. Co., 438 U.S. at 124).

After undertaking a meticulous analysis of the Penn Central factors as applied to

the facts at bar, the trial court concluded that appellants had "reasonable investment-

backed expectations" with respect to only the four-acre parcel described as "WL 17B,"

which appellants purchased in 1989 but which was first delineated as wetlands in the

1991 Delineation. See id. at 267-68. The trial court then concluded that the economic

impact factor weighed against a finding of a taking, because the 1999 Permit actually

increased the economic value of the parcel as a whole by "allow[ing] plaintiffs to fill

valuable commercial property and develop that property in exchange for setting aside

States, 284 F.3d 1261, 1274 (Fed. Cir. 2002) ("[a] party waives arguments based on
what appears in its brief."). Although this practice is "not governed by a rigid rule," we
will adhere to it except "where circumstances indicate that it would result in basically
unfair procedure." Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 800 (Fed.
Cir. 1990). No such circumstances are presented here. Even if appellants' arguments
appeared in their primary brief, we would find them unconvincing, as they amount to
little more than generalized disagreement with the trial court's analysis. Appellants
make no effort to provide a sustained and coherent argument for a different parcel as a
whole.

05-5039 15
other, less valuable property for mitigation." Id. at 278. Finally, the trial court analyzed

the character of the government action, concluding that the issuance of the 1999 Permit

served a "legitimate public welfare obligation"; that appellants were treated fairly by the

Corps and that the Permit was itself the product of negotiations between the Corps and

appellants; and that appellants were not singled out for disparate treatment. See id. at

282-86. Weighing all these factors in light of the facts of the case, the trial court

concluded that "no regulatory taking of property . . . occurred," because the Corps'

actions "simply did not unduly burden plaintiffs." Id. at 287.

The Normans challenge very little of the trial court's Penn Central analysis. Their

briefs do not even mention the trial court's extensive discussion of the "character of the

governmental action" factor. With respect to the other two factors, their rather cursory

arguments amount to little more than a reiteration of the claim, rejected above, that the

critical causative element at issue here was not the 1999 Permit but the events of 1988-

1991. Appellants argue, for example—albeit briefly—that the trial court erred in failing

to measure economic impact as of the time of the 1988 Delineation. This position is

illogical. The Normans cannot explain why the trial court should have measured

economic impact as of a time when they did not own the great majority of the property

allegedly taken.

The same is true regarding reasonable investment-backed expectations. The

Normans argue that their expectation interest should have been measured as of 1988,

when they purchased the initial 470-acre parcel. We note first that the trial court did, in

fact, measure appellants' expectations with respect to the 470 acres as of the date they

purchased that land, and found that the Normans had reasonable investment-backed

05-5039 16
expectations in a few of those acres. See Norman II, 63 Fed. Cl. at 266-70. Appellants

do not explain on what theory we should measure their expectation as of 1988 with

respect to acreage they did not own until 1994. It is axiomatic that "'a reasonable

investment-backed expectation' must be more than 'a unilateral expectation or an

abstract need.'" Ruckelshaus v. Monsanto, 467 U.S. 986, 1005-06 (1984) (quoting

Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980)). As of 1988,

the Normans simply could not have had any investment-backed expectation in property

in which they had not yet invested.

In addition, we note that although a takings claim "is not barred by the mere fact

that title was acquired after the effective date of the state-imposed restriction,"

Palazzolo v. Rhode Island, 533 U.S. 606, 630 (2001), it is particularly difficult to

establish a reasonable investment-backed expectation in circumstances like these.

"The purpose of consideration of plaintiffs' investment-backed expectations," we have

held, "is to limit recoveries to property owners who can demonstrate that they 'bought

their property in reliance on a state of affairs that did not include the challenged

regulatory regime.'" Cienega Gardens v. United States, 331 F.3d 1319, 1345-46 (Fed.

Cir. 2003) (quoting Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1177 (Fed.

Cir. 1994)). Here, the Normans were not only constructively but also actually aware of

the applicable wetland restrictions, and purchased most of the land with full knowledge

that portions of it were not subject to development. They could not have made those

purchases in reliance on a "state of affairs" that did not include those restrictions. We

conclude that the trial court correctly found that the appellants had reasonable

05-5039 17
investment-backed expectations only with respect to the four-acre parcel known as "WL

17B."

The trial court found that the Normans reasonably relied on the 1988 Delineation

when purchasing their original 470-acre parcel. In that delineation, the Corps

designated only 17 acres of the 470-acre parcel as wetlands. The 1991 Delineation

identified an additional 70 acres of that parcel as wetlands. Although as of the time they

purchased the 470-acre parcel, the Normans had reasonable investment-backed

expectations that they would be able to develop those 70 acres, the effect of the 1991

Delineation was considerably mitigated by the 1999 Permit and related Deed of

Restrictions, which resulted in the transfer of 220.85 acres to the South Meadows

Association but also resulted in the Normans gaining the right to develop all but a few of

the 70 acres designated as wetlands in 1991. To be sure, in order to obtain the right to

develop those acres, appellants had to agree to set aside additional acreage as

mitigation wetlands. The trial court found, however, that almost all of the property that

either had been designated as wetlands in the original 1988 Delineation (of which the

Normans were fully aware when they purchased the 470-acre parcel), or was outside

the 470-acre parcel (and thus was purchased by the Normans only after it had already

been designated as wetlands in 1991), or was never intended for development

(because it was intended to be used for storm run-off and flood control). Thus, the trial

court found that of the 220.85 acres set aside for mitigation, only 4.07 acres constituted

property that the appellants intended and reasonably expected to be able to develop.

The Normans argue that they had reasonable investment-backed expectations

with respect to the entire 220.85 acres that were set aside as mitigation. They do not,

05-5039 18
however, specifically challenge the trial court's characterization of each of the

components of the 220.85 acres. Neither do they suggest any way in which the trial

court erred in concluding that the 1991 Delineation, as applied to the 470-acre parcel,

had any lingering effects other than with regard to the 4.07-acre parcel as to which the

trial court found that the appellants had a reasonable investment-backed expectation.

Because the trial court's finding as to the appellants' reasonable investment-backed

expectations with regard to the 470-acre parcel has not been shown to be erroneous,

we uphold the trial court's finding that the Normans' reasonable investment-backed

expectations were limited to the 4.07-acre plot.

In light of the trial court's finding with respect to reasonable investment-backed

expectations, the Normans' challenge to the court's regulatory takings analysis is

unpersuasive. The appellants claim that the trial court's implementation of Penn

Central's inherently fact-specific, ad hoc inquiry was, for lack of a better phrase,

insufficiently ad hoc. Decrying the careful three-factored analysis of the trial court as

inappropriately employing a "rigid set formula," they argue that in a properly fact-

sensitive analysis, the "single fact" of the Corps' "illegal redelineation" should have been

"dispositive of the takings issue," and argue that on several occasions the courts have

allowed a single extraordinary fact to determine the entire takings question. In that

regard, we note that on those occasions when this court and the Supreme Court have

found a single factor dispositive of the takings issue, it has been the absence of that

factor—not its presence—that proved dispositive. See, e.g., Monsanto, 467 U.S. at

1005 (finding that "the force of the [reasonable expectations factor] is so overwhelming .

. . that it disposes of the taking question," where the plaintiff "could not have had a

05-5039 19
reasonable investment-backed expectation"); Golden Pac. Bank Corp. v. United States,

15 F.3d 1066, 1074 (Fed. Cir. 1994) (concluding that the absence of reasonable

investment-backed expectations was dispositive of a takings claim).6 None of the

authorities cited by appellants identifies a compensable taking in a circumstance like

this one, in which reasonable investment-backed expectations existed with respect to a

tiny fraction of the allegedly taken property, and the other two Penn Central factors—

largely unchallenged here—were resolved decisively against the takings claim.

In short, the Normans have provided us no basis on which to reverse the trial

court's conclusion that no taking occurred here.

E. Illegal Exaction Claim

On April 17, 2003, the Court of Federal Claims issued an opinion and order

dismissing appellants' illegal exaction claim for lack of jurisdiction. See Norman I, 56

Fed. Cl. at 266-67, 270. Appellants' amended complaint claimed, as an alternative to

their takings claim, that the 1991 Delineation effected an "exaction" of their property in

violation of Public Law 102-104, which "forbade the expenditure of any funds by the

Corps to delineate wetlands under the 1989 Federal Manual." Id. at 266.

We note at the outset that both appellants' amended complaint and their briefs

appear to conflate two distinct types of "exactions." Paragraph 40 of the complaint

alleges that "[b]y reason of the 1999 permit requirement . . . plaintiffs were required to

dedicate for public use in perpetuity 220.85 acres of plaintiffs' land in violation of Pub. L.

6
The Supreme Court's decision in Hodel v. Irving, 481 U.S. 704 (1987), is
not to the contrary. In that case, the Court clearly found that two of the three Penn
Central factors—economic impact and character of the government's action—weighed
in favor of just compensation, and that in light of the "extraordinary" nature of the
government action, the absence of reasonable investment-backed expectations did not
defeat the takings claim. See Hodel, 481 U.S. at 714.

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102-104 and the Fifth Amendment to the United States Constitution." This sentence

appears to allege the kind of "exaction" at issue in takings cases like Dolan and

Nollan—where the government uses a permitting process to obtain from a landowner

concessions which, if the government accomplished them directly, would constitute

takings. Although such claims are phrased, in part, in terms of "exactions," they are

clearly Fifth Amendment takings claims. These claims were not dismissed by the trial

court's order of April 17, 2003, and are discussed in the sections on takings above.

Paragraph 41 of the amended complaint, however, appears to allege something

different. It reads, "[a]s a proximate result of the acts of Defendant United States,

plaintiffs also have incurred substantial expenses," including approximately $2 million in

service fees incurred in assisting the Corps with its delineation and $1 million in

construction costs for mitigation projects. The complaint describes these expenses as

"illegal exactions."

An "illegal exaction," as that term is generally used, involves money that was

"improperly paid, exacted, or taken from the claimant in contravention of the

Constitution, a statute, or a regulation." Eastport S.S. Corp. v. United States, 372 F.2d

1002, 1007 (Ct. Cl. 1967). The classic illegal exaction claim is a tax refund suit alleging

that taxes have been improperly collected or withheld by the government. See, e.g.,

City of Alexandria v. United States, 737 F.2d 1022, 1028 (Fed. Cir. 1984). An illegal

exaction involves a deprivation of property without due process of law, in violation of the

Due Process Clause of the Fifth Amendment to the Constitution. See, e.g., Casa de

Cambio Comdiv, 291 F.3d at 1363. The Court of Federal Claims ordinarily lacks

jurisdiction over due process claims under the Tucker Act, 28 U.S.C. §1491, see Murray

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v. United States, 817 F.2d 1580, 1582 (Fed. Cir. 1987), but has been held to have

jurisdiction over illegal exaction claims "when the exaction is based upon an asserted

statutory power." Aerolineas Argentinas v. United States, 77 F.3d 1564, 1573 (Fed. Cir.

1996); see also Eastport, 372 F.2d at 1008 (Court of Claims had jurisdiction over

exaction "based upon a power supposedly conferred by a statute"). To invoke Tucker

Act jurisdiction over an illegal exaction claim, a claimant must demonstrate that the

statute or provision causing the exaction itself provides, either expressly or by

"necessary implication," that "the remedy for its violation entails a return of money

unlawfully exacted." Cyprus Amax Coal Co. v. United States, 205 F.3d 1369, 1373

(Fed. Cir. 2000) (concluding that the Tucker Act provided jurisdiction over an illegal

exaction claim based upon the Export Clause of the Constitution because the language

of that clause "leads to the ineluctable conclusion that the clause provides a cause of

action with a monetary remedy").

The Normans claim that the 1991 Delineation "exacted" from them their land, in

contravention of Public Law 102-104, which prohibited the expenditure of public funds

for delineations using the Corps' 1989 Wetland Delineation Manual. They claimed

below that "funds were expended on delineation of [the disputed property] as late as

October 30, 1991, when the Corps claims the 1991 delineation became final." Norman

I, 56 Fed. Cl. at 265. Before this court, they argue that because the 1991 Delineation

used the 1989 Manual and expended funds in doing so, and because the 1991

Delineation led "foreseeably and predictably" to "the loss of the 220.85 acres," that

"exaction" occurred in violation of a federal statute and therefore came within the

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subject matter jurisdiction of the Court of Federal Claims under Casa de Cambio

Comdiv and similar cases.

The trial court rejected that argument, concluding that even if the 1991

Delineation violated Public Law 102-104, the Court of Federal Claims lacked jurisdiction

over the supposed exaction because the land was not exacted "due to [a]

misapplication of" the statute as required by Aerolineas, Casa de Cambio Comdiv and

Eastport. See Norman I, 56 Fed. Cl. at 266 (emphasis original). The trial court ruled

that "Public Law 102-104 was not the instrument through which plaintiffs' property was

exacted[;] it was merely an appropriations act, and, as such, plaintiffs cannot maintain

an illegal exaction claim based exclusively on violation of this act." Id.

Appellants argue that "it was precisely through the Corps' illegal 1991 re-

delineation of the Normans' property . . . that the Corps gained jurisdiction over an

additional 70 acres of wetland and, as the price of allowing the Normans to regain the

use of that 70 acres, exacted from the Normans 220.85 acres of 'mitigation' lands."

This is a reiteration of appellants' argument, rejected above, that the 1991 Delineation

somehow itself effected the taking of the 220.85 acres set aside in the 1999 Permit.

The facts simply do not support that contention. Appellants' assertion that "the loss of

the 220.85 acres was the foreseeable and predictable result of redelineation under the

1989 manual," such that the 220.85 acres were "exacted as a direct result of the

application of" Public Law 104-102, as required for Tucker Act jurisdiction over exaction

claims, strains the meanings of the words "foreseeable," "predictable," and "directly"

beyond all recognition. See Casa de Cambio Comdiv v. United States, 48 Fed. Cl. 137,

145 (2000), aff'd, 291 F.3d 1356 (Fed. Cir. 2002). As we concluded in rejecting

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appellants' takings claims, the causal connection between the 1991 Delineation and the

alleged exaction is simply too attenuated to bear the weight appellants place upon it.

This court has addressed this causal attenuation problem in exaction cases on

several occasions. We have held, for example, that "a plaintiff has a claim for an illegal

exaction only where the government [action] has direct and substantial impact on the

plaintiff asserting the claim." Casa de Cambio Comdiv, 291 F.3d at 1364; see also Ont.

Power Generation, Inc. v. United States, 369 F.3d 1298, 1303 (Fed. Cir. 2004) ("The

government is considered to have illegally exacted money from a plaintiff only where the

government's actions . . . have a direct and substantial impact on the plaintiff.") (internal

quotations omitted). The Normans argue that the 1991 Delineation had a direct or

substantial effect on them, but they cannot reasonably maintain that it directly caused

the actual "exaction" alleged here, which resulted from the 1999 Permit. Although these

cases involved somewhat different factual circumstances, they are sufficiently

analogous to support our decision here.

Assuming arguendo that illegal exaction principles are ever applicable to actions

against the United States for just compensation for an alleged taking of real property,

we agree with the trial court that "misapplication of Public Law No. 02-104 did not

directly result in an exaction . . . so as to satisfy the jurisdictional prerequisite for

maintaining an illegal exaction claim" under the Tucker Act. Norman I, 53 Fed. Cl. at

266. In addition, we conclude that Public Law 102-104 does not, by its terms or by

necessary implication, provide a cause of action with a monetary remedy for its

violation. Cf. Cyprus Amax Coal, 205 F.3d at 1373 (concluding that the Tucker Act

provided jurisdiction over an illegal exaction claim based upon the Export Clause of the

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Constitution because the language of that clause "leads to the ineluctable conclusion

that the clause provides a cause of action with a monetary remedy"). We affirm the trial

court's order dismissing appellants' illegal exaction claim.

CONCLUSION

For the reasons set forth in this opinion, we affirm the trial court's judgment in

favor of the United States as to the Normans' takings claims and affirm the trial court's

dismissal, for lack of jurisdiction, of the Normans' illegal exaction claim.

AFFIRMED

No costs.

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