No. 11-1352

In the

Supreme Court of the United States

Ë

CCA ASSOCIATES,

Petitioner,v.

UNITED STATES,

Respondent.

Ë

On Petition for Writ of Certiorarito the United States Court of Appeals

for the Federal Circuit

Ë

BRIEF AMICUS CURIAE OF PACIFIC LEGALFOUNDATION IN SUPPORT OF PETITIONER

Ë

R. S. RADFORD

Counsel of RecordPacific Legal Foundation930 G StreetSacramento, California 95814Telephone: (916) 419-7111Facsimile: (916) 419-7747E-mail: rsr@pacificlegal.org

Counsel for Amicus CuriaePacific Legal Foundation

i

QUESTION PRESENTED

Whether the Emergency Low Income HousingPreservation Act of 1987 and the Low-IncomeHousing Preservation and Resident HomeownershipAct of 1990 effected a taking of Petitioner’sproperty, without just compensation, in violation ofthe Fifth Amendment of the Constitution, undereither the Loretto per se physical takings test or thePenn Central regulatory takings test?

ii

TABLE OF CONTENTSPage

QUESTION PRESENTED . . . . . . . . . . . . . . . . . . i

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . iv

INTEREST OF AMICUS CURIAE . . . . . . . . . . . 1

STATEMENT OF THE CASE . . . . . . . . . . . . . . 2

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . 3

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

I. CERTIORARI SHOULD BE GRANTEDTO RESOLVE QUESTIONS OFNATIONAL IMPORTANCE REGARDING THE SCOPE OF THIS COURT’S PHYSICAL TAKINGS DOCTRINE . . . . . . . . . . . . . . . . 4

A. This Court Should Clarify That aForced Physical Occupation ofPrivate Property That IsSubsequently Terminated CanEffect a Per Se Taking for the Timeof the Occupation . . . . . . . . . . . . . . . . . . . 5

B. Certiorari Should Be Granted toClarify That a Landowner’s Choiceto Put Property to a Specific UseDoes Not Bar a SubsequentPhysical Takings Claim If theGovernment Compels theContinuation of That Use . . . . . . . . . . . . . . . . . . . . . . 11

TABLE OF CONTENTS—ContinuedPage

iii

II. THE HOLDING OF THE COURTBELOW, THAT THE ECONOMICIMPACT OF LAND-USEREGULATIONS SHOULD BEMEASURED AGAINST THELIFETIME VALUE OF REALPROPERTY, WOULD NULLIFY THEVERY CONCEPT OF TEMPORARYREGULATORY TAKINGS UNDERPENN CENTRAL . . . . . . . . . . . . . . . . . . 14

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . 17

iv

TABLE OF AUTHORITIESPage

Cases

Cienega Gardens v. United States, 265 F.3d 1237 (Fed. Cir. 2001) (Cienega VI) . . . . . . . . . . . . . . . . . . . . . . . . 5, 11

Cienega Gardens v. United States, 33 Fed. Cl. 196 (1995) . . . . . . . . . . . . . . . . . . . 5

Cienega Gardens v. United States, 503 F. 3d 1266 (Fed. Cir. 2007) (Cienega X). . . . . . . . . . . . . . . . . . . . . . . . 3, 15

Fed. Power Comm'n v. Hope Natural Gas Co., 320 U.S. 591 (1944) . . . . . . . . . . . . 16

First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987) . . . . . . . . . . 7

Hendler v. United States, 952 F.2d 1364 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . 10

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949) . . . . . . . . . . . . . . . . . . . . . . . 7

Lingle v. Chevron USA, 544 U.S. 528 (2005) . . . 7

Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) . . . . . . . . . . . . . . . . . 3-9, 11-16

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) . . . . . . . . . . . . . . . . . 14-15

Nollan v. California Coastal Commission, 483 U.S. 825 (1987) . . . . . . . . . . . . . . . . . . . . . 1

TABLE OF AUTHORITIES—ContinuedPage

v

Palazzolo v. Rhode Island, 533 U.S. 606 (2001) . . . . . . . . . . . . . . . . . . . . . 1

Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) . . . . . 3-9, 14-16

Preseault v. United States, 100 F.3d1525 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . 9-10

Preseault v. United States, 27 Fed. Cl. 69 (1992) . . . . . . . . . . . . . . . . . . . 9

Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997) . . . . . . . . . . . . . . . . . . . . . 1

Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) . . . . . . . . . . . . . . . . . . . . 15

United States v. General Motors Corp., 323 U.S. 373 (1945) . . . . . . . . . . . . . . . . . . . . . 7

United States v. Petty Motor Co., 327 U.S. 372 (1946) . . . . . . . . . . . . . . . . . . . . . 7

United States v. Pewee Coal Co., Inc., 341 U.S. 114 (1951) . . . . . . . . . . . . . . . . . . . . 8-9

Yee v. City of Escondido, 503 U.S. 519 (1992) . . . . . . . . . . . . . . . . . . 12-13

TABLE OF AUTHORITIES—ContinuedPage

vi

Miscellaneous

Hopper, M. Reed, A Rationale for PartialRegulatory Takings: A Closer Look atSelected United States Supreme CourtPrecedent, 31 Sw. U. L. Rev. 19 (2001) . . . . . . . . . . . . . 11

Long, Dennis H., Note, The ExpandingImportance of Temporary Physical Takings:Some Unresolved Issues and An Opportunityfor New Directions in Takings Law, 72 Ind. L. J. 1185 (1997) . . . . . . . . . . . . . . . . . 8

1

INTEREST OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37.2, PacificLegal Foundation (PLF) submits this brief amicuscuriae in support of Petitioner, CCA Associates.1

Pacific Legal Foundation is a nonprofit,tax-exempt corporation organized under the laws ofCalifornia for the purpose of litigating mattersaffecting the public interest. Representing theviews of thousands of members and supporters, PLFis an advocate of individual rights, including thefundamental right to own and make productive useof private property.

PLF attorneys have litigated many leadingcases before this Court and around the nationarising under the Takings and Due Process Clausesof the Fifth and Fourteenth Amendments. PLFattorneys were counsel of record before this Court in Nollan v. CaliforniaCoastal Comm’n, 483 U.S. 825 (1987);Suitum v. Tahoe Regional Planning Agency, 520U.S. 725 (1997), and Palazzolo v. Rhode Island, 533U.S. 606 (2001).

PLF and its supporters recognize that theTakings Clause provides crucial safeguards for the

1 All parties have consented to the filing of this brief.Counsel of record for all parties received notice of theAmicus Curiae’s intention to file this brief. Lettersevidencing such consent have been filed with the Clerk ofthe Court.

Pursuant to Rule 37.6, Amicus Curiae affirms that nocounsel for any party authored this brief in whole or in part,and no counsel or party made a monetary contributionspecifically for the preparation or submission of this brief.

2

rights of property owners against predatory andoverreaching government regulations. The decisionof the Federal Circuit in this case, if allowed tostand, could effectively eliminate the doctrine oftemporary takings from this Court’s jurisprudence. For that reason, PLF’s board of trustees, a majorityof whom are attorneys, have authorized the filing ofthis brief urging this Court to grant the petition fora writ of certiorari.

STATEMENT OF THE CASE

This case raises the question of whether thefederal government can conscript private propertyfor use as low-income housing for a period of morethan five years, without incurring liability for ataking.

Under the 1961 amendments to the NationalHousing Act, Petitioner, like many other propertyowners, was induced to build and operate anapartment complex as low-income housing.Petitioner’s Appendix (App.) 5a. As incentive forPetitioner’s agreement to lease its apartments atbelow-market rents, the federal governmentprovided mortgage insurance and interest subsidies. Importantly, this agreement included a“prepayment” provision, by which Petitioner couldprepay the mortgage and regain complete control ofits property after twenty years. Id.

But as the twenty-year mark approached, thegovernment enacted the Emergency Low IncomeHousing and Preservation Act of 1987 (ELIHPA),imposing a two-year moratorium on prepaymentsbeginning in 1988. Then, the government enactedthe Low-Income Housing Preservation and Resident

3

Homeownership Act of 1990 (LIHPRHA),indefinitely cancelling prepayment rights. Petitioner and other similarly situated propertyowners were effectively compelled to continueproviding low-income housing after the twenty-yearprepayment date had come and gone.

Petitioner sued the government, alleging interalia that ELIHPA and LIHPRHA effected acompensable taking under the Takings Clause ofthe United States Constitution. Shortly thereafter,in 1996, LIHPRHA was repealed. This establisheda terminus date for the compelled occupation ofPetitioner’s property, which had existed for fiveyears and ten days. App. 5a. After more thanfifteen years of litigation, including two trials, theFederal Circuit rejected Petitioner’s claims in lightof its previous decision in CienegaGardens v. United States, 503 F. 3d 1266 (Fed. Cir.2007) (Cienega X).

SUMMARY OF ARGUMENT

The petition raises important constitutionalissues relating to the Takings Clause of the UnitedStates Constitution. The Court should grantcertiorari to resolve important questions concerningthe application of two takings tests—the per setakings standard of Loretto v. TeleprompterManhattan CATV Corp., 458 U.S. 419 (1982), andthe ad hoc takings test of Penn CentralTransportation Co. v. City of New York, 438 U.S.104 (1978). The decision below deepens theconfusion over these tests and, in some respects,guts the protections they afford against governmentabuse.

4

Loretto establishes liability for compensationunder the Takings Clause if a regulatory schemecompels a physical occupation of private property bythird parties. The Court below found Loretto to beinapplicable to the facts of this case because theforced occupation did not continue indefinitely. However, nothing in Loretto holds that liability fora forced physical occupation can be evaded simplyby terminating the taking.

The Court below acknowledges that thecharacter of the regulations at issue – forcingPetitioner to bear the full costs of providinglow-income housing – supports a finding of a taking. However, following its own erroneous precedent, theFederal Circuit ruled that the economic impact ofELIHPA and LIHPRHA must be evaluated relativeto the value of Petitioner’s property over its entirelife. Under that computation, neither this nor anyother conceivable regulatory enactment could rise tothe level of a taking, so long as the value of theproperty is not entirely destroyed.

ARGUMENT

I

CERTIORARI SHOULD BE GRANTED TORESOLVE QUESTIONS OF NATIONAL

IMPORTANCE REGARDING THE SCOPEOF THIS COURT’S PHYSICAL TAKINGS

DOCTRINE

Because LIHPRHA forced Petitioner to suffera physical occupation of its property by thirdparties, this case comes within this Court’s doctrineof per se physical takings. See Loretto, 458 U.S. 419. Yet, although the Federal Circuit recognized that

5

the forced occupation of Petitioner’s property hadthe “character” of a taking, it found this point to be“not dispositive” of the takings issue. App. 16a. This holding was presumably compelled by thecourt’s earlier erroneous ruling that LIHPRHA“merely . . . enhance[d] an existing tenant’spossessory interest.” Cienega Gardens v. UnitedStates, 265 F.3d 1237, 1248 (Fed. Cir. 2001)(Cienega VI).

The holding in Cienega VI, as applied toPetitioner’s physical taking claim by the courtbelow, rests on two faulty premises. First, theFederal Circuit appears to assume thatgovernment- mandated physical occupations oflimited duration—like LIHPRHA’s forcedoccupation of Petitioner’s property—are not“permanent” enough to qualify as per se takingsunder Loretto. Second, once a landowner chooses aspecific use for his property, a per se physical takingsupposedly cannot result from a forced extension ofthat use. See, e.g., Cienega Gardens v. UnitedStates, 33 Fed. Cl. 196 (1995).

Both these premises are inconsistent with thefacts and reasoning of Loretto itself.

A. This Court Should Clarify That aForced Physical Occupation ofPrivate Property That IsSubsequently Terminated Can Effect a per Se Taking for The Time of the Occupation

In Loretto, a New York statute requiredlandlords to permit cable companies to installfacilities on their properties—not indefinitely, but

6

only “[s]o long as the property remain[ed]residential and a [cable] company wishe[d] to retainthe installation.” Loretto, 458 U.S. at 439. Thestatute was challenged on the grounds that theforced acquiescence in the occupation of one’sproperty by third parties effected a taking, and thisCourt agreed. Id. at 421.

The Court observed that a temporary physicalinterference with property that falls short of anoccupation, and regulations that merely restrictproperty use, are properly analyzed under themulti-factor balancing analysis of Penn Central. Id.at 430. However, when the character of theregulatory action “reaches the extreme form of apermanent physical occupation,” the Penn Centraltest can be dispensed with. Id. at 426. In suchcases, the character of the government’s actionbecomes the determinative factor, giving rise to acompensable taking without regard to otherconsiderations. Id.

This holding was based in part on priordecisions which recognized that even short-termphysical occupations by government may constituteper se violations of the Takings Clause. Id. at 431. In United States v. Pewee Coal Co., Inc., 341 U.S.114 (1951), the federal government “possessed andoperated” the property of a coal mining company forfive-and-a-half months in order to stave off anationwide miners’ strike in wartime. Id. at 115. The Court unanimously concluded that thegovernment’s seizure was a per se taking, with noregard to the occupation’s relatively limitedduration. Id. (plurality); id. at 119 (Reed, J.,concurring); id. at 121-22 (Burton, J., dissenting).

7

The limited duration of the government’s occupationof the property was considered relevant only to theamount of compensation due to the plaintiff. Id. at117. The Loretto Court attached no significance tothe fact that the Pewee Coal occupation wasshort-lived, focusing on the character—not theduration—of the government’s action. Loretto, 458U.S. at 431 (because of the “‘actual taking ofpossession and control,’ the taking was as clear as ifthe Government held full title and ownership”(citing Pewee Coal, 341 U.S. at 116)).

Other wartime seizure cases are in accord withPewee Coal’s principle: the forced physicaloccupation of private property constitutes acategorical taking, irrespective of the fact that theoccupation is subsequently terminated. See KimballLaundry Co. v. United States, 338 U.S. 1, 16 (1949)(per se taking in government’s temporary use andoccupancy of laundromat); United States v. PettyMotor Co., 327 U.S. 372, 378 (1946) (per se taking inthe government’s temporary occupation of abuilding through the ouster of existing tenants);United States v. General Motors Corp., 323 U.S. 373,375 (1945) (per se taking in the government’s“temporary occupancy of a portion of a leasedbuilding” for one year). This Court has repeatedlyreaffirmed the continued vitality of these seizurecases. See, e.g., Lingle v. Chevron USA, Inc., 544U.S. 528, 537 (2005); First English EvangelicalLutheran Church of Glendale v. County of LosAngeles, 482 U.S. 304, 318 (1987).

Inexplicably, however, while expressly relyingon the analysis of Pewee Coal, dictum in Lorettopurported to distinguish a compensable “permanent

8

physical occupation” from a mere “temporaryinvasion,” which would be subject to Penn Central’sbalancing test. Loretto, 458 U.S. at 428. In anespecially enigmatic footnote, the Court noted:

The permanence and absolute exclusivityof a physical occupation distinguish it fromtemporary limitations on the right toexclude. Not every physical invasion is ataking.… [S]uch temporary limitations aresubject to a more complex balancingprocess to determine whether they are ataking. The rationale is evident: they donot absolutely dispossess the owner of hisrights to use, and exclude others from, hisproperty.

Id. at 436 n.12.

“This single judicial pronouncement is aprincipal source of the current uncertainty in thetemporary physical takings jurisprudence.” DennisH. Long, Note, The Expanding Importance ofTemporary Physical Takings: Some UnresolvedIssues and An Opportunity for New Directions inTakings Law, 72 Ind. L. J. 1185, 1194 (1997). If, asthe Loretto dictum suggests, Penn Central’s testapplies to all “temporary” government incursions,then Loretto must be interpreted to have overruledsub silentio the wartime seizure cases, includingPewee Coal. Yet this is impossible: Lorettounqualifiedly, expressly relies on Pewee Coal. Loretto, 458 U.S. at 431. A more plausibleinterpretation is that Loretto sought to relegate toPenn Central “a class of temporary takings claims inwhich the duration is less than some as yet

9

unspecified threshold”— presumably less than thefive-and-a-half months spanning the Pewee Coaloccupation. See Long, supra, at 1194. Petitioner’sclaim arising from a five-year compelled physicaloccupation of its property is not in this class.

Courts have struggled to determine exactlywhich physical occupations are subject to Loretto,with conflicting results. In Preseault v. UnitedStates, 27 Fed. Cl. 69 (1992), plaintiffs owned landthrough which a railroad had for years owned aneasement for its tracks. After the rail companyabandoned the easement, plaintiffs expected theeasement to revert back to them under state law. But under an intervening federal statute, thegovernment authorized transfer of the easement asa hiking trail to a neighboring town for a maximumof thirty years. Plaintiffs challenged thegovernment’s action as a per se taking. Id. at 75-81.

The Court of Federal Claims found that thegovernment’s forced transfer of the easement to athird party effected a physical occupation, but onlya temporary one, because of the thirty-year leaselimit. Id. at 95. Consequently, the court analyzedthe physical occupation under the Penn Centralbalancing test and held there was not a taking. Butthe Federal Circuit subsequently reversed, holdingthat is was error to interject the Penn Centralanalysis into what was clearly a “physicaloccupation case.” Preseault v. United States, 100F.3d 1525, 1540 (Fed. Cir. 1996).

In contrast to the trial court decision inPreseault stands Hendler v. United States, 952 F.2d1364 (Fed. Cir. 1991). To combat ground waterpollution, the federal government in Hendler

10

requested access to plaintiffs’ property to installwells for monitoring and extracting waste migratingfrom a nearby site. Notwithstanding plaintiffs’refusal, government agents installed the wellsanyway. Id. at 1369. Plaintiffs challenged thegovernment’s actions as effecting a taking. TheCourt of Federal Claims ruled in the government’sfavor, but the Federal Circuit reversed. Id. at 1367.

Consistent with the wartime seizure cases, theFederal Circuit held that the installation of wells onplaintiffs’ property constituted a physicaloccupation, and thus a per se taking—regardless ofthe finite or even short-term duration of theoccupation. Id. at 1378. Addressing thegovernment’s claim that the occupation wastemporary, the Federal Circuit offered a differentinterpretation of “temporary” occupations than thatof the Court of Federal Claims in Preseault:

“[P]ermanent” does not mean forever . . . . Ataking can be for a limited term—what is“taken” is . . . an estate for years, that is, aterm of finite duration as distinct from the infinite term of an estate in fee simpleabsolute. . . .

If the term “temporary” has any realworld reference in takings jurisprudence, itlogically refers to those governmentalactivities which involve an occupancy thatis transient and relatively inconsequential,and thus properly can be viewed as no morethan a common law trespass.

Id. at 1376-77.

11

The present case squarely presents thisunresolved question from Loretto, that has been asource of confusion and conflict among the lowercourts. The most internally consistentinterpretation of Loretto is that the dispositivefactor in a physical occupation takings claim is thecharacter of the regulatory action, i.e., whether “thegovernment exercises ‘complete dominion or control’over the property interest affected.” M. ReedHopper, A Rationale for Partial Regulatory Takings:A Closer Look at Selected United States SupremeCourt Precedent, 31 Sw. U. L. Rev. 19, 21 (2001). Certiorari should be granted to clarify that theregulatory intrusion in this case—a five-year forcedoccupation of Petitioner’s property by thirdparties— rises to the level of a per se physicaltaking under Loretto.

B. Certiorari Should Be Granted toClarify That a Landowner’s Choice toPut Property to a Specific Use DoesNot Bar a Subsequent PhysicalTakings Claim If the GovernmentCompels the Continuation of ThatUse

Both the Court of Federal Claims and the courtbelow were constrained in their adjudication ofPetitioner’s physical takings claim by the previouserroneous treatment of this issue by the FederalCircuit in Cienega VI, 265 F.3d at 1248-49. In thatdecision, the lower court held that ELIHPA andLIHPRHA did not give rise to a physical takingbecause the effect of the regulations “is merely toenhance an existing tenant’s possessory interest.”

12

Id. (citing Yee v. City of Escondido, 503 U.S. 519(1992)).

While the court below was not free to repudiatethis astonishing proposition, it is now squarelypresented to this Court. In essence, the FederalCircuit ruled that because Petitioner and otherinvestors accepted the government’s inducements toenter the rental business in the first place, theysomehow implicitly consented to the forcedoccupation of their property by low-income tenantstwenty years later. This reasoning, incorporated inthe present case, App. at 6a-7a, finds no basis in Yeeor any other of this Court’s precedents.

Yee involved a physical takings challenge to amobile home rent control ordinance. Mobile homepark owners claimed the ordinance, in conjunctionwith a state statute, effected a per se taking underLoretto by eliminating their right to chooseincoming tenants, and to set the rent charged forthe pad on which the mobile home sits. Yee, 503U.S. at 526-27.

This Court upheld the ordinance, concluding itdid not effect a physical taking. The Court notedthat the “element of required acquiescence is at theheart of the concept of occupation,” and that “[t]hegovernment effects a physical taking only where itrequires the landowner to submit to the physicaloccupation of his land.” Id. at 527 (citation andquotation marks omitted).

In that case:

[N]either the city nor the State compelspetitioners, once they have rented theirproperty to tenants, to continue doing so.

13

To the contrary, [state law] provides thata park owner who wishes to change theuse of his land may evict his tenants . . . .Put bluntly, no government has requiredany physical invasion of petitioners’property. Petitioners’ tenants were invitedby petitioners, not forced upon them by thegovernment.

Id. at 527-28.

Absent government compulsion, there could beno physical occupation under Loretto, andtherefore no per se taking. The Yee Court madeclear it did not address a case where “the statute, onits face or as applied, [compelled] a landowner overobjection to rent his property or to refrain inperpetuity from terminating a tenancy.” Id. at 528. Yet LIHPRHA did just that, compelling Petitionerover its objection to rent its property to low-incometenants for more than five years. Moreover,Petitioner had no reasonable means of convertingits property to other uses, so its property was at themercy of the government and its approved tenants. Consequently, the holding in Yee has no bearing onthis case.

Certiorari should be granted to clarify that alandowner’s choice to make a specific use of hisproperty cannot bar all per se taking claims againstsubsequent compelled physical occupationsconsistent with that use.

II

THE HOLDING OF THE COURT BELOW,THAT THE ECONOMIC IMPACT OF

LAND-USE REGULATIONS SHOULD BE

14

MEASURED AGAINST THE LIFETIMEVALUE OF REAL PROPERTY, WOULD

NULLIFY THE VERY CONCEPT OFTEMPORARY REGULATORY TAKINGS

UNDER PENN CENTRAL

Although Petitioner’s takings claims shouldhave been resolved in its favor under Loretto’s per serule, the impact of ELIHPA and LIHPRHA clearlygive rise to takings liability under the multi-factorbalancing test of Penn Central.

Under Penn Central, liability for justcompensation under the Takings Clause depends onthe offending regulation’s economic impact on theproperty owner and the character of the governmentaction. Penn Central, 438 U.S. at 124. As the courtbelow recognized, the character of the governmentaction in this case – the forced physical occupationof Petitioner’s property for more than five years –clearly favors a taking. App. 15a-16a. Congress’sabrogation of the prepayment option effectivelyauthorized a continuing physical occupation ofPetitioner’s property against its will; moreover,Congress specifically did so to force a small numberof property owners to bear the full costs of providinga general public benefit (affordable housing).

In a straightforward application of PennCentral, the Court of Federal Claims determinedthat Petitioner had suffered a severe economicimpact from the application of ELIHPA andLIHPRHA to its property. App. at 137a. Nevertheless, the court below set aside thisdetermination due to the egregious economic

15

blunder it had previously committed in Cienega X,holding that the economic impact prong of PennCentral must be evaluated by the regulation’sreduction in the value of real property over itsentire expected life, i.e., to infinity. App. at 10a-12a. If allowed to stand, this outlandish rule would erasethis Court’s jurisprudence of temporary regulatorytakings, render Penn Central a curiosity, andreduce the class of compensable takings to thosethat fit within the narrow categorical rules ofLoretto or Lucas v. South Carolina Coastal Council,505 U.S. 1003 (1992).

In a gross misreading of this Court’s decision inTahoe-Sierra Preservation Council v. TahoeRegional Planning Agency, 535 U.S. 302 (2002), theFederal Circuit in Cienega X extended the analysisin that case to partial regulatory takings, stating“the necessity of considering of the overall [e.g.,lifetime] value of the property was explicitlyconfirmed in the temporary regulatory takingscontext.” Cinega X, 503 F.3d at 1281 (citingTahoe-Sierra, 535 U.S. at 331). Yet Tahoe-Sierra, acase in which the plaintiff property owners allegeda complete deprivation of economic value underLucas, had no bearing whatsoever on temporaryregulatory takings.

If liability for a Penn Central taking required asignificant economic impact on the value of realproperty measured over its entire useful life, areduction in the financial rate of return over theeffective duration of a regulation could never effecta taking. Yet this Court has frequently noted thatan inadequate return is part of a taking analysis inthe context of regulated utilities and other

16

commercial enterprises. See, e.g., Fed. PowerComm’n v. Hope Natural Gas Co., 320 U.S. 591, 603(1944). Penn Central itself absolved the localgovernment of takings liability in part because of itsevaluation that the plaintiffs’ railroad terminalcould “be regarded as capable of earning areasonable return” on the owners’ investment. PennCentral, 438 U.S. at 129, 136.

Certiorari should be granted in this case toexplicate the relationship between Penn Central andTahoe-Sierra, and to clarify that the economicimpact prong of the former decision is unaffected bythe analysis of Lucas claims set forth in the latter. Only this Court can clarify that when a physicalinvasion of land is countenanced by the government,the taking must be compensated, whether theLoretto per se physical takings test or Penn Centralad hoc takings test applies.

17

CONCLUSION

For these reasons, the Court should grant thepetition for writ of certiorari.

Dated: June 11, 2012

R. S. RADFORD

Counsel of RecordPacific Legal Foundation930 G StreetSacramento, California 95814Telephone: (916) 419-7111Facsimile: (916) 419-7747E-mail: rsr@pacificlegal.org

Counsel for Amicus CuriaePacific Legal Foundation