Legal Briefs

Resource Investment, Inc. v. United States

By Mark F. Hearne, Stephen S. Davis, and Ilya Shapiro
January 19, 2016

The constitutional command that no property may be taken by the government without just compensation is crystal clear. Yet, the Supreme Court and Congress continue to permit a judicial quagmire with respect to these claims that deprives many litigants of their just compensation. In the early 1980s, two waste-management contractors responded to a request by Pierce County, Washington to develop a state-of-the-art waste-disposal facility. The site was approved by the Washington State Department of Ecology. But before the companies could get the requisite permits, the U.S. Army Corps of Engineers intervened, asserting jurisdiction and claiming that the companies needed to acquire a Clean Water Act permit. The Army Corps took six years to process the application before denying it, despite the state’s approval of the site under the same standards. The companies were able to pursue two claims as a result—one seeking an injunction against the Corps, the second for damages due to a temporary taking. Because of complications created by the relevant jurisdictional statutes, the first claim, being equitable in nature, had to be pursued in federal district court, while the second claim, being against the federal government for monetary damages, had to be pursued separately in the special Court of Federal Claims. Moreover, the companies had to pursue their injunction first in order to establish their second (takings) claim. Eventually, they won the injunction after taking it all the way to the federal appellate court, which result allowed them to pursue and eventually win summary judgment in the Court of Federal Claims—until, the Supreme Court issued its decision in United States v. Tohono O’Odham Nation (2011). That case held that a Civil War-era statute (28 U.S.C. § 1500) bars plaintiffs from pursuing monetary claims in the Court of Federal Claims while any other actions with “substantial overlap in operative facts” are pending in district court. Thus, the government successfully moved to dismiss the takings claim, because the companies had filed their claim in the Court of Federal Claims while their injunction was pending before the federal appellate court—to avoid running afoul of the statute of limitations. The Court of Federal Claims’ decision to dismiss the valid taking claim was upheld on appeal, with the circuit court reading § 1500 so broadly as to prevent a federal court from hearing a meritorious constitutional question. Cato has now joined the National Association of Reversionary Property Owners (NARPO) on an amicus brief urging the Supreme Court to take up the case and clarify that Tonoho does not (and cannot) permit a statute to block property owners from suing for constitutionally required just compensation—as has come to pass in the last few years. Indeed, just last year, Cato and NARPO filed in another, similar case, Ministerio Roca Solida v. United States. The Supreme Court needs to take the current case and clean up the mess that (at least lower courts think) it created five years ago.

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