Morris v. United States

• Court: Court of Appeals for the Federal Circuit
• Decided: December 16, 2004
• Docket: 2004-5029
• Status: Published

Opinion

United States Court of Appeals for the Federal Circuit

04-5029

ROBERT E. MORRIS and CAROL L. MORRIS,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

J. David Breemer, Pacific Legal Foundation, of Sacramento, California, argued for plaintiffs-appellants. With him on the brief was Robin L. Rivett.

Kathryn E. Kovacs, Attorney, Appellate Section, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Thomas L. Sansonetti, Assistant Attorney General; Katherine J. Barton, Attorney, and William J. Shapiro, Attorney, General Litigation Section, of Washington, DC. Of counsel on the brief was Deanna Harwood, Attorney, Office of the General Counsel, National Oceanic and Atmospheric Administration, of Long Beach, California.

Appealed from: United States Court of Federal Claims

Senior Judge Bohdan A. Futey United States Court of Appeals for the Federal Circuit

___________________________

DECIDED: December 16, 2004 ___________________________

Before NEWMAN, CLEVENGER, and DYK, Circuit Judges.

CLEVENGER, Circuit Judge.

In this appeal, the Morrises challenge the decision of the United States Court of

Federal Claims, which dismissed as unripe their claim that regulatory provisions of the

Endangered Species Act effected a taking compensable under the Fifth Amendment.

See Morris v. United States, 58 Fed. Cl. 95 (2003). Because the agency has discretion

over the cost to the Morrises of complying with the regulations, this claim is unripe and

we therefore affirm the trial court's decision.

I

In 1995, the Morrises paid $2,500 to purchase a half-acre lot adjacent to the Eel

River in Humboldt County, California. Morris, 58 Fed. Cl. at 96. They now seek to harvest six large old-growth redwood trees that grow on that property and assert that

this is the property's only economically viable use. Id. Potentially standing in their path

is the Endangered Species Act ("the Act"), see 16 U.S.C. §§ 1531-1544 (2000). The

Act prohibits the "take" of certain listed species, § 1538(a)(1)(B),1 but empowers the

Secretary to permit "any taking otherwise prohibited by section 1538(a)(1)(B) . . . if such

taking is incidental to . . . an otherwise lawful activity." § 1539(a)(1)(B). To receive an

Incidental Take Permit ("ITP"), a person wishing to engage in acts that might effect a

"take" of a listed species must file an application that includes a Habitat Conservation

Plan ("HCP"). See 16 U.S.C. § 1539(a)(2)(A)(i)-(iv); see also 50 C.F.R. § 222.307

(2004).

After being contacted by the Morrises, the National Marine Fisheries Service

("NMFS" or "the agency") visited the property to evaluate whether harvesting the trees

would violate the Act by interfering with the behavior patterns of certain fish in the Eel

River. 58 Fed. Cl. at 96. Through correspondence it became clear that the position of

NMFS was that the Morrises should obtain an ITP before harvesting the trees. Id. The

Morrises investigated the cost of filing an application with the required HCP.

Concluding that the cost was greater than the value of the trees or the property, they

decided not to file an application for an ITP. Instead, they brought suit against the

1 In relevant part, the Act states: (a)(1) Except as provided in sections 1535(g)(2) and 1539 of this title, with respect to any endangered species of fish or wildlife listed pursuant to section 1533 of this title it is unlawful for any person subject to the jurisdiction of the United States to . . . (B) take any such species within the United States or the territorial sea of the United States; 16 U.S.C. § 1538 (2000).

04-5029 2 United States alleging a regulatory taking in the requirement that they comply with the

permitting process.

The government moved to dismiss the claim on the pleadings, contending that it

was unripe because the Morrises never applied for an ITP and, consequently, the

government never took a final action restricting the use of the property. The Court of

Federal Claims agreed, holding that the Morrises must at least make an application for

an ITP before their claim can ripen. 58 Fed. Cl. at 99. The Morrises appeal.

Absent an express statutory grant of jurisdiction to the contrary, the Tucker Act

provides the Court of Federal Claims exclusive jurisdiction over takings claims for

amounts greater than $10,000. See Palm Beach Isles Assocs. v. United States,

208 F.3d 1374, 1383 n.10 (Fed. Cir. 2000). However, that court does not have

jurisdiction over claims that are not ripe. See Howard W. Heck & Assocs., Inc. v. United

States, 134 F.3d 1468 (Fed. Cir. 1998). We review the jurisdictional determination of

the Court of Federal Claims pursuant to 28 U.S.C. § 1295(a)(3) (2000). This court's

review of the ripeness question is de novo. Heck, 134 F.3d at 1471.

II

According to the Morrises, their takings claim is ripe for review because the cost

of the permitting process exceeds $10,000 and is greater than the value of their

property, and the government has no meaningful discretion to change those facts.

Thus, argue the Morrises, the agency has no further discretion to reduce the economic

impact of the regulatory scheme and the effects of that scheme are known to a

reasonable degree of certainty. The Morrises also conditionally challenge the Court of

Federal Claims's decision on procedural grounds. They argue that if the Court of

04-5029 3 Federal Claims dismissed their claim on the premise that their allegations of the cost of

the permitting process were not accurate, the court erred because it is required to

accept their factual allegations as true.

The government responds that the Morrises' claim is unripe because the

Morrises have made no attempt to use the available permitting procedure. It argues

that there has been no agency decision impacting the property in question and that the

futility exception extant in the law applies only where the agency's conduct operates as

a constructive denial of a permit, not where the permitting process is merely complex,

arduous, or expensive. Concerning the Morrises' procedural argument, the government

argues that the condition has not been met because the Morrises' claim was dismissed

for not filing any application, not because the court disbelieved the Morrises' allegations

concerning the cost of the application. Addressing the alternative, the government

argues that even if the Court of Federal Claims had decided the case on the grounds

the Morrises suggest, such a decision is proper because a court addressing a challenge

to subject matter jurisdiction in a dispositive motion is not bound to accept all of the

allegations in the complaint as true and can look beyond the pleadings to determine

whether it has jurisdiction.

III

The Morrises' theory of taking is not grounded in any agency restriction of the

actual use of their property, but on their obligation to apply for and secure a permit

before harvesting the trees. That is to say, the agency has not told the Morrises that

they either may or may not harvest the trees they seek to harvest, and if they may, what

conditions might apply to such permission. Instead, to be confident that they comply

04-5029 4 with the take prohibitions of the Act, the Morrises must file an application, which,

accepting their assertion of the relevant costs, will cost more than their property is

worth. Thus, it is the burdens attending the administrative procedure rather than the

burdens attending a decision on restriction of use that define the Morrises' claim.

We have no comment on whether a regulatory taking can arise in these

circumstances. However, the Morrises' theory of taking directs the ripeness inquiry.

Under the Morrises' theory, ripeness depends not on a final agency decision pertaining

to the actual use of their property, but, instead, on a final agency decision establishing

the cost of the application process.

The general rule is that a claim for a regulatory taking "is not ripe until the

government entity charged with implementing the regulations has reached a final

decision regarding the application of the regulations to the property at issue."

Williamson County Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 186 (1985);

Boise Cascade Corp. v. United States, 296 F.3d 1339, 1349 (Fed. Cir. 2002) ("[A]bsent

denial of the permit, only an extraordinary delay in the permitting process can give rise

to a compensable taking."). This "finality" requirement is compelled by the nature of the

takings inquiry. Evaluating whether the regulations effect a taking requires knowing to a

reasonable degree of certainty what limitations the agency will, pursuant to regulations,

place on the property. See MacDonald, Sommer & Frates v. Yolo County, 477 U.S.

340, 350-51 (1986). This means that when an agency provides procedures for

obtaining a final decision, a takings claim is unlikely to be ripe until the property owner

complies with those procedures. See Greenbriar v. United States, 193 F.3d 1348, 1359

(Fed. Cir. 1999).

04-5029 5 Where further administrative process could reasonably result in a more definite

statement of the impact of the regulation, the property owner is generally required to

pursue that avenue of relief before bringing a takings claim. See id. ("The failure to

follow all applicable administrative procedures can only be excused in the limited

circumstance in which the administrative entity has no discretion regarding the

regulation's applicability and its only option is enforcement."). Indeed, in Heck we went

so far as to state: "the futility exception simply serves 'to protect property owners from

being required to submit multiple applications when the manner in which the first

application was rejected makes it clear that no project will be approved.'" 134 F.3d at

1472 (quoting S. Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir.

1990)). Thus, where the agency's decision makes clear that pursuing remaining

administrative remedies will not result in a different outcome, the remaining remedies

are futile and the impact of the regulation on the use of the property is reasonably

certain. See Suitum v. Tahoe Reg'l Planning Agency, 520 U.S. 725, 739 (1997).

IV

Here the Morrises' claim is not ripe because there has been no final agency

decision that has sufficiently fixed the cost of the application. Even accepting that the

Morrises must file an application to harvest their trees, the agency has discretion to

assist the Morrises with the application. Because we have no idea and no way to

predict what influence the wielding of that discretion will have on the cost of the

application to the Morrises, this case cannot be ripe, see Greenbriar, 193 F.3d at 1359

(citing Suitum, 520 U.S. at 738-40), and we thus cannot reach the Morrises' novel

theory that a compensable taking can arise from the cost of complying with a valid

04-5029 6 regulatory process where the government has never actually restricted the use of the

property in question.

The assumption that the cost of applying for the ITP is fixed and knowable is

simply incorrect. The statute requires that an ITP applicant submit an HCP.2 Notably,

however, the Habitat Conservation Planning and Incidental Take Permit Processing

Handbook, (Nov. 4, 1996) ("Handbook"), which guides NMFS in processing ITP

applications, explains that NMFS is to provide assistance to an ITP applicant. It

"strongly recommend[s]" that an applicant request technical assistance from NMFS and

further states that the NMFS Field Office is "to provide[] technical assistance to the

permit applicant." We also note that the Handbook makes the Field Office "responsible

for assisting the applicant in preparing the HCP" and contemplates an involved role for

NMFS throughout the process. This is consistent with the agency's position in this

litigation and consistent with the estimate provided by the appellants' consultant, which

reflects that NMFS offered to prepare the National Environmental Policy Act

2 (2)(A) No permit may be issued by the Secretary authorizing any taking referred to in paragraph (1)(B) unless the applicant therefor submits to the Secretary a conservation plan that specifies—

(i) the impact which will likely result from such taking;

(ii) what steps the applicant will take to minimize and mitigate such impacts, and the funding that will be available to implement such steps;

(iii) what alternative actions to such taking the applicant considered and the reasons why such alternatives are not being utilized; and

(iv) such other measures that the Secretary may require as being necessary or appropriate for purposes of the plan.

16 U.S.C § 1539 (2000).

04-5029 7 Assessment and committed to providing technical assistance for the design of mitigation

or conservation measures. Moreover, at argument, Appellants' counsel candidly

conceded that the agency has discretion concerning what the Morrises must do to

complete a satisfactory HCP.

The cost of an ITP application is unknowable until the agency has had some

meaningful opportunity to exercise its discretion to assist in the process. Because the

cost to the Morrises of the ITP application following the exercise of NMFS's discretion

may be less than the alleged economic value of their property, deciding whether a

taking would occur if the cost is greater is a hypothetical exercise. It is no more than

asking the court to advise whether a taking will occur if the agency were to exercise its

discretion in a particular manner. To allow a claim to ripen on the assertion that the

exercise of an agency's discretion would have a certain result, without permitting the

agency to exercise that discretion would offend the requirement from Abbott

Laboratories v. Gardner, 387 U.S. 136, 149 (1967), that the issue be fit for review.

Accordingly, in its current posture, the Morrises' claim cannot ripen until the agency

refuses to exercise its discretion, or exercises its discretion in a manner that makes

reasonably clear or final the affect the regulation will have on the Morrises' application.

See Palazzolo v. Rhode Island, 533 U.S. 606, 620-21 (2001).

V

Because the Morrises have not allowed NMFS to exercise its discretion, their

claim is not ripe as a matter of law. Accordingly, this claim is not ripe until the Morrises

make a meaningful attempt to engage NMFS by filing an application and requesting

assistance. In addition, because the Court of Federal Claims correctly dismissed this

04-5029 8 claim as a matter of law, the Morrises' procedural arguments do not establish reversible

error.

The decision of the Court of Federal Claims to dismiss the complaint is affirmed.

COSTS

No costs.

AFFIRMED

04-5029 9