Summary of a Recent
Judicial Development in
Environmental Law

Enforcement of Wetlands Protections is Neither
a Physical or Regulatory Taking

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Brace v. United States, 72 Fed. Cl. 337 (Fed. Cl. 2006), the United States Court of Federal Claims ruled in favor of the government, holding that the government's actions constituted neither a regulatory or physical taking of the plaintiff's property under the Fifth Amendment. The plaintiff alleged both physical and regulatory takings following the enforcement of a wetlands restoration plan mandated by consent decree.

Background

The plaintiff, a farmer, came from a long line of farmers in Erie County, Pennsylvania. Id. at 339. For many years, wetlands located on his family's farmland were drained to accommodate farming activities with the assistance of the United States Department of Agriculture (USDA). Id. However, when the plaintiff acquired the property from his parents, he attempted to drain and fill the wetlands, and the Environmental Protection Agency (EPA) filed an enforcement suit against him. Id. The enforcement action resulted in a consent decree requiring the plaintiff to remedy his draining activities. Id. The plaintiff claimed that the EPA's actions constituted either a regulatory or physical taking of property under the Fifth Amendment. Id.

Arguments

The plaintiff argued: 1) that the application of wetlands regulations through consent decree constituted a regulatory taking; 2) that the consent decree, which required the farmer to comply with a wetlands restoration plan, effectuated a physical taking of the farmer's property; and 3) that the flooding of his farm following wetlands restoration effectuated a physical taking. Id.

Analysis and Holdings

The takings clause of the Fifth Amendment states, "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V. Most cases interpreting the clause involve either a physical taking or a regulatory taking. See id. at 346. A physical taking occurs when the government authorizes a physical occupation of property, and compensation is usually required. Id. However, regulatory takings are more complex. When the government regulates the use of property,

compensation is required only if considerations such as the purpose of the regulation or the extent to which it deprives the owner of the economic use of the property suggest that the regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole. Id. In the case at bar, the plaintiff alleged both types of takings.
Id.

First, the court examined the plaintiff's regulatory takings claim through the lens of the Penn Central factors. When utilizing the Penn Central analysis, courts look at the following three factors: 1) the economic impact of the regulation on the claimant; 2) the extent to which the regulation has interfered with distinct investment-backed expectations; and 3) the character of the governmental action. Id. at 347 (citing Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, at 124 (1978)). In applying the factors to the instant case, the court believed that enforcing the consent decree interfered with the plaintiff's reasonable investment-backed expectations; however, when the court focused its attention on the first and third factors of the Penn Central analysis, it found that the regulation only reduced the value of the plaintiff's land by 14 percent, and it emphasized the obligation of the government to preserve the nation's wetlands. Id. at 349-56. After examining the three factors comprehensively, the court concluded that the application of the wetlands regulations did not effectuate a regulatory taking of the plaintiff's property. Id. at 358.

The court then examined the plaintiff's claim that the consent decree amounted to a physical taking in violation of the Fifth Amendment. Id. After a thorough analysis of the plaintiff's allegations, the evidence presented, and applicable case law on point, the court held that the consent decree did not effectuate a physical taking, the flooding of the plaintiff's property did not effectuate a physical taking, and the consent decree did not create a conservation easement that effectuated a taking. Id. at 358-64. Therefore, the court ruled in favor of the government. Id.

The case was decided on August 4, 2006.