Summary of a Recent
Judicial
Development in
Administrative Law
Application for Building Permit Not Required
for Takings Claim to Be Ripe for Review
Walt McCarterNational AgLaw Center Research Associate
Summary of Decision
In McGuire v. United States, 550 F.3d 903 (9th Cir. 2008), the Ninth Circuit Court of Appeals held that a plaintiff's inverse condemnation claim was ripe for review even though the plaintiff had never filed a formal application for a building permit, because the doctrine of ripeness required only that he take reasonable and necessary steps to allow the government to exercise its discretion, and he had satisfied that requirement.
Background
McGuire leased farmland located on the Colorado River Indian Tribe reservation from the Tribe for a ten-year period that expired on December 31, 2004. Id. at 906. The lease required the approval of the United States Bureau of Indian Affairs (BIA) since it was land held in trust for the tribe by the United States. Id. The land was bisected by a canal, and at the time the lease was executed, a bridge crossed the canal providing access to the north portion of the property. Id. Subsequently, the BIA sought to remove the bridge because it was unsafe. Id. The tribe informed the BIA that removal of the bridge would severely limit access to farming lands and decrease the value of the land, and it asked them to explore alternatives, but the BIA determined the bridge had to be removed because it was not legally authorized under 25 C.F.R. § 171.9 and because they believed it was unsafe. Id. at 907. McGuire sought approval to build a new bridge from the superintendent of the Colorado River Agency of the BIA, but the superintendent never returned his calls and BIA staff never provided McGuire with a permit form or formal application for a bridge permit. Id. He then filed a complaint in tribal court against the BIA, claiming that removal of the bridge would be illegal and would breach his lease, but the BIA declined to appear in tribal court. Id. McGuire also appealed within the BIA to the Western Regional Office, which upheld the decision, but he did not take the appeal any further within the BIA. Id. After the bridge was removed, McGuire could not generate enough revenue to cover the lease payment from the income from the southern portion alone; he defaulted on his lease and filed for Chapter 11 bankruptcy protection. Id. at 907-08. He filed this inverse condemnation action against the United States in bankruptcy court, and the government moved to dismiss for lack of jurisdiction on sovereign immunity grounds. Id. at 908. The bankruptcy court held that the Tucker Act, 28 U.S.C. § 1491, waived the government's immunity to suit in district court and found that the United States had committed a regulatory taking of McGuire's leasehold interest. Id. The district court rejected the bankruptcy court's recommendations and held that McGuire's claim was not ripe for review because the government never denied an application for a permit to construct a new bridge, and McGuire appealed. Id.
Arguments
The government argued that McGuire's claim was not ripe because he had not submitted a formal application for a bridge permit. Id. at 909.
Analysis and Holdings
The Ninth Circuit reversed and held that that McGuire's takings claim was ripe because he sufficiently complied with the permitting system as established by the BIA. Id. The court explained that BIA regulations permitted a private party to apply for a permit to build a bridge for private use at the party's own expense by obtaining the approval of the "Officer-in-Charge." Id. McGuire had attempted to do so by contacting the BIA on a number of occasions, following the instructions in the BIA's letters, and discussing plans for a new bridge several times with the appropriate officials. Id. Moreover, he repeatedly attempted to reach the superintendent by phone, but his calls were never returned. Id. He also enlisted the help of the tribe, to no avail, and attempted to bring suit against the BIA in tribal court but it refused to appear. Id. The court stated that the ripeness doctrine did not require McGuire to submit a formal application; rather, it required him to take reasonable and necessary steps to allow the BIA to exercise its full discretion in considering development plans for the property, and he had done so. Id. at 909-10. However, the court found that the Court of Federal Claims was the proper court to hear the claim because the Tucker Act's sovereign immunity waiver is limited to suits filed in the United States Court of Federal Claims, and therefore transferred the case pursuant to 28 U.S.C. § 1631. Id. at 914-15.
The case was decided on December 24, 2008.