Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

The Enterprises, Fannie Mae and Freddie Mac, suffered financial losses in 2008 when the housing market collapsed. The Housing and Economic Recovery Act of 2008 (HERA), created the Federal Housing Finance Agency (FHFA), an independent agency tasked with regulating the Enterprises, including stepping in as conservator, 12 U.S.C. 4511.With the consent of the Enterprises’ boards of directors, FHFA placed the Enterprises into conservatorship, then negotiated preferred stock purchase agreements (PSPAs) with the Treasury Department to allow the Enterprises to draw up to $100 billion in exchange for senior preferred non-voting stock having quarterly fixed-rate dividends. A “net worth sweep” under the PSPAs replaced the fixed-rate dividend formula with a variable one that required the Enterprises to make quarterly payments equal to their entire net worth, minus a small capital reserve amount, causing the Enterprises to transfer most of their equity to Treasury, leaving no residual value for shareholders.Shareholders challenged the net worth sweep. Barrett, an individual shareholder, separately asserted derivative claims on behalf of the Enterprises. The Claims Court dismissed the shareholders’ direct Fifth Amendment takings and illegal exaction claims for lack of standing; dismissed for lack of subject matter jurisdiction the shareholders’ direct claims for breach of fiduciary duty, and breach of implied-in-fact contract; and found that Barrett had standing to bring his derivative claims, notwithstanding HERA. The Federal Circuit affirmed the dismissal of shareholders’ direct claims but concluded that the shareholders’ derivatively pled allegations should also be dismissed. View "Fairholme Funds, Inc. v, United States" on Justia Law

The Enterprises, Fannie Mae and Freddie Mac, suffered financial losses in 2008 when the housing market collapsed. The Housing and Economic Recovery Act of 2008 (HERA), created the Federal Housing Finance Agency (FHFA), tasked with regulating the Enterprises, including stepping in as conservator, 12 U.S.C. 4511. FHFA placed the Enterprises into conservatorship, then negotiated preferred stock purchase agreements (PSPAs) with the Treasury Department to allow the Enterprises to draw up to $100 billion in exchange for senior preferred non-voting stock having quarterly fixed-rate dividends. A “net worth sweep” under the PSPAs replaced the fixed-rate dividend formula with a variable one that required the Enterprises to make quarterly payments equal to their entire net worth, minus a small capital reserve amount, causing the Enterprises to transfer most of their equity to Treasury, leaving no residual value for shareholders.In a companion case, the Federal Circuit affirmed the dismissal of shareholders’ direct claims challenging the net worth sweep and concluded that the shareholders’ derivatively pled allegations should also be dismissed.The Washington Federal Plaintiffs alleged direct takings and illegal exaction claims, predicated on the imposition of the conservatorships, rather than on FHFA's subsequent actions. The Federal Circuit affirmed the dismissal of those claims. Where Congress mandates the review process for an allegedly unlawful agency action, plaintiffs may not assert a takings claim asserting the agency acted in violation of a statute or regulation. These Plaintiffs also lack standing to assert their substantively derivative claims as direct claims. View "Washington Federal v. United States" on Justia Law

The Landowners own parcels of land adjacent to a 2.45-mile strip of a Union Pacific railroad line in McLennan County, Texas. Union Pacific’s predecessor in interest, Texas Central originally acquired the Line in 1902 through multiple deeds executed by the Landowners’ predecessors in interest. The Landowners sued, seeking compensation based on a theory that their predecessors in interest had conferred only easements to Texas Central, and that the Surface Transportation Board (STB) enforcement of the National Trails System Act, 16 U.S.C. 1241, by “railbanking” amounted to a “taking” of their property. Railbanking involves the transition of unused railroad corridors into recreational hiking and biking trails, generally by a transfer of an interest in the use of a rail corridor to a third-party entity. The Claims Court interpreted the deeds as having conveyed fee simple estates, not easements.The Federal Circuit affirmed. No takings from the Landowners occurred when the government later authorized conversion of the railroad line to a recreation trail; the granting clauses of the subject deeds unambiguously conveyed fee simple interests in the land and not easements despite contradictory language elsewhere in the deeds. View "Anderson v. United States" on Justia Law

GSA leased a building from NOAA’s predecessor; the annual rent includes agreed “[b]ase year taxes.” GSA must compensate NOAA for “any increase in real estate taxes during the lease term over the amount established as the base year taxes” and defines “real estate taxes” as “only those taxes, which are assessed against the building and/or the land upon which the building is located, without regard to benefit to the property, for the purpose of funding general Government services. Real estate taxes shall not include, without limitation, general and/or special assessments, business improvement district assessments, or any other present or future taxes or governmental charges that are imposed upon the Lessor or assessed against the building and/or the land upon which the building is located.In 2016, NOAA asked GSA to reimburse it for the Stormwater/Chesapeake Bay Water Quality tax, the Washington Suburban Transit Commission tax, the Clean Water Act Fee, and a Supplemental Education Tax. All four appear on the consolidated tax bill. The clean water tax, effective in 2013, is collected for the Watershed Protection and Restoration Fund, “in the same manner as County real property taxes and [has] the same priority, rights, and bear[s] the same interest and penalties, and [is] enforced in the same manner as County real property taxes.”GSA denied the claim. The Civilian Board of Contract Appeals held that the lease provision excludes all taxes enacted after the date of the lease, even if those taxes meet expressly stated criteria for being a real estate tax. The Federal Circuit reversed. Under ordinary interpretive principles, a real estate tax qualifies under the Lease provision whenever it satisfies the three criteria of the first sentence. View "NOAA Maryland, LLC v. General Services Administration" on Justia Law

Sharifi alleges the U.S. Army took his land when it built Combat Outpost Millet in Afghanistan in 2010. The government asserted that Sharifi’s Fifth Amendment complaint was “vague and ambiguous” because it did not specifically identify the property interest that the government allegedly took, that Sharifi had not provided a legal description of the land, a deed, or other documents that would allow the government to identify the location. The Claims Court instructed Sharifi to file an amended complaint. Sharifi alleged that government records, verified by the District Governor of Arghandab, showed that his grandfather owned the land on which the Army built COP Millet: Ownership of the land passed to Sharifi and his siblings, who subdivided the land by a 2004 inheritance agreement. The government submitted six declarations, including several witness declarations and an expert declaration on Afghan law. The Claims Court dismissed Sharifi’s amended complaint for failure to show a cognizable property interest.The Federal Circuit affirmed. The government records attached to Sharifi’s amended complaint and the 2004 inheritance agreement do not constitute proof of land ownership under the laws of Afghanistan. Even accepting as true all factual allegations in Sharifi’s amended complaint, the amended complaint does not contain sufficient facts to state a plausible takings claim. View "Sharifi v. United States" on Justia Law

Hardy owns land in Newton County, Georgia, through which CGA operated a rail line. CGA’s predecessor acquired interests in Hardy’s parcels through various deeds. In 2013, CGA applied for authority to abandon a portion of its rail line by filing a notice of exemption from formal abandonment proceedings with the Surface Transportation Board (STB). The Foundation requested interim trail use under the National Trail Systems Act, 16 U.S.C. 1247(d). The STB issued a Notice of Interim Trail Use or Abandonment (NITU). In 2016, CGA notified the STB that the map attached to CGA’s notice of exemption was inaccurate and attached a corrected map. The STB accepted CGA’s revised map and modified 2013 NITU “effective on its date of service.” Hardy filed suit, alleging that the 2013 NITU caused takings by preventing CGA’s abandonment of sections of the rail line running through Hardy’s parcels.The Federal Circuit affirmed summary judgment that Hardy has a cognizable property interest; the deeds conveyed easements rather than fee simple estates. The court vacated a holding that the NITU caused a temporary taking of parcels that were erroneously included in the description of the land. In a rails-to-trails case, a taking occurs when a “NITU is issued and state law reversionary interests that would otherwise take effect pursuant to normal abandonment proceedings are forestalled.” The court remanded for determinations of whether or when the Railroad would have abandoned the easements absent the NITU. View "Hardy v. United States" on Justia Law

Water levels in Eagle Lake, near Vicksburg, are controlled by the Muddy Bayou Control Structure, part of the Army Corps of Engineers’ Mississippi River flood control program. Eagle Lake's predictable water levels allowed the plaintiffs to build piers, boathouses, and docks. In 2010, the Corps determined that “sand boils” threatened the stability of the nearby Mississippi River Mainline Levee, a component of the same flood-control program. Unusually wet weather in 2011 exacerbated the problem. The Corps declared an emergency, finding that the rise in nearby water levels threatened the structural integrity of the levee and “that the likelihood of breach was over 95%.” The Corps decided to flood Eagle Lake to reduce pressures along the levee. Because of that action, the levee did not breach. A breach would have resulted in widespread flooding affecting “about a million acres and possibly between four thousand to six thousand homes and businesses.” The damage to the plaintiffs’ properties would have exceeded the damage caused by raising the lake level. The plaintiffs sued, seeking compensation. The Federal Circuit reversed the Claims Court’s finding that the government was liable and award of $168,000 in compensatory damages. The relative benefits doctrine bars liability. The plaintiffs were better off as a result of the Corps’ actions. If the government had not raised the water level, the levee would almost certainly have breached, and the plaintiffs would have suffered more damage. View "Alford v. United States" on Justia Law

Caquelin's land was subject to a railroad easement. The Surface Transportation Board granted the railroad permission to abandon the line unless the process (16 U.S.C. 1247(d)) for considering the use of the easement for a public recreational trail was invoked. That process was invoked. The Board issued a Notice of Interim Trail Use or Abandonment (NITU), preventing effectuation of the abandonment approval and blocking the ending of the easement for 180 days, during which the railroad could try to reach an agreement with two entities that expressed interest in the easement for trail use. The NITU expired without such an agreement. The railroad completed its abandonment three months later.Caquelin sued, alleging that a taking occurred when the government, by issuing the NITU, prevented the termination of the easement during the 180-day period. Following a remand, the Claims Court again held that a taking had occurred. The Federal Circuit affirmed, rejecting the contention that the multi-factor approach adopted for government-created flooding in the Supreme Court’s 2012 “Arkansas Game” decision displaced the categorical-taking analysis adopted in Federal Circuit precedents for a NITU that blocks termination of an easement. The categorical taking analysis is applicable even when that NITU expires without a trail-use agreement. A NITU does not effect a taking if, even without a NITU, the railroad would not have abandoned its line during the period of the NITU. Here, the evidence permits a finding that abandonment would have occurred during the NITU period if the NITU had not issued. View "Caquelin v. United States" on Justia Law

In 1999, the Taylors purchased land near a New Mexico Air Force base to raise calves. The Air Force began flying training missions over the land, sometimes “no more than 20 feet . . . off the deck.” In 2008, the Taylors granted Wind Energy an exclusive five-year option for an easement on the Taylors’ property, for “wind resource evaluation, wind energy development, energy transmission and related wind energy development uses.” In 2012, Air Force employees suggested to Wind Energy that the FAA would not issue a “No Hazard” designation for the air space above the Taylors’ land, which would be “fatal to the construction of planned wind turbines.” Wind Energy exercised its contractual right to terminate the agreement.The Taylors sued, claiming that the Air Force’s informal advice to Wind Energy caused a regulatory taking of their property interest in their contract and that the flyovers effected a physical taking. The Federal Circuit affirmed the dismissal of the complaint. Wind Energy’s termination was not a breach of the agreement so the Taylors had no property right in the continuation of that agreement nor did they have any investment-backed expectations. Any advice given by Air Force employees did not amount to an FAA denial. The Taylors did not provide factual allegations of how the flights “directly, immediately, and substantially interfere” with their quiet enjoyment and use of the land View "Taylor v. United States" on Justia Law

GIP purchased property from a steel mill’s bankruptcy estate, omitting the “Eastern Excluded Property” (EEP). GIP purchased some personal property located on the EEP, which contains two piles comprising slag (a steel manufacturing byproduct), kish (a byproduct of a blast furnace operation), and scrap. Each pile occupied more than 10 acres and was more than 80 feet high. GIP's "Itemization of Excluded Item from Sale” referred to: “All by-products of production other than kish and 420,000 cubic yards of slag” on the EEP “with a reasonable period of time to remove such items.” The EPA began investigating contaminants leaching from the piles. While GIP was negotiating for the separation of recoverable metals, the EPA decided to reduce the size of the piles. In 2009-2013, EPA contractors recovered and sold 245,890 tons of material and recovered and used 92,500 cubic yards of slag onsite for environmental remediation; they processed approximately 50% of the piles, spending about $14.5 million, about a million more than income from sales. The EPA compacted the materials to minimize leachate, leaving further remediation to state environmental authorities. GIP did not attempt its own recovery operation during the EPA remediation.GIP sued, alleging “takings” of the slag, kish, and scrap. The trial court awarded GIP $755,494 for the slag but awarded zero damages for the kish and scrap. The Federal Circuit vacated in part. GIP had no claim to any particular subset of slag. The trial court erred in finding that the EPA somehow prevented GIP from recovering its full allotment of slag; GIP cannot establish a cognizable property interest in the slag that was recovered. The court affirmed in part. GIP’s unreliable calculations left the trial court without competent evidence relating to a critical component of the damages calculation with respect to the kish and scrap. View "Gadsden Industrial Park, LLC v. United States" on Justia Law