(202) 514-2007
WWW.USDOJ.GOV
TDD (202) 514-1888
FEDERAL APPEALS COURT RULES AGAINST DEVELOPER IN
PRECEDENT-SETTING PROPERTY RIGHTS CASEWASHINGTON, D.C. -- In a significant environmental ruling, a federal appeals court has rejected claims by a Florida developer that he was entitled to compensation because environmental regulations affected the value of his property, the Justice Department announced today. The United States Court of Appeals for the Federal Circuit ruled that because the developer purchased his property knowing that it would be subject to environmental regulation by federal and state authorities, it was not reasonable for him to expect that he would be able to build a luxury waterfront development without regard to the project's impacts on the environment.
"This decision is a significant victory for environmental protection and sets an important precedent," said Lois Schiffer, Assistant Attorney General for the Environment and Natural Resources Division. "The ruling ensures that courts considering takings claims in the future will take a hard look at the reasonableness of a developer's plans in light of federal, state and local environmental protection standards." The Federal Circuit hears appeals in all cases in which landowners are seeking compensation above $10,000 for alleged takings of property.
In 1973, developer Lloyd A. Good, Jr. purchased a 40-acre tract of undeveloped land -- which included 32 acres of wetlands -- on Sugarloaf Key in the Florida Keys. Seven years later he began plans to develop the property, initially intending to erect a 54-lot subdivision and marina. In the purchase contract, however, Good had explicitly acknowledged the risk that he might not be able to obtain the necessary state and federal permits under the environmental regulatory regimes that were then in effect. In fact, Good was never able to obtain all of the necessary state and local approvals for his project.
When Good applied for a permit to fill wetlands from the U.S. Army Corps of Engineers in 1990, agency officials said he could proceed so long as he tailored the project to protect endangered species living on his property. Good refused to accept these conditions and instead sued the federal government for a taking under the Fifth Amendment to the U.S. Constitution.
The Federal Circuit held that, even if the permit conditions required by the Corps would not allow Good to exploit the full economic potential of his property, there was no taking because at the time of Good's purchase, Good knew that the property would be subject to federal and state environmental protections, and it was reasonable for Good to expect that those protections would become more restrictive over time. Therefore, Good was not entitled to compensation under the Fifth Amendment, the court ruled.
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