oversight

Regulatory Takings: Implementation of Executive Order on Government Actions Affecting Private Property Use

Published by the Government Accountability Office on 2003-09-19.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Subcommittee
                 on the Constitution, Committee on the
                 Judiciary, House of Representatives


September 2003
                 REGULATORY
                 TAKINGS
                 Implementation of
                 Executive Order on
                 Government Actions
                 Affecting Private
                 Property Use




GAO-03-1015

                 a

                                                 September 2003


                                                 REGULATORY TAKINGS

                                                 Implementation of Executive Order on
Highlights of GAO-03-1015, a report to           Government Actions Affecting Private
Chairman, Subcommittee on the
Constitution, Committee on the Judiciary,        Property Use
House of Representatives




Each year federal agencies issue                 Justice has not updated the guidelines that it issued in 1988 pursuant to the
numerous proposed or final rules                 executive order, but has issued supplemental guidelines for three of the four
or take other regulatory actions                 agencies. The executive order provides that Justice should update the
that may potentially affect the use              guidelines, as necessary, to reflect fundamental changes in takings case law
of private property. Some of these               resulting from Supreme Court decisions. While Justice and some other
actions may result in the property
owner being owed just
                                                 agency officials said that the changes in the case law since 1988 have not
compensation under the Fifth                     been significant enough to warrant a revision, other agency officials and
Amendment. In 1988 the President                 some legal experts said that fundamental changes have occurred and that
issued Executive Order 12630 on                  the guidelines should be updated. Justice issued supplemental guidelines for
property rights to ensure that                   three agencies, but not for Agriculture because of unresolved issues such as
government actions affecting the                 how to assess the takings implications of denying or limiting permits that
use of private property are                      allow ranchers to graze livestock on federal lands managed by Agriculture.
undertaken on a well-reasoned
basis with due regard for the                    Although the executive order’s requirements have not been amended or
potential financial impacts imposed              revoked since 1988, the four agencies’ implementation of some of these
on the government.                               requirements has changed over time as a result of subsequent guidance
GAO was asked to provide
                                                 provided by the Office of Management and Budget (OMB). For example, the
information on the compliance of                 agencies no longer prepare annual compilations of just compensation
the Department of Justice and four               awards or account for these awards in their budget documents because OMB
agencies—the Department of                       issued guidance in 1994 advising agencies that this information was no
Agriculture, the Army Corps of                   longer required. According to OMB, this information is not needed because
Engineers, the Environmental                     the number and amount of these awards are small and the awards are paid
Protection Agency, and the                       from the Department of the Treasury’s Judgment Fund, rather than from the
Department of the Interior—with                  agencies’ appropriations. Regarding other requirements, agency officials
the executive order. Specifically,               said that they fully consider the potential takings implications of their
GAO examined the extent to which                 regulatory actions, but provided us with limited documentary evidence to
(1) Justice has updated its                      support this claim. For example, the agencies provided us with a few
guidelines for the order to reflect
changes in case law and issued
                                                 examples of takings implications assessments because, agency officials said,
supplemental guidelines for the                  these assessments are not always documented in writing or retained on file.
four agencies, (2) the four agencies             In addition, our review of the agencies’ rulemakings for selected years that
have complied with the specific                  made reference to the executive order revealed that relatively few specified
provisions of the executive order,               that a takings implication assessment was done and few anticipated
and (3) just compensation awards                 significant takings implications.
have been assessed against the four
agencies in recent years.                        According to Justice, 44 regulatory takings lawsuits brought against the four
                                                 agencies by property owners were concluded during fiscal years 2000
We provided the agencies with a                  through 2002, and of these, 14 cases resulted in just compensation awards or
draft of this report for comment.                settlement payments totaling about $36.5 million. The executive order’s
They provided technical and
editorial suggestions that we
                                                 requirement for assessing the takings implications of planned actions
incorporated as appropriate.                     applied to only three of these cases. The actions associated with the other
                                                 11 cases either predated the order’s issuance or were otherwise excluded
                                                 from the order’s provisions. The relevant agency assessed the takings
www.gao.gov/cgi-bin/getrpt?GAO-03-1015.
                                                 potential of its action in only one of the three cases subject to the order’s
To view the full product, including the scope    requirements. According to Justice, as of the end of fiscal year 2002, 54
and methodology, click on the link above.        additional regulatory takings lawsuits involving the four agencies were
For more information, contact Anu K. Mittal at
(202) 512-3841 or mittala@gao.gov.
                                                 pending resolution.
Contents




Letter
                                                                                                1
                             Results in Brief 
                                                        4
                             Background                                                                6

                             Justice Has Not Updated Its 1988 Guidelines, but Has Issued 

                               Supplemental Guidelines for Three of the Four Agencies                  9
                             Implementation of Key Provisions by the Four Agencies Has
                               Changed Over the Life of the Executive Order                           14
                             Few Awards of Just Compensation Were Made Against the Four
                               Agencies for Takings Cases Concluded during Fiscal Years 2000
                               through 2002                                                           20
                             Agency Comments and Our Evaluation                                       23


Appendixes
              Appendix I:    Objectives, Scope, and Methodology                                       25
             Appendix II:    Summary of Significant Supreme Court Regulatory Takings
                             Cases                                                                    28
                             Cases Decided After 1988                                                 28
                             Cases Decided Before 1988                                                32
             Appendix III:   Proposed and Final Rules That Address the EO, for the Four
                             Agencies, Calendar Years 1989, 1997, and 2002                            36
             Appendix IV:    Regulatory Takings Cases Concluded during Fiscal Years
                             2000 through 2002 Related to Actions of the Four
                             Agencies                                                                 37
              Appendix V:    GAO Contacts and Staff Acknowledgments                                   42
                             GAO Contacts                                                             42
                             Acknowledgments                                                          42


Tables	                      Table 1: Number of Proposed and Final Rules Addressing the EO 

                                      for Four Agencies, Calendar Years 1989, 1997, and 2002          19

                             Table 2: Awards of Just Compensation or Settlement Payments for 

                                      Concluded Regulatory Takings Cases for the Four

                                      Agencies, Fiscal years 2000 through 2002                        22

                             Table 3: Proposed and Final Rules That Address the EO, for the 

                                      Four Agencies, Calendar Years 1989, 1997, and 2002              36

                             Table 4: Regulatory Takings Cases Concluded with Payments, for 

                                      the Four Agencies, Fiscal Years 2000 through 2002               37

                             Table 5: Regulatory Takings Cases Concluded Without Payments, 

                                      for the Four Agencies, Fiscal Years 2000 through 2002           39




                             Page i                                        GAO-03-1015 Regulatory Takings
Contents




Abbreviations

EO           Executive Order 12630

EPA          U.S. Environmental Protection Agency

GAO          General Accounting Office

OMB          Office of Management and Budget


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Page ii                                                   GAO-03-1015 Regulatory Takings
A

United States General Accounting Office
Washington, D.C. 20548



                                    September 19, 2003

                                    The Honorable Steve Chabot
                                    Chairman, Subcommittee on the
                                     Constitution
                                    Committee on the Judiciary
                                    House of Representatives

                                    Dear Mr. Chairman:

                                    Each year federal agencies issue numerous proposed or final rules or take
                                    other regulatory actions that may potentially affect the use of private
                                    property. Agencies take these actions to meet a variety of societal goals,
                                    such as protecting the environment, promoting public health and safety,
                                    conserving natural resources, and preserving historic sites. At the same
                                    time, these actions may place restrictions on the use of private property,
                                    such as limiting the development of land that includes critical wildlife
                                    habitat or wetlands needed for flood control, thereby potentially depriving
                                    the landowner of the use or economic value of the property. In such cases,
                                    the property owner may be owed just compensation under the Fifth
                                    Amendment to the Constitution.

                                    In 1988 the President issued Executive Order 12630 (EO),1 “Governmental
                                    Actions and Interference with Constitutionally Protected Property Rights,”
                                    to ensure that government actions are undertaken on a well-reasoned basis
                                    with due regard for the potential financial impacts imposed on the
                                    government by the Just Compensation Clause of the Fifth Amendment.
                                    Specifically, the EO requires executive branch agencies, among other
                                    things, to (1) prepare annual compilations of awards of just compensation
                                    resulting from landowner lawsuits alleging takings, (2) account for takings
                                    awards levied against them in their annual budget submissions, (3)
                                    designate an agency official responsible for implementing the order, and
                                    (4) consider the potential takings implications of their proposed actions
                                    and document significant takings implications in notices of proposed
                                    rulemaking. The EO also requires the Department of Justice (Justice),
                                    specifically the U.S. Attorney General, to issue general guidelines to
                                    provide agencies with a uniform framework for their implementation of the
                                    EO and to issue supplemental guidelines for each agency, as appropriate,
                                    that reflect that agency’s unique responsibilities. In addition, the EO

                                    1
                                     53 Fed. Reg. 8859 (Mar. 18, 1988).




                                    Page 1                                          GAO-03-1015 Regulatory Takings
requires the Attorney General to update the general guidelines, as
necessary, to reflect fundamental changes in takings case law resulting
from U.S. Supreme Court decisions. Furthermore, the EO requires the
Office of Management and Budget (OMB) to ensure that the policies of
executive branch agencies are consistent with the EO’s requirements and
that just compensation awards made against the agencies are included in
agencies’ budget submissions.

If a landowner believes that a government regulatory action has resulted in
a taking of his or her private property, that landowner may file a lawsuit
seeking just compensation under the Fifth Amendment. In general, these
suits must be brought in the United States Court of Federal Claims.2
Justice is generally responsible for litigating these cases on behalf of the
government.3 Such cases, many of which may take years to resolve, may
result in a dismissal, a decision in favor of the government, a settlement
payment made to the landowner, or an award of just compensation. In
general, these awards and settlements are paid from the Department of the
Treasury’s Judgment Fund.4 Relative to the thousands of regulatory
actions taken by federal agencies each year, the number of lawsuits seeking
just compensation related to these actions is small.5




2
 Lawsuits seeking just compensation of $10,000 or less may be brought in a U.S. District
Court.
3
 The Department of Justice represents the U.S. government in litigation, unless otherwise
authorized by law. 28 U.S.C. § 516.
4
 The Judgment Fund, administered by the Department of the Treasury, is a permanent,
indefinite appropriation. The Fund is available for payment of final judgments, awards, or
settlements related to litigation involving federal agencies, where payment is not otherwise
provided for. 31 U.S.C. § 1304. Because agency appropriations generally are not available
for payments of just compensation awards and settlements, these payments generally are
made from the Judgment Fund.
5
 Regarding the small number of regulatory takings lawsuits filed relative to the many
regulatory actions taken by agencies each year, the experience of the Corps of Engineers is
illustrative. Specifically, this agency reported that it approved 99.98 percent of the 264,447
permit applications submitted to it by landowners during fiscal years 2000 through 2002. Of
the 41 permits denied with prejudice (meaning the applicant could not resubmit) during
these years, only a fraction resulted in regulatory takings lawsuits. In general, these permit
applications were made under §10 of the Rivers and Harbors Act or §404 of the Clean Water
Act. The applications generally related to landowners’ plans to develop or alter a wetland or
engage in other activities that may affect the waters of the United States.




Page 2                                                      GAO-03-1015 Regulatory Takings
You asked us to provide information on measures taken by Justice to
implement certain provisions of the EO and the efforts of four agencies—
the Department of Agriculture, the U.S. Army Corps of Engineers, the
Environmental Protection Agency (EPA), and the Department of the
Interior6—to comply with the EO’s requirements. Specifically, we
examined the extent to which (1) Justice has updated its guidelines to
reflect changes in case law and issued supplemental guidelines for the four
agencies, (2) the four agencies have complied with the specific provisions
of the EO, and (3) awards of just compensation have been assessed by the
courts against the four agencies in recent years and, in these cases,
whether the agencies assessed the potential takings implications of their
actions before implementing them.

To report on the extent to which Justice has updated its guidelines and
issued supplemental guidance for the four agencies, we obtained copies of
these documents and interviewed knowledgeable agency officials. We also
conducted legal research and sought the opinions and reviewed the
publications of other relevant individuals, including representatives of
private property rights and environmental groups and law school
professors, as to whether changes in takings case law since 1988 warranted
revisions to the guidelines. To determine the extent of the four agencies’
compliance with specific provisions of the EO, we interviewed
knowledgeable agency officials and reviewed the documents they
provided. We also interviewed OMB and Justice officials regarding the
agencies’ compliance with specific provisions, as appropriate. In addition,
we reviewed 375 Federal Register notices published in 1989, 1997, and 2002
relating to regulatory actions of the four agencies and referencing the EO.
These years were selected judgmentally: 1989 represents the first full year
under the EO, 1997 represents an intermediate year, and 2002 represents
the most recent full year. In addition, these years provide 1 year’s
experience under each of the past three presidential administrations. We
undertook this analysis to determine if and how the agencies documented
their compliance with the EO. Finally, regarding awards of just
compensation made against the agencies and, in these cases, whether the
agencies had assessed the takings potential of their actions, we obtained
from Justice a list of all regulatory takings cases related to the four
agencies that were concluded during fiscal years 2000 through 2002. We
initially sought this type of data for the full 15-year period since the EO’s
issuance, but Justice officials indicated that the full set of data was not


6
We refer to these agencies as the “four agencies” in subsequent references.




Page 3                                                    GAO-03-1015 Regulatory Takings
                    readily available. We then discussed these cases with relevant officials at
                    the four agencies and analyzed documents they provided. We also
                    discussed these cases with the Clerk of the U.S. Court of Federal Claims
                    and officials responsible for administering the Department of the
                    Treasury’s Judgment Fund and reviewed documents they provided.



Results in Brief	   Justice has not updated the general guidelines that it issued pursuant to the
                    EO in June 1988, but has issued supplemental guidelines for three of the
                    four agencies. Officials at Justice and two of the four agencies generally
                    expressed the view that changes in takings case law related to U.S.
                    Supreme Court decisions since 1988 have not been significant enough to
                    warrant a revision of the guidelines. Justice officials also noted that the
                    guidelines are intended to provide a general framework for agencies to
                    follow in implementing the EO, and thus do not require frequent revision.
                    However, Interior and Agriculture officials said that it would be helpful to
                    their staff if Justice updated a summary of the key aspects of relevant case
                    law contained in an appendix to the guidelines to reflect significant
                    developments over the past 15 years. Similarly, some representatives of
                    property rights groups and law school professors stated that the guidelines
                    should be updated. In general, they noted that the body of relevant case
                    law has evolved significantly over the past 15 years. For example, one law
                    professor, noting the detailed manner in which Justice discussed takings
                    cases in the original guidelines, said that case law covering the past 15
                    years should be thoroughly discussed in the guidelines as well. Regarding
                    the supplemental guidelines for individual agencies, although Justice
                    issued final guidelines for three of the four agencies, it has not issued
                    guidelines for the Department of Agriculture. According to Justice and
                    Agriculture officials, Agriculture’s guidelines were never completed
                    because the two agencies disagreed on issues such as how to assess the
                    takings implications of agency actions related to grazing and special use
                    permits. However, both Justice and Agriculture officials told us that
                    Agriculture’s compliance with the EO has not been encumbered by the lack
                    of supplemental guidelines.

                    Although the executive order’s requirements have not been amended or
                    revoked since 1988, the four agencies’ implementation of some of its key
                    provisions has changed over time because of subsequent guidance
                    provided by OMB. For example, the agencies no longer prepare annual
                    compilations of just compensation awards or account for these awards in
                    their budget documents because OMB issued guidance in 1994 advising
                    agencies that this information is no longer required. According to OMB,



                    Page 4                                           GAO-03-1015 Regulatory Takings
this information is not needed because the number and amount of these
awards is small, and the awards are paid from the Department of the
Treasury’s Judgment Fund, rather than from the agencies’ appropriations.
Regarding the EO requirement for a designated official, the four agencies
have each designated an official—typically the chief counsel, general
counsel, or solicitor—to be responsible for ensuring the agency’s
compliance with the EO. Finally, although the four agencies told us that
they fully consider the potential takings implications of their planned
regulatory actions, they provided us with limited documentary evidence to
support this claim. Specifically, agency officials told us that takings
implication assessments are not always documented in writing, and,
because of the passage of time, those assessments that were documented
may no longer be on file with the agency. Similarly, our independent review
of 375 Federal Register notices published in 1989, 1997, and 2002 relating to
regulatory actions of the four agencies and referencing the EO revealed
that 50 of the notices specified that a takings implication assessment was
done, and of these, 10 indicated that the agency anticipated significant
takings. Given the limited nature of the available information, we could not
fully assess the extent to which the EO’s requirements for assessing
potential takings were fully considered by the agencies.

According to Justice data, 44 regulatory takings cases brought against the
four agencies were concluded during fiscal years 2000 through 2002. Of
these, the courts decided in favor of the plaintiff in 2 cases, resulting in
awards of just compensation totaling about $4.2 million. The Justice
Department settled in 12 other cases, providing total payments of about
$32.3 million. Of the 14 cases resulting in award or settlement payments, 10
related to actions of Interior, 3 related to actions of the Corps of Engineers,
and 1 related to an action of Agriculture. The EO’s requirements for
assessing the takings implications of planned regulatory actions applied to
only 3 of the 14 cases. For the other 11 cases, the associated regulatory
action either predated the EO’s issuance or the matter at hand was
otherwise excluded from the EO’s provisions. Based on available evidence,
we found that the relevant agency assessed the takings potential of its
action in only one of the three cases subject to the EO’s requirements. As
of the end of fiscal year 2002, Justice reported that 54 additional regulatory
takings cases involving the four agencies were pending resolution.




Page 5                                             GAO-03-1015 Regulatory Takings
Background	   The just compensation clause of the Fifth Amendment states “nor shall
              private property be taken for public use, without just compensation.”
              Initially, this clause applied to the government’s exercise of its power of
              eminent domain. In eminent domain cases, the government invokes its
              eminent domain power by filing a condemnation action in court against a
              property owner to establish that the taking is for a public use or purpose,
              such as the construction of a road or school, and to have the amount of just
              compensation due the property owner determined by the court.7 In such
              cases, the government takes title to the property, providing the owner just
              compensation based on the fair market value of the property at the time of
              taking. In later years, Supreme Court decisions established that regulatory
              takings are subject to the just compensation clause as well. In contrast to
              the direct taking associated with eminent domain, regulatory takings arise
              from the consequences of government regulatory actions that affect private
              property. In these cases, the government does not take action to condemn
              the property or offer compensation. Instead, the government effectively
              takes the property by denying or limiting the owner’s planned use of the
              property, referred to as an inverse taking.8 An owner claiming that a
              government action has effected a taking and that compensation is owed
              must initiate suit against the government to obtain any compensation due.9
              The court awards just compensation to the owner upon concluding that a
              taking has occurred.

              In 1987, concerned with the number of pending regulatory takings lawsuits
              and with court decisions seen as increasing the exposure of the federal
              government to liability for such takings, the President’s Task Force on
              Regulatory Relief began drafting an executive order to direct executive
              branch agencies to more carefully consider the takings implications of their
              proposed regulations or other actions. According to a former Assistant
              Attorney General, this order was needed to protect public funds by

              7
               The use of “condemnation” in this case does not mean the property is unfit for use. Instead,
              it refers to the government's action to declare the property convertible to public use through
              the exercise of its power of eminent domain.
              8
               In general, an inverse taking has the effect of an affirmative exercise of the power of
              eminent domain. An inverse taking is also referred to as inverse condemnation.
              9
               Takings of property effected by government actions may occur in a number of ways.
              Examples of such actions include: (1) a government regulation restricting development, (2)
              a government requirement that a landowner provide the public access to private property
              (such as by providing public access to a private beachfront), and (3) an agency’s denial of a
              mineral drilling permit.




              Page 6                                                       GAO-03-1015 Regulatory Takings
minimizing government intrusion upon private property rights and to
budget for the payment of just compensation when such intrusions were
inevitable. The President issued this order, EO 12630, on March 15, 1988.

According to the EO, actions subject to its provisions include regulations,
proposed regulations, proposed legislation, comments on proposed
legislation, or other policy statements that, if implemented or enacted,
could cause a taking of private property. Such actions may include rules
and regulations that propose or implement licensing, permitting, or other
conditions, requirements or limitations on private property use. The EO
also enumerates agency actions that are not subject to the order, including
the exercise of the power of eminent domain and law enforcement actions
involving seizure, for violations of law, of property for forfeiture, or as
evidence in criminal proceedings.

Among other things, the EO requires the U.S. Attorney General to issue
guidelines to help agencies evaluate the takings implications of their
proposed actions, and, as necessary, to update these guidelines to reflect
fundamental changes in takings case law resulting from U.S. Supreme
Court decisions. The Attorney General issued these guidelines on June 30,
1988, to establish a basic, uniform framework for federal agencies to use in
their internal evaluations of the takings implications of administrative,
regulatory, and legislative policies and actions.10 In addition, the guidelines
discuss agency responsibilities for implementing the EO and the process
for preparing agency-specific supplemental guidelines.

The Attorney General’s guidelines provide that agencies should assess the
takings implications of their proposed actions to determine their potential
for a compensable taking and that decision makers should consider other
viable alternatives, when available, to meet statutorily required objectives
while minimizing the potential impact on the public treasury. In cases
where alternatives are not available, the potential takings implications are
to be noted, such as in a notice of proposed rulemaking. The guidelines
also state that takings implication assessments are internal, predecisional
management aids and that they are not subject to judicial review. In
addition, the form and manner of these assessments are left up to each
agency.



10
   Attorney General’s Guidelines for the Evaluation of Risk and Avoidance of
Unanticipated Takings, June 30, 1988.




Page 7                                                   GAO-03-1015 Regulatory Takings
The guidelines also include an appendix that provides detailed information
regarding some of the case law surrounding consideration of whether a
taking has occurred and the extent of any potential just compensation
claim. For example, the appendix discusses the Penn Central
Transportation Co. v. City of New York11 case in which the Supreme Court
set out a list of three “influential factors” for determining whether an
alleged regulatory taking should be compensated: (1) the economic impact
of the government action, (2) the extent to which the government action
interfered with reasonable investment-backed expectations, and (3) the
“character” of the government action. However, the appendix provides a
caveat that it is not intended to be an exhaustive account of relevant case
law, adding that the consideration of the potential takings of an action as
well as the applicable case law will normally require close consultation
between agency program personnel and agency counsel.

In addition to requiring guidelines, the EO requires OMB to ensure that the
policies of executive branch agencies are consistent with the EO’s
principles, criteria, and requirements. For example, for proposed
regulatory actions subject to OMB review, agencies are required to include
a discussion summarizing the potential takings implications of these
actions in their submissions to OMB. The EO also requires OMB to ensure
that all takings awards levied against the agencies are properly accounted
for in agencies’ budget submissions.

Despite the existence of the EO, some Members of Congress hold the view
that the enforcement of the just compensation clause with respect to
regulatory takings is inadequate and that statutory measures are needed to
reduce the infringement on private property rights resulting from
government regulation and to ensure compensation in the event of such
infringement. For example, a variety of legislation has been proposed in
Congress over the past 10 years to achieve those goals. In general,
according to a study prepared by the Congressional Budget Office, these
bills included measures that would (1) increase the requirements for
analysis and reporting that federal agencies must meet before making
decisions that could restrict the uses of private property, (2) relax the
procedural requirements that must be satisfied before a federal court will
hear the merits of a takings claim, and (3) require that the budget of an




11
     438 U.S. 104 (1978).




Page 8                                          GAO-03-1015 Regulatory Takings
                          agency whose action triggers a regulatory compensation claim be the
                          source of any compensation awarded.12 Although property rights
                          advocates have supported these legislative initiatives, others, including
                          some environmental groups, have questioned the need for legislation and
                          voiced the view that the consideration of the takings potential of an agency
                          action should not impede the government’s ability to protect the
                          environment or provide other societal benefits.



Justice Has Not           Justice has not updated the general guidelines that it issued pursuant to the
                          EO in June 1988 for evaluating the risk of and avoiding regulatory takings,
Updated Its 1988          but it has issued supplemental guidelines for three of the four agencies.
Guidelines, but Has       Officials at Justice and two of the four agencies said that changes in takings
                          case law related to Supreme Court decisions made since 1988 have not
Issued Supplemental       been significant enough to warrant a revision of the general guidelines.
Guidelines for Three of   Justice officials also noted that because the guidelines provide a general
the Four Agencies         framework for agencies to follow in implementing the EO, they do not
                          require frequent revision. However, Interior and Agriculture officials said
                          that it would be helpful to their staffs if Justice updated a summary of the
                          key aspects of relevant case law contained in an appendix to the guidelines
                          to reflect significant developments in the past 15 years. Similarly, some law
                          professors and representatives of property rights groups noted that the
                          body of relevant case law has evolved significantly over the past 15 years,
                          requiring an update to the guidelines. Regarding supplemental guidelines,
                          Justice has issued these guidelines for three of the four agencies, but has
                          not done so for Agriculture. According to Justice and Agriculture officials,
                          Agriculture’s supplemental guidelines went through several drafts in the
                          early 1990s, but were never completed because the two agencies disagreed
                          on issues such as how to assess the takings implications of changes in




                          12
                           Regulatory Takings And Proposals for Change, Congressional Budget Office, December
                          1998.




                          Page 9                                                GAO-03-1015 Regulatory Takings
                              grazing and special use permits. 13 However, Justice and Agriculture
                              officials told us that Agriculture’s compliance with the EO has not been
                              encumbered by the agency’s lack of supplemental guidelines.



Agency Officials and Other    Agency officials and other experts differ on the need to update the Attorney
Experts Differ on the Need    General’s guidelines to reflect changes in regulatory takings case law since
                              1988. Justice officials said the guidelines have not been updated since 1988
to Update the Guidelines to
                              because there have been no fundamental changes in regulatory takings
Reflect Changes in Takings    case law, the EO’s criterion for an update. They said that the guidelines, as
Case Law                      written, still cover the main issues in determining the risk of a regulatory
                              taking and that subsequent Supreme Court decisions have not substantially
                              changed this analysis. For example, these officials said the three-factor
                              test outlined in the 1978 Penn Central case remains the most important
                              guidance for analyzing the potential for a taking that is subject to just
                              compensation. Justice officials also emphasized that the guidelines
                              address only a general framework for agencies’ evaluations of the takings
                              implications of their proposed actions and thus are not intended to be an
                              up-to-date, comprehensive primer on all possible considerations. The
                              guidelines state that the individual agencies must still conduct their own
                              evaluations, including necessary legal research, when assessing the takings
                              potential of a proposed regulation or action.

                              Two of the four agencies supported Justice’s position that the guidelines do
                              not need to be updated. Officials at the other two agencies expressed the
                              view that an appendix to the guidelines that summarizes key regulatory
                              takings case law should be updated. Regarding agencies that supported
                              Justice’s position, Corps of Engineers staff indicated that based on their
                              review of relevant Supreme Court decisions since 1988, there has been no
                              fundamental change in the criteria for assessing potential takings and thus
                              no update to the Attorney General’s guidelines is necessary. Similarly, EPA
                              staff said that some of the takings cases decided since 1988 gave the

                              13
                                 A grazing permit provides official written permission to a farmer or rancher to graze a
                              specific number, kind, and class of livestock for a specified time period on defined federal
                              rangeland, such as rangelands managed by Agriculture’s Forest Service. A special use
                              permit is a written instrument that grants rights or privileges of occupancy and use subject
                              to specified terms and conditions on National Forest land. These permits are granted for a
                              variety of recreational and commercial purposes. Recreational purposes include hunting,
                              fishing, rafting, lodging services, the use of lots for vacation houses, and a variety of special
                              group events. Commercial purposes include ski area concessions, the use of mountaintops
                              for radio and TV broadcasting, rights-of-way for pipelines and power lines, and industrial
                              activities, such as timber processing or mineral exploration.




                              Page 10                                                       GAO-03-1015 Regulatory Takings
appearance that the Court was changing the three-pronged test set out in
the Penn Central decision. However, these officials noted that more recent
cases have returned to the Penn Central test, thereby removing the need
for updating the Attorney General’s guidelines. In contrast, officials at
Interior and Agriculture said that it would be helpful if Justice updated the
summary of key takings cases contained in an appendix to the guidelines to
reflect significant developments in case law over the past 15 years.

Other legal experts also said that the Attorney General’s guidelines should
be updated, noting that regulatory takings case law has not remained static
over the past 15 years. For example, a Congressional Research Service
attorney who has written extensively on the issue of regulatory takings said
that the guidelines should be updated to reflect more recent Supreme Court
decisions. This attorney noted that while the EO does not define a
“fundamental” change regarding the need for an update, a number of
important cases have been decided since the guidelines were issued. For
example, the attorney pointed to the Lucas v. South Carolina Coastal
Council14 decision of 1992 concerning a state ban on the development of
beachfront property. This attorney noted that this case laid out a
categorical exception to the Penn Central test for regulations that deny a
property owner all economically viable use of the owner’s lands. The
attorney stated that Lucas made new law in clarifying when,
notwithstanding a denial of all economically viable use, there is no taking.

Similarly, other legal experts concerned with the protection of private
property rights said that there have been significant developments in
regulatory takings case law since 1988. These experts also cited Lucas and
other cases and said that these cases further develop and/or limit the
application of the three-pronged test outlined in the Penn Central case.
These experts said that the mere passage of time and the sheer number of
regulatory takings cases concluded since 1988 argue for updating the
guidelines.

In addition, one of these experts, a law professor who has written and
lectured on the issue of regulatory takings, said that the level of specificity
with which Justice prepared the original guidelines sets a precedent. This
expert explained that there have been many important changes in
regulatory takings case law since 1988 and that the guidelines should be



14
     505 U.S. 1003 (1992).




Page 11                                            GAO-03-1015 Regulatory Takings
                              updated to reflect these changes given the detailed manner in which the
                              original guidelines were prepared.

                              At the same time, another legal expert, an attorney from an environmental
                              research group, indicated that the guidelines might not require updating. In
                              general, this attorney said that regulatory takings cases concluded since
                              1988 reaffirm the three-pronged test in the Penn Central case. According
                              to this attorney, the Lucas case was initially thought to be more significant,
                              but more recently it has been read and interpreted more narrowly by the
                              courts and therefore does not constitute a fundamental change in the law.15

                              Appendix II provides a summary of Supreme Court regulatory takings
                              cases decided since 1988 that were cited as being important by officials we
                              contacted or in the relevant literature and that may be appropriate for
                              inclusion in the guidelines.



Justice Has Issued            The Attorney General has issued supplemental guidelines required by the
Supplemental Guidelines for   EO for three of the four agencies—the Corps of Engineers, EPA, and
                              Interior.16 Although several attempts were made to draft supplemental
Three of the Four Agencies    guidelines for Agriculture in the early 1990s, the Attorney General did not
                              finalize and issue these guidelines because of unresolved issues.17
                              However, Justice and Agriculture officials indicated that the latter agency’s
                              lack of supplemental guidelines has not hindered its compliance with the
                              EO.

                              The EO directed the Attorney General, in consultation with each executive
                              branch agency, to issue supplemental guidelines for each agency as
                              appropriate to the specific obligations of that agency. The Attorney
                              General’s guidelines state that the supplement should prescribe
                              implementing procedures that will aid the agency in administering its
                              specific programs under the analytical and procedural framework


                              15
                                 See, e.g., Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency,
                              535 U.S. 302 (2002) and Palazzolo v. Rhode Island, 533 U.S. 606 (2001).
                              16
                               Justice issued supplemental guidelines for the Corps of Engineers on January 23, 1989; for
                              Interior on March 29, 1989; and for EPA on January 14, 1993. According to Justice and
                              agency officials, these guidelines have not been updated since their original issuance.
                              17
                               An Agriculture official indicated that negotiations with Justice on a draft of their guidelines
                              were never concluded after the change in administrations in 1993.




                              Page 12                                                       GAO-03-1015 Regulatory Takings
presented in the EO and the Attorney General’s guidelines, including the
preparation of takings implication assessments.

In general, for certain agency actions, the three agencies’ supplemental
guidelines include specific categorical exclusions from the EO’s provisions.
For example, Interior’s guidelines exclude its nonlegislative actions to
which the affected property owners have consented; regulations or permits
authorizing the taking, possession, transportation, or use of migratory birds
or wildlife; biological opinions issued pursuant to the Endangered Species
Act under certain conditions; listings of certain species under the
Endangered Species Act; and denial of permits to import species into or
export species from the United States. Similarly, the Corps of Engineers’
guidelines exclude its denials “without prejudice” (i.e., the applicant can
apply again) of Clean Water Act section 404 permits, because these denials
are not considered substantive decisions. In addition, EPA’s guidelines
exclude its actions related to the transportation, storage, disposal,
registration, distribution, and use of pesticides; protection of public water
systems and underground sources of drinking water; control of emissions
of air pollutants; disposal of hazardous, solid, and medical waste; and
control of actual or threatened releases of hazardous substances or
pollutants or contaminants.

The Attorney General has not issued supplemental guidelines for
Agriculture because Justice and Agriculture could not reach agreement on
how to assess the potential takings implications of the latter agency’s
actions related to grazing and special use permits covering applicants’ use
of public lands.18 In this regard, Agriculture officials said that because the
agency issues, modifies, or denies literally thousands of grazing and special
use permits every year, the agency was concerned about the resource
implications of having to do a takings implication assessment in each case.
In addition, in Agriculture’s view, the granting of a permit for the use of
public lands does not convey “property rights” to the permit recipient, and
thus agency actions to condition or deny such a permit do not constitute a
potential taking. Accordingly, Agriculture argued that these permit actions
should be excluded from the EO’s requirements or, if not, that the agency
be allowed to do a generic takings implication assessment that would apply
to multiple permits. Agriculture officials indicated that Justice officials did


18
   Justice and Agriculture officials also indicated that other issues may have been unresolved,
but because of the passage of time (nearly 10 years) and the purging of older files, they
could not identify other possible reasons why Agriculture’s guidelines were not completed.




Page 13                                                      GAO-03-1015 Regulatory Takings
                         not agree with these suggestions, and the matter was never resolved.
                         According to Agriculture officials, this lack of resolution resulted, in part,
                         because of ongoing litigation against Agriculture alleging a taking related to
                         the agency’s denial of a grazing permit19 and changing priorities related to
                         the arrival of a new administration in 1993. Despite Agriculture’s lack of
                         supplemental guidelines, agency officials said that their implementation of
                         the EO and the Attorney General’s guidelines has not been encumbered.
                         Justice officials agreed with this assessment.



Implementation of Key    Although the EO’s requirements have not been amended or revoked since
                         1988, the four agencies’ implementation of some of its key provisions has
Provisions by the Four   changed over time because of subsequent guidance provided by OMB. For
Agencies Has Changed     example, the agencies no longer prepare annual compilations of just
                         compensation awards or account for these awards in their budget
Over the Life of the     documents because OMB issued guidance in 1994 advising agencies that
Executive Order          this information is no longer required. According to OMB, this information
                         is not needed because the number and amount of these awards is small and
                         the awards are paid from the Department of the Treasury’s Judgment Fund,
                         rather than from the agencies’ appropriations. Each of the four agencies
                         has designated an official—typically the chief counsel, general counsel, or
                         solicitor—to be responsible for ensuring the agency’s compliance with the
                         EO. Finally, the four agencies told us that they fully consider the potential
                         takings implications of their planned regulatory actions, but provided us
                         with limited documentary evidence to support this claim.




                         19
                           See Hage v. United States, 51 Fed. Cl. 570 (2002). In Hage, ranch owners brought suit
                         against the United States, alleging that the suspension and cancellation of their permits to
                         graze livestock on federal land constituted a taking of their property interests, including
                         grazing rights and water usage rights, without just compensation. The court held that the
                         plaintiffs did not have property rights in the grazing permits, stating that grazing permits are
                         licenses, rather than rights. However, the court also stated that, if by revoking the grazing
                         permits, Interior’s Bureau of Land Management and Agriculture’s Forest Service prevented
                         the plaintiffs from accessing and using their water rights, the agencies may have taken these
                         rights. The court has not yet resolved the issue of whether the water rights were taken by
                         the government.




                         Page 14                                                       GAO-03-1015 Regulatory Takings
Agencies No Longer Prepare   The EO requires each executive branch agency to submit annually to OMB
and Report Annual            and Justice an itemized compilation report of all just compensation awards
                             entered against the United States for regulatory takings related to the
Compilations of Just         agencies’ activities. The EO also requires that agencies include information
Compensation Awards or       on these awards in their annual budget submissions. However, at present,
Include Information on       the agencies are not complying with these provisions because of guidance
These Awards in Their        provided by OMB.
Annual Budget Submissions
                             Regarding annual compilations of just compensation awards, OMB first
                             provided guidance on the form and content of compilations in its Circular
                             A-11, issued in June 1988.20 However, in a subsequent version of this
                             circular issued in July 1994, OMB advised agencies that the submission of
                             this information is no longer necessary.21 According to OMB officials, this
                             information is not needed because just compensation awards or
                             settlements related to regulatory takings cases do not affect agency
                             budgets but are paid from the Department of the Treasury’s Judgment
                             Fund. Furthermore, OMB and Justice officials said that because the
                             number of just compensation awards and settlements paid by the federal
                             government annually and the total dollar amount of these payments are
                             relatively small, the overall budget implications for the government are
                             small. Hence, these officials said the annual reporting of just compensation
                             awards was unnecessary. OMB officials offered similar reasons for not
                             requiring agencies to include information on just compensation awards in
                             their annual budget documents.

                             Although OMB no longer requires agencies to comply with these EO
                             provisions, the provisions remain in the EO. However, OMB and Justice
                             officials noted that because the provisions of executive orders are not the


                             20
                              Circular No. A-11: Preparation and Submission of Budget Estimates, issued by the
                             Director, Office of Management and Budget, June 17, 1988. This circular, updated annually,
                             provides executive branch agencies with guidance on the preparation of their budgets and
                             related justifications.
                             21
                                In general, the agencies had difficulty in documenting their submission of compilations
                             reports for the period 1989 through 1993 because of the passage of time. For example,
                             Agriculture was able to provide its report for fiscal year 1990 only, and Interior was able to
                             provide reports for fiscal years 1989, 1990, and 1992. EPA and the Corps of Engineers were
                             not able to provide copies of any of their reports. EPA officials recalled submitting the
                             reports for the first few years after the EO was implemented. Corps officials could not
                             determine if reports had been done for years in which just compensation awards were
                             made. In addition, OMB and Justice, the recipients of these reports, indicated that they had
                             not retained copies.




                             Page 15                                                     GAO-03-1015 Regulatory Takings
                              equivalent of statutory requirements, not complying with these provisions
                              does not have the same implications. Instead, executive orders are policy
                              tools for the executive branch and are subject to changing interpretation
                              and emphasis with each new administration. Furthermore, these officials
                              said that the relative lack of regulatory takings cases and associated just
                              compensation awards each year is an indication that the EO has succeeded
                              in raising agencies’ awareness of the need to carefully consider the
                              potential takings implications of their actions, even if subsequent OMB
                              guidance has excused the agencies from some of the EO’s provisions.



The Four Agencies Have        Each of the four agencies has designated an official to be responsible for
Designated Officials to       ensuring that the agency’s actions comply with the EO’s requirements. In
                              general, the responsible official at each agency is the agency’s senior legal
Ensure the Agencies’          official.22 EPA’s and Interior’s supplemental guidelines specifically identify
Implementation of the EO      the designated official by title. Concerning Agriculture and the Corps of
                              Engineers, we did not find written evidence of this designation, although
                              agency officials assured us that their senior legal official fulfilled this role.
                              Justice officials indicated that the designated official at each of the four
                              agencies is effectively performing the compliance assurance and liaison
                              functions required by the EO. However, as a practical matter, staff
                              attorneys, in consultation with relevant program officials, determine the
                              potential takings implications of an agency’s planned actions.



Agencies Report That They     The four agencies said that they fully consider the potential takings
Fully Consider the Takings    implications of their planned regulatory actions, but provided us with
                              limited documentary evidence to support this claim. Officials at each of
Implications of Their         the four agencies indicated that the requirements of the EO and the
Planned Actions but           provisions of the Attorney General’s guidelines primarily guide their
Provided Little Evidence to   consideration of the takings potential of agency actions. Officials at the
Support This Claim            Corps of Engineers, EPA, and Interior also cited the Attorney General’s
                              supplemental guidelines for each agency as being important, particularly
                              for identifying agency-specific exclusions to the EO’s provisions. For
                              example, EPA officials indicated that their agency performs relatively few
                              takings implication assessments because most of its actions are excluded
                              from the provisions of the EO, as enumerated in its guidelines. These

                              22
                               At Agriculture and EPA, the designated official is the General Counsel. At the Corps of
                              Engineers, this official is the Chief Counsel. At Interior, the designated official is the
                              Solicitor.




                              Page 16                                                     GAO-03-1015 Regulatory Takings
officials explained that EPA’s program responsibilities generally do not
include land management, and in past lawsuits alleging regulatory takings
that involved EPA, another federal agency usually took the action giving
rise to the takings claim, and EPA typically served as an advisor or
consultant to that agency.

Officials at three of the agencies—Agriculture, the Corps of Engineers, and
Interior—also said that their agency has provided relevant internal
guidance. For example, an Agriculture internal regulation on rulemaking
requires implementation of the EO, including the preparation of takings
implication assessments, as appropriate.23 Similarly, the Corps’ Chief
Counsel issued internal guidance in a memo that addresses legal analyses
and takings implication assessments related to wetland and other permit
decisions. For Interior, the agency’s departmental manual requires that it
assess the potential takings implications of planned rulemakings before
they are published in the Federal Register.24

Agencies provided us a few written examples of takings implication
assessments. Agency officials said that these assessments are not always
documented in writing, and, because of the passage of time, those
assessments that were put in writing may no longer be on file. They also
noted that these assessments are internal, predecisional documents that
generally are not subject to the Freedom of Information Act or judicial
review; thus they are not typically retained in a central file for a rulemaking
or other decision, and therefore they are difficult to locate. For example,
the Corps of Engineer’s internal guidance memo states that takings
implication assessments should be removed from the related
administrative file once the agency has concluded a decision on a permit.




23
   Regulatory Decisionmaking Requirements, Departmental Regulation 1512-1, U.S.
Department of Agriculture, Mar. 14, 1997.
24
 Departmental Manual, Part 318, Federal Register Documents, U.S. Department of the
Interior, May 14, 1998.




Page 17                                                GAO-03-1015 Regulatory Takings
In addition, agency officials also noted that they do not maintain a master
file of all takings implication assessments. For example, in many cases,
attorneys assigned to field offices conduct these assessments. In these
cases, agency officials said that headquarters staff may not have copies.
Nevertheless, with the exception of EPA, each agency provided us with
some examples of written takings implication assessments.25 These
assessments varied in form and the level of detail included.26

We also had difficulty independently verifying the four agencies’
preparation of takings implication assessments from the information
contained in Federal Register notices related to their proposed and final
rulemakings. Specifically, 375 notices mentioned the EO in 1989, 1997, and
2002, but relatively few provided an indication as to whether a takings
implication assessment was done. Most of these rules included only a
simple statement that the EO was considered and, in general, that there
were no significant takings implications. In contrast, 50 specified that an
assessment of the rule’s potential for takings implications was prepared,
and of these, 10 noted that the rule had the potential for “significant”
takings implications.27 Table 1 summarizes this information. In addition,
appendix III provides more detailed information on these rules.


25
   EPA officials indicated that they did not have any written examples of takings implication
assessments prepared by the agency largely because the agency’s actions are generally
excluded from the EO’s requirements. Interior officials indicated that they probably could
have provided more examples of written takings implication assessments, but finding them
would have required a significant investment of their resources and time. For example, they
said they would have had to search files in a number of headquarters and field offices. In
addition, Corps officials emphasized that they prepare very few takings implication
assessments because these assessments are only needed in cases where the agency plans to
deny a permit application, and, in general, the Corps denies very few of these applications.
26
 Although takings implication assessments are typically considered internal documents,
Interior has chosen to publish some of its written assessments in the Federal Register or
make others publicly available. For example, its takings implication assessments of
regulatory actions related to use of valid existing rights to conduct surface coal mining can
be found in a proposed rule at 62 Fed. Reg. 4836 (Jan. 31, 1997) and a final rule at 64 Fed.
Reg. 70765 (Dec. 17, 1999). In addition, instructions for obtaining the takings implication
assessments related to designation of critical habitat can be found in proposed rules at 67
Fed. Reg. 39206 (June 6, 2002) and 67 Fed. Reg. 55064 (Aug. 27, 2002).
27
 According to the Attorney General’s guidelines, a significant takings implication exists
when the decision maker concludes that the proposed action poses a “substantial risk” that
a taking of private property may result or insufficient information is available to assess
whether the action has significant takings consequences. In publishing a rule, the agency is
to state the conclusions of its takings assessment if any significant implications are
anticipated.




Page 18                                                     GAO-03-1015 Regulatory Takings
Table 1: Number of Proposed and Final Rules Addressing the EO for Four Agencies,
Calendar Years 1989, 1997, and 2002

                         Agriculture           Corps         EPA      Interior        Total
Rules that 

reference the EO                     8              3         92          272          375

Number of these 

rules that specify 

that a takings 

implication

assessment was 

prepared                             1              0          0           49
          50
Number of the 

assessments that 

found significant 

takings 

implications                         0              0          0           10
          10
Source: GAO.

Note: GAO’s analysis of relevant Federal Register notices.


Given the limited amount of information available from the agencies or
available from the Federal Register notices we reviewed, we could not fully
assess the extent to which the EO’s requirements were fully considered by
the agencies.




Page 19                                                      GAO-03-1015 Regulatory Takings
Few Awards of Just          According to Justice data, 44 regulatory takings cases brought against the
                            four agencies were concluded during fiscal years 2000 through 2002.28 Of
Compensation Were           these cases, the courts decided in favor of the plaintiff in 2 cases, resulting
Made Against the Four       in awards of just compensation totaling about $4.2 million. The Justice
                            Department settled in 12 other cases, providing total payments of about
Agencies for Takings        $32.3 million. Of these 14 cases with awards or settlements payments, 10
Cases Concluded             related to actions of Interior, 3 to actions of the Corps of Engineers, and 1
during Fiscal Years         to an action of Agriculture. However, the EO’s requirements for assessing
                            the takings implications of planned regulatory actions applied to only 3 of
2000 through 2002           these 14 cases. For the other 11 cases, the associated regulatory action
                            either predated the EO’s issuance or the matter at hand was otherwise
                            excluded from the EO’s provisions. Based on available evidence, we found
                            that the relevant agency assessed the takings potential of its action in only
                            1 of the 3 cases subject to the EO’s requirements. As of the end of fiscal
                            year 2002, Justice reported that 54 additional regulatory takings cases
                            involving the four agencies were pending resolution.



Fourteen Takings Cases      Fourteen of 44 regulatory takings cases involving the four agencies and
Concluded during Fiscal     concluded during fiscal years 2000 through 2002 resulted in government
                            payments, according to Justice data. The U.S. Court of Federal Claims
Years 2000 through 2002
                            awarded payment of just compensation in 2 cases for a sum totaling about
Ended with Awards of Just   $4.2 million. Justice settled the remaining 12 cases, for a sum totaling
Compensation or             about $32.3 million.29 In general, the cases settled were concluded with
Settlement Payments         compromise agreements, including stipulated dismissals or settlement
                            agreements, reached among the litigants and approved by the applicable
                            court. In these cases, the agreement usually provides that the parties have
                            agreed to end the case with a payment to the plaintiff, but no finding that a
                            taking occurred. For example, in one case concluded in 2001 that alleged a
                            taking of an oil and gas lease on federal land managed by Interior’s Bureau


                            28
                              The data provided by Justice referred to these 44 cases as regulatory takings cases.
                            According to information provided by Interior, at least 9 of the cases, including 4 with award
                            or settlement payments, were alleged by the property owner to be “legislative” takings. In
                            legislative takings cases, the potential taking results directly from an act of Congress. One
                            of these 9 cases (Board of County Supervisors of Prince William County, Virginia v.
                            United States) involved the government’s taking title to property by exercising its power of
                            eminent domain.
                            29
                             In addition to the financial remuneration made to the plaintiff, the award and settlement
                            payment totals may include compensation for attorney fees, interest, and other litigation
                            costs.




                            Page 20                                                     GAO-03-1015 Regulatory Takings
of Land Management, the litigants negotiated a stipulated dismissal that
provided that a payment of $3 million be made to the plaintiffs. This
payment was to cover all claims made by the plaintiffs in the case.
However, the stipulated dismissal also provided that the final outcome
should not be construed as an admission of liability by the United States
government for a regulatory taking. In addition, the dismissal required that
the plaintiffs surrender their interests in a portion of the lease. In the 2
cases with award payments, the court concluded that a taking had
occurred and thus it awarded just compensation.

Of these 14 cases with awards or settlement payments, the 10 Interior cases
generally dealt with permits related to mining claims on federal lands
managed by that agency or matters related to granting access on public
lands. For example, one case involving mining claims resulted in the
plaintiff receiving a settlement of almost $4 million. In another case,
involving the denial of preferred access to a lake on land managed by the
agency, the plaintiff received a settlement of $100,000. The three Corps’
cases generally related to its denial or issuance with conditions of wetlands
permits for private property. One of these cases, concerning the filling of a
wetland in Florida, resulted in a settlement payment of $21 million,
accounting for more than half of the total compensation awards and
settlement payments related to the 14 cases. The single Agriculture case
concerned the title to mineral rights in a national forest managed by the
agency. The plaintiff received an award of $353,000 in this case. Table 2
provides a breakout by agency on the number of cases and the amount of
the award or settlement involved. In addition, appendix IV provides
detailed descriptions of the particulars for each case.




Page 21                                          GAO-03-1015 Regulatory Takings
                            Table 2: Awards of Just Compensation or Settlement Payments for Concluded
                            Regulatory Takings Cases for the Four Agencies, Fiscal years 2000 through 2002

                            Dollars in thousands
                                               Number of         Number of          Just
                                               concluded         cases with compensation
                            Agency                 cases          payments       awards            Settlements             Total
                            Agriculture                  1                  1              $353                $0          $353
                            Corps                       15                  3                  0          22,085       22,085
                            EPA                          2                  0                  0                0             0
                            Interior                    26                 10             3,851           10,216       14,067
                            Total                       44                 14             4,204         $32,301       $36,505
                            Source: GAO.

                            Note: GAO’s analysis of data provided by the Department of Justice’s Environment and Natural
                            Resources Division.


                            In addition to the cases concluded during fiscal years 2000 through 2002,
                            Justice reported that an additional 54 regulatory takings cases involving the
                            four agencies were still pending resolution at the end of fiscal year 2002. 30



Only Three of the Takings   Based on information provided by the four agencies, only 3 of the 14 cases
Cases Concluded with        with payments were subject to the EO’s requirement to conduct a
                            regulatory takings implication assessment. For the other 11 cases, the
Awards of Just
                            agency action involved either predated the EO’s issuance or was otherwise
Compensation or             excluded from the EO’s requirements.
Settlement Payments Were
Subject to the EO




                            30
                              Of the 54 pending cases, 30 involved Interior, 14 involved the Corps of Engineers, 7
                            involved Agriculture, and 3 involved EPA.




                            Page 22                                                        GAO-03-1015 Regulatory Takings
                      Of the three cases subject to the EO’s requirements, we found evidence that
                      a regulatory takings implication assessment had been done in only one
                      instance.31 In that case, the Corps of Engineers denied a wetlands permit
                      sought by the plaintiff to fill wetlands on the plaintiff’s property in order to
                      develop a commercial medical center. The plaintiff brought suit alleging a
                      compensable taking had occurred. In its takings implication assessment,
                      the Corps had concluded that the permit denial did not constitute a taking
                      because the applicant was still free to use the property for other purposes
                      that did not involve filling the wetland. Therefore, the Corps concluded
                      that the permit denial did not deprive the plaintiff of all viable economic
                      use of the property. However, the case ended with a stipulated dismissal
                      and a payment of $880,000 to the plaintiff.



Agency Comments and   We provided a draft of this report to Agriculture, the Corps of Engineers,
                      EPA, Interior, Justice, and OMB for review and comment. With the
Our Evaluation        exception of OMB, the agencies provided us with technical corrections and
                      editorial comments that we have incorporated as appropriate. OMB
                      indicated that it did not have any comments on the draft. In addition, two
                      of the agencies, Agriculture and EPA, provided an overall reaction to the
                      report. Agriculture indicated that the report provides a thorough and
                      reasonable review of the issues regarding the EO’s implementation and that
                      the agency does not disagree with the information presented. Similarly,
                      EPA indicated that it generally agreed with the information provided in the
                      report.


                      31
                        Two of these three cases related to Interior’s actions. In providing us written information
                      on one of these cases, Interior initially indicated that the EO did not apply to the case
                      (Devon Energy Corporation, et al. v. United States) because the agency did not “reasonably
                      anticipate” that its action would result in takings. As a result, Interior did not perform a
                      takings implication assessment. In commenting on a draft of this report, Interior stated that,
                      in hindsight, it appears that the EO may have applied to this action. While a formal takings
                      implication assessment was not prepared in this case, Interior stated there was a “good
                      faith” discussion of its takings implications within the department. Accordingly, we have
                      included this case among those subject to the EO’s requirements. In the other case (W.A.
                      Moncrief, Jr. et al. v. United States), although Interior initially said that the EO’s
                      requirements applied, it was unable to provide evidence that a takings implication
                      assessment was done. However, Interior officials noted that the record of decision for the
                      related environmental impact statement discussed the legislative requirements for
                      negotiating takings compensation for the complete or partial cancellation of a federal
                      mineral lease with the leaseholder. In addition, in commenting on a draft of this report,
                      Interior stated that since Interior’s current management did not make the decision on
                      whether the action was subject to the EO, the agency was unable to unequivocally state that
                      the EO applied.




                      Page 23                                                     GAO-03-1015 Regulatory Takings
As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days after the 

date of this letter. We will send copies of this report to the Attorney 

General; the Secretary of Agriculture; the Secretary of the Army; the

Administrator, Environmental Protection Agency; the Secretary of the 

Interior; the Director, Office of Management and Budget; and interested 

congressional committees. We will make copies available to others upon 

request. In addition, the report will be available at no charge on the GAO 

Web site at http://www.gao.gov. 


If you have any questions concerning this report, I can be reached at 202-

512-3841 or mittala@gao.gov. Major contributors to this report are listed in

appendix V.


Sincerely yours,





Anu K. Mittal

Acting Director, Natural Resources

 and Environment




Page 24                                            GAO-03-1015 Regulatory Takings
Appendix I

Objectives, Scope, and Methodology



              The Chairman of the House Subcommittee on the Constitution, Committee
              on the Judiciary, asked us to provide information on measures taken by the
              Department of Justice to implement certain provisions of Executive Order
              12630 (EO) regarding regulatory takings of private property and the efforts
              of four agencies—the Department of Agriculture, U.S. Army Corps of
              Engineers, Environmental Protection Agency, and the Department of the
              Interior1—to comply with the requirements of the EO. Specifically, the
              Chairman asked us to examine the extent to which (1) Justice has updated
              its guidelines to implement the EO to reflect changes in case law and issued
              supplemental guidelines for the four agencies, (2) the four agencies have
              complied with the specific provisions of the EO, and (3) awards of just
              compensation have been assessed against the four agencies by the courts
              for regulatory takings in recent years and, in these cases, whether the
              agencies assessed the potential takings implications of their actions before
              implementing them.

              To report on the extent to which Justice has updated its guidelines and
              issued supplemental guidance for the four agencies, we obtained copies of
              these documents and interviewed knowledgeable agency officials. At
              Justice, these officials included attorneys in the agency’s Environment and
              Natural Resources Division. At the four agencies, these officials included
              attorneys in each agency’s legal office (i.e., Office of the Chief Counsel,
              General Counsel, or Solicitor). We also discussed these matters with
              officials of the Office and Management and Budget’s Office of Information
              and Regulatory Affairs. In addition, we conducted legal research and
              sought the opinions and reviewed the publications of other relevant
              individuals at the Congressional Research Service; private property rights
              groups, including the Defenders of Property Rights; environmental groups,
              including the Georgetown Environmental Law and Policy Institute; and law
              schools, as to whether changes in takings case law since 1988 warrant
              revisions to the guidelines. In the course of this work, we identified and
              summarized key regulatory takings cases heard before the Supreme Court
              that have been concluded since 1988. Our work may not have identified all
              such cases. Furthermore, we do not take a position as to whether these
              cases, individually or collectively, constitute a fundamental change in the
              body of regulatory takings case law that would trigger the need to update
              Justice’s guidelines.




              1
               We refer to these agencies as the “four agencies” in subsequent references.




              Page 25                                                    GAO-03-1015 Regulatory Takings
Appendix I

Objectives, Scope, and Methodology





To determine the extent of the four agencies’ compliance with specific
provisions of the EO, we interviewed knowledgeable officials in the legal
offices of these agencies and reviewed the documents they provided.
These documents included written takings implication assessments of the
takings potential of proposed regulatory actions. At each agency we
requested examples of these assessments, although we did not ask the
agencies to conduct an exhaustive search of their records for these
assessments because the agencies generally expressed concerns about the
time and resources such a search could require. In addition, the agencies
indicated that assessments are not always written or, if written, are not
always retained in official files. During the course of our work, we also
asked for copies of written assessments associated with specific regulatory
takings cases that were concluded with either a settlement or just
compensation payment. In addition, we obtained copies of some additional
takings implication assessments from Federal Register notices.

Furthermore, regarding the agencies’ compliance with specific provisions
of the EO, we interviewed Justice and OMB Officials, as appropriate. We
also reviewed OMB’s Circular A-11, Preparation and Submission of
Budget Estimates, and discussed with OMB officials how the guidance in
that circular has changed over time and affected the four agencies’
compliance with the EO. In addition, we reviewed 375 Federal Register
notices of proposed and final regulatory actions published in 1989, 1997,
and 2002 relating to the four agencies and referencing the EO to determine
if and how the agencies documented their compliance with the EO. These
years were selected judgmentally: 1989 represents the first full year under
the EO, 1997 represents an intermediate year, and 2002 represents the most
recent full year. These years also provide 1 year’s experience under each of
the past three presidential administrations.

Finally, regarding awards of just compensation made against the agencies
and, in these cases, whether the agencies had assessed the takings
potential of their actions, we obtained from Justice a list of all takings
cases related to the four agencies that were concluded during fiscal years
2000 through 2002. We initially sought this type of data for the full 15-year
period since the EO’s issuance, but Justice officials indicated that the full
set of data was not readily available and would be very labor intensive to
provide. We then discussed these cases with relevant officials at the four
agencies and analyzed documents they provided. In particular, we focused
on cases in which just compensation awards or settlement payments were
made, and, for these cases, whether the agencies had assessed the potential
takings implications of their actions before implementing them. We also



Page 26                                          GAO-03-1015 Regulatory Takings
Appendix I

Objectives, Scope, and Methodology





discussed the cases with the Clerk of the U.S. Court of Federal Claims and
officials responsible for administering the Department of the Treasury’s
Judgment Fund and reviewed documents they provided, in part, to verify
the information on the cases with just compensation awards or settlement
payments.

We conducted our work between October 2002 and September 2003 in
accordance with generally accepted government auditing standards.




Page 27                                         GAO-03-1015 Regulatory Takings
Appendix II

Summary of Significant Supreme Court
Regulatory Takings Cases

                      This appendix summarizes regulatory takings cases decided by the U.S.
                      Supreme Court since 1988, the year the EO was issued and the Attorney
                      General promulgated guidelines related to the EO. These cases were cited
                      as being important to the body of relevant case law by legal experts in our
                      interviews with them or in various written products they prepared,
                      including books, law review articles, reports, papers, speeches, or
                      testimonies. The cases discussed are not intended to be an exhaustive list
                      of all such cases. In addition, the appendix discusses certain cases that
                      were decided prior to 1988 because they are referenced in some of the
                      more recent cases discussed below or are cited elsewhere in this report.



Cases Decided After   Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional
                      Planning Agency, 535 U.S. 302 (2002)
1988
                      Issue: Were two moratoria imposed by the Lake Tahoe Regional Planning
                      Agency compensable takings?

                      Background: The Tahoe Regional Planning Agency issued two
                      ordinances prohibiting all development on vacant lots within residential
                      subdivisions in the Lake Tahoe Basin for a period of 32 months. A group of
                      about 400 individual owners brought suit contending that the ordinances
                      constituted compensable takings. (Subsequent to the landowners bringing
                      suit in 1984, development moratoria continued to prohibit use of many of
                      the parcels; however, the Supreme Court was only asked to address the 32-
                      month moratoria.)

                      Decision: The Supreme Court held that the temporary moratorium on
                      development was not a per se or categorical taking. Instead, the question
                      of whether the Takings Clause of the Fifth Amendment requires
                      compensation when the government enacts a temporary regulation denying
                      a property owner any economic use of his property is to be decided by
                      applying the factors of Penn Central rather than any categorical rule. The
                      Court also stated that First English Evangelical Lutheran Church v.
                      County of Los Angeles (discussed below) concerned the question of
                      whether compensation is an appropriate remedy for a temporary taking,
                      not whether or when such a taking has occurred.

                      Palazzolo v. Rhode Island, 533 U.S. 606 (2001)

                      Issue: Did state denials rejecting developer’s proposals to fill in or build
                      on all or most of a lot, principally consisting of wetlands, cause a taking?



                      Page 28                                           GAO-03-1015 Regulatory Takings
Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





Background: A landowner made several applications to the state for a
permit to fill 11 acres of wetlands, build 74 houses, or construct a private
beach club. The state denied these applications, but informed him that he
would be allowed to build at least one house on the property. The
landowner estimated that the limitations imposed by the state equated to a
94 percent diminution in value of the property and brought suit, arguing for
an extension of the Lucas v. South Carolina Coastal Council (Lucas) test
(discussed below) to his situation.

Decision: The Supreme Court rejected extending Lucas to a situation
where there had been less than a complete denial of the economically
viable use of the property. The Court noted that the ability to build a house
on the property was of significant worth. The Court remanded the case
back to state court for evaluation under the Penn Central test. The Court
also ruled that the acquisition of title after the effective date of the
regulation that was the basis for the regulatory takings claim did not bar
the claim.

City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687
(1999)

Issues: Was it proper to submit the determination of a city’s liability for a
regulatory taking to a jury and did the rough-proportionality standard of
Dolan v. City of Tigard (Dolan) (discussed below) apply to challenges
based on denial of development?

Background: Del Monte Dunes and its predecessor landowner sought to
develop an oceanfront parcel of land within the jurisdiction of the city of
Monterey. The city, in a series of repeated rejections, denied proposals to
develop the property, each time imposing more rigorous demands on the
developers. The property owner brought a civil rights suit against the city
alleging, among other things, that the rejections had effected a regulatory
taking. The case was tried before a jury, which ruled in favor of Del Monte
Dunes.

Decision: The Supreme Court ruled that the issues of whether the city’s
repeated rejections of the property owner’s development proposals
deprived the owner of all economically viable use of the owner’s property
and whether the city’s decision to reject Del Monte Dunes’ development
plan was reasonably related to a legitimate public purpose were factual
questions for a jury to resolve. The Court also stated that the “rough
proportionality” standard of Dolan did not apply. Dolan dealt with



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Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





situations in which land-use decisions condition approval of development
on the dedication of property to public use. The Court held that Dolan did
not apply to the present case in which the landowner’s challenge was based
on denial of development.

Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997)

Issue: Was a landowner’s regulatory taking claim ripe for adjudication?

Background: A landowner claimed that the Tahoe Regional Planning
Agency committed a regulatory taking when it determined that the
landowner’s undeveloped residential lot near Lake Tahoe was ineligible for
development. However, the planning agency had indicated that the
landowner was entitled to receive certain “Transferable Development
Rights” that she could sell to other landowners with the agency’s approval.
The landowner did not seek those rights but instead brought an action for
just compensation for the agency’s alleged taking of her property. In
response, the planning agency claimed that the landowner’s takings claim
was not ripe because she failed to apply to transfer her development rights,
and thus, the amount of her takings claim could not be determined.

Decision: The Supreme Court ruled that the planning agency had made a
final decision in determining that the landowner’s property was ineligible
for development, and thus, her claim was ripe for adjudication. The Court
reasoned that the valuation of the landowner’s transfer rights is simply an
issue of fact about possible market prices and went to the issue of how
much just compensation was owed, not whether there had been a taking.
The Court discussed Agins v. City of Tiburon (discussed below), in which
it held that because the owners who were challenging ordinances
restricting the number of houses they could build on their property had not
submitted a plan for development of their property, there was no concrete
controversy regarding the application of the specific zoning provisions.

Dolan v. City of Tigard, 512 U.S. 374 (1994)

Issue: The Court stated that it granted certiorari to resolve a question left
open by its decision in Nollan v. California Coastal Commission
(discussed below): What is the required degree of connection between the
exactions imposed by the city and the projected impacts of the proposed
development?




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Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





Background: A landowner applied to the city of Tigard for a permit to
redevelop her plumbing and electrical supply store site. As a condition of
granting the landowner’s permit application, the city required the
landowner to dedicate a portion of her property as a public greenway to
minimize flooding and to dedicate an additional portion of her land as a
pedestrian/bicycle pathway to reduce traffic congestion, in accordance
with the city’s land use plan. The landowner challenged the dedication
requirements on the grounds that they were not related to the proposed
development and, therefore, constituted an uncompensated taking of her
property under the Fifth Amendment.

Decision: The Supreme Court found that preventing flooding and
reducing traffic congestion were legitimate public purposes and that there
was a nexus between the conditions imposed by the city and these
purposes. The Supreme Court then applied a “rough proportionality” test,
stating that the city has the burden of establishing the constitutionality of
its conditions by making an “individualized determination” that the
conditions in question were proportional to the stated purposes. The Court
ruled that the city’s dedication requirements constituted an uncompensated
taking of the landowner’s property because the city had failed to show
either the need for a public, as opposed to a private, greenway or that the
additional number of vehicle and bicycle trips generated by the proposed
development was reasonably related to the city’s requirement for a
dedicated pedestrian/bicycle path.

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)

Issue: Is a government regulation of land that completely eliminates its
economic use a compensable taking?

Background: A landowner bought two residential lots on a South Carolina
barrier island, intending to build single-family homes. Subsequently, the
state enacted a statute that barred him from erecting permanent habitable
structures on the land. The landowner filed suit in state court, claiming
that the law caused a taking of his property without just compensation.
The South Carolina trial court found that the statute rendered the
landowner’s parcel valueless, and awarded compensation. The South
Carolina Supreme Court reversed the award of compensation, holding that,
under previous U.S. Supreme Court cases, when a regulation is designed to
prevent “harmful or noxious uses” of property akin to public nuisances, no
compensation was due the landowner, regardless of the regulation’s effect
on the property’s value.



Page 31                                          GAO-03-1015 Regulatory Takings
                       Appendix II

                       Summary of Significant Supreme Court 

                       Regulatory Takings Cases





                       Decision: The Court reversed the South Carolina Supreme Court’s
                       decision, ruling that the state court erred in applying the “harmful or
                       noxious” uses principle to decide this case. The Court stated that
                       regulations that deny the property owner all “economically viable uses of
                       his land” constitutes a per se, or categorical, regulatory taking that requires
                       compensation, without inquiring into the public interest advanced in
                       support of the restraint. However, the Court also noted that no taking has
                       occurred if the state law simply makes explicit the limitations on land
                       ownership already existing as a result of the background principles of a
                       state’s law of property and nuisance. The Supreme Court remanded the
                       case for the South Carolina court to determine whether these principles
                       would have prohibited the landowner from building on his property.



Cases Decided Before   Nollan v. California Coastal Commission, 483 U.S. 825 (1987)

1988                   Issue: Was there a nexus between the condition on the requested permit
                       and a legitimate state government purpose of protecting the public view of
                       a beach?

                       Background: The California Coastal Commission demanded a lateral
                       public easement across the Nollans’ beachfront lot in exchange for a permit
                       to demolish an existing bungalow and replace it with a three-bedroom
                       house. The public easement was designed to connect two public beaches
                       that were separated by the Nollan property. The Coastal Commission had
                       asserted that the public easement condition was imposed to promote the
                       legitimate state interest of diminishing the “blockage of the view of the
                       ocean” caused by construction of the larger house.

                       Decision: The Court found that there had been a taking, as it found no
                       “essential nexus” between the government’s purpose and its condition on
                       construction that required the property owners to grant an easement
                       allowing the public access to their beachfront. The Court ruled that while
                       the Coastal Commission could have required that the Nollans provide a
                       viewing spot on their property for passersby, there was no nexus between
                       visual access to the ocean and a permit condition requiring lateral public
                       access along the Nollans’ beachfront lot.




                       Page 32                                            GAO-03-1015 Regulatory Takings
Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





First English Evangelical Lutheran Church v. County of Los
Angeles, 482 U.S. 304 (1987)

Issue: Did an interim ordinance prohibiting construction of any structures
in a flood zone cause a temporary taking of property requiring
compensation?

Background: A church purchased a 21-acre parcel of land located in a
canyon along the banks of a river that is a natural drainage channel for a
watershed area. The church operated a campground on the site. Flooding
destroyed the campground and its buildings. In response to the flooding of
the canyon, the County of Los Angeles adopted an interim ordinance that
prohibited construction in an interim flood protection area, including the
site on which the campground had stood. The church filed suit, seeking
just compensation for loss of the use of the campground.

Decision: The Court ruled that even if a regulation that has been found to
result in a taking is repealed or invalidated the government must pay just
compensation for the interim period that the regulation was in effect.

Agins v. City of Tiburon, 447 U.S. 255 (1980)

Issue: Did a zoning ordinance limiting the number of houses that
landowners could build on their property cause a taking?

Background: The landowners acquired 5 acres of unimproved land for
residential development in Tiburon, California. Subsequently, the city
adopted two ordinances that modified existing zoning requirements. The
density restrictions under the ordinances permitted the landowners to
build between one and five single-family residences on their 5-acre tract.
The landowners did not seek approval to develop their land, and instead
brought suit for just compensation. The complaint alleged that their land
had greater value than other suburban property in California due to the
scenic views, and that the ordinances destroyed the value of their property.

Decision: The Court held that the zoning ordinance on its face did not
cause a taking. The court stated that the ordinance was rationally related
to the legitimate public goal of open-space preservation, the ordinance
benefits property owners as well as the public, and the landowners may
still be able to build up to five houses on a lot. The Court also found that
because the landowners had not submitted a plan for development of their




Page 33                                          GAO-03-1015 Regulatory Takings
Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





property, there was no concrete controversy regarding the application of
the specific zoning provisions.

Penn Central Transportation Co. v. City of New York, 438 U.S. 104
(1978)

Issue: Did the city’s use of a historic preservation ordinance to block
construction of an office tower atop a designated historic landmark cause a
taking?

Background: The Landmark Preservation Commission denied Penn
Central permission to build a multistory office building above Grand
Central Station in New York City. Penn Central alleged the regulation took
its property.

Decision: The Court ruled that there had been no taking of property. In
evaluating the case, the Court set forth a three-pronged test for determining
whether a government regulation has resulted in a taking: (1) the character
of the governmental actions; (2) the economic impact of the action on the
property owner; and (3) the extent to which the regulation has interfered
with the distinct, investment-backed expectations of the owner.

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)

Issue: Did a state law barring coal mining that might cause subsidence of
overlying land result in a taking of private property in a case where the
mineral estate owner is different from the surface estate owner?

Background: A coal company conveyed the surface ownership of its
property and retained the right to remove coal from the subsurface.
Subsequently, a state law was enacted, forbidding the mining of coal in
such a way as to cause the subsidence of housing in situations where the
surface and subsurface ownership belong to different parties. As a result,
the coal company was unable to exercise its right to remove the coal.

Decision: The Court held that a taking occurred. The Court stated “while
property may be regulated to a certain extent, if regulation goes too far it
will be recognized as a taking.” The Court reasoned that the extent of the
taking under the state law—abolishing the right to mine coal, which it
deemed “a very valuable estate”—was great. Moreover, because the state
law applied only where surface and subsurface land is in different




Page 34                                          GAO-03-1015 Regulatory Takings
Appendix II

Summary of Significant Supreme Court 

Regulatory Takings Cases





ownership, it benefits a narrow private interest rather than a broad public
one.




Page 35                                          GAO-03-1015 Regulatory Takings
Appendix III

Proposed and Final Rules That Address the
EO, for the Four Agencies, Calendar Years
1989, 1997, and 2002

Table 3: Proposed and Final Rules That Address the EO, for the Four Agencies, Calendar Years 1989, 1997, and 2002

                                                                            Number of these rules that                     Number of the
                                                                                     specify a takings            assessments that found
                                                                              implication assessment                   significant takings
Agency              Year                 Rules that reference the EO                    was prepared                             potential
Agriculture         1989                                                1                                  0                                  0
                    1997                                                5                                  1                                  0
                    2002                                                2                                  0                                  0
Subtotal                                                                8                                  1                                  0
Corps               1989                                                1                                  0                                  0
                    1997                                                2                                  0                                  0
                    2002                                                0                                  0                                  0
Subtotal                                                                3                                  0                                  0
EPA                 1989                                                0                                  0                                  0
                    1997                                                0                                  0                                  0
                    2002                                              92                                   0                                  0
Subtotal                                                              92                                   0                                  0
Interior            1989                                              15                                   0                                  0
                    1997                                              62                                   2                                  1
                    2002                                             195                                 47                                   9
Subtotal                                                             272                                 49                                 10
Total	              1989                                              17                                   0                                  0
                    1997                                              69                                   3                                  1
                    2002                                             289                                 47                                   9
                    Total                                            375                                 50                                 10
Source: GAO.

                                          Notes: GAO’s analysis of related Federal Register notices.
                                          Regarding EPA rules mentioning the EO in 2002, EPA officials attributed the significant increase seen
                                          that year to the widespread use of a template that was developed for use in applicable notices of
                                          proposed and final rulemakings. This template states that EPA had complied with the EO and the
                                          Attorney General's supplemental guidelines. Interior officials were unable to explain the significant
                                          increase in the number of Interior rules mentioning the EO in 2002.




                                          Page 36                                                          GAO-03-1015 Regulatory Takings
Appendix IV

Regulatory Takings Cases Concluded during
Fiscal Years 2000 through 2002 Related to
Actions of the Four Agencies

Table 4: Regulatory Takings Cases Concluded with Payments, for the Four Agencies, Fiscal Years 2000 through 2002

                                                                                                          Was the          Was a takings
                                                                                                          action           implication
                                                                                                          subject to the   assessment
Fiscal year and case      Court name and                   Payment type       Agency action related       Executive        done by
names                     case number          Agency      and amounts        to the alleged taking       Order 12630?     agency?
2000
James Koconis & Ted       Court of Federal     Corps of    Settlement         Decision on a wetlands    Yes                Yes
G. Koconis v. United      Claims 94-517L       Engineers   $880,000           permit under § 404 of the
States                                                                        Clean Water Act

Speerex Ltd., et al. v.   Court of Federal     Interior    Settlement         Anticipated rejection of    No—plaintiff  No
United States             Claims 97-351L                   $110,000           drilling permits on oil and made claim
                                                                              gas leases                  before agency
                                                                                                          action
W.C. Bell and Davis O. Court of Federal        Corps of    Settlement         Decision on a wetlands    No—excluded No
Heniford v. United     Claims 97-857L          Engineers   $205,000           permit under § 404 of the under
States                                                                        Clean Water Act           supplemental
                                                                                                        guidelines
Lake Pleasant Group v. Court of Federal Interior           Settlement         Denial of plaintiff's       No—predated      No
United States          Claims 92-848L                      $100,000           preferred access to lake    EO
                       Court of Appeals,
                       Federal Circuit
                       95-5061
2001
Del-Rio Drilling          Court of Federal     Interior    Settlement         Bureau of Indian Affairs’ No—predated        No

Programs, Inc., et al. v. Claims 569-86L                   $300,000           failure to grant surface     EO

United States             (37 Fed. Cl. 157)                Litigation Costs   use for oil and gas leases 

                          rev’d, Court of                  $591               on Indian lands due to the 

                          Appeals, Federal                                    tribe's lack of consent

                          Circuit 97-5055

                          (146 F.3d 1358)

Arnold E. Howard, et      U.S. District        Interior    Settlement         (1) Legislative taking of   Either (1) No, No
al. v. United States      Court, District of               $838,000           mining claims under         legislative
                          Alaska F98-                                         § 120 of Pub. L. No. 105-   taking not
                          0006CV (JKS)                                        83 or alternatively (2)     covered by EO
                                                                              taking under                or
                                                                              implementation of Mining    (2) No, plaintiff
                                                                              in the Parks Act            made claim
                                                                                                          before final
                                                                                                          agency action
Devon Energy              Court of Federal     Interior    Attorney fees      Denial of applications to   Yesa             No
Corporation, et al. v.    Claims 98-665L                   $380,000           permit drilling
United States
Florida Rock              Court of Federal     Corps of    Settlement         Decision on a wetlands    No—predated        No
Industries, Inc. v.       Claims 266-82L       Engineers   $21,000,000        permit under § 404 of the EO
United States                                                                 Clean Water Act




                                                 Page 37                                                  GAO-03-1015 Regulatory Takings
                                                Appendix IV

                                                Regulatory Takings Cases Concluded during

                                                Fiscal Years 2000 through 2002 Related to

                                                Actions of the Four Agencies





(Continued From Previous Page)
                                                                                                                Was the           Was a takings
                                                                                                                action            implication
                                                                                                                subject to the    assessment
Fiscal year and case      Court name and                    Payment type         Agency action related          Executive         done by
names                     case number         Agency        and amounts          to the alleged taking          Order 12630?      agency?
Shirl Pettro v. United    Court of Federal    Agriculture   Court Order of       Temporary denial of            No—legal          No
States                    Claims 96-651L                    Just                 access to minerals from        action not
                          (47 Fed. Cl. 136)                 Compensation         national forest due to         within the
                                                            $74,479              dispute over title to          scope of the
                                                            Attorney fees        mineral rights                 EO
                                                            $250,294
                                                            Litigation costs
                                                            $28,217
W.A. Moncrief, Jr. et al. Court of Federal    Interior      Settlement           Anticipated and actual         Yes               No
v. United States          Claims 97-565L                    $3,000,000           denial of drilling permits
                                                                                 to protect Lechuguilla
                                                                                 Cave

2002
Kantishna Mining          U.S. District      Interior       Settlement           (1) Legislative taking of      Either (1) No, No
Company, et al. v.        Court, District of                $872,000             mining claims under §          legislative
Bruce Babbitt, et al.     Alaska                            Interest             120 of Pub. L. No. 105-83      taking not
                          98-00007CV                        $528,000             or alternatively (2) taking    covered by EO
                          (JKS)                                                  under implementation of        or
                          Court of Appeals,                                      Mining in the Parks Act        (2) No, plaintiff
                          Ninth Circuit, 01-                                                                    made claim
                          35201, 01-35248                                                                       before final
                                                                                                                agency action
John W. Taylor v.         Court of Federal    Interior      Settlement           Delay in issuing an            No—excluded No
United States             Claims 99-131L                    $175,000             incidental take permit         under
                                                                                 under § 10 of the              supplemental
                                                                                 Endangered Species Act         guidelinesb
Board of County           Court of Federal    Interior      Court Order of       Legislative taking of land     No—excluded No
Supervisors of Prince     Claims 90-364L                    Just                 under Pub. L. No. 100-         for eminent
William County,           (47 Fed. Cl. 714)                 Compensation         647 to add land to the         domain
Virginia v. United        aff’d, Court of                   $1,153,578           Manassas National
States                    Appeals, Federal                  Interest             Battlefield Park
                          Circuit (276 F.3d                 $2,697,534
                          1359)
Richard P. Cook, et al.   Court of Federal    Interior      Settlement           Legislative taking of          No—           No
v. United States          Claims 94-344L                    $3,911,838           rights to a patent for         legislative
                                                                                 mining claims with the         taking not
                                                                                 establishment of the           covered by EO
                                                                                 Jemez National
                                                                                 Recreation Area by 16
                                                                                 U.S.C. § 460jjj
Total                     14 Cases                          $36,504,531
Source: GAO.

                                                Note: GAO analysis of data provided by the Department of Justice’s Environment and Natural
                                                Resources Division, counsel or solicitor staff at the four agencies and from court documents.




                                                Page 38                                                          GAO-03-1015 Regulatory Takings
                                                Appendix IV

                                                Regulatory Takings Cases Concluded during

                                                Fiscal Years 2000 through 2002 Related to

                                                Actions of the Four Agencies





                                                a
                                                 While Interior initially reported the EO did not apply to this case, further examination revealed that the
                                                action neither predated nor was excluded from the EO. Interior commented that while a formal takings
                                                implication assessment was not prepared in this case, there was a “good faith” discussion of its takings
                                                implications within the department.
                                                b
                                                 While the supplemental guidelines for Interior provide an exclusion for the issuance of the permit, the
                                                EO provides that the duration of the process shall be “kept to the minimum necessary.” GAO makes no
                                                judgment on whether there was undue delay in this case.




Table 5: Regulatory Takings Cases Concluded Without Payments, for the Four Agencies, Fiscal Years 2000 through 2002


Fiscal year and case names       Court name and case number              Agency            Agency action related to the alleged taking
2000
Northwest Explorations Joint     U.S. District Court, District of        Interior	         Taking of mining claims under Mining in the Parks
Venture v. Bruce Babbitt         Alaska 99-0643CV                                          Act


Boise Cascade Corporation v.     Court of Federal Claims 98-634L         Interior          District Court injunction against logging spotted owl
United States                                                                              habitat without an Endangered Species Act permit
Ned Majors v. Dial Companies, Court of Federal Claims 98-0873            Corps of          Decision on a wetlands permit under § 404 of the
Inc.                                                                     Engineers         Clean Water Act
David Clark, et al. v. United    U.S. District Court, District of        Interior          (1) Legislative taking of mining claims under § 120 of
States                           Alaska F-99-0045CV                                        Pub. L. No. 105-83 or alternatively (2) taking under
                                                                                           implementation of Mining in the Parks Act
Shickrey Anton v. United         Court of Federal Claims 93-447          Corps of          Decision on a wetlands permit under § 404 of the
States                                                                   Engineers         Clean Water Act
Lloyd A. Good Jr. v. United      Court of Federal Claims 94-442L Corps of                  Decision on permits under § 10 of the Rivers and
States                           (39 Fed. Cl. 81)                 Engineers                Harbors Act and § 404 of the Clean Water Act
                                 aff’d, Court of Appeals, Federal
                                 Circuit 97-5138 (189 F.3d 1355)
                                 cert. denied, U.S. Supreme Court
                                 99-881 (529 U.S. 1053)
Broadwater Farms Joint           Court of Federal Claims 94-1041L Corps of                 Decision on a wetlands permit under § 404 of the
Venture v. United States         (45 Fed. Cl. 154)                Engineers                Clean Water Act
Lakewood Associates v. United Court of Federal Claims 97-303L            Corps of          Decision on a wetlands permit under § 404 of the
States                        (45 Fed. Cl. 320)                          Engineers         Clean Water Act
R & Y Inc. and Josef Ressel v.   Court of Federal Claims 97-484L         Corps of          Decision on a wetlands permit under § 404 of the
United States                                                            Engineers         Clean Water Act
Forest Properties, Inc. v.       Court of Federal Claims 92-851L         Corps of          Decision on a wetlands permit under § 404 of the
United States                                                            Engineers         Clean Water Act
William J. Smereka, et al. v. Lt. U.S. District Court, Eastern           Corps of          Decision on a wetlands permit under § 404 of the
Colonel Thomas C. Haid            District of Michigan 97-070151         Engineers         Clean Water Act
S&S Development, et al. v.       U.S. District Court, District of        Corps of          Decision on a wetlands permit under § 404 of the
Army Corps of Engineers          Alaska 98-006                           Engineers         Clean Water Act




                                                Page 39                                                              GAO-03-1015 Regulatory Takings
                                                Appendix IV

                                                Regulatory Takings Cases Concluded during

                                                Fiscal Years 2000 through 2002 Related to

                                                Actions of the Four Agencies





(Continued From Previous Page)

Fiscal year and case names       Court name and case number         Agency         Agency action related to the alleged taking
2001
Kenneth Battley v. United        U.S. District Court, District of   Interior       (1) Legislative taking of mining claims under § 120 of
States                           Alaska A-99-636CV                                 Pub. L. No. 105-83 or alternatively (2) taking under
                                                                                   implementation of Mining in the Parks Act
James C. Pendleton, et al. v.    Court of Federal Claims 98-161L    Interior       Action by the Office of Surface Mining, pursuant to
United States                    (1 Fed. Cl. 480)                                  the Surface Mining Control and Reclamation Act of
                                                                                   1977
James S. Sette v. United         Court of Federal Claims 98-157C    Interior       Unspecified agency action caused taking of seven
States                                                                             unpatented mining claims
Ultimate Sportsbar, Inc. v.      Court of Federal Claims 98-0160L EPA              EPA’s action to clean up hazardous materials under
United States                                                                      Comprehensive Environmental Response,
                                                                                   Compensation and Liability Act and Toxic
                                                                                   Substances Control Act caused the plaintiff to lose its
                                                                                   lease
Barry Bradshaw, et al. v. United Court of Federal Claims 98-0708    Interior       Cancellation and/or termination of Bureau of Land
States                                                                             Management and Forest Service grazing permits
M. Alfieri Co., Inc. v. United   Court of Federal Claims 99-0759    EPA            State of New Jersey’s denial of a permit under § 404
States	                                                                            of the Clean Water Act pursuant to the delegation of
                                                                                   regulatory authority by EPA to the state
Michael F. Beirne, et al. v.     Court of Federal Claims 00-353     Corps of       Decision on a wetlands permit under § 404 of the
United States                                                       Engineers      Clean Water Act
Joseph M. Foley, et al. v.       Court of Federal Claims 00-553C    Interior       Bureau of Land Management invalidated six
United States                                                                      unpatented mining claims
Eldridge C. Daniel v. United     Court of Federal Claims 97-0397    Corps of       Decision on a wetlands permit under § 404 of the
States                                                              Engineers      Clean Water Act
Karuk Tribe of California v.     Court of Federal Claims 90-3993 Interior          Legislation caused taking of reservation lands
United Statesa	                  (41 Fed. Cl. 468)
                                 aff’d, Court of Appeals, Federal
                                 Circuit (209 F.3d 1366)
                                 cert. denied, U.S. Supreme Court
                                 (532 U.S. 941)
Gregory T. Banner, et al. v.     Court of Federal Claims 96-708L    Interior       Legislation, the Seneca Nation Land Claims
United States	                   aff’d, Court of Appeals, Federal                  Settlement Act, 25 U.S.C. § 1774, prevented renewal
                                 Circuit 00-5006 (238 F.3d 1348)                   of their lease and caused a taking
2002
Larry D. Compton v. Bruce        U.S. District Court, District of   Interior       (1) Legislative taking of mining claims under § 120 of
Babbitt                          Alaska A-99-637CV                                 Pub. L. No. 105-83 or alternatively (2) taking under
                                                                                   implementation of Mining in the Parks Act
Northwest Exploration, Inc. v.   U.S. District Court, District of   Interior       Taking of mining claims by Mining in the Parks Act
United States                    Alaska A-99-654CV
Pax Christi Memorial Gardens, Court of Federal Claims 00-717        Corps of       Decision on a wetlands permit under § 404 of the
et al. v. United States                                             Engineers      Clean Water Act




                                                Page 40                                                  GAO-03-1015 Regulatory Takings
                                              Appendix IV

                                              Regulatory Takings Cases Concluded during

                                              Fiscal Years 2000 through 2002 Related to

                                              Actions of the Four Agencies





(Continued From Previous Page)

Fiscal year and case names       Court name and case number           Agency           Agency action related to the alleged taking
Last Chance Mining Co., Inc. v. Court of Federal Claims 94-402L       Interior         Application of federal mining laws allegedly caused
United States                                                                          taking of 300 unpatented mining claims
Kingman Reef Atoll               Court of Federal Claims 02-140L      Interior         The designation of Kingman Reef as a national
Investments L.L.C., et al. v.                                                          wildlife refuge after transfer from the U.S. Navy
United States
Rith Energy, Inc. v. United      Court of Federal Claims 92-480L Interior              Suspension of mining permit and denial of a permit
States	                          (44 Fed. Cl. 108)                                     revision under the Surface Mining Control and
                                 aff’d, Court of Appeals, Federal                      Reclamation Act of 1977
                                 Circuit (247 F.3d 1355)
                                 cert. denied, U.S. Supreme Court
                                 (536 U.S. 958)
Eastern Minerals International   Court of Federal Claims 94-1098 Interior              Delay in processing a coal mining permit application
Inc., et al. v. United States	   rev’d, Court of Appeals, Federal                      under the Surface Mining Control and Reclamation
                                 Circuit (271 F.3d 1090)                               Act of 1977
                                 cert. denied, U.S. Supreme Court
                                 (535 U.S. 1077)
Source: GAO.

                                              Note: GAO’s presentation of data provided by the Department of Justice’s Environment and Natural
                                              Resources Division, by counsel or solicitor staff at the agencies, and from court documents.
                                              a
                                              In this case, litigation costs of $10,169 were awarded to the United States.




                                              Page 41                                                           GAO-03-1015 Regulatory Takings
Appendix V

GAO Contacts and Staff Acknowledgments




GAO Contacts	      Anu K. Mittal (202) 512-3841
                   James R. Jones, Jr. (202) 512-9839



Acknowledgments	   In addition to the individuals named above, Doreen S. Feldman, James K.
                   McDowell, Jonathan S. McMurray, John P. Scott, and Timothy W. Wexler
                   made key contributions to this report. Kathleen A. Gilhooly and Lisa M.
                   Wilson also made important contributions.




(360275)           Page 42                                        GAO-03-1015 Regulatory Takings
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