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What areas of law does Marzulla Law practice, and what types of clients do you represent?

 

Our primary practice focus is on takings cases, and litigation in the U.S. Court of Federal Claims. We help property owners ----companies, business owners, and landowners ---- get paid just compensation in accordance with the Fifth Amendment to the U.S. Constitution when the Government takes their property through what's known as inverse condemnation, commonly referred to as a "taking." We represent companies, business owners, land developers, trade associations, landowners, and water districts in litigation of property rights and contract claims. We represent clients in environmental enforcement actions, and in litigation involving natural resources and permitting issues. Finally, we represent Indian tribes in various disputes with the federal government, including breach of trust claims, seeking monetary damages for the federal government's failure to fulfill its trust obligations.

 

What is a "taking"?

 

A "taking" of property is a shorthand way of referring to an act of eminent domain whereby the government takes privately owned property and converts it into public property for the benefit of the public as a whole, incurring the constitutional duty to pay the owner for the reasonable or fair market value of the property taken. The power of eminent domain is considered an inherent power of a governmental entity.

 

A "taking" is also used to describe an act of what we earlier referred to as "inverse condemnation," whereby the government acquires property without formally exercising its power of eminent domain. In inverse condemnations, the property owner must file a legal action to obtain payment of just compensation from the government entity that has taken the property. Inverse condemnations typically involve the government's acquisition of private property either by physically invading the property, such as by flooding land, or by physically occupying the property such as placing equipment or buildings on the land, or by interfering with the use of the property by regulation or legislation such as by denying the owner a permit allowing an otherwise lawful use of the property. Courts have held that not all acts of interference with the use of private property constitute a taking. Therefore, in order to trigger the constitutional duty to pay just compensation for a taking under the Fifth Amendment, the owner must show that the governmental interference with the use of the property has been substantial or physical in nature.

 

What is property?

 

Although "property" is a term that has historically been defined very broadly, it is generally understood as the right to possess, use, and enjoy a specific thing such as a tract of land, an improvement on land, or a right to use water. But property can also include intangible things such as a trade secret, a contract right, stock options, and business goodwill. In the constitutional sense, property refers to a combination of rights, powers, and duties that are protected from undue government interference. The Supreme Court has held that property ownership includes "the right to possess, use, and dispose" of it.

 

What are some examples of takings cases?

 

Below are summaries of three cases that offer excellent overviews of takings and the diversity of life and land issues that can become involved. Marzulla Law represented the plaintiffs in each of these cases.

 

WATER RIGHTS

Klamath Irrigation District v. United States 

On February 18, 2011, a major victory was won by landowners in the Klamath Water Basin, a nearly 16,000 square-mile region comprising parts of southern Oregon and northern California which, under the oversight of the U.S. Bureau of Reclamation (Bureau), provides water to about 240,000 acres of irrigable crop lands. The long-running case, Klamath Irrigation District v. United States, stems from a 2001 decision by the Bureau not to deliver any water to Klamath Basin farmers and irrigators that year. The Bureau claimed it was doing so because it was obligated under the Endangered Species Act (ESA) of 1973 to protect endangered species. Several agricultural landowners as well as a number of water, drainage, and irrigation districts filed a complaint for just compensation. Although the U.S. Court of Federal Claims in 2005 denied the plaintiffs' takings claims and held that there was no equitable property right in their use of Klamath Basin water for irrigation, the U.S. Court of Appeals for the Federal Circuit later affirmed that the plaintiffs do in fact possess water rights in the Klamath Water Basin. The Federal Circuit remanded the case for further proceedings.

 

BUSINESS/PROPERTY ISSUES

Former Chrysler Dealerships Sue After Being Forced To Close Due To U.S. Government's Auto Bailout 

In 2009, 789 Chrysler automobile dealerships were forced to close after the federal Government determined that Chrysler would be more financially healthy with a smaller dealership network. Therefore, as a condition of receiving any federal relief money under the Troubled Asset Relief Program (TARP), President Obama's Auto Task Force required Chrysler to enter into bankruptcy and utilize the bankruptcy proceeding to terminate 25% of its dealerships. The stated objective of the closures of 25% of all Chrysler dealership franchises was to promote stability in the U.S. financial system and U.S. markets by preventing a significant disruption of the automotive industry.

Shortly after the termination of the franchise agreements, 75 of the terminated Chrysler dealership owners ---- many of whom had been in business for generations ---- filed suit in the U.S. Court of Federal Claims seeking monetary relief for the loss of their businesses, losses which were in fact uncompensated takings of their property in violation of the Fifth Amendment.

In its motion to have the case dismissed, the Government claimed that the ending of the dealership franchise agreements did not constitute a taking. However, we highlighted case law that plainly supported these claims. In Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir. 2003), the Third U.S. Circuit Court held that contracts are property protected against uncompensated taking by the Fifth Amendment. Furthermore, in Boise Cascade Corp. v. United States, 296 F.3d 1339 (Fed. Cir. 2002), the Third U.S. Circuit Court confirmed that if the Government uses the judicial system to take private property for public use ----such as what happened with the Chrysler bankruptcy and the government purpose it served ---- the Government must still pay compensation.

 

The U.S. Court of Federal Claims recently denied the Government's motion to dismiss the case. The court held that, contrary to the Government's contention that the dealership owners are challenging the district court's bankruptcy decision, the dealership owners are in fact suing the United States Government for the uncompensated taking of their constitutionally protected property rights, which was accomplished via the mechanism of bankruptcy proceedings.

 

PHYSICAL OCCUPATION OF THE LAND

Federal Government Admits To Liability In Land Takings: The Otay And Bassett Cases 

In 2006, three commercial real estate partners in southern California filed a lawsuit (Otay Mesa Property, LP v. United States) against the federal government in an effort to obtain just compensation under the Fifth Amendment of the U.S. Constitution for the physical taking of approximately 1,050 acres of their land in San Diego County, California. The land, which is located in the path of development anticipated by a third border crossing, comprised of 11 parcels of private property which border Mexico, had been regularly entered upon for years by U.S. Border Patrol agents who were engaged in the pursuit and apprehension of Mexican nationals entering the United States illegally. Of particular concern to the landowners was that the presence and activity of U.S. Border Patrol agents on their land ---- which included 24-hour patrolling, installing underground motion detectors, and even constructing new roads and a permanent tent station without permission ---- was preventing them from developing it.

During the course of the case, the federal government admitted to liability for the physical taking of the landowners' property. In an August 28, 2008 filing in the U.S. Court of Federal Claims, the government stipulated that "by virtue of its placement of [14 seismic motion sensors] on the listed parcels of land, it has taken a property interest in the nature of an easement over the parcel of land on which the sensors have been placed."

 

I don't often hear about the U.S. Court of Federal Claims? What is its jurisdiction, and why is it known as the People's Court?

 

While most Americans are aware of the existence and role of U.S. district courts, circuit courts of appeal, and the U.S. Supreme Court, many people are not aware of the U.S. Court of Federal Claims and its unique role in protecting the Constitutional rights of citizens and providing a forum in which an individual can seek relief for grievances against its sovereign ---- the federal government.
Simply put, in the U.S. Court of Federal Claims the U.S. Government is the defendant against claims by citizens of violations of Constitutional rights relating to property or money.The Court of Federal Claims is authorized to hear money claims founded upon the Constitution, federal statutes, executive regulations, or contracts, express or implied-in-fact, with the United States. In recent years, the court's Fifth Amendment takings jurisdiction has included many cases involving environmental and natural resource issues. The court also hears intellectual property, Indian tribe, and various statutory claims against the United States by individuals, domestic and foreign corporations, states and localities, Indian tribes and nations, and foreign nationals and governments.

In many cases, claims involve a breach of contract where the government and a private landowner entered into a contract in which the government has breached. Breach of contract cases can result in a person's loss of land, money, or both. As such, a person has the right to file a claim against the government in the Court of Federal Claims in order to seek compensation for losses.

 

Will a jury decide the takings issue in the U.S. Court of Federal Claims?

 

Not if the claims involve a taking of property by the federal government. All claims for just compensation against the federal government must be brought in the U.S. Court of Federal Claims in Washington, D.C. All trials in the U.S. Court of Federal Claims are "bench trials," meaning that the cases are decided by a judge, not a jury. Since the U.S. Court of Federal Claims hears all claims for money damages against the United States, including breach of contract claims, patent and tax claims, and tribal breach of trust claims, litigants in the court benefit from the experience and expertise of judges who have extensive experience with these kinds of claims.

 

Can I recover attorney's fees if I prevail in my takings case?

 

In addition to just compensation, a prevailing plaintiff in a takings case against the federal government is entitled to recover reasonable attorneys' fees and costs (including appraisers and other experts' fees). The award will also include interest on the value of the property taken from the date of the taking until paid.

 

 

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