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Hendler v. United States

May 11, 1999

HENRY HENDLER, PAUL GARRETT AND TILLIE GOLDRING AS TRUSTEES FOR HENRY HENDLER AND IRVING GRONSKY, PLAINTIFFS-APPELLANTS,
v.
UNITED STATES, DEFENDANT-APPELLEE.



Before Plager, Circuit Judge, Archer, Senior Circuit Judge, and Clevenger, Circuit Judge.

The opinion of the court was delivered by: Plager, Circuit Judge.

Appealed from: United States Court of Federal Claims Senior Judge Wilkes C. Robinson

In this takings case, we approach the final chapter in a decade-long dispute between the landowners and the Government. The dispute was initiated when the Government entered upon the land of the plaintiffs, without their consent and over their objection, for the purpose of sinking wells for monitoring of ground water migration from adjacent properties. Over time the Government continued to establish additional wells and to service them, all without payment to the landowners for the use of their property. The landowners sued, claiming inverse condemnation.

After several false starts at the trial level, see Hendler v. United States, 11 Cl. Ct. 91 (1986) ("Hendler I"); Hendler v. United States, 19 Cl. Ct. 27 (1989) ("Hendler II"), this court determined that plaintiffs had a good cause of action. We held that the Government, however well motivated and however important its cause, must adhere to fundamental Constitutional principles: if private property is taken for public use, just compensation must be paid. See Hendler v. United States, 952 F.2d 1364 (Fed. Cir. 1991) ("Hendler III"). The cause was remanded to the trial court for further proceedings.

Subsequently, the Court of Federal Claims undertook to determine, on the facts of the case, what was the just compensation mandated by the Constitution. After trials on liability theories and damages issues, the Court of Federal Claims determined that plaintiffs ultimately were due no compensation. See Hendler v. United States, 36 Fed. Cl. 574 (1996) ("Hendler IV"); Hendler v. United States, 38 Fed. Cl. 611 (1997) ("Hendler V"). Plaintiffs appeal that judgment, and the findings that underlay it.

BACKGROUND

The detailed background of the case is described in the prior opinions, Hendler I-V. We provide here a brief overview. The subject property is an approximately 100-acre tract of land in southern California, near the city of Riverside. Plaintiffs first acquired the property for investment purposes in 1960, at which time the area was largely agricultural. They planned to hold the property until economic conditions favored commercial development, at which time they expected to sell the land to a developer. See Hendler IV, 36 Fed. Cl. at 576-77.

The property is located near and `downstream' of a seventeen-acre former rock quarry that, under the auspices of the State of California, was converted in 1952 to a toxic-waste disposal site serving many manufacturing companies associated with the aerospace industry. This site became known, infamously, as the Stringfellow Acid Pits ("Stringfellow"). See id. at 577. In 1969, Stringfellow became a source of public concern when heavy rains caused the acid pits to overflow, releasing toxic chemicals to lower-lying areas, including plaintiffs' property. See id. In 1972 waste disposal at Stringfellow was stopped; not long afterward it was discovered that toxic chemicals had seeped into the groundwater aquifer below Stringfellow. The site was declared a public nuisance in 1975, but large-scale cleanup efforts did not begin until 1980. See id.

The State of California and the United States, acting through the U.S. Environmental Protection Agency ("Government"), undertook cleanup efforts pursuant to federal authority under CERCLA, *fn1 commonly known as Superfund. As part of its efforts, the Government decided to locate wells and associated equipment on plaintiffs' property to monitor the movement of the contaminated groundwater from Stringfellow. When the Government approached plaintiffs with this proposal, plaintiffs resisted. See id. at 577-78. Shortly thereafter, in 1983, the Government issued an order (herein "access order") mandating that government officials, including both state and federal officials and their agents, were to have access to plaintiffs' land for purposes of installing wells and related equipment, and conducting tests and other related activities. The access order further ordered that plaintiffs were not to interfere in any manner. See id. at 578-79.

Well-drilling then began on plaintiffs' property. Over the course of the following three years, twenty wells were installed on the property. During this period and well beyond, Government officials and agents periodically entered the property to monitor the groundwater, using the installed wells. See id. at 579. Based on information derived from the wells, a plume of contaminated water from Stringfellow was located flowing directly under portions of plaintiffs' land, and on down to lower-lying communities. See id.

The Government undertook extensive cleanup and remediation activities at Stringfellow. Groundwater samples since taken from the wells on plaintiffs' property have shown these efforts to have been successful. The groundwater contamination under plaintiffs' property has been greatly reduced, to the extent that, it is reported, the groundwater as of May 1995 has been restored almost to its pre-polluted condition, nearly meeting drinking water standards. See id. at 579-80.

In 1994 the Government formally terminated the 1983 access order. See id. at 580. As noted, the litigation triggered by the order had started some ten years earlier when plaintiffs filed suit against the Government in the Claims Court (now the Court of Federal Claims). This was shortly after the Government began installing the wells on their property. In their suit, plaintiffs claimed that their property suffered a regulatory and physical taking by way of the access order and the associated activities taken thereunder on their land; they sought just compensation for the alleged takings.

In Hendler II, 19 Cl. Ct. 27, the trial court dismissed plaintiffs' suit on procedural grounds, and entered a final judgment. In Hendler III, 952 F.2d 1364, we reviewed the dismissal, as well as prior rulings on the merits by the trial court in Hendler I, 11 Cl. Ct. 91, which we determined to be properly before us. We reversed the dismissal and concluded that the trial court should have entered summary judgment for plaintiffs on their physical taking claim, opining that "the Government behaved as if it had acquired an easement . . . ." Hendler III, 952 F.2d at 1378. We also noted with respect to the physical taking that plaintiffs would have "the opportunity to establish their severance damages, the damages accruing to their retained land as a result of the taking." Id. at 1383-84. With respect to plaintiffs' regulatory taking claim, we indicated concurrence in the trial court's view that the access order did not, alone, effect a regulatory taking. See id. at 1375. However, we noted that "subsequent events . . . might have had sufficient economic impact on the plaintiffs to constitute a regulatory taking." Id.

On remand, the trial court bifurcated the trial between the liability issues and damages. The liability issues were reviewed and resolved in Hendler IV, 36 Fed. Cl. 574, and damages in Hendler V, 38 Fed. Cl. 611, though evidence relevant to damages was heard in both trial phases. In Hendler IV, the trial court determined that the physical taking was in the form of well-site and access-corridor easements. 36 Fed. Cl. at 584. Specifically, the court found that each well-site easement "comprises a 50 by 50 foot square area for activities related to the well(s) contained therein," and that each access-corridor easement comprises a "16 foot wide access corridor [from a well-site] to a public right of way." Id. With regard to the regulatory taking issue, the court determined that there had been no regulatory taking because, among other reasons, in its view the nuisance doctrine defeated the claim and there was insufficient adverse economic impact on plaintiffs. See id. at 586-88.

In the damages trial, the court heard evidence on the valuation of the well-site and access-corridor easements, as well as evidence as to whether and to what extent plaintiffs' remaining property was harmed or benefited from the Government's activity on their land. The court found that neither the easements nor the access order damaged the remaining part of plaintiffs' property, and hence determined that the remaining part suffered no compensable severance damage. See Hendler V, 38 Fed. Cl. at 622. The court further determined that plaintiffs' remaining property received substantial "special benefits" and that those benefits outweighed the value of the easements taken. As a consequence, the court concluded that plaintiffs are due no compensation for the value of the easements, and plaintiffs were awarded no compensation for the access order and the Government's activities thereunder. See id. at 626-27.

Plaintiffs appeal, asserting that the trial court erred in denying them compensation for the partial physical taking of their land, both for the value of the part taken and severance damages to the remainder. Plaintiffs also assert that the trial court erred in determining that there has not been a regulatory taking of their land. We consider these issues in turn.

DISCUSSION

I.

We review the judgment of the Court of Federal Claims to determine whether it is premised on errors of law or clearly erroneous factual findings. See Whitney Benefits, Inc. v. United States, 926 F.2d 1169, 1171 (Fed. Cir. 1991). The trial court's findings regarding the property's value, nature, and alternative uses, as well as the extent to which the property's use is limited by the Government's actions, are all reviewed for clear error. See id. at 1172-73, 1177-78. Also reviewed for clear error are the court's findings on causation. See Loesch v. United States, 645 F.2d 905, 913 (Ct. Cl. 1981).

Under the clear error standard of review, a finding is clearly erroneous, even though there is some supporting evidence in the record, when the reviewing court, based on the entire record, "is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). This standard gives considerable deference to the trial court's factual findings. Conclusions of law, however, are "subject to full and independent review," ...


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