Before Michel, Plager, and Rader Circuit Judges.
The opinion of the court was delivered by: Plager, Circuit Judge.
Appealed from: United States Court of Federal Claims
Perry McKay and Charles S. McKay ("the McKays") sued the United States ("the Government") in the Court of Federal Claims for a Taking under the Fifth Amendment of the United States Constitution. See McKay v. United States, No. 94-580L (Fed. Cl. Apr. 8, 1998). The trial court granted summary judgment of no liability to the Government. Because the Court of Federal Claims did not properly draw all reasonable inferences for and view the facts in the light most favorable to the non-movant, the McKays, and because when that is done there are genuine issues of material fact in dispute, we reverse the grant of summary judgment and remand for further proceedings in accordance with this opinion.
Perry McKay and Charles McKay each owned a fifty percent interest in 227 acres of land adjoining the Department of Energy's ("DOE") Rocky Flats Environmental Technology Site ("Rocky Flats"), a nuclear weapons research and production facility. The McKays had a clay mine on that land and had plans to mine gravel there as well.
In response to the Government's initiative to expand the buffer zone surrounding Rocky Flats, the McKays granted the surface rights of their land to the Government in the mid-1970s. The McKays explicitly reserved the mineral interests underlying the 227 acres of land and obtained 'special exception' mining permits in 1979 and 1987 from the local government, the Jefferson County Board of Adjustment ("Board"). In furtherance of their mining interests, the McKays entered into a mineral lease in 1990 with Western Aggregates, Inc. that provided the McKays would receive a minimum of $100,000 in annual payments, plus royalties on all materials mined.
Unbeknownst to the McKays, from 1982 through 1985, DOE periodically sprayed effluence from their facilities onto a 94-acre tract, known as the West Spray Field, which was in that part of the buffer zone overlying the McKays' mineral estate. The sprayed waste was pumped from one of a complex of ponds that were used to hold waste water from several production buildings in Rocky Flats, or to hold runoff or leakage from the ponds.
In the mid to late 1980s, DOE took soil samples from the West Spray Field and conducted a study to assess potential contamination of the area. In a Closure Plan published in 1988, DOE stated that it had preliminarily concluded from its studies of soil samples from the West Spray Field that there were elevated levels of nitrates and volatile organic compounds in the soil. In the Closure Plan, DOE recommended that additional testing be done.
In January of 1991, DOE, the Environmental Protection Agency ("EPA") and the Colorado Department of Public Health and Environment ("CDH") entered into a Federal Facility Agreement and Consent Order ("Interagency Agreement") setting forth schedules and responsibilities for investigating and remediating any contamination at Rocky Flats. Under the Interagency Agreement, because of the uncertainty about the effect of past spraying activities, the West Spray Field was designated a "Hazardous Substance Site."
As part of the studies of the possible contamination of the West Spray Field, groundwater monitoring wells that extended into the McKays' mineral estate were installed on the West Spray Field, without the McKays' consent. The monitoring wells remained there for a period of years.
In May of 1991, a few months after the Interagency Agreement had been signed, David P. Simonson of DOE's Rocky Flats Office sent a letter (the "Simonson letter") to H. Bruce Humphries, the Mineral's Program Supervisor of the Mined Land Reclamation Division of the Department of Natural Resources in Denver, Colorado. The letter demanded that McKays' lessee, Western Aggregates, not interfere nor aggravate the situation in the West Spray Field:
Our major concern is that Rocky Flats is currently a Superfund site. DOE entered into an interagency agreement with EPA and the Colorado Department of Health (CDH) in order to carry out investigation and remediation activities in compliance with applicable laws. Obviously, we would like assurances that Western Aggregates' activities will not interfere with these activities nor aggravate the existing situation. (emphasis added).
The Simonson letter was copied to the Jefferson County Board of Adjustment.
In June of 1991, a month after the Simonson letter was sent, the Jefferson County Board held a hearing to reconsider the McKays' 1987 special exception mining permit for areas underlying the West Spray Field. ...