Otay Mesa Property, L.P. v. United States , 670 F.3d 1358 ( 2012 )

United States Court of Appeals
for the Federal Circuit
__________________________
OTAY MESA PROPERTY, L.P.,
RANCHO VISTA DEL MAR,
OTAY INTERNATIONAL, LLC,
OMC PROPERTY, LLC,
D & D LANDHOLDINGS, LP,
AND INTERNATIONAL INDUSTRIAL PARK, INC.,
Plaintiffs-Cross Appellants,
v.
UNITED STATES,
Defendant-Appellant.
__________________________
2011-5002, -5008
__________________________
Appeals from the United States Court of Federal
Claims in Case No. 06-CV-167, Judge Thomas C.
Wheeler.
_________________________
Decided: January 25, 2012
_________________________
ROGER J. MARZULLA, Marzulla Law, LLC, of Washing-
ton, DC, argued for plaintiffs-cross appellants. With him
on the brief was NANCIE G. MARZULLA.
JOHN E. ARBAB, Attorney, Appellate Section, Envi-
ronment & Natural Resources Division, United States
OTAY MESA PROPERTY v. US 2
Department of Justice, of Washington, DC, argued for
defendant-appellant. With him on the brief was IGNACIA
S. MORENO, Assistant Attorney General.
__________________________
Before NEWMAN, SCHALL, and MOORE, Circuit Judges.
SCHALL, Circuit Judge.
The United States appeals the final decision of the
United States Court of Federal Claims in Otay Mesa
Property, L.P. v. United States, 93 Fed. Cl. 476 (2010)
(“Compensation Decision”). In that decision, the court
awarded plaintiffs $3,043,051, plus interest, for the
temporary taking of a blanket easement over five parcels
of land in the Otay Mesa area of San Diego County,
California. For their part, plaintiffs cross-appeal the
decision of the court which limited the government’s
liability to the taking of an easement over those five
parcels and which limited the period of the taking to April
of 1999 to October of 2008. See Otay Mesa Prop., L.P. v.
United States, 86 Fed. Cl. 774, 790-91 (2009) (“Liability
Decision”); Compensation Decision at 486-87. As far as
the government’s appeal is concerned, we hold that the
Court of Federal Claims erred when it concluded that the
government’s taking of the easement was a temporary
rather than a permanent physical taking. This error
resulted in an erroneous calculation of plaintiffs’ dam-
ages. As far as the plaintiffs’ cross-appeal is concerned,
we hold that the court did not err in limiting the govern-
ment’s liability. We therefore affirm-in-part, vacate-in-
part, and remand the case to the Court of Federal Claims
for further proceedings.
3 OTAY MESA PROPERTY v. US
BACKGROUND
I
Plaintiffs Otay Mesa Property, L.P., Rancho Vista Del
Mar, Otay International, LLC, OMC Property, LLC, D &
D Landholdings, LP, and International Industrial Park,
Inc. (collectively, “Otay Mesa”) own eleven contiguous
parcels of largely undeveloped land adjacent to the Mexi-
can border in the Otay Mesa area of San Diego County.
Liability Decision at 775. In 1992, Rancho Vista del Mar
granted the United States Border Patrol a twenty-foot-
wide easement along the Mexican border. The easement
was for the purpose of enabling the Border Patrol to
monitor and respond to illegal alien activity. Id. Accord-
ing to Otay Mesa, the Border Patrol dramatically in-
creased its operations on Otay Mesa’s property in the
aftermath of the September 11, 2001 terrorist attacks. Id.Otay Mesa filed suit in the Court of Federal Claims in
2006. 1 The suit alleged that the Border Patrol’s activities
of patrolling outside the boundaries of the easement,
assuming stationary positions on Otay Mesa’s land,
creating new roads, constructing a permanent tented
structure on Otay Mesa’s land, and installing under-
ground motion-detecting sensors constituted a “perma-
nent and exclusive occupation” entitling the plaintiffs to
just compensation under the Fifth Amendment’s Takings
Clause. 2 Liability Decision at 775 (citing Boise Cascade
1 Ultimately, three separate suits were consoli-
dated. Liability Decision at 776-77.
2 In relevant part, the Fifth Amendment requires
that the United States pay “just compensation” whenever
it takes private property for public use. U.S. Const.
amend. V (“[N]or shall private property be taken for
public use, without just compensation.”).
OTAY MESA PROPERTY v. US 4
Corp. v. United States, 296 F.3d 1339, 1353 (Fed. Cir.
2002).
II
After a trial on liability, the Court of Federal Claims
ruled that, with the exception of the placement of the
sensors, it lacked jurisdiction to consider Otay Mesa’s
claims. The court reasoned that “[i]f the Border Patrol’s
activity on [Otay Mesa’s] property ever arose to a ‘perma-
nent and exclusive occupation,’ it did so between 1996 and
1999.” Id. at 788. The court held that because Otay Mesa
did not file suit until 2006, its claims were barred by the
six-year statute of limitations in 28 U.S.C. § 2501 (2006),
id. at 786-90. See John R. Sand & Gravel Co. v. United
States, 552 U.S. 130, 133-34 (2008) (noting that the Su-
preme Court has “long interpreted” the statute of limita-
tions for the Court of Federal Claims as setting forth a
jurisdictional deadline). Otay Mesa has not appealed that
ruling.
Otay Mesa’s claim relating to the Border Patrol’s use
of underground sensors was not found to be time-barred
because on August 28, 2008, the government filed a
stipulation of partial liability directed to its placement of
underground sensors on five of Otay Mesa’s eleven parcels
(Nos. 1, 3, 4, 5, and 10). Liability Decision at 777; Def.’s
Stip., Otay Mesa Prop., L.P. v. United States, No. 06-CV-
167 (Fed. Cl. Aug. 28, 2008, am. Oct. 16, 2008) (“Def.’s
Stip.”). 3 The stipulation acknowledged that the Border
Patrol had installed fourteen “seismic intrusion sensors”
3 Although we follow the parties in referring to the
government’s concession of liability as a “stipulation,”
Otay Mesa did not participate in the drafting of the
document and did not agree to its substance. Thus, it was
more a “unilateral concession of liability” than a stipula-
tion. Compensation Decision at 479 n.1.
5 OTAY MESA PROPERTY v. US
at various underground locations on parcels 1, 3, 4, 5, and
10 between April of 1999 and November of 2005. Liability
Decision at 777. The government stipulated that “by
virtue of its placement of the 14 sensors . . . on the [five]
parcels of land, it had taken a property interest in the
nature of an easement over the parcel of land on which
the sensors have been placed . . . .” Id. (quoting Def.’s
Stip. ¶ 6). The stipulation described the easement as:
A perpetual and assignable easement to locate,
construct, operate, maintain and repair or replace
the specified underground seismic intrusion sen-
sors on the specified parcels, including the right to
ingress and egress to each sensor location. The
easement shall be deemed to have commenced on
the date the sensor is listed as having been in-
stalled, and will continue until the sensor is no
longer needed or the property is developed. Each
sensor is and shall be located so as not to affect
the functionality of the property. Should the
landowner desire to develop any portion of the
subject parcel, the sensor will be removed or rede-
ployed upon 30 days written notice that a grading
permit has been issued by the County of San
Diego permitting development of all or a portion of
the property. Upon removal of a sensor, the por-
tion of the easement relating to that sensor shall
terminate . . . .
Liability Decision at 777 (quoting Def.’s Stip. ¶ 7).
Based on the government’s stipulation, the Court of
Federal Claims held that the government was liable for
the physical taking of an easement over the five parcels
for the purpose of installing and operating the sensors.
Liability Decision at 790-91. The court reserved the
OTAY MESA PROPERTY v. US 6
determination of damages for a subsequent proceeding.
Id. at 791.
Following a damages trial, the Court of Federal
Claims concluded that Otay Mesa was entitled to just
compensation of $3,043,051, plus interest, for the sensor
easement. The court based this conclusion on its finding
that the Border Patrol “possesses a temporary, non-
exclusive, blanket easement to deploy seismic sensors” on
the parcels identified in the stipulation. Compensation
Decision at 479-80. The court reasoned that the taking
was temporary because either party may terminate the
easement, i.e., it terminates “upon the occurrence of one of
two events: (1) when the sensor is removed because it is
no longer needed [by the Border Patrol]; or (2) when [Otay
Mesa] obtain[s] a grading permit from the County of San
Diego permitting development of all or a portion of the
property.” Id. at 480, 488. The court determined the
period of the easement to be from April of 1999 to October
of 2008. Id. at 486. The court arrived at the April 1999
beginning date because that was when the first sensor
identified in the stipulation was installed. The court
selected October of 2008 as the ending date because that
was the cut-off date used by Otay Mesa in presenting its
damages evidence. Id. at 480, 481. The court ruled that
the easement was “non-exclusive” because it found that
the Border Patrol’s use of the sensors placed no restriction
on Otay Mesa’s use of the property. Id. at 480. Finally,
because the stipulation permitted the sensors to be placed
anywhere on Otay Mesa’s property and included the right
of ingress and egress over the property, the court deter-
mined that the easement was a “blanket” easement over
the entirety of the five parcels. Id. at 485-86.
Having found the easement to be temporary, the
Court of Federal Claims calculated the amount of com-
pensation to be awarded to Otay Mesa based upon the
7 OTAY MESA PROPERTY v. US
“fair market rental value” of the property. Id. at 488-89.
The court determined that value by averaging the
monthly rental for a skydiving training lease ($25 per
acre) and a parachute training lease ($58 per acre), which
resulted in a rental of $41.50 per acre per month. Id. at
489. The court then applied this rate to each of the five
parcels identified in the stipulation, which range in size
from 89 acres (parcel 1) to 393.6 acres (parcel 3), begin-
ning with the date the first sensor was installed on that
parcel and ending with the October 2008 damages cut-off
date employed by Otay Mesa, to arrive at a total damages
amount of $3,043,051. Id. at 490. 4 The court rejected the
government’s contention that the easement was perma-
nent and that therefore Otay Mesa’s compensation should
be calculated based upon the “before-and-after” compen-
sation method, whereby a parcel is valued before and
after an easement is imposed. Id. at 488-89.
The government’s appeal and Otay Mesa’s cross-
appeal followed. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(3).
DISCUSSION
We review the Court of Federal Claims’s legal conclu-
sions de novo and its findings of fact for clear error. Ind.
Mich. Power Co. v. United States, 422 F.3d 1369, 1373
(Fed. Cir. 2005).
On appeal, the government argues that the court
erred in its damages award because it incorrectly ruled
that the taking was temporary rather than permanent,
which led the court to use the fair market rental value
method of determining compensation rather than the
4 The Court of Federal Claims provided a chart
showing its damages calculation for each parcel. Com-
pensation Decision at 490.
OTAY MESA PROPERTY v. US 8
before-and-after method. According to the government,
under the latter method, Otay Mesa is entitled to only a
nominal award, given the court’s finding that “the use of
the sensors places no restriction on the functionality of
the property to [Otay Mesa].” Compensation Decision at
479, 480. Otay Mesa cross-appeals the court’s decision to
limit the scope of the taking to the five parcels and the
time period identified in the stipulation. We first address
the government’s appeal.
I
As seen, the Court of Federal Claims first considered
whether the sensor easement was temporary or perma-
nent. Then, having determined that issue, the court
turned to the question of the amount of compensation
owed to Otay Mesa. The parties do not dispute that this
was the correct analytical approach, and we agree.
Although there has been some confusion over the use
of the terms “temporary” and “permanent” in the takings
context, see Hendler v. United States, 952 F.2d 1364,
1376-77 (Fed. Cir. 1991), it is clear that courts recognize
both types of physical takings, see e.g., Kimball Laundry
Co. v. United States, 338 U.S. 1, 6-7 (1949) (temporary
taking), and Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419, 441 (1982) (permanent taking). It
also is clear that courts use different methods to deter-
mine just compensation owed, depending on the temporal
classification of a taking. See Yuba Natural Res., Inc. v.
United States, 821 F.2d 638, 641 (Fed. Cir. 1987) (noting
that this court has “recognized the distinction between
temporary and permanent takings and the concurrent
distinction between measures of compensation applicable
to those two situations.”). The duration of a physical
taking pertains, not to the issue of whether a taking has
occurred, but to the determination of just compensation.
9 OTAY MESA PROPERTY v. US
Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1582-
83 (Fed. Cir. 1993) (“The limited duration of this taking is
relevant to the issue of what compensation is just, and not
the issue of whether a taking has occurred.”); Hendler,
952 F.2d at 1376 (discussing United States v. Gen. Motors
Corp., 323 U.S. 373 (1945), and noting that in that case
“[t]he government’s appropriation of the unexpired term
of a warehouse lease was a taking; the fact that it was
finite went to the determination of compensation rather
than to the question of whether a taking had occurred”);
see United States v. Causby, 328 U.S. 256, 268 (1946)
(“Since on this record it is not clear whether the easement
taken is a permanent or a temporary one, it would be
premature for us to consider whether the amount of the
award made by the Court of Claims was proper.”).
Once a taking has been classified as either temporary
or permanent, the court applies the appropriate method of
determining just compensation. The usual measure of
just compensation for a temporary taking is the fair
rental value of the property for the period of the taking.
See, e.g., Kimball Laundry, 338 U.S. at 7 (“[T]he proper
measure of compensation [in a temporary takings case] is
the rental that probably could have been obtained . . . .”).
In the case of a permanent taking, the owner is entitled to
the fair market value of his property at the time of the
taking. Almota Farmers Elevator & Warehouse Co. v.
United States, 409 U.S. 470, 474 (1973). Where the
property interest permanently taken is an easement, the
“conventional” method of valuation is the “before-and-
after” method, i.e., “the difference between the value of
the property before and after the Government’s easement
was imposed.” United States v. Va. Elec. & Power Co.,
365 U.S. 624, 632 (1961). These methods are not exclu-
sive; there may be appropriate alternative valuation
OTAY MESA PROPERTY v. US 10
methods for the taking of an easement. See Vaizburd v.
United States, 384 F.3d 1278, 1285-87 (Fed. Cir. 2004).
II
A
On appeal, the government argues that the Court of
Federal Claims erred in holding that the sensor easement
was temporary, rather than permanent. The government
first points to its stipulation, which defines the easement
as “perpetual” and which states that a sensor that is
removed due to development of the property by Otay
Mesa may be “redeployed” by the Border Patrol. Liability
Decision at 777 (quoting Def.’s Stip. ¶ 7). Continuing, the
government notes that the Court of Federal Claims
reached its conclusion that the taking was temporary
because, “[m]ost significantly, the Government’s easement
terminates upon the occurrence of one of two events:
(1) when the sensor is removed because it is no longer
needed [by the Border Patrol]; or (2) when [Otay Mesa]
obtain[s] a grading permit from the County of San Diego
permitting development of all or a portion of the prop-
erty.” Compensation Decision at 488. According to the
government, this reasoning is flawed. The government
argues that neither of the cited events is certain to occur
because nothing suggests that illegal immigration over
Otay Mesa’s property is only a temporary problem, and
because the Border Patrol reserves the right to redeploy
sensors in different locations if Otay Mesa obtains a
grading permit. The government contends that the
stipulation thus describes a permanent easement.
In response, Otay Mesa argues that a taking that
ends on occurrence of a specified event is temporary. In
other words, the lack of a definite end date does not
preclude the classification of a taking as “temporary.” In
making this argument, Otay Mesa relies on First English
11 OTAY MESA PROPERTY v. US
Evangelical Lutheran Church of Glendale v. Cnty. of Los
Angeles, 482 U.S. 304 (1987), Tahoe-Sierra Preservation
Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S.
302 (2002), Bass Enters. Prod. Co. v. United States, 133
F.3d 893 (Fed. Cir. 1998), and Speir v. United States, 485
F.2d 643 (1973). Otay Mesa contends that because the
easement in this case will end when the Border Patrol
removes the sensors because they are no longer needed or
when Otay Mesa obtains a grading permit allowing
development on its property, the Court of Federal Claims
correctly held that the taking was temporary. Whether a
taking is temporary or permanent is a question of law
subject to de novo review. Yuba, 821 F.2d at 640.
B
We hold that the Border Patrol’s blanket easement to
install, maintain, and service sensors on Otay Mesa’s
property constituted a permanent physical taking. First,
we do not believe that the cases upon which Otay Mesa
relies support its argument that because the Border
Patrol’s easement will end upon the occurrence of either
of two specified events, the taking was temporary.
Our predecessor court found the avigation easement
in Speir to be temporary. In doing so, the court took into
account the government’s intention at the outset of the
easement that the easement be temporary despite the fact
that the government did not know at the outset when the
easement might conclude. 485 F.2d at 647-48. Moreover,
by the time the court decided the issue, the easement had
terminated. Id. at 648. Speir is consistent with other
temporary physical takings cases, in which the takings at
issue usually have specific end dates by the time just
compensation is awarded. See, e.g., Kimball Laundry, 338
U.S. at 3, 7 (noting that the taken property was returned
on March 23, 1946, and that “it was known from the
OTAY MESA PROPERTY v. US 12
outset that this taking was to be temporary”); United
States v. Petty Motor Co., 327 U.S. 372, 374-75 (1946)
(temporary taking concluding June 30, 1945); General
Motors, 323 U.S. at 375-76 & n.3 (“The case now pre-
sented involves only the original taking for one year.”). 5
Speir does not support Otay Mesa’s argument. In this
case, there is no indication that the Border Patrol in-
tended that its easement be temporary. In addition, and
most importantly, the easement has not terminated.
First English, Tahoe-Sierra, and Bass Enterprises,
which involved regulatory takings, also do not support
Otay Mesa’s argument. 6 First English came to the Su-
preme Court from the California Court of Appeals. That
court had held that a landowner who claimed that his
5 In the context of regulatory takings, we have
stated that “[t]he essential element of a temporary taking
is a finite start and end to the taking.” Wyatt v. United
States, 271 F.3d 1090, 1097 n.6 (Fed. Cir. 2001); see Am.
Pelagic Fishing Co. v. United States, 379 F.3d 1363, 1371
n.11 (Fed. Cir. 2004) (quoting Wyatt); see also Yuba, 821
F.2d at 641-42 (holding that a prohibition on mining
activities that was withdrawn after six years was a tem-
porary taking and rejecting the government’s argument
that because the taking was allegedly intended at the
outset to be irreversible and for all time it was perma-
nent).
6 See Tahoe Sierra, 535 U.S. at 323-24 (“Th[e] long-
standing distinction between acquisitions of property for
public use, on the one hand, and regulations prohibiting
private uses, on the other, makes it inappropriate to treat
cases involving physical takings as controlling precedents
for the evaluation of a claim that there has been a “regu-
latory taking,” and vice versa. For the same reason that
we do not ask whether a physical appropriation advances
a substantial government interest or whether it deprives
the owner of all economically valuable use, we do not
apply our precedent from the physical takings context to
regulatory takings claims.” (footnote omitted)).
13 OTAY MESA PROPERTY v. US
property had been “taken” by a land-use regulation pro-
hibiting construction in a flood protection area could not
recover damages for the period before it was finally de-
termined that the regulation’s prohibition resulted in a
“taking” of his property. 482 U.S. at 306-07. In arriving
at that holding, the Court of Appeal had relied upon Agins
v. Tiburon, 598 P.2d 25 (Cal. 1979). In that case, the
California Supreme Court decided that a landowner could
not maintain an inverse condemnation suit in California
courts based upon a regulatory taking, and instead could
only sue for declaratory relief or a writ of mandamus. Id.
at 29-31, aff’d on other grounds, 447 U.S. 255, 263 (1980).
In First English, the Supreme Court addressed the merits
of the Agins rule, 482 U.S. at 310, and thus the issue of
whether “the Just Compensation Clause requires the
government to pay for ‘temporary’ regulatory takings,” id.
at 313. The Court in First English did not address
whether operation of the regulation at issue had resulted
in a taking; instead it assumed that a taking had occurred
for the purposes of its analysis. Id. at 311-13. The Court
held that invalidation of an ordinance following a period
during which the ordinance was in effect would have the
effect of converting the taking at issue into a temporary
taking but that such a conversion would not be “a suffi-
cient remedy to meet the demands of the [Takings]
Clause.” Id. at 319-20. The Court thus decided that “on
these facts the California courts have decided the com-
pensation question inconsistently with the requirement of
the Fifth Amendment.” Id. at 311. “[A]ssum[ing] that
the . . . ordinance has denied appellant all use of its
property for a considerable period of years,” the Court
stated, the “invalidation of the ordinance without pay-
ment of fair value for the use of the property during this
period would be a constitutionally insufficient remedy.”
Id. at 322. The Court therefore reversed the California
Court of Appeal’s holding that the landowner church
OTAY MESA PROPERTY v. US 14
could not recover damages for the time before it was
finally determined that the prohibition mandated by the
land-use regulation constituted a taking. Id. at 306-07,
322. The Court stated that abandonment of a permanent
taking creates a temporary taking, thereby affecting the
compensation due. Id. at 318 (citing United States v.
Dow, 357 U.S. 17, 26 (1958)). However, the Court did not
hold or suggest that, in that case, prior to the abandon-
ment, the taking would be classified as temporary.
In Tahoe-Sierra, the Court refused to adopt a bright-
line rule that a temporary moratorium on development
near Lake Tahoe was a per se taking. 535 U.S. at 342. In
Tahoe-Sierra, the moratorium, and thus the alleged
taking, pertained to a defined 32-month period of restric-
tion that had concluded eighteen years prior to the
Court’s decision. Id. at 306. Tahoe-Sierra does not speak
to the question of when a physical occupation is a tempo-
rary or permanent taking.
Bass Enterprises also does not support Otay Mesa’s
argument. In that case, the plaintiffs held a lease to drill
on land that was condemned for storage of nuclear waste.
133 F.3d at 894. Congress had passed an act prohibiting
all drilling through and under the condemned land, but
had exempted the plaintiffs’ lease from that prohibition
unless the Environmental Protection Agency (“EPA”)
determined that the plaintiffs’ pre-existing rights would
need to be acquired. Id. The plaintiffs applied for drilling
permits, but the Bureau of Land Management (“BLM”)
denied the permits for the time being, noting the EPA’s
present inability to assess whether it would be necessary
to acquire the plaintiffs’ lease. Id. Bass filed suit, alleg-
ing the permanent taking of portions of its lease, and the
Court of Federal Claims held that the government had
permanently taken the plaintiffs’ property interest. Id. at
895. On appeal, the government argued that the taking
15 OTAY MESA PROPERTY v. US
was temporary because, “at some definite point in the
near future, the government will make a determination of
whether to condemn Bass’ lease.” Id. The plaintiffs
contended that the taking was permanent because the
date at which the prohibition against drilling would end
was speculative. Id. The court agreed with the govern-
ment that the taking was not permanent, since the EPA
was statutorily mandated to make a determination about
the necessity of condemning the plaintiffs’ lease. It there-
fore remanded the case to the Court of Federal Claims for
further proceedings to determine whether the BLM’s
denial of the drilling permits constituted a temporary
taking. Id. at 895-96. Addressing what it viewed to be
the Court of Federal Claims’s error in declining to find a
temporary taking, the court noted that the cessation of a
regulation’s prohibition may be sufficient to establish a
temporary taking but that it is not necessary for such a
determination. Instead, “[t]he fact that regulation has
not ceased may complicate a determination of just com-
pensation but does not justify a bright-line rule against
liability.” Id. at 896. The court further noted that
“[w]here an ultimate determination regarding Bass’ lease
is mandated by statute, the termination of the regulation
process here is not as speculative as in other regulatory
settings.” Id. Thus, in Bass, the court based its conclu-
sion that the taking at issue was not permanent on the
fact that the EPA was statutorily mandated to come
forward with a decision, thereby rendering “termination”
of the drilling prohibition less speculative than the termi-
nations of prohibitions in other regulatory cases. Putting
aside the noted difference between regulatory and physi-
cal takings, in this case there is no potential termination
of the sensor easement on the horizon that resembles the
statutorily-mandated termination in Bass. If Otay Mesa
does not develop the entirety of its property and the
OTAY MESA PROPERTY v. US 16
government does not remove the sensors, the easement
can and will continue “perpetual[ly].”
C
Second, “‘permanent’ does not necessarily mean for-
ever, or anything like it.” Hendler, 952 F.2d at 1376.
Thus, the government has been held to have permanently
taken property, despite the fact that “[a]ll takings are
‘temporary,’ in the sense that the government can always
change its mind at a later time . . . .” Id., see, e.g.; Loretto,
458 U.S. at 441. Further, the Supreme Court has defined
a taking to be “permanent” even when specified action
initiated by the landowner could terminate the taking.
See generally Loretto, 458 U.S. 419. In Loretto, the Su-
preme Court rejected a challenge to the “permanent”
status of a taking despite the fact that it was possible for
the landowner to act in a manner so as to avoid the tak-
ing. Specifically, a New York law provided that a land-
lord was required to permit a cable television company to
install its cable facilities upon his or her property. 458
U.S. at 421. In the context of the New York law, the
Court held that a cable installation on portions of a land-
owner’s roof and the side of her building was a permanent
taking, reversing the decision of the New York Court of
Appeals to the contrary. Id. at 441. In reaching its
decision, the Court noted that a landlord could avoid the
law’s requirements by ceasing to rent the building to
tenants, but that this did not make the cable company’s
invasion of the property not permanent. Id. at 438-39 &
n.17 (“Insofar as Teleprompter means to suggest that this
is not a permanent physical invasion, we must differ. So
long as the property remains residential and a CATV
company wishes to retain the installation, the landlord
must permit it.”); see id. at 448-49 (Blackmun, J., dissent-
ing).
17 OTAY MESA PROPERTY v. US
Thus, we disagree with the Court of Federal Claims
and Otay Mesa that the parties’ respective abilities to
terminate the sensor easement in this case renders the
taking temporary. Just as the landowner in Loretto could
have terminated the taking by discontinuing use of the
property as a residential rental facility, so Otay Mesa
could decide to develop the entirety of its property,
thereby terminating the sensor easement. Further, read
in its entirety, we agree that the stipulation defines a
“perpetual” easement that reserves in the government the
right to “redeploy” the sensors in the case of Otay Mesa’s
development of the property.
We also disagree with the Court of Federal Claims’s
use of October 2008 as an arbitrary end-date for the
damages calculation as indicative of the temporary nature
of the Border Patrol’s easement. See Compensation
Decision at 480, 486-87. The problem with the court’s
approach is that the October 2008 date bears no relation
to any activities of either the Border Patrol or Otay Mesa
relating to the easement period. It is only such activi-
ties—abandonment of the easement by the Border Patrol
or development of the property by Otay Mesa—that can
end the easement.
Having held that the Court of Federal Claims erred in
ruling that the sensor easement constituted a temporary
taking, we remand to the court for a redetermination of
damages. On remand, the court should determine
damages based upon the Border Patrol having taken a
permanent blanket easement over Otay Mesa’s property,
as set forth in the stipulation. In that regard, we offer the
following:
The government has argued that, because the sensor
easement is permanent, the compensation due Otay Mesa
is much less than the compensation that would be due if
OTAY MESA PROPERTY v. US 18
the easement were temporary. We find this argument
difficult to accept. It does not seem to us logical that Otay
Mesa should receive less compensation for the taking of a
permanent easement than it would for the taking of a
temporary easement. In our view, this case aptly demon-
strates that “just compensation” should be carefully
tailored to the circumstances of each particular case. See
Kimball Laundry, 338 U.S. at 20 (explaining that “compu-
tation of the compensation due” should be consistent
“with an approach which seeks with the aid of all relevant
data to find an amount representing value to any nor-
mally situated owner or purchaser of the interests
taken”). Compensation should be based on an assessment
of precisely what the government takes from a landowner.
Gen. Motors, 323 U.S. at 382. The landowner is entitled
“to be put in as good a position pecuniarily as if his prop-
erty had not been taken. He must be made whole but is
not entitled to more.” Olson v. United States, 292 U.S.
246, 255 (1934).
We think that the Court of Federal Claims erred in its
prior damages calculation in this case when it awarded
compensation based upon the rental value of the property
for skydiving and parachute training. The sensor ease-
ment clearly differs from a lease to use land for those
purposes. By exclusively applying a rental value method-
ology and looking to rents paid for the use of land for
skydiving and parachute training, the court, we believe,
overlooked exactly what has been taken by the Border
Patrol – a minimally invasive permanent easement to use
undeveloped land that is unilaterally terminable by Otay
Mesa. Under the easement, each sensor must be located
so as not to affect the functionality of the property. In
addition, should Otay Mesa wish to develop any portion of
the property, any affected sensor will be removed or
redeployed upon 30 days written notice that a grading
19 OTAY MESA PROPERTY v. US
permit has been issued by the County of San Diego.
Finally, upon removal of a sensor, the portion of the
easement relating to that sensor terminates. In short,
the court did not squarely address the just compensation
appropriate to compensate Otay Mesa for the taking.
As noted, the government has argued before us that
Otay Mesa’s damages should be determined based upon a
before-and-after methodology. While diminution in value
is a useful methodology in many cases, we reiterate that
the focus of the damages analysis must always remain on
awarding just compensation for what has been taken. To
award just compensation, a court must sometimes deviate
from the traditional permanent taking-diminution in
value and temporary taking-rental value approaches.
See, e.g., Vaizburd, 384 F.3d at 1286-87 (remanding for
consideration of alternate methodology when there was no
diminution in value).
The government acknowledges that “there can in
principle be an appropriate alternative valuation measure
to the ‘before-and-after’ method in a given takings case.”
Reply Br. 24. See also Vaizburd, 384 F.3d at 1283 (stat-
ing, in the circumstances of an easement, that “[a] com-
parison of the property’s market value before and after a
taking is one appropriate method of valuation”) (emphasis
added); Compensation Decision at 489 (noting that it was
“afforded ample leeway in determining the fair market
value of the [g]overnment’s sensor easement”) Thus,
while the sensor easement is permanent, on remand the
Court of Federal Claims will have discretion in identifying
a methodology that fulfills the goal of awarding Otay
Mesa just compensation. What is important is that the
focus be on awarding just compensation for exactly what
we have identified as having been taken in this case. We
are confident that, after receiving the views of the parties,
the court will be able to fashion an appropriate measure
OTAY MESA PROPERTY v. US 20
of compensation for the Border Patrol’s taking of a per-
manent easement over Otay Mesa’s property.
III
We turn now to Otay Mesa’s cross-appeal. Otay Mesa
argues that the Court of Federal Claims clearly erred
when it limited the scope of the taking to the parcels and
time period identified in the stipulation. Specifically,
although the government stated in the stipulation that it
placed fourteen sensors on five parcels of land between
1999 and 2005, Otay Mesa urges that the government’s
own witnesses testified that twenty-four sensors were
placed on ten parcels of land, and that sensors had been
on the property since the mid-1980s. Otay Mesa points to
the testimony of Border Patrol Agent Michael Hance that
the stipulation reflected only those sensors, and the dates
of their installation, that were in place when the litigation
commenced, but that in fact there had been sensors on the
property going back to “approximately 1984, 1985” and on
three to four additional parcels. Joint Appendix (“J.A.”)
247-48, 249-50, 253. Agent Hance’s testimony, Otay Mesa
contends, is supported by that of two other Border Patrol
agents, one of whom testified that he did not have reason
to question Hance’s testimony and that he had personal
knowledge of sensor placement for the time period 1988-
2000. J.A. 273. The other agent testified generally about
the placement of sensors on additional parcels. J.A. 199.
The government contends that we should review this
aspect of the Court of Federal Claims’s decision for an
abuse of discretion, since Otay Mesa previously had
requested reconsideration of the scope of the Liability
Decision, which the court denied in the Compensation
21 OTAY MESA PROPERTY v. US
Decision. See Compensation Decision at 487. 7 The gov-
ernment also argues that we should disregard certain
testimony Otay Mesa cites on appeal because it was not
cited to the court when, according to the government,
Otay Mesa sought reconsideration of the Liability Deci-
sion. The government responds to Otay Mesa’s substan-
tive arguments by pointing to what it characterizes as the
imprecise nature of Agent Hance’s testimony, and by
arguing that little corroborative value should be given to
the testimony of the other two agents.
Because we conclude that the Court of Federal Claims
did not clearly err when it limited the scope of the taking
to the parcels and time period identified in the stipula-
tion, we need not resolve the dispute over whether Otay
Mesa sought reconsideration of the Liability Decision and
whether the more restrictive “abuse of discretion” stan-
dard is applicable. Further, although “this court does not
‘review’ that which was not presented to the [trial] court,”
Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420,
1426 (Fed. Cir. 1997), even were we to consider all of the
testimony Otay Mesa cites we do not believe Otay Mesa
has demonstrated clear error. Specifically, having re-
viewed the several agents’ testimony, which we agree is
imprecise and vague, we are not left with “the definite
and firm conviction that a mistake has been committed.”
See United States v. U.S. Gypsum Co., 333 U.S. 364, 395
(1948).
CONCLUSION
For the foregoing reasons, we affirm-in-part and va-
cate-in-part the decision of the Court of Federal Claims.
7 Otay Mesa takes the position that the government
is incorrect in stating that it sought reconsideration of the
Liability Decision.
OTAY MESA PROPERTY v. US 22
The case is remanded to the Court of Federal Claims for
further proceedings consistent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, and
REMANDED
COSTS
Each party shall bear its own costs.