Banks v. United States ( 2015 )

In the United States Court of Federal Claims
No. 99-4451L
(consolidated with, 99-4452 L, 99-4453 L, 99-4454 L, 99-4455 L, 99-4456 L, 99-4457
L, 99-4458 L, 99-4459 L, 99-44510 L, 99-44511 L, 99-44512 L, 00-365 L, 00-379 L,
00-380 L, 00-381 L, 00-382 L, 00-383 L, 00-384 L, 00-385 L, 00-386 L, 00-387 L, 00-
388 L, 00-389 L, 00-390 L, 00-391 L, 00-392 L, 00-393 L, 00-394 L, 00-395 L, 00-396
L, 00-398 L, 00-399 L, 00-400 L, 00-401 L, 05-1353 L, 05-1381 L, 06-072 L)
(E-Filed: January 30, 2015)
)
JOHN H. BANKS, et al., )
)
Mandate Interpretation; Claim Accrual
Plaintiffs, )
Principles in Takings Cases Involving
)
Gradual Physical Processes;
v. )
“Permanent” Nature of Taking in
)
Determining Claim Accrual; Factual
THE UNITED STATES, )
Findings Presented in the Alternative
)
Defendant. )
)
Mark E. Christensen, Chicago, IL, with whom was John B. Ehret, Olympia Fields, IL, for
plaintiffs in No. 99-4451L. Eugene J. Frett, Chicago, IL, pro se in No. 05-1353L.
Terry M. Petrie, Environment & Natural Resources Division, United States Department
of Justice, Denver, CO, with whom was Sam Hirsch, Acting Assistant Attorney General,
Environment & Natural Resources Division, United States Department of Justice,
Washington, DC, for defendant.
OPINION AND ORDER
CAMPBELL-SMITH, Chief Judge
The purpose of this Opinion and Order is to address and resolve the initial issues
raised by plaintiffs in light of the Federal Circuit’s mandate in Banks v. United States
(“Banks IV”), 741 F.3d 1268, 1283 (Fed. Cir. 2014), Dkt. No. 508, which reversed this
court’s dismissal of plaintiffs’ claims for lack of jurisdiction in Banks v. United States
(“Banks III”), 102 Fed. Cl. 115 (2011), Dkt. No. 505, and remanded the case for further
proceedings.
I. Background
A thorough discussion of the history of this case can be found in the court’s
opinions following trials on liability and damages. See Banks v. United States (“Liability
Opinion”), 78 Fed. Cl. 603, 604–09 (2007), Dkt. No. 245; Banks III, 102 Fed. Cl. at 120–
26. For ease of reference, however, a brief description of the facts and a review of the
current procedural posture of the case follows.
This case involves a Fifth Amendment taking by continuous, physical processes.
Beginning in the 1830s, the United States government, acting through the United States
Army Corps of Engineers (“defendant” or “the Corps”) re-constructed the mouth of the
St. Joseph River and began constructing two harbor jetties that jutted into Lake Michigan
in order to accommodate commercial shipping vessels exiting the St. Joseph River into
Lake Michigan. Liability Opinion, 78 Fed. Cl. at 604. Over time, the Corps lengthened
the jetties and encased them in steel. Id. The Corps released a series of reports
(collectively, “Corps Reports”) over several decades describing the erosion caused by the
jetties south of the St. Joseph Harbor, outlining a plan to mitigate the erosion attributable
to the jetties, and evaluating the effectiveness of the mitigation program that was
eventually implemented. Id. at 612.
Plaintiffs are landowners along approximately four and a half miles of the eastern
shore of Lake Michigan, south of St. Joseph Harbor. Id. at 604. Plaintiffs allege that the
Corps’ construction and maintenance of the jetties caused erosion of their shoreline
property. Id. “Specifically, plaintiffs claim that the encasement of the jetties in ‘sand-
tight’ steel sheet piling during the period from 1950 to 1989, at the direction of the Corps,
interrupted the natural littoral drift of sand to their properties,” and effected a shoreline
loss for which plaintiffs seek damages. Banks III, 102 Fed. Cl. at 120–21 (footnote
omitted) (citing Banks v. United States, 99 Fed. Cl. 622, 624 (2011), Dkt. No. 499).
On motion to dismiss, the court dismissed plaintiffs’ claims as untimely filed.
Banks v. United States (“Banks I”), 49 Fed. Cl. 806, 809 (2001), Dkt. No. 3, rev’d, 314
F.3d 1304 (Fed. Cir. 2003). On appeal, the circuit court reversed and remanded the
claims. Banks v. United States (“Banks II”), 314 F.3d 1304, 1310 (Fed. Cir. 2003), Dkt.
No. 6. On first remand, the court conducted separate trials on liability and damages.
Following the trial on damages, a jurisdictional arose as to plaintiffs’ claims, and the
court again dismissed plaintiffs’ claims as time-barred. Banks III, 102 Fed. Cl. at 119.
The Federal Circuit considered the case for a second time on appeal in Banks IV
and found that this court’s dismissal decision in Banks III: (1) violated the mandate rule
by redetermining the accrual date of plaintiffs’ claims, Banks IV, 741 F.3d at 1276–79;
and (2) erred in its analysis of accrual suspension by finding that plaintiffs knew or
should have known of their claims before 1952, id. at 1279–82.
2
The Federal Circuit further held that it lacked jurisdiction to review the merits
discussion contained in Banks III. Id. at 1282–83; see id. at 1282 (“In the absence of
anything appealable, this court lacks appellate jurisdiction. To be final and appealable, a
decision must end the litigation on the merits, and the judge must clearly declare her
intention in this respect.” (internal citations, quotation marks and alterations omitted)).
The Federal Circuit remanded the claims with a mandate that reinforced its earlier
mandate in Banks II. Id. at 1283; cf. Banks v. United States, 68 Fed. Cl. 524, 528–29
(2005), Dkt. No. 87 (finding that “[b]ecause the last of the three reports, the 1999 Report,
was issued in January 2000 . . . , the effective date of claim accrual for plaintiffs’ claims
in this case is January 2000”).
Following receipt of the mandate in Banks IV, this court issued a post-remand
order, noting that “[a]s the appellate court limited its review to the jurisdictional issue and
did not review this court’s alternative findings on the merits, this court is inclined to re-
enter its merit findings and proceed to a damages analysis.” Order, Apr. 30, 2014, Dkt.
No. 512. Before doing so, the court solicited the parties’ perspectives on the proposed
approach for moving forward on remand. Id.The parties thereafter filed a joint status report in which the plaintiffs posited that
there are “substantive legal issues . . . [to] be initially addressed and ruled upon in light of
the remand.” Joint Status Report, June 19, 2014, Dkt. No. 519, at 1. Although defendant
disagreed with plaintiffs, id., both parties agreed that at this juncture, the most efficient
way to move forward is to resolve the “predicate and necessary” issues identified by
plaintiffs, id. at 3, 6. Thus, to address the issues identified by plaintiffs, the court
scheduled post-remand briefing. Order, July 17, 2014, Dkt. No. 521.
Now pending before the court are the parties’ post-remand briefings: Plaintiffs’
Post-Remand Motion for Entry by this Court of Rulings Consistent With and to Enforce
the Federal Circuit Court of Appeals’ January 28, 2014 Mandate (“Pls.’ Mot.”), Dkt. No.
523, filed August 12, 2014; United States’ Brief on the Federal Circuit’s Mandate and
This Court’s Denial of Plaintiffs’ Motion-in-Limine (“Def.’s Br.”), Dkt. No. 524, filed
August 12, 2014; Plaintiffs’ Response to United States’ Brief on the Federal Circuit’s
Mandate and This Court’s Denial of Plaintiffs’ Motion-in-Limine, Dkt. No. 525, filed
August 29, 2014; Eugene Frett’s Response to United States’ Brief on the Federal
Circuit’s Mandate and This Court’s Denial of Plaintiffs’ Motion in Limine, Dkt. No. 528,
filed September 22, 2014; 1 United States’ Response to Plaintiffs’ Post-Remand Motion,
1
Self-represented plaintiff, Eugene J. Frett, filed a separate response brief, docketed
as Dkt. No. 528, in his individual action that was consolidated in 2006 with the other
pending claims. See Order, Mar. 17, 2006, Frett v. United States, Case No. 05-1353,
Dkt. No 7 (consolidating Frett v. United States, Case No. 05-1353, with Banks v. United
States, Case No. 99-4451); cf. infra note 2 (explaining plaintiffs’ improper filing of two
reply briefs).
3
Dkt. No. 529, filed September 22, 2014; Plaintiffs’ Reply in Support of Post-Remand
Motion for Entry by This Court of Rulings Consistent With and to Enforce the Federal
Circuit Court of Appeals’ January 28, 2014 Mandate (“Pls.’ Reply”), Dkt. No. 531, filed
October 6, 2014; 2 and United States’ Reply Brief on the Federal Circuit’s Mandate, Dkt.
No. 532, filed October 6, 2014.
On remand, plaintiffs ask the court to enter a ruling making two factual findings
that, plaintiffs claim, are “necessary and predicate” to their offered interpretation of the
Federal Circuit’s mandate: first, a finding that the taking of plaintiffs’ properties is
permanent and irreversible; and second, a finding that the nearshore lakebed adjacent to
plaintiffs’ properties is cohesive, not sandy. Pls.’ Mot. 38; see also Pls.’ Reply 1–2.
Plaintiffs also ask the court not to re-enter, but instead to re-open, the alternative merits
findings it made after trial because, plaintiffs contend, the trial findings were based on a
mistaken understanding of the claims’ factual predicate on which plaintiffs now seek a
ruling. 3 Pls.’ Mot. 38. Defendant, on the other hand, urges the court to re-enter the
2
In contravention of the Rules of the Court of Federal Claims (“RCFC”), plaintiffs’
counsel filed, on behalf of all plaintiffs, two separate documents, both identified as reply
briefs. See Order, Jan. 13, 2015, Dkt. No. 535, at 1 (identifying two reply briefs filed
respectively by John B. Ehret and Mark E. Christensen). Based on the representations of
plaintiffs’ counsel in the two documents filed as statements of clarification regarding the
reply briefs, see Dkt. Nos. 536–37, the court deemed the reply brief filed by Mark E.
Christensen, docketed as Dkt. No. 531, to be the properly filed post-remand reply
briefing on behalf of all plaintiffs, see Order, Jan. 21, 2015, Dkt. No. 538, at 2. The court
struck the other reply brief filed by John B. Ehret, docketed as Dkt. No. 530, and, at
plaintiffs’ request, the first statement of clarification regarding the reply briefs, docketed
as Dkt. No. 536, which was improperly filed by John B. Ehret as a joint motion to
schedule an early neutral evaluation. Id.
3
Portions of plaintiffs’ post-remand briefing are devoted to discussing the other
post-remand relief sought by plaintiffs, to include a request to exclude the testimony,
declarations, and report of defendant’s expert witness on the ground that such evidence is
inconsistent with what the Federal Circuit has mandated. Pls.’ Mot., Dkt. No. 523, at 38;
see also Pls.’ Reply, Dkt. No. 531, at 1 (contending that the alternative merits findings
reflect an improper consideration of evidence that is contrary to plaintiffs’ proposed
factual findings, the Federal Circuit’s mandate, and scientific possibility). Plaintiffs
assert that once the problematic findings in the alternative merits findings are set aside,
“the remaining unrebutted evidence [establishes] that the United States is responsible for
70% of the erosion to [p]laintiffs’ shoreline properties.” Pls.’ Mot. 38. Further, plaintiffs
request that the court enter judgment in the amount of $19,113,621.00 for diminution in
value damages for land taken, plus interest, and in the amount of $2,246,197.00, plus
interest, for the out-of-pocket shore protection expenses that plaintiffs have incurred. Id.
4
alternative merits findings from the damages trial and complete the damages analysis.
Def.’s Br. 13.
II. Governing Standards
A. The Mandate Rule
On remand, the court is bound by the mandate of the Federal Circuit and by its
own prior findings—to the extent such findings are not inconsistent with the mandate.
As informed by the law-of-the-case doctrine, “‘when a court decides upon a rule of law,
that decision should continue to govern the same issues in subsequent stages in the same
case.’” Banks IV, 741 F.3d at 1276 (quoting Christianson v. Colt Indus. Operating Corp.,
486 U.S. 800, 815–16 (1988)). “This rule encourages both finality and efficiency in the
judicial process by preventing relitigation of already-settled issues.” Id.The mandate rule, which is encompassed by the broader law-of-the case doctrine,
provides that “‘an inferior court has no power or authority to deviate from the mandate
issued by an appellate court.’” Id. (quoting Briggs v. Pa. R. Co., 334 U.S. 304, 306
(1948)); see also Cent. Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1580 (Fed.
Cir. 1983) (explaining that the law-of-the-case doctrine was “judicially created to ensure
judicial efficiency and to prevent the possibility of endless litigation”). “Once a question
has been considered and decided by an appellate court, the issue may not be reconsidered
at any subsequent stage of the litigation, save on appeal.” Banks IV, 741 F.3d at 1276.
The mandate rule “is limited to issues ‘actually decided, either explicitly or by
necessary implication’” in the previous litigation. Id. (quoting Toro Co. v. White Consol.
Indus., Inc., 383 F.3d 1326, 1335 (Fed. Cir. 2004)). “In evaluating the scope of the
mandate, the actions of the Court of Federal Claims must not be inconsistent with the
letter or spirit of the mandate.” Id. at 1279 (citing Engel Indus. Inc. v. Lockformer Co.,
166 F.3d 1379, 1383 (Fed. Cir. 1999)). “Indeed, ‘all issues within the scope of the
appealed judgment are deemed incorporated within the mandate and thus are precluded
from further adjudication.’” Id. (quoting Engel Indus., 166 F.3d at 1383).
B. Claim Accrual Principles
The Federal Circuit has remanded this action once again for further proceedings
based on a determination that plaintiffs’ cause of action was not time-barred by claim
accrual principles. Claim accrual principles that govern jurisdictional timeliness
at 38–39. Finally, plaintiffs ask the court to set this matter for hearing on the issue of
plaintiffs’ future damages. Id. at 39.
5
determinations for takings actions that arise from gradual physical processes—such as
those at work in this case—have been established in the case law. These principles offer
guidance to courts making the difficult determination in these types of cases as to when a
claim has become ripe for action.
As first set forth by the Supreme Court in United States v. Dickinson, a plaintiff’s
cause of action in a takings case involving a gradual physical process does not accrue
“until ‘the situation becomes stabilized.’” Banks II, 314 F.3d at 1308 (quoting United
States v. Dickinson, 331 U.S. 745, 749 (1947)). The Federal Circuit has interpreted the
guidance provided in Dickinson to mean that “‘stabilization occurs when it becomes clear
that the gradual process set into motion by the government has effected a permanent
taking, not when the process has ceased or when the entire extent of the damage is
determined.’” Id. (alteration omitted) (quoting Boling v. United States, 220 F.3d 1365,
1370–71 (Fed. Cir. 2000)). The Federal Circuit has explained:
During the time when it is uncertain whether the gradual process will result
in a permanent taking, the plaintiff need not sue, but once it is clear that the
process has resulted in a permanent taking and the extent of the damage is
reasonably foreseeable, the claim accrues and the statute of limitations
begins to run.
Boling, 220 F.3d at 1371. A claim stabilizes—and thus becomes ripe—“when the
‘permanent nature’ of the taking is evident.” See Banks II, 314 F.3d at 1309 (quoting
Fallini v. United States, 56 F.3d 1378, 1382 (Fed. Cir. 1995)).
In Banks IV, the Federal Circuit discussed how the stabilization doctrine, which it
had addressed in Banks II, and the accrual suspension doctrine inform a claim accrual
determination in a circumstance where the government undertakes mitigation efforts to
offset the effects of government-triggered erosion at the same time that the impacts of the
natural erosion are ongoing. The Federal Circuit has counseled against a strict
application of claim accrual principles under either doctrine based on the practical
difficulties of evaluating the “permanent” nature of a taking involving gradual,
continuous processes. See Banks II, 314 F.3d at 1309 (quoting Boling, 220 F.3d at 1371,
for the proposition that the statute of limitations jurisprudence “recognize[s] that gradual
takings present special difficulties and ‘represent an application of general accrual
principles, rather than a broad exception to them’”); Banks IV, 741 F.3d at 1282
(reiterating that the statute of limitations jurisprudence “discourage[s] a strict application
of accrual principles in unique cases involving Fifth Amendment takings by continuous
physical processes” (citing Applegate v. United States, 25 F.3d 1579, 1582 (Fed. Cir.
1994))).
6
1. The “Justifiable Uncertainty of the Permanency of the Taking”
In Banks II, the Federal Circuit determined that the relevant question for claim
accrual purposes, under the stabilization doctrine, was “whether the ‘predictability [and
permanence]’ of the extent of damage to the [plaintiffs’] land’ was made justifiably
uncertain by the Corps’ mitigation efforts.” Banks II, 314 F.3d at 1309 (alterations in
original) (quoting Applegate, 25 F.3d at 1583). Based on the information available to
plaintiffs, the Federal Circuit found that “[w]ith . . . mitigation efforts underway, the
accrual of plaintiffs’ claims remained uncertain until the Corps’ 1996 Report, 1997
Report, and 1999 Report collectively indicated that erosion was permanent and
irreversible.” Id. at 1310. The Federal Circuit held that the claims were not time-barred
prior to the issuance of the three reports “because plaintiffs remained uncertain as to the
permanent nature of the taking until the Corps reported that the erosion was permanent
and irreversible.” Id.; see also Boling, 220 F.3d at 1372 (“[I]t is the uncertainty
surrounding the permanent nature of the taking, and not the uncertainty surrounding the
ultimate extent of the erosion damage, that is critical in determining whether the situation
has stabilized.” (citing to Applegate, 25 F.3d at 1583)).
2. The Meaning of the Term “Permanence” When Evaluating the
Timeliness Takings Claims Based on Erosion-Related Property Loss
After the Federal Circuit’s decision in Banks II, this court, on remand, addressed
the “permanence” element of the stabilization doctrine in a pre-trial ruling on plaintiffs’
request to exclude certain evidence from trial based on the expansive interpretation of the
mandate in Banks II that plaintiffs proposed. Banks v. United States (“Order Denying
Mot. in Lim.”), 98 Fed. Cl. 123, 123, 129 (2011), Dkt. No. 452 (denying plaintiffs’
motion in limine and concluding that “the issue decided by the Federal Circuit [in Banks
II] was the point at which plaintiffs’ justifiable uncertainty ‘as to the permanent nature of
the taking’ ended, rather than whether erosion of their properties was permanent”
(quoting Banks II, 314 F.3d at 1310)). This court clarified that the term “permanent” is
used in two distinct ways in such takings cases: first, “in its popular sense,” to discuss
the constancy of erosion, and second, “as a legal term of art” in the context of takings
claims when describing the lasting impact of a gradual, physical process. Id. at 127.
This court also explained that “the term ‘permanent taking’ is employed by courts
when examining the period of time during which a cause of action does not accrue for
purposes of the statute of limitations because the property owners are ‘justifiably
uncertain about the permanency of the . . . taking.’” Id. at 127–28 (alteration in original)
(quoting Boling, 220 F.3d at 1372). In such circumstances, “[t]he focus is on the
plaintiff’s justifiable uncertainty as to when any permanent taking accrued, not on the
merits question of whether a taking actually did occur.” Id. at 128.
7
This court acknowledged that “[s]ome of the confusion about what issue the
Federal Circuit decided [in Banks II] may [have] result[ed] from the phrasing of its
opinion,” and observed that “[s]everal times, the Federal Circuit [had] referred [in Banks
II] to the point at which the information available to plaintiffs indicated that erosion was
‘permanent and irreversible,’ rather than merely “permanent,” the term ordinarily used in
the context of the stabilization doctrine.” Id. at 129 n.4 (internal citation omitted). The
court added: “It is not the view of the court—and plaintiffs do not contend—that use of
the term ‘permanent and irreversible’ rather than ‘permanent’ to describe the potential
taking in this case indicates an additional factual determination about the nature of the
erosion to plaintiffs’ properties.” Id.
3. Plaintiffs’ Awareness of the “Permanent” Nature of the Erosion
Subsequently, on the second appeal of the case in Banks IV, the Federal Circuit
found that the court had erred in its jurisdictional analysis by finding that plaintiffs had
waived their accrual suspension arguments. See Banks IV, 741 F.3d at 1280 (observing
that “[t]hough [plaintiffs] did not use the term ‘accrual suspension’ in making [their]
argument, the substance [of their asserted position] is the same as that which [they had]
argue[d] before the court,” and finding that the “[plaintiffs’] argument ‘that as late as
1997 it was not understood that the harbor jetties caused increased erosion in plaintiffs’
zone’ [was] not waived”).
Under the articulated accrual suspension rule, a claim against the United States
does not accrue—but rather is suspended for purposes of 28 U.S.C. § 2501—until the
claimant knew or should have known that the claim existed. Id. at 1280–81. For the
accrual suspension rule to apply, either the claimant “must . . . show that the defendant
has concealed its acts with the result that plaintiff was unaware of their existence or it
must show that its injury was ‘inherently unknowable’ at the accrual date.” Id. at 1280(quoting Young v. United States, 529 F.3d 1380, 1384 (Fed. Cir. 2008)). “The inherently
unknowable test ‘includes a reasonableness component.’” Id. (quoting Holmes v. United
States, 657 F.3d 1303, 1320 (Fed. Cir. 2011)).
The Federal Circuit observed that “when determining when a taking claim accrues,
‘the key issue is whether the permanent nature of the taking was evident such that the
landowner should have known that the land had suffered erosion damage.’” Id. (quoting
Boling, 220 F.3d at 1373). The circuit court added that “[c]laims are deemed to accrue
once the [erosion] damage has ‘substantially encroached the parcels at issue and the
damages [are] reasonably foreseeable.’” Id. at 1281 (quoting Boling, 220 F.3d at 1373).
To assist courts in making such determinations regarding “permanence,” the Federal
Circuit identified the following factors for consideration: “the uncertainties of the terrain,
the difficulty in determining the location of the government’s easement, and the irregular
8
process of erosion.” Id. (quoting Boling, 220 F.3d at 1373); 4 see also Boling, 220 F.3d at
1373 (observing that “[t]he point at which the erosion damage transitions from ‘mere
inches’ to substantial encroachment is not amenable to precise definition, and will vary
from parcel to parcel”).
The appellate court noted that other factors specific to plaintiffs’ shorelines further
complicated the determination of “when [plaintiffs] knew or should have known of their
alleged takings claims.” Banks IV, 741 F.3d at 1281. While the factually complicated
circumstances in this case involving naturally occurring erosion and erosion caused by
the government-installed jetties provided “plaintiffs[’] . . . [with an] aware[ness] of some
erosion[, that awareness was] not sufficient for the claim to accrue.” 5 Id.
As it had expressed earlier in Banks II, the Federal Circuit in Banks IV noted
again that “[t]he [g]overnment’s mitigation efforts . . . delayed when [plaintiffs] knew or
should have known they had a claim.” Id. at 1282. “Without a basis for imputing
knowledge [to plaintiffs] of the effect of the jetty-caused erosion on [their] properties,”
the Federal Circuit found that “[plaintiffs] could not reasonably have known the damage
was ‘permanent’ until the Corps issued its 1996, 1997, and 1999 Reports showing that its
mitigation efforts could not reverse the damage caused by its jetties.” Id. (citing Banks
II, 314 F.3d at 1310). The appellate court also eliminated in Banks IV any confusion that
4
The court notes that in its discussion of the accrual suspension rule, the Federal
Circuit cites to claim accrual principles that were developed within the context of the
stabilization doctrine. See Banks v. United States (“Banks IV”), 741 F.3d 1268, 1280–81
(Fed. Cir. 2014), Dkt. No. 508 (citing Boling v. United States, 220 F.3d 1365, 1373 (Fed.
Cir. 2000)). The stabilization doctrine evolved to squarely address the complexity of
takings cases that result from gradual physical processes, and the accrual suspension rule
is a form of equitable tolling with broader application. In this case, both the stabilization
doctrine and accrual suspension rule operate similarly to delay the accrual of claims. In
its earlier decision, the Federal Circuit clarified that the “justifiable uncertainty of the
permanency of the taking” that delayed stabilization of plaintiffs’ claims was further
complicated by the efforts to mitigate the damages. See Banks v. United States (“Banks
II”), 314 F.3d 1304, 1310 (Fed. Cir. 2003), Dkt. No. 6. Here, in Banks IV, the Federal
Circuit examined plaintiffs’ awareness of the “permanent” nature of their claims by
applying the accrual suspension rule to the same particularized set of facts, while also
considering the uncertainties of plaintiffs’ shorelines. See Banks IV, 741 F.3d at 1279–
82.
5
On at least two occasions, the Federal Circuit refers to plaintiffs’ “claim,” rather
than plaintiffs’ “claims.” See Banks IV, 741 F.3d at 1281, 1282. While the takings
claims are individual to the plaintiffs in this consolidated action, the issue addressed by
the appellate court was “claim” accrual.
9
might have arisen from the use of the term “permanent” in its earlier opinion in Banks II,
by placing the term within quotation marks and using the term in a manner that is
consistent with the claim accrual principles set forth in case law. See id. (citing Banks II,
314 F.3d at 310).
IV. Discussion
A. Issues Before the Federal Circuit in Banks IV
The principal issues on appeal in Banks IV were: (1) whether the Federal
Circuit’s opinion in Banks II precluded this court from reconsidering when plaintiffs’
claims accrued for the purposes of subject matter jurisdiction; and (2) whether plaintiffs
knew or should have known that their claims accrued by 1952. Banks IV, 741 F.3d at
1275.
1. The Banks II Mandate Precluded This Court from Redetermining the
Claim Accrual Date
In analyzing whether this court violated the mandate rule, the Federal Circuit
reiterated its earlier holding in Banks II, stating: “We are satisfied that the plaintiffs met
their jurisdictional burden before the Court of Federal Claims on the basis of the
justifiable uncertainty of the permanence of the taking caused by the actual mitigation
efforts of the Corps.” Banks IV, 741 F.3d at 1277 (alteration omitted) (quoting Banks II,
314 F.3d at 1310). Emphasizing that its first decision in “Banks II did not ‘leave open
the issue of when [p]laintiffs’ claims accrued,” the appellate court explained that
“[n]ecessary and predicate” to the Banks II holding that plaintiffs’ claims were not barred
by the statute of limitations “was a finding that the mitigation efforts [had] delayed claim
accrual.” Id. at 1278. “Because the Banks II mandate [had] decided the [claim] accrual
date,” the Federal Circuit turned, in Banks IV, to consider whether an exception to the
mandate rule permitted this court to revisit the accrual date—namely, “whether
subsequent evidence presented at trial was substantially different from the original
evidence” presented to this court in Banks I (and reviewed by the Federal Circuit in
Banks II). Id.
The Federal Circuit found that a “Beach Erosion Control Study” that was released
by the Corps in 1958 and admitted into evidence in July 2007 (six years after Banks I and
four years after Banks II), id., “was not ‘new’ but merely cumulative of evidence before
[the trial court] in 2001,” id. at 1279. The appellate court examined the evidentiary
record that was before this court in Banks I—in particular, the three Corps Reports from
the 1990s, a 1998 newspaper article, and testimony given by plaintiffs’ expert—and
determined that the developed record at trial “contained information similar to that in the
[Beach Erosion Control] Study.” Id. The Federal Circuit failed to be persuaded “that any
‘new’ evidence required reexamining [the issue of] jurisdiction that had already been
10
decided [in its earlier Banks II decision],” and it concluded that without any new
evidence to consider, this court was precluded by the mandate rule from redetermining
the accrual date of plaintiffs’ claims. Id. The Federal Circuit accordingly reversed this
court’s dismissal decision. Id.
2. This Court Erred in Its Claim Accrual Suspension Analysis
As discussed in Section II.B.3 above, the Federal Circuit noted the factually
complicated circumstances presented in this case, and considered—when performing its
claim accrual suspension analysis—whether plaintiffs were aware of the “permanent”
nature of their claims. Banks IV, 741 F.3d at 1279–82. The circuit court decided that the
“plaintiffs[’] . . . aware[ness] of some erosion [was] not sufficient for the claim to
accrue,” id. at 1281, and noted that the “[t]he [g]overnment’s mitigation efforts . . .
delayed when [plaintiffs] knew or should have known they had a claim,” id. at 1282.
Although plaintiffs appear to concede that the appellate court limited its review to
the jurisdictional issue of claim accrual, see Pls.’ Mot. 25 (“[B]oth the Banks II court and
the Banks IV court were deciding on appeal whether, for purposes of the stabilization
doctrine, there was justifiable uncertainty about the permanency of the [alleged] taking”
(second alteration in original) (internal quotation marks omitted)), plaintiffs contend that
the Federal Circuit’s jurisdictional determination amounted to a pronouncement on the
merits of plaintiffs’ takings claims, see Pls.’ Reply 8 (“[T]he Federal Circuit’s
jurisdictional inquiry under the stabilization doctrine—and the Circuit’s conclusions that
the taking by the United States was permanent, irreversible, and not capable of
mitigation—was ‘inextricably intertwined’ with the merits.”). 6
6
Citing to the Federal Circuit’s decision in Nippon Steel Corp. v. United States, 219
F.3d 1348, 1353 (Fed. Cir. 2000), plaintiffs assert their view that “where (as here) the
jurisdictional issue and the merits are factually intertwined, the Federal Circuit
necessarily considers and decides the merits when rendering its opinion on the
jurisdictional issue.” Pls.’ Reply 3. Plaintiffs’ reliance on this case is misplaced. Both
the “unusual” factual and procedural circumstances in Nippon Steel are distinguishable
from the case at hand. Nippon Steel Corp., 219 F.3d at 1353. Because the Court of
International Trade’s jurisdiction turned on whether the initiation by the Department of
Commerce of an anticircumvention inquiry contravened the scope of the agency’s
authority, the Federal Circuit in Nippon Steel concluded that “both the merits and the
jurisdictional inquiry turn, at least in part, upon the same question: Did Commerce act
within its authority in initiating its inquiry?” Id.By turning to Nippon Steel, plaintiffs ignore persuasive jurisprudential teaching
that questions on the merits in takings cases are not resolved per se by a factually
interrelated jurisdictional inquiry. See Hansen v. United States, 65 Fed. Cl. 76, 129
(2005).
11
Given the fact-intensive nature of both claim accrual determinations and takings
claim considerations, the same facts might inform both inquiries. Examination of the
same facts within the context of both inquiries, however, does not make the facts
informing a claim accrual question fully dispositive of the merits issues.
As this court observed in Hansen v. United States, “the accrual of takings claim is
not the same thing as [a determination of] takings liability.” Hansen v. United States, 65
Fed. Cl. 76, 129 (2005). After a determination on claim accrual, which solely relates to
the period of time during which a cause of action does not accrue for statute of limitations
purposes, a “plaintiff will of course have to prove the elements of a takings claim; this
limited issue of claim accrual does not establish defendant’s liability.” Id.In the instant case, the court conducted trials on liability and damages further to
the first remand, but dismissed plaintiffs’ claims for timeliness. See Banks III, 341 F.3d
at 119. In the alternative, the court made detailed liability and damages findings. See id.
at 150–215.
B. The Alternative Merits Discussion in Banks III is Not a Final, Appealable
Decision
On appeal in Banks IV, the Federal Circuit held that the “alternative merits
discussion” contained in Banks III did not constitute “a final and appealable decision
over which [it had] jurisdiction.” Banks IV, 741 F.3d at 1283; see also id. at 1282 (“In
the absence of anything appealable, this court lacks appellate jurisdiction. To be final
and appealable, a decision must end the litigation on the merits, and the judge must
clearly declare her intention in this respect.” (internal citations, quotation marks, and
alterations omitted)).
The Federal Circuit observed that this court had presented its findings from the
trial on damages “in the alternative” for purposes of judicial efficiency in the event that
the jurisdictional threshold had been met. See id. at 1275 (noting that this court
“additionally presented findings ‘in the alternative’ on the merits of the case, stating if
‘any appeal should disagree with the court’s view of its jurisdiction, and to avoid the
possibility . . . of a repetitive trial, the court also presents here its findings from the trial’”
(alteration in original) (quoting Banks III, 102 Fed. Cl. at 120)). The circuit court
recognized that most of the fact finding from the trial on damages had been completed,
except for a final determination of damages with respect to plaintiffs’ shoreline protection
expenses. See id. (observing that the trial court explained that “‘if the reviewing court
does not agree with the court’s determination that it lacks jurisdiction to address
plaintiffs’ claims,’ it would direct the parties to file either a stipulation or briefing” in
order to make such a determination (alteration omitted) (quoting Banks III, 102 Fed. Cl.
at 212)).
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With a narrow determination of damages yet to be made, the Federal Circuit
acknowledged the prematurity of any review on appeal of the alternative merits findings.
Id. at 1282–83. Contrary to plaintiffs’ contention, the Federal Circuit’s
acknowledgement that shoreline protection expenses have not yet been finalized does not
amount to an invitation to re-litigate and reargue the merits of this case. 7
C. Implementing the Federal Circuit’s Mandate in Banks IV
Plaintiffs make their post-remand requests based on their interpretation of the
Federal Circuit’s mandate. To properly evaluate these various requests, the court first
must ascertain for itself the scope of the directive contained in the Federal Circuit’s
mandate in Banks IV. As discussed in Section II.A above, the court is bound by the
mandate, and by its own prior findings—to the extent such findings are not inconsistent
with the mandate.
The Federal Circuit set forth the following mandate in Banks IV:
The Court of Federal Claims’ alternative merits discussion is not a final and
appealable decision over which this court has jurisdiction. On remand, the
Court of Federal Claims may reconsider any merits rulings that were
rendered at a time it mistakenly believed it lacked jurisdiction. In light of
the Court of Federal Claims’ clearly erroneous fact finding on claim
accrual, it is appropriate that there be no law-of-the-case or comparable
obstacle preventing it from reconsidering its earlier, related findings on the
7
The issue of shoreline composition has been litigated extensively in this case.
Nonetheless plaintiffs seek to visit this issue yet again. See Pls.’ Mot. 38 (asking the
court to make a factual “finding that the nearshore lakebed adjacent to [p]laintiffs’
properties is cohesive, not sandy”). Following the trial on liability, the court addressed
the evidence presented at trial and issued findings regarding the composition of the
shoreline adjacent to plaintiffs’ properties. Banks v. United States, 78 Fed. Cl. 603, 621–
28 (2007), Dkt. No. 245. “Plaintiffs had the opportunity during [the] trial [on liability] to
present evidence regarding the composition of the nearshore lakebed of plaintiffs’ zone,”
but the court nevertheless allowed plaintiffs to present additional evidence at the trial on
damages “in order to avoid possible inefficiency and delay in resolving plaintiffs’
claims.” Banks v. United States, 84 Fed. Cl. 288, 297–98 (2008), Dkt. No. 276. Despite
plaintiffs’ attempt to exclude this evidence, see, generally, Banks v. United States, 98
Fed. Cl. 123 (2011), Dkt. No. 452, the court again addressed the evidence presented at
the trial on damages and made findings, see Banks III, 102 Fed. Cl. at 150–80. Because
the issue of shoreline composition has been litigated fully, it need not be treated—as
plaintiffs contend—as if it had not been so considered.
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merits. This court’s prior mandate—that the claims did not accrue until the
1999 Report—is still law-of-the-case, binding below.
Banks IV, 741 F.3d at 1283.
Because the Federal Circuit carefully limited its appellate review to the
jurisdictional issue of claim accrual in Banks IV, the scope of what is contemplated by
the mandate is very narrow. The Federal Circuit resolved decisively the issue of claim
accrual, affirming its earlier holding that plaintiffs’ claims accrued upon publication of
the 1999 Report. Id. at 1282. Consistent with the mandate rule, the matter of plaintiffs’
claims accrual is settled and cannot be adjudicated further. See Engel Indus., 166 F.3d at
1383.
The Federal Circuit allowed, however, that certain of the trial court’s fact finding
might warrant reconsideration on remand, but advised that such reconsideration is limited
to only the factual findings that were premised on evidence that was considered purely to
support the court’s erroneous determination that it lacked jurisdiction in Banks III. See
Banks IV, 741 F.3d at 1283. Accordingly, further proceedings by this court on remand
must be narrowly tailored to evaluating whether any of the alternative merits findings on
damages were calculated based on any time-sensitive parameters that are inconsistent
with the January 2000 claim accrual date. 8
The factual findings plaintiffs now ask the court to make by far exceed the scope
of both the Federal Circuit’s mandate and the extensive findings made after the two trials
held on liability and damages, respectively. Counter to plaintiffs’ arguments, the Federal
Circuit did not direct the court to engage in an unrestricted effort to reconsider all of the
merits findings presented in the alternative in Banks III, which were based on the
evidence heard and considered during the two trials.
Plaintiffs also misapprehend the Federal Circuit’s use of the term “permanent” in
the context of ascertaining the date of claim accrual; the appellate court considered it only
as a pertinent factor in determining whether plaintiffs’ claims were timely filed. The
circuit court adverted to the alternative merit findings in Banks III, and indicated that it
could not evaluate the substantial but incomplete findings because no final decision had
yet issued. Nonetheless, plaintiffs ask this court to disregard, on remand, the entirety of
8
In accordance with the Federal Circuit’s earlier mandate, see Banks II, 314 F.3d at
1310 (concluding that the statute of limitations did not begin to run for plaintiffs’ claims
until the Corps issued the 1996, 1997, and 1999 Reports), on remand, the court
determined that “[b]ecause the last of the three reports, the 1999 Report, was issued in
January 2000 . . . , the effective date of claim accrual for plaintiffs’ claims in this case is
January 2000,” Banks v. United States, 68 Fed. Cl. 524, 528–29 (2005), Dkt. No. 87.
14
the evidence presented by defendant at trial and to render—on the remaining record—a
decision that would be much more favorable to plaintiffs.
Although styled as plaintiffs’ request to “enforce the mandate,” plaintiffs
effectively endeavor to re-litigate matters that have been fully litigated, but not yet
concluded. Plaintiffs offer no compelling reason for doing so, other than their own
insistence. Plaintiffs have misconstrued the circuit court’s timeliness of filing
determination to be a finding that defendant is liable for damages of an amount that
comports with plaintiffs’ views exclusively about their alleged losses. But plaintiffs’
alleged interpretation obtains no support from the plain language of the mandate and
proposes to unduly extend this already protracted litigation.
V. Conclusion
Accordingly, based on the foregoing, Plaintiffs’ Post-Remand Motion for Entry by
this Court of Rulings Consistent With and to Enforce the Federal Circuit Court of
Appeals’ January 28, 2014 Mandate is DENIED. By separate order, the court will
address further proceedings in light of this ruling.
IT IS SO ORDERED.
s/ Patricia Campbell-Smith
PATRICIA CAMPBELL-SMITH
Chief Judge
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