Trinco Investment Company v. United States

In the United States Court of Federal Claims
No. 11-857L
(Filed: October 31, 2018)
******************************************
*
TRINCO INVESTMENT CO. AND *
KATHLEEN G. ROSE, TRUSTEE OF *
THE V. & M. ROSE - MARITAL TRUST, * Subject Matter Jurisdiction; Fifth
* Amendment; Takings; Just Compensation
Plaintiffs, * Self-executing; Sovereign Immunity;
* Separation of Powers; Article I; Article
v. * III; Common Law; Public Rights; Jury
* Trial; Seventh Amendment; Federal
THE UNITED STATES, * Courts; Legislative Courts; Tucker Act
*
Defendant. *
*
******************************************
ORDER AND OPINION
On October 11, 2017, the eve of the pre-trial conference, Plaintiffs filed a Motion to
Transfer (Plaintiffs’ “Motion”) to the U.S. District Court for the Eastern District of California,
pursuant to 28 U.S.C. § 1631 and Rule 12(b)(1) of the Rules of the Court of Federal Claims
(“RCFC”), alleging that the Court of Federal Claims lacks subject matter jurisdiction to hear
Fifth Amendment Takings claims. See Pls.’ Mot., ECF No. 137. In addition to requesting oral
argument, Plaintiffs also seek a stay of proceedings and certification of appeal to the Federal
Circuit in the event that this Court denies their Motion. Pls.’ Mot. at 1. On October 12, 2017,
the Court issued a stay of proceedings pending the Supreme Court’s decision in Oil States
Energy Services, LLC v. Greene’s Energy Group, LLC, _____ U.S. _____, 138 S. Ct. 1365(2018). After Oil States was decided, Plaintiffs filed a supplemental brief on May 18, 2018,
addressing the relevance of that case to the issues raised in Plaintiffs’ Motion. See Pls.’ Suppl.
Mem., ECF No. 145. On July 2, 2018, Defendant filed a response. Def.’s Resp., ECF No. 147.
On July 20, 2018, Plaintiffs filed a reply. Pls.’ Reply, ECF No. 148. This matter is now fully
briefed and ripe for decision.
For the reasons set forth below, Plaintiffs’ Motion to Transfer is hereby DENIED.
Plaintiffs’ request for oral argument is hereby DENIED as moot,1 but, Plaintiffs’ request for a
stay of proceedings and certification of issues for appeal to the Federal Circuit are hereby
GRANTED.
1
The Court does not believe that oral arguments would aid in the resolution of these
issues, as the parties’ briefs adequately elucidate their respective positions.
1
I. FACTS AND PROCEDURAL HISTORY
This takings case arises out of efforts in California to combat the persistent wildfires that
have devastated much of the northwest United States. The Plaintiffs, collectively referred to as
“TrinCo,” possess interests in 5 properties, all consisting of between 524 and 714 timbered acres,
located in and around the Shasta-Trinity National Forest in Trinity County, California. On June
20, 2008, several wildfires, collectively referred to as the Iron Complex fires, ignited near
Plaintiffs’ properties during a summer of unprecedented fire activity aggravated by drought
conditions, high winds, and lightning strikes. As a result, several communities in the vicinity of
Plaintiffs’ properties were under mandatory evacuation orders.
Although the United States Forest Service (“the Forest Service”) and the State of
California worked in concert to manage these fires, the firefighters assigned to suppress these
fires had limited resources and steep, rugged terrain to consider while implementing their
strategies. In order to preserve the maximum amount of property and private structures in the
path of the fires, the Forest Service utilized indirect firefighting methods, which involved the
setting of control fires ahead of the fire path to consume any unburned timber that might fuel the
wildfire. As a result, 1,782 acres of Plaintiffs’ merchantable timber, valued at approximately
$6.6 million, was destroyed.
On December 7, 2011, Plaintiffs filed suit in the Court of Federal Claims, seeking
compensation pursuant to the Fifth Amendment of the U.S. Constitution, based on the
Defendant’s physical taking of Plaintiffs’ merchantable timber through actions of the U.S. Forest
Service.
II. DISCUSSION
In their Motion to Transfer, Plaintiffs argue that the U.S. Court of Federal Claims cannot
constitutionally hear takings claims against the United States based on the Fifth Amendment.
Pls.’ Mot. at 1. They argue that such cases must be decided in an Article III court rather than in
an Article I court, such as the Court of Federal Claims. Hence, Plaintiffs move to transfer their
case to the U.S. District Court for the Eastern District of California. Pls.’ Mot. at 1.
Plaintiffs argue that the takings clause of the Fifth Amendment is self-executing, by
which it means not only that there is no need for Congress to pass legislation to create the right
to just compensation for a governmental taking but also that the doctrine of sovereign immunity
does not apply to it. Therefore, the United States can be sued ipso facto, without regard to a
waiver of its sovereign immunity. Not only can the Government be sued without having waived
its sovereign immunity, but it must be sued in an Article III court, because takings claims are
actions based in common law. Plaintiffs bolster their argument by declaring a takings case
between a private plaintiff and the U.S. Government as concerning a private right rather than a
public right, the latter being within the exclusive purview of Article III courts. Finally, Plaintiffs
argue that Fifth Amendment takings cases must be decided by a jury.
2
Defendant agrees that the takings clause is self-executing in that it creates a substantive
right to just compensation where the government has taken property, but maintains, however,
that it is not a waiver of sovereign immunity. Instead, the right to sue the government, whether
for a taking or otherwise, must come from an explicit act of Congress, and can be conditioned as
Congress sees fit. Moreover, Defendant argues that the right to bring suit for just compensation
is a public right, which Congress can permissibly assign to non-Article III courts for resolution.
Finally, Defendant contends that as a condition to the government’s waiver of sovereign
immunity, there is no right to a jury trial in Fifth Amendment takings cases.
A. The Federal Judiciary
Article III, Section 1, of the U.S. Constitution vests the judicial power of the United
states in “one supreme Court, and in such inferior Courts as the Congress may from time to time
ordain and establish.” U.S. Const. art. III, § 1. Thus, all federal courts, other than the Supreme
Court, are creatures of Congressional legislation. Congress need not establish any inferior courts
at all, and it has plenary power over the extent of their jurisdiction. See United States v. Union
Pac. R.R. Co., 98 U.S. 569, 602 (1878) (“The discretion . . . of Congress as to the number, the
character, the territorial limits of the courts among which it shall distribute [the] judicial power,
is unrestricted except as to the Supreme Court.”). Indeed, even the Supreme Court, which has
original jurisdiction in certain matters, does not have unlimited jurisdiction in appellate matters,
but only “with such Exceptions, and under such Regulations as the Congress shall make.” U.S.
Const. art. III, § 2. Therefore, putting aside the doctrine of sovereign immunity, Article III
allows for the possibility that citizens could not sue the federal government for compensation for
a taking even in an Article III court where Congress did not establish inferior courts, thus
proving that the judiciary is “the least dangerous branch.” The Federalist No. 78 (Alexander
Hamilton).
In addition to inferior courts established under Article III, Congress may establish courts
under Article I. See Williams v. United States, 289 U.S. 553 (1933). These have been called
“legislative courts.” Congress’s power to create such courts is well-established, and even the
Plaintiffs do not question it. See Pls.’ Mot. at 9. The first such courts were territorial courts, but
with the expansion of the bureaucratic state under President Franklin Roosevelt, agencies began
to exercise judicial power in limited circumstances—and this development was sanctioned by the
Supreme Court. See American Ins. Co. v. Canter, 26 U.S. 511, 1 Pet. 511 (1828) (concluding
Article III did not apply to territorial courts); See also, Opp Cotton Mills v. Administrator of
Wage and Hour Division of Department of Labor, 312 U.S. 126, 144 (1941) (“The mandate of
the Constitution, Art. 1, s 1, that all legislative powers granted ‘shall be vested’ in Congress has
never been thought to preclude Congress from resorting to the aid of administrative officers or
boards as fact-finding agencies . . . .”); Morgan v. United States, 304 U.S. 1, 22 (1938) (“The
maintenance of proper standards on the part of administrative agencies in the performance of
their quasijudicial functions is of the highest importance and in no way cripples or embarrasses
the exercise of their appropriate authority.”).
The predecessor of the Court of Federal Claims and the Court of Appeals for the Federal
Circuit was the Court of Claims, which was thought to be—for most of its existence—a
legislative court, that is, one established under Article I. Compare Ex Parte Bakelite Corp., 279
3
U.S. 438 (1929) (holding the Court of Claims was not an Article III Court), and Williams v.
United States, 289 U.S. 553 (1933) (same), with Glidden Co. v. Zdanok, 370 U.S. 530, 584
(1962), superseded by statute, Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96
Stat. 25. In general, it dealt with money claims against the United States, and its decisions
originally were recommendations to Congress. Act of February 24, 1855, ch. 122, 10 Stat. 612;
Langford v. United States, 101 U.S. 341, 344 (1879). Court of Claims decisions were
definitively accorded final judgement status in 1866. Act of March 17, 1866, ch. 19, sec. 1, 14
Stat. 9. The Court of Claims’ jurisdiction was significantly expanded by the Tucker Act, Act of
March 3, 1887, ch. 359, 24 Stat. 505, which articulated the court’s jurisdiction over “claims
founded upon the Constitution of the United States.” The Tucker Act, and later expansions of its
jurisdiction, were understood to be waivers of sovereign immunity on the part of the U.S.
government. See e.g., Soriano v. United States, 352 U.S. 270, 273 (1957); United States v.
Sherwood, 312 U.S. 584, 590 (1941); Belknap v. Schild, 161 U.S. 10, 17 (1896); Schillinger v.
United States, 155 U.S. 163, 166–67 (1894). In 1982, the trial court functions of the Court of
Claims became the work of the new United States Claims Court, later called the Court of Federal
Claims, Federal Courts Administration Act of 1992, Pub. L. 102-572, Title IX, § 902, 106 Stat.
4506 (1992), and it was designated an Article I court. Federal Courts Improvement Act of 1982,
Pub. L. No. 97-164, 96 Stat. 25. Thus, until the Tucker Act, compensation for takings by the
federal government were a matter of private bills and, after 1855, Court of Claims
recommendations. Act of February 24, 1855, ch. 122, 10 Stat. 612; see United States v. Mitchell,
463 U.S. 206, 212–14 (1983). From 1789 to 1887, no one felt that the takings clause of the Fifth
Amendment automatically gave a citizen the right to sue in court, let alone in an Article III court.
See 18 Cong. Rec. 2680 (Remarks of Rep. Bayne) (“The fact is that [the Tucker Act] is going to .
. . give the people of the United States what every civilized nation of the world has already
done—the right to go into the courts to seek redress against the government for their
grievances.”); See also, Langford v. United States, 101 U.S. 341 (1879).
B. Self-Executing
As alluded to before, Plaintiffs think that the designation of the takings clause as “self-
executing” means that the Constitution gives citizens the right to sue the United States in an
Article III court. Again, this would be news to judges and legal scholars in the first one hundred
years of this nation’s existence under the present constitution. Rather, this Court believes that
“self-executing” means that no congressional legislation is necessary to make the United States
subject to liability for just compensation to a property owner whose property is taken by it.
Jacobs v. United States, 290 U.S. 13, 15 (1933) (“the right to recover just compensation for
property taken by the United States . . . rested upon the Fifth Amendment. Statutory recognition
was not necessary. A promise to pay was not necessary. Such a promise was implied because of
the duty to pay imposed by the amendment.”). If a property owner wishes to obtain
compensation for such a taking, he or she must contend with the doctrine of sovereign immunity,
which makes the United States immune to suit unless it consents to it. Now, this seems rather
like the famous “Catch 22”: the owner has the right to compensation for a taking but the means
to obtain it lie entirely in the hands of the taker.
That this cannot be the case is a natural reaction, and, indeed, it was the initial reaction of
this Court, but the law supports this result. See Lynch v. United States, 292 U.S. 571, 581 (1934)
4
(“For consent to sue the United States is a privilege accorded, not the grant of a property right
protected by the Fifth Amendment. The consent may be withdrawn, although given after much
deliberation and for pecuniary consideration.”). There is simply no precedent that the doctrine of
sovereign immunity is waived by the mere fact of the presence of the takings clause in the
Constitution. To the contrary, one can find statements that sovereign immunity is limitless and
that it applies even to rights granted by the Constitution. See Lynch, 292 U.S. at 582 (“The
sovereign’s immunity from suit exists whatever the character of the proceeding or the source of
the right sought to be enforced. It applies alike to causes of action arising under acts of Congress
and to those arising from some violation of rights conferred upon the citizens by the
Constitution.”).
Furthermore, if a waiver of sovereign immunity were not necessary to sue the United
States for compensation for a taking, Congress would be compelled by the Constitution to set up
a court—or at least some kind of judicial tribunal—in the absence of the establishment of the
inferior courts mentioned in Article III or of the provision of another judicial forum. This Court
is not aware of any precedent that would give the Supreme Court jurisdiction over takings cases
or permit it to force Congress to create a judicial tribunal for takings cases in order that the Fifth
Amendment takings clause not be a dead letter. See Webster v. Doe, 486 U.S. 592, 613 (1988)
(Scalia, J., dissenting) (“No one would suggest that, if Congress had not passed the Tucker Act,
the courts would be able to order disbursements from the Treasury to pay for property taken
under lawful authority . . . without just compensation.”) (internal citation omitted)). This is
perhaps why until 1855 there was no judicial forum for trying takings cases.
Of course, inferior courts under Article III do exist today—but so does the Court of
Federal Claims. Even if the Constitution requires—and the United States could be compelled—
to provide a means to determine that a taking has occurred and what is just compensation for it,
why would Congress be prohibited from establishing a judicial forum under Article I?
C. Public v. Private Right
To counter this argument, Plaintiffs classify a taking case against the United States as a
private right, which they say requires an Article III court. Pls.’ Mot. at 7–10. But it is not clear
that the public/private right distinction can serve as a definitive method of judging whether an
Article III court is necessary. Furthermore, it is not clear that a lawsuit against the United States
for compensation for a taking is a private right.
The lack of clarity in the Supreme Court’s jurisprudence regarding the public/private
right distinction was recently acknowledged: “This Court has not ‘definitively explained’ the
distinction between public and private rights, Northern Pipeline Constr. Co. v. Marathon Pipe
Line Co., 458 U.S. 50, 69 (1982), and its precedents applying the public-rights doctrine have ‘not
been entirely consistent,’ Stern, 564 U.S., at 488.” Oil States Energy Servs., LLC v. Greene’s
Energy Group, LLC, _____ U.S. _____, 138 S.Ct. 1365, 1373 (2018).
Northern Pipeline figures prominently in the Supreme Court’s recent jurisprudence on
the requirements of Article III. 458 U.S. 50 (1982). In that case, the Court, while admitting that
the Supreme Court had not “definitively explained” the public/private rights distinction,
5
nevertheless firmly held that private rights demand an Article III court while public rights may
be judged by an Article I tribunal:
The distinction between public rights and private rights has not been
definitively explained in our precedents. Nor is it necessary to do so in the
present cases, for it suffices to observe that a matter of public rights must at
a minimum arise “between the government and others.” Ex parte Bakelite
Corp., supra, at 451, 49 S.Ct., at 413. In contrast, “the liability of one
individual to another under the law as defined,” Crowell v. Benson, supra, at
51, 52 S.Ct., at 292, is a matter of private rights. Our precedents clearly
establish that only controversies in the former category may be removed from
Art. III courts and delegated to legislative courts or administrative agencies
for their determination.
458 U.S. 50, 69–70 (1982).
It seems that one might draw from this passage the lesson that, however undefined the
whole universe of the public/private right distinction is, it may at least be said that public rights
are ones between the government and others and that private rights are ones between one
individual and another. See Ex parte Bakelite Corp., 279 U.S. at 451; Crowell, 285 U.S. 22, 51;
United States v. Jicarilla Apache Nation, 564 U.S. 162, 174 (2011). Therefore, it is logical to
conclude that since takings cases under the Fifth Amendment arise between the government and
others, they involve public rights, not private ones. See First English Evangelical Lutheran
Church of Glendale v. Los Angeles County, Cal., 482 U.S. 304, 318–19 (1987) (“It is axiomatic
that the Fifth Amendment's just compensation provision is ‘designed to bar Government from
forcing some people alone to bear public burdens which, in all fairness and justice, should be
borne by the public as a whole.’”). Indeed, the parties have cited no cases and this Court has not
discovered in its research any case that holds that a claim against the United States is a private
right. Consequently, Fifth Amendment takings disputes may be removed from Article III courts
and delegated to legislative courts such as the Court of Federal Claims. It is important to note,
however, that Northern Pipeline does not say that Article III courts cannot hear cases involving
public rights. 458 U.S. 50, 70. It is just that they may be “removed” from Article III courts by
act of Congress. Id.However, this neat explanation of the difference between public and private rights and its
ramifications regarding the competence of a non-Article III forum quickly breaks down upon
further examination.
Northern Pipeline found violative of Article III the scope of a Bankruptcy Courts’
adjudicative powers under the statute in force at the time. 458 U.S. at 87, superseded by statute,
28 U.S.C. § 157(b)(5). The Court’s plurality opinion in Northern Pipeline focused on two cases,
Crowell and Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272 (1856), in its
discussion of the public/private right distinction. Northern Pipeline, 458 U.S. at 63–86.
According to Northern Pipeline, the public rights doctrine was first set forth in Murray’s Lessee:
6
[W]e do not consider congress can either withdraw from judicial cognizance
any matter which, from its nature, is the subject of a suit at the common law,
or in equity, or admiralty; nor, on the other hand, can it bring under the
judicial power a matter which, from its nature, is not a subject for judicial
determination. At the same time there are matters, involving public rights,
which may be presented in such form that the judicial power is capable of
acting on them, and which are susceptible of judicial determination, but
which congress may or may not bring within the cognizance of the courts of
the United States, as it may deem proper.
Id. at 67. In Murray’s Lessee, the U.S. Treasury used an extra-judicial process pursuant to an act
passed by Congress to get back its money from a customs collector who had embezzled it. 59
U.S. 272, 274, 18 How. 272, 274. The Court held that it was not a violation of Article III for the
government to use this process. Id. at 285–86.
Crowell involved a determination by an administrative agency in favor of one private
party against another private party pursuant to a system of workers compensation for injury
sustained on the navigable waters of the United States. 285 U.S. 22, 36–37. One of the bases on
which the decision of the agency was attacked was that it was unconstitutionally exercising
Article III judicial power. Id. at 49. The Court held that Congress could set up a system that
allowed an agency to determine the claim without violating Article III, despite the fact that the
case involved two private parties—and indeed, despite the fact that the Court labeled the issue as
one of private right! Id. at 51 (“The present case . . . is one of private right, that is, of the liability
of one individual to another under the law as defined.”).2
The circumstances in which a dispute between private parties decided by a non-Article III
tribunal would be constitutional were described in a plurality opinion of the Court in Northern
Pipeline. 458 U.S. at 67–68. Quoting Crowell, the Court stated:
The [public rights] doctrine extends only to matters arising “between the
Government and persons subject to its authority in connection with the
performance of the constitutional functions of the executive or legislative
departments,” Crowell v. Benson, 285 U.S. 22, 50, 52 S.Ct. 285, 292, 76
L.Ed. 598 (1932), and only to matters that historically could have been
determined exclusively by those departments.
Id.But, the reasoning of the plurality in Northern Pipeline has been questioned in
subsequent Supreme Court decisions. In Thomas v. Union Carbide Agr. Prods. Co., 473 U.S.
568 (1985), for example, the Court stated:
2
It is interesting that the case involved admiralty law, which is part of the judicial power
of the United States according to Article III. See U.S. Const. art. III, § 2.
7
This theory that the public rights/private rights dichotomy of Crowell and
Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272 (1856),
provides a bright-line test for determining the requirements of Article III did
not command a majority of the Court in Northern Pipeline. Insofar as
appellees interpret that case and Crowell as establishing that the right to an
Article III forum is absolute unless the Federal Government is a party of
record, we cannot agree. Cf. Northern Pipeline Construction Co., 458 U.S.,
at 71 (plurality opinion) (noting that discharge in bankruptcy, which adjusts
liabilities between individuals, is arguably a public right). But see id., at 69,
n. 23. Nor did a majority of the Court endorse the implication of the private
right/public right dichotomy that Article III has no force simply because a
dispute is between the Government and an individual. Compare id., at 68, n.
20, with id., at 70, n. 23.
Thomas, 473 U.S. at 585–86. Thus, the Thomas Court rejects the proposition that where the
federal government is not a party to the suit the case must be decided in an Article III court, and
it does not feel bound by the principle that where a suit is between the federal government and an
individual Article III does not apply. See id. at 587–89.
In fact, the Court in Thomas goes farther in concluding that the public/private right
distinction does not provide a definitive method of judging whether an Article III court is
necessary in a given case, and, indeed, sees the distinction as a “formalistic or abstract Article III
inquiry,” id. at 586, that is opposed to the reasoning in Crowell! Compare Thomas, 473 U.S. at586–87, with Crowell, 285 U.S. at 50–51. Thomas notes (as this Court has done) that
“[a]lthough [the] findings [of the federal official in Crowell] clearly concern obligations among
private parties, this fact did not make the scheme invalid under Article III.” Thomas, 473 U.S. at586–87. Thus, “[t]he enduring lesson of Crowell is that practical attention to substance rather
than doctrinaire reliance on formal categories should inform application of Article III.” Id. at
587. In conclusion, the Court opines that “[i]n essence, the public rights doctrine reflects simply
a pragmatic understanding that when Congress selects a quasi-judicial method of resolving
matters that ‘could be conclusively determined by the Executive and Legislative Branches,’ the
danger of encroaching on the judicial powers is reduced.” Id. at 589.
The context of Thomas was a provision of the Federal Insecticide, Fungicide, and
Rodenticide Act (“FIFRA”) that provided for binding arbitration regarding the obligation of a
later registrant of a pesticide with the Environmental Protection Agency to compensate a prior
registrant when the later registrant uses the data submitted by the prior registrant, as is permitted
by FIFRA. See id. at 571. Thus, the context was one of a regulatory scheme administered by an
agency. The Court held that the binding arbitration provision did not violate Article III. Id. at
594.
For the Thomas Court, the bottom line is this: “The Court’s holding in [Northern
Pipeline] establishes only that Congress may not vest in a non-Article III court the power to
adjudicate, render final judgment, and issue binding orders in a traditional contract action arising
under state law, without consent of the litigants, and subject only to ordinary appellate review.”
Id. at 584.
8
We return to the bankruptcy context with Stern v. Marshall, 564 U.S. 462 (2011), this
time under a different statute than the one in force in Northern Pipeline. Compare Stern, 564
U.S. 462 (applying 28 U.S.C. § 157), with Northern Pipeline, 458 U.S. 50 (1982) (applying
Bankruptcy Act of 1978, 28 U.S.C. § 1471, Pub. L. 95-598 (effective Oct. 1, 1979)). In holding
that “[t]he Bankruptcy Court below lacked the constitutional authority to enter a final judgment
on a state law counterclaim,” Stern, 564 U.S. at 503, the Court had recourse to the public/private
right distinction (also now characterized as “the public right exception”—presumably because it
believes that otherwise the judicial power of the United States resides exclusively in Article III
courts), despite admitting that “our discussion of the public rights exception . . . has not been
entirely consistent, and the exception has been the subject of some debate.” Id. at 488.
Thus, the majority opinion uses the public right exception as an analytical tool only to
ascertain whether the case before it “fall[s] within any of the various formulations of the concept
that appear in [the Supreme] Court’s opinions.” Id. In examining these formulations, the Court
has recourse to the (now familiar) case of Murray’s Lessee, but in its discussion of this case, the
Court makes a novel connection—between the public right exception and sovereign immunity:
The challenge in Murray’s Lessee to the Treasury Department’s sale of the
collector’s land likewise fell within the “public rights” category of cases,
because it could only be brought if the Federal Government chose to allow it
by waiving sovereign immunity. The point of Murray’s Lessee was simply
that Congress may set the terms of adjudicating a suit when the suit could not
otherwise proceed at all.
Stern, 564 U.S. at 489 (emphasis added). The purport of the emphasized language is that—at
least for Murray’s Lessee—the doctrine of sovereign immunity and the public right exception
overlap. Consequently, if the federal government would have to waive sovereign immunity to
allow the suit, the suit would be one of public right, in which case the government could
establish a non-Article III tribunal to decide it.
The Stern Court’s review of the various formulations of the public right exception to see
if they apply to the circumstances in the case before it does not yield any new insights except
insofar as the Court distinguishes public right exception cases that involve administrative
agencies from those which involve courts. See id. at 488–95, 494 (“Given the extent to which
this case is so markedly distinct from the agency cases discussing the public rights exception in
the context of [a substantive regulatory scheme], however, we do not in this opinion express any
view on how the doctrine might apply in that different context.”). The Court admits that the
public/private right distinction “fails to provide concrete guidance as to whether, for example, a
particular agency can adjudicate legal issues under a substantive regulatory scheme,” id. at 494,
but “[w]hat is plain here is that this case involves the most prototypical exercise of judicial
power: the entry of a final, binding judgment by a court with broad substantive jurisdiction, on a
common law cause of action, when the action neither derives from nor depends upon any agency
regulatory regime.” Id. (emphasis in original).
9
From the above discussion, this Court is convinced that the Supreme Court has no precise
notion of the public/private right distinction. The distinction is a useful but inconclusive
analytical tool. In the administrative agency context, the Thomas Court sees in Supreme Court
precedent the rule that “practical attention to substance rather than doctrinaire reliance on formal
categories should inform application of Article III.” Thomas v. Union Carbide Agr. Prods. Co.,
473 U.S. 568, 587 (1985). In a judicial context, the later Stern case, while expressing
reservations about the “public right exception,” nevertheless, searches the Court’s various
formulations of the public right exception to shed light on the question before it. Stern, 564 U.S.
at 488–95. In addition, it seems to see in waiver of sovereign immunity an indication of a public
right. See id. at 489. It seems also to caution against applying the rationale of administrative
agency cases to cases in which an actual court is involved. Id. at 493–94. But, in the end, this
Court feels that the result in Stern was based on the fact that the case was between private parties
and on the fact that the Bankruptcy Court was exercising jurisdiction over a traditionally
common law cause of action. See id. at 503 (“Congress, in one isolated respect, exceeded [the
limitation of Article III] in the Bankruptcy Act of 1984. The Bankruptcy Court below lacked the
constitutional authority to enter a final judgment on a state law counterclaim that is not resolved
in the process of ruling on a creditor’s proof of claim.”).
The case before this Court fits the classic definition of public right in that it is a dispute
between the government and an individual, not between private parties. This Court has already
stated that it is not aware of any cases in which the Supreme Court has held that a dispute
between the federal government and another is a private right. See supra. Indeed, Stern hints
that disputes between the government and another always involve a public right. Stern, 564 U.S.
at 490 (“Shortly after Northern Pipeline, the Court rejected the limitation of the public rights
exception to actions involving the Government as a party.”). None of the cases discussed above
were between the United States and another party. See Murray’s Lessee v. Hoboken Land &
Improvement Co., 59 U.S. 272, 18 How. 272 (1856) (private individuals); Crowell v. Benson,
285 U.S. 22 (1932) (private individuals); Thomas, 473 U.S. 568 (1985) (pesticide
manufacturers); Northern Pipeline, 458 U.S. 50 (1982) (corporations); Stern, 564 U.S. 462(2011) (private individuals). It is only when the Supreme Court wishes to conclude, in a private
versus private context, that the use of a non-Article III forum does not violate Article III does it
tie itself up in knots regarding the application of the public/private distinction. Indeed, this Court
feels that, as a rule of thumb, the use of a non-Article III forum to adjudicate disputes between
the government and another is consistent with Article III. The Stern Court’s interpretation of
Murray’s Lessee supports this conclusion by recognizing the overlap between waiver of
sovereign immunity and the ascertainment of a public right. See Stern, 564 U.S. at 489.
The conclusion that a dispute between the government and another is ordinarily a matter
of a public right does not mean that such a dispute cannot be confided by Congress to an Article
III court, just that it need not be. Among many examples, the Little Tucker Act is most pertinent.
See 28 U.S.C. § 1346. To be sure, the Thomas court noted that a majority of the Court in
Northern Pipeline did not “endorse the implication of the private right/public right dichotomy
that Article III has no force simply because a dispute is between the Government and an
individual.” Thomas, 564 U.S. at 586. This statement, of course, is about something the Court
did not do; it is not authority for the proposition that the Supreme Court has held that Article III
has force in a dispute between the government and another. In light of Stern’s reading of
10
Murray’s Lessee, it may very well be that it is simply not violative of Article III for a non-Article
III forum to adjudicate a dispute between the government and another, this being a corollary of
the doctrine of sovereign immunity.
D. A Takings Case Is Not a Common Law Cause of Action
Plaintiffs argue that, since takings cases are common law causes of action, they must be
heard in an Article III court. Pls.’ Mot. at 6–7. As authority for this proposition, they cite Stern.
See id. at 6. But this citation to Stern is actually a citation to Murray’s Lessee, and Plaintiffs’
quotation leaves out a crucial phrase. In quoting from Murray’s Lessee, the Court stated: “[W]e
have long recognized that, in general, Congress may not ‘withdraw from judicial cognizance any
matter which, from its nature, is the subject of a suit at the common law, or in equity, or
admiralty.’” Stern, 564 U.S. at 484 (emphasis added). With good reason the Stern Court used
“in general,” because in Murray’s Lessee, what follows the phrase quoted in Stern, is: “At the
same time there are matters, involving public rights, which may be presented in such form that
the judicial power is capable of acting on them, and which are susceptible of judicial
determination, but which congress may or may not bring within the cognizance of the courts of
the United States, as it may deem proper.” Murray’s Lessee, 59 U.S. at 284 (emphasis added).
Thus, the quotation presented to this Court in support of the proposition that common law causes
of action must be heard by Article III courts is, in fact, qualified by the next sentence. To be
sure, the second sentence may be denoting public rights cases as ones not at common law, but
this interpretation does not account for the phrase “at the same time” nor does it account for the
Stern Court’s use of “in general,” which clearly implies that some common law cases need not
be heard by Article III courts. Thus, the quotation from Stern does not support Plaintiffs’
proposition; indeed, it seems to indicate that some common law causes of action may be heard by
non-Article III courts. This is, of course, true of territorial courts. See e.g., Simms v. Simms, 175
U.S. 162 (1899); Foley v. Harrison, 56 U.S. 433, 15 How. 433 (1854); Burgess v. Gray, 57 U.S.
48, 16 How. 48 (1854); American Ins. Co. v. Canter, 26 U.S. 511, 1 Pet. 511 (1828).3
But, even if arguendo a non-Article III court cannot hear common law cases, is a takings
case one at common law? Plaintiffs distinguish eminent domain from inverse condemnation, the
former being the taking of property through a formal judicial proceeding, the latter being a de
facto condemnation.
Regarding eminent domain proceedings, Plaintiffs cite Kohl v. United States, 91 U.S. 367(1876): “[t]he right of eminent domain always was a right at common law.” Pls.’ Mot. at 6
(quoting Kohl, 91 U.S. at 376). But the context of this statement considerably weakens its
significance regarding the general question of whether a non-Article III court can hear a takings
case, and, in any event, the Court of Federal Claims does not hear eminent domain cases.
3
Giving Bankruptcy Courts the power to decide “a common law cause of action” does
seems to have been crucial to the Stern Court’s holding that Congress had violated Article III,
but it may have been equally crucial to the Court that the case was between private parties. See
Stern, 564 U.S. at 493, 495, 499-500, 503.
11
Kohl was actually about whether an Article III court could hear an eminent domain case!
The United States had brought an action for the condemnation of property in Cincinnati as a site
for a post office. As the plaintiff was the federal government, the defendant appealed to the
Supreme Court from an adverse ruling in the U.S. Circuit Court. Defendant argued: “For
upwards of eighty years, no act of Congress was passed for the exercise of the right of eminent
domain in the States, or for acquiring property for Federal purposes otherwise than by purchase,
or by appropriation under the authority of State laws in State tribunals.” Kohl, 91 U.S. at 369.
Congress had not expressly given the Circuit Courts jurisdiction over eminent domain cases.
Nevertheless, the Supreme Court held that the Circuit Courts of the United States had the power
to hear condemnation cases: “The Judiciary Act of 1789 conferred upon the circuit courts of the
United States jurisdiction of all suits at common law or in equity, when the United States, or any
officer thereof, suing under the authority of any act of Congress, are plaintiffs.” Id. at 375(emphasis added). It was in this context that the Court found that “[t]he right of eminent domain
always was a right at common law.” Id. at 376. But (ironically for the Plaintiffs) the Court also
said that Congress could have made other provisions for the exercise of eminent domain by the
federal government:
Doubtless Congress might have provided a mode of taking the land, and
determining the compensation to be made, which would have been exclusive
of all other modes. They might have prescribed in what tribunal or by what
agents the taking and the ascertainment of the just compensation should be
accomplished. The mode might have been by a commission, or it might have
been referred expressly to the Circuit Court; but this, we think, was not
necessary.
Id. at 375 (emphasis added). Thus, the Kohl case stands for the proposition that, although
eminent domain proceedings were actions at common law, Congress may have provided a non-
Article III forum to hear them.
Turning to inverse condemnation, Plaintiffs quote from City of Monterey v. Del Monte
Dunes at Monterey, Ltd., 526 U.S. 687 (1999), that as “a matter of historical practice . . . suits to
recover just compensation [for government takings] have been framed as common law tort
actions.” Pls.’ Mot. at 6 (quoting City of Monterey, 526 U.S. at 715–16). Now, while Plaintiffs
are precise enough to point out that this statement is in a plurality opinion, they are not precise
enough to quote the whole sentence (as Defendant points out) that puts a different spin on the
subject. The whole sentence reads: “as a matter of historical practice, when the government has
taken property without providing an adequate means for obtaining redress, suits to recover just
compensation have been framed as common law tort actions.” City of Monterey, 526 U.S. at 715(emphasis added). The omitted part, which is in italics, speaks for itself and obviously weakens
Plaintiffs’ point, as the government has provided “an adequate means for obtaining redress,”
namely, the Court of Federal Claims. See id.Aside from being a plurality opinion—and a case not involving the U.S. government—
the case is so convoluted that it really doesn’t pack the punch for the Plaintiffs’ broad assertion
that takings claims are common law causes of action that must be heard by Article III courts. In
Monterey, a property owner brought a section 1983 action against the city, alleging that the city’s
12
repeated rejections of the owner’s proposals for the development of its property had violated the
owner’s equal protection and due process rights, and had effected a regulatory taking. Id. at 694.
The essence of the case, however, was whether the Seventh Amendment required a jury trial for
the section 1983 action. As the section 1983 action included an allegation of taking without just
compensation, this allegation figured into the Court’s Seventh Amendment analysis.
Regarding the requirement of a jury, the Court noted that Congress did not provide that
section 1983 actions be tried by a jury, and the Court had already laid down a rule that “the
Seventh Amendment jury guarantee extends to statutory claims unknown to the common law, so
long as the claims can be said to ‘soun[d] basically in tort.’” Id. at 709. The Court noted that:
[A]t the time of the city’s actions, the State of California did not provide a
compensatory remedy for temporary regulatory takings. The constitutional
injury alleged, therefore, is not that property was taken but that it was taken
without just compensation. Had the city paid for the property or had an
adequate postdeprivation remedy been available, Del Monte Dunes would
have suffered no constitutional injury from the taking alone. Because its
statutory action did not accrue until it was denied just compensation, in a
strict sense Del Monte Dunes sought not just compensation per se but rather
damages for the unconstitutional denial of such compensation. Damages for
a constitutional violation are a legal remedy.
Id. at 710.
It is worth noting that the Court rejected the City’s argument that the Court should look to
the “underlying constitutional right asserted.” Id. at 711. There is a very short discussion of the
Fifth Amendment in the opinion. The Court mentions that sovereign immunity does not apply to
the City of Monterey, id. at 714, and it focuses again on the problem of the lack of a forum in
inverse condemnation cases: “Even when the government takes property without initiating
condemnation proceedings, there is no constitutional violation ‘unless or until the state fails to
provide an adequate postdeprivation remedy for the property loss.’” Id. at 714–15 (internal
citations omitted). History, says the Court, supports the holding that a section 1983 case is one at
common law: “Early opinions, nearly contemporaneous with the adoption of the Bill of Rights,
suggested that when the government took property but failed to provide a means for obtaining
just compensation, an action to recover damages for the government’s actions would sound in
tort.” Id. at 715 (emphasis added).
Fifth Amendment takings come up again in the opinion in the context of the jury trial
requirement issue:
Although this Court has decided many regulatory takings cases, none of our
decisions has addressed the proper allocation of liability determinations
between judge and jury in explicit terms. This is not surprising. Most of our
regulatory takings decisions have reviewed suits against the United States or
suits seeking only injunctive relief. It is settled law that the Seventh
Amendment does not apply in these contexts.
13
Id. at 719 (internal citations omitted).
Justice Scalia’s concurring opinion articulates the question presented to the Court simply
and accurately: “The question before us, therefore, is not what common-law action is most
analogous to some generic suit seeking compensation for a Fifth Amendment taking, but what
common-law action is most analogous to a § 1983 claim.” Id. at 724 (Scalia, J., concurring)
(emphasis in the original).
Clearly, then, the Court in Monterey did not focus on whether a takings case against the
federal government is a common law cause of action. In fact, it concentrated on the lack of a just
compensation remedy in the case before it, and alluded to the fact that its holding had no effect
on Fifth Amendment takings claims against the federal government. See id. at 721–22.
Finally, this Court wishes to mention one other case pertinent to the question of
classifying a takings claim against the federal government as a common law cause of action.
Defendant points to McElrath v. United States, 102 U.S. 426, 440 (1880), in its argument that the
Seventh Amendment does not require jury trials for suits for just compensation under the Fifth
Amendment. See Def.’s Response at 20–21. Plaintiffs ignore this case. True, this case did not
involve a takings case as such; instead, it involved a claim for military pay. See McElrath, 102
U.S. at 435–36. Because the government had filed a counterclaim, the plaintiff had challenged
the power of the Court of Claims to decide this case without a jury, arguing that it was a common
law cause of action in excess of $20 for which the Seventh Amendment requires a jury trial. But
the Court expatiated on the jurisdiction of the Court of Claims and the question of common law
causes of action before it:
Suits against the government in the Court of Claims, whether reference be
had to the claimant’s demand, or to the defence (sic), or to any set-off, or
counter-claim which the government may assert, are not controlled by the
Seventh Amendment. They are not suits at common law within its true
meaning. The government cannot be sued, except with its own consent. It
can declare in what court it may be sued, and prescribe the forms of pleading
and the rules of practice to be observed in such suits.
Id. at 440 (emphasis added).
Now, it may be argued that the Court here is talking only about military pay cases when it
says “[s]uits against the government,” but such an interpretation is crabbed. The Court seems to
be talking about suits against the government in the Court of Claims in general, and this
interpretation is supported by the explanation that immediately follows the declaration that such
suits are not “suits at common law within its true meaning,” namely, that “[t]he government
cannot be sued, except with its own consent.” Id. In other words, cases before the Court of
Claims were not really common law causes of action because they could be precluded by
sovereign immunity.
E. Cases Discussing Article I/Article III Courts
14
The three most important Supreme Court cases that actually discuss Article I and Article
III courts (outside the bankruptcy context) are: Ex parte Bakelite Corp., 279 U.S. 438 (1929);
Williams v. United States, 289 U.S. 553 (1933); and Glidden Co. v. Zdanok, 370 U.S. 530 (1962)
(plurality opinion).
In Bakelite, the question before the Court was whether the Court of Customs Appeals was
an Article III or an Article I court. 279 U.S. at 448. The opinion, however, on the way to
concluding that the Court of Customs Appeals was an Article I court, has a lengthy discussion of
the Court of Claims, the predecessor of the Court of Federal Claims. See id. at 451–55. It makes
several important points.
First, in its description of “legislative courts” it characterizes them as courts addressing
cases between “the government and others.” Id. at 451.
Second, in discussing claims against the United States, Bakelite specifically mentions
claims involving “lands,” and it places legislative courts in the context of sovereign immunity. It
is worth quoting the passage in full:
[Claims against the United States] may arise in many ways and may be for
money, lands, or other things. They all admit of legislative or executive
determination, and yet from their nature are susceptible of determination by
courts; but no court can have cognizance of them except as Congress makes
specific provision therefor. Nor do claimants have any right to sue on them
unless Congress consents; and Congress may attach to its consent such
conditions as it deems proper, even to requiring that the suits be brought in a
legislative court specially created to consider them.
Id. at 452.
Third, Bakelite relates the Court of Claims to Congress’s power to pay debts.
The Court of Claims is such a court. It was created, and has been maintained,
as a special tribunal to examine and determine claims for money against the
United States. This is a function which belongs primarily to Congress as an
incident of its power to pay the debts of the United States. But the function
is one which Congress has a discretion either to exercise directly or to
delegate to other agencies.
Id.Finally, Bakelite notes that legislative courts, although established under Article I, may
be called courts of the United States. Speaking specifically of the Court of Customs Appeals, the
Court in Bakelite said: “Another feature to which attention was given is the denomination of the
court as a United States court. That the court is a court of the United States is plain; but this is
quite consistent with its being a legislative court.” Id. at 460.
15
In Williams, the question whether the Court of Claims was an Article I or an Article III
court was squarely presented. 289 U.S. 553, 561 (1933). The context was the legality of the
diminution in compensation of a Court of Claims judge that had been voted by Congress. The
Court held that the Court of Claims was a legislative court not a constitutional court established
under Article III; therefore, the judge’s salary could be reduced. Id. at 581. At the time of the
decision, the Court of Claims was enabled by Congress to decide takings cases against the
federal government. See Act of March 3, 1887, ch. 359, 24 Stat. 505 (granting the Court of
Claims jurisdiction over “claims founded upon the Constitution of the United States”).
The Williams opinion explained why the Court of Claims was not an Article III court
despite the fact that Article III extends the judicial power of the United States to “Controversies
to which the United States shall be a Party.” See id. at 567–81. For purposes of this Motion, two
parts of the Court’s explanation are important: (1) sovereign immunity and (2) separation of
powers.
The Court agreed that, on its face, this clause includes cases against the United States, but
it concluded that the doctrine of sovereign immunity withdrew these cases from its ambit: “[I]n
the light of the rule, then well settled and understood, that the sovereign power is immune from
suit, the conclusion is inadmissible that the framers of the Constitution intended to include [in the
doctrine of sovereign immunity] suits or actions brought against the United States.” Id. at 573.
Further, the Court cites the words of Chief Justice Marshall: “And in Cohens v. Virginia, supra,
at pages 411—412 of 6 Wheat., 5 L.Ed. 257, Chief Justice Marshall said: ‘The universally
received opinion is, that no suit can be commenced or prosecuted against the United States; that
the judiciary act does not authorize such suits.’” Id. at 574. Finally, the Court’s construction is
as follows:
That clause must be construed, in accordance with the practical construction
put upon it by the first Judiciary Act, as though it read, ‘controversies to
which the United States shall be a party plaintiff or petitioner;’ and, thus read,
controversies to which the United States may by statute be made a party
defendant, at least as a general rule, lie wholly outside the scope of the
judicial power vested by article 3 in the constitutional courts.
Id. at 577.
The doctrine of separation of powers comes into play to counter the argument that once
the Unites States consents to be sued, Article III attaches to the court. The Court stated:
[This argument] cannot be reconciled with the limitation fundamentally
implicit in the constitutional separation of the powers, namely, that a power
definitely assigned by the Constitution to one department can neither be
surrendered nor delegated by that department, nor vested by statute in another
department or agency.
16
Id. at 578. This turns on its head any contention that separation of powers requires that takings
cases against the federal government must be heard in Article III courts.
It is clear from the above, that the Supreme Court considered the Court of Claims to be an
Article I court, and there is not a hint of a problem with it hearing takings cases against the
federal government. In these cases, we see again the foundation of the court being the waiver of
sovereign immunity. See Bakelite, 279 U.S. at 452; Williams, 289 U.S. at 562–64.
In 1953, Congress enacted a law that declared the Court of Claims and the Court of
Customs and Patent Appeals to be Article III courts. Act of July 28, 1953, ch. 253, § 1, 67 Stat.
226. Glidden arose, not because of a challenge to this declaration, but because one Court of
Claims judge and one judge of the Court of Customs and Patent Appeals had sat by designation
in an Article III court before the 1953 declaration. Glidden v. Zdanok, 370 U.S. 530, 531–33.
Each of the judges, unlike the Court of Federal Claims today, were protected in their tenure and
compensation like Article III judges, from the time of the court’s inception. Id. at 533 & n.5; See
Act of February 24, 1855, 10 Stat. 612 (1855); Act of June 25, 1948, Pub. L. 80-773, ch. 646, 62
Stat. 898 (1948). The Glidden Court found that this protection depended on the constitutional
status of the courts to which they were appointed, 370 U.S. at 540–41; therefore, this protection
was an indication that the Court of Claims was an Article III court. In holding that the Court of
Claims was, since the congressional declaration and seemingly from its inception (or at least
when it got final judgment authority) an Article III court,4 the Glidden court swept aside the
discussion in Bakelite, the holding in Williams and the fact that the court continued to hear
congressional reference cases, thereby rendering advisory opinions.
Justice Clark’s dissent in Glidden accused the majority of overruling Bakelite and
Williams,5 but these cases seem to live on at least in the cogency of some of their analyses if not
in their results. See e.g., Oil States Energy Servs., LLC v. Greene’s Energy Group, _____ U.S.
_____, 138 S.Ct. 1365 (2018); Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989); Northern
Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982). For example, in a very
recent case dealing with the Patent Trial and Appeal Board’s (an Article I tribunal) power to
cancel an existing patent, Oil States, the Court cited Bakelite and Williams approvingly. _____
U.S. _____, 138 S.Ct. 1365, 1373–74, 1378 (2018). Indeed, recourse was had to Bakelite for an
understanding of the public/private right distinction. See id. at 1378. Oil States held that the
Board could hear reconsiderations of the Patent and Trademark Office’s patent grants and that it
could cancel existing patents. Id. at 1377–79. Neither party in the present litigation considers
this holding to be particularly helpful deciding the question presented here. See Pls.’ Suppl.
4
“Since the Court of Claims and the Court of Customs and Patent Appeals are courts
created under Article III, their judges—including retired judges—are and have been
constitutionally protected in tenure and compensation.” Id. at 584 (emphasis added).
5
“I cannot agree to the unnecessary overruling of Ex parte Bakelite Corp., 279 U.S. 438,
49 S.Ct. 411, 73 L.Ed. 789 (1929), and Williams v. United States, 289 U.S. 553, 53 S.Ct. 751, 77
L.Ed. 1372 (1933). Both were unanimous opinions by most distinguished Courts, headed in the
Bakelite case by Chief Justice Taft and in Williams by Chief Justice Hughes.” Id. at 585 (Clark,
J., dissenting).
17
Mem. at 1, 3–4; Def.’s Resp. at 23–24; Pls.’ Reply at 18. Nevertheless, this Court points out a
few interesting points in the opinion: (1) the invocation of the public/private right distinction, (2)
the use of Bakelite and Williams, and (3) the examination of English law at the time of the
Framers. Oil States, _____ U.S. _____, 138 S.Ct. at 1373–74, 1376–78. Regarding (3), this
Court notes that the Supreme Court found that challenging patents was a matter for the courts
and for the government. Id. at 1377–78.
Two recent Circuit Court cases, however, deal squarely with the authority of the Court of
Federal Claims to hear and decide takings cases against the federal government. Brott v. United
States, 858 F.3d 425 (6th Cir. 2017), cert denied, _____ U.S. _____, 138 S.Ct. 1324 (2018),
involved the taking of land, and Sammons v. United States, 860 F.3d 296 (5th Cir. 2017), cert
denied, _____ U.S. _____, 138 S.Ct. 1325 (2018), involved a regulatory taking of shares. In
both cases the court held that the Court of Federal Claims had constitutional power to decide
these issues. Brott, 858 F.3d at 437; Sammons, 860 F.3d at 300.
In Brott, the 6th Circuit found that, although the Fifth Amendment provided the remedy
of just compensation, sovereign immunity allowed the United States to decide the forum in
which the remedy might be sought. 858 F.3d at 432–36. It found that the Fifth Amendment is
self-executing only insofar as no act of Congress is necessary for the federal government to be
liable for compensation for a taking. Id. at 432–33. And it found that the doctrine of sovereign
immunity applies to constitutional rights. Id. at 432 (quoting Webster v. Doe, 486 U.S. 592, 613
(1988) (Scalia, J., dissenting)). Finally, the Court found that plaintiff’s claim was a matter of
public right:
The landowners’ compensation claims are public-right claims. These are
claims made by private individuals against the government in connection
with the performance of a historical and constitutional function of the
legislative branch, namely, the control and payment of money from the
treasury. Indeed, the Court of Claims, the predecessor to the Court of Federal
Claims, derived its power from the ‘‘Congressional power ‘to pay the debts
of the United States’, which it is free to exercise through judicial as well as
non-judicial agencies.’’ Sherwood, 312 U.S. at 587, 61 S.Ct. 767 (quoting
U.S. Const. art. 1, § 8, cl. 1); see Bakelite, 279 U.S. at 452, 49 S.Ct. 411.
Therefore, Congress may delegate the landowners’ just-compensation claims
to a legislative court—the Court of Federal Claims—for resolution.
Brott, 858 F.3d at 435 (internal quotation omitted).
In arriving at its decision in Brott, the 6th Circuit discussed Monongahela Navigation Co.
v. United States, 148 U.S. 312 (1893). 858 F.3d at 435–36. Since Plaintiffs in this case place
great store by this decision, this Court would like to comment on it. See Pls.’ Mot. at 8–10; Pls.’
Reply at 6–8, 19. This case involved condemnation of a lock and dam on the Monongahela
River. Monongahela, 148 U.S. at 324. By means of private legislation, Congress provided that a
component of the value of the lock and dam, namely, the franchise to collect tolls, should not be
included in the compensation paid the owner. See Act of August 11, 1888, 25 Stat. 411. The
federal court that heard the condemnation case valued the property taken without taking into
18
consideration the toll franchise, as Congress had ordered. Monongahela, 148 U.S. at 314(Statement of Brewer, J.). The owner argued that it had not received “just” compensation. The
Supreme Court agreed with the owner and ordered that the value of the franchise be included in
the determination of the owner’s compensation. Id. at 344–45. Brott found Monongahela to be
inapposite because that case involved only an Article III court, and it went on to say that judicial
review would satisfy the requirement of judicial determination. Brott, 858 F.3d. at 435–36.
Monongahela did not mention—let alone discuss—the extent of the judicial power of the
United States under Article III versus Congress’s ability to create courts under Article I.
Monongahela merely held that just compensation was a judicial question that cannot be
determined by legislation: “By this legislation congress seems to have assumed the right to
determine what shall be the measure of compensation. But this is a judicial, and not a legislative,
question.” 148 U.S. at 327. In other words, Congress cannot by legislation limit the
compensation justly due the owner. This is a far cry from Plaintiffs’ interpretation of this
passage, namely, that the question of just compensation cannot be confided to an Article I court
that Congress has established with final judgment power. See Pls.’ Mot. at 6–8; Pls.’ Reply at 6–
8.
In Sammons, one panel of the 5th Circuit felt bound by another panel of the circuit, which
decided, in Ware v. United States, 626 F.2d 1278, 1279–80 (5th Cir. 1980), that sovereign
immunity prevented it from entertaining a pendent claim for a taking over $10,000. 860 F.3d
296, 300. Sammons, however, did make a few pertinent observations: (1) the self-executing
character of the Fifth Amendment takings clause did not mean that the United States had
automatically waived sovereign immunity, id., and (2) a claim against the United States for a
taking under the Fifth Amendment was a matter of a public right that Congress could confide to
a non-Article III court. Id.Plaintiffs, of course, believe that these cases were wrongly decided. See Pls.’ Mot. at 12–
13. However, their reasons for so concluding are singularly weak: (1) the Brott court failed to
take into consideration the arguments of the amici, and (2) the Sammons court relied on Ware,
which was decided when the Court of Claims was an Article III court. Pls.’ Mot. at 12–13. The
court’s reasoning in Ware, however, had nothing to do with the status of the Court of Claims.
626 F.2d 1278, 1285–87. The Ware decision was based on an analysis of the doctrine of
sovereign immunity. It found that the United States must waive sovereign immunity for a claim
to be heard—either in an Article III court or a non-Article III court. Id. at 1286. The holding in
Ware was simply that the United States had only waived sovereign immunity for U.S. district
courts for takings of $10,000 or less, that waivers of sovereign immunity must be strictly
construed, that Congress had waived sovereign immunity to vest the Court of Claims with the
power to decide claims of takings over $10,000, and that the doctrine of pendent jurisdiction
cannot overcome sovereign immunity. Id. at 1286–87. This logic appears unassailable.
Finally, although the Federal Circuit has not squarely dealt with the issue of the
constitutionality of the Court of Federal Claims jurisdiction over takings claims against the
federal government, this Court looks to MCM Portfolio LLC v. Hewlitt-Packard Co., 812 F.3d
1284 (Fed. Cir. 2015), to see if the Federal Circuit has provided some guidance on the Article
I/Article III court distinction. This case dealt with whether a Patent Trial and Appeals Board’s
19
decision to revoke a patent in an inter partes review provided for by statute violated Article III
and the Seventh Amendment. The court held that it did not. Id. at 1292–93.
In arriving at its decision, the court recurred to the now-familiar public/private
distinction. See id. at 1289–93. As this case involved a government agency (the Patent and
Trademark Office (“PTO”)) the court paid particular attention to those Supreme Court cases that
found a matter of public right even in a dispute between private individuals: “The public rights
exception was first applied to disputes between the government and private parties, as in
Murray’s Lessee. More recently, the Court has extended the doctrine to disputes between private
parties concerning public rights.” Id. at 1289. The court found inter partes review to be
“indistinguishable” from cases such as Thomas v. Union Carbide and “wholly distinguishable”
from the state law claims decided by bankruptcy courts in Stern. Id. at 1290. As Congress
created patent rights and delegated patent grants to the PTO, the determination of these rights
was a public right because it was a right “integrally related to particular federal government
action.” Id. (quoting Stern v. Marshall, 564 U.S. 462, 490–91 (2011)). As to the significance of
the court’s reasoning in MCM to the issue of takings claims adjudicated by an Article I court, it
can at least be said that the Federal Circuit has not taken a crabbed view of public right.
To summarize this Court’s review of the Article I/Article III cases:
Bakelite and Williams retain their doctrinal force, even if their holdings have been
superseded. These cases unmistakably related the authority of the Court of Claims to sovereign
immunity. At the time of these decisions, the Court of Claims was considered to be an Article I
or legislative court, and it heard takings cases. Importantly, the Court in Bakelite linked the
general jurisdiction of the Court of Claims over money claims against the United States to
Congress’s power to pay the debts of the United States. 279 U.S. 438, 452. This link raises the
issue of separation of powers, as Williams points out. See 289 U.S. 553, 480–81. A holding that
a monetary claim against the United States must be tried in an Article III court would encroach
upon Congress’s power to pay the debts of the United States.
Given the fact that the Court of Claims was considered to be an Article I court until 1953,
the relevance of Glidden’s retroactive holding that it was an Article III court all along is hard to
assess. See Glidden v. Zdanok, 370 U.S. 530, 584 (1962). Its ruling certainly does not entirely
vitiate the jurisprudence of earlier cases that held or assumed that the Court of Claims was an
Article I court, as we have seen from the continued use of Bakelite and Williams by the Supreme
Court and by the Circuit Courts. See e.g., Oil States Energy Servs., LLC v. Greene’s Energy
Group, _____ U.S. _____, 138 S.Ct. 1365 (2018); Stern, 564 U.S. 462 (2011); Samuels, Kramer
& Co. v. Comm’r of Internal Revenue, 930 F.2d 975 (2d Cir. 1991); Continental Equities, Inc. v.
Comm’r of Internal Revenue, 551 F.2d 74 (5th Cir. 1977). As an aside, this Court finds the
holding in Glidden that the Court of Claims was an Article III court even before Congress’s
declaration to be puzzling, given its practice of giving advisory opinions, not only before 1953,
but seemingly, after! See e.g., Banfi Prods. Corp. v. United States, 41 Fed. Cl. 581 (Fed. Cl.
1998); Shane v. United States, 3 Ct. Cl. 294 (Cl. Ct. 1983); Mackie v. United States, 172 Ct. Cl.
393 (Ct. Cl. 1965); Dickson v. United States, 159 Ct. Cl. 185 (Ct. Cl. 1962); Gordon v. United
20
States, 148 Ct. Cl. 31 (Ct. Cl. 1960); Love v. United States, 48 Ct. Cl. 74 (Ct. Cl. 1913).6 In any
event, the Court of Claims is no more. See Federal Courts Administration Act of 1992, Pub. L.
102-572, Title IX, § 902, 106 Stat. 4506 (1992).
Of the other cases discussed, most notable are the circuit court cases that upheld the
constitutionality of the Court of Federal Claims jurisdiction over takings cases. Brott is the most
important as it discussed the self-executing nature of the takings clause, the public/private rights
distinction, and sovereign immunity, especially as it applies even to rights created by the
Constitution. 858 F.3d 425, 432–36 (6th Cir. 2017).
F. Jury Trial Requirement
The Seventh Amendment provides (in relevant part): “In Suits at common law, where the
value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . .
.” U.S. Const. amend. VII.
Plaintiffs’ argument that the Seventh Amendment requires that takings claims against the
federal government be tried to a jury depends on classifying such claims as suits at common law.
See Pls.’ Mot. at 10–11. Prominent in Plaintiffs’ brief on this point is the City of Monterey case.
See Pls.’ Mot. at 10–11; City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687(1999). This is not surprising, given the fact that the Court held that a jury trial was required in a
section 1983 action involving inverse condemnation. City of Monterey, 526 U.S. at 720–21. The
inverse condemnation part is relevant to the case before this Court, but the section 1983 part is
not. The Court inquired into the common law circa 1791 not to answer the question whether
inverse condemnation was a suit at common law, but what suit at common law was analogous to
a section 1983 action. See id. at 715–18. In fact, it is important to note (again) in this context
that the Court expressly found that takings cases against the United States were irrelevant to its
inquiry: “Most of our regulatory takings decisions have reviewed suits against the United
States…. It is settled law that the Seventh Amendment does not apply in these contexts.” Id. at
719.
In addition to Monterey, Plaintiffs rely primarily on Monongahela. 148 U.S. 312 (1893);
Pls.’ Reply at 6–8, 19. This case, it may be recalled, held that the determination of just
compensation was a “judicial question.” Monongahela, 148 U.S. at 327. Again, this case did
not involve an Article I court deciding a takings claim against the United States. It was a
condemnation case brought before a federal circuit court. Ordinarily, these cases would entail a
jury. Therefore, it is not surprising that the Court would say that determination of just
compensation is a question for the jury.7
6
It is interesting, however, that the implication of the Court’s holding is that judges
confirmed and appointed while the Court of Claims was considered to be Article I were deemed
to be Article III judges. See Glidden, 370 U.S. at 584 (“Since the Court of Claims and the Court
of Customs and Patent Appeals are courts created under Article III, their judges—including
retired judges—are and have been constitutionally protected in tenure and compensation.”).
7
Curiously, the plaintiff in the case waived its right to a jury. See id. at 314.
21
Conspicuously absent from Plaintiffs’ briefing is reference to McElrath, discussed above.
102 U.S. 426 (1880). This Court has already used this case as authority to prove that a takings
case against the federal government is not your garden-variety common law cause of action. See
supra. Here, this Court wishes to emphasize that part of the opinion that concerns the
requirement for a jury trial: “Suits against the government in the Court of Claims . . . are not
controlled by the Seventh Amendment. They are not suits at common law within its true
meaning.” McElrath, 102 U.S. at 440.
Finally, having in mind Monterey’s analogy of a section 1983 case to a tort at common
law, this Court notes that Federal Tort Claims Act cases, which are cases against the United
States and which are heard in federal district courts, are decided without a jury. See 28 U.S.C. §
2402; 28 U.S.C. § 1346(b); Lehman v. Nakshian, 453 U.S. 156, 161 & n.8 (1981).
III. Conclusion
From the above, this Court concludes that it is not a violation of Article III for Congress
to confide takings claims against the federal government in excess of $10,000 to the exclusive
jurisdiction of the Court of Federal Claims, a court established under Article I. In addition, this
Court concludes that the Seventh Amendment does not require a jury trial for such cases.
Article III does not require Congress to establish any federal courts other than the
Supreme Court. Consequently, Congress may grant the judicial power of the United States to
them as it wills. See United States v. Union Pac. R.R. Co., 98 U.S. 569, 602 (1878) (“The
discretion . . . of Congress as to the number, the character, the territorial limits of the courts
among which it shall distribute [the] judicial power, is unrestricted except as to the Supreme
Court.”). Plaintiffs’ interpretation of the self-executing nature of the Fifth Amendment takings
clause would require Congress to establish an Article III court to hear cases brought pursuant to
it. This result is clearly contrary to Congress’s plenary power over inferior courts in Article III.
Patchak v. Zinke, _____ U.S. _____, 138 S.Ct. 897, 906 (2018) (“So long as Congress does not
violate other constitutional provisions, its ‘control over the jurisdiction of federal courts’ is
‘plenary.’”); See also Bowles v. Russell, 551 U.S. 205, 212–13 (2007) (“Because Congress
decides whether federal courts can hear cases at all, it can also determine when, and under what
conditions, federal courts can hear them.”). The proper interpretation of the self-executing
nature of the takings clause is that it is not necessary for Congress to pass legislation holding the
United States liable to pay just compensation for a taking. This interpretation leaves intact the
doctrine of sovereign immunity. Therefore, no one may sue the United States for a taking unless
Congress has provided a forum to do so. See Williamson County Regional Planning Comm’n v.
Hamilton Bank of Johnson City, 473 U.S. 172 (1985) (“taking claims against the Federal
Government are premature until the property owner has availed itself of the process provided by
the Tucker Act, 28 U.S.C. § 1491.”).
Congress may create a court to hear takings cases either under Article I or Article III.
That Congress may establish an Article I court to do so is based on the public/private right
distinction. Cases involving public right may be heard in Article I courts. See Crowell v.
Benson, 285 U.S. 22, 50–51 (1932). Although this distinction has not been clearly defined by
22
the Supreme Court, a takings claim against the federal government is a matter of public right.
Indeed, the Supreme Court has held that disputes between private parties might be matters of
public right under certain circumstances. See e.g., Thomas v. Union Carbide Agr. Prods. Co.,
473 U.S. 568 (1985); Block v. Hirsh, 256 U.S. 135 (1921); Murray’s Lessee v. Hoboken Land &
Improvement Co., 59 U.S. 272, 18 How. 272 (1856). Congress’s control over compensating
takings claims derives from its constitutional power to pay the debts of the United States. United
States v. Sherwood, 312 U.S. 584, 587 (1941); Ex parte Bakelite, 279 U.S. 438, 452 (1929).
Takings cases against the federal government are not common law causes of action.
Therefore, trial by jury is not required by the Seventh Amendment. McElrath v. United States,
102 U.S. 426, 440 (1880).
Throughout most of the history of the United States under the current constitution,
takings claims against the federal government were not heard in Article III courts. Prior to 1855,
just compensation was provided only through private bills. United States v. Bormes, 568 U.S. 6,
11 (2012); United States v. Mitchell, 463 U.S. 206, 212 (1983). After the Court of Claims was
established in 1855, payment according to its findings was still a matter of congressional
largesse. The Court of Claims did not achieve final judgment authority effectively until 1866.
See Act of March 17, 1866, ch. 19, sec. 1, 14 Stat. 9. The Court of Claims and its successor, the
Court of Federal Claims, has had clear statutory authority over takings claims since the Tucker
Act in 1887. Compare Act of February 24, 1855, ch. 122, 10 Stat. 612 (“[The Court of Claims]
shall hear and determine all claims founded upon any law of Congress . . . .”), with Act of March
3, 1887, ch. 359, 24 Stat. 505 (“the Court of Claims shall have jurisdiction to hear and determine
. . . All claims founded upon the Constitution of the United States or any law of Congress . . . .”)
(emphasis added). Until the Glidden case was decided, it was generally thought that the Court of
Claims was an Article I court until 1953, when Congress declared it to be an Article III court.
See Act of July 28, 1953, 67 Stat. 226; Glidden Co. v. Zdanok, 370 U.S. 530 (1962); Williams v.
United States, 289 U.S. 553 (1933); Bakelite, 279 U.S. 438 (1929). The Court of Claims was
established as an Article I court in 1982 and retained jurisdiction over claims against the federal
government “founded upon the Constitution.” See Federal Courts Improvement Act of 1982,
Pub. L. No. 97-164, 96 Stat. 25 (“[The United States Claims Court] is declared to be a court
established under article I of the Constitution of the United States”); Act of March 3, 1887, ch.
359, 24 Stat. 505 (granting jurisdiction over “claims founded upon the Constitution of the United
States”).
The judges of the Court of Federal Claims are appointed by the President of the United
States after confirmation by the Senate. 28 U.S.C. § 171. Although they have 15-year terms, 28
U.S.C. § 172, once the term ends, failing reappointment, they continue to serve as judges until
death, disabled or voluntarily retired. 28 U.S.C. § 178. Effectively, this a life term. Their
compensation is pegged to that of the district court judges. 28 U.S.C. § 172(b). They may be
removed by the Federal Circuit, 28 U.S.C. § 176, but this provision may be unconstitutional.
Thus, the judges of the Court of Federal Claims are as independent as Article I judges could be.
In my 20 years on this Court—seven of them as Chief Judge—I have never heard that any judge
was instructed by a government official to decide a case in a certain way.
23
In sum, Plaintiffs’ argument that the Court of Federal Claims lacks subject matter
jurisdiction to hear takings cases is unavailing. Accordingly, Plaintiffs’ Motion to Transfer is
hereby DENIED. In addition, Plaintiffs’ request for oral arguments is DENIED as moot.
Finally, Plaintiffs’ requested a stay of proceedings and certification to appeal the issues in
the event the Court denies their Motion to Transfer. Although transfer is inappropriate in this
case, Plaintiffs’ Motion raises a controlling question of law to which there are substantial
grounds for difference of opinion, and an immediate appeal from this order may materially
advance the ultimate termination of the litigation.8 See 28 U.S.C. § 1292(d)(2). Therefore, the
Court hereby STAYS all proceedings until the United States Court of Appeals for the Federal
Circuit issues a decision on the following question:
Whether it is a violation of Article III of the U.S. Constitution for Congress
to provide that the U.S. Court of Federal Claims has jurisdiction to hear
claims for just compensation pursuant to the Fifth Amendment.
The parties shall file a Joint Status Report within 30 days from the date of a final decision from
the Federal Circuit.
IT IS SO ORDERED.
s/ Edward J. Damich
EDWARD J. DAMICH
Senior Judge
8
The Federal Circuit recently heard a case involving the jurisdictional issue raised here,
but did not address the merits of the challenge due to the movant’s status as an intervener. See
Fairholme Funds, Inc. v. United States, 132 Fed. Cl. 49 (Fed. Cl. 2017) (Sweeney, C.J.), aff’d,
681 Fed. Appx. 945 (Fed. Cir. 2017).
24