Gradual Takings Claim Not Barred by Statute of Limitations

Banks v. U.S., 314 F.3d 1304 (Fed. Cir. 2003).

Jason Savarese, 2L

The Federal Circuit recently addressed the time limits for filing a gradual takings lawsuit, in which a landowner argues that his property has been taken by government action over the course of several years.

Background
A group of landowners with acreage running along four miles of Lake Michigan sued the U.S. claiming marina jetties installed by the Army Corps of Engineers (the Corps) were causing a gradual, yet steady erosion of their properties. Although the shorelines of the Great Lakes naturally erode, the erosion had been accelerated over the years by the construction of the harbor jetties, built by the Corps in Lake Michigan’s St. Joseph Harbor around 1903. The jetties were upgraded using sandtight steel sheet piling from 1950 through 1989. These improvements doubled the annual, natural erosion rate of Lake Michigan’s littoral land abutting the jetties from one to two feet per year.

Because of the increased erosion surrounding St. Joseph Harbor, the Corps developed a sand mitigation plan pursuant to the Rivers and Harbors Act.1 For over fifteen years the Corps attempted to mitigate the erosion by nourishing and replenishing the beaches with fine sand. In 1986, the Corps switched to coarser materials with a longer retention time on the beach.

The Lawsuit
The landowners sued the United States in July of 1999, charging the Corps with restricting the natural flow of sand and river sediment to their properties, causing a slow, yet unceasing taking of their littoral land without just compensation. The owners claimed these jetties and some dredging projects had permanently taken away sand needed to replenish the naturally eroding shorelines along Lake Michigan.

The Corps moved to dismiss for lack of jurisdiction, arguing that the takings occurred more than six years before the Plaintiffs’ filed suit, and thus the claim was barred by the six-year statute of limitations. Claims against the government must be filed “within six years after such a claim first accrues.”2 The landowners argued that their gradual takings claims were unclear until the end of the 1990s, when, through the compilation of three Corps technical reports, they learned that the visible erosion of their littoral land was both permanent and irreversible. The Court of Federal Claims determined that the statute of limitations began to run in 1989, the year the Corps completed the steel sheet piling upgrades. Because the landowners waited to file their claims until July 9, 1999, ten years later, the court ruled their claims time-barred and dismissed the lawsuit. The landowners appealed.

Stabilization Doctrine
In this situation, the erosion of the landowners’ properties was not sudden nor obvious. Rather, the taking occurred over the course of a century. A gradual physical takings claim accrues when the condition stabilizes, or when the result of the government action is demonstrated to be a permanent taking. It is important to note that a claim does not accrue simply because the process causing the gradual taking ceases nor does it accrue when the full extent of damage can be determined. The law requires the condition to stabilize so that a more accurate damage assessment can be made. This also ensures that the landowner receives notice of the permanent nature of the condition. Before a claim can accrue, the situation must stabilize to the point that the “consequences of [the government action] have so manifested themselves that a final account may be struck.”3 Basically, under the stabilization doctrine, “a claim stabilizes when the ‘permanent nature’ of the taking is evident.”4

The Corps’ Technical Reports
In the present case, the main question was whether the landowners were justifiably uncertain about the impacts of the Corps’ mitigation efforts on the permanence of the damage to their land no earlier than 1999. The Court held that the vast uncertainty caused by the Corps’ twenty-three year period of mitigation, which appeared successful, stayed the accrual of the takings claims until the release of the Corps’ three technical reports revealed the permanent and irreversible nature of the erosion. Technical reports on the St. Joseph mitigation endeavor were issued by the Corps in 1996, 1997, and 1999. The June 1996 report expressed uncertainty about the impact of the beach nourishment program, but stated that mitigation might provide partial protection against erosion. The 1997 Technical Report described the erosion as irreversible, but also discussed a favorable change in the amount of sand eroding in the area. The court held that these two reports would have confused landowners as to whether they were suffering a permanent and irreversible taking or if the mitigation measures were succeeding. It was not until the January 1999 Report that the Corps stressed the irreversible and possibly permanent nature of the erosion. The permanent nature of the taking could not have been known by the landowners until the Reports were issued. The court ruled that accrual of the landowners’ claims began when the 1996, 1997, and 1999 reports were issued.

Conclusion
The landowners are not barred by the statute of limitations since their claims were filed within six years of the time the claim accrued. The case was remanded for further proceedings before the Court of Federal Claims.

ENDNOTES
1. River and Harbor Act of 1968, Pub. L. No. 90-483, 82 Stat. 731, 735 (1970). Section 111 of the RHA gives the Secretary of the Army the power “to investigate, study, and construct projects for the prevention or mitigation of shore damages attributable to Federal navigation works.”
2. 28 U.S.C. § 2501 (2003).
3. United States v. Dickinson, 331 U.S. 745, 749 (1947).
4. Banks v. United States, 314 F.3d 1304, 1309 (Fed. Cir. 2003).

University of Mississippi