Darby Development Company, Inc. v. United States
Citation112 F.4th 1017
Date Filed2024-08-07
Docket22-1929
Cited12 times
StatusPublished
Full Opinion (html_with_citations)
Case: 22-1929 Document: 80 Page: 1 Filed: 08/07/2024
United States Court of Appeals
for the Federal Circuit
______________________
DARBY DEVELOPMENT COMPANY, INC., ET AL.,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2022-1929
______________________
Appeal from the United States Court of Federal Claims
in No. 1:21-cv-01621-AOB, Judge Armando O. Bonilla.
______________________
Decided: August 7, 2024
______________________
CREIGHTON REID MAGID, Dorsey & Whitney LLP,
Washington, DC, argued for plaintiffs-appellants. Also
represented by SHAWN LARSEN-BRIGHT, Seattle, WA.
NATHANAEL YALE, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-appellee. Also represented
by BRIAN M. BOYNTON, PATRICIA M. MCCARTHY, LOREN
MISHA PREHEIM.
LELA AMES, Womble Bond Dickinson (US) LLP, Wash-
ington, DC, for amicus curiae National Association of Home
Builders. Also represented by JASMINE CHALASHTORI.
Case: 22-1929 Document: 80 Page: 2 Filed: 08/07/2024
2 DARBY DEVELOPMENT COMPANY, INC. v. US
BRETT SHUMATE, Jones Day, Washington, DC, for ami-
cus curiae National Association of Realtors. Also repre-
sented by BRINTON LUCAS.
GREGORY DOLIN, New Civil Liberties Alliance, Wash-
ington, DC, for amicus curiae New Civil Liberties Alliance.
______________________
Before DYK, PROST, and STOLL, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST.
Dissenting opinion filed by Circuit Judge DYK.
PROST, Circuit Judge.
In September 2020, the Centers for Disease Control
and Prevention (âCDCâ) responded to the COVID-19 pan-
demic by issuing a nationwide order temporarily halting
residential evictions. This eviction moratorium (or itera-
tions of it) remained generally effective for nearly a year.
Owners of residential rental properties sued the gov-
ernment in the U.S. Court of Federal Claims, claiming that
the CDCâs order constituted a physical taking of their prop-
erty for public use, thus requiring just compensation under
the Fifth Amendmentâs Takings Clause. The Court of Fed-
eral Claims dismissed their complaint for failing to state a
claim upon which relief could be granted. Because we con-
clude that the complaint stated a claim for a physical tak-
ing, we reverse and remand for further proceedings.
BACKGROUND
I
The COVID-19 pandemic prompted several legislative
and executive responses.
On March 27, 2020, Congress enacted the CARES Act,
which instituted a 120-day moratorium on commencing
Case: 22-1929 Document: 80 Page: 3 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 3
eviction proceedings for nonpayment of rent as to certain
properties that received federal assistance or had federally
backed loans. Pub. L. No. 116-136, sec. 4024(b),134 Stat. 281
, 493â94 (2020). That moratorium expired on July 24,
2020.
On August 8, 2020, the President issued Executive Or-
der 13945, titled âFighting the Spread of COVID-19 by
Providing Assistance to Renters and Homeowners.â
85 Fed. Reg. 49935(Aug. 8, 2020). It stated: â[T]he policy of the United States [is] to minimize, to the greatest extent possible, residential evictions and foreclosures during the ongoing COVID-19 national emergency.âId. at 49936
. It also directed the Secretary of Health and Human Services and the CDC Director to âconsider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession into any other State or possession.âId.
Less than a month later, on September 4, 2020, the
CDC issued an order titled âTemporary Halt in Residential
Evictions [t]o Prevent the Further Spread of COVID-19.â
85 Fed. Reg. 55292(Sept. 4, 2020) (âOrderâ). The CDC rep- resented that it was issuing the Order under the authority of section 361 of the Public Health Service Act (âPHSAâ) 1 (codified as amended at42 U.S.C. § 264
) as well as42 C.F.R. § 70.2
.Id.
at 55292â93, 55297. The Order pro-
vided that
a landlord, owner of a residential property, or other
person with a legal right to pursue eviction or pos-
sessory action shall not evict any covered person
from any residential property in any State or U.S.
territory in which there are documented cases of
1 Pub. L. No. 78-410, sec. 361,58 Stat. 682
, 703â04
(1944).
Case: 22-1929 Document: 80 Page: 4 Filed: 08/07/2024
4 DARBY DEVELOPMENT COMPANY, INC. v. US
COVID-19 that provides a level of public-health
protections below the requirements listed in this
Order.
Id. at 55296. The Order did not relieve tenants of their obligation to pay rent.Id. at 55294
. And the government
represents that the Order also did not prevent landlords
from commencing eviction proceedings for nonpayment of
rent. Appelleeâs Br. 7 & n.3 (citing J.A. 42). The Order did,
however, prevent any actual eviction for nonpayment of
rent from occurring. See 85 Fed. Reg. at 55293 (defining
âEvictâ and âEvictionâ), 55294 (preventing evictions for vi-
olations of contractual obligations concerning âtimely pay-
ment of rent or similar housing-related paymentâ). 2 The
Order was originally set to expire on December 31, 2020.
See id. at 55297.
On December 27, 2020âjust days before the Order was
set to expireâCongress extended it by a month, through
January 31, 2021. Consolidated Appropriations Act, 2021,
Pub. L. No. 116-260, div. N, sec. 502,134 Stat. 1182
, 2078â79. In the preceding section of that same Act, Con- gress also appropriated $25 billion in emergency rental as- sistance, including for payment of rent and rental arrears.Id.
sec. 501(a)(1), 501(c)(2), 134 Stat. at 2069â73. Such
2 The Order did not prevent evictions for certain rea-
sons unrelated to rent, such as engaging in criminal activ-
ity on the premises or threatening the health and safety of
other residents. Id. at 55294. The Order also prevented evictions only if the tenant was a â[c]overed person,â which, as defined, generally meant someone who supplied a sworn declaration attesting to economic hardship. Seeid. at 55293
. Neither side has suggested that this latter qual- ification should affect our analysis of the legal issues that we decide in this appeal. Therefore, and for simplicityâs sake, we will refer to the Order generally as having pre- vented evictions for nonpayment of rent. Case: 22-1929 Document: 80 Page: 5 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 5 payments were ultimately intended for lessors. Seeid.
sec. 501(c)(2)(C), 134 Stat. at 2073. Less than three months later, Congress appropriated an additional $21.55 billion in emergency rental assistance. American Rescue Plan Act of 2021,Pub. L. No. 117-2, sec. 3201
,135 Stat. 4
, 54â58.
As the congressional extension of the Order lapsed, the
CDC itself (now under a different administration) extended
it. 86 Fed. Reg. 8020(Feb. 3, 2021) (extending through March 31, 2021). It did so again a few more times, ulti- mately through October 3, 2021.86 Fed. Reg. 16731
(Mar. 31, 2021) (extending through June 30, 2021);86 Fed. Reg. 34010
(June 28, 2021) (extending through July 31, 2021);86 Fed. Reg. 43244
(Aug. 6, 2021) (extending
through October 3, 2021). 3
II
Rental-property owners challenged the Order almost
as soon as it issued. One litigationâAlabama Association
of Realtorsâculminated in a Supreme Court opinion rele-
vant here.
In Alabama Association of Realtors, the plaintiffs con-
tended that the Order exceeded the CDCâs statutory au-
thority under the PHSA, thus violating the Administrative
Procedure Act. Over the governmentâs opposition, the dis-
trict court agreed with the plaintiffs and therefore vacated
the Order. But, instead of letting the vacatur take effect
immediately, the district court granted the governmentâs
request to stay that result pending appeal.
In August 2021, the Supreme Court vacated the dis-
trict courtâs stay, thus allowing the Orderâs vacatur to take
3 Although these extensions included some modifica-
tions to the originally issued Order, they are immaterial to
this opinionâs discussion.
Case: 22-1929 Document: 80 Page: 6 Filed: 08/07/2024
6 DARBY DEVELOPMENT COMPANY, INC. v. US
effect. Ala. Assân of Realtors v. Depât of Health & Hum.
Servs., 594 U.S. 758(2021). The merits issue of whether the CDC exceeded its PHSA statutory authority was not directly before the Courtâonly the stay was. But, because a stayâs appropriateness generally depends on whether the stay-seeking party has made a strong showing that it will likely succeed on the merits, seeid.
at 761â63 (citing Nken v. Holder,556 U.S. 418, 434
(2009)), the Court spoke to the merits issue in that context. And, in the Courtâs view, it was the plaintiffsânot the stay-seeking governmentâwho had a substantial likelihood of success on the merits. Id. at 759 (deeming the plaintiffs âvirtually certain to succeedâ on the statutory-authority issue); id. at 762â65. Further, when evaluating the equities of a stay, the Court observed that âpreventing [landlords] from evicting tenants who breach their leases intrudes on one of the most fundamen- tal elements of property ownershipâthe right to exclude.â Id. at 765 (citing Loretto v. Teleprompter Manhattan CATV Corp.,458 U.S. 419, 435
(1982)).
With the stay no longer in place, the district courtâs va-
catur of the Order took effect, and the government volun-
tarily dismissed its appeal.
III
Appellants filed this suit against the government in the
Court of Federal Claims under the Tucker Act, 28 U.S.C.
§ 1491. In their operative complaint, they claimed that the
Order, by preventing them from evicting non-rent-paying
tenants, constituted a physical taking of their rental prop-
erties for public use, thus requiring just compensation un-
der the Fifth Amendmentâs Takings Clause. See J.A. 37
Âś 31, 38 œœ 36â37 (describing the Order as having deprived
Appellants of their âfundamental right to excludeâ and hav-
ing âeffected a government-authorized physical invasion,
Case: 22-1929 Document: 80 Page: 7 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 7
occupation, or appropriation of [their] private property, for
the government itself or for third partiesâ (cleaned up)). 4
The government moved under Court of Federal Claims
Rule 12(b)(6) to dismiss Appellantsâ complaint for failing to
state a claim upon which relief could be granted. The gov-
ernment made two primary arguments relevant here.
First, it argued that a takings claim cannot be premised on
government action that was unauthorized; and, in its view,
the Supreme Court in Alabama Association of Realtors es-
sentially confirmed that the Order was unauthorized. Sec-
ond, it argued that, under Yee v. City of Escondido, 503 U.S.
519 (1992), the Order could not constitute a physical taking
because it merely regulated the landlord-tenant relation-
ship.
The Court of Federal Claims granted the governmentâs
motion and dismissed the complaint. Darby Dev. Co. v.
United States, 160 Fed. Cl. 45(2022). It agreed with the governmentâs first argument and therefore dismissed with- out considering the second. Seeid.
at 51â56. Notably, it rejected Appellantsâ arguments that Congress, by extend- ing the Order for a month, had âratifiedâ the CDCâs asser- tion of legal authority for the Order (or that Congress had otherwise âacquiesce[d]â in that assertion). Seeid.
at 54â55, 55 n.12. In addition to analyzing and rejecting
these arguments on their merits, the court reasoned that
4 Appellants alternatively claimed that the Order
constituted an illegal exaction. The Court of Federal
Claims dismissed that claim, and Appellants appealed that
dismissal. At oral argument, however, Appellants repre-
sented that if we reversed the dismissal of the takings
claim (which we do), we need not reach the dismissal of the
illegal-exaction claim. Oral Arg. at 39:34â40:01,
https://oralarguments.cafc.uscourts.gov/default.aspx?fl=
22-1929_09072023.mp3. We therefore do not reach the dis-
missal of the illegal-exaction claim.
Case: 22-1929 Document: 80 Page: 8 Filed: 08/07/2024
8 DARBY DEVELOPMENT COMPANY, INC. v. US
accepting them would be inconsistent with the Supreme
Courtâs ruling in Alabama Association of Realtors. See id.
at 54â55.
Appellants timely appealed. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review de novo the Court of Federal Claimsâ
Rule 12(b)(6) dismissal of a complaint for failure to state a
claim. E.g., Kellogg Brown & Root Servs., Inc. v. United
States, 728 F.3d 1348, 1365(Fed. Cir. 2013). In doing so, we accept well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiffâs favor. Seeid.
The Fifth Amendmentâs Takings Clause provides:
â[N]or shall private property be taken for public use, with-
out just compensation.â U.S. CONST. amend. V. This con-
stitutional guarantee âwas 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.â Armstrong v. United States, 364 U.S.
40, 49 (1960) (cleaned up).
Appellantsâ position is straightforward. They claim
that the Order, by imposing an eviction moratorium pre-
venting them from evicting non-rent-paying tenants, con-
stituted a physical taking of their rental properties for
public use, thus requiring just compensation under the
Fifth Amendmentâs Takings Clause.
The government responds with the same two argu-
ments described above: that the Order cannot support a
takings claim because it was unauthorized; and that, under
Yee, it could not constitute a physical taking because it
merely regulated the landlord-tenant relationship. We ad-
dress each issue in turn.
Case: 22-1929 Document: 80 Page: 9 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 9
I
A
âA compensable taking arises only if the government
action in question is authorized.â Del-Rio Drilling Pro-
grams Inc. v. United States, 146 F.3d 1358, 1362(Fed. Cir. 1998). Two cases in particularâDel-Rio (from this court) and Ramirez (from the D.C. Circuit)âexplain what it means for a government agentâs action to be âauthorizedâ in this context. See Del-Rio, 146 F.3d at 1362â63; Ramirez de Arellano v. Weinberger,724 F.2d 143
, 151â53 (D.C. Cir.
1983) (Scalia, J.). 5
In the takings context, âauthorizedâ is not synonymous
with âlawfulâ or âdone with legal authority.â That is, an
action can be authorized for takings-claim purposes even if
it is unlawful or done without legal authority. See, e.g.,
Ramirez, 724 F.2d at 151(âIt is well established that the mere fact that a government officer has acted illegally does not mean he has exceeded his authority for Tucker Act pur- poses, even though he is not âauthorizedâ to break the law.â); Del-Rio,146 F.3d at 1362
(discussing ââauthorizedâ
as that term is used in the law of takings,â and noting that
â[m]erely because a government agentâs conduct is unlaw-
ful does not mean that it is unauthorized; a government
official may act within his authority even if his conduct is
5 Although the en banc D.C. Circuit vacated the
panelâs opinion and judgment in Ramirez, we have ob-
served that âthe en banc court did not disagree with the
panelâs analysis of the authorization issue.â Del-Rio,
146 F.3d at 1363(citing Ramirez de Arellano v. Weinberger,745 F.2d 1500
, 1523â24 (D.C. Cir. 1984) (en banc), vacated on other grounds,471 U.S. 1113
(1985)). We therefore con- tinue to find the Ramirez panelâs discussion of the author- ization issue instructiveâjust as we did in Del-Rio. See id. at 1362â63. Case: 22-1929 Document: 80 Page: 10 Filed: 08/07/2024 10 DARBY DEVELOPMENT COMPANY, INC. v. US later determined to have been contrary to lawâ (emphasis added)). Indeed, then-Judge Scaliaâwriting for a panel of the D.C. Circuitâcharacterized as âextremeâ the position that âthe Tucker Act precludes recovery for acts by govern- ment agents beyond their statutory or constitutional au- thority.â Ramirez,724 F.2d at 151
. 6
Instead of asking merely whether the action was le-
gally authorized, the takings-law inquiry asks âwhether
the alleged invasion of property rights is chargeable to the
government.â Del-Rio, 146 F.3d at 1362(emphasis added). The focus is on whether the government should be held li- able for its agentsâ actions. See, e.g., Portsmouth Harbor Land & Hotel Co. v. United States,260 U.S. 327, 330
(1922) (Holmes, J.) (considering whether the plaintiffs could âes- tablish authority on the part of those who did the acts to bind the government by taking the landâ (cleaned up)); United States v. N. Am. Transp. & Trading Co.,253 U.S. 330, 334
(1920) (âWhat [the government agent] had done[,] . . . having been without authority, . . . created no liability on the part of the government.â); Hooe v. United States,218 U.S. 322, 335
(1910) (addressing circumstances
under which a government agent âwill not, in any legal or
constitutional sense, represent the United States,â and
6 We will assume in this opinion that the Order ex-
ceeded the CDCâs statutory authority under the PHSA.
Although Appellants correctly observe that the Supreme
Court in Alabama Association of Realtors did not directly
rule on that merits issue (having instead considered it only
in the context of ruling on the stay), we find it difficult to
ignore the Courtâs clearly expressed view of that issue. So,
while we appreciate the distinction Appellants observe, we
will still assume that the Order exceeded the CDCâs statu-
tory authority. Again, however, as we explain, an action
can be âauthorizedâ in the takings context even if it was
done without such authority.
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DARBY DEVELOPMENT COMPANY, INC. v. US 11
noting that âwhat he does or omits to do, without the au-
thority of the Congress, cannot create a claim against the
governmentâ); see also Ramirez, 724 F.2d at 151 (roughly
analogizing the inquiry to respondeat superior, a private-
law doctrine concerning an employerâs liability for actions
of its employees). 7
Certain considerations help separate authorized ac-
tions from unauthorized ones in the takings context. See,
e.g., Ramirez, 724 F.2d at 151â53 (synthesizing case law).
An action will normally be deemed authorized if it was
done by government agents âwithin the general scope of
their dutiesââi.e., if it was âa natural consequence of con-
gressionally approved measuresâ or âpursuant to the good
faith implementation of a congressional act.â Del-Rio,
146 F.3d at 1362(cleaned up); see also Ramirez,724 F.2d at 152
(â[O]n numerous occasions when the government
agent was acting within the ordinary scope of responsibili-
ties conferred on him by Congress, and took private prop-
erty without express statutory authority or prohibition, the
Tucker Act remedy was held to lie.â).
7 In determining when an agentâs act is attributable
to a principal, it is not novel to define the agentâs authority
based on its reasonable (even if ultimately mistaken) un-
derstanding of the authority that the principal gave it. See,
e.g., Restatement (Third) of Agency § 2.02 cmt. c (Am. Law.
Inst. 2006) (âActual authority is an agentâs power to affect
the principalâs legal relations in accord with the agentâs
reasonable understanding, at the time the agent acts, of
the principalâs manifestations to the agent. . . . If an agentâs
understanding is reasonable, the agent has actual authority
to act in accordance with the understanding, although the
principal subsequently establishes that the agent was mis-
taken.â (emphasis added)).
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12 DARBY DEVELOPMENT COMPANY, INC. v. US
Precedent bears this out. For example, in Great Falls,
Congress had authorized the Secretary of War to take land
embraced within a survey for purposes of constructing a
dam. The plaintiff alleged that the Secretary took land out-
side the survey. The Supreme Court held that even if some
of the land taken âhappen[ed] not to be covered by the sur-
vey . . . , the United States [was] as much bound to make
just compensation therefor as if such land[] had been actu-
ally embraced in that survey.â Great Falls Mfg. Co. v. Gar-
land, 124 U.S. 581, 597(1888). To be sure, the Court was not âsaying that the Secretary of War could, by any act of his, bind the United States to pay for land[] taken by himâ that was unrelated to the damâs construction.Id.
(empha- sis added) (cleaned up). In the case before it, however, nothing suggested that the Secretary of War had taken more than was âreasonably necessary for the purposes de- scribed in the Act of Congress, or that he did not honestly and reasonably exercise the discretion with which he was invested.âId.
(cleaned up); see also Ramirez,724 F.2d at 153
(discussing Great Falls).
In Portsmouth, the plaintiffs alleged that the govern-
ment took their land by firing guns over it from a nearby
fort. The Court of Claims dismissed the takings claim at
the pleadings stage. In reversing the dismissal, the Su-
preme Court addressed the authorization issue, acknowl-
edging that âit very well may be that the [plaintiffs] will be
unable to establish authority on the part of those who did
the acts to bind the government by taking the land.â
260 U.S. at 330(cleaned up). But, given the plaintiffsâ al- legations, the Court was unprepared to conclude at the pleadings stage that the government agents in question lacked that authority. After all, the Court noted, âas the United States built the fort and put in the guns and the men, there is a little natural unwillingness to find lack of authority to do the acts even if the possible legal conse- quences were unforeseen.âId.
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DARBY DEVELOPMENT COMPANY, INC. v. US 13
In Eyherabide, the plaintiffs owned property near a
military gunnery range used for testing aerial ordnance.
Although the military had previously been a lessee of the
property, its lease had ended in 1947. Eyherabide v. United
States, 345 F.2d 565, 567(Ct. Cl. 1965). Sometime after 1952, military personnel were dropping fuel tanks, shells, and other objects on or near the property. Seeid.
at 568â69. Military personnel even visited the property several times and warned its caretakers that they were trespassers and that they should leave or else be arrested.Id. at 568
. The plaintiffs brought a takings claim. Our predecessor court addressed the authorization issue and concluded that, because the government agents were act- ing within the âgeneral scope of [their] duties,â their ac- tions were not âwholly unauthorizedââeven though âthey may have been mistaken, imprudent, or wrongful.âId. at 570
. The court added that â[n]o statute or regulation forbade these activities.âId.
(emphasis added).
Finally, in Del-Rio itself, an agency responsible for is-
suing drilling permits had denied a permit due to its mis-
interpretation of a statute. 8 We held that, even if the
denial had been unlawful, it was still authorized for tak-
ings-claim purposes because â[i]t was part of [the agentsâ]
job to interpret the statutes and regulations governing fed-
eral mining leases, and there [was] no reason to suppose
that their decision reflected anything but a good faith effort
to apply the statutes and regulations as they understood
8 Technically, and contrary to the governmentâs
characterization, this court in Del-Rio never held that the
agency had âmistakenly interpreted the statute.â Contra
Appelleeâs Br. 24. We instead held that whether it had
done so was immaterial to the takings claimâs viability. See
Del-Rio, 146 F.3d at 1363â64. Nevertheless, for the pur-
poses of our discussion, we will assume that the agency did
indeed misinterpret the statute.
Case: 22-1929 Document: 80 Page: 14 Filed: 08/07/2024
14 DARBY DEVELOPMENT COMPANY, INC. v. US
them.â Del-Rio, 146 F.3d at 1363. âIn short,â we said, the agents âhad the authority to regulate the proposed min- ing.âId.
(cleaned up).
In contrast, unauthorized actions for takings-claim
purposes tend to be âoutside the normal scope of the gov-
ernment officialsâ dutiesâ or done despite an âexplicit pro-
hibit[ion].â 9 See id.; see also Ramirez, 724 F.2d at 151
(observing that, if a taking occurs while a government
agent âis acting within the normal scope of his duties,â it
will typically be deemed authorized âunless Congress has
expressed a positive intent to prevent the taking or to ex-
clude governmental liabilityâ (emphasis added)).
Precedent bears this out as well. In Hooe, for example,
a government agency was leasing a building (except for the
basement) for $4,000 annually, yet the agency proceeded to
occupy the basement anyway. 218 U.S. at 327. The lessors balked at renewing the lease for $4,000, wanting $6,000 in- stead (to include the basement).Id.
at 327â28. Although
Congress initially refused to increase the appropriation
9 The Del-Rio court described each of these as a de-
fining characteristic of actions done âultra vires,â id.(italics removed), and it contrasted ultra vires actions with those that are âchargeable to the governmentâ (and thus capable of supporting takings liability), id. at 1362. We recognize that, in City of Arlington, the Supreme Court viewed âultra viresâ agency action more generally as anything going âbe- yond what Congress has permitted it to do.â See City of Arlington v. FCC,569 U.S. 290
, 297â98 (2013). We think it clear, however, that the Del-Rio court was using the term in a narrower sense, given that it said repeatedly that just because an action is unlawful does not mean it is unauthor- ized for takings-claim purposes. E.g.,146 F.3d at 1363
; see also Appelleeâs Br. 27 (referencing âultra vires conduct as that term is used in Del-Rioâ (emphasis added) (some italics removed)). Case: 22-1929 Document: 80 Page: 15 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 15 above $4,000, it later appropriated $4,500. Id. at 328. In doing so, Congress âdistinctly advisedâ the plaintiffs that this amount was all that it was authorizing for the build- ingâs rent. Id. at 332 (citing relevant appropriation acts specifying that the amount appropriated for the rent was intended to be âfull compensationâ (emphasis in original)); see also id. at 331 (collecting background statutes generally prohibiting government agencies from making contracts for rent until an appropriation had been made). The Sec- retary of the Interior then reached agreement to lease the building (except for the basement) for $4,500, id. at 328â29, but the agency nonetheless continued to occupy the base- ment. When the lessors filed suit to recover the difference between what they were paid and what they believed they were owed (including for the continued occupation of the basement), the Supreme Court held that they could not re- cover because, under the circumstances, the government agents had no authority to bind the government for any- thing more than what Congress had appropriated for rent. See id. at 333â36. Notably, the Court later distinguished Hooe from other takings cases on the ground that it in- volved âspecific limitation on the agentâs authority.â Lar- son v. Domestic & Foreign Com. Corp.,337 U.S. 682
, 701 n.24 (1949); see Ramirez,724 F.2d at 151
(observing as much); see also United States v. Buffalo Pitts Co.,234 U.S. 228, 235
(1914) (distinguishing Hooe because âthe attempt
to make the government liable for rent was in the face of a
statute . . . [that] provided that no contract should be made
for rent until an appropriation for that purpose had been
made by Congressâ). 10
10 This courtâs predecessor distinguished Hooe on a
similar basis. See Armijo v. United States, 663 F.2d 90, 96
(Ct. Cl. 1981) (characterizing Hooe as holding that takings
liability âcould not be founded on the acts of officers wholly
without authority from Congress, express or implied, the
Case: 22-1929 Document: 80 Page: 16 Filed: 08/07/2024
16 DARBY DEVELOPMENT COMPANY, INC. v. US
The Supreme Court also deemed action unauthorized
in North American Transportation. There, an army gen-
eral had taken possession of the plaintiffâs property.
253 U.S. at 332. Although Congress had authorized such an appropriation, that authority had been conferred only upon the Secretary of War. Seeid.
at 333â34. And while the Secretary did later authorize the appropriation, â[w]hat [the army general] had done before that date[,] having been without authority, . . . created no liability on the part of the government.âId. at 334
; see also Ramirez,724 F.2d at 151
& n.9 (discussing North American Transportation and
characterizing the army generalâs action as ânot compensa-
ble under the Tucker Act since the applicable statute had
explicitly conferred confiscation power only upon the Sec-
retary of Warâ).
* * *
To summarize: even if an action by a government agent
is unlawful, it will likely be deemed authorized for takings-
claim purposes if it was done within the normal scope of
the agentâs dutiesâfor example, if it was done âpursuant to
the good faith implementation of a congressional act.â Del-
Rio, 146 F.3d at 1362(cleaned up). If instead the action was outside the normal scope of the government agentâs du- tiesâor, despite being within that scope, it contravened an explicit prohibition or other positively expressed congres- sional intentâit will likely be deemed unauthorized. Seeid. at 1363
; Ramirez,724 F.2d at 151
. The ultimate inquiry is whether the government agentâs action is âchargeable to the government.â Del-Rio,146 F.3d at 1362
.
implication being to the contrary in view of the express
rental limitâ (emphasis added)).
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DARBY DEVELOPMENT COMPANY, INC. v. US 17
B
We now consider whether the Order was âauthorizedâ
in the way takings law contemplates. We conclude that it
was. 11
To begin, we conclude that the CDC was acting within
the normal scope of its duties when it issued the Order.
The CDC is a national public-health agency, and its Direc-
tor is authorized under section 361 of the PHSA âto make
and enforce such regulations as in [its] judgment are nec-
essary to prevent the introduction, transmission, or spread
of communicable diseases . . . from one State or possession
into any other State or possession.â 42 U.S.C. § 264(a). 12 The CDC issued the Order explicitly under that statutory authority. 85 Fed. Reg. at 55292â93, 55297. The Order explained why evictions would increase the risk of spread.Id. at 55296
(âIn short, evictions threaten to increase the spread of COVID-19 as they force people to move, often into close quarters in new shared housing settings with friends or family, or congregate settings such as homeless shel- ters.â). And it determined that the eviction moratorium âconstitute[d] a reasonably necessary measure . . . to pre- vent the further spread of COVID-19 throughout the United States.âId.
Plainly, when the CDC issued the Or- der, it was trying to âprevent the . . . spread of communica- ble diseasesâ across statesâone of its core functions under the PHSA. See42 U.S.C. § 264
(a).
Critically, we also conclude that the CDC issued the
Order âpursuant to the good faith implementation ofâ the
11 Neither side has suggested that any factual dispute
or other reason here prevents us from resolving this issue
as a matter of law at this stage.
12 The PHSA named the Surgeon General when set-
ting forth this authority, but it is undisputed that the rele-
vant authority now lies with the CDC Director.
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18 DARBY DEVELOPMENT COMPANY, INC. v. US
PHSA. See Del-Rio, 146 F.3d at 1362(cleaned up). The government certainly does not suggest otherwise. See Oral Arg. at 29:18â29. Nor could it, really. After all, the gov- ernment spent months in litigation defending its Order-re- lated interpretation of the PHSA. See, e.g., Mot. Summ. J. at 8, Ala. Assân of Realtors v. U.S. Depât of Health & Hum. Servs., No. 1:20-cv-03377 (D.D.C. Dec. 21, 2020) (â[The] CDC acted within its statutory and regulatory authority in issuing the Order. This issue is one of straightforward statutory analysis . . . .â), ECF No. 26. And, although the Supreme Court eventually rejected that interpretation, it was hardly an unfounded one; other courts (and three dis- senting Justices) deemed it meritorious. See, e.g., Ala. Assân of Realtors v. U.S. Depât of Health & Hum. Servs., No. 21-5093,2021 WL 2221646
, at *1â2 (D.C. Cir. June 2, 2021); see also Ala. Assân of Realtors, 594 U.S. at 768â70 (Breyer, J., joined by Sotomayor and Kagan, JJ., dissent- ing);id. at 770
(âAt minimum, there are arguments on both sides.â). On the whole, the circumstances here indicate that the CDC issued the Order in a good-faith attempt to prevent interstate spread of COVID-19, based on a good- faith interpretation of its authority under the PHSA. This suffices to conclude that the CDC issued the Order within the normal scope of its duties for takings-claim purposes. See Del-Rio,146 F.3d at 1362
.
Having concluded that the CDC issued the Order
within the normal scope of its duties, we next consider
whether it contravened some explicit prohibition or posi-
tively expressed congressional intent in so doing. See id.
at 1363, Ramirez,724 F.2d at 151
. We conclude it did not.
The government, for its part, does not identify any relevant
explicit prohibition or intentâwhether in the PHSA or oth-
erwise. And the circumstances here, in addition to confirm-
ing there was not one, further suggest that any taking
resulting from the Order should be deemed chargeable to
the government. For example, unlike other takings cases
deciding the authorization issue (involving localized
Case: 22-1929 Document: 80 Page: 19 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 19
interests regarding one property owner or another), here
the Order was of vast national significance and impacted
property owners nationwideâall in a time of national dis-
tress. 13 It hardly escaped Congressâs attention. And yet,
not only did this all play out under Congressâs watchful eye
without eliciting any legislative pushback, Congress actu-
ally extended the Order by a month. Consolidated Appro-
priations Act, 2021 div. N, sec. 502, 134 Stat. at 2078â79
(further describing the Order as issued âunder section 361
of the [PHSA] (42 U.S.C. [§] 264)â). While we do not dispute
13 We note that, although Youngstown involved an is-
sue of national significance and impactânamely, the Pres-
identâs seizure of most of the nationâs steel mills in response
to a threatened labor strikeâthe Supreme Court in
Youngstown did not decide the takings-claim-authorization
issue. See Youngstown Sheet & Tube Co. v. Sawyer,
343 U.S. 579, 584â85 (1952). Instead, it simply acknowl- edged the issue when assessing whether, on prudential grounds, it should decline to reach the constitutional issue implicated by the district courtâs injunction. The theory be- hind the prudential ground was: if the steel mills had an adequate remedy in takings liability, an injunction might have been denied on that basis without having to confront the constitutional issue. Seeid.
In assessing that pruden- tial ground, the Court noted only that some of its prior cases âcast doubtâ on a plaintiffâs ability to establish tak- ings liability for âpropert[y] unlawfully taken.âId.
at 585 (citing Hooe and North American Transportation). It also reasoned that damages for the alleged taking would be âdif- ficult, if not incapable, of measurement.âId.
âViewing the case this way, and in the light of the facts presented,â the Court agreed with the district court that there was âno rea- son for delaying decision of the constitutional validityâ of the Presidentâs seizure.Id.
And it ultimately affirmed the injunction because it concluded that the Presidentâs seizure was indeed unconstitutional. Seeid.
at 587â89.
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20 DARBY DEVELOPMENT COMPANY, INC. v. US
the Court of Federal Claimsâ conclusion that Congress did
not necessarily ratify or acquiesce in the CDCâs assertion
of legal authority for the Order, see, e.g., supra note 6, we
do think Congressâs role respecting the Order additionally
supports the conclusion that any taking resulting there-
from is fairly chargeable to the government. At the very
least, it dispels any notion that there was some explicit con-
gressional prohibition (or something to similar effect) that
the Order contravened. 14
Accordingly, because the CDC issued the Order within
the normal scope of its duties, and because it did not con-
travene any explicit prohibition or positively expressed
congressional intent in so doing (far from it, as just dis-
cussed), we conclude that the Order was âauthorizedâ for
takings-claim purposes. See Del-Rio, 146 F.3d at 1362â63;
Ramirez, 724 F.2d at 151â53.
That the Order was âauthorized,â or chargeable to the
government, not only accords with doctrine; it also accords
with common sense. The CDC issued the Order only after
receiving a directiveâfrom the President himselfâto âcon-
sider whether any measures temporarily halting residen-
tial evictions of any tenants for failure to pay rent are
reasonably necessary to preventâ further interstate spread
14 We reiterate that Congress, in a neighboring sec-
tion of the Consolidated Appropriations Act, 2021, appro-
priated $25 billion in emergency rental assistance
(ultimately intended for lessors) and another $21.55 billion
soon thereafter. See supra Background Part I. While un-
necessary to our decision, we think this contemporaneous
action further suggests that Congress appreciated that any
taking resulting from the Order would be âchargeable to
the governmentââin quite a literal sense. Indeed, had the
congressionally appropriated money made its way to oth-
erwise-unpaid lessors, there may have been little to no un-
compensated-taking allegations to speak of.
Case: 22-1929 Document: 80 Page: 21 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 21
of COVID-19. 85 Fed. Reg. at 49936. Just before the Order
was set to expire by its own terms, Congress stepped in and
extended it. Thereafter, the CDCânow under a different
administrationâextended it several more times. All the
while, the government vehemently defended the Orderâs le-
gality against challenges. Taken together, these acts show
the Order to be a sustained, comprehensive governmental
effort bearing hallmarks of official governmental action.
Under these circumstances, there is indeed âa little natural
unwillingness to find lack of authorityâ on the CDCâs part.
See Portsmouth, 260 U.S. at 330.
Ultimately, requiring that a government agentâs action
be âauthorizedâ in order to support takings liability reflects
solicitude for Congressâs âpower of the purse.â See, e.g.,
NBH Land Co. v. United States, 576 F.2d 317, 319 (Ct. Cl.
1978). The basic idea is to guard against government
agents obligating the public fisc without sufficient say-so
from Congress. For the foregoing reasons, we do not be-
lieve that concern is implicated by this case. Moreover, any
such concern should be assuaged by the fact that Congress
has already appropriated a significant sum for the purpose
of rent or rental arrears, ultimately intended for lessors.
See supra note 14.
C
1
The dissent and government take a contrary view of
the authorization issue. They insist that, because the Or-
der exceeded the CDCâs statutory authority under the
PHSA, it was unauthorized for takings-claim purposesâno
further analysis needed. While they acknowledge that an
authorized action can be unlawful in some respects, they
say there exists a bright-line rule: if the government
agentâs action exceeds the authority of the statute under
which the agent was acting, it cannot be authorized in the
takings sense. Rather, they maintain, actions of the âun-
lawful yet authorizedâ sort contemplate only violations of
Case: 22-1929 Document: 80 Page: 22 Filed: 08/07/2024
22 DARBY DEVELOPMENT COMPANY, INC. v. US
some other statute, or some (arguably) other miscellaneous
type of error (for the dissent, it is a mistake of fact; for the
government, it is a mere âprocedural[]â error, or perhaps
the way in which the action was carried out, or maybe even
a constitutional violation, like violating the Eighth Amend-
ment). See, e.g., Dissent 1â2; Appelleeâs Br. 17, 25â27.
This type of line-drawing is both unsupported and unper-
suasive.
Initially, the dissent marshals several cases that it
says support its bright-line rule. The cases it relies on,
however, are distinguishableâat least because in those
cases, unlike here, the alleged taking contravened an ex-
plicit prohibition or other positively expressed congres-
sional intent. For example, in addition to Hooe and North
American Transportation (discussed supra Discussion
Part I.A), the dissent relies on this courtâs predecessorâs de-
cisions in NBH and Southern California Financial. Dis-
sent 15â16, 24. In NBH, the alleged taking related to a
proposed expansion of a military baseâa proposal Con-
gress had twice explicitly rejected. NBH, 576 F.2d at 318. In deeming the requisite authorization lacking, the court repeatedly stressed this latter fact.Id. at 319
(observing that âthe only participation by Congress has been to reject the acquisition out of handâ);id.
(reasoning that âaware-
nessâ of potential Tucker Act liability âcannot be imputed
to Congress when its only connection with a proposed land
acquisition has been to reject itâ).
Likewise, in Southern California Financial, the mili-
tary appropriated what amounted to a fee or permanent
easement. Our predecessor court determined that, under
the Military Construction Authorization Act, such an ap-
propriation âwould have required the specific consent of
Congress,â which the military neither sought nor obtained.
S. Cal. Fin. Corp. v. United States, 634 F.2d 521, 523 & n.3 (Ct. Cl. 1980). Central to the courtâs conclusion that the requisite authority was lacking was the fact that the mili- tary had acted despite Congressâs âexpress demandâ that Case: 22-1929 Document: 80 Page: 23 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 23 Congress first âconsider and authorize a permanent or in- definite acquisition of this size.âId. at 525
(emphasis added). Indeed, this fact âma[de] all the difference.â Id.; see alsoid.
(âIn the face of the express requirement to seek congressional consent in a Military Construction Authori- zation statute, there can be no implied authority to take a permanent or indefinite interest apart from that route.â (cleaned up));id. at 524
(â[A]n executive agency is not au-
thorized to take steps resulting in a compensable taking
where Congress has refused to authorize such a taking or
properly expects that no such taking can occur unless spec-
ified procedures involving Congress are followed.â (empha-
sis added)).
Other cases the dissent relies on are to similar effect.
See Coast Indian Cmty. v. United States, 550 F.2d 639, 650â52, 650 nn.23 & 25 (Ct. Cl. 1977) (one section of the congressional Act appeared to authorize the alleged taking, but a neighboring section of the same Act âexpressly forb[ade]â such an action without tribal consent; the al- leged taking âin the absence of the required consents was an act beyond the authority of the government agents in- volvedâ (cleaned up)); Sun Oil Co. v. United States,572 F.2d 786, 819
(Ct. Cl. 1978) (the congressional Act ap-
peared to authorize the alleged taking, but only in âspecial
national emergency or state of war situations,â which were
not present). 15
15 The dissent also relies on Mitchell v. United States,
267 U.S. 341(1925), to support its bright-line rule. See Dissent 7â8, 24. We think its reliance is misplaced. In Mitchell, the Supreme Court primarily held that plaintiffs whose land was taken could not recover consequential damages for the resulting loss to their business.Id.
at 344â45. The Court additionally reasoned that (1) there
was no finding that the government intended to take the
business (and that without such intent, there could be no
Case: 22-1929 Document: 80 Page: 24 Filed: 08/07/2024
24 DARBY DEVELOPMENT COMPANY, INC. v. US
In each of these cases, Congress had provided some ex-
plicit indication that the alleged taking was not authorized.
As we have explained, those circumstances are not present
in this case; if anything, the circumstances here are the op-
posite. This distinction âmakes all the difference.â See S.
Cal. Fin., 634 F.2d at 525.
The dissent also reads Del-Rio, and the principles it ar-
ticulated, as being limited to the dissentâs bright-line rule.
See, e.g., Dissent 18â19 (maintaining that Del-Rio recog-
nized only that a government agentâs action, âthough un-
lawful because violative of another statute or mistaken on
the facts,â can be authorized in the takings sense (emphasis
added)). We disagree with the dissentâs narrow reading of
Del-Rio. Nowhere does Del-Rio itself ascribe significance
to such a distinctionâe.g., between acts contrary to the
takings liability); and (2) there was no finding that the gov-
ernment even took the business. Id. at 345. Only after
providing these additional reasons did the Court add that,
â[m]oreover,â because the Act in question did not confer au-
thority to take a business, there could be no takings liabil-
ity. Id. (citing N. Am. Transp., 253 U.S. 330). Even then, however, the Court interpreted language in the Act as demonstrating that Congress did authorize accounting for consequential damages from a resulting loss to a busi- nessâbut only in cases where the property owner and the government reached an agreement on the sale price (as dis- tinct from the case before it, where the property was ac- quired via eminent domain). Seeid.
In other words, with Congress having granted such authority (but only in cer- tain instances), the case resembled North American Trans- portation, the sole case Mitchell cited for the takings-claim- authorization issue. Regardless, Mitchellâs facts and pri- mary holding are not implicated hereâwhich may explain why the government, despite citing the case in its brief, did not discuss it. Case: 22-1929 Document: 80 Page: 25 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 25 statute under which the agent was acting and acts contrary to some other statuteâlet alone indicate that only the lat- ter (and not the former) could support takings liability. Nor do we think such a distinction is dispositive of whether the action should be deemed chargeable to the government. In either scenario, the agent has exceeded its authority in some sense. See Ramirez,724 F.2d at 151
(no agent is ââau-
thorizedâ to break the lawâ). And each type of misstep could
well arise in the course of an agentâs carrying out what it
fairly perceives to be its duty, based on what Congress has
(and has not) told it. Put simply, the question of authority
for takings-claim purposes is different from the question of
statutory authority.
Finer legal points aside, the implications of the dissent
and governmentâs position illustrate its weakness. Taken
to its logical conclusion, their position is that government
agents can physically occupy private property for public
use, resist for months the ownerâs legal attempts to make
them leave, and then, when finally made to leave, say they
need not pay for their stay because they had no business
being there in the first place. It would be one thing for this
to be the result when government agents are clearly acting
apart from Congressâs will; in such a case, requiring just
compensation would encroach too much on Congressâs
power of the purse. 16 But there is no sound reason for such
a result in a case like this, where (1) the government agent,
after receiving a directive from the President, acted in good
faith pursuant to a good-faith understanding of its congres-
sionally conferred authority, (2) there was no explicit con-
gressional prohibition foreclosing that understanding
(indeed, Congress at the time did nothing but lend support
16 Moreover, we think that in such a case, the lack of
legal authority that would demand ending the occupation
would become apparent relatively quickly in any litigation
challenging the occupation.
Case: 22-1929 Document: 80 Page: 26 Filed: 08/07/2024
26 DARBY DEVELOPMENT COMPANY, INC. v. US
to that understanding), and (3) the government vehe-
mently pressed that understanding in litigation so as to se-
riously impede the property ownersâ efforts to end the
alleged occupation. Depriving property owners of a poten-
tial Fifth Amendment remedy in this case would deprive
them of any meaningful remedy at all. It would vitiate the
Takings Clause by âforcing some people alone to bear pub-
lic burdens which, in all fairness and justice, should be
borne by the public as a whole.â Armstrong, 364 U.S. at 49
(cleaned up). No precedent or good sense compels such a
result.
2
The dissent and government further argue that, even
if the CDCâs lack of PHSA authority for the Order does not
by itself foreclose a takings claim, the CDC also was not
acting within the normal scope of its duties when it issued
the Order. See Dissent 25â31; see also Appelleeâs Br. 27,
35. Both rely heavily on the Supreme Courtâs ruling in Al-
abama Association of Realtors in advancing this argument.
See, e.g., Dissent 31 (â[T]he Supreme Courtâs decision spe-
cifically held that the [Order] was outside the agencyâs nor-
mal scope of duties or any reasonable interpretation of its
powers.â); Appelleeâs Br. 27 (observing that the Court
deemed it âvirtually certainâ that the CDC lacked statutory
authority for the Order (quoting Ala. Assân of Realtors,
594 U.S. at 759)).
We are unconvinced. As we have explained, the ques-
tion of statutory authority is distinct from the question of
authority for takings-claim purposes. Only the former was
at all implicated in Alabama Association of Realtors. And
we are unwilling to assume that the Supreme Court, in as-
sessing the merits of the PHSA statutory-authority ques-
tion, also implicitly decided (or even suggested) that the
Order was unauthorized in the takings senseâso as to re-
lieve the government of a Fifth Amendment obligation to
compensate for any taking that resulted from the Order.
Case: 22-1929 Document: 80 Page: 27 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 27
The dissent nonetheless maintains that, because the
Order was so abnormal, it could not have possibly been
within the ânormal scopeâ of the CDCâs duties. See Dis-
sent 28 (â[T]he [PHSA] had been in existence for 76 years,
but the CDCâs [Order] was unlike any previous action
taken under the PHSA before the COVID-19 pandemic.â);
id.at 27â30. Of course, when we say that the CDC issued the Order within the ânormal scopeâ of its duties, we do not mean to suggest that the Order itself was normal. We read- ily agree it was not. But then again, neither was a bur- geoning pandemic on the scale of COVID-19 (certainly not in the 76 years of the PHSAâs existence). See, e.g., 85 Fed. Reg. at 55292 (observing that COVID-19 presented âa his- toric threat to public healthâ prompting âunprecedented or exceedingly rare [governmental] actionsâ). The Orderâs ab- normality flowed naturally from the abnormal circum- stances the CDC was confrontingâand from the CDCâs reasonable (if ultimately incorrect) interpretation and ap- plication of its PHSA authority to those circumstances. In this case, simply because the Order was abnormal does not mean that the CDCâthe agency charged with issuing reg- ulations âas in [its] judgmentâ are necessary to prevent the interstate spread of communicable diseases,42 U.S.C. § 264
(a)âwas acting outside the ânormal scopeâ of its du-
ties for takings-claim purposes when issuing it.
Accordingly, for the foregoing reasons, we conclude
that the Order was âauthorizedâ in the way takings law
contemplates.
II
Having concluded that there is no âlack of authoriza-
tionâ impediment to Appellantsâ takings claim, we turn
now to whether their complaint stated a claim for a physi-
cal taking by the government. We conclude that it did.
The law recognizes two main categories of takingsâ
physical takings and regulatory takingsâeach analyzed
differently. See, e.g., Tahoe-Sierra Pres. Council, Inc. v.
Case: 22-1929 Document: 80 Page: 28 Filed: 08/07/2024
28 DARBY DEVELOPMENT COMPANY, INC. v. US
Tahoe Regâl Plan. Agency, 535 U.S. 302, 321â23 (2002). Generally speaking, physical takings (which concern phys- ical occupation or appropriation of property) involve per se rules, whereas regulatory takings (which concern re- strictions on how a property owner uses its property) in- volve a flexible, multifactor balancing inquiry. See Cedar Point Nursery v. Hassid,594 U.S. 139
, 147â49 (2021); Ta-
hoe-Sierra, 535 U.S. at 321â23. Here, we consider only
whether Appellantsâ complaint stated a claim for a physical
taking, as they have expressly disclaimed any regulatory-
taking theory. Darby, 160 Fed. Cl. at 51 n.9; Appellantsâ
Br. 13; Oral Arg. at 40:00â07.
The partiesâ dispute over whether the complaint stated
a physical-taking claim centers largely on two Supreme
Court cases. Appellants rely on Cedar Point, and the gov-
ernment relies on Yee. We therefore recount these two
cases before analyzing the physical-taking issue here.
A
In Cedar Point, a state regulation granted labor organ-
izations a right to take access to an employerâs property.
The regulation required employers to allow union organiz-
ers onto their property for up to three hours a day, 120 days
a year. 594 U.S. at 143. In analyzing the regulationâs tak-
ings implications, the Supreme Court observed that the
âright to exclude is âone of the most treasuredâ rights of
property ownership.â Id. at 149 (quoting Loretto, 458 U.S.
at 435). And, after canvassing its precedent, it confirmed
that âgovernment-authorized invasions of property . . . are
physical takings requiring just compensation.â Id. at 152.
The Court determined that the regulation âappropriate[d]
a right to physically invadeâ the employersâ property. Id.;
see id. at 149 (âRather than restraining the [employersâ]
use of their own property, the regulation appropriate[d] for
the enjoyment of third parties the ownersâ right to ex-
clude.â). It therefore constituted a per se physical taking.
Id. at 152. And such takings are assessed âusing a simple,
Case: 22-1929 Document: 80 Page: 29 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 29
per se rule: The government must pay for what it takes.â
Id. at 148 (italics removed).
Yee involved park owners renting space to mobile-home
owners for their mobile homes. As a practical matter, these
âmobileâ homes stayed put. So, when a mobile-home owner
wished to move, the home would be sold in place, and the
buyer would continue to rent the space from the park
owner. Yee, 503 U.S. at 523. At issue were a state statute and a local rent-control ordinance. The statute limited the bases upon which a park owner could terminate a mobile- home ownerâs tenancyâthough, notably, ânonpayment of rentâ and âthe park ownerâs desire to change the use of his landâ remained permissible bases.Id.
at 524 (citingCal. Civ. Code § 798.56
(West 1991)). The ordinance set rent at what the park owners claimed was below market.Id. at 524
, 526â27. The park owners argued that their mobile- home-owner tenants could take advantage of the below- market rent they paid (and that any future tenant would pay) under the ordinance by selling their home at a pre- mium. That is, these mobile-home owners could convince a prospective buyer that paying extra for the home was worth it, because the buyer would be paying below-market rent. In the park ownersâ view, their mobile-home-owner tenants could thus reap value that the park owners as- serted belonged to them. They claimed that this âtrans- fer[]â to the mobile-home owners constituted a physical taking. Seeid.
at 526â27.
The Supreme Court concluded in Yee that no physical
taking occurred. It observed that â[t]he government effects
a physical taking only where it requires the landowner to
submit to the physical occupation of his land.â Id. at 527(emphasis in original). That element of required acquies- cence was missing, however, because the park owners âvol- untarily rented their land to mobile home owners.âId.
The Court reasoned that âno government ha[d] required any physical invasion of [the park ownersâ] propertyâ; rather, â[their] tenants were invited by [them], not forced upon Case: 22-1929 Document: 80 Page: 30 Filed: 08/07/2024 30 DARBY DEVELOPMENT COMPANY, INC. v. US them by the government.âId. at 528
. Ultimately, the Court concluded that the laws at issue âmerely regulate[d] [the park ownersâ] use of their land by regulating the rela- tionship between landlord and tenant,âid.
(emphasis in original), and it confirmed that â[w]hen a landowner de- cides to rent his land to tenants, the government may place ceilings on the rents the landowner can chargeâ without ef- fecting a physical taking, seeid. at 529
. In so concluding, however, the Court was careful to note that (1) nothing compelled the park owners, once they had rented their property to tenants, to continue doing so,id.
at 527â28; (2) in fact, a park owner wishing to change use of its prop- erty could evict its tenants (albeit with six- or twelve- monthsâ notice),id. at 528
; and (3) â[a] different case would be presentedâ if a landowner were âcompel[led] . . . over ob- jection to rent his property or to refrain in perpetuity from terminating a tenancy,âid.
B
Cedar Pointâs reasoning indicates that the complaint
stated a physical-taking claim. And, as explained below,
we consider Yee distinguishable. We therefore conclude
that the complaint stated a physical-taking claim.
We begin with Cedar Point. Just as in that caseâ
where, absent the regulation, the employers could have ex-
cluded the union organizers from their property, Cedar
Point, 594 U.S. at 155âhere Appellants alleged (and there
has been no dispute) that, absent the Order, they could
have evicted (or âexcludedâ from their property) at least
some non-rent-paying tenants, see J.A. 31 Âś 10. And, just
as the Cedar Point regulation resulted in government-au-
thorized physical invasionâhaving âappropriate[d] for the
enjoyment of third partiesâ the employersâ right to exclude,
594 U.S. at 149âhere too Appellants alleged that the Or-
der, by removing their ability to evict non-rent-paying ten-
ants, resulted in âgovernment-authorized invasion,
occupation, or appropriationâ of their property, J.A. 37 Âś 31
Case: 22-1929 Document: 80 Page: 31 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 31
(cleaned up). See also Sheetz v. Cnty. of El Dorado,
601 U.S. 267, 274 (2024) (observing that a physical taking
occurs if the government physically appropriates property
âor otherwise interfere[s] with the ownerâs right to exclude
others from itâ (citing Cedar Point, 594 U.S. at 149â52)).
Moreover, even apart from these significant similarities, at
a fundamental level, we cannot reconcile how forcing prop-
erty owners to occasionally let union organizers on their
property infringes their right to exclude, while forcing
them to house non-rent-paying tenants (by removing their
ability to evict) would not.
Yee, meanwhile, is distinguishable and does not control
here. Unlike here, the laws at issue in Yee expressly per-
mitted eviction for nonpayment of rent. See 503 U.S.
at 524; see alsoid.
at 531 n.* (noting that the ordinance âonly limits rentsâ). Indeed, Yee was fundamentally a rent- control case. Seeid.
at 529â30 (observing that â[o]rdinary rent control often transfers wealth from landlords to ten- ants,â and that although a mobile-home ownerâs âability to sell the mobile home at a premium may make this wealth transfer more visible than in the ordinary case,â âthe exist- ence of the transfer in itself d[id] not convert regulation into physical invasionâ (emphasis in original)). The grava- men of the park ownersâ challenge in Yee concerned an al- leged transfer of value that was occasioned by the rent- control ordinanceâa theory that was âpredicated on the unusual economic relationshipâ between park owners and mobile-home owners. Seeid. at 526
. The Court simply was
not presented with something akin to what has been chal-
lenged here: an outright prohibition on evictions for non-
payment of rent.
Although the government advances several Yee-based
arguments for why Appellantsâ complaint did not state a
physical-taking claim, none is persuasive.
First, the government seems to suggest that Yee
broadly established that government actions implicating
Case: 22-1929 Document: 80 Page: 32 Filed: 08/07/2024
32 DARBY DEVELOPMENT COMPANY, INC. v. US
the landlord-tenant relationship can never be physical tak-
ings. See, e.g., Appelleeâs Br. 17â18. We disagree. To be
sure, Yee confirmed that states âhave broad power to regu-
late housing conditions in general and the landlord-tenant
relationship in particular without paying compensation for
all economic injuries that such regulation entails.â
503 U.S. at 528â29 (quoting Loretto, 458 U.S. at 440); see also FCC v. Fla. Power Co.,480 U.S. 245, 252
(1987) (artic- ulating a similar principle where the FCC was regulating rates that utilities charged to cable companies for attach- ments on utility poles). But we see nothing in Yee (or any other binding precedent we are aware of) that immunizesâ as a categorical matterâgovernment action implicating the landlord-tenant relationship from being treated as a physical taking. That is particularly so given the express caveat in Yee that â[a] different case would be presentedâ if a landowner were âcompel[led] . . . over objection to rent his property or to refrain in perpetuity from terminating a ten- ancy.â503 U.S. at 528
. 17
Second, the government argues that here, like Yee (and
unlike Cedar Point), Appellantsâ tenants had been volun-
tarily âinvitedâ onto Appellantsâ propertyâwhich,
17 Florida Power provides another example of this
type of caveat. There, the Supreme Court stated that âstat-
utes regulating the economic relations of landlords and ten-
ants are not per se takings.â Fla. Power, 480 U.S. at 252(italics removed) (citing Loretto,458 U.S. at 440
). But, even setting aside what was (and was not) specifically con- templated by âeconomic relations,â the statement was hardly unqualified. Earlier in the same paragraph, the Court expressly noted that it was not deciding what the physical-taking implications âwould be if the FCC in a fu- ture case required utilities, over objection, to enter into, re- new, or refrain from terminating pole attachment agreements.â Seeid.
at 251â52 n.6. Case: 22-1929 Document: 80 Page: 33 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 33 according to the government, means that there was no physical taking. See Appelleeâs Br. 41, 46â47; see also Yee,503 U.S. at 528
(observing that the park ownersâ âtenants
were invited by [them], not forced upon them by the gov-
ernmentâ). While we agree that this point distinguishes
this case from Cedar Point, we are not persuaded that it
compels a different result. If a previous voluntary invita-
tion (by itself) controlled the analysis, that would essen-
tially mean that all government actions implicating the
landlord-tenant relationship are immune from being
treated as physical takings. (After all, we can safely as-
sume that just about every landlord-tenant relationship
stems from a voluntary âinvitationâ from the landlord to
the tenant.) And yet, as noted above, we see no reason why
government actions implicating that relationship must be
categorically immune from being treated as a physical tak-
ing. At bottom, just because tenants (or other occupiers of
property) were at one point âinvitedâ does not mean that
their continued, government-compelled occupation cannot,
under any circumstances, be treated as a physical taking.
Third, the government downplays the significance of
Yeeâs express caveat that â[a] different case would be pre-
sentedâ if a landowner were âcompel[led] . . . over objection
to rent his property or to refrain in perpetuity from termi-
nating a tenancy,â 503 U.S. at 528 (emphasis added). Spe-
cifically, the government argues that the Order did not
prevent evictions in perpetuity. See Appelleeâs Br. 43. But
the Supreme Court confirmed in Cedar Point that even
temporary physical appropriations are physical takings.
594 U.S. at 153 (â[W]e have held that a physical appropri-
ation is a taking whether it is permanent or temporary.â).
The mere fact that the Order did not extend âin perpetuityâ
therefore does not preclude it from having effected a phys-
ical taking.
In sum, the complaint states a claim sharing signifi-
cant similarities with what was described and held in Ce-
dar Point to constitute a physical taking. And, although
Case: 22-1929 Document: 80 Page: 34 Filed: 08/07/2024
34 DARBY DEVELOPMENT COMPANY, INC. v. US
Yee was concerned with a landlord-tenant relationship, for
the foregoing reasons, we find it distinguishable from the
circumstances presented in this case. We therefore con-
clude that Appellantsâ complaint stated a physical-taking
claim requiring just compensation. Our conclusion in this
regard is only bolstered by the Supreme Courtâs observa-
tion in Alabama Association of Realtors that the Order, by
âpreventing [landlords] from evicting tenants who breach
their leases[,] intrudes on one of the most fundamental el-
ements of property ownershipâthe right to exclude.â
594 U.S. at 765 (citing Loretto, 458 U.S. at 435).
Before completing our discussion, however, one final
point bears mentioning. The government envisions âstrik-
ingâ implications of concluding that Appellantsâ complaint
stated a physical-taking claim. See Appelleeâs Br. 43. It
argues that, if Appellantsâ claim can proceed, any law that
prevents a property owner from immediately effecting an
eviction will constitute a physical taking, since it will have
âtemporarily interfer[ed] with the purported âright to ex-
clude.ââ See id. at 43â44.
We take the governmentâs point, but its concern is ulti-
mately misplaced. Initially, what we have here is hardly a
run-of-the-mill law implicating the landlord-tenant rela-
tionship. Instead, it is a highly unusualâand, so far as the
parties have shown, unprecedentedâOrder that outright
prevented evictions for nonpayment of rent. Cf. Cmty.
Hous. Improvement Program v. City of New York, 59 F.4th
540, 552(2d Cir. 2023) (âIt is well settled that limitations on the termination of a tenancy do not effect a [physical] taking so long as there is a possible route to an eviction.â (emphasis added)), cert. denied,144 S. Ct. 264
(2023).
Further, just because other means might have had a
similar economic impact on Appellantsâe.g., government
action making it more onerous or time-consuming to real-
ize an evictionâit does not follow that such means would
give rise to a physical taking. The Supreme Court
Case: 22-1929 Document: 80 Page: 35 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 35
considered a similar situation in Horne v. Department of
Agriculture, 576 U.S. 350(2015). There, a federal order required raisin growers to give a percentage of their crop to the government.Id. at 355
. The Court held that this requirement was a physical taking.Id. at 361
. Although it acknowledged that the government could have simply prohibited the sale of raisins (or limited their production) without effecting a physical taking, the Court concluded that this distinction âflow[ed] naturallyâ from the âsettled difference in [its] takings jurisprudence between appropri- ation and regulation.âId. at 362
. It explained:
A physical taking of raisins and a regulatory limit
on production may have the same economic impact
on a grower. The Constitution, however, is con-
cerned with means as well as ends. . . . As Justice
Holmes noted, âa strong public desire to improve
the public condition is not enough to warrant
achieving the desire by a shorter cut than the con-
stitutional way.â
Id.(quoting Pa. Coal Co. v. Mahon,260 U.S. 393, 416
(1922)). A similar explanation suffices here. Whatever
might be said of other means to achieving the same or a
similar end as the Orderâand to be clear, we do not pass
on any such meansâwe conclude that Appellantsâ com-
plaint stated a claim that fits within the Courtâs conception
of a physical taking.
CONCLUSION
We have considered the governmentâs remaining argu-
ments and find them unpersuasive. For the foregoing rea-
sons, we reverse the Court of Federal Claimsâ dismissal and
remand for further proceedings.
REVERSED AND REMANDED
COSTS
Costs to Appellants.
Case: 22-1929 Document: 80 Page: 36 Filed: 08/07/2024
United States Court of Appeals
for the Federal Circuit
______________________
DARBY DEVELOPMENT COMPANY, INC., ET AL.,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2022-1929
______________________
Appeal from the United States Court of Federal Claims
in No. 1:21-cv-01621-AOB, Judge Armando O. Bonilla.
______________________
DYK, Circuit Judge, dissenting.
For well over 100 years the Supreme Court has recog-
nized that unauthorized actions of a federal agency or fed-
eral official cannot create takings liability. If a government
agent exceeds the authority conferred by the statute which
grants it the power to act, then that action is unauthorized.
Unauthorized actions are distinct from unlawful actions.
The pertinent difference is that a government action which
is unlawful because it violates some other statute or misin-
terprets the facts can still be authorized. The majority fails
to recognize this critical distinction.
1. Until now our court and our predecessor court have
faithfully followed that Supreme Court authority. How-
ever, the panel majority here, relying on a misreading of
our decision in Del-Rio Drilling Programs, Inc. v. United
Case: 22-1929 Document: 80 Page: 37 Filed: 08/07/2024
2 DARBY DEVELOPMENT COMPANY, INC. v. US
States, 146 F.3d 1358(Fed. Cir. 1998), rejects established precedent and concludes that âan action can be authorizedâ even if it is âdone without legal authority,â Maj. Op. 9, and that âthe question of authority for takings-claim purposes is different from the question of statutory authority,â Maj. Op. 25. That is, an agency may be authorized if it exceeds the scope of the statute which empowers it to actâso long as the action is within the ânormal scope of the government agentâs duties.â Maj. Op. 16. This approach is unsup- ported. Del-Rio held that an action may be authorized if it is within the normal scope of duties, even if it turns out to be illegal or improper for a separate reason (for example, violating another statute or erroneously determining the facts). Del-Rio does not hold that the action can be author- ized if it exceeds statutory authority under which the agency or official operates. Nor could it have done so, given that the Supreme Court and earlier circuit decisions have repeatedly held the opposite. These cases establish that unauthorized acts by government officials cannot be at- tributed to Congress, which has the sole authority to obli- gate government funds. See Hooe v. United States,218 U.S. 322, 335
(1910).
2. The Supreme Court cases on which the majority re-
liesâGreat Falls Manufacturing Co. v. Garland, 124 U.S.
581(1888) and Portsmouth Harbor Land & Hotel Co. v. United States,260 U.S. 327
(1922)âeither specifically
found authorization (Great Falls) or ordered the very in-
quiry into authorization that the governing cases clearly
require (Portsmouth). There is not a single Supreme Court
case that applies the majorityâs ânormal scope of dutiesâ
standard. Whatever interpretation is given to the lan-
guage of Del-Rio, the fact remains that not a single case
from the Supreme Court or our court has ever imposed tak-
ings liability where the agency acted beyond the scope of
statutory authorization.
3. Even if the majorityâs reading of Del-Rio were cor-
rect, the majorityâs conclusion that the Centers for Disease
Case: 22-1929 Document: 80 Page: 38 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 3
Control and Preventionâs (âCDCâ) eviction moratorium was
within the ânormal scopeâ of the duties of the CDC acting
under section 361 of the Public Health Service Act
(âPHSAâ), Maj. Op. 17, is unsupported and inconsistent
with the Supreme Courtâs decision in Alabama Association
of Realtors v. Department of Health & Human Services, 594
U.S. 758 (2021) (hereinafter âAlabama Realtorsâ). There,
the Supreme Court held that the eviction moratorium at
issue here was well outside the CDCâs normal scope of du-
ties. âThis claim of expansive authority under § 361(a) is
unprecedented.â Alabama Realtors, 594 U.S. at 765. The
Court concluded that it was âvirtually certain . . . that the
CDC has exceeded its authorityâ in adopting an eviction
moratoriumââ[i]t strains credulity to believe that [the
PHSA] grants the CDC the sweeping authority that it as-
serts.â Id. at 759â60. âSection 361(a) is a wafer-thin reed
on which to rest such sweeping power,â id. at 765, and âit
is a stretch to maintain that § 361(a) gives the CDC the
authority to impose this eviction moratorium,â id. at 764.
4. The majorityâs holding here would have significant
consequences. It would effectively make even clearly un-
authorized agency action authorized for purposes of tak-
ings liability unless that action was contrary to a specific
prohibition of the authorizing statute or taken in bad faith.
That cannot be correct. The majorityâs decision would work
a sea change in our takings jurisprudence and impose sig-
nificant takings liability on agencies for unauthorized acts,
directly discouraging adoption of legitimate government
programs because of the risk of takings liability in addition
to injunctive and declaratory relief. Historically, unau-
thorized programs were enjoined. Now, in addition there
is the specter of takings liability. In this case alone, the
Supreme Court found that Congressâ ânearly $50 billion in
emergency rental assistanceâ was âa reasonable proxy of
Case: 22-1929 Document: 80 Page: 39 Filed: 08/07/2024
4 DARBY DEVELOPMENT COMPANY, INC. v. US
the moratoriumâs economic impact.â Alabama Realtors,
594 U.S. at 764. 1
5. The majority contends that â[d]epriving property
owners of a potential Fifth Amendment remedy in this case
would deprive them of any meaningful remedy at all.â Maj.
Op. 26. This is simply incorrect. The appellants here did
have a meaningful remedy, which has been repeatedly rec-
ognized by the Supreme Court and this court and led to the
invalidation of the eviction moratorium order. âOrdinarily,
whenever there is no authority for a taking or intrusion,
the claimant, although unable to obtain compensation, can
seek an injunction or a declaratory judgment against the
unauthorized governmental activities.â S. Cal. Fin. Corp.
v. United States, 634 F.2d 521, 526 n.8 (Ct. Cl. 1980); see also Larson v. Domestic & Foreign Com. Corp.,337 U.S. 682, 689
(1949) (âThe officer is not doing the business
which the sovereign has empowered him to do or he is do-
ing it in a way which the sovereign has forbidden. His ac-
tions are ultra vires his authority and therefore may be
made the object of [an injunction].â).
Here, however, the plaintiffs never even bothered to
seek an injunction. The CDCâs eviction moratorium was
first implemented on September 4, 2020, and the plaintiffs
could have immediately sought an injunction or declara-
tory relief. Instead, the plaintiffs did not seek an injunc-
tion or declaratory relief and waited nearly a year, until
July 27, 2021, to file suit in the Court of Federal Claims
alleging a takings claim. Plaintiffs cannot fail to seek an
injunction or declaratory relief, wait for damages to accrue,
1 Other sources have similarly estimated that the
amount of back rent, utilities, and late fees owed as of Jan-
uary 2021 would be $57 billion. Jim Parrott & Mark Zandi,
Averting an Eviction Crisis 2 (Urb. Inst. 2021),
https://www.urban.org/sites/default/files/publication/
103532/averting-an-eviction-crisis.pdf.
Case: 22-1929 Document: 80 Page: 40 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 5
and then contend that only a takings claim is a meaningful
remedy.
I
I now explain how fundamentally the majority has
gone astray. The length of this dissent is testament to the
large number of cases in the Supreme Court, our court, and
our predecessor court that directly contradict the major-
ityâs approach.
A
The requirement that there can be no taking in the ab-
sence of authority (and the reason for that requirement)
has been recognized repeatedly by the Supreme Court.
There can be no takings liability for unauthorized acts be-
cause they are not chargeable to the United States.
In 1910 in the seminal Hooe case, the Court explained:
It is the Constitution which places these matters
under the control of Congress. If an officer of the
United States assumes, by virtue alone of his office,
and without the authority of Congress, to take such
matters under his control, he will not, in any legal
or constitutional sense, represent the United
States, and what he does or omits to do, without
the authority of the Congress, cannot create a claim
against the government . . . . The constitutional
prohibition against taking private property for
public use without just compensation is directed
against the government, and not against individual
or public officers proceeding without the authority
of legislative enactment. The taking of private
property by an officer of the United States for pub-
lic use, without being authorized, expressly or by
necessary implication, to do so by some act of Con-
gress, is not the act of the government.
Case: 22-1929 Document: 80 Page: 41 Filed: 08/07/2024
6 DARBY DEVELOPMENT COMPANY, INC. v. US
Hooe, 218 U.S. at 335â36 (emphasis omitted). Similarly, in
the Regional Rail Reorganization Act Cases:
âThe taking of private property by an officer of the
United States for public use, without being author-
ized, expressly or by necessary implication, to do so
by some act of Congress, is not the act of the gov-
ernment,â and hence recovery is not available in
the Court of Claims.
419 U.S. 102, 127 n.16 (1974) (quoting Hooe,218 U.S. at 336
).
The Supreme Court decisions applying these principles
are legion. The first mention of the authorization require-
ment appears in United States v. Great Falls Manufactur-
ing Co., 112 U.S. 645, 656(1884). The Court found that the Secretary of the Interior was authorized to take the land because it was acquired âunder the sanction of legislative enactments by Congressâ which âappropriate[ed] [] money specifically for the construction of the dam.âId.
The tak-
ing was authorized by the statute and not unlawful, but the
failure to pay compensation was unlawful.
In Hooe, the Court for the first time found that a lack
of authorization defeated a takings claim. The Secretary
of the Interior rented a building for an amount in excess of
the amount appropriated by Congress. 218 U.S. at 328. The Court held that â[t]he statutes . . . make it plain that the Secretary was without power to make any express con- tract for rent in excess of the appropriation made by Con- gress,â and thus there was no takings liability.Id. at 333
.
In North American Transportation & Trading Co. v.
United States, 253 U.S. 330, 334 (1920), a decade after
Hooe, the Supreme Court held there was no taking when
an Army General appropriated land as a site for an army
post. The General took the land pursuant to a statute
which provided:
Case: 22-1929 Document: 80 Page: 42 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 7
[T]he Secretary of War may cause proceedings to
be instituted, in the name of the United States . . .
for the acquirement, by condemnation, of any land,
or right pertaining thereto, needed for the site, lo-
cation, construction, or prosecution of works for for-
tifications and coast defenses . . . .
Act of Aug. 18, 1890, ch. 797, 26 Stat. 315, 316. The Su- preme Court construed the statute to mean that only the Secretary of War had that authority. N. Am. Transp.,253 U.S. at 333
. Because the General exceeded the scope of statutory authority, his action was âwithout authorityâ for takings purposes.Id. at 334
. The Supreme Court found that âalthough Congress may have conferred upon the Ex- ecutive Department power to take land for a given purpose, the [g]overnment will not be deemed to have so appropri- ated private property, merely because some officer thereaf- ter takes possession of it with a view to effectuating the general purpose of Congress.âId. at 333
.
Two years later in Portsmouth Harbor Land & Hotel
Co. v. United States, a taking was alleged to have occurred
when a military base fired gun projectiles over the plain-
tiffâs property. 260 U.S. 327, 329(1922). There was a ques- tion of whether firing the guns was authorized, and the Supreme Court remanded to determine whether the ac- tions were authorized.Id. at 330
. The Court concluded that â[i]t very well may be that the claimants will be unable to establish authority on the part of those who did the acts to bind the [g]overnmentâ and then cited North American Transportation, discussed earlier, making clear once again that statutory authorization was essential to succeed on a takings claim.Id.
In Mitchell v. United States, 267 U.S. 341, 343(1925), land was taken by the President for military purposes, in- cluding the plaintiffâs land which was alleged to be âespe- cially adapted to the growing of [a] particular quality of corn.â Because â[p]laintiffs were consequently unable to re- Case: 22-1929 Document: 80 Page: 43 Filed: 08/07/2024 8 DARBY DEVELOPMENT COMPANY, INC. v. US establish themselves elsewhere,â they claimed a taking of their business.Id.
The Court held there was no taking because, among other reasons, âthe Act did not confer au- thority to take a business.âId. at 345
. âThe Act authorized the taking only of âland and appurtenances and improve- ments attached thereto,ââ and âit did not declare that com- pensation should be made for losses resulting from the establishment of the [military] ground.âId.
at 344 (quoting Act of Oct. 6, 1917, ch. 79,40 Stat. 345
, 353). âIn the ab- sence of authority, even an intentional taking cannot sup- port an action for compensation under the Tucker Act.âId. at 345
.
In Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 19(1940), a taking was alleged when the government con- structed dikes which caused part of the plaintiffâs land to wash away. The Supreme Court held that the construction of the dikes was authorized, and the government would in- cur takings liability âif this authority to carry out the pro- ject was validly conferred, that is, if what was done was within the constitutional power of Congress.âId.
at 20â21.
In Youngstown Sheet & Tube Co. v. Sawyer, the Court
reasoned that Congress had not authorized the Presidentâs
action in seizing steel mills. An injunction was appropriate
because of prospective irreparable injury. The injury was
irreparable in part because a right to after-the-fact takings
liability had not been established. âPrior cases in this
Court have cast doubt on the right to recover in the Court
of Claims on account of properties unlawfully taken by gov-
ernment officials for public use.â 343 U.S. 579, 585(1952) (first citing Hooe, 218 U.S. at 335â36; and then citing N. Am. Transp.,253 U.S. at 333
). 2
2 See also Larson, 337 U.S. at 701 n.24 (â[W]here a
suit is brought against the United States, in which it is
Case: 22-1929 Document: 80 Page: 44 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 9
In Malone v. Bowdoin, the plaintiff alleged that a For-
est Service officerâs occupation of land was unauthorized
because the plaintiff was the rightful owner of the land.
369 U.S. 643, 644(1962). The Supreme Court explained that a takings claim could lie because the Forest Service officer was authorized in occupying land; âit [had not] been asserted that the [officer] was exceeding his delegated pow- ers as an officer of the United States in occupying the land in question, or that he was in possession of the land in an- ything other than his official capacity.âId. at 648
(footnote
omitted).
Similarly in the Regional Rail Reorganization Act
Cases, the Court found takings liability because the gov-
ernmentâs actions were authorized. The government re-
quired the transfer of the property of eight major railroads
into a single for-profit corporation. 419 U.S. at 108â09.
The Court noted that ââ[t]he taking of private property by
an officer of the United States for public use, without being
authorized, expressly or by necessary implication, to do so
by some act of Congress, is not the act of the [g]overnment,â
and hence recovery is not available in the Court of Claims.â
Id.at 127 n.16 (quoting Hooe,218 U.S. at 336
). However, the Court concluded that â[t]hese cases are inapposite since the [g]overnment actions at issue here are authorized by the Rail Act.âId.
claimed that the tortious actions of public officers, within
the scope of their delegated powers, are the actions of the
United States . . . Portsmouth . . . demonstrates that such
suits cannot be defeated by arguing that the officersâ ac-
tions, because tortious, are outside of their authority and
hence not actions of the United States.â) (citation omitted);
id. at 702 (government action is unauthorized when âit is
not within the officerâs statutory powers or, if within those
powers, only if the powers, or their exercise in the particu-
lar case, are constitutionally voidâ).
Case: 22-1929 Document: 80 Page: 45 Filed: 08/07/2024
10 DARBY DEVELOPMENT COMPANY, INC. v. US
Thus, the Supreme Court has repeatedly recognized
that for a taking to lie, the government agent must have
statutory authority. If a government agent violates or ex-
ceeds the very statute which grants him power to act, then
that action is unauthorized. The majority cannot distin-
guish these cases or explain why they are not contrary to
the approach that it adopts.
These cases leave no room for a normal or general scope
of duties exception to statutory authorization. They explic-
itly require authorization, and if âthe [a]ct did not confer
authority to take . . . [it] cannot support an action for com-
pensation under the Tucker Act.â Mitchell, 267 U.S. at 345.
B
The Supreme Court cases relied on by the majority do
not support its contention that an action beyond statutory
authority can result in takings liability âif it was done by
government agents âwithin the general scope of their du-
ties.ââ Maj. Op. 11 (quoting Del-Rio, 146 F.3d at 1362).
The majority points to the second Great Falls decision,
Great Falls Manufacturing Co., v. Garland, 124 U.S. 581(1888), as demonstrating that â[a]n action will normally be deemed authorized if it was done by government agents âwithin the general scope of their duties.ââ Maj. Op. 11 (quoting Del-Rio,146 F.3d at 1362
). Great Falls stands for
no such proposition. Great Falls involved formal condem-
nation proceedingsâa different context than liability for
inverse condemnation, the issue involved here. As with
Great Falls, many condemnation cases involve arguments
that the government was not authorized to condemn land
Case: 22-1929 Document: 80 Page: 46 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 11
because it did not follow the requirements set forth in the
condemnation statute. 3
In Great Falls, the statute provided that:
The Secretary of War shall cause to be made . . . a
like survey and map of the land necessary for a
dam . . . and when surveys and maps shall have
been made the Secretary of War and the Attorney
General of the United States shall proceed to ac-
quire to and for the United States the outstanding
title, if any, to said land and water rights . . . by
condemnation.
124 U.S. at 585(first omission in original) (quoting Act of July 15, 1882, ch. 294,22 Stat. 168
). The plaintiff, in seek- ing to restrain the United States officers from occupying its property, alleged that the survey required by the statute had not been conducted.Id. at 588
.
The government never argued that takings liability
could not lie because the Secretary of Warâs acts were un-
authorized. Instead, the government contended that it
complied with the statute and that the condemnation was
authorized. Br. of Argument for Appellees at 7, Great
Falls, 124 U.S. 581. The Supreme Court found that the
3 See, e.g., Natâl R.R. Passenger Corp. v. Bos. & Me.
Corp., 503 U.S. 407, 417(1992) (analyzing whether Amtrak was authorized to condemn specific railroad track under a statute which only allowed condemnation of property âre- quired for intercity rail passenger serviceâ (quoting45 U.S.C. § 562
(d) (1988))); Fed. Power Commân v. Tuscarora Indian Nation,362 U.S. 99, 115
(1960) (evaluating if the licensee was authorized to condemn Indian land under a statute which permitted condemnation of âlands or prop- erty of others necessary to the construction, maintenance, or operation of anyâ licensed project (quoting16 U.S.C. § 814
)). Case: 22-1929 Document: 80 Page: 47 Filed: 08/07/2024 12 DARBY DEVELOPMENT COMPANY, INC. v. US Secretary of Warâs authorization was not limited by the survey, but extended explicitly to âsaid land,â that is, âthe land necessaryâ for a dam. Great Falls,124 U.S. at 596
. â[I]f the Secretary of War . . . found it necessary to take . . . lands of the plaintiff for the proposed dam, which happen not to be covered by the survey and map,â such an act was nonetheless authorized.Id. at 597
. The âSecretary of War [] was invested with large discretion in determining what land was actually required to accomplish in the best man- ner the object Congress had in view.âId.
â[T]he record disclose[d] nothing showing that [the Secretary of War] ha[d] taken more land than was reasonably necessary for the purposes described in the act of Congress, or that he did not honestly and reasonably exercise the discretion with which he was invested.âId.
The actions of the Secre-
tary of War were authorized by the statute. 4
Great Falls therefore held that the government
properly followed condemnation proceedings, not that the
4 See Brooks v. United States, 39 Ct. Cl. 494, 505(1904) (âIt is not controverted that the Secretary of the Navy was authorized by law to construct the vessels in con- troversy and to construct them in the most improved way, to do which he was necessarily clothed with large discre- tion, both as to the materials and methods to be used, as was the Secretary of War in the case of the Great Falls Manufacturing Co. v. The Attorney-General (124 U.S., 581
)
in determining what land should be taken to carry out, in
the best manner, the object Congress had in view by the act
in that case, though he took lands outside the survey and
map which the act directed to be first made showing the
lands to be taken.â).
Case: 22-1929 Document: 80 Page: 48 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 13
government was liable for a taking even though the acts
were unauthorized. 5
So too in Portsmouth (also relied on by the majority,
Maj. Op. 12), the Supreme Court explicitly reaffirmed that
a lack of authorization would defeat takings liability, see
supra p. 7.
C
The cases of this court and our predecessor court have
never departed from the Supreme Courtâs authority until
now. 6 We have consistently held that if a government
5 The Supreme Court also relied on an alternative
ground. It âfurther said that all such objections [to the ac-
curacy of the survey and effectiveness of the published no-
tice] were waived by the company when, proceeding under
the act of 1882, it invoked the jurisdiction of the Court of
Claims to give judgment against the United States for such
compensation as it was entitled to receive for its land and
water rights.â Great Falls, 124 U.S. at 597. âThe plaintiff, by adopting that mode, has assented to the taking of its property by the [g]overnment for public use, and has agreed to submit the determination of the question of com- pensation to the tribunal named by Congress.âId. at 599
.
6 See, e.g., Rith Energy, Inc. v. United States, 247
F.3d 1355, 1365(Fed. Cir. 2001) (â[A] takings claim lies, as long as the governmentâs action was authorized, even if the governmentâs action was subject to legal challenge on some other ground.â); Del-Rio,146 F.3d at 1362
(âA compensable taking arises only if the government action in question is authorized.â); S. Cal. Fin. Corp.,634 F.2d at 523
(â[B]efore a compensable taking can be found by the court, there must be some congressional authorization, express or implied, for the particular taking claimed.â); NBH Land Co. v. United States,576 F.2d 317, 319
(Ct. Cl. 1978) (â[A] Tucker
Case: 22-1929 Document: 80 Page: 49 Filed: 08/07/2024
14 DARBY DEVELOPMENT COMPANY, INC. v. US
agent exceeds its statutory authority to act, then that act
is unauthorized and there is no takings liability. A detailed
analysis of the cases shows that this was established long
before Del-Rio by authority binding on and cited by the Del-
Rio court.
In Eyherabide v. United States, the plaintiffs owned a
ranch surrounded by an aerial gunnery range for the U.S.
Navy. 345 F.2d 565, 567(Ct. Cl. 1965). A taking was al- leged to have resulted from the Navyâs gunnery practice and military drills.Id. at 568
. There was no claim that the Navy was unauthorized under its own authorizing statute to conduct gunnery practice. Our predecessor court found there was a taking because âthe naval personnel who lobbed shells, dropped casings and other objects, and flew over and near the propertyâ âacted within the general scope of [their] dutiesâ and âthe placement of the warning signs was also obviously within the local authority of the gun- nery range.âId. at 570
. In other words, the U.S. Navy was authorized to conduct gunnery practice and other military drills. The court noted that while the actions âmay have been mistaken, imprudent, or wrongful,â they were not âwholly unauthorized.âId.
In Coast Indian Community v. United States, 550 F.2d
639, 641(Ct. Cl. 1977), the Bureau of Indian Affairs (âBIAâ) was alleged to have taken tribal property when it conveyed âa right-of-way across [the plaintiffâs tribal] reservationâ to a state entity. As to authority, the plaintiff âclaimed that the BIA conveyed the right-of-way pursuant to the author- ity vested in the Secretary of the Interior by25 U.S.C. § 323
(1970).âId. at 650
. The court found that â[s]ection 323, it is true, conferred broad powers on the Secretary âto grant rights-of-way for all purposesâ across Indian lands . . . [b]ut section 324 of the same title . . . restricted those powers by Act suit does not lie for an executive taking not authorized by Congress, expressly or by implication.â). Case: 22-1929 Document: 80 Page: 50 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 15 requiring that consents of Indian occupants be obtained in certain circumstances before making a conveyance pursu- ant to section 323.âId.
The court held that â[t]he BIA vio- lated the restrictions contained in the statute and regulations, for although it was required by them to obtain the consents of a majority of the adult members of the Coast Indian Community before conveying the right-of- way, it failed to do so.âId.
âIn order for a taking to occur by virtue of the act of an agent of the [g]overnment, the agentâs act must be accomplished within the scope of his statutory or delegated authority.âId. at 649
. âThe court must therefore conclude that the BIAâs conveyance of the right-of-way in the absence of the required consents was an act beyond the authority of the [g]overnment agents in- volvedâ and that there was no takings liability.Id. at 652
.
The next year in Sun Oil Co. v. United States, 572 F.2d
786, 793(Ct. Cl. 1978), the plaintiffs, having leased oil properties from the United States, alleged that the govern- mentâs ârefusal to approve their application to install [a platform]â for oil drilling amounted to a taking of their leasehold rights. The government âgranted the lease on the authority of the Outer Continental Shelf Lands Act [âOCSL Actâ].âId. at 792
. Our predecessor court found that â[t]he only language in the OCSL Act which expressly authorizes the Secretary to take plaintiffâs lease rights is to be found . . . in special national emergency or state of war situa- tions.âId. at 819
. âNo such situations are present in this case.âId.
Thus, the court held âthat the Secretary was without authority to take an OCSL Act lesseeâs leasehold rightsâ and there was no takings liability.Id.
In NBH Land Co. v. United States, military officers dis-
seminated a plan to expand a military reservation onto
nearby land, decreasing the land value. 576 F.2d 317, 318(Ct. Cl. 1978). Our predecessor court held that there was no taking because there was no authority.Id. at 319
. The military officersâ actions were unauthorized because âCon- gress ha[d] never given affirmative support or recognition Case: 22-1929 Document: 80 Page: 51 Filed: 08/07/2024 16 DARBY DEVELOPMENT COMPANY, INC. v. US of any sort to this project,âid. at 318
, and thus the action was not âexpressly authorized or directed by Congress . . . a natural consequence of Congressionally approved measures . . . [or a] good faith implementation of a Con- gressional Act,âid. at 319
.
In Southern California Financial Corp. v. United
States, a taking was alleged when the Air Force took an
indefinite easement of the plaintiffâs land. 634 F.2d at 525. The court held that there was no taking because the taking of an indefinite easement was unauthorized.Id. at 524
. The court found a âlack of authority for the Air Force, act- ing by itself, to take a fee or perpetual easement of the value involved here,âid. at 523
, because âit would be an invasion of the letter and spirit of the Military Construc- tion Program and the Military Construction Appropriation Acts,âid. at 524
.
In Yuba Goldfields, Inc. v. United States, a property
owner sold the United States land but reserved the right to
extract metals from the land and sold that right to the
plaintiff. 723 F.2d 884, 885(Fed. Cir. 1983). A taking was alleged because the United States, mistakenly believing that the plaintiff did not own any extraction rights, advised the plaintiff that it must cease any mining.Id.
at 885â86. The government defended by claiming the prohibition was unauthorized.Id. at 890
. We held that the governmentâs prohibition of mining was authorized because the Corps were working on the property and regulating it pursuant to the âMarysville project as authorized by PL 89â789.âId. at 891
. Just because the government was mistaken as to ownership did not mean âall of those government officials were without authorization to assert what they believed were the rights of the United States, to announce an intent to enforce those rights, and to prohibit what they viewed as infringement of those rights.âId.
In Florida Rock Industries, Inc. v. United States, a tak-
ing was alleged when the Army engineers denied a permit
Case: 22-1929 Document: 80 Page: 52 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 17
to mine limestone. 791 F.2d 893, 895(Fed. Cir. 1986). The Army had determined that the mining would result in pol- lution of federal waters.Id.
â[T]he Claims Court . . . found as a fact that the proposed limestone mining would not pol- lute.âId. at 898
. We held that if indeed the mining would not result in pollution, âthen the Army engineers had no statutory authority to actâ and thus their denial of the per- mit would have been unauthorized and not a taking.Id.
at 898â99. But we ultimately held that the Claims Courtâs determination that the mining would not pollute was error, and the governmentâs action was therefore authorized.Id. at 905
.
These cases, all decided before Del-Rio, demonstrate
that when a government agent, by some act, exceeds the
authority of the very statute which the government claims
grants it authority, there is no takings liability. At the
same time, consistent with Supreme Court authority, we
have found takings liability when the government act rests
on a mistaken factual assumption (e.g., property owner-
ship) or is illegal or wrongful based on violation of some
other statute or regulation.
Del-Rio itself was about property ownership rather
than the scope of legislative authorization. We held that
the Claims Court in takings cases could determine the ex-
tent of the claimantâs property interest and that the gov-
ernment did not lack authority to deny the permit simply
because the government was mistaken as to the extent of
the plaintiffâs property rights. Del-Rio, 146 F.3d at 1364â
65.
The majority fundamentally misunderstands our deci-
sion in Del-Rio, contending that âeven if an action by a gov-
ernment agent is unlawful, it will likely be deemed
authorized for takings-claim purposes if it was done within
the normal scope of the agentâs dutiesâfor example, if it
was done âpursuant to the good faith implementation of a
congressional act.ââ Maj. Op. 16 (quoting Del-Rio, 146 F.3d
Case: 22-1929 Document: 80 Page: 53 Filed: 08/07/2024
18 DARBY DEVELOPMENT COMPANY, INC. v. US
at 1362 (cleaned up)). In Del-Rio, the plaintiff claimed that
the United States had taken its property when the Bureau
of Land Management (âBLMâ) denied the plaintiff a permit
to mine minerals because it lacked a right to access the
property for drilling purposes. Del-Rio, 146 F.3d at 1361. The plaintiff contended that it in fact had the required property interest. 7 Br. for Appellant at 9, Del-Rio,146 F.3d 1358
. The government urged that the plaintiffâs claim de- pended on the existence of an error by the BLM in the per- mitting process as to property ownership, which amounted to a claim by the plaintiff that the BLM lacked authority to deny the permit, and that under the cases described above there could be no taking. Del-Rio,146 F.3d at 1361
. The
plaintiff responded that the government action was author-
ized because the government agents were acting pursuant
to the ânormal scope of their dutiesâ under the authorizing
7 The plaintiff had entered into a mineral lease with
the government, allowing it to extract oil and gas on an In-
dian reservation. In creating the reservation, the govern-
ment became trustee for the Indian Tribe for the surface
rights, but retained the mineral interest. 146 F.3d at 1360. The lease gave the plaintiff âthe right âto drill for, mine, extract, remove, and dispose of all the oil and gas deposits . . . in the lands leased.ââId.
By regulation âthe BLM re- quired owners of mining leases on federal land to secure special permits before drilling or surveying on the land cov- ered by the leases,â and to demonstrate that they had ac- cess rights.Id.
The BLM denied the plaintiffâs permit on the ground that the plaintiff did not have the required ac- cess rights, holding that those rights had to be secured from the tribe pursuant to the Tribal Consent Act (25 U.S.C. §§ 323â325 (1994)). Id. at 1360â61. The plaintiff maintained that it already had access rights, which it con- tended had been retained by the government and trans- ferred to the plaintiff as part of the lease. See Br. for Appellant at 9, Del-Rio,146 F.3d 1358
. Case: 22-1929 Document: 80 Page: 54 Filed: 08/07/2024 DARBY DEVELOPMENT COMPANY, INC. v. US 19 statute in denying the permit. Br. for Appellant at 23, Del- Rio,146 F.3d 1358
. Determining property ownership was within the normal scope of the agentâs duties. We agreed that a government officialâs actions, though unlawful be- cause violative of another statute or mistaken on the facts, may create takings liability if the action is within the ânor- mal scopeâ of that officialâs duties. Del-Rio,146 F.3d at 1362
(quoting Ramirez v. Weinberger,724 F.2d 143, 151
(D.C. Cir. 1983), revâd,745 F.2d 1500
(D.C. Cir. 1984) (en banc), vacated on other grounds,471 U.S. 1113
(1985)).
In that connection, we held that the Court of Federal
Claims could resolve the question of property ownership in
adjudicating the takings claim. Del-Rio, 146 F.3d at 1367. There was no lack of regulatory authority since the BLM clearly had authority to engage in the permitting process. See30 U.S.C. §§ 189
, 226(a) (1994); Del-Rio,146 F.3d at 1363
(âIt was part of [the Interior Department officialsâ] job to interpret the statutes and regulations governing federal mineral leases . . . .â). Nor did the government on appeal even argue that the permit denial was unauthorized. Quite the contrary, both parties argued that the action was au- thorized. Br. for Appellee at 6, 7, 11, Del-Rio,146 F.3d 1358
; Br. for Appellant at 6, Del-Rio,146 F.3d 1358
. An
alleged mistake of fact as to access rights by the BLM did
not render the government action unauthorized or prevent
the Court of Federal Claims from considering the takings
claim and determining whether access rights existed.
We distinguished cases such as Florida Rock where it
was alleged that there was a lack of statutory authority.
We quoted approvingly Florida Rockâs statement that â[i]n
defending, the government may deny the authority and in
that way authority could become an issue in a Tucker Act
taking case.â Del-Rio, 146 F.3d at 1365(quoting791 F.2d at 899
). We confirmed that â[t]he courtâs focus in Florida Rock was thus on the issue of authorization, and the court properly held that a plaintiff in a Tucker Act suit cannot Case: 22-1929 Document: 80 Page: 55 Filed: 08/07/2024 20 DARBY DEVELOPMENT COMPANY, INC. v. US obtain relief if the government officials in question were acting without authorization.âId.
We explained that âgovernment agents have the requi-
site authorization if they act within the general scope of
their duties, i.e., if their actions are a ânatural consequence
of Congressionally approved measures,â or are pursuant to
âthe good faith implementation of a Congressional Act.ââ
146 F.3d at 1362(first quoting NBH Land Co.,576 F.2d at 319
; and then quoting S. Cal. Fin. Corp.,634 F.2d at 525
).
But, we held that an agentâs act was unauthorized if âthe
conduct was ultra vires, i.e., it was either explicitly prohib-
ited or was outside the normal scope of the government of-
ficialsâ duties.â Id. at 1363. In Del-Rio, on no fewer than
five occasions, we treated ultra vires action as defeating
authority for takings purposes. 8 An agencyâs ultra vires
8 1. âThe first [question] is whether the government
conduct at issue was âauthorized,â i.e., whether the alleged
invasion of property rights is chargeable to the government
or is an act committed by a government agent acting ultra
vires.â Del-Rio, 146 F.3d at 1362.
2. â[W]hen a government official engages in ultra vires
conduct, the official âwill not, in any legal or constitutional
sense, represent the United States, and what he does or
omits to do, without the authority of Congress, cannot cre-
ate a claim against the Government âfounded upon the
Constitution.âââ Id.(quoting Hooe,218 U.S. at 335
).
3. âIn holding that ultra vires conduct cannot give rise
to a Fifth Amendment taking, the courts have drawn an
important distinction between conduct that is âunauthor-
izedâ and conduct that is authorized but nonetheless unlaw-
ful.â Id.
4. âWhile this court has on occasion referred to âinvalidâ
or âillegalâ government conduct as âunauthorizedâ . . . we
Case: 22-1929 Document: 80 Page: 56 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 21
actions are those taken without statutory authority. Ar-
lington v. F.C.C., 569 U.S. 290, 297 (2013) (âBoth [an
agencyâs] power to act and how they are to act is authorita-
tively prescribed by Congress, so that when they act im-
properly, no less than when they act beyond their
jurisdiction, what they do is ultra vires.â).
The reference to ânormal scope of dutiesâ does not sug-
gest that statutory authorization is unnecessary but
simply responds to the Claims Courtâs holding that â[o]nly
if the action is âvalid,â i.e., unassailable on some independ-
ent constitutional, statutory, or procedural ground, should
the Takings Clause be implicated,â Del-Rio, 37 Fed. Cl.
157, 161(1997), revâd,146 F.3d 1358
, and to make clear
that issues of fact as to property ownership do not equate
to a lack of authorization. 9
The majority in Del-Rio relied on the D.C. Circuitâs va-
cated opinion in Ramirez, another case involving a dispute
as to property ownership. There, the Department of De-
fense occupied land, allegedly owned by plaintiff, for use as
a training facility for Salvadoran soldiers, apparently una-
ware of the plaintiffâs ownership. Ramirez, 724 F.2d at 145.
The occupation was alleged to be illegal because the
understand those references to require a showing that the
conduct was ultra vires . . . .â Id. at 1363.
5. â[T]he plaintiff in a takings action cannot assert that
the government conduct was unauthorized, since conduct
by a government official who is acting ultra vires cannot
effect a governmental taking for public purposes within the
meaning of the Fifth Amendment.â Id. at 1365.
9 âThe cases cited by the government do not stand for
the proposition that the Court of Federal Claims loses ju-
risdiction to decide a takings claim whenever the govern-
ment seeks to defend the agency action on the ground that
the plaintiff lacks the property right on which its takings
claim is based.â Del-Rio, 146 F.3d at 1365.
Case: 22-1929 Document: 80 Page: 57 Filed: 08/07/2024
22 DARBY DEVELOPMENT COMPANY, INC. v. US
government appropriated land belonging to the plaintiff
without compensation. Id. at 146. The government did not
violate the statute under which it was operating, a statute
that granted it authority to set up military training facili-
ties. Id. at 153. Instead, the government made a simple
mistake as to who owned the land. The occupation of the
land was nonetheless held to be authorized for purposes of
takings liability. Id. The court made it clear that âthe mere
fact that a government officer has acted illegally does not
mean he has exceeded his authority for Tucker Act pur-
poses,â and precluding takings liability based solely on the
government action turning out to be illegal would be âan
extreme position.â Id. at 151. The court found authoriza-
tion specifically because âthe officials of the Defense De-
partment in the present case were performing their
ordinary responsibilities of deploying United States mili-
tary forces and of planning and operating a training facility
for the military forces of a friendly country.â Id. at 153.
Nothing in Ramirez says a takings claim can be based on
government acts which lack statutory authority. 10
10 The majority also points to Ramirez as suggesting
the relevance of agency law and to the Restatement of
Agency for the proposition that âit is not novel to define the
agentâs authority based on its reasonable (even if ulti-
mately mistaken) understanding of the authority that the
principal gave it.â Maj. Op. 11 n.7. However, Ramirez it-
self recognizes that authority in the takings context is ânot
as liberal as[] the âscope of employmentâ test for application
of the doctrine of respondeat superior in private law.â
Ramirez, 724 F.2d at 151. And, unlike the law of agency, a federal agency cannot acquire authority by reasonably be- lieving that it has such authority. Indeed, the Supreme Court has rejected exactly that proposition. See Loper Bright Enterprises v. Raimondo,144 S. Ct. 2244
, 2262
Case: 22-1929 Document: 80 Page: 58 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 23
Our cases after Del-Rio confirm that statutory author-
ization is required. In Rith Energy, Inc. v. United States,
an office of the Department of the Interior (âOSMâ) leased
mining rights to the plaintiff. 247 F.3d 1355, 1358(Fed. Cir. 2001). The government âsuspended [the plaintiffâs] permit and prohibited it from mining most of the coal cov- ered by the mining leases.âId.
The plaintiff claimed the suspension of its permit was a taking.Id.
The Surface Mining Control and Reclamation Act of 1977 âauthorizes the Department of the Interior to prohibit mining opera- tions that create an imminent danger to the health and safety of the public or can reasonably be expected to cause significant, imminent environmental harm to land, air, or water resources.âId.
at 1358â59 (citing30 U.S.C. § 1271
). We found âthat if OSM had failed to act, there was a high probability that acid mine drainage would have occurred, severely polluting the Sewanee Conglomerate and endan- gering domestic and public water supplies.âId. at 1365
. Thus, we held that âa takings claim lies, as long as the gov- ernmentâs action was authorized, even if the governmentâs action was subject to legal challenge on some other ground.âId.
Later cases are to the same effect. In Taylor v. United
States, 959 F.3d 1081, 1089(Fed. Cir. 2020), we found that â[t]he [plaintiffs] cannot deny that the action was within the âauthorityâ of those who took it; such a denial would de- feat their taking claim.â In Lion Raisins, Inc. v. United States, we once again recognized that âin a takings case we assume that the underlying governmental action was law- ful [under the statute].â416 F.3d 1356, 1370
(Fed. Cir. 2005) (quoting Rith,270 F.3d 1347, 1352
(Fed. Cir. 2001));
see also Washington Federal v. United States, 26 F.4th
(2024) (explaining that it is up to the reviewing court to
decide âwhether the statute at issue delegates particular
discretionary authority to an agencyâ).
Case: 22-1929 Document: 80 Page: 59 Filed: 08/07/2024
24 DARBY DEVELOPMENT COMPANY, INC. v. US
1253, 1264 (Fed. Cir. 2022). Our post-Del-Rio cases thus
have consistently held that authority is essential to a tak-
ings claim and takings liability cannot be founded upon a
lack of authorization. 11
The majorityâs decision is inconsistent with cases such
as Hooe, North American Transportation, Mitchell, South-
ern California Financial, Coast Indian Community, Sun
Oil Co., and NBH Land Co., where takings liability was
11 Our nonprecedential decisions after Del-Rio have
likewise held that authorization is required for takings li-
ability. In Filler v. United States, the plaintiff claimed that
an online post by a government agent, employed by the Na-
tional Marine Fisheries Service (âNMFSâ), regarding a
medical procedure, was an authorized government act that
resulted in a taking of the plaintiffâs medical license. 602
F. Appâx 518, 519â20 (Fed. Cir. 2015) (non-precedential). We held there was no taking because the âNMFS does not have the statutory authority to regulate medical practices or drug safety.âId. at 521
. Because there was no statutory
authority, there was no taking.
In Canuto v. United States, we found no taking. 651 F.
Appâx 996, 998(Fed. Cir. 2016) (non-precedential). The plaintiff alleged âthat on several occasions, members of the United States militaryâ assaulted her and her family and took her property.Id. at 997
. We found that â[the plaintiff] does not allege any facts that can plausibly be taken to show that the government agents, members of the military, were acting in an authorized manner in the conduct she allegesâ because â[s]he has not, for instance, identified a law-enforcement initiative, an investigation, a military op- eration, or a statutory mandate that might have led gov- ernment agents to commit the acts she alleges.âId. at 998
.
Case: 22-1929 Document: 80 Page: 60 Filed: 08/07/2024
DARBY DEVELOPMENT COMPANY, INC. v. US 25
rejected because of a lack of authorization, and inconsistent
with cases finding takings liability only because there was
statutory authorization for the governmentâs action.
Finally, to the extent that the majority suggests that a
directive from the President could make the CDCâs action
authorized, see Maj. Op. 20, it is inconsistent with Supreme
Court precedent. âIn order that the [g]overnment shall be
liable it must appear that the officer who has physically
taken possession of the property was duly authorized so to
do, either directly by Congress or by the official upon whom
Congress conferred the power.â N. Am. Transp., 253 U.S.
at 333. Presidential action is not a substitute for Congres- sional authorization. Congress âcan authorize the taking of private property for public useâ and â[t]he Constitution does not subject this law-making power of Congress to presidential . . . control.â Youngstown,343 U.S. at 588
. â[T]he President may not exercise the legislative power to authorize the seizure of private property for public use.â Clinton v. Jones,520 U.S. 681, 700
(1997).
II
The Supreme Court and circuit authority is clear. But
let us assume for the moment that the majority, contrary
to all authority, is correct as to the legal standard. Even if
the majorityâs statement of the law were correct, and that
a government officialâs action could be authorized if it fell
within that officialâs ânormal scope of duties,â even though
beyond the officialâs authority under the statute, the CDC
issuing an eviction moratorium cannot plausibly be said to
be within the CDCâs normal scope of duties.
First, the history and language of the statute (section
361 of the PHSA) demonstrates that the primary concern
was with quarantine and inspection and that Congress did
not contemplate measures such as eviction moratoriums.
Section 361, first enacted in 1944, was designed to accumu-
late past legislative authorities. That authority was lim-
ited.
Case: 22-1929 Document: 80 Page: 61 Filed: 08/07/2024
26 DARBY DEVELOPMENT COMPANY, INC. v. US
Health regulation designed to avoid the spread of pan-
demics began in the 17th century with local and state reg-
ulation of vessels arriving from foreign ports. The federal
government became involved at the end of the 18th cen-
tury, and in 1796 Congress for the first time passed a law
which authorized the President to assist states in quaran-
tine measures. An Act Relative to Quarantine, ch. 31, 1
Stat. 474(1796) (repealed 1799). In 1878 Congress passed a law which empowered the Surgeon General to implement quarantine regulations to prevent the introduction of con- tagious or infectious diseases into the United States, which included requiring vessels to report infections onboard. Act of Apr. 29, 1878, ch. 66, §§ 2, 5, 20 Stat. 37â38. In 1893, Congress expanded federal quarantine powers by enacting a law which regulated how and when foreign vessels could unload cargo and passengers, including enabling the Sec- retary of the Treasury to place infected vessels in federal quarantine stations. Act of Feb. 15, 1893, ch. 114, § 6,27 Stat. 449
, 452. The new law also authorized the President to halt immigration from specific countries which posed a âserious danger of the introduction of [cholera or other in- fectious or contagious diseases] into the United States.âId.
§ 7.
The PHSA was enacted âto bring together into a single
and consistent enactment virtually all of the statutes relat-
ing to the [Public Health] Serviceâa body of law which had
accumulated over a century and a half.â Alanson W. Will-
cox, The Public Health Service Act, 1944, 7 SOC. SEC. BULL.
15, 15 (1944). 12
12 Since its enactment in 1944, Congress has only
substantively amended the provision once, in 2002, as part
of the Public Health Security and Bioterrorism Prepared-
ness and Response Act. The amendment expanded the
Health and Human Services (âHHSâ) Secretaryâs authority
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DARBY DEVELOPMENT COMPANY, INC. v. US 27
Section 361 of the PHSA was evidently primarily in-
tended to allow the federal government to inspect and
quarantine articles, animals, or individuals that were in-
fected or diseased. The legislative history describes the
purpose of section 361 of the PHSA only in terms of quar-
antine and inspections. See Hearing Before a Subcomm. on
Interstate & Foreign Commerce on H.R. 3379: A Bill to
Codify the Laws Relating to the Public Health Service, and
for Other Purposes, 78th Cong. 138â39 (1944) (statement
of Mr. Wilcox).
The text of the statute confirms this primary purpose.
Section 361(a) provides for the adoption of âregulations . . .
for such inspection, fumigation, disinfection, sanitation,
pest extermination, destruction of animals or articles found
to be so infected or contaminated as to be sources of dan-
gerous infection to human beings.â 42 U.S.C. § 264(a). 13 Section (b) provides for the limited regulation of âapprehen- sion, detention, or conditional release of individuals . . . for the purpose of preventing the introduction, transmission, or spread of [] communicable diseases.âId.
§ 264(b). On its face, though the statute provides for such âother measures, as in [the Surgeon Generalâs] judgment may be by eliminating a provision that only allowed the Secretary to issue quarantine rules if they were recommended by the National Advisory Health Council and to allow interstate quarantine of individuals who were reasonably believed to be in the pre-communicable stage of an infectious disease if the disease âwould be likely to cause a public health emergency if transmitted to other individuals.â Public Health Security and Bioterrorism Preparedness and Re- sponse Act of 2002,Pub. L. No. 107-188, § 142
(b)(2)(B), 116
Stat. 626â27.
13 As the majority recognizes, the PHSA names the
Surgeon General, but this authority has been transferred
to the CDC. See Maj. Op. 17 n.12.
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28 DARBY DEVELOPMENT COMPANY, INC. v. US
necessaryâ âto prevent the introduction, transmission, or
spread of communicable diseases,â the statute is concerned
with preventing the interstate movement of âinfected or
contaminatedâ articles or persons. Id. § 264(a). The CDCâs
order is unlike any of the specific examples of permitted
agency action in the text of the statute, the examples ref-
erenced in the legislative history, or past practices under
predecessor statutes. It is not an action within the CDCâs
normal scope of duties.
Second, the statute had been in existence for 76 years,
but the CDCâs eviction moratorium order was unlike any
previous action taken under the PHSA before the COVID-
19 pandemic. âPrior to the COVID-19 pandemic, agencies
that were delegated authority under Section 361 generally
invoked the provision to issue regulations related to the
quarantine and isolation of individuals believed to have
been infected or exposed to a contagious disease, as well as
the control or treatment of areas, animals, or articles that
were susceptible or subject to contamination or infection.â
WEN W. SHEN, CONGRESSIONAL RESEARCH SERVICE, SCOPE
OF CDC AUTHORITY UNDER SECTION 361 OF THE PUBLIC
HEALTH SERVICE ACT (PHSA) 11 (2021) (footnotes omitted).
Specifically, â[u]ntil the COVID-19 pandemic, the CDC pri-
marily invoked its [s]ection 361 authority to issue and re-
fine regulations relating to quarantine and isolation.â Id.
at 12.
The CDCâs eviction moratorium is more like prior state
eviction moratoriums designed to mitigate the economic ef-
fects of a pandemic than a public health measure designed
to prevent the spread of disease. 14 President Biden indeed
14 Many states enacted eviction moratoriums aimed
at addressing the economic effects of the pandemic. See,
e.g., Baptiste v. Kennealy, 490 F. Supp. 3d 353, 376 (D.
Mass. 2020) (âThe House Speaker said, âWe acted to
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DARBY DEVELOPMENT COMPANY, INC. v. US 29
justified the CDCâs eviction moratorium in part because âit
will probably give some additional time while weâre getting
that $45 billion out to people who are, in fact, behind in the
rent and donât have the money.â The White House, Re-
marks by President Biden on Fighting the COVID-19 Pan-
demic (Aug. 3, 2021). Economic regulations are plainly not
within the CDCâs normal scope of duties.
The Supreme Court in Alabama Realtors confirmed
that the statute âha[d] rarely been invokedâand never be-
fore to justify an eviction moratorium. Regulations under
this authority have generally been limited to quarantining
infected individuals and prohibiting the import or sale of
animals known to transmit disease.â 594 U.S. at 761. 15 It
is hard to understand how the majority here can conclude
safeguard tenants and homeowners from economic insecu-
rity during and for a period after the state of emergency
ends.ââ); Elmsford Apartment Assocs., LLC v. Cuomo, 469
F. Supp. 3d 148, 155 (S.D.N.Y. 2020) (âThe New York State Legislature and the Governor, Defendant Andrew Cuomo, have worked together to respond to this evolving crisis and its effects on the health, safety, and economic wellbeing of New Yorkers.â). The CDCâs Order likewise addresses âhousing stabilityâ and prevents landlords from evicting tenants who are unable to pay their rent. Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19,85 Fed. Reg. 55292
, 55292.
15 Likewise, in granting summary judgment that the
eviction moratorium exceeded the CDCâs statutory author-
ity, the district court explained that â[i]t is also telling that
the CDC has never used [section 361] in this manner. As
the [CDC] confirms, [section 361] âhas never been used to
implement a temporary eviction moratorium,â and âhas
rarely [been] utilized . . . for disease-control purposes.ââ Al-
abama Assân of Realtors v. United States Depât of Health &
Hum. Servs., 539 F. Supp. 3d 29, 41 (D.D.C. 2021).
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30 DARBY DEVELOPMENT COMPANY, INC. v. US
that the CDCâs actions were within the normal scope of the
CDCâs duties when the CDC had never used section 361 for
anything like an eviction moratorium before.
Third, in defending the CDCâs Order before the Su-
preme Court in Alabama Realtors, the government never
characterized the order as a routine exercise of authority.
Instead, the government explained that the Order ârested
on the CDCâs findings that the United States faced the risk
of an unprecedented wave of evictionsâ based on âan un-
precedented public emergency.â Response in Opposition to
Applicantsâ Emergency Application to Vacate the Stay at
16, 34, Alabama Realtors. The majority here likewise de-
scribes the eviction moratorium as âhardly a run-of-the-
mill law implicating the landlord-tenant relationshipâ and
â[i]nstead, it is a highly unusualâand, so far as the parties
have shown, unprecedentedâOrder.â Maj. Op. 34. The
CDCâs Order was a response to an extreme event, and not
a routine order issued within the normal scope of its duties.
Fourth, and most significantly, the Supreme Courtâs
decision in Alabama Realtors made clear that the CDCâs
action is far outside any reasonable construction of the
statute. In vacating a stay of the injunction barring en-
forcement of the eviction moratorium, the Supreme Court
found âthat the applicants are virtually certain to succeed
on the merits of their argument that the CDC has exceeded
its authority.â Alabama Realtors, 594 U.S. at 759. In an-
alyzing the likelihood of success on the merits, the Su-
preme Court did not mince its words. It held that it
âstrains credulityâ that the âdecades-old statute that au-
thorizes [the CDC] to implement measures like fumigation
and pest exterminationâ grants CDC the power to impose
a nationwide eviction moratorium. Id. at 760. The Su-
preme Court found that âit [wa]s a stretch to maintain that
§ 361(a) gives the CDC the authority to impose this eviction
moratorium.â Id. at 764. âIndeed, the [g]overnmentâs read
of § 361(a) would give the CDC a breathtaking amount of
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DARBY DEVELOPMENT COMPANY, INC. v. US 31
authorityâ and â[s]ection 361(a) is a wafer-thin reed on
which to rest such sweeping power.â Id. at 764â65.
It cannot be both that the eviction moratorium was
within the normal scope of the CDCâs duties and that â[t]his
claim of expansive authority under § 361(a) is unprece-
dented.â Id. at 765. The Supreme Court explained that
â[w]e expect Congress to speak clearly when authorizing an
agency to exercise powers of âvast âeconomic and political
significance.âââ Id. at 764 (quoting Util. Air Regul. Grp. v.
EPA, 573 U.S. 302, 324, (2014)). For the CDC to implement eviction moratoriums, which the Supreme Court described as exercising âa breathtaking amount of authority,â it would first need explicit Congressional authorization.Id.
Such clear authorization is missing from the PHSA. In
sum, the Supreme Courtâs decision specifically held that
the eviction moratorium was outside the agencyâs normal
scope of duties or any reasonable interpretation of its pow-
ers.
Thus, even under the majorityâs expressed view of Del-
Rio, the CDCâs eviction moratorium was not within the nor-
mal scope of its duties under the PHSA and thus the CDCâs
action was unauthorized. A takings claim cannot lie for
such unauthorized acts of a government official.
As discussed earlier, the majorityâs mistake will have
significant consequences for future cases. It will impose
potential takings liability on agencies for virtually any act
that is not contrary to a specific statutory prohibition or
taken in bad faith. The increased risk of takings liability
will deter government programs, and the government in
this case alone has potential liability upwards of $50 bil-
lion. This major change to our takings jurisprudence is
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32 DARBY DEVELOPMENT COMPANY, INC. v. US
without support and cannot be correct. I respectfully dis-
sent. 16
16Since the takings claim must be rejected for lack of
authority, I do not reach the physical takings issue.