{\rtf1\ansi\deff0\deftab720{\fonttbl{\f0\fswiss MS Sans Serif;}{\f1\fdecor\fcharset2 Symbol;}{\f2\fswiss\fprq2 System;}{\f3\fswiss MS Sans Serif;}} {\colortbl\red0\green0\blue0;} \deflang1033\pard\plain\f3\fs17 \par No. 94-1921 \par \par In The Supreme Court of The United States \par \par OCTOBER TERM, 1995 \par \par BOARD OF COUNTY SUPERVISORS OF PRINCE \par WILLIAM COUNTY, VIRGINIA, PETITIONER \par \par v. \par \par UNITED STATES OF AMERICA \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES COURT OF APPEALS \par FOR THE FEDERAL CIRCUIT \par \par BRIEF FOR THE UNITED STATES IN OPPOSITION \par \par DREW S. DAYS, III \par Solicitor General \par \par LOIS J. SCHIFFER \par Assistant Attorney General \par \par JOHN A. BRYSON \par JACQUES B. GELIN \par Attorneys \par \par Department of Justice \par Washington, D.C. 20530 \par (202)514-2217 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par QUESTION PRESENTED \par \par Whether "proffers" that a landowner submits to a \par county, in order to induce that county to rezone a \par tract of land, are "property" of the county for which \par the United States must pay just compensation when \par it acquires the tract from the landowner by eminent \par domain. \par \par (1) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par TABLE OF CONTENTS \par \par Page \par \par Opinions below . . . . 1 \par Jurisdiction . . . . 2 \par Statement . . . . 2 \par Argument . . . . 5 \par Conclusion . . . . 11 \par \par TABLE OF AUTHORITIES \par \par Cases: \par \par Armstrong v. United States, 364 U. S. 40 (1960) . . . . 10 \par Bishop v. Wood, 426 U. S. 341 (1976) . . . . 10 \par Bothwell v. United States, 254 U. S. 231 (1920) . . . . 9 \par Louisville Joint Stock Land Bank v. Radford, 295 \par Us. 555 (1935) . . . . 10 \par Meagher v. Appalachian Electric Power Co., 77 S.E. 2d \par 461 (Vs. 1953) . . . . 10-11 \par Mitchell v. United States, 267 U. S. 341 (1925) . . . . 7, 8 \par Mullen Benevolent Corp. v. United States, 290 U.S. 89 \par (1933) . . . . 9 \par Net Realty Holding Trust v. Franconia Properties, Inc., \par 544 F. Supp. 759(E.D. Va. 1982) . . . . 11 \par Omnia Commercial Co. v. United States, 261 U.S \par 502 (1923) . . . . 7 \par Reichelderfer v. Quinn, 287 U.S. 315 (1932) . . . . 7 \par Rinker v. City of Fairfax, 381 S.E. 2d 215 (Va. 1989) . . . . 6 \par Tardy v. Creasy, 81 Va. 553 (1886) . . . . 11 \par United States v. 50 Acres of Land, 469 U. S. 24(1984) . . . . 9 \par United States v. Petty Motor Co., 327 U. S. 372(1946) . . . . 9 \par United States ex rel. T.V.A. v. Powelson, 319 U. S. 266 \par (1943) . . . . 6, 8, 9 \par Washington & Old Dominion R.R. v. City of Alexandria, \par 60 S.E. 2d 40 (Vs. 1950) . . . . 6 \par \par Constitution and statutes: \par \par U.S. Const. Amend. V . . . . 5, 6, 9, 10 \par \par (III) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par IV \par \par Page \par \par Statutes-Continued: \par Federal Courts Administration Act of 1992, Pub. L. No. \par 102-572, 106 Stat. 4506 . . . . 1 \par Technical Miscellaneous Revenue Act of 1988 (Manassas \par Battlefield Act) Tit. X, Pub. L. No. 100-647, 102 Stat . \par 3810: 10002(2), 102 Stat. 3810: \par 16 U.S.C. 429b(b) . . . . 3 \par 16 U.S.C. 429b(2)(B) . . . . 3 \par \par Miscellaneous: \par C. Clark, Real Covenants and Other Interests Which \par Run With Land'' (2d ed. 1947) . . . . 11 \par 5 R. Powell, The Law of Real Property (1994) . . . . 11 \par 6 P. Rohan, Zoning and Land Use Controls (1995) . . . . 6 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par In the Supreme Court of the United States \par \par OCTOBER TERM, 1995 \par \par No. 94-1921 \par \par BOARD OF COUNTY SUPERVISORS OF PRINCE \par WILLIAM COUNTY, VIRGINIA, PETITIONER \par \par v. \par \par UNITED STATES OF AMERICA \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES COURT OF APPEALS \par FOR THE FEDERAL CIRCUIT \par \par BRIEF FOR THE' UNITED STATES IN OPPOSITION \par \par OPINIONS BELOW \par \par The opinion of the court of appeals (Pet. App. 1a- \par 38a) is reported at 48 F.3d 520. The opinion of the \par United States Claims Court (now the Court of \par Federal Claims)' dismissing petitioner's claim (Pet. \par App. 47a-87a) is reported at 23 Cl. Ct. 205. The opinion \par \par ___________________(footnotes) \par \par 1 This action was commenced in the United States Claims \par Court, Pet. App. 47a. The Federal Courts Administration Act \par of 1992, Pub. L. No. 102-572, 106 Stat. 4506, renamed that court \par "Court of Federal Claims." For convenience, we will use the \par trial court's new name to refer to proceedings held and \par decisions rendered by it and its predecessor. \par \par (1) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 2 \par \par of the United States Claims Court denying peti- \par tioner's motion for reconsideration (Pet. App. 39a-46a) \par is not yet reported. \par \par JURISDICTION \par \par The judgment of the court of appeals was entered on \par February 21, 1995. The petition for a writ of \par certiorari was filed on May 22, 1995, The jurisdiction \par of this Court is invoked under 28 U.S.C. 1254(1). \par \par STATEMENT \par \par 1. The William Center Tract is a 550-acre property \par adjacent to the Civil War battlefield at Manassas, in \par Prince William "County, Virginia. In 1986, the owner \par of the tract (the landowner) submitted `\{proffers" to \par petitioner, the Board of County Supervisors of Prince \par William County, to induce petitioner to rezone the \par tract from agricultural to Planned Mixed Use \par (permitting a mixture of commercial, office, and \par residential uses). Under Virginia law, "proffers" are \par commitments made by a developer to a zoning \par authority in order to mitigate anticipated develop- \par ment impacts. `The landowner's proffers in this ease \par included, among other things, providing for open \par spaces, community trails, and recreation facilities, \par undertaking certain road improvements (or com- \par pensating petitioner for their construction), contri- \par buting to the funding of local public schools, and \par providing five acres for a fire station and a commuter \par parking lot or other public facility. Petitioner \par granted the landowner's request to rezone the tract \par for development. Pet. App. 4a-7a, 48a-52a. \par When the landowner proposed to construct a much \par larger development on the tract than originally \par proposed, a citizens coalition persuaded Congress to \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 3 \par \par enact the Manassas National Battlefield Park Amend- \par ments of 1988, Title X of the Technical and Mis- \par cellaneous Revenue Act of 1988, Pub. L. No. 100-647, \par 10002(2), 102 Stat. 3810, codified at 16 U.S.C. 429b(b). \par See Pet. App. 52a-53a. That Act vested in the United \par States, as an addition to the Manassas Battlefield \par National Park, all right, title and interest in and to, \par and the right to immediate possession of, the William \par Center Tract. The Act further obligated the United \par States to "pay just compensation to the owners of any \par property taken pursuant to this [Act] and * * * \par pledged * * * the payment of any judgment entered \par against the United States with respect to the taking \par of such property." 16 U.S.C. 429b(b)(2)(B). \par 2. The landowner and petitioner filed separate \par suits in the United States Court of Federal Claims \par (CFC) seeking compensation claimed to be due them. \par Petitioner sought $2 million for 16.05 acres of rights \par of way that had been conveyed to it. Petitioner also \par sought compensation for the proffers, alleging, inter \par alia, that the proffers constituted a property interest \par of which it was deprived as a result of Congress's \par decision to exercise its power of eminent domain. No \par value was assigned to the proffers. See Complaint \par 10. \par The United States settled the developer's suit, but \par declined to pay petitioner for either the value of the \par proffers or the 16.05 acres of rights of way that had \par been conveyed to it in fee. On June 3, 1991, the CFC \par issued a partial summary judgment dismissing \par petitioner's claim relating to the proffers. Pet. App. \par 47a-87a. The court reasoned that Virginia law is \par clear that the effect of a proffer is not to create \par property rights in the zoning authority, but simply to \par incorporate the agreed-upon restrictions as part of \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 4 \par \par the zoning plan for the jurisdiction. Id. at 60a-61a. \par Because local zoning codes do not apply to property \par that is owned by the United States, the court \par concluded that the restrictions "simply ceased to \par exist as of the date of the taking; they were not \par taken." Id. at 61a, 83a-84a, The court also concluded \par that Virginia law did not support petitioner's claims \par that the proffers amounted to a "dedication" of \par property for public use (id. at 67a-70a), or that the \par proffers were equivalent to restrictive covenants (id. \par at 70a-78a). \par On December 18, 1992, the CFC issued a second \par opinion dismissing the remainder of petitioner's suit \par (relating to the rights of way). 27 Fed. Cl. 339. The \par court reasoned that the proposed development at the \par William Center. Tract will never take place and there \par is no longer any need for petitioner to build roads. \par Because petitioner failed to show that it could devote \par the rights of way that had been dedicated for use as \par public roads to other, more profitable uses, the court \par concluded that petitioner was entitled only to nominal \par compensation for that property. \par 3. Petitioner appealed both decisions, and the court \par of appeals affirmed in part, reversed in part, and \par remanded. Pet. App. 1a-38a. The court first held that \par proffers are neither contract rights nor analogous to \par a security interest, like a materialmen's lien. The \par court explained that petitioner's acceptance of the \par proffers was simpIy the exercise of delegated zoning \par authority under Virginia law, which could not fairly \par be "overla[id] * * * with a contract veneer" (id. at \par 17a), and noted_ that "[t]he object of the proffers in this \par case was not to give [petitioner] something of \par intrinsic value with which it could go into the market \par place and trade, or which it could use and possess for \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 5 \par \par county purposes" (id. at 20a-21a). Rather, "the prof- \par fers, when incorporated,] as Virginia law provides,] \par into the ordinance granting the rezoning, gave \par [petitioner] the power to enforce the- ordinance as \par enacted. That power [petitioner] could not sell, give \par away, or transfer. Such enforcement rights arise out \par of and are defined by [petitioner's] exercise of the \par police power." Id. at 23a-24a. Accordingly, the court \par concluded that petitioner "did not `own' any interests \par by virtue of the proffers," and that "[t]he trial court \par was correct in dismissing [petitioner's] claim \par regarding the proffers." Id. at 25a-26a. \par The court of appeals reversed, however, the trial \par court's ruling with respect to the 16.05 acres that the \par landowner conveyed to petitioner for use as rights of \par way. Because that property was conveyed to \par petitioner by the landowner in fee simple, the court \par concluded, "[i]t matters not that the parties con- \par templated that the property would be used for a \par particular purpose." Pet. App. 32a. "[A]s a matter of \par property law," the court noted, petitioner "was free \par * * * to do with the property what it wished." Id. at \par 33a-34a. The court therefore remanded for a deter- \par mination of the just compensation due petitioner for \par the taking of rights of way that it held in unencum- \par bered fee simple. Id. at 38a. \par \par ARGUMENT \par \par The holding of the court of appeals on the narrow \par issue presented by petitioner-that proffers accepted \par by a Virginia local government in connection with \par rezoning do not constitute "property" within the \par meaning of the Fifth Amendment-is correct and does \par not conflict with a decision of any court of appeals or \par of this Court. Further review is not warranted. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 6 \par \par 1. While the meaning of "property" in the Fifth \par Amendment is a federal question, ordinarily federal \par courts look to local law to resolve whether rights \par amounting to "property" have been taken. United \par States ex rel. T.V.A. v. Powelson, 319 U.S. 266, 279 \par (1943). In this case, both courts below correctly \par concluded that nothing in Virginia law supports \par petitioner's claim that the proffers conferred prop- \par erty rights upon petitioner. That is because a local \par government's acceptance of proffers effects a legis- \par lative rezoning under Virginia law. See Rinker V. \par City of Fairfax 381 S.E. 2d 215,217 (Va. 1989). Thus, \par once accepted, proffers simply become part of the \par zoning restrictions that apply to the property. Zoning \par is a non-compensable exercise of the legislative will, \par not "property" within the meaning of the Fifth \par Amendment. Moreover, as the Virginia courts have \par recognized, local zoning restrictions do not apply to \par property owned by the United States. See Pet. App. \par 83a-84a (citing Washington & Old Dominion R.R. v. \par City of Alexandria, 60 S.E. 2d 40, 44 (Vs. 1950)); see \par also 6 P. Rohan, Zoning and Land Use Controls \par 40.03(l)(a) (1995). The Court of Federal Claims was \par therefore assuredly correct in concluding that \par petitioner's zoning restrictions, including the \par proffers made by the former owner of the William \par Center Tract, "simply ceased to exist as of the date of \par the taking; they were not taken." Pet. App. 61a. \par That analysis is not impugned by petitioner's claim \par that, by virtue of the proffers, it acquired valuable \par rights that it could have enforced against the owner \par of the property if the development had not. been \par terminated by Congress's action. Pet. 30, 31, 38. This \par Court has repeatedly recognized that "the existence \par of value alone does not generate interests protected \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 7 \par \par by the Constitution against diminution by the govern- \par ment." Reichelderfer v. Quinn, 287 U.S. 315, 319 \par (1932). Indeed, in circumstances like those present \par here, where the claimed loss is simply a con- \par sequential injury from the condemnation of the \par property of another, this Court has long held that no \par compensation is due. That principle is illustrated by \par Omnia Commercial Co. v. United States, 261 U.S. \par 502 (1923), where this Court held that the United \par States was not liable to a third party for the \par frustration of a contract to purchase a large quantity \par of steel from a steel manufacturer at a favorable price \par when the government requisitioned the steel \par company's entire product for a year. "[F]or \par consequential loss or injury resulting from lawful \par government action," the Court said, "the law affords \par no remedy." Id. at 510. The Court went on to explain \par (id. at 511): \par \par In exercising the power to requisition, the \par Government dealt only with the Steel Company, \par which company thereupon became liable to deliver \par its product to the Government, by virtue of the \par statute and in response to the order. As a result \par of this lawful governmental action the per- \par formance of the contract was rendered impossible. \par It was not appropriated but ended. \par \par Similarly, in Mitchell v. United States, 267 U.S. 341 \par (1925), the government condemned land used by the \par plaintiffs in their business of growing and canning \par corn of a special grade and quality. After receiving \par just compensation for the value of their land, the \par plaintiffs filed suit for additional recovery for the loss \par of their canning business, which was destroyed \par because no other land in the vicinity was suitable for \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 8 \par \par growing high-quality corn. The Court, after noting \par that "settled rules of law'' precluded consideration of \par "consequential damages" for losses of a business or \par its destruction, stated (267 U.S. at 345): \par No recovery therefor can be had now as for a \par taking of the business. There is no finding as a \par fact that the Government took the business, or \par that what it did was intended as a taking. If the \par business was destroyed, the destruction was an \par unintended incident of the taking of land. \par And in United States ex rel. T.V.A. v. Powelson, \par supra, the Court held that the United States was not \par required to compensate a property owner for loss of \par its privilege to use the State's power of eminent \par domain to acquire several tracts together with the \par tract condemned to form a multiple-dam, hydro- \par electric plant project, explaining (319 U.S. at 281): \par \par This public project, to be sure, has frustrated \par respondent's plan for the exploitation of its power \par of eminent domain. We may assume that that \par privilege was a thing of value and that this \par frustration of the plan means a loss to res- \par pondent. But our denial of compensation for that \par loss does not make this an exceptional case in the \par law of eminent domain. There are numerous \par business losses which result from condemnation \par of properties but which are not compensable under \par the Fifth Amendment. \par \par After adverting to its rulings in the Omnia and \par Mitchell cases, id. at 281-283, and reaffirming their \par rule on the non-compensability of consequential dam- \par ages, the Court- found "no reason based on precedent \par or principle * * * why respondent's privilege to use \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 9 \par \par the power of eminent domain should be treated as \par 'private properly' within the meaning of the Fifth \par Amendment so as to give rise to a private claim \par against the public treasury," Id. at 283. 2. \par As the lower courts correctly concluded, there is \par no reason for a different conclusion with respect to \par petitioner's exercise of its statutory zoning authority \par under Virginia law. Thus, far from creating "new \par Federal law * * * about, what constitutes a com- \par pensable property interest" (pet. 19), as petitioner \par contends, the result reached by those courts is \par completely consistent with the controlling decisions \par of this Court. \par 2. There is no merit to petitioner's contention \par (Pet. 14, 46) that the court of appeals' conclusion \par conflicts with United States v. 50 Acres of Land, 469 \par U.S. 24 (1984), because it means that public con- \par demnees are not entitled to similar treatment as \par private condemnees. In 50 Acres, a muncipality \par whose landfill was condemned by the United States \par argued that the government was required to pay it \par the cost of acquiring a substitute facility. The Court \par held that the muncipility was not entitled to that \par measure of compensation (which concededly would \par have applied if the government had taken property for \par which there was no market, such as streets), because \par there was "a fairly robust market for sanitary landfill \par \par ___________________(footnotes) \par \par 2. Numerous other cases affirm the proposition that \par consequential damages that result from taking of property \par by the federal government are not compensable under the \par Fifth Amendment even when, as petitioner asserts was the case \par here, the claimant has lost a valuable expectancy. See, e.g., \par United States v. Petty Motor Co., 327, 377-378 (1946); \par Mullen Benevolent Corp. v. United States, 290 U.S. 89, 94-95 \par (19930; Bothwell v. United States, 254 U.S. 231, 233 91920). \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 10 \par \par properties." Id. at 30. That holding has no relevance \par to the court of appeals' ruling, which turned on \par petitioner's failure to meet a threshold requirement \par for compensation that applies equally to private and \par public condemners-the taking of "property." The \par reason petitioner is not entitled to compensation for \par the loss of the proffers is not that it is being treated \par differently from private condemnees, but that it is \par being treated in the same manner as private \par condemners who lose business opportunities and \par expectations as a result of a taking. \par There is no greater force to petitioner's claim (Pet. \par 37) that the decision below is inconsistent with \par Armstrong v. United States, 364 U.S. 40 (1960). \par Armstrong held that the government's destruction of \par certain materialmens' liens was a compensable taking \par of property interests within the meaning of the Fifth \par Amendment. Id. at 44-46. Liens, however, generally \par give the holder the right "to resort to the specific \par property" for satisfaction of the claims they secure \par (id. at 44; see also Louisville Joint Stock Land Bank \par v. Radford, 295 U.S. 555, 589-590 (1935)). By contrast, \par Virginia law provides only that the restrictions \par reflected in the proffers become part of the legislative \par rezoning of the tract. See Pet. App. 14a-15a, 17a, 60a. \par Petitioner's disagreement with that interpretation of \par Virginia law, in which both courts below concurred, \par does not merit this Court's review. Cf. Bishop v. \par Wood, 426 U.S. 341,345-346 (1976). 3. \par \par ___________________(footnotes) \par \par 3 Petitioner's alternative argument (Pet. 38-39), that the \par proffers were analogous to restrictive covenants, is also without \par merit. In Virginia, restrictive covenants are compensable \par property if taken by eminent domain. Meagher v. Appalachian \par Electric Power Co., 77 S.E. 2d 461, 465 (Vs. 1963) (reviewing \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 11 \par \par CONCLUSION \par The petition for a writ of certiorari should be \par denied. \par \par Respectfully submitted. \par \par DREW S. DAYS, III \par Solicitor General \par \par LOIS J. SCHIFFER \par Assistant Attorney General \par \par JOHN A. BRYSON \par JACQUES B. GELIN \par Attorneys \par \par JULY 1995 \par \par ___________________(footnotes) \par \par authorities). To qualify as property, however, the benefit or \par burden must "run with the land." 5 R. Powell, The Law of \par Real Property 673[2] (1994); see Net Realty Holding Trust v. \par Franconia Properties, 544 F. Supp. 759, 762 (E.D. Va. 1982). \par Because of the lack of the requisite privity of estate between \par petitioner and the developer, the Court of Federal Claims \par correctly found that the proffers were more closely akin to \par affirmative covenants, which are created when the covenantor \par promises to perform an act upon his land which benefits land \par owned by the covenantee.. See C. Clark, Real Covenants and \par Other Interests Which "Run With Land" 97, App. I (2d ed. \par 1947) at 213-232. In Virginia, the burdens of affirmative \par covenants do not run with the land. See, e.g., Tardy v. Creasy, \par 81 Va. 553, 562 (1886). \par \par \par }