Jimmy Hall, 3L

Tammy L. Shaw, J.D.
 

After nearly twenty years of changing, ambiguous law, the United States Court of Federal Claims, in Kingsport Horizontal Property Regime v. United States, awarded South Carolina property owners compensation for erosion caused by the government's construction of the Atlantic Intercoastal Waterway. In a similar decision, the Federal Circuit Court of Appeals, in Palm Beach Isles Assocs. v. United States, recently granted a group of private landowners rights to potential compensation by limiting the scope of the navigational servitude as a defense to takings claims. In both cases, the courts held that the government may not use the federal navigational servitude as an absolute bar to takings claims, a decision that opens the door to compensation for other waterfront landowners.

Palm Beach Isles Assocs. v. United States, 208 F.3d 1374 (Fed. Cir. 2000).

In 1956, a large group of investors (PBIA) purchased a tract of land, consisting of 50.7 acres of wetlands and submerged land below the mean high tide of Lake Worth, on the Atlantic Intercoastal Waterway. Shortly after acquiring the parcel, PBIA applied for a dredge and fill permit in order to develop the parcel. Although the Army Corps of Engineers (Corps) granted the permit, PBIA never began the development, and in 1963, the permit expired. Twenty-five years later PBIA renewed its intentions to develop the tract of submerged land and again applied for a permit. This time the application was denied citing potential harm the development would cause to Lake Worth's shallow water habitat. Following this denial, PBIA filed suit in the court of Federal Claims, claiming that denial of the permit application precludes any economically viable use of the 50.7 acres and therefore is a compensable regulatory taking. The government argues that because the parcel is part of the bed of a navigable water body, the doctrine of navigational servitude grants power to regulate and control the tract and provides a defense to takings claims.

The Federal Navigational Servitude derives from the Commerce Clause of the U.S. Constitution and gives the government power to regulate and control submerged lands of the U.S. in the interest of commerce.1 The doctrine grants the U.S. a dominant interest in property which limits a private landowner's title and subjects it to the government's interest in maintaining navigation. This limitation bars a compensable takings claim that arises from action taken by the government in maintaining navigation.

PBIA argued that because the water level over these lands never exceeded three feet in depth they were incapable of supporting navigation and thus, the land was not subject to navigational servitude restrictions. PBIA further argued that the Corps denied the dredge and fill permits on environmental grounds, rather than navigational concerns and therefore should not be entitled to use the navigational servitude as a defense.

The Federal Circuit disagreed, holding that the navigational servitude applies to all areas of navigable waters that fall below the mean high water mark, regardless of depth. However, the court went on to say that in order to raise the navigational servitude as a defense to a regulatory takings claim, the government must show that the regulatory imposition is related to navigation. Since the Corps' decision to deny PBIA's permit cites environmental concerns rather than navigation issues, the case is remanded to the Court of Federal Claims to determine the Corps' reasons for the denial.

This court relied on Owen v. United States 2 for the proposition that the navigational servitude applies to all lands below the mean high water mark of navigable waterways. However, the question of whether the government could raise navigational servitude as a defense to takings claims for property above the mean high water mark, remained unanswered. The United States Court of Federal Claims recently addressed this issue in Kingsport Horizontal Prop. Regime v. United States.
 

Kingsport Horizontal Prop. Regime v. United States, 46 Fed. Cl. 691 (2000).

During the 1930's, the United States constructed the Atlantic Intercoastal Waterway (Waterway) to aid in the inland transportation of goods along the east coast. In order to maintain a continuous waterway, the United States obtained easements from private property owners to construct a connecting channel. Decades later, property owners adjacent to the Waterway noticed that the wave-wash from passing boats was causing parts of their land, outside the easement, to erode. Initially, the Federal Circuit denied compensation for the erosion stating that the landowners had "no property right to be safeguarded by the Army Engineers against collateral consequences of navigation improvements."3 However, the Federal Circuit later retracted, finding that the navigational servitude has horizontal limits that do not extend beyond the mean high water mark.4 Following that decision, the claimants filed a takings claim in the United States Court of Federal Claims.

In order to prove a taking, the claimant must prove that governmental action was the proximate cause of the injury.5 Where a claimant is able to prove that a government action caused erosion above the mean high water mark, courts have often ordered compensation.6 Here, the claimants argued that while the erosion to their property was caused by the wave-wash from private boats on the waterway, that erosion would not have been possible but for the construction of the waterway. The government, on the other hand, attempted to circumvent the proximate cause issue by arguing that the navigational servitude protected it from liability since the waterway was navigable and the erosion was caused by vessels in navigation.

The court sided with the property owners, stating that the government's use of the navigational servitude as a defense was not applicable in this case. The court noted that the characteristic effects of navigation along a natural waterway, including erosion above the mean high water mark, cannot give rise to governmental liability because the public's right to access and the government's dominant navigational servitude are pre-existing limitations on the property owner's interest in the land. However, unlike a natural waterway, a man-made waterway subjects the property owners to risks and conditions that would not have occurred otherwise. Moreover, in natural waterways, the government's right to encroach on private property is limited by acts necessary to maintain navigation, while in man-made waterways that right is defined by the specific boundaries of the easement. Applying the same rules to man-made and natural waterways would prevent the government from ever needing an easement since it could simply construct waterways over any privately owned property and avoid compensation by claiming a commercial and navigable connection.

The court determined that the navigational servitude does not reach beyond the mean high water mark of the Atlantic Intercoastal Waterway, nor beyond the boundaries of an easement. The court awarded compensation after finding the government's construction of the waterway to be the proximate cause of erosion of the claimants' property.
 

Conclusion

With these two decisions, the United States Court of Federal Claims and the Federal Circuit held that the government's use of the navigational servitude as a defense to takings claims is not absolute. In cases in which the land in question rests below the mean high water mark, the government bears the burden of proving that its actions are connected with navigation. Similarly, the navigational servitude defense does not reach land above the mean high water mark of a man-made waterway.
 

ENDNOTES

1. United States v. Rand, 389 U.S. 121 (1967).

2. Owen v. United States, 851 F.2d 1404 (Fed. Cir. 1988).

3. Ballam v. United States, 806 F.2d 1017, 1022 (1986).

4. Owen, 851 F.2d at 1415.

5. Sanguinetti v. United States, 264 U.S. 146, 149-50 (1924).

6. United States v. Dickenson, 331 U.S. 745 (1947).