Case: 19-1901   Document: 40     Page: 1   Filed: 05/15/2020




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

         BUDDY TAYLOR, DONNA TAYLOR,
               Plaintiffs-Appellants

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2019-1901
                 ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:18-cv-01082-TCW, Judge Thomas C. Wheeler.
                  ______________________

                 Decided: May 15, 2020
                 ______________________

     A. BLAIR DUNN, Western Agriculture, Resource and
 Business Advocates, LLP, Albuquerque, NM, argued for
 plaintiffs-appellants. Also argued by MARSHALL RAY, Law
 Offices of Marshall J. Ray, LLC, Albuquerque, NM.

     NATHANAEL YALE, Commercial Litigation Branch, Civil
 Division, United States Department of Justice, Washing-
 ton, DC, argued for defendant-appellee. Also represented
 by JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN, JR.,
 LOREN MISHA PREHEIM; MICHAEL CASILLO, Air Force Legal
 Operations Agency, Joint Base Andrews, MD.
                  ______________________
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 2                                   TAYLOR   v. UNITED STATES



     Before PROST, Chief Judge, O’MALLEY and TARANTO,
                      Circuit Judges.
 TARANTO, Circuit Judge.
      Buddy and Donna Taylor allege that, after they pur-
 chased land near a United States Air Force base in New
 Mexico, the Air Force began flying training missions low
 over the land. Several years later, the Taylors entered into
 an agreement with Wind Energy Prototypes, LLC, giving
 the company an exclusive option to obtain an easement it
 could use to build and operate structures to collect energy
 from wind. The Taylors allege that during the term of the
 option, employees of the Air Force informally advised Wind
 Energy that the Federal Aviation Administration would
 not issue a No Hazard designation for such structures on
 the land. Thereafter, Wind Energy, rather than exercising
 the option, terminated the contract with the Taylors, a de-
 cision that the Taylors acknowledge was permitted by their
 contract with Wind Energy.
     The Taylors sued the federal government in the Court
 of Federal Claims. The complaint is properly understood
 as making essentially two claims—that the Air Force’s in-
 formal advice to Wind Energy effected a regulatory taking
 of the Taylors’ property interest in their contract with
 Wind Energy, and that the Air Force’s flyovers effected a
 physical taking of their property interest in their land and
 associated air space. The trial court dismissed the com-
 plaint, concluding that it lacked jurisdiction over the regu-
 latory-taking claim and, on the merits, that both taking
 claims failed to state a claim on which relief could be
 granted. We reverse the jurisdictional ruling but affirm
 the dismissal on the merits.
                               I
    The complaint alleges that in 1999 the Taylors pur-
 chased a large plot of land near a United States Air Force
 base in New Mexico. They use the land to raise stocker
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 TAYLOR   v. UNITED STATES                                  3



 calves. After the purchase, the complaint says, the Air
 Force began flying training missions over the land, some-
 times “no more than 20 feet . . . off the deck.” J.A. 28.
     In October 2008, the Taylors entered into an agree-
 ment with Wind Energy. The agreement, which is at-
 tached to the complaint, granted Wind Energy an exclusive
 option for an easement, into and on the Taylors’ property,
 for “wind resource evaluation, wind energy development,
 energy transmission and related wind energy development
 uses.” J.A. 38–62. The agreement provided Wind Energy
 five years (the “option term”) to exercise the easement op-
 tion, during which Wind Energy could terminate the agree-
 ment without fee, upon giving the Taylors appropriate
 notice. J.A. 38, 49.
     In mid-2012, according to the complaint, employees of
 the Air Force on the nearby base suggested to Wind Energy
 that the Federal Aviation Administration (FAA) would not
 issue a “No Hazard” designation for the air space above the
 Taylors’ land. J.A. 29–30. The absence of such a designa-
 tion, the complaint alleges, is “fatal to the construction of
 planned wind turbines because other regulatory agencies
 will withhold permits for construction” and “financing be-
 comes impracticable.” J.A. 29. On September 11, 2012,
 within the option term, Wind Energy exercised its contrac-
 tual right to terminate the agreement. J.A. 65. 1




     1    Although the complaint contains a passing refer-
 ence to “breach” by Wind Energy, J.A. 32, the Taylors ex-
 plained during oral argument in this court that they were
 not alleging that Wind Energy breached the contract—
 which, by its terms, gave Wind Energy a right to terminate
 when and as it did, J.A. 49. Oral Argument at 6:40–7:18;
 see also J.A. 49. We read the complaint in accordance with
 that acknowledgment.
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 4                                   TAYLOR   v. UNITED STATES



      On July 25, 2018, the Taylors sued the United States
 in the Court of Federal Claims. Fairly read, and as under-
 stood in the trial court, the complaint makes two claims:
 (1) the government effected a regulatory taking of the Tay-
 lors’ property interest in its contract with Wind Energy
 when Air Force personnel led Wind Energy to terminate
 the contract by suggesting that the FAA would not issue a
 “No Hazard” designation; (2) the Air Force’s flyovers ef-
 fected a physical taking of their property interest in the
 land and associated air space. The government filed a mo-
 tion to dismiss under Court of Federal Claims Rule 12(b)(1)
 for “lack of subject-matter jurisdiction” and under Rule
 12(b)(6) for “failure to state a claim upon which relief can
 be granted.” The trial court granted the motion and dis-
 missed the complaint. Taylor v. United States, 

(2019). The trial court dismissed the regulatory-taking
 claim for lack of subject-matter jurisdiction and also for
 failure to state a claim.

The court dismissed
 the physical-taking claim for failure to state a claim.

     The Taylors timely appealed. We have jurisdiction un-
 der 28 U.S.C. § 1295(a)(3).
                              II
     We review the dismissal for lack of subject-matter ju-
 risdiction de novo. Biltmore Forest Broadcasting FM, Inc.
 v. United States, 

, 1380 (Fed. Cir. 2009);
 Folden v. United States, 

, 1354 (Fed. Cir.
 2004). We review the dismissal for a failure to state a claim
 on which relief can be granted de novo. Cambridge v.
 United States, 

, 1335 (Fed. Cir. 2009). The
 complaint must allege facts “‘plausibly suggesting (not
 merely consistent with)’ a showing of entitlement to relief.”
 Palmyra Pacific Seafoods, L.L.C. v. United States, 

, 1366–67 (Fed. Cir. 2009) (quoting Bell Atl. Corp. v.
 Twombly, 

, 557 (2007)). We accept the well-
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 TAYLOR   v. UNITED STATES                                  5



 pleaded factual allegations as true.     Ashcroft v. Iqbal,
 

, 678 (2009).
                              A
     At the outset, we reject the trial court’s holding that
 the court lacked subject-matter jurisdiction over the Tay-
 lors’ regulatory-taking claim. 

–
 72. The Tucker Act gives the Court of Federal Claims “ju-
 risdiction to render judgment upon any claim against the
 United States founded either upon the Constitution, or any
 Act of Congress or any regulation of an executive depart-
 ment, or upon any express or implied contract with the
 United States, or for liquidated or unliquidated damages in
 cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The
 trial court held that it lacked jurisdiction, despite the ex-
 press allegation of a claim founded on the Takings Clause
 of the Fifth Amendment to the Constitution, because the
 complaint also describes the Air Force actions at issue as
 meeting the elements of a state-law tort. Taylor, 142 Fed.
 Cl. at 470–72. But we have rejected such a rationale for
 denying Tucker Act jurisdiction.
     As a substantive-law matter, we have recognized that
 “the same operative facts may give rise to both a taking and
 a tort.” Moden v. United States, 

, 1339 n.1
 (Fed. Cir. 2005) (relying on City of Monterey v. Del Monte
 Dunes at Monterey, Ltd., 

, 717 (1999), and
 other cases). And in El-Shifa Pharmaceutical Industries
 Co. v. United States, we specifically held that Tucker Act
 jurisdiction existed over a complaint that asserted a taking
 claim notwithstanding that the complaint also character-
 ized the same government conduct as tortious. 

, 1353–54 (Fed. Cir. 2004). We noted that the com-
 plaint invoked the Takings Clause and sought a remedy
 under that clause, and we concluded: “That the complaint
 suggests the United States may have acted tortiously to-
 wards the appellants does not remove it from the jurisdic-
 tion of the Court of Federal Claims.”

We
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 6                                    TAYLOR   v. UNITED STATES



 explained that, even if the complaint’s tort characterization
 made the complaint a “multipurpose” one, “[t]he multipur-
 pose nature of the complaint did not deprive the Court of
 Federal Claims of jurisdiction to entertain the takings
 claim alleged therein.”

In so ruling, we applied
 to a tort-taking overlap the dual-wrong rationale of Del-Rio
 Drilling Programs, Inc. v. United States, 

,
 1363–64 (Fed. Cir. 1998), and Rith Energy, Inc. v. United
 States, 

, 1365 (Fed. Cir. 2001).
     That precedent applies to this case. The Taylors chose
 to challenge the alleged Air Force action as a Fifth Amend-
 ment taking of their property interest in the Wind Energy
 contract. There is “ample precedent for acknowledging a
 property interest in contract rights under the Fifth Amend-
 ment.” Cienega Gardens v. United States, 

,
 1329 (Fed. Cir. 2003); see also Lynch v. United States,
 

, 579 (1934) (“The Fifth Amendment com-
 mands that property be not taken without making just
 compensation. Valid contracts are property, whether the
 obligor be a private individual, a municipality, a state, or
 the United States.”). That the complaint also indicates
 that the Air Force action constituted tortious interference
 with a contract does not remove the taking claim from the
 jurisdiction of the Court of Federal Claims under the
 Tucker Act. 2




     2   This case does not involve a situation in which the
 conduct alleged is a tort that, as a matter of law, is not a
 taking. In this respect, the case differs from the allegations
 of patent infringement against the federal government at
 issue in Schillinger v. United States, 

(1894).
 See Golden v. United States, 

, 986–88
 (Fed. Cir. 2020).
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 TAYLOR   v. UNITED STATES                                  7



                              B
      The Taylors’ regulatory-taking claim nevertheless fails
 on the merits as a matter of law. The Taylors invoke the
 standards for a regulatory taking that call for “ad hoc, fac-
 tual inquiries into the circumstances of each particular
 case.” Connolly v. Pension Benefit Guar. Corp., 

, 224 (1986). In Penn Central Transportation Co. v. City
 of New York, the Supreme Court considered three factors:
 (1) “[t]he economic impact of the regulation on the claim-
 ant”; (2) “the extent to which the regulation has interfered
 with distinct investment-backed expectations”; and (3) “the
 character of the government action.” 

, 124
 (1978); see also Ruckelshaus v. Monsanto Co., 

,
 1005 (1984) (considering “reasonable investment-backed
 expectations”). We conclude that the Taylors’ regulatory-
 taking claim cannot pass muster under those standards,
 even without further factual inquiry.
                              1
     The first factor, the economic impact of the regulation
 on the Taylors, weighs so strongly against finding a regu-
 latory taking that it might be decisive on its own—some-
 thing we need not decide because the full three-factor
 analysis leads to the same conclusion. As we have noted,
 the Taylors acknowledge that Wind Energy’s termination
 was not a breach of the agreement it had with the Taylors.
 The Taylors thus have not identified Fifth Amendment
 property in the form of “contract rights” against their con-
 tract counterparty (Wind Energy) that have been taken
 from them. Cienega 

(emphasis
 added). And they have not identified any takings law that
 treats as a protected form of “property” a person’s interest
 in the benefits of a contract that the counterparty may
 freely terminate (and, here, terminated without any plau-
 sible allegation of government coercion). At a minimum, in
 resting their regulatory-taking claim entirely on alleged
 harm to their contractual relationship, the Taylors’
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 8                                   TAYLOR   v. UNITED STATES



 complaint contains no allegation of any material harm to a
 constitutionally protected aspect of that relationship. 3
                              2
      The second factor, the extent to which the regulation
 interferes with the Taylors’ distinct, reasonable invest-
 ment-backed expectations, also weighs against finding a
 regulatory taking. Although the regulatory-taking claim is
 focused entirely on the loss of the hoped-for benefits of the
 2008 Wind Energy contract, the complaint states no facts
 indicating that the Taylors made any investment specifi-
 cally related to that contract. The only investment re-
 flected in the complaint is the purchase of the land in 1999.
 And even as to that, the complaint does not allege that the
 purchase was made with any expectation as to use of the
 property for harvesting wind energy. There are no mate-
 rial “distinct investment-backed expectation[s].” Penn
 

.
      Besides lacking support for an inference of investment-
 backed expectations regarding wind energy, the Taylors’
 claim supports no inference of reasonable expectations as
 to freedom from regulatory actions that might adversely af-
 fect use of the land for harvesting wind energy. We have



     3    The Takings Clause’s focus on particular property
 interests is reflected in the longstanding rule that the
 clause does not provide for compensation for “consequential
 losses.” United States v. General Motors Corp., 

, 379–80 (1945) (“The rule in [a takings] case is that
 compensation for that [property] interest does not include
 . . . consequential losses.”); see Mitchell v. United States,
 

, 345 (1925) (“The settled rules of law however,
 precluded his considering in that determination conse-
 quential damages for losses to their business, or for its de-
 struction.”); cf. Monongahela Navigation Corp. v. United
 States, 

, 326 (1893).
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 TAYLOR   v. UNITED STATES                                       9



 articulated three considerations relevant to that issue:
 (a) “whether the plaintiff operated in a ‘highly regulated
 industry’”; (b) “whether the plaintiff was aware of the prob-
 lem that spawned the regulation at the time it purchased
 the allegedly taken property”; and (c) “whether the plaintiff
 could have ‘reasonably anticipated’ the possibility of such
 regulation in light of the ‘regulatory environment’ at the
 time of purchase.” Appolo Fuels, Inc. v. United States,
 

, 1349 (Fed. Cir. 2004) (quoting Common-
 wealth Edison Co. v. United States, 

, 1348
 (Fed. Cir. 2001) (en banc)); see Reoforce, Inc. v. United
 States, 

, 1270 (Fed. Cir. 2017). All three con-
 siderations weigh against the Taylors.
     Airspace used for aircraft is highly regulated. See
 49 U.S.C. § 40103(b)(1) (The FAA “shall develop plans and
 policy for the use of the navigable airspace and assign by
 regulation or order the use of the airspace necessary to en-
 sure the safety of aircraft and the efficient use of air-
 space.”); see also 49 U.S.C. § 44718(a)(1) (“[T]he Secretary
 of Transportation shall require a person to give adequate
 public notice . . . of the construction . . . of a structure . . .
 when the notice will promote . . . safety in air commerce.”).
 Such strict regulation weighs against the Taylors’ claim,
 although “[a] property owner does not automatically relin-
 quish her Fifth Amendment rights by entering a highly
 regulated industry,” 

; see Ruckel-
 

(finding regulatory taking in an in-
 dustry “regulated . . . for nearly 75 years.”). Moreover, at
 the time the Taylors contracted with Wind Energy in 2008,
 they knew that the Air Force flew “training missions, some-
 times no more than 20 feet . . . off the deck.” J.A. 28 ¶ 12.
 The FAA regulations regarding hazard designations were
 also in place long before the Taylors purchased the prop-
 erty in 1999. See, e.g., Flowers Mill Assoc. v. United States,
 

, 186 (1991) (discussion of FAA No Hazard
 designations). When buying the land at issue, located near
 an Air Force base, the Taylors should have “reasonably
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 10                                  TAYLOR   v. UNITED STATES



 anticipated” that the FAA might not issue a No Hazard
 designation for their land. Thus, the Taylors’ distinct in-
 vestment-backed expectations weigh against finding a reg-
 ulatory taking.
                              3
     The third Penn Central factor, the character of the gov-
 ernment action, also weighs against finding a regulatory
 taking here. The action at issue is not the denial of a No
 Hazard designation. Rather, it is Air Force employees’ giv-
 ing of information and advice to Wind Energy suggesting
 that the FAA would not issue a No Hazard designation. See
 J.A. 18, 29–30; see also Oral Argument at 8:52–9:02 (“It’s
 not that the FAA gave some sort of presumption of
 [whether a No Hazard designation would issue], it’s that
 the Air Force said [that] this is not going to be forthcom-
 ing.”).
     That action falls into no category of government action
 we have recognized as supporting a regulatory-taking
 claim. It is not even the action of the FAA, which was not
 asked by Wind Energy or the Taylors for a No Hazard des-
 ignation. The challenged action by Air Force personnel did
 not have a “legal effect or impose a direct legal obligation
 on any party.” Dimare Fresh, Inc. v. United States,
 

, 1309 (Fed. Cir. 2015). It was not a form of
 coercive government action at all, but at most a form of
 “persuasion,” convincing Wind Energy of something assert-
 edly relevant to its prospects for having air clearance for
 contemplated wind towers. A&D Auto Sales, Inc. v. United
 States, 

, 1154 (Fed. Cir. 2014) (“The line be-
 tween coercion (which may create takings liability) and
 persuasion (which does not create takings liability) is
 highly fact-specific and hardly simple to determine.”). And
 there is no issue here of a withholding of specifically prom-
 ised government approval after large investments were
 made on the basis of the promise. See United Nuclear Corp.
 v. United States, 

(Fed. Cir. 1990).
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 TAYLOR   v. UNITED STATES                                 11



      The character of the government action counts against
 finding a taking. The Taylors cannot deny that the action
 was within the “authority” of those who took it; such a de-
 nial would defeat their taking claim. 4 The dissemination
 of information is a legitimate agency function, especially in
 the context of public safety. See Dimare 

. And we have already held that there are good rea-
 sons for caution about subjecting agency information dis-
 closures, even informal disclosures, to the risk of takings
 liability, especially when there are alternative means of
 checking harmful disclosures.

     In sum, each of the Penn Central factors weighs
 strongly against finding a regulatory taking. Together
 they mean that the Taylors’ claim, on the allegations of
 their complaint, cannot succeed as a matter of law.
                              III
                              A
     The complaint in this case also alleges that the govern-
 ment’s overflights have effected a physical taking of the
 Taylors’ “compensable property interests in the air space
 above their fee property.” J.A. 31 ¶ 29. The trial court con-
 cluded that the complaint provides legally insufficient


     4   A government action cannot be a taking if “the ad-
 ministrative agency lacked the authority to regulate the
 property it ‘appropriated,’” Dimare 

,
 or, more generally, if the government actors lacked the “au-
 thority” to take the action, Del-Rio 

(explaining nature of “authority” rule). See United
 States v. N. American Transp. & Trading Co., 

,
 333 (1920) (“In order that the government shall be liable it
 must appear that the officer who has physically taken pos-
 session of the property was duly authorized so to do.”); Fla.
 Rock Indus., Inc. v. United States, 

, 898–99
 (Fed. Cir. 1986).
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 12                                  TAYLOR   v. UNITED STATES



 factual support to survive a motion to dismiss the asserted
 physical-taking claim. 

. We
 agree.
     Under United States v. Causby, “[f]lights over private
 land are not a taking, unless they are so low and so fre-
 quent as to be a direct and immediate interference with the
 enjoyment and use of the land.” 

, 266 (1946).
 In applying that standard for finding an imposition of an
 “avigation easement,” we have considered (1) whether the
 planes flew directly over the claimant’s land; (2) whether
 the flights were low and frequent; and (3) whether the
 flights directly, immediately, and substantially interfered
 with the claimant’s enjoyment and use of the land. Brown
 v. United States, 

, 1102 (Fed. Cir. 1996). The
 Taylors’ complaint sufficiently alleges the first factor, but
 not the others.
     The Taylors allege that “military aircraft regularly fly
 training routes at altitudes below . . . 500 feet [above
 ground level] over [the Taylors’] property.” J.A. 30 ¶ 22.
 The trial court determined that the Taylors did not “allege
 that the flights were frequent enough to state a claim for
 an avigation easement.” 

. In the
 absence of greater specificity, “regularly” is not a factual
 allegation that can support an inference of the required fre-
 quency. There are no further allegations of how often
 flights occur.
      Nor have the Taylors provided any factual allegations
 of how the flights “directly, immediately, and substantially
 interfere” with their quiet enjoyment and use of the land.
 The complaint describes the Taylors’ ranch operations as
 the “buying and straightening out [of] stocker calves” but
 fails to allege how the overflights affect those operations.
 J.A. 28 ¶ 8. The complaint simply pleads that the Air Force
 “engage[s] in conduct and actions to inversely condemn the
 Taylor[s’] compensable property interest in the air space
 above their private property and the quiet enjoyment of the
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 TAYLOR   v. UNITED STATES                                    13



 reminder of their property interests.”

see also
 J.A. 33 ¶ 38 (The government’s actions “impaired [the Tay-
 lors’] right to use their property interests as they saw fit.”).
 These allegations are insufficient because they do no more
 than recite “labels and conclusions” and repeat the ele-
 ments of the cause of action without providing sufficient
 factual information. 

(“A pleading
 that offers ‘labels and conclusions’ or ‘a formulaic recitation
 of the elements of a cause of action will not do.’” (quoting
 

)); 

 (“Factual allegations must be enough to raise a right to re-
 lief above the speculative level.”). Therefore, the Taylors
 failed to state a claim for a physical taking.
                                B
     The trial court dismissed the Taylors’ physical-taking
 claim. 

(“[T]he Court grants the
 Government’s Motion to Dismiss as to all [the Taylors’]
 claims.” (capitalization altered)). The Taylors argue that
 we should vacate the dismissal and remand to allow them
 to amend their complaint. The trial court, however, did not
 abuse its discretion in dismissing the complaint.
       Court of Federal Claims Rule 15(a)—which is identical
 in all material respects to Federal Rule of Civil Procedure
 15(a)—prescribes when a party may amend its pleadings
 before trial. As a matter of course, a party may amend its
 pleadings within 21 days after service of the pleading or 21
 days after service of a responsive pleading or motion under
 Rule 12(b), (e), or (f), whichever is earlier. Ct. Fed. Cl.
 R. 15(a)(1). If a party wishes to amend a pleading outside
 Rule 15(a)(1), it may do so with either the opposing party’s
 written consent or the court’s leave. Ct. Fed. Cl. R. 15(a)(2).
 And “[t]he court should freely give leave when justice so
 requires.” Id.; see also Foman v. Davis, 

, 182
 (1962) (“In the absence of any apparent or declared reason
 . . . the leave sought [under Federal Rule of Civil Procedure
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 14                                   TAYLOR    v. UNITED STATES



 15(a)] should, as the rules require, be ‘freely given.’” (quot-
 ing Fed. R. Civ. P. 15(a))).
     At no point during the trial court’s proceedings, how-
 ever, did the Taylors seek to invoke any part of Rule 15(a)
 to amend their complaint—not on their own, not with the
 government’s permission, and not with the court’s permis-
 sion, even after the dismissal. We will not find an abuse of
 discretion on the part of the trial court with respect to a
 request for amendment never made to it.
                               IV
      For the foregoing reasons, we reverse the dismissal for
 lack of subject-matter jurisdiction but affirm the dismissal
 for failure to state a claim.
      The parties shall bear their own costs.
   REVERSED IN PART AND AFFIRMED IN PART