ELAINE D. KAPLAN, Judge.
The plaintiff in this action, Daniel Gabino Martinez, seeks compensation for the value of certain livestock under the Fifth Amendment's Takings Clause. The United States Forest Service impounded and sold the livestock because Mr. Martinez had grazed them on land within the Apache-Sitgreaves National Forest without a permit. Currently before the Court are the government's motion to dismiss Mr. Martinez's claim pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the Court of Federal Claims (RCFC), the government's motion in the alternative for summary judgment pursuant to RCFC 56, and the plaintiff's motion pursuant to RCFC 15 for leave to file an amended complaint.
For the reasons set forth below, the Court concludes that it has jurisdiction over plaintiff's Fifth Amendment claim and so
As the Supreme Court has noted, "the public lands of the nation are held in trust for the people of the whole country."
Pursuant to the Federal Land Policy and Management Act (Federal Land Act), 43 U.S.C. §§ 1701 et seq., the Secretary of Agriculture is authorized to develop regulations that govern the granting, cancellation, suspension, or modification of grazing permits or leases "with respect to lands within National Forests in the sixteen contiguous Western States." 43 U.S.C. § 1752(a). Those regulations are codified at 36 C.F.R. Part 222, Subpart A. In addition, the Secretary has promulgated regulations governing the impoundment and disposal of unauthorized livestock, pursuant to his authority under 7 U.S.C. § 1011(f) "[t]o make such rules and regulations as he deems necessary to prevent trespasses and otherwise regulate the use and occupancy of property." Those regulations are codified at 36 C.F.R. Part 262.
The Secretary's regulations require that all livestock that graze on "National Forest System lands and other lands under Forest Service control must be authorized by a grazing or livestock use permit." 36 C.F.R. § 222.3(a). When livestock are identified as "unauthorized" or are grazing in numbers "in excess of those authorized by grazing permit," the Forest Service is empowered to impound the animals "any time five days after written notice of intent to impound such livestock is . . . delivered to such owners."
The Martinez family owns and operates a cattle ranch in Greenlee County, Arizona, consisting of approximately 160 acres of patented lands.
Plaintiff's father, Abelardo Martinez Sr., had held a permit to graze livestock on the Pleasant Valley allotment since 1948. Def.'s Mot. Ex. A ¶ 18. In 2001, following an environmental review of the Pleasant Valley allotment, the Forest Service decided to amend Mr. Martinez Sr.'s permit to decrease the amount of time his livestock could graze (as measured in "animal unit months" or AUMs).
Daniel Martinez, the plaintiff in this action, took ownership of the Martinez Ranch on January 21, 2004.
On October 14, 2004 the Forest Service issued a "Notice of Intent to Impound Unauthorized Livestock" and, citing 36 C.F.R. § 262.10(f), informed Mr. Martinez that his livestock would be impounded unless he immediately remove them from federal lands. Def.'s Mot. Ex. D. The Forest Service issued a second notice on July 25, 2005, which Mr. Martinez returned with the words "Refused for Fraud" written across the notice. Def.'s Mot. Ex. E; Ex. F.
The Forest Service then sent a letter on October 20, 2005, informing Mr. Martinez he could avoid the "livestock impoundment actions currently in motion" by removing his livestock from the Pleasant Valley and Hickey allotments and by agreeing not to graze his livestock on the national forest without first receiving a permit. Def.'s Mot. Ex. G. The Forest Service asked that Mr. Martinez respond by October 21, 2005, to formulate an agreement to come into compliance; otherwise the Forest Service would impound his livestock on October 22, 2005.
On October 22, 2005, pursuant to 36 C.F.R. § 262.10(a), the Forest Service gathered and impounded Mr. Martinez's livestock grazing on federal land. Def.'s Mot. Ex. A ¶ 34. In letters dated October 28, 2005, and November 1, 2005, the Forest Service informed Mr. Martinez that it had impounded over 300 livestock belonging to him, and that he had fourteen days to claim his animals and pay a redemption fee. Def.'s Mot. Ex. M; Ex. N. If he failed to do so, the letters continued, the livestock would be "transported to a sale barn, following the 14 day holding period, and sold at a public auction to the highest bidder," pursuant to 36 C.F.R. § 262.10(f).
The Forest Service scheduled the public auction for December 15, 2005, and provided Mr. Martinez notice, pursuant to 36 C.F.R. § 262.10(f), in a letter dated December 6, 2005. Def.'s Mot. Ex. T. The Forest Service subsequently informed Mr. Martinez that an additional auction was scheduled for December 22, 2005. Def.'s Mot. Ex. U. Each time, the Forest Service provided Mr. Martinez the opportunity to claim and recover his livestock.
On November 27, 2006, the United States filed suit in district court in New Mexico, claiming that Mr. Martinez owed a balance of $132,642.37, plus interest, to the United States for the costs it incurred to gather, impound, care for, and auction the livestock. Compl.,
The district court then directed the parties to attend an evidentiary hearing on June 26, 2007 to determine the proper amount of damages. Order at 4,
On October 27, 2010, the district court denied Mr. Martinez's motion for relief from judgement under Rule 60 of the Federal Rules of Civil Procedure. Order,
Mr. Martinez filed the present "Complaint for Just Compensation" in this Court on November 8, 2011. In that complaint, he alleges that the sale of his livestock to third parties constituted a taking under the Fifth Amendment of the Constitution. Compl. ¶¶ 22-23. Estimating each animal's fair market value at $1,640, Mr. Martinez requests that the Court award damages of $637,970 plus interest for the livestock "taken" by the Forest Service.
On March 13, 2012, the United States moved to dismiss for lack of jurisdiction, claiming that the action was time barred. It argued that, to the extent that Mr. Martinez had stated a claim under the Fifth Amendment, the claim accrued when Mr. Martinez's livestock were impounded in October of 2005, which was more than six years before he filed suit in this Court. Def.'s Mot. to Dismiss at 12, ECF No. 8. After receiving briefs and holding an oral argument on the question, Judge Bruggink denied the government's motion, reasoning that:
Opinion at 10, ECF No. 21.
Following Judge Bruggink's denial of the government's motion to dismiss, the parties engaged in discovery, which concluded on February 21, 2015. In the interim, the case was transferred to the undersigned.
Thereafter, on March 17, 2015 plaintiff filed a motion to amend his complaint. In addition, on April 20, 2015, the government filed the motion to dismiss or in the alternative for summary judgment that is currently before the Court. Oral argument was held on the pending motions on September 25, 2015.
In deciding a motion to dismiss for lack of subject matter jurisdiction, the court accepts as true all undisputed facts in the pleadings and draws all reasonable inferences in favor of the plaintiff.
Under the Tucker Act, this Court is granted jurisdiction to "render judgement upon any claim against the United States founded . . . upon the Constitution . . . for liquidated or unliquidated damages in cases not sounding in tort." 28 U.S.C. § 1491(a)(1). It is well established that this Court has jurisdiction under the Tucker Act "to the extent the [plaintiff has] a nonfrivolous takings claim founded upon the Fifth Amendment."
In this case, in addition to seeking compensation under the Fifth Amendment for an alleged taking of his property, Mr. Martinez has raised a variety of challenges to the government's authority to impound and sell his livestock. Compl. ¶¶ 24-26; Oral Arg. at 33:00. However, whether based on the Constitution, a statute, or a regulation, such challenges cannot be pursued before this Court.
The government does not deny that—to the extent that the Court assumes the lawfulness of the impoundment and sale of the livestock—Mr. Martinez has alleged a Fifth Amendment claim that is within this Court's Tucker Act jurisdiction. It argues, however, that this Court cannot assert jurisdiction over Mr. Martinez's takings claim because it is barred by the Tucker Act's six-year statute of limitations.
A takings claim accrues when "all the events which fix the government's alleged liability have occurred and the plaintiff was or should have been aware of their existence."
In fact, as explained in greater detail below, neither the impoundment nor sale of Mr. Martinez's livestock can be considered a "taking" because the government impounded and sold Mr. Martinez's livestock as an exercise of its lawful police power, not its eminent domain authority.
Therefore, for purposes of determining its jurisdiction, the Court will not adopt the government's recasting of Mr. Martinez's takings claim. Instead, it will construe that claim as Mr. Martinez has asserted it: that the government's sale of his livestock constituted a taking of his property for which compensation is due. While that claim does not survive a motion to dismiss under Rule 12(b)(6) for the reasons described below, the claim as alleged accrued within the limitations period. Therefore, the Court denies the government's motion to dismiss under Rule 12(b)(1).
When considering a motion to dismiss for failure to state a claim under RCFC 12(b)(6), the court accepts as true the complaint's undisputed factual allegations and construes them in the light most favorable to the plaintiff.
The Fifth Amendment of the Constitution provides in pertinent part that "private property [shall not] be taken for public use without just compensation." U.S. Const. amend. V. The purpose of the Takings Clause is to protect individuals "from bearing public burdens `which, in all fairness and justice, should be borne by the public as a whole.'"
The Federal Circuit uses a two-part test to determine whether a physical taking has occurred. First, the court must determine "whether the claimant has established a property interest for purposes of the Fifth Amendment," and second, "the court must determine whether the governmental action at issue amounted to a compensable taking of that property interest."
In this case, the government does not deny that Mr. Martinez had a property interest in his livestock. It contends, however, that Mr. Martinez failed to state a takings claim under the Fifth Amendment because the Forest Service's impoundment of the livestock was a police action, and not undertaken pursuant to the government's eminent domain power to take property for public use. Def.'s Mot. at 16-18. The Court agrees.
It is well established that the Fifth Amendment's Taking Clause is not applicable where property is taken by the government on the basis of its exercise of its police powers.
While Mr. Martinez characterizes the government's sale of his livestock as a "taking," he does not argue (nor could he) that the government acted pursuant to its eminent domain powers. Indeed, as Mr. Martinez recognized in his original complaint, the government relied upon its statutory and regulatory authority when it impounded and sold his property.
Some two months after discovery was completed in this case, on March 17, 2015, Mr. Martinez filed a motion to amend the complaint in order to add additional claims that he asserted "came to light" during discovery. Pl.'s Mot. for Leave to File Am. Compl. at 1 ¶ 2, ECF No. 46. Among many other things, Mr. Martinez's proposed amended complaint requests that the Court "determine whether the [Forest Service] acted within the scope of authority delegated." Proposed Am. Compl. at 26, ECF No. 46-2. Like the memoranda plaintiff has already filed in connection with the government's motion to dismiss, the amended complaint (which is some fifty pages in length) includes a bewildering array of challenges to the government's authority to impound and sell Mr. Martinez's livestock. These include claims under numerous constitutional provisions (both state and federal), claims founded on numerous state and federal statutes, and what appear to be contract claims.
Under RCFC 15(a)(2), the court may permit a plaintiff to amend his or her pleadings "when justice so requires." Discretion to afford a party leave to amend lies with the court. Where the court finds that amending the complaint would cause "undue delay," "undue prejudice to the opposing party," or where "apparent futility" defeats the purpose of the amendment, the court may deny the plaintiff's motion to amend.
As is apparent, for the reasons set forth above, the challenges to the government's authority to impound and sell Mr. Martinez's livestock that are set forth in his amended complaint are not within the Court's jurisdiction. Further, consequential damages are not a component of just compensation under the Fifth Amendment.
Indeed, apparently recognizing that the proposed amended complaint contains numerous claims that are not within this Court's jurisdiction, or otherwise are clearly without merit, counsel for Mr. Martinez explicitly abandoned all but one of the new claims during oral argument on the government's motion to dismiss. He also offered to withdraw the proposed amended complaint and file a new, shorter one. Oral Arg. at 54:56. Thus, counsel stated that, notwithstanding the contents of the fifty-page proposed amended complaint lodged with his motion to amend, Mr. Martinez actually sought leave to make only a single new claim. Oral Arg. at 53:36. That claim, which is referenced only obliquely in the proposed amended complaint, is that "the seizure of [his] livestock has abrogated his property interest in the beneficial use of water." Proposed Am. Compl. at 31.
The Court concludes that it would not serve justice to allow Mr. Martinez to amend his complaint to add his newly conceived water rights claim at this juncture in the litigation. First, although Mr. Martinez asserts in his motion that this claim came to his attention as a result of discovery, this assertion has no basis. Indeed, at oral argument counsel acknowledged that the claim could have been made at the time the original complaint was filed because all facts relevant to that claim were already known to plaintiff. Oral Arg. at 37:34.
Further, in determining whether an amendment is prejudicial, the court looks to whether the amended complaint is based on the same theory as the original complaint.
In this case, the new claim that Mr. Martinez seeks to add changes the single theory upon which the case has been proceeding up to this point—that there was a taking of Mr. Martinez's livestock and that he should be compensated for the value of the livestock taken. The new claim, as best the Court understands it, and as articulated by counsel at oral argument, is that Mr. Martinez's rights to beneficial use of the water within the national forest were abrogated by the seizure and sale of his livestock. Specifically, he argues, because his livestock were sold, he can no longer exercise his rights to use of the water on government land for those livestock. Oral Arg. at 38:36.
Even assuming that such a dubious and poorly articulated claim could withstand a motion to dismiss under RCFC 12(b)(6), adding it to the case at this point would unduly burden the government after more than three years of litigation in this Court. Thus, adding the claim would likely result in a new round of briefing on motions to dismiss, and, assuming the claim survived such a motion, a new round of discovery.
In short, as the government has pointed out, issues surrounding the impoundment and sale of Mr. Martinez's livestock in 2005 have been in litigation for almost ten years in both the state and federal courts. It does not serve the interests of justice to take this dispute into its second decade by permitting Mr. Martinez to amend his complaint at this late date to add the new claim counsel articulated at oral argument.
For the foregoing reasons, the Court