Constitutional Law – Eminent Domain Clause of the Fifth Amendment – Compensation for Partial Regulatory Takings

In September 1972, Florida Rock Industries, Inc., (Florida Rock) purchased 1,560 acres of unimproved wetlands in Dade County, Florida, for the purpose of conducting limestone mining operations. The purchase price was $ 2,964,000, or $ 1,900 per acre, and, according to tests, the property would have yielded 100,000 tons of usable rock per acre. When Florida Rock purchased the property, it was zoned to permit the mining of the limestone without the prior approval of the federal, state, or local government. However, in the same year as the purchase, Congress passed the Federal Water Pollution Control Act Amendments which gave the United States Army Corps of Engineers (Corps) jurisdiction to regulate the discharge of certain materials into the "waters of the United States." In 1977 the Corps extended the definition of "waters of the United States" to apply to wetlands areas. Because of a weak market, Florida Rock allowed the property to lie dormant until 1978, when it began mining, unaware that it was required to obtain a permit from the Corps. Upon learning of Florida Rock's activities, the Corps issued an order to cease and desist. Florida Rock filed for a permit, but the Corps denied the request. Florida Rock filed suit in the United States Court of Federal Claims alleging that the Corps' permit denial was a regulatory taking requiring compensation by the government.

This article was first published in the Tennessee Law Review in the winter of 1995.