## Facts

- Florida Rock Industries, Inc., a limestone mining company, owned approximately 1,560 acres of wetlands in Dade County, Florida.
- Florida Rock applied to the U.S. Army Corps of Engineers for a Clean Water Act § 404 permit to discharge dredged/fill material to mine limestone on about 98 acres of the tract, projected to last roughly three years.
- Federal and state agencies opposed the project due to wetlands loss and potential water-quality effects.
- The Corps denied the permit as contrary to the public interest in protecting south Florida wetlands.
- Florida Rock sued in the U.S. Claims Court, alleging the denial was a Fifth Amendment regulatory taking requiring just compensation.
- The Claims Court found a taking limited to the 98-acre segment and awarded about $1,029,000 plus interest and attorney’s fees.
- The United States appealed the taking and valuation; Florida Rock cross-appealed, arguing the taking should be measured against the entire 1,560-acre tract.

## Issues

1. Whether denial of a Clean Water Act § 404 dredge-and-fill permit can, as a matter of law, constitute a compensable regulatory taking under the Fifth Amendment.
2. What analytical framework and factual findings are required to decide whether a taking occurred, including:
   1. What constitutes the relevant parcel for analysis (98 acres or the larger tract).
   2. How to evaluate economic impact, interference with distinct investment-backed expectations, and the character of the government action.

## Decision

- The Federal Circuit held it was not legally impossible that denial of a § 404 permit could constitute a taking, and also not legally impossible that no taking occurred on these facts.
- The court rejected categorical rules that either (a) environmental regulation under the Clean Water Act can never be a taking, or (b) serious impairment of profit expectations necessarily establishes a taking.
- The court vacated the Claims Court’s judgment and compensation award because the trial court used an incorrect takings framework and inadequately addressed the relevant-parcel and economic-impact inquiries.
- The case was remanded for further proceedings applying the proper, factor-based takings analysis and for findings on the appropriate parcel and the regulation’s impact on value and expectations.

## Legal Principles

- Regulatory authority to restrict land use does not itself constitute a taking, and the existence of such authority does not bar takings liability.
- A denial of a Clean Water Act § 404 permit may, under some circumstances, effect a compensable regulatory taking.
- Regulatory takings determinations are fact-intensive and generally require consideration of: economic impact, interference with distinct investment-backed expectations, and the character of the government action.
- The “parcel as a whole” problem is central: defining the relevant parcel is necessary to measure economic impact and determine whether the challenged action is compensable.
- A compensable taking is not limited to situations of total loss of economic value; a partial taking may be compensable depending on the overall balancing of factors.

## Conclusion

The Federal Circuit vacated and remanded because the lower court treated the § 404 permit denial too mechanically as a taking of the 98 acres; the appellate court required a correct, factor-based regulatory takings analysis, including proper identification of the relevant parcel and a supported assessment of economic impact and expectations.


Florida Rock Indus., Inc. v. United States, 791 F.2d 893 (Fed. Cir. 1986)