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Bass Enters. Prod. Co. v. United States

ELR Citation: 33 ELR 20102
Nos. No. 95-52L, 54 Fed. Cl. 400/(Fed. Cl., 11/13/2002) Decision on remand

The court holds that in the wake of the holding in Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 122 S. Ct. 1465, 32 ELR 20627 (2002), the Bureau of Land Management's (BLM's) denial from 1994 to 1998 of applications by oil leaseholders to drill wells in the area of the Waste Isolation Pilot Plant (WIPP) was not a taking requiring compensation. Before the Tahoe decision, the court had found that the BLM's denial of the drilling applications was a temporary taking requiring compensation of $1,137,808. Tahoe, however, requires the temporary takings analysis of Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 8 ELR 20528 (1978), to be applied in all takings cases where there is anything less than a complete elimination of value. The court first holds that under that Penn Central factors, the oil leaseholders had reasonable investment-backed expectations of drilling on the leased lands. The court next holds that the BLM's denial of the drilling applications denied the leaseholders economic use of their land, but not to the degree that the court had determined in its original holding. Using the economic impact test, the court determines that the cost of the delay was only 5% of the economic value of the leases. Nevertheless, the court holds that although the leaseholders had investment-backed expectations, the importance of the government action to public health and safety and the negligible economic impact negate the leaseholders' takings claim. The BLM denied the applications in order to determine if drilling in the vicinity of the WIPP posed a serious threat to public health and welfare, and where the purpose of a regulation is to prevent injury to the public, compensation for a taking is not required.

[A prior decision in this litigation is published at 28 ELR 20446.]

Harold L. Hensley Jr.
Hinkle, Hensley, Shanor & Martin
400 Penn Plaza, Ste. 700, Roswell NM 88202
(505) 622-6510

Counsel for Defendant
Susan V. Cook
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000