       In the United States Court of Federal Claims
                         No. 06-167L (and consolidated cases)

                                 (Filed: May 30, 2013)

*************************************
OTAY MESA PROPERTY, L.P., et al.,   *
                                    *
                                    *           Fifth Amendment Taking; U.S. Border
                    Plaintiffs,     *           Patrol’s Use of Seismic Intrusion
                                    *           Sensors on Plaintiffs’ Property; Risk to
 v.                                 *           Plaintiffs that Property Could Not Be
                                    *           Used for Mitigation Purposes Under
THE UNITED STATES,                  *           California Land Use Law; Fair and
                                    *           Reasonable Determination of Damages.
                    Defendant.      *
                                    *
*************************************

Roger J. Marzulla, with whom was Nancie G. Marzulla, Marzulla Law, LLC,
Washington, D.C., for Plaintiffs.

Lary C. Larson, with whom were Ignacia S. Moreno, Assistant Attorney General, and
Joshua A. Doan, Trial Attorney, United States Department of Justice, Environment and
Natural Resources Division, Washington, D.C., Michael Felts, Senior Attorney, United
States Customs and Border Protection, Of Counsel, for Defendant.

                               OPINION AND ORDER

WHEELER, Judge.

        This case is before the Court on remand from the United States Court of Appeals
for the Federal Circuit to determine the proper amount of damages due Plaintiffs Otay
Mesa Property, LP, Rancho Vista Del Mar, Otay International, LLC, OMC Property,
LLC, D&D Landholdings, LP, and International Industrial Park, Inc. See Otay Mesa
Prop., L.P. v. United States, 670 F.3d 1358, 1360 (Fed. Cir. 2012). The factual
background and history of this case are found in the Court’s previous opinions. See Otay
Mesa Prop., L.P. v. United States, 93 Fed. Cl. 476, 479-84 (2010) (“Damages Decision”);
Otay Mesa Prop., L.P. v. United States, 86 Fed. Cl. 774, 775-85 (2009) (“Liability
Decision”). The Court will provide a brief overview of the facts relevant to the issues
currently on remand.
       Plaintiffs own eleven contiguous parcels of largely undeveloped land in San Diego
County, California near the United States’ border with Mexico. The land is subject to an
easement taken by the United States Border Patrol to allow for the placement of seismic
intrusion sensors on the property. In proceedings leading up to the trial in the liability
phase, Government counsel drafted and filed this easement on October 16, 2008,
conceding liability for a Fifth Amendment taking. The easement is styled as a
“stipulation,” but Plaintiffs played no role in drafting or assenting to the terms of this
document. Plaintiffs did not receive any compensation in return for the Government’s
taking of the easement.

        According to the October 16, 2008 document, the Government holds “[a]
perpetual and assignable easement to locate, construct, operate, maintain and repair or
replace the specified underground seismic intrusion sensors on the specified parcels,
including the right to ingress and egress to each sensor location.” PX 1 at ¶ 7. The
document lists fourteen seismic intrusion sensors at various underground locations on
parcels 1, 3, 4, 5, and 10 of Plaintiffs’ property, and states the month of installation for
each sensor. Id. at ¶ 5; see Liability Decision, 86 Fed. Cl. at 777. The Government states
that in placing these sensors on the five parcels of land, “it has taken a property interest in
the nature of an easement over the parcel of land on which the sensors have been placed.”
PX 1 at ¶ 6. The Government also states that the easement “will continue until the sensor
is no longer needed or the property is developed[,]” in which case “the sensor will be
removed or redeployed upon 30 days written notice that a grading permit has been issued
by the County of San Diego permitting development of all or a portion of the property.”
Id. at ¶ 7. Regarding termination, the document states that “upon removal of a sensor, the
portion of the easement relating to that sensor shall terminate.” Id. The sensors are
approximately one cubic foot in size, and upon being buried in the ground, a one-foot
long antenna extends above the ground for each sensor. Id. at ¶ 3.

        Based upon the Government’s concession, this Court held that the Government
was liable for the physical taking of an easement over the five parcels for the purpose of
installing and operating the sensors. Liability Decision, 86 Fed. Cl. at 790. In the
subsequent decision on damages, the Court held that the Border Patrol had taken a
temporary, non-exclusive blanket easement, entitling Plaintiffs to monthly compensation
of $41.50 per acre based on a fair market rental valuation method. Damages Decision, 93
Fed. Cl. at 479-80. The Court awarded a total of $3,043,051, plus interest, for the
number of acres covered and the duration of the easement for each sensor. Id. at 488-90.

       On appeal, the Federal Circuit held that the blanket easement encumbering
Plaintiffs’ property was a permanent rather than a temporary taking, and remanded the
case to this Court for a redetermination of damages. Otay Mesa, 670 F.3d at 1369. The
Federal Circuit characterized the taking as “a minimally invasive permanent easement to
use undeveloped land that is unilaterally terminable by Otay Mesa.” Id. at 1368. This

                                              2
Court conducted a remand trial on damages in Washington, D.C. on December 11-12,
2012. Thereafter, the parties submitted post-trial briefs on February 21, 2013 and reply
briefs on March 15, 2013. The Court heard closing arguments on May 1, 2013.

        After three trials, two decisions from this Court, and a decision from the Federal
Circuit, the parties’ positions on damages remain widely divergent. Currently, Plaintiffs
assert that they are entitled to approximately $5,100,000 in just compensation, while the
Government argues that Plaintiffs are entitled to no more than nominal damages.
Plaintiffs claim that the easement reduces the value of their developable land, and
prevents the environmentally sensitive land within the parcels from being used for
valuable mitigation purposes under California land use law.1

       The Court has conducted a thorough review of the entire record in this case. For
the 897 acres of land at issue on parcels 1, 3, 4, 5, and 10, approximately 278 acres are
suitable for development, and 619 acres can be used for mitigation. As will be explained,
the Court finds that it must treat Plaintiffs’ developable land differently from the
mitigation land. The Border Patrol’s sensor easement would have no material effect on
the developable land, because Plaintiffs may have the sensor removed upon 30 days
written notice that the county has approved development. For the mitigation land,
however, the Court is faced with conflicting evidence on the issue of whether the sensor
easement would constitute an impediment to a contemplated mitigation use. Plaintiffs’
witnesses state that the easement would preclude use of the property for mitigation, and
have ascribed a 40 percent reduction in fair market value for this land. Conversely,
Defendant’s witnesses state that the sensor easement would pose no obstacle to the use of
the property for mitigation purposes.

       In weighing this conflicting evidence, the Court finds Defendant’s position that the
environmentally sensitive land is still suitable for mitigation to be slightly more credible.
However, there is a risk to Plaintiffs that the property might not be acceptable to
California authorities for mitigation because of the Border Patrol’s sensor easement.
Whether or not the property is ultimately deemed unsuitable, Plaintiffs were involuntarily
required to assume a risk that they did not have prior to the sensor easement. The task
before the Court is to place a value on this risk. A fair and reasonable outcome is to
award Plaintiffs a five percent reduction in the value of their mitigation land because of
the potential denial of a mitigation request. Using Plaintiffs’ assessment of fair market
value of $9,110,400 for the 619 acres of mitigation land, a five percent reduction results
in an award of $455,520 in damages to Plaintiffs.



1
  In general, a real estate developer in California must acquire and set aside “mitigation land” equal to the
amount of land used for development. Thus, undeveloped “mitigation land” has a significant value to
anyone wanting to gain approval for a real estate development project, as further discussed in the next
section.

                                                     3
       The Court is mindful of the Federal Circuit’s observation that “[i]t does not seem
to us logical that Otay Mesa should receive less compensation for the taking of a
permanent easement than it would for the taking of a temporary easement.” Otay Mesa,
670 F.3d at 1368. However, the Federal Circuit also instructed this Court to award
damages for precisely what was taken by the Government: a taking defined as “a
minimally invasive permanent easement to use undeveloped land that is unilaterally
terminable by Otay Mesa,” the use of which cannot “affect the functionality of the
property.” Id. In light of this Court’s discretion “to fashion an appropriate measure of
compensation,” id. at 1369, the Court determines that a five percent reduction of the
mitigation land’s fair market value is an appropriate measure of the risk that the sensor
easement causes to Plaintiffs. A full analysis of the Court’s reasoning is provided below.

   I.     Conservation Programs and Mitigation Land

       The properties at issue are all located in the Otay Mesa area of San Diego County,
California. “Otay Mesa is ‘sandwiched’ between two fast-growing areas [Tijuana and
Chula Vista] . . . [and] [t]he growth in these two areas creates a demand pressure for land
that spills over into Otay Mesa.” PX 6 at 8. Much of Otay Mesa, however, consists of
environmentally sensitive land, which both the federal and local governments seek to
preserve, while still allowing reasonable economic growth. See id. at 58-61. The United
States Fish and Wildlife Service (“FWS”) has determined that many endangered and
threatened species and their respective critical habitats are found on portions of the
subject properties. Damages Decision, 93 Fed. Cl. at 483.

       Conservation programs such as the Multiple Species Conservation Program
(“MSCP”) and the Multiple Habitat Conservation Program identify areas of high
biological value in which preservation is encouraged. PX 6 at 59. In efforts “to protect
and preserve environmentally sensitive lands,” regulations and ordinances dictate that
development is permissible provided that the landowner mitigates any environmental
impacts by preserving biologically equivalent land, called “mitigation land.” Pls.’ Post-
Trial Br. 6, 30-32; see also Def.’s Post-Trial Br. 46.

       “Mitigation land” is land that qualifies under federal, state, or local regulations as
land that can be used to offset development of other environmentally sensitive land. Pls.’
Post-Trial Br. 29. Generally, mitigation requires the substitution of one acre of
environmentally sensitive land for another through the preservation of biologically
equivalent land. Id. at 30, 32; see also Def.’s Post-Trial Br. 43. Depending on the
affected habitats and species, however, the ratio of impacted acres to mitigation acres
may change. PX 5 at OM_006200. Resource agencies must approve management plans
for the mitigation land, which are reviewed to ensure the perpetual preservation of critical
habitat and endangered species. Id. at OM_006220. A typical application for a proposed
mitigation bank includes a title report “indicating any easements or other encumbrances”
on the proposed property, as well as an explanation as to how any encumbrance may

                                             4
affect viability for mitigation. Id. at OM_006231 (Multi-Agency Checklist, Prospectus
for Mitigation Banks).2 Once a plan is approved, the United States Fish and Wildlife
Service, working in concert with the California Department of Fish and Game,
“essentially issue ‘take authorizations,’” which authorize harm to an individual species or
habitat in exchange for conserving the species or habitat proportionally on other acreage.
PX 6 at 60.

        Given that developers may find it difficult to locate appropriate mitigation land
and provide for its long-term management, FWS incentivizes the creation and
management of conservation banks, which allow developers to purchase off-site
compensatory habitat, known as “off-site mitigation.” PX 5 at OM_006188. As
explained by the FWS, “Landowners can profit from selling habitat or species credits to
parties who need to compensate for adverse impacts to these species.” Id. The land
within an established conservation bank is actively managed and protected, thus the
purchase of credits from such a bank affords developers “regulatory certainty,” as well as
helping them to save time and money in the event of required mitigation. Id.

    II.    2009 Damages Trial

        During the 2009 damages trial, the parties presented fourteen witnesses in support
of their respective positions regarding the easement’s impact on the property. In the
remand trial, the parties and their experts drew upon the record established in the 2009
trial. The Court will discuss here the relevant portions of the 2009 record that the experts
relied upon in the present damages trial.

       In preparing his report, Plaintiffs’ expert, Mr. Randy Tagg, stated that he primarily
relied on the testimony and reports of the following witnesses presented in the 2009 trial:
Sean Dyer, a land entitlement and development professional; Cynthia Eldred, a San
Diego land use attorney; Jim Carter, a mitigation land broker; Susan Wynn, of the U.S.
Fish and Wildlife Service; and David Lawhead, of the California Department of Fish &
Game. PX 6 at 103-05; 2012 Tr. 41-42. In addition to his reliance on these witnesses,
the Government’s expert, Mr. Stephen Roach, stated that he also relied upon the
testimony of Michael McCollum, a private sector land consultant on environmental issues
and mitigation banking, and Richard Shick, a project manager for the County of San
Diego Department of Public Works. DX 44 at 42-43; 2012 Tr. 217. Mr. Dyer, Ms.
Eldred, and Mr. Carter were all experts called by Plaintiffs during the 2009 trial, whereas


2
  “Note: any liens and easements on the proposed Bank Property that may affect a mitigation bank’s
viability will need to be resolved before a mitigation bank can be approved. Provide a property
assessment that summarizes and explains each recorded or unrecorded lien or encumbrance on, or interest
in, the proposed Bank Property, including, without limitation, each exception listed in the Preliminary
Title Report and describing the manner in which each encumbrance may affect the mitigation bank’s
operation or habitat services.” PX 5 at OM_006231.

                                                  5
Ms. Wynn, Mr. Lawhead, Mr. McCollum, and Mr. Shick were called by the Government.
The Court will summarize the opinions of these witnesses below.

       a. Plaintiffs’ Witnesses

       The Court accepted Mr. Dyer as “an expert in the purchase and development of
land in San Diego County.” 2009 Tr. 141. Mr. Dyer testified that he “wouldn’t touch
this property with a 10 foot pole,” as the easement was “one of the most devastating
easements [he’d] ever heard of.” Id. at 150, 160. Mr. Dyer’s opinion was based on his
assumption that the easement allowed for an unlimited number of sensors to be placed on
the property: “Well, first of all, let me point out that it doesn’t, to me, limit the number of
sensors that can go on the property, and there’s almost 43 million square feet of property
here, so you could put a lot of sensors out there if you wanted to.” Id. at 153. Mr. Dyer
also testified that the easement “makes it very difficult to mitigate for endangered
species.” Id. at 150.

        The Court also accepted Ms. Eldred, a land use and zoning attorney in San Diego
County, as an expert. Id. at 71. She testified that “the existence of the easement itself
decreases the value of the land for mitigation purposes not only because of the
disturbance that it involves, but because it increases the requirements for habitat
management which will then decrease the land value.” Id. at 91. In her experience,
“agencies have deducted from the value of property as mitigation land, if they will
approve it at all, because of the existence of the ability of agencies, public or private
entities, to go on the property pursuant to easements.” Id. at 98.

         The Court accepted Mr. Carter, a mitigation land broker in California, as an expert
in mitigation. Id. at 182. He testified that the October 16, 2008 stipulation, as he reads it,
“would have a pretty severe effect on using this property as mitigation,” and that he was
“primarily concerned with the sensitive habitats.” Id. at 193, 195. Mr. Carter observed
that, in his opinion, “[the] Border Patrol’s normal duties, other than responding to sensor
hits, . . . makes it very difficult to manage these properties for mitigation purposes.” Id.
at 217.

       b. Defendant’s Witnesses

       For the Defendant, the Court accepted Ms. Wynn as an expert, to which Plaintiffs
stipulated. 2009 Tr. 861. Ms. Wynn is a biologist at the U.S. Fish and Wildlife Service,
where she primarily focuses on research and protection of biological resources in San
Diego County. Id. at 857-60. In particular, she actively works on implementing and
amending the Multiple Species Conservation Plan, which determines which areas and
species need to be conserved and mitigated, and governs the issuance of permits and
monitoring of land management. Id. at 858-67. Ms. Wynn testified that the FWS,
through its implementation of the MSCP, views all of the Plaintiffs’ property as valuable

                                              6
property for mitigation purposes. Id. at 883-84. Ms. Wynn acknowledged that FWS is
aware of the long-present Border Patrol activities that disrupt the environmentally
sensitive land, but nonetheless, “[t]here [are] a fair number of species that only occur in
this vicinity[,]” id. at 884, “this is where the habitat is, this is where the species are, and
there’s not other options,” id. at 885-86. Ms. Wynn testified to her knowledge that the
Border Patrol had placed seismic sensors on the property, but based on her observations
in the field, she “believe[s] that the impacts are negligible, that they’re not measurable.”
Id. at 887. In her opinion, the rights granted under the easement – the right to place,
access, and relocate fourteen underground sensors – would not have any effect on FWS
accepting the properties for mitigation purposes. Id. at 890-91.

        The Government also presented the expert report and testimony of David
Lawhead, a Staff Environmental Scientist at the California Department of Fish and
Game, where, among other duties, he reviews proposed mitigation banking agreements
and issues permits. Id. at 535-36. Based on his review of the relevant documents and his
site visit, Mr. Lawhead concluded that the direct placement of the sensors and the
occasional maintenance would have a “negligible effect” on biological resources, and
would not cause a deduction of any mitigation credits. Id. at 553, 560 (“The impact is
much too small to be concerned. Our assessment of its mitigation value would be a
summation of all the impacts that are occurring there just looking at the current existing
state of the property as a result of all the activities that have been there historically and up
to the present.”). Mr. Lawhead did note, however, that the California Department of Fish
and Game may want to analyze what rights the federal government has under the
easement, and would perhaps seek a supplemental agreement prior to approving the land
for mitigation. Id. at 574.

       Mr. McCollum, a biologist and former Chief Deputy Director of the California
Department of Fish and Game, also testified on behalf of the Government. Id. at 904-05.
Mr. McCollum was accepted and testified as an expert in the field of the purchase and
sale of environmental mitigation lands. Id. at 902. Mr. McCollum is currently employed
as a land consultant involved in setting up and selling habitat mitigation. Id. at 907. Mr.
McCollum opined that the easement and activities conducted under it would have a
negligible effect on the environmental resources of the property as well as on an agency’s
decision to use the property for mitigation. Id. at 908-10.

       Mr. Shick, a project manager for the County of San Diego Department of Public
Works, testified as an expert in the grading permit process. Id. at 489. Within this
department, Mr. Shick “oversee[s] a team of land surveyors and engineers in the
processing of entitlement and final engineering private development projects within the
County of San Diego, the unincorporated area.” Id. at 486. He reviews and approves
plans and is responsible for issuing grading permits in the Otay Mesa area. Id. at 487. In
Mr. Shick’s opinion, the easement would not prevent the department from issuing a
grading permit, id. at 495, although the stipulation “may result in an advisory note on the

                                               7
plans advising the applicant that they would have to notify the United States within 30
days upon issuance of the permit,” id. at 494.

   III.   2012 Damages Trial

       At the December 2012 damages trial, the parties each presented only one witness,
the testimony of their respective expert. Each expert provided an appraisal report based
on the Federal Circuit’s determination that the easement was permanent, as opposed to
temporary. Plaintiffs’ expert, Mr. Tagg, concluded that the easement reduced the value
of the developable acres by ten percent, and the mitigation acres by 40 percent. The
Government’s expert, Mr. Roach, concluded that the easement has no measurable impact
on the value of Plaintiffs’ land. Mr. Tagg and Mr. Roach both provided expert reports
and testified in previous stages of the litigation, the liability trial and the damages trial,
respectively. Where relevant, portions of these previous reports will be addressed in this
discussion.

          a. Plaintiffs’ Expert – Randy A. Tagg

       Plaintiffs’ expert, Mr. Tagg, valued the property through “the standard before-and-
after approach recommended for valuing permanent easements by the Government-
published Uniform Appraisal Standards for Federal Land Acquisition.” Pls.’ Post-Trial
Br. 12. In valuing real property, the key consideration is the property’s “highest and best
use,” defined as “[t]he highest and most profitable use for which the property is adaptable
and needed or likely to be needed in the reasonably near future.” PX 6 at 53 (citing
Uniform Appraisal Standards for Federal Land Acquisition 34 (Appraisal Institute ed.,
2000)); 2012 Tr. 35. Accordingly, Mr. Tagg first determined the highest and best use of
each parcel in the before (pre-easement) condition, based upon factors such as “size,
shape, topography, biology, street improvements, title report, and zoning.” Pls.’ Post-
Trial Br. 12-13. Of the 897 acres covered under the blanket easement, Mr. Tagg
concluded that mitigation was the highest and best use of 619 acres, and industrial
development was the highest and best use of 278 acres. Id. at 13; PX 6 at 113.

       After assessing the highest and best use, Mr. Tagg used a series of comparable
sales to determine the fee value, or market value, of each parcel in the before condition.
Pls.’ Post-Trial Br. 14. Mr. Tagg identified and used a total of eleven comparable sales
for his valuation process. Id. at 14, 15; PX 6 at 87. Based upon this comparable sales
analysis, Mr. Tagg concluded that the market value of the subject property in the before
condition was $23,658,200. Pls.’ Post-Trial Br. 16; PX 6 at 99. Mr. Tagg then
proceeded to determine the highest and best use of the land in the after condition. The
after condition, according to Mr. Tagg’s interpretation, was land burdened by a
permanent, blanket easement which:



                                              8
                [A]llows the use and occupancy of the entire 897-acre Subject
                property by the government. The number of sensors and their
                locations, along with ingress/egress routes, is neither
                specified nor limited. Any number of seismic sensors can be
                placed anywhere on the five (5) Subject parcels and
                responders have the right to ingress/egress by any route to
                any location on the parcels.

PX 6 at 101. As discussed below, Mr. Tagg determined that the sensor easement
impacted the value of developable and mitigation acres differently.

                     i. Tagg’s View of Impact on Developable Land

       In assessing the impact of the sensor easement on the value of the developable
land, Mr. Tagg relied on the results of his market survey and the testimony of Mr. Dyer.
PX 6 at 104, 111. For his market survey, Mr. Tagg contacted seven people, only four of
whom responded and participated. 2012 Tr. 158. The four who did respond were
industrial developers in Otay Mesa. Id. at 86. The interviews with these four persons
consisted of telephone conversations in which Mr. Tagg paraphrased the easement and
inquired whether, and to what extent, the market value of the developable property would
be reduced by such an easement. Id. at 86, 158.

        Two of these individuals would not provide an exact value or percentage, but
stated that they would pay less for the property because of the easement. Id. at 90. As a
result, Mr. Tagg established a bottom range for diminution of five percent, based on his
experience as an appraiser that “if a value characteristic is noticeable it has to be at least 5
percent to be measurable.” Id. The other two individuals Mr. Tagg spoke with believed
that the upper limit of the diminution value associated with this easement would be “close
to” ten percent. Id. at 91. Out of this five to ten percent range, Mr. Tagg set the
diminution in value at ten percent, reflecting the unquantifiable “self-mitigation
problem.” Id.3 Accordingly, Mr. Tagg deducted ten percent from the value of the
developable land within each parcel. PX 6 at 112. Mr. Tagg exchanged no written
correspondence with these developers, and his work files do not contain any notes of his
conversations with them. 2012 Tr. 158.

                    ii. Tagg’s View of Impact on Environmentally Sensitive Land

      Regarding the environmentally sensitive land within the subject parcels, Mr. Tagg
concluded that the easement changed the highest and best use of the land from mitigation
3
  Mr. Tagg explained this “self-mitigation problem” as follows: “When the mitigation acreage is no
longer usable as mitigation and the property owner needs to go out into the market and buy it, that’s a
huge market risk. So that is an issue also. So I would conclude it at the upper range or 10 percent for that
reason.” 2012 Tr. 91-92.

                                                     9
to conservation, resulting in a diminution in value of 40 percent. PX 6 at 111-113.
According to Mr. Tagg, “conservation land is property that is voluntarily preserved in its
natural, scenic, agricultural, historical, forested, or open-space condition for reasons other
than to satisfy a mitigation requirement.” Pls.’ Post-Trial Br. 35. Mr. Tagg explained
that the basic difference between mitigation and conservation is buyer motivation. PX 6
at 106. “A purchaser of mitigation land buys out of necessity, and some urgency, in
order to proceed with a companion development project.” Id. Because “[t]iming is
critical” and mitigation purchasers “must meet certain vegetation/habitat requirements
and ratios in order to mitigate specifically-defined environmental damage,” the demand
for such property drives up the price. Id. “Conversely, conservation transactions are
typically opportunistic purchases by non-profit conservation groups,” and therefore such
a use is less valuable. Id. Mr. Tagg also explained that “a conservation sale is when the
property is no longer usable for mitigation . . . [if] it’s not suitable for mitigation, it’s not
marketable for mitigation, then it’s conservation.” 2012 Tr. 137.

        In arriving at his conclusion that the easement rendered the environmentally
sensitive land unsuitable for mitigation, Mr. Tagg relied upon the testimony of expert and
government witnesses in earlier proceedings in this case, and emails between Susan
Wynn and the landowners. Pls.’ Post-Trial Br. 17-18. These emails related to the
landowners’ “efforts to obtain mitigation credit for other environmentally sensitive land
in the area.” Id. at 17. In relevant part, Ms. Wynn explained “we do not generally give
credit for mitigation purposes for . . . access roads, utility corridors, etc.” and noted that
“[i]f the easements allow the easement holder to disturb the site, then those areas would
need to be subtracted from the total.” PX 2 at 1-2.4 Applying Ms. Wynn’s statement to
the Border Patrol’s right “to locate, construct, operate, maintain and repair or replace the
specified underground seismic intrusion sensors on the specified parcels, including the
right to ingress and egress to each sensor location,” PX 1 at ¶ 7, Mr. Tagg concluded that
the burdened parcels were no longer suitable for mitigation, Pls.’ Post-Trial Br. 18.
Instead, the highest and best use of the 619 acres of environmentally sensitive land in the
after condition changed from mitigation to conservation. Id.

       To determine the value of these 619 acres in the after condition, Mr. Tagg
reviewed comparable sales for both mitigation and conservation use within the county,
and conducted a “matched-pair analysis”5 to assess the value differences between the two
uses. Id. at 19; PX 6 at 107-09. This matched-pair analysis suggested a market value
reduction range of 16 to 46 percent. Pls.’ Post-Trial Br. 19. Based on the fact that the
easement prevented the Plaintiffs from using the environmentally sensitive land for self-

4
 These emails did not relate to the subject parcels, and did not discuss the specific sensor easement held
by the Border Patrol. See 2012 Tr. 162.
5
 As described in Mr. Tagg’s report, “[a] matched-pair analysis is an appraisal tool, using two or more
pairings of otherwise very similar properties, yielding a market-derived adjustment for a specific value
characteristic.” PX 6 at 107.

                                                   10
mitigation, Mr. Tagg concluded that the easement reduced the market value of the land
by 40 percent. Id.

       Mr. Tagg bolstered his conclusion by examining three comparable properties
where a market participant paid a landowner to keep a parcel of land off the market for a
specific time period. Id. at 20; PX 6 at 114-15. Using a mid-range value of $600 per
year as the market value and a ten percent capitalization rate, this valuation approach
yielded a comparable reduction of 40 percent of the market value of the environmentally
sensitive land. Pls.’ Post-Trial Br. 20; PX 6 at 114-15.

        In Mr. Tagg’s 2009 appraisal report, he had concluded that the highest and best
use of all 897 acres in the after condition was mitigation. PX 6 at 78. The reason for the
change in his 2012 report, he explained, was the Federal Circuit’s determination “that the
sensor easement is a permanent/blanket encumbrance,” which is different than the 2009
premise of a temporary easement. Id.; 2012 Tr. 109. Although Mr. Tagg “never looked
at the issue” of how the Border Patrol’s rights differed under a permanent easement, 2012
Tr. 110, in his professional opinion, a permanent easement has a significantly greater
impact on the suitability of the environmentally sensitive land for mitigation, id.

          b. Defendant’s Expert – Stephen Roach

        Similar to Mr. Tagg, Defendant’s expert Mr. Roach valued the properties through
a before and after valuation method based on highest and best use. Mr. Roach agreed
with Mr. Tagg that the highest and best uses of the subject parcels in the before condition
were either mitigation or industrial development. Def.’s Post-Trial Br. 42; DX 44 at 31-
32. Like Mr. Tagg, Mr. Roach then used a sales comparison approach to value each of
the subject properties in the before condition, reviewing eleven different comparable
sales, and arrived at a total value of $16,271,150 for the properties. DX 44 at 30, 41.

       Mr. Roach then analyzed the permanent, blanket easement, which he viewed as
permitting the placement of no more than fourteen sensors on the property. DX 44 at 42;
2012 Tr. 395. Upon reviewing expert reports and testimony from representatives of the
relevant government agencies, Mr. Roach surmised that “[t]he easement has no impact on
future development, nor does it preclude use of the land as mitigation,” DX 44 at 42, and
accordingly, “the impact of the easement on each subject parcel is de minimis,” id. at 44.
Unlike Mr. Tagg’s conclusion, Mr. Roach found that the easement did not alter the
highest and best use of the acres within each parcel. Therefore, under Mr. Roach’s
analysis, “the easement has no measurable impact on value, and . . . the market value in
the after condition is no different than the value of each subject parcel in the before
condition.” DX 44 at 47.




                                            11
                 i. Roach’s View of Impact on Developable Land

       Mr. Roach concluded that the sensor easement has no measurable effect on the
suitability of the developable land for future development. His primary basis for this
conclusion was the easement language itself, which provides:

             Should the landowner desire to develop any portion of the
             subject parcel, the sensor will be removed or redeployed upon
             30 days written notice that a grading permit has been issued
             by the County of San Diego permitting development of all or
             a portion of the property. Upon removal of a sensor, the
             portion of the easement relating to that sensor shall terminate.

PX 1 at ¶ 7. Mr. Roach also relied upon the testimony of Mr. Shick of the County of San
Diego Department of Public Works, who stated that, based on his experience, the
easement would not result in the Department “not issuing the permit. I think it would just
result in an advisory note on the plan.” Id. at 495.

                 ii. Roach’s View of Impact on Environmentally Sensitive Land

       Similar to his conclusion regarding impact on the developable land, Mr. Roach
also concluded that the sensor easement has no measurable impact on the suitability of
the environmentally sensitive land for mitigation. In reaching this conclusion, Mr. Roach
relied upon the testimony and reports of Ms. Wynn of the U.S. Fish and Wildlife Service
and Mr. Lawhead of the California Department of Fish and Game. DX 44 at 42. Given
that the approval process for mitigation involves mostly state and federal resource
agencies, and representatives from these agencies opined that the easement would have
no impact on the acceptance of the land for mitigation, Mr. Roach concluded that the
easement impact on the environmentally sensitive land is negligible. DX 44 at 42, 44.

      At trial, Mr. Roach challenged Mr. Tagg’s adoption of “conservation” as a highest
and best use, explaining that “[c]onservation and preservation are not economic uses.
They have no economic basis behind them. They have no economic intent behind them.”
2012 Tr. 191. Mr. Roach noted that, although a buyer’s intentions may be helpful in
conducting an appraisal, such intentions are not determinative:

             I might have a piece of property in downtown San Diego
             that’s a vacant parcel of land that has a highest and best use to
             build a highrise condo project, but the buyer intends to devote
             it to surface parking because all they want to do is operate it
             as a parking lot or they’re an investor and they want to hold
             it. That doesn’t make parking the highest and best use.


                                            12
Id. at 191-92. Accordingly, because the environmentally sensitive land may still be used
for mitigation purposes, appraisal standards dictate that the highest and best use of that
land is mitigation. DX 44 at 31. In these circumstances, the easement has no effect on
the highest and best use of the subject properties and therefore did not cause any
diminution in value.

                                      DISCUSSION

        Cases before this Court on remand are governed by the mandate rule. Carolina
Power & Light Co. v. United States, 98 Fed. Cl. 785, 794 (2011). “[E]very appellate
court judgment vests jurisdiction in the trial court to carry out some further proceedings.”
Exxon Chem. Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475, 1483 (Fed. Cir. 1998). As
the district court’s actions on remand “should not be inconsistent with either the letter or
the spirit of the mandate,” Laitrim Corp. v. NEC Corp., 115 F.3d 947, 950-51 (Fed. Cir.
1997), mandates should be interpreted by looking at the language of the judgment in
combination with the accompanying opinion, Exxon Chem., 137 F.3d at 1483 (citing,
inter alia, In re Sanford Fork & Tool Co., 160 U.S. 247, 256 (1895)).

       Here, the Federal Circuit’s mandate instructs this Court to “determine damages
based upon the Border Patrol having taken a permanent blanket easement over Otay
Mesa’s property, as set forth in the stipulation.” Otay Mesa, 670 F.3d at 1368. In cases
of a permanent taking by easement, damages are often determined through a diminution
in value approach. Id. at 1369. The Federal Circuit highlighted the fact, however, that
this approach is but one appropriate method of valuation, and noted that “on remand the
Court of Federal Claims will have discretion in identifying a methodology that fulfills the
goal of awarding Otay Mesa just compensation.” Id. It further instructed that the
awarded compensation be for “exactly what [the Federal Circuit] identified as having
been taken in this case,” namely, “a minimally invasive permanent easement to use
undeveloped land that is unilaterally terminable by Otay Mesa.” 670 F.3d at 1368-69.
The Court’s undertaking of this task follows.

   I.     Just Compensation

       Under the Fifth Amendment, “private property [shall not] be taken for public use,
without just compensation.” U.S. Const. amend. V. Accordingly, when government
action results in a taking of private property rights, the Constitution requires
compensation. See, e.g., First Evangelical Lutheran Church of Glendale v. Cnty. of Los
Angeles, 482 U.S. 304, 314-15 (1987). The landowner bears the burden of proving the
value of the land taken for purposes of obtaining just compensation. See Bd. of Cnty.
Supervisors of Prince William Cnty., VA v. United States, 276 F.3d 1359, 1364 (Fed.
Cir. 2002). When less than an entire interest is taken, just compensation is traditionally
determined by comparing the difference in market value immediately before and
immediately after the taking. See, e.g., United States v. Miller, 317 U.S. 369, 376 (1943).

                                             13
Inability to show a diminution in value does not preclude recovery, as damages may be
assessed based on the cost of cure, i.e. the costs associated with mediating or preventing
the injury. Vaizburd v. United States, 384 F.3d 1278, 1285-86 (Fed. Cir. 2004)
(remanding for a determination of whether plaintiff presented “sufficient evidence to
establish that they reasonably incurred costs to remove the accreted sand”); Ridge Line,
Inc. v. United States, 346 F.3d 1346, 1358-59 (Fed. Cir. 2003) (remanding for a
determination of damages notwithstanding the lack of a before and after appraisal). The
Court of Federal Claims does not have jurisdiction, however, to award nominal damages.
Vaizburd, 384 F.3d at 1283 (citing Marion & Rye Valley Ry. Co. v. United States, 270
U.S. 280, 282 (1926)).

   II.    The Government’s Concession of Liability

        In its October 16, 2008 concession of liability, the Government admitted to the
installation of fourteen sensors on parcels 1, 3, 4, 5, and 10 of Plaintiffs’ property. PX 1
at ¶ 5. Much debate has centered on the parameters of the rights the Government
possesses under the easement.          The Government maintains that the easement
circumscribes the Government’s rights to the fourteen stipulated sensors, whereas
Plaintiffs argue that “[n]othing in the easement . . . limits the Government to 14 sensors
(or any other number).” Pls.’ Post-Trial Resp. 47. An additional point of contention is
what types of sensors are allowed to be placed on the property. Therefore, as a starting
point, the Court will review the stipulation language to determine the extent of the rights
held by the Government, given that “[c]ompensation should be based on an assessment of
precisely what the government takes from a landowner.” Otay Mesa, 670 F.3d at 1368
(citing United States v. Gen. Motors Corp., 323 U.S. 373, 382 (1945)).

       In paragraph three of the stipulation, the Government explains the need for and the
type of intrusion on Plaintiffs’ property:

              As part of its patrol of the border area, the Border Patrol has
              the need to place seismic intrusion sensors (hereinafter,
              “sensors”) at various underground locations on undeveloped
              property in the vicinity of the border for the purposes of
              apprehending aliens attempting illegal entry. These sensors
              are each approximately one cubic foot in size. Once buried in
              the ground, an approximately one foot long antenna extends
              above ground from the sensor.

PX 1 at ¶ 3. The Government then lists fourteen specific sensors and their general
locations, and stipulates that “by virtue of its placement of the 14 sensors specified above
on the listed parcels of land, it has taken a property interest in the nature of an easement
over the parcel of land on which the sensors have been placed.” Id. at ¶¶ 5-6 (emphasis
added). The stipulation goes on to describe the easement more fully, stating that it is:

                                             14
             A perpetual and assignable easement to locate, construct,
             operate, maintain and repair or replace the specified
             underground seismic intrusion sensors on the specified
             parcels, including the right to ingress and egress to each
             sensor location.

Id. at ¶ 7 (emphasis added). In the Court’s view, the plain language of the easement gives
the Government the right “to locate, construct, operate, maintain and repair” only those
fourteen underground seismic intrusion sensors listed within paragraph five of the
stipulation. This determination does not alter the fact that the Government has a
“blanket” easement, as the easement “language suggests that the Border Patrol may place
its fourteen sensors anywhere on the five parcels and move them to different locations as
desired.” Damages Decision, 93 Fed. Cl. at 486, 487 (noting that Plaintiffs were due just
compensation for “the Government’s taking of an easement to place fourteen sensors”).
However, there may not be more than a total of fourteen sensors on the properties at any
given time. This reading is reinforced by the Federal Circuit’s explanation that “upon
removal of a sensor, the portion of the easement relating to that sensor terminates.” Otay
Mesa, 670 F.3d at 1369. If the easement granted the Government the right to place an
unlimited number of sensors on the subject property, there would be no reason to tether
the easement rights to the individual sensors already on the parcels.

       Plaintiffs make much of email correspondence between counsel for the
Government, Lary Larson, and one of the Government’s witnesses, David Lawhead of
the California Department of Fish and Game. See, e.g., Pls.’ Post-Trial Resp. 48.
Prompted by Mr. Lawhead’s email inquiry on whether the easement sets a maximum of
fourteen sensors, Mr. Larson replied “Basically we admitted liability for 14. Conceivably
Border patrol could add more. . . . Border Patrol can answer any questions you have
directly[.]” PX 254. The Court does not agree with Plaintiffs’ implication that this email
is an admission establishing the Border Patrol’s right to place an unlimited number of
sensors on Plaintiffs’ property. In this email, Mr. Larson made no authoritative
statements regarding the parameters of the easement, and instead referred Mr. Lawhead
to the Border Patrol for any questions he may have. Moreover, the stipulation itself is a
legally binding document, and one which, as demonstrated above, is confined to fourteen
sensors. Mr. Larson’s email does not change the meaning of the Government’s
document.

       Plaintiffs postulate that in future years, the Border Patrol may use larger, more
intrusive sensors, consistent with the easement’s language. The Government rejects this
supposition, pointing to testimony by Border Patrol agents regarding the specific sensors
used, as well as their dimensions. Def.’s Post-Trial Br. 8 (citing 2009 Tr. 809-10
(Herrara)). As quoted above, the stipulation defines the sensors as being “each
approximately one cubic foot in size. Once buried in the ground, an approximately one

                                            15
foot long antenna extends above ground from the sensor.” PX 1 at ¶ 3. Plaintiffs are
correct in pointing out that technology, and subsequently, the sensors themselves, may
change throughout the years. Any future sensors, however, cannot exceed the
measurements contained in the stipulation; otherwise, the Government will have
exceeded the parameters of its easement.

       For purposes of determining just compensation, the Government has taken the
right to locate, construct, operate, maintain, repair, or replace fourteen seismic sensors,
approximately one cubic foot in size with an approximately one foot long antenna, on
Plaintiffs’ property. To the extent any of the witnesses premise their valuation
conclusions on the Border Patrol’s ability to place more than fourteen sensors, their
evaluation is flawed.

   III.   Impact of the Border Patrol’s Easement

        Based on the evidence presented during the three trials as well as the Federal
Circuit’s remand instructions, Plaintiffs contend that the sensor easement caused a ten
percent diminution in value of the developable land, and a 40 percent diminution in value
of the environmentally sensitive land. The Government maintains that any impact on
either type of land is negligible or nonexistent. Below, the Court presents its conclusions
from the competing arguments and evidence of each side, concerning both categories of
land.

          a. No Impact on Developable Land

       Plaintiffs contend that the easement reduced the value of the 278 acres of
industrial land by ten percent, entitling them to just compensation of $1,454,780. Pls.’
Post-Trial Br. 16-17; PX 6 at 115. The support for this assertion is the testimony of Mr.
Dyer in the 2009 trial and the results of Mr. Tagg’s market survey, both discussed above.
Plaintiffs characterize Mr. Tagg’s industrial land analysis as “flexible and robust,”
asserting that “Tagg found ample, reliable evidence supporting his conclusion that the
sensor easement caused a 10% reduction in value of the industrial property[.]” Pls.’ Post-
Trial Resp. 9. The Court, however, finds this analysis less than compelling.

       During the 2009 trial, Mr. Dyer spoke generally, and sometimes hyperbolically,
regarding the negative implications of the Border Patrol’s sensor easement. Mr. Dyer’s
opinion is based on the assumption that the easement does not limit the number of
sensors, a factual predicate this Court has rejected. This mistaken assumption, combined
with the pervasive generalities in his testimony, render Mr. Dyer’s opinion minimally
persuasive. Accordingly, to the extent Mr. Tagg relied upon Mr. Dyer’s testimony, his
conclusion of a ten percent reduction in value is dubious.



                                            16
        Mr. Tagg’s market survey results suffer from similar flaws. To “confirm[] the
market perception” of a diminution in value, Mr. Tagg conducted a market survey of
Otay Mesa industrial developers. PX 6 at 111. Although Mr. Tagg presented the results
of this survey as a “general consensus of damage” of five to ten percent of the fee value,
id., a closer review of his survey methodology and results belies this broad
characterization. In conducting his survey, Mr. Tagg called seven different people, only
four of whom responded. 2012 Tr. 158. With the four participants, Mr. Tagg conducted
telephone calls during which he paraphrased the easement and inquired as to what they
believed the diminution in land value would be if subjected to such an easement. Id. at
86. Two of the participants refused to estimate any numerical impact. See id. at 90
(“Judd Halenza and John Dillard, I twisted their arm to give me a percentage and they
wouldn’t. They wouldn’t do it.”). Nonetheless, based on the conversations with these
two participants, Mr. Tagg established a bottom percentage of five percent for the
diminution in value. Id. at 90-91. Based on conversations with two other participants,
Kaitlin Murphy and John Bragg, Mr. Tagg established an upper limit of ten percent for
the diminution in value. Id. at 91. Within this range, Mr. Tagg concluded that the
diminution in value of the developable land was ten percent, because the land was not
suitable for self-mitigation. Id. at 91-92.

        Although there are no records of these conversations, it seems eminently logical
that in this “paraphrasing,” Mr. Tagg informed the participants of his own interpretation
of the easement, to wit, that it allows the Border Patrol to place an unlimited number of
sensors on the property. Thus, at the outset, the responses of the survey participants are
minimally persuasive, because they were based on an easement that allows for an
unlimited number of sensors, as opposed to the limited number of fourteen sensors. See
Fed. R. Evid. 702 (expert testimony is reliable and trustworthy when “the testimony is the
product of reliable principles and methods . . . and the expert has reliably applied the
principles and methods to the facts of the case”); Bracco Diagnostics, Inc. v. Amersham
Health, Inc., 627 F. Supp. 2d 384, 453 (D. N.J. 2009) (oral survey question that omitted
information from subject document, thereby changing meaning of document, rendered
the survey “unreliable, inconclusive and lacking fit to the facts in issue”). Even
disregarding this fundamental alteration of the rights permitted under the easement, in the
Court’s view, the general responses from four out of seven developers hardly indicates
that “[t]he general consensus of damage, related to this easement encumbrance, is 5% to
10% of the fee value,” much less provides “ample, reliable evidence.” PX 6 at 111; Pls.’
Post-Trial Resp. 9. This casual, undocumented, and narrow “survey” fails to evince that
Plaintiffs are entitled to $1,454,780 in damages for the industrial development land.

      The Court finds the testimony of Mr. Shick, in which he stated that the easement
would not impact the development approval process, much more instructive. 2009 Tr.
494-95. Mr. Shick was designated by San Diego County “[a]s the most knowledgeable in
the department” on the impact of the easement to receive grading permits for
development. Id. at 487, 489; Def.’s Post-Trial Br. 56. Moreover, Mr. Tagg confirmed

                                            17
Mr. Shick’s informed opinion during the damages trial, when he testified that “[u]nder
the easement the property owner can still pursue development,” and the sensors will not
have any effect on the commercial development of developable land. 2009 Tr. 775.
Accordingly, the Court finds that Plaintiffs have failed to prove actual damages with
respect to a diminution in value of developable land.

          b. Impact on Mitigation Land

       Plaintiffs claim that the easement rendered the 619 acres of environmentally
sensitive land unsuitable for mitigation, resulting in a 40 percent diminution in value. In
support of this theory, Plaintiffs rely on Mr. Tagg’s report, which in turn relies upon the
testimony of Mr. Dyer, Ms. Eldred, and Mr. Carter. Mr. Tagg also relied on documents
relevant to mitigation and conservation efforts of other parcels within the area, such as
emails from Ms. Wynn and existing conservation easements. Pls.’ Post-Trial Br. 10, 17.
In contrast, the Government contends that the easement and the Border Patrol’s activities
under the easement have no measurable effect on the suitability of the environmentally
sensitive land for mitigation. The Government’s conclusion is supported by the appraisal
report and testimony of Mr. Roach, who in turn relied upon the testimony of, inter alia,
Ms. Wynn of the Fish and Wildlife Service and Mr. Lawhead of the California
Department of Fish and Game. DX 44 at 12.

       In valuing the easement, Mr. Tagg assumed that “[t]he number of sensors . . . is
neither specified nor limited.” PX 6 at 101. Mr. Dyer was also of the opinion that the
Border Patrol could place an unlimited number of sensors under the easement. 2009 Tr.
153; PX 6 at 104. Because of this assumption, both Mr. Tagg and Mr. Dyer deemed the
opinion of Mr. Lawhead, of the California Department of Fish and Game, irrelevant, as
he viewed the easement as allowing only fourteen sensors. Id.; 2009 Tr. 158.

        As the Court has repeatedly instructed, it “only will evaluate the just compensation
due Plaintiffs as a result of the Government’s taking of an easement to place fourteen
sensors anywhere on five parcels of Plaintiffs’ property and to access the sensors.”
Damages Decision, 93 Fed. Cl. at 487; see also Otay Mesa, 670 F.3d at 1369 (“we
reiterate that the focus of the damages analysis must always remain on awarding just
compensation for what has been taken.”). Mr. Tagg himself pointed out that an easement
limited to fourteen sensors “is a very different and far less burdensome property interest.”
PX 6 at 105. Therefore, by Mr. Tagg’s own admission, he determined the diminution of
value based on a significantly different property interest. It is axiomatic that “[a]n expert
opinion is no better than the soundness of the reasons supporting it.” Perreira v. Sec’y of
Health & Human Servs., 33 F.3d 1375, 1377 n.6 (Fed. Cir. 1994) (citing cases).

       Plaintiffs further argue that concessions of Ms. Wynn establish that the FWS
would not grant mitigation credits for the environmentally sensitive land, thus
substantially reducing the value of the property. In making this argument, Plaintiffs point

                                             18
to two emails exchanged between Ms. Wynn and the landowners, in which they
discussed mitigation credits for parcels not at issue in this case. Pls.’ Post-Trial Br. 17-
18. In the first of these emails, dated November 7, 2011, Ms. Wynn explained “we do
not generally give credit for mitigation purposes for storm water facilities, access roads,
utility corridors, etc.” PX 2 at 1. This general statement is consistent with the stance of
wildlife agencies to reduce mitigation credits for significant intrusions, but not for small
intrusions. Damages Decision, 93 Fed. Cl. at 483-84 (citing DX 67 at 4). Although the
Border Patrol’s easement grants agents ingress and egress to the sensors, it does not
permit the Border Patrol to construct “storm water facilities, access roads, utility
corridors, etc.” PX 2 at 1; see also PX 1 at ¶ 7 (defining the easement as “including the
right to ingress and egress to each sensor location . . . . No rights other than those
specifically enumerated in this paragraph are being acquired.”). In contrast, the easement
is “minimally invasive,” Otay Mesa, 670 F.3d at 1368, with only negligible effects on the
biological resources, 2009 Tr. 887 (Wynn), 2009 Tr. 553 (Lawhead).

       In the second of Ms. Wynn’s emails, dated January 9, 2012, she discussed the
need to review title reports prior to finalizing a conservation maintenance agreement:

              With regards to the title reports, I thought that the county was
              going to review them and provide us with some feed back on
              whether the easements would allow the site to be disturbed
              for roads, access, pipelines etc – review of title reports is a bit
              out of my area of expertise. If the easements allow the
              easement holders to disturb the site, then those areas would
              need to be subtracted from the total[.]

PX 2 at 2. As in the November 7, 2011 email, Ms. Wynn communicated general
principles regarding permissible intrusions on mitigation land. Similarly, this email
correspondence does not relate to any of the subject parcels, but instead discusses
easements entirely different from the sensor easement at issue here. 2012 Tr. 162. Mr.
Tagg himself described the present easement as “unique. There is nothing like it. There
is no property that I’m aware of encumbered with a similar easement.” Id. at 85-86. As
Ms. Wynn testified, the subject parcels have habitat that is a high priority for
conservation, as some endangered species only occur in the relevant vicinity. 2009 Tr.
884. Thus, given that “[c]onservation banks are a flexible means of meeting a variety of
conservation needs of listed species,” PX 5 at OM_006192, the unique, minimally
invasive nature of the easement, combined with the strong desire on the part of wildlife
agencies to preserve the rare habitat on the subject properties, leads this Court to
conclude that Ms. Wynn’s emails are not applicable to the subject parcels, much less
dispositive.

      Finally, Plaintiffs point to a conservation easement covering a 92-acre plot of land
that several of the landowners granted to San Diego County as mitigation for

                                              19
development. PX 3; Pls.’ Post-Trial Br. 10. This document lists prohibited uses of the
land, which include “[u]se of off-road vehicles and use of other motorized vehicles
except on existing roadways and except as may be required for land management
purposes.” PX 3 at 2. These prohibited uses are consistent with the U.S. Fish and
Wildlife’s Guidance for the Establishment, Use, and Operation of Conservation Banks,
which states that “an active management program – to . . . prevent an area’s use by off-
road vehicles, illegal garbage dumpers or others; and address myriad other threats – is
essential to ensure that the potential conservation value of a particular property is realized
and maintained.” PX 5 at OM_006197. Plaintiffs argue that because the Border Patrol’s
easement does not specifically preclude the Border Patrol from accessing the sensors with
off-road vehicles, the potential biological destruction from these hypothetical access
scenarios vitiates the suitability of the property for mitigation.

        The Border Patrol had been traversing Plaintiffs’ land in such vehicles prior to the
imposition of the easement, Liability Decision, 86 Fed. Cl. at 785, a time frame in which
Plaintiffs maintain the properties were suitable for mitigation, Pls.’ Post-Trial Br. 13-14
(asserting that the property contained 619 acres of mitigation land in the before
condition). Any claims Plaintiffs may have had regarding this Border Patrol presence are
time barred. Liability Decision, 86 Fed. Cl. at 785-86. Additionally, “[s]ince at least
1982, members of the general public have used the subject property for recreational
purposes such as riding off-road vehicles.” Id. at 785 (listing trucks, ATVs, motorcycles,
and emergency response vehicles); see also 2012 Tr. 121-22 (Tagg) (admitting that, in
the before condition, illegal entrants and off-road recreational vehicles users traversed the
subject parcels); 2009 Tr. 216 (Carter) (admitting “there are a lot of other activities on the
property in additional to the sensors” that would contribute substantially to the
management costs). The parties have presented no method of determining what
percentage, if any, of the land’s environmental degradation was caused by sensor activity.
Even if the Court were to accept the premise that the land is no longer suitable for
mitigation, Plaintiffs ostensibly ask the Court to disregard the extensive evidence of
destructive activity conducted on the land by the Border Patrol and the public, and
instead attribute the entirety of this “damage” to the placement of fourteen sensors across
897 acres.

        Despite the Court’s conclusion that the conflicting evidence tilts in Defendant’s
favor, the Court is not convinced that a landowner would willingly convey an interest in
land to the Government for absolutely no compensation whatsoever, nor that the
encumbrance has absolutely no effect on the value of the subject property. In
determining compensation due, a court exercises its reasonable judgment “with the aid of
all relevant data to find an amount representing value to any normally situated owner or
purchaser of the interests taken[.]” Kimball Laundry Co. v. United States, 338 U.S. 1, 20
(1949). Here, Plaintiffs undeniably face a risk that their environmentally sensitive
property will not be approved for mitigation use. The Court does not assess this risk to
be anywhere near the 40 percent level advocated by Mr. Tagg, but the risk is significant

                                             20
enough that the Court cannot accept the Government’s position of a zero impact either.
For Plaintiffs to assume this risk without any compensation for the admitted Fifth
Amendment taking would leave Plaintiffs in a worse position than before the taking
occurred. See Olson v. United States, 292 U.S. 246, 255 (1934) (“[Plaintiff] is entitled to
be put in as good a position pecuniarily as if his property had not been taken.”). Plaintiffs
did not bear this risk in the “before” condition, and certainly it is plausible that the
Government’s sensor easement might prevent the use of Plaintiffs’ property for
mitigation purposes. Even if this outcome never occurs, Plaintiffs’ assumption of the risk
should be ascribed some value.

        In the Court’s view, fair and reasonable compensation is to award Plaintiffs five
percent of the $9,110,400 fair market value appraisal for the 619 acres of mitigation land.
PX 6 at 99. Five percent of the fair market value is $455,520, which is the amount of
damages awarded to Plaintiffs on remand from the Federal Circuit. The Court is aware
that the parties have debated the validity of the experts’ fair market value appraisals, but
Mr. Tagg was the only person who set a fair market value for the 619 acres of mitigation
land. Id. Even if Mr. Tagg’s appraisal may lack perfection, it is the best evidence
available. At a damages award of five percent of the appraised amount, any adjustment
to Mr. Tagg’s fair market value appraisal would have only minimal effect on the final
result.

                                      CONCLUSION

       For the foregoing reasons, the Court finds that Plaintiffs are entitled to just
compensation of $455,520, plus interest. The Court awards Plaintiffs compounded
interest from October 16, 2008, the date on which Plaintiffs became aware of the taking
through the Government’s filing of the stipulation. Consistent with the previous decision,
the interest computation shall be based on the rate set forth in the Contract Disputes Act
(“CDA”), 41 U.S.C. § 7109. Damages Decision, 93 Fed. Cl. at 491. The Court requests
that the parties submit a joint filing on or before June 10, 2013 stating the proper interest
amount to be paid under the CDA. The entry of judgment will be stayed pending the
determination of the proper amount of interest to which Plaintiffs are entitled.

       IT IS SO ORDERED.

                                                  s/Thomas C. Wheeler
                                                  THOMAS C. WHEELER
                                                  Judge




                                             21
