WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND … of energy, climate, and the... · WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT Volume 6, Issue 2 EDITOR-IN-CHIEF

WASHINGTON AND LEE

JOURNAL OF ENERGY,

CLIMATE, AND THE

ENVIRONMENT

Volume 6, Issue 2

EDITOR-IN-CHIEF

Dan Strong

EXECUTIVE

EDITOR

Ashley H. Waterbury

EXECUTIVE

MANAGING EDITOR

Scott D. Salmon

EXECUTIVE

DEVELOPMENT EDITOR

James K. Pickle

NOTE EDITOR

Matthew S. Hale

MANAGING EVENTS

EDITOR

Alison Leary

STAFF EDITOR

Sean T. Twomey

SENIOR ARTICLES

EDITORS

Jessica Chi

Amy Forman

Cameron E. Tommey

FACULTY ADVISORS

Professor Albert V. Carr

Professor Mark A.

Drumbl

Professor Joan M.

Shaughnessy

LEAD ARTICLES EDITORS

Elizabeth A. Farrell

Regan Loper

Whitney D. Pulliam

Ryan Redd

Michael Cooke

James A. Cooper

Kaitlin DeCrescente

Amanda L. Fisher

Margaret Hayes

STAFF WRITERS

Caroline E. Colpoys

Richard Clagett

Tyler A. Carpenter

Ashley N. Barendse

Brandon S. Allred

Max Sender

Anne H. McPherson

Samantha Nicholson

Christina Rossi

Kathleen Ryland

Aaron Siegrist

Washington and Lee University

KENNETH P. RUSCIO, B.A., M.P.A., Ph.D.

President of the University

Deans

NORA V. DEMLEITNER, B.A., J.D., LL.M.

Dean and Roy L. Steinheimer Jr. Professor of Law

SAMUEL W. CALHOUN, B.A., J.D.

Associate Dean for Academic Affairs, Professor of Law

ELIZABETH BRANNER, B.A., M.B.A.

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CLIFF JARRETT, B.A., J.D.

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PETER JETTON, B.A., M.A.

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SHAWN MCSHAY, B.S., M.B.A.

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MARY Z. NATKIN, B.A., J.D.

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CAROLINE OSBORNE, B.A., J.D., LL.M., M.S.L.S.

Assistant Dean for Legal Information Services

S. BRETT TWITTY

Assistant Dean for Student Affairs

Emeritus Faculty

WILLIAM S. GEIMER, B.S., J.D.

Professor of Law, Emeritus

EDWARD O. HENNEMAN, B.A., J.D.

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LEWIS HENRY LARUE, A.B., LL.B

Class of 1958 Law Alumni Professor of Law, Emeritus

ANDREW W. MCTHENIA, JR., A.B., M.A., LL.B.

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JOSEPH E. ULRICH, B.S., J.D.

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DAVID BALUARTE, B.A., J.D.

Associate Clinical Professor of Law and Director, Immigrant

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C. ELIZABETH BELMONT

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JOHANNA E. BOND, B.A., J.D., LL.M

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DAVID I. BRUCK, B.A., J.D.

Clinical Professor of Law and Director, Virginia Capital Case

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CHRISTOPHER M. BRUNER, A.B., M.Phil, J.D.


JUDY CLARKE, B.A., J.D.

Professor of Practice

ROBERT T. DANFORTH, B.A., J.D.

Professor of Law

MARK A. DRUMBL, B.A., M.A., J.D., LL.M., J.S.D.

Class of 1975 Alumni Professor of Law and Director,

Transnational Law Institute

MICHELLE L. DRUMBL, B.A., J.D.

Associate Clinical Professor of Law and Director, Tax Clinic

DANIEL EVANS, B.A., B.S., J.D.


JOSHUA A.T. FAIRFIELD, B.A., J.D.


JUDGE JOHN F. FORSTER, JR., B.A., J.D.

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JILL M. FRALEY, B.A., J.D., LL.M., J.S.D.


SUSAN D. FRANCK, A.A., B.A., J.D., LL.M.


MARK H. GRUNEWALD, B.A., J.D.

James P. Morefield Professor of Law

BRANT J. HELLWIG, B.S., J.D., LL.M.

Professor of Law

MARGARET HOWARD, A.B., J.D., M.S.W., LL.M.

Law Alumni Association Professor of Law

MARGARET HU, B.A., J.D.

Assistant Professor of Law

LYMAN P.Q. JOHNSON, B.A., J.D.

Robert O. Bently Professor of Law

TIMOTHY S. JOST, B.A., J.D.

Robert L. Willett Professor of Law

JOHN D. KING, B.A., J.D., LL.M.

Associate Clinical Professor of Law

JUSTICE DONALD W. LEMONS, B.A., J.D.

Distinguished Professor of Judicial Studies

ERIK LUNA, B.S., J.D.

Sydney and Frances Lewis Professor of Law

TIMOTHY C. MACDONNELL, B.A., J.D., LL.M., LL.M.

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ANN MACLEAN MASSIE, B.A., M.A., J.D.

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RUSSELL A. MILLER, B.A., J.D., M.A., LL.M

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DAVID MILLON, B.A., M.A., Ph.D., J.D.

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JAMES E. MOLITERNO, B.S., J.D.

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BRIAN C. MURCHISON, B.A., J.D.

Charles S. Rowe Professor of Law

DOUG RENDLEMAN, B.A., M.A., J.D., LL.M.

Robert E.R. Huntley Professor of Law

THOMAS H. “SPEEDY” RICE, B.A., J.D.

Professor of Practice, Transnational Law Institute

CHRISTOPHER B. SEAMAN, B.A., J.D.


VICTORIA A. SHANNON, B.A., J.D.


JOAN SHAUGHNESSY, B.A., J.D.

Roger D. Groot Professor of Law

KISH PARELLA, B.A., M.Phil., J.D., LL.M.


SARAH K. WIANT, B.A., M.L.S., J.D.

Professor of Law

Visiting Faculty

MICHAL BUCHHANDLER-RAPHAEL, L.L.B., LL.M., S.J.D.

Visiting Assistant Professor of Law

ALBERT V. CARR, B.A., J.D.

Visiting Professor of Law

KEVIN L. COPE, B.A., J.D.

Visiting Assistant Professor of Law

DAVID EGGERT, B.A., J.D.


MATTHEW ENGLE, B.A., J.D.


JEFFREY KAHN, B.A., J.D.


SUZETTE M. MALVEAUX, B.A., J.D.


TATJANA PAPIÄ, B.A., J.D.


TODD C. PEPPERS, B.A., J.D., Ph.D.


JONATHAN SHAPIRO, B.A., J.D.


CHRISTOPHER J. WHELAN, LL.B., M.A., Ph.D.


Adjunct & Extended Faculty

HARLAN RAY BECKLEY, B.S., M.Div., M.A., PH.D.

Lecturer in Religion & Law, Director, Shepherd Program, Fletcher

Otey Professor of Religion

NEIL V. BIRKHOFF, B.A., J.D., LL.M.

Adjunct Professor of Law

MICHELE S. BURKE, B.S., J.D.


R. EDWIN BURNETTE, JR., B.A., J.D.


GREGORY J. COOPER, B.A., Ph.D.

Lecturer in Philosophy & Law, Associate Professor of Philosophy

JOHN H. CRADDOCK, JR., B.S.E., J.D., LL.M.


DAVID DEJONG, B.A., J.D., LL.M.

Adjunct Professor of Practice

KELLY L. FAGLIONI, B.A., J.D.


AARON SAMUEL HAAS, B.A., J.D.

Oliver Hill Fellow (Adjunct)

DAVID L. HEILBERG, B.A., J.D.


JAMES W. JENNINGS, JR., B.A., J.D.


TIMOTHY JOSEPH KEEFER, B.A., J.D.


REX LAMB, B.A., J.D.


CHARLES LOWNEY, B.A., M.A., Ph.D.

Lecturer in Philosophy & Law, Visiting Professor of Philosophy

TIMOTHY LUBIN, B.A., M.T.S., Ph.D.

Lecturer in Law and Religion, Professor of Religion

A. CARTER MAGEE, JR., B.A., J.D.


JAMES E. MAHON, B.A., M. Phil., Ph.D.

Lecturer in Philosophy and the Law, Professor of Philosophy

JOHN LAWRENCE MANNING, B.S., LL.B., J.D.


JOHN J. MILES, B.S., M.A., J.D.


FRANK W. MORRISON, B.A., J.D.


LAWRENCE LLOYD MUIR, JR., B.A., J.D.


STEPHEN WILLS MURRAY, B.A., M.Phil., Ph.D., J.D.


CAROL D. NEWMAN, B.A., PH.D., J.D.


J. LEE E. OSBORNE, B.A., J.D., LL.M.


G. MICHAEL PACE, JR., B.A., J.D.


JAMES H. PANNABECKER, B.A., J.D., M.R.P.


HOWARD PICKETT

Adjunct Instructor of Shepard Poverty

CHRISTOPHER P. RUSSELL, A.B., J.D.


GILBERT E. SCHILL, JR., B.A., J.D.


JAMES S. SEEVERS, JR., B.A., J.D.


GUY BRYAN SEREFF II, B.S., J.D.


JONNIE SPEIGHT, B.A., J.D.


GREGORY N. STILLMAN, B.A., J.D.


DANIEL J. VICTOR, B.A., J.D.


ED WALKER, B.A., J.D.


WILLIAM P. WALLACE, JR., B.A., J.D.


MARK ALLEN WILLIAMS, B.A., J.D., M.B.A.


R. CRAIG WOOD, B.A., M.Ed., J.D.


ROBERT C. WOOD, III, B.A., LL.B.


HENRY L. WOODWARD, A.B., LL.B.


CHARLES L. WOODY, B.A., J.D.


The Washington and Lee Journal of Energy, Climate,

and the Environment sponsors an annual symposium

examining prospects for change in an important area

of the law dealing with energy, climate, or the

environment.

Previous Major Symposia

Protecting Water Resources: Are Corporations

Responsible?

(February 13, 2015)

(2015)

Environmental Justice

(March 21, 2014)

(2014)

The “All of the Above” Strategy: Evaluating the

Obama Administration and the Future of Federal

Law and Policy on Energy and Climate Change

(February 1, 2013)

(2013)

Reclaiming Environmental Federalism

(February 17, 2012)

(2012)

Regulating Resource Extraction: Creating Order in

a Legal Morass

(February 18, 2011)

(2011)

The Intersection of Renewable Energy Development

and Geoengineering

(March 19, 1010)

(2010)

Climate Policy for the Obama Administration

(February 20, 2009)

(2009)

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JOURNAL OF ENERGY,

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WASHINGTON AND LEE

JOURNAL OF ENERGY,

CLIMATE, AND THE

ENVIRONMENT

Volume 6 2015 Number 2

ARTICLES

The Privatization of Antartica

Leonid A. Krasnozhon, Pedro A. Benitez,

and Walter E. Block

379

Rising Seas, Receding Ethics? Why Real Estate

Professionals Should Seek the Moral High Ground

Keith W. Rizzardi

402

Implementation of the EU Directive on Environmental

Impact Assessment in the Czech Republic: How Long Can

the Wolf Be Tricked?

Veronika Tomoskova

451

STUDENT ARTICLES

An Increase in Beach Reconstruction May Mean a

Decrease in Property Rights: The Need for a Multi-Factor

Balancing Test when Protecting Waterfront Property

Amy Forman

509

Necessary Change: Re-Calculating Just Compensation for

Environmental Benefits

Scott Salmon

552

Moving Military Energy “Behind the Fence:”

Renewable Energy Generation on U.S. Defense Lands

Cameron E. Tommey

592

The Shifting Use of the So-Remote-as-to-be-Negligible

Standard for Qualified Conservation Contributions

Ashley H. Waterbury

634

379

The Privatization of Antarctica

Leonid A. Krasnozhon, Pedro A. Benitez,

and Walter E. Block*

Abstract

The seventh continent, Antarctica, is a no man’s land in

terms of economic development. This is not due to its harsh

weather conditions. Parts of Alaska, Canada and Russia are

almost equally inhospitable. Rather, this Article argues that

Antarctica’s economic isolation is the result of political paralysis

and a lack of appreciation for private property rights. This Article

makes the case for adding Antarctica to the family of nations,

whether as one or several countries.

Table of Contents I. Introduction ............................................................................ 379

II. History ................................................................................... 382

III. Resources .............................................................................. 387

IV. Criticisms ............................................................................. 392

V. Conclusion .............................................................................. 400

I. Introduction

It is not uncommon to hear claims that humanity will be

the cause of its own demise.1 Most people have a fatalistic view

that they are bound to bring about their own doom.2 Recently, the

* Dr. Leonid Krasnozhon, Assistant Professor of Economics,

Loyola University New Orleans, New Orleans, LA, email: [email protected].

Pedro Benitez, Honors Program, Loyola University New Orleans, LA, email:

[email protected]. Dr. Walter Block, Harold E. Wirth Eminent Scholar

Endowed Chair and Professor of Economics, Loyola University New Orleans,

New Orleans, LA, email: [email protected].

1. See Nick Bostrom, Existential Risks: Analyzing Human

Extinction Scenarios and Related Hazards, 9 J. EVOLUTION & TECH. 2002, at 1, 3

(describing the threats facing humanity).

2. See id. at 5 (stating that it is pointless to “wallow in gloom and

doom”).

380 6 WASH. & LEE J. ENERGY CLIMATE & ENV’T 2 (2015)

environment has been a great source of distress.3 Are we running

out of resources? Are we extracting them in such a way that we

will contaminate the planet and provoke climate catastrophes? Is

it possible to stop this seemingly oncoming Armageddon?

Humanity’s greatest resource is creativity.4 Historically,

we have proved fatalists like Thomas Malthus 5 wrong, 6

demonstrating that even with growing populations we can control

our reproduction and boost our food production. Since humans

always face scarcity, they have been forced to innovate.7 When

competing in a free market, the desire to reduce costs and

maximize profits leads them to seek ways to obtain the most out

of available resources.8 Substitutes also appear, often times a

result of technological advances. All that is necessary is some

quantity of resources that can be exploited for the aforementioned

innovation to take place. That is where Antarctica comes in.

When considering the continents, the names of the big six

tend to pop into mind. Yet this is the fifth largest continent, and

as a landmass of such magnitude, contains much untapped

potential.9 From oil to a gigantic mass of protein in the form of

3 See id. (noting that intelligent life could go extinct in sudden

disaster).

4. See JULIAN SIMON, THE ULTIMATE RESOURCE 3 (Princeton

University Press, ed., 1st ed. 1981) (noting that Julia Simson a free market

economist, offered a wager to economist Paul Ehrlich to disprove the idea that

humanity was running out of resources). By tracking the prices of several

resources over a period of ten years, they would decide if they’d become more

scarce of plentiful. See id. Simon won the bet as businesses develop new ways to

more efficiently use their resources, as well as seek alternate resources. See id.

5. See generally THOMAS MALTHUS, AN ESSAY ON THE PRINCIPLE OF

POPULATION (1798).

6. See LIONEL ROBBINS, THE THEORY OF ECONOMIC DEVELOPMENT

IN THE HISTORY OF ECONOMIC THOUGHT 22–33 (1966) (analyzing the relation

between world population size and well-being).

7. See Beth Gardiner, Jugaad Innovation: The Businesses Getting

Creative in the Face of Scarcity, THE GUARDIAN (Dec. 3, 2013),

http://www.theguardian.com/sustainable-business/jugaad-innovation-business-

creativity-scarcity (describing how innovation tends to happen when businesses

face scarcity of resources) (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY, CLIMATE, AND THE ENVIRONMENT).

8. See id. (noting how entrepreneurs are often forced to cut costs

dramatically to survive)

9. See What is Antarctica?, NASA (Dec. 8, 2010),

https://www.nasa.gov/audience/forstudents/k-4/stories/what-is-antarctica-

k4.html (describing the size and value of Antarctica) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

PRIVATIZATION OF ANTARCTICA

381

krill, the development of Antarctica could change the playing

field of international trade in a huge way. Yet, for decades, it has

really just sat there, unproductive, unyielding, undeveloped and

unpopulated.10 This is a direct result of the international politics

that stifle Antarctica in a complicated political limbo. Conflicting

political interests and policies make it difficult for a decision to be

made on this landmass that pleases all the parties involved.11

There is huge potential in the Antarctic continent and to

understand how to best access it, we must look at different paths.

An approach through privatization would certainly result in

better resource exploitation and care of the continent than that

given by political bodies that seek their own interest at the

expense of others.12 Through free enterprise, Antarctica would be

subjected to market forces that would determine the best ways to

reach equilibrium of sustainability and exploitation, as well as

benefitting humanity as a whole. 13 The privatization of

Antarctica is a concept that requires a good understanding of

history, Antarctic resources, and the concept of ownership.

In Section II of this paper we discuss the history of

Antarctica. 14 Section III is devoted to an examination of the

resources offered by this continent that might serve as the basis

for homesteading.15 Finally, Section IV deals with criticisms of

this Article’s proposal.16

10. See id. (noting that Antarctica is too cold for people to live

there a long time, and huge swaths of the continent are uninhabitable).

11. See Antarctica, THE WORLD FACTBOOK,

https://www.cia.gov/library/publications/the-world-factbook/geos/ay.html (last

visited Apr. 19, 2015) (discussing how complex the politics of who controls

Antarctica is, and how many claims are not universally recognized) (on file with

the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

12. See RICHARD W. MANSBACH & KIRSTEN L. TAYLOR,

INTRODUCTION TO GLOBAL POLITICS 182 (2013) (describing the effects of

privatization of state responsibilities).

13. See id. (noting that privatization often results in slashing

costs).

14. See infra Part II and accompanying text.

15. See infra Part III and accompanying text.

16. See infra Part IV and accompanying text.

https://www.cia.gov/library/publications/the-world-factbook/geos/ay.html


II. History

Antarctica existed only as a rumor about a mysterious

southern landmass for quite a while.17 Whalers and sealers who

dared go south in pursuit of prey found themselves in extremely

cold, arid temperatures. 18 Throughout the sixteenth century,

many of these men would make land claims and others would

hide their discoveries from each other so as to obtain access to

particular fishing locations.19 Interests in Antarctica were more

focused on the waters around it than the actual landmass, an

explanation of why very few people paid real attention to the

continent.20 This situation made ownership more difficult, as no

one individual could be said to have acquired any entitlement to

the land.21 The explorers had no interest in claiming the land for

themselves, and countries did not regard the claims as worthy of

recognition.22

The actual discovery is greatly contested amongst the

United States, Great Britain, and the former Soviet Union. 23

From the American Palmer, who supposedly made the first

sighting in November 182024, to the Briton Bransfield who saw it

17. See STEPHEN MARTIN, A HISTORY OF ANTARCTICA (Rosenburg

ed., 2013) (noting that the first European idea of the land was based on

explanations of philosophers rather than actual exploration).

18. See M.J. PETERSON, MANAGING THE FROZEN SOUTH: THE

CREATION AND EVOLUTION OF THE ANTARCTIC TREATY SYSTEM 32 (University of

California, ed., 1988) (noting that human activity on the continent seemed

impossible).

19. See id. (noting that these individuals preferred to settle

disputes without getting others involved).

20. See id. at 31 (arguing that although the waters were more

easily explored, the politics of the two entities have been connected).

21. See id. (describing how the government of the explorers would

not follow up on any claims explorers made to the land).

22. See id. at 32 (revealing that “long distance and slow

communication” made administration of the areas slow and costly—both

reasons why the countries did not follow up on explorer’s claims”).

23. See DEBORAH SHAPLEY, THE SEVENTH CONTINENT 23 (Resources

for the Future, Inc. ed., 1st ed. 1985) (noting that this battle over discovery has

legal significance, “since discovery is sometimes considered a basis for territorial

possession”).

24. See id. (noting that the American was from Stonington,

Connecticut).


383

on January of 1819,25 and to the Russian Imperial Navy officer

Bellingshausen who supposedly saw it on 1819 (despite having no

record of this year on his logs whatsoever)26 many explorers had

claims on the territory that no country upheld.27

In the twentieth century, Antarctic interests evolved from

sealing to whaling, until the point that stocks of the latter had

been so reduced that the activity was no longer viable.28 In 1912,

a series of expeditions to the South Pole began as part of a

renewed interest in exploring the entire planet.29 This renewed

interest in the area resulted in many governmental incursions.30

The first nation to view Antarctica with serious interest

was Britain, which began compiling old historical logs, making

claims on the territory named Graham.31 As their claims started

to grow, French action began, claiming the Adelie Land. World

War I put a halt to this process, but almost immediately after its

conclusion, Great Britain tried to annex the entire continent into

the British Empire.32 German expeditions prompted by Hitler on

the hope of making claims triggered an international reaction by

Norway and the Soviet Union, which also began enforcing their

own claims.33 Argentina and Chile disputed islands and territory

between their national territories and the South Pole, citing

25. See id. (stating that the British claim is hard to substantiate

because the explorer’s logbook is lost).

26. See id. (detailing that this explorer even seemed to credit the

American for discovering Antarctica).

27. See PETERSON, supra note 18, at 31 (stating that discovery of

the continent did not start to matter until explorers actually landed and

“wintered over” the interior of the continent).

28. See id., at 8–9 (noting that sealing died out after 1830 and

whaling collapsed largely in the 1960s but some illegal and legal whaling still

exists today).

29. See SHAPLEY supra note 23, at 11 (arguing that because the

rest of the globe had been conquered, the Artic saw a burst of exploration in

1890).

30. See PETERSON, supra note 18, at 34 (noting that governments

made claims to lands because of “discovery, later exploration, or geographical

proximity”).

31. See id. at 33 (“Britain formally laid claims to all islands lying

south of the 50°S between 20° and 80°W.”).

32. See id. (describing the land as a stretch of the Antarctic coast

between 136° and 142°E).

33. See id. at 33–34 (noting that this decision led to claims based

on the previous actions of British explores described previously).


geographic proximity and old agreements as their basis.34 Soviets

claimed that by being the alleged first discoverers of Antarctica,

the entire continent was theirs 35

Activities in the region ranged from exploitation of trade

routes, water resources, strategic military placement, and

preventive measures.36 Unlike North and South America or other

continents, the ownership status of Antarctica remained

unclear. 37 Because of the nature of the land, agriculture and

homesteading on the land was difficult, making claims

problematic and hard to enforce.38

Defining the ownership of Antarctica became a power

struggle of political sluggishness and lack of private property

rights. 39 Realizing the difficulties of actually settling disputes

between rival governments, the United States proposed a

trusteeship, with each country being able to exploit resources in

Antarctica as it saw fit, with the United Nations giving a certain

quantity of territory to all countries.40 This suggestion, however,

was rejected quickly by all parties involved in the negotiations.41

This rejection was accompanied with fears that Antarctica could

become its own independent state, which to all contending parties

seemed undesirable (Peterson, 1988: 55).42 Colonialism may have

disappeared from Africa and the Americas, but it appeared to be

thriving in Antarctica.

34. See id. at 35 (arguing that claims by Norway and the United

States spurred formal claims from Argentina and Chile).

35. See id. at 38 (relaying the USSR’s argument supported by

propaganda that historical discoveries by Russian explorers gave the country

the right to all of Antarctica).

36. See id. at 37 (describing the near clashes that occurred

between various naval forces).

37. See id. at 36 (noting that the seven states who laid claim to the

land felt as if the land was “open to appropriation” but some private individuals

proposed that the land be administered by the League of Nations).

38. See id. at 31–32 (explaining that the inhospitable nature of the

land turned governments away from enforcing claims on Antarctica).

39. See id. at 32–39 (discussing the varying claims and debates

surrounding ownership and use of Antarctica by a variety of nations)

40. See id. at 37 (explaining the origination of the idea of a

trusteeship as a way to avoid conflict between the United States’ allies in Great

Britain and South America).

41. See id. (describing the near immediate rejection of the U.N.

trusteeship proposal).

42. See id. at 54–56 (explaining why each participant disfavored

several options for creation of law on Antarctica).


385

On one side, there was the concept of Terra Nullis, which

claimed Antarctica as a political no-man’s land, the property of

whoever found and administered the territory. 43 All original

claimants of Antarctica supported this view.44 On the other hand,

many other countries that had no connection whatsoever with the

continent favored res communis, the land of all of humanity,

which is similar to the ownership of the oceans.45

After much debate, Chile suggested halting all arguments

on claims of ownership and, instead, refocusing efforts on the

peaceful development of scientific research. 46 This plan was

adopted and revised by the United States delegation and a treaty

was signed by twelve nations in 1959.47 It was enacted in 1961.48

Article IV Section 2 of the Antarctic Treaty demonstrates that its

focus is on putting all claims and disputes on hold for an

unspecified period of time while using the continent for scientific

research only:

“No acts or activities taking place while the present

Treaty is in force shall constitute a basis for

asserting, supporting or denying a claim to

territorial sovereignty in Antarctica or create any

rights of sovereignty in Antarctica. No new claim,

or enlargement of an existing claim to territorial

sovereignty in Antarctica shall be asserted while

the present Treaty is in force.”49

43. See id. at 36 (explaining that terra nullius permitted open

appropriation for any state administering the territory).

44. See id. (identifying the seven original claimants to Antarctica

that supported terra nullis).

45. See id. (defining res communis as common land that is shared

by all).

46. See id. at 38 (describing the Chilean proposals that led to the

first international “gentlemen’s agreement” for scientific research for a

designated period of time).

47. See id. at 41 (identifying the twelve signatory states to the

Atlantic Treaty).

48. See id. (explaining that the treaty came into effect after the

last of the twelve signatory states ratified the treaty).

49. The Antarctic Treaty, art IV, Dec. 1, 1959.


The number of signatories grew from twelve to fifty-one

because the Treaty allowed any member of the United Nations to

accede to it.50

The treaty is vague regarding ownership or what is to be

done if resources are more plentiful than is currently known. Its

purpose is mostly to ensure peaceful cooperation by denigrating

ownership issues. 51 Mineral and fossil fuel extractions were

forbidden to preserve Antarctica in its original condition.52 No

military development of any kind is allowed. 53 As shown in

Picture 1, the Antarctic Treaty maintains the status quo of

Antarctic land ownership with seven territorial claims made by

Argentina, Australia, Chile, France, New Zealand, Norway, and

the United Kingdom.54 Argentina, Chile, and the United Kingdom

have overlapping claims.55 The United States and Russia, the

nation taking the role of the former Soviet Union, maintain a

“basis of claim”.56 In addition to the treaty, the Madrid Protocol

(1991), formally known as the Protocol on Environmental

Protection to the Antarctic Treaty, designates Antarctica as a

wilderness area.57

50. See The Antarctic Treaty, SECRETARIAT OF THE ANTARCTIC

TREATY, http://www.ats.aq/e/ats.htm (last visited Apr. 19, 2015) (“The total

number of Parties to the Treaty is now 52.”) (on file with the WASHINGTON AND

LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

51. See PETERSON, supra note 18, at 41 (explaining the principles

of the Antarctic Treaty).

52. See Rick Rozzof, Scramble For World Resources: Battle For

Antarctica, GLOBAL RESEARCH, May 16, 2009,

http://www.globalresearch.ca/scramble-for-world-resources-battle-for-

antarctica/13639 (describing the ban on exploitation of any resources from

Antarctic except for scientific research) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

53. See id. (explaining that development and exploitation of

Antarctica is limited to endeavors for peace).

54. See Antarctica: Territorial Claims, Map 13567, AUSTRALIAN

ANTARCTIC DATA CENTER,

https://www1.data.antarctica.gov.au/aadc/mapcat/display_map.cfm?map_id=135

67 (last visited Apr. 19, 2015) (showing the territorial claims of the seven

original claimants) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT).

55. See id. (showing the overlapping claims of several claimants).

56. See Antarctic Treaty, supra note 53 (explaining modern claims

on Antarctica following the Antarctic Treaty).

57. See Protocol on Environmental Protection to the Antarctic

Treaty, SECRETARIAT OF THE ANTARCTIC TREATY, http://www.ats.aq/e/ep.htm (last

visited Apr. 19, 2015) (designating Antarctica as a “natural reserve, devoted to


387

FIGURE 1: National Claims to Antarctic Territory.58

III. Resources

At first glance, Antarctica appears to be an uneconomical

landmass. Its surface is covered 98% in ice, has little vegetation,

extremely cold temperatures, great winds, no rainfall, and

peace and science”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


58. Territorial Claims, supra note 54.


difficult terrain.59 It was that harshness that made the continent

appear as a barren wasteland that drew little attention from

explorers and governments.60 Upon closer inspection, however,

Antarctica’s true potential becomes apparent.

Food may not be as available in Antarctica as in other

continents, but its surrounding waters tell quite the opposite

story. Because of the constant daylight during half the year,

nutrient rich waters, and the flow of underwater currents, the

Southern ocean has been estimated to be up to eight times more

productive than the north Atlantic, giving it an amazing

biomass.61 In fact, the stock estimates in 1996 projected around

4.83 million tons of krill in the waters off of East Antarctica

alone.62

Antarctica’s biggest untapped resource could potentially

be those tiny shrimplike creatures that exist in massive

quantities off its coasts.63 Due to the high amount of protein they

contain in their bodies, krill is the single largest protein mass on

the planet.64 Their present use in Japanese and Russian meals is

something that could be introduced to the rest of the world,

providing a new, cheap food source that could potentially

substitute for shrimp and other types of seafood in the global

market.65 Currently, however, krill are being over-exploited as a

59. See Antarctica Fact File, UNITED KINGDOM NATURAL HISTORY

MUSEUM, http://nhm.ac.uk/nature-online/earth/antarctica/antarctica-fact-

file/index.html (last visited Apr. 19, 2015) (discussing the characteristics of the

continent in general) (on file with the WASHINGTON AND LEE JOURNAL OF


60. See PETERSON, supra note 18, at 31–32 (explaining that the

inhospitable nature of the land turned governments away from enforcing claims

on Antarctica).

61. See SHAPLEY, supra note 23, at 115 (describing the immense

krill resource available in the waters surrounding Antarctica).

62. See Timothy Pauly, et. al., Distribution and Abundance of

Antarctic Krill (Euphausia superba) Off East Antarctica (80–150°E) During the

Austral Summer of 1995/1996, 47 Deep Sea Research Part II: Topical Studies in

Oceanography, 2465 (Aug. 2000) (identifying the number of krill estimated in an

hydroacoustic survey in East Antarctica).

63. See SHAPLEY, supra note 23, at 115 (describing the immensity

of the biomass of the krill in the Southern Ocean).

64. See id. at 113 (explaining the protein content of krill to be

nearly 16 percent).

65. See W. Nigel Bonner, The Future of Antarctic Resources, 152

THE GEOGRAPHICAL J. 248, 253 (1986) (“Most Krill is caught by the USSR and

Japan.”).


389

result of fishing in international waters, an example of the

tragedy of the commons.

Patagonian toothfish is currently the most valuable of

Antarctica’s sea produce at the moment. 66 It is a large fish, with

fine white meat and few bones, fetching up to 10 dollars a kilo.67

These fish are very common in southern waters, yet illegal

fishing and excessive commercial fishing has slowly reduced its

numbers in recent years. 68 This problem also constitutes a

tragedy of the commons, as the fish are depleted with no

incentive to regenerate lost fish, as they are fair game to other

fishermen.

Antarctica has also been a historically great source of

whale and seal products. 69 Most of these aquatic mammals

migrate south to feed on the swarms of krill that surround

Antarctica. 70 However, like the Patagonian toothfish, excessive

whaling and sealing, both legal and illegal, has greatly reduced

the numbers of these creatures. 71 This practice was greatly

reduced due to near extinction. 72

A huge cap of ice that is pushing down the actual

continent 600 feet underground covers Antarctica’s surface. It is

estimated that Antarctica contains around 70% of the world’s

fresh water.73 This massive water deposit is a market that, in the

future, could be exploited once sufficient drilling and

transportation technologies are developed. The uses for this could

be commercial, agricultural, or even environmental. A single

66. See Dick Williams, A History of the Patagonian Toothfish

Fishery, AUSTRALIAN ANTARCTIC MAGAZINE 47 (Spring 2001) (“Today the

Patagonian Toothfish is the most valuable fishery in Antarctic or subantarctic

waters.”).

67. See id. (explaining that the white flesh and few bones in

Patagonian Toothfish lead to high market prices).

68. See id. (noting that illegal fishing around the subantarctic

islands has been a large-scale problem since 1996).

69. See Bonner, supra note 65, at 253 (detailing the few living

resources found in and around Antarctica).

70. See id. at 253 (noting that whales are a major predator of

krill).

71. See id. at 252 (describing the history of the seal harvesting and

whaling that has taken place in Antarctica).

72. See id. (highlighting the international legislation and

regulations in place to prevent over-exploitation).

73. See id. at 250 (“The Antarctic contains approximately 70 per

cent of the world’s supply of fresh water locked up in its ice-cap . . . .”).


iceberg, the Trolltunga, for example, had an area of nearly the

size of Delaware, and could be a source of fresh water for nine

times the annual requirements of the United States.74

When first discovered, explorers were surprised to find

lumps of coal scattered throughout the ice, as these two

substances are almost never found together. 75 In fact, the

presence of any mineral was considered unusual. Geological

studies have since then revealed the existence of a massive

continent, Gondwana, which was composed of Antarctica,

Australia, South America, and Africa. 76 These countries have

many kinds of resources which suggests that the Antarctica too

must be mineral rich. 77 Some pockets of resources have been

found and deemed “commercially insignificant,” yet the amount of

land surveyed for resources is analogous to “prospecting in an

area the size of Delaware for clues to the mineral wealth of the

United States and Mexico.”78 This gives a sense of perspective to

the vast potential that could lie below the ice, and could serve as

the basis for private property rights.

Coal and iron are the most prevalent of the minerals

found, with one of the largest reserves on the planet. 79 Along

with this, various pockets of natural gas and petroleum have

been found, sparking certain degrees of interest in them. 80 Yet

they remain unexploited as a result of the Antarctic Treaty. 81

These resources could in effect lower global fuel prices, as well as

shift coal production away from countries like China, the United

States and India.

74. See F.M AUBURN, ANTARCTIC LAW AND POLITICS 32 (Ind. Univ.

Press Bloomington, 1st ed. 1982) (providing one example of a large tabular berg

composed of mostly fresh water).

75. See SHAPLEY, supra note 23, at 5 (questioning how coal and ice

could coexist).

76. See Bonner, supra note 65, at 249 (providing an overview of

the former supercontinent).

77. See id. (connecting the presence of minerals on the

supercontinent derivatives).

78. See SHAPLEY, supra note 23, at 127.

79. See id. at 249 (hypothesizing that the Antarctic might contain

the largest coalfield in the world).

80. See id. (noting that layers of sediments associated with oil

deposits have been found).

81. See id. at 255 (explaining that the Antarctic Treaty keeps

Antarctica a ‘continent for science’ for the benefit of the greatest number of

people).


391

The year 1973 was a big one for Antarctic fossil fuels.82 It

included a rise in Middle Eastern oil prices as well as a discovery

of hydrocarbons by the accidental drilling of a scientific U.S. ship.

Antarctic oil reserves are hard to accurately calculate, but there

are approximately 45 billion barrels of oil in West Antarctica

alone.83 This oil deposit might equal the production of the U.S.

Atlantic continental shelf. Still, in a world where fear of oil

depletion still haunts some, Antarctica could potentially be

nestled on large reserves. This belief is also coupled with several

hydrocarbon findings, which make Antarctica potentially one of

the world’s biggest untapped oil sources. Prospecting combined

with improvements in better extraction techniques could enable

us to more accurately assess future prospects of oil production.84

Antarctica’s location in the south, a convergence point for

the Indian, Atlantic and Pacific oceans, gives it a key location for

accessing various landmasses. Were technology to advance to a

point where Antarctica could actually be used as a settlement or

trade area, the flow of products across the world could radically

change. The most important thing, however, is that human

creativity could come up with new ways to exploit the Antarctic

continent and extract resources from it in ways that today seem

impractical or beyond the scope of current human ability.85 The

major challenge in Antarctica is not weather, or skills, or

technology; rather, it is to fix the political system so that private

property rights can be respected.86

82. See id. at 125 (explaining that the treaty powers moved to both

claim jurisdiction and prioritize preservation in Antarctica in 1973).

83. See id. (stating that there is little known of what lies under the

surface and waters surrounding Antarctica).

84. See id. (highlighting the fact that using Antarctica’s natural

resources can boost world oil production).

85. See id. (noting the melting of the Arctic Ice cap, with new

nuclear boats opening their way through the ice between Russia, China, and

other northern countries). The Antarctic Treaty does not allow for or even

contemplate a market economy to internalize cost and benefits of the melting of

the Arctic Ice cap. See id.

86. See Paul Lincoln Stoller, Comment: Protecting the White

Continent: Is the Antarctic Protocol Mere Words or Real Action?, 12 ARIZ. J. INT’L

& COMP. LAW 335, 336 (1995) (outlining the numerous problems associated with

Antarctica and how these problems led to the adoption of the Antarctic Treaty).


IV. Criticisms

Antarctica is currently at a standstill, and this is the

result of the nature of politics and governments worldwide. 87

Antarctica’s current level of stagnation is a direct result of

government mismanagement, which seeks to retard resource

exploitation. 88 This government mismanagement consists of

abuse of jurisdiction to prevent people from claiming parts of

Antarctica, coalitions to prevent countries from entering the

markets, the desire to prevent expansion by other nations, and

the overall inefficiency to determine what to do with Antarctica is

a result of government officials who seek to pursue their own

interests.89

An example of this is the American attempt to divide

Antarctica, which was summarily rejected due to political

tensions.90 Instead of allowing economic freedom, governments

use their political weight to prevent others from trying to

compete.91 Another example was the refusal to accept any type of

treaty that could have resulted in a separate sovereign state.92

This was quite hypocritical as many of the countries, including

the United States, were colonies that later became independent.

For decades, Antarctica has remained static while its

resources, which could be used for the benefit of all humanity,

remain untouched.93 Instead, the fifth largest continent is used

87. See Rozzof, supra note 52 (discussing historical territorial

claims made by different countries).

88. See id. (giving the current political structure in Antarctica,

which limits it to scientific endeavors).

89. See id. (limiting what countries can do in Antarctica).

90. See MARIE JACOBSSON, BUILDING THE INTERNATIONAL LEGAL

FRAMEWORK FOR ANTARCTICA, at 4 http://www.atsummit50.org/media/book-5.pdf

(providing background of previously proposed Antarctic plans for development)

(on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT).

91. See ADRIAN JOHN HOSKINS, FROZEN EMPIRES: A HISTORY OF THE

ANTARCTIC SOVEREIGNTY DISPUTE BETWEEN BRITAIN, ARGENTINA, AND CHILE,

1939–1959 172 (2008) (stating the different ways that countries used their

influence to overrule previous treaty attempts).

92. See Rozzof, supra note 52 (describing the different attempts to

privatize Antarctica).

93. See Bonner, supra note 65, at 249 (discussing different

resources, including minerals and oil, that are present in Antarctica).


393

only for research stations. 94 Is that really what is needed?

Obviously, individuals, politicians, or even combinations of them

can’t be certain. Markets, on the other hand, would best

determine the proper allocation between mining companies and

research stations as they do for every other good and service.95

Private property rights better determine resource usage. Have we

learned nothing for the economic disarray of East Germany,

Cuba, the U.S.S.R? These lessons are not being applied to

Antarctica. 96 Competition would ensure that those who waste

resources go out of business, that pollution would be internalized

to prevent legal action and that innovation to differentiate

products would actually be brought forth.

Lack of ownership in Antarctica has already had

damaging effects on the environment.97 Due to the unusual status

of maritime claims around the land as a result of riparian law,

there has been a tremendous abuse of fish, whales, and seals to

the point that extinction was a real threat. 98 Attempts at

regulation of the harvest of these creatures have proven

ineffective, with declining populations resulting from both legal

and illegal fishing.99 Without private ownership, there is little or

no incentive to keep the animals alive, no way to farm them, and

94. See Stoller, supra note 86, at 338 (outlining the results that

could occur through scientific research).

95. The Madrid Protocol, AUSTRALIAN ANTARCTIC DIVISION

http://www.antarctica.gov.au/law-and-treaty/the-madrid-protocol (last visited

Apr. 19, 2015) (outlining the limits of Antarctic claims and further limiting the

1595 Antarctica Treaty) (on file with the WASHINGTON AND LEE JOURNAL OF


96. See Rozzof, supra note 52 (describing the political problems

that have arisen in relation to Antarctica).

97. See Christina A. Hoefsmit, Note and Comment: Southern

Ocean Shakeup: Establishing Sovereignty in Antarctica and the Consequences

for Fishery Management, 15 ROGER WILLIAMS U. L. REV. 547, 548 (describing the

overall effect that the Antarctic political situation has had on the fish

environment).

98. See id. (stating the risk that the environment faces due to this

lack of enforcement).

99. See id. (highlighting the fact that the 1959 Antarctica Treaty

does not extend to aquatic resources).


no reason to spare any to the competition.100 This situation puts

the Antarctic biodiversity at great risk.101

There are many ways that this issue could be approached:

governments could enforce their claims,102 the land could be split

evenly among countries, 103 the continent could be opened to

citizens of the world to homestead, 104 etc. The methods and

approaches are numerous but privatization is an alternative that

will not only yield better results, but the optimal ones. 105

Delineating private property can be done in several ways.

The Lockean view, in which mixing labor with the land actually

gives a person claim over the property, is ideal.106 In the case of

Antarctica, this interpretation could be followed in some degree

in an approach similar to the Homestead Act, either under a free

Antarctica, or under different national claims.107 This might well

center on resource extraction. 108 Technological developments

100. See id. (outlining problems that could result if this

environment is not regulated in the future).

101. See id. (giving the possible solution that could occur to the local

environment and providing a way to fix that problem).

102. See Christy Collis, Critical Legal Geographies of Possession:

Antarctica and the International Geophysical Year 1957–1958, 75 GEO J. (NO. 4)

387, 389–91 (2010) (explaining one historical viewpoint of Antarctica as under

territorial claim).

103. See id. at 392 (outlining another view of the Antarctic as terra

communius being “a continent communally owned by every person on Earth”).

104. See Scott J. Shackelford, The Tragedy of the Common Heritage

of Mankind, 28 STAN. ENVTL. L.J. 109, 112 (2009) (promoting the benefits of a

homesteading system for international commons).

105. See id. at 168 (advocating that a form of privatization “would

better promote economic growth, achieve optimal levels of pollution, reduce

inefficiency, and modify the legal regime by responding to societal needs”).

106. See Walter E. Block & Michael R. Edelstein, Popsicle Sticks

and Homesteading Land for Nature Preserves, 7 ROM. ECON. & BUS. REV. (No. 1)

7, 7 (2012) (“According to libertarian theory if private property rights are to be

properly conferred on unowned virgin territory, it must be done through a

process of homesteading.”); see also HANS-HERMANN HOPPE, THE ECONOMICS AND

ETHICS OF PRIVATE PROPERTY: STUDIES IN POLITICAL ECONOMY AND PHILOSOPHY,

332 (2d ed., Ludwig von Mises Institute 2006) (“Every person owns his own body

as well as all scarce goods which he puts to use with the help of his body before

anyone else does . . . [which] implies the right to employ these scarce goods

however one sees fit [without harming another] . . . .”).

107. See Shackelford, supra note 104, at 112 (suggesting “a

modified leasehold system somewhat reminiscent of the Homestead Act”).

108. See id. at 119 (noting developing nations’ drive for “direct

participation in the international management of resource extraction”).


395

would aid this process.109 In the future, this could facilitate the

habitation of Antarctica.110 A procedure similar to sea steading,111

an idea of creating nations on international waters, could

facilitate privatization. An approach as this one would require

that the nations with claims over the land declare this as res

communis, however.112

A formal privatization can be an alternative to

homesteading. There are four different methods of such

privatization: direct sale, mass privatization, management-

employee buyout, and restitution. 113 Privatization increases the

role of the private sector and private property rights in the

109. See id. at 111 (“With resources becoming increasingly scarce

and technology advancing to meet surging demand, longstanding principles of

communal property in the international commons will either be reinterpreted or

rewritten outright.”).

110. See British Antarctic Survey, Natural Environment Research

Council, Living in Antarctica (describing currently established “comfortable

living quarters, with living areas and bedrooms, a kitchen, offices,

communication room, generator rooms and facilities” in Antarctica) (on file with

the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT);

see also Felicity Aston, Polar Vehicles Get Ice Traction, ENGINEERING & TECH.

MAG. (Mar. 16, 2015) (finding it “far too comfortable to be proper polar

exploring” as modern technology offered an Antarctic-capable vehicle with “a

conveniently placed holder,” a “heated driver’s seat,” and “music on a six-

speaker audio system”) (on file with the WASHINGTON AND LEE JOURNAL OF


111. See Doug Bandow, Getting Around Big Government: The

Seastead Revolution Begins to Take Shape, FORBES (Jul. 30, 2012) (defining

“seasteading” as “living on a floating city outside of any country’s jurisdiction”)


ENVIRONMENT).

112. See Shackelford, supra note 104, at 139 (“The legal status of

Antarctica remains unsettled. It is not terra communis, since a number of states

formally uphold their claims over sections of the continent.”) Shackelford

indicates that a privatization effort such as he proposes would require

“renouncement of all [state] territorial claims and a movement towards an

internationalized regime.” Id.

113. See Oleh Havrylyshyn & Donal McGettigan, Privatization in

Transition Countries: Lessons of the First Decade, ECON. ISSUES (No. 18)

(International Monetary Fund, Aug. 1999), available at

http://www.imf.org/external/pubs/ft/issues/issues18 (defining direct sale, mass

privatization, management-employee buyout, and restitution); see also John

Bennet, et. al, The Choice Of Privatization Method In A Transition Economy

When Insiders Control A Firm, 23 EUROPEAN J. OF POL. ECON. 806, 806–07

(2007) (discussing methods of privatization for economies transitioning from

communism to capitalism).


economy.114 Properly-defined and enforced private property rights

are key ingredients of economic progress. 115 Privatization of

Antarctica is an effective process of property transfer from the

current status quo of no man’s land to the private sector (i.e.,

private business and private ownership).116

The modern concept of privatization is often associated

with its implementation by Britain’s Prime Minister Margaret

Thatcher in the early 1980s. 117 Facing dire economic conditions,

the Thatcher government decided to sell state-owned companies

to raise revenues and improve the efficiency of state-owned

enterprises. 118 The success of the privatization of the British

Telecom in 1984 made privatization a popular policy in the

United Kingdom and across the world. 119 A series of successful

114. See id. (“Owners must be assured of the right to use assets, to

decide on their use by others, and to profit from their use and sale.”).

115. See James Gwartney, et. al, Economic Freedom of the World:

2011 Annual Report, 6 (Fraser Inst. 2011) (“Protection of persons and their

rightfully acquired property is a central element of economic freedom and a civil

society. Indeed, it is the most important function of government.”); See also

James Gwartney, et. al, Economic Freedom of the World 1975–1995, 27 (Fraser

Inst. 1996) (“A legal structure that clearly defines property rights, enforces

contracts, and provides a mutually agreeable mechanism for the settlement of

contractual and property right disputes provides the foundation for a market

economy.”).

116. See Shackelford, supra note 104, at 165 (“[F]ormalized

property rights are . . . the starting point for sustained economic

growth . . . [and with those rights,] the market would better promote economic

growth, achieve optimal levels of pollution, reduce inefficiency, and modify the

legal regime by responding to societal needs.”).

117. See Saul Estrin, The Impact of Privatization in Transition

Economies, 2 (London Sch. of Econ. & Pol. Sci., Jan. 2007) (“[Privatization]has

been a major activity for governments in both the developed and developing

world since Mrs. Thatcher’s first modern privatization programme in the UK

between 1979 and 1984.”)

118. See Richard Seymour, A Short History of Privatisation in the

UK: 1979–2012, THE GUARDIAN, Mar. 29, 2012,

http://www.theguardian.com/commentisfree/2012/mar/29/short-history-of-

privatisation (“In response to the prolonged crisis of the 1970s, . . . [the Thatcher

government] focus[ed] . . . on privatising already profitable entities to raise

revenues and thus reduce public-sector borrowing.”) (on file with the


119. See Amy L. Chua, The Privatization-Nationalization Cycle: The

Link Between Markets and Ethnicity in Developing Countries, 95 COLUM. L. REV.

223, 223 (1995) (“By the early 1990s, ‘at least eighty-three countries were

conducting some significant form of privatization’ . . . .”); see also Maxwell O.

Chibundu, Law and the Political Economy of Privatization in Sub-Saharan


397

privatizations between the late 1980s and the early 1990s greatly

reduced the share of the public sector in the British economy.120

The Thatcher government started a wave of privatization

copied across the world.121 Italy, France, Germany, and other

European countries also launched privatization programs in the

1990s. 122 Asian countries including Japan and China followed

suit.123 While the government involvement in China’s economy

remains significantly large, small-scale privatization has been

moving China’s economy towards capitalism since the 1970s.

Latin American countries (i.e., Chile, Mexico, Brazil, and

Guatemala) also used privatization for both political and

economic purposes with different rates of success. 124 Sub-

Saharan Africa remains a region with the lowest number of

privatizations, while Antarctica is completely excluded from this

market reform. 125 The most recent wave of privatization is

Africa, 21 MD. J. INT’L L. & TRADE 1, 10 (1997) (describing “the emergence of

privatization as a global phenomenon . . . [substantially because of] Britain, and

more specifically her combative former Prime Minister, Margaret Thatcher,

[who] blazed the path”).

120. See Larry Elliott & Jill Treanor, A Whole World Sold on Sell-

Offs, THE GUARDIAN, NOV. 21, 2000,

http://www.theguardian.com/business/2000/nov/22/thatcher.politics1 (“In one

stroke, the dead hand of the state was removed from the economy, unleashing a

new spirit of enterprise and derring do.”) (on file with the WASHINGTON AND LEE


121. See Chibundu, supra note 119, at 11 (discussing privatization

in Eastern Europe and Latin America).

122. See Organisation for Economic Co-operation and Development,

Privatisation in the 21st Century: Recent Experiences of OECD Countries, Report

on Good Practices, 6 (Jan. 2009) (detailing results of privatizations in France,

Italy, Germany, Japan, Turkey, Netherlands, Australia, etc.).

123. See Robert W. Poole, Jr., Privatization, The Concise

Encyclopedia of Economics, The Library of Economics and Liberty (2008),

http://www.econlib.org/library/Enc/Privatization.html (“China, India, and

numerous other developing countries continue to prepare and sell [state-owned-

enterprises] . . . .”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


124. See William L. Megginson & Jeffrey M. Netter, From State to

Market: A Survey of Empirical Studies on Privatization, 39(2) Journal of

Economic Literature, 321, 325–26 (2001) (discussing how privatization has fared

in various Latin American countries).

125. See id. at 326 (stating that few countries in sub-

Saharan Africa have embarked on privatization programs).


associated with former communist countries in Europe and

former Soviet states. 126

Privatization was a part of large reform in post-communist

countries like Russia and the Czech Republic. 127 For former

communist countries, privatization was a significant stepping

stone towards capitalism and democracy.128 The main objectives

of privatization in this area of the world were to create a private

sector and to reduce the role of state in former command (i.e.,

state-controlled) economies.129 After the collapse of communism in

1989-1991, the former communist countries embarked on

privatization that was mainly accomplished by three methods:

mass privatization, management-employee buyout, and direct

sale.130

Mass privatization was the most popular method among

former communist countries.131 It allocates vouchers to eligible

citizens for free or at nominal cost so that people can use them for

share acquisition of state-owned assets (e.g., factories, land).132

The first mass privatization began in former Czechoslovakia in

1992. 133 Other post-communist countries followed the Czech

model of privatization with slight variations. 134 Management-

employee buyout, also popular among the post-communist

countries, gives employees of state-owned enterprise certain

privileges in the share acquisition of state-owned enterprise (i.e.,

126. See id. (“The last major region to adopt privatization programs

comprises the former Soviet-bloc countries of central and eastern Europe.”).

127. See id. at 345 (noting that Russia and the Czech Republic

underwent privatization after the fall of communism).

128. See id. at 326 (discussing the implications of privatization in

formerly communist countries).

129. See id. (“These countries began privatizing SOEs as part of a

broader effort to transform themselves from command to market economies.”).

130. See id. at 380 (describing the three types of schemes that

governments generally use to effect privatization).

131. See id. at 326 (noting that many countries preferred the mass

privatization method).

132. See id. (explaining the mechanics of the mass privatization

method).

133. See id. at 360 (commenting that Czech privatization began in

1992).

134. See id. at 327–28 (discussing the trend towards mass

privatization in Europe).


399

exclusive buy-out rights or priority buy-out rights). 135 For

example, in former Czechoslovakia privatization allowed all

citizens to participate in the privatization of state-owned

companies, while in Russia the government restricted

privatization of state-owned enterprise only to managers and

employees.136

Privatization does not have to be the deliberate sale of

public assets to private owners. 137 It can also consist of a free

conversion of public to private property. 138 A free give-away of

public property to people has become associated with populist

policies in former communist countries like Ukraine and

Poland.139

Another example of free privatization is restitution. This

is the process of returning public property to private ownership if

the state-owned assets are acquired through expropriation of

private property. 140 It allows only the original owners or their

heirs to come to own state-owned property. Restitution, or

reparations, is important for establishing essential governance

norms such as government accountability, respect for the rule of

law, trust in government, and protection of individual rights. 141

Nonetheless, restitution is an inappropriate method of

privatization in the case of Antarctica because the lands were

never privately owned.142

The empirical economic literature on the effect of

privatization demonstrates that privately-owned enterprise

performs better than government-owned enterprise (Megginson

135. See id. at 342–43 (explaining that direct asset sales may prefer

certain investors to others).

136. See id. at 345 (providing an overview of the privatization

programs in Czechoslovakia and Russia).

137. See id. at 339–40 (discussing various methods of privatization).

138. See id. at 339 (describing how voucher programs are used to

distribute state owned assets at little or no cost to investors).

139. See id. at 345 (illustrating how voucher programs were used

throughout Europe).

140. See id. at 339 (explaining how restitution operates).

141. See id. (implying that there are valuable policy reasons behind

restitution).

142. See generally Walter Block, On Reparations to Blacks for

Slavery, 3(4) Human Rights Review, 53 (2002); Wilton D. Alston & Walter E.

Block, Reparations, Once Again, 9(3) Human Rights Review, 379 (2007).


and Netter, 2001). 143 One of these studies directly deals with the

exploration of Arctic by using a sample of 35 government and 57

privately-funded expeditions to the Arctic from 1818 to 1901.144

Karpoff (2001) finds that the privately-funded expeditions

performed better. 145 They made a larger number of major

discoveries and technological innovations. 146 In contrast,

government-funded expeditions incurred the most major losses.147

They lost more ships.148 They had higher rates of scurvy and crew

deaths.149

The importance lies, however, on the final goal. An

Antarctica that is free to develop its resources in conformity with

the market and the needs of humanity would tend to lead to the

development of better technologies in this regard. 150 Market

forces will maximize the value of Antarctica and, hopefully, bring

more resources to the people of the world.

V. Conclusion

We are not headed for a world without resources. That is

far from the reality. If and when resources run low, their prices

rise. This leads us to use our resources in smarter ways. We dig a

little deeper. We make use of the resources we have and try to

143. See Megginson, supra note 124, at 380-81 (concluding that

privatization generates a generally positive economic result).

144. See Jonathan M. Karpoff, Public versus Private Initiative in

Arctic Exploration: The Effects of incentives and Organizational Structure,

109(1) J. OF POL. ECON., 38 (2001) (“From 1818 to 1909, 35 government and 57

privately funded expeditions sought to locate and navigate a Northwest

Passage, discover the North Pole, and make other significant discoveries in

Arctic regions.”).

145. See id. (summarizing that privately-funded expeditions tended

to produce better results).

146. See id. at 40 (noting that privately-funded expeditions were

generally more successful).

147. See id. at 38 (“Public expeditions were better funded than their

private counterparts yet lost more ships, experienced poorer crew health, and

had more men die.”).

148. See id. (stating that publicly funded expeditions lost more

ships than privately funded expeditions).

149. See id. (“They made fewer major discoveries, introduced fewer

technological innovations, were subject to higher rates of scurvy, lost more

ships, and had more explorers die.”).

150. See Bonner, supra note 65, at 254 (implying that market forces

are the most efficient driver of development in Antarctica).


401

maximize their productivity. We use less of them. We look harder

for substitutes. When the time comes to tap into Antarctica’s

resources, the forces of supply and demand will decide how much

oil is extracted, how effectively it will be used, and how pollution

and research will be involved in the development of the territory.

The privatization of Antarctica is something that will

bring about benefits for everyone across the board. How we can

accomplish this, politically, is unclear. Political interests run

high, focused not on using resources but preventing others from

doing so. The governments of the world do not pursue the

betterment of mankind, but the betterment of flags, governments,

and specific parties selected as a result of personal preference.

Until we can rid ourselves from these biases, until world leaders

recognize that privatization is the most effective way to exploit

the continent, the situation will continue as it is: stagnant. This

is a call to action, and one that people, not the government, must

make.

402

Rising Seas, Receding Ethics?

Why Real Estate Professionals Should

Seek the Moral High Ground

Keith W. Rizzardi*

Abstract

Despite the scientific consensus, some political leaders in

the United States deny the need for policy making in response to

sea level rise. Even in coastal Florida and Virginia, where

communities face acute risks of flooding and economic damage,

the problem has been denied. Land use development and real

estate professionals, when discussing the subject, have a

responsibility to do better than our political leaders. In fact, the

ethical codes of the professions – law, architecture, engineering,

planning, real estate, and corporate compliance – all demand

honesty. Material facts must be disclosed, and professionals

cannot conceal truth, particularly if it leads to fraud or

misconduct.

Elsewhere on Earth, ethical considerations have

influenced sea level rise policy. In the Netherlands, where major

cities exist below sea level, political leaders confront the risks of a

tragic flood. Dutch engineers have planned and designed projects

and revised safety standards related to river widening, flood

management, and salt-water intrusion and freshwater

supplies. The low-lying Republic of the Marshall Islands also

fears the loss of lands and lifestyles. But lacking the economic

resources to protect themselves, the nation submitted a

resolution to the United Nations decrying the threats created by

the rising seas upon human rights to life, property, culture, food,

* Keith W. Rizzardi is a law professor at St. Thomas University

in Miami Gardens, Florida, where he teaches environmental law and

professional responsibility. A graduate of the University of Virginia and

University of Florida, he has served as a trial attorney for the U.S. Department

of Justice, a managing attorney for the South Florida Water Management

District, and the director of a water law program in the Netherlands. He also

has earned board certifications in state and federal administrative practice and

in corporate compliance and ethics.

RISING SEAS, RECEDING ETHICS 403

housing, health and water.

While public sector representatives wrestle with decisions

to adapt to, mitigate for, or retreat from sea level rise, the private

sector has a role to play. Corporations, by law, have rights and

privileges; with them must come corporate social

responsibility. Mere compliance with law is insufficient when a

company’s real estate endeavors fail to protect human rights.

Ethical behavior by the real estate professions and corporations

means informing the people, partnering with the public sector

leaders, protecting the public interest, and ensuring a resilient

community with a sustainable future.

Table of Contents

I. Introduction ............................................................................ 403

II. Truth, Material Facts and Omissions: the Minimum

Professional Standards. ............................................................. 405

III. What is Truth, Anyway? ...................................................... 413

A. Facts and Risks in South Florida ...................................... 416

B. Facts and Risks in Coastal Virginia .................................. 423

C. Truth, Risk, Insurance and the Uncertainty Conundrum 427

D. Comparative Risk: Never Again vs. Caveat Emptor ......... 433

IV. Sea Level Rise and Human Rights. ..................................... 437

V. Taking the Higher Ground: Professionalism and Corporate

Social Responsibility. ................................................................. 441

VI. Conclusion ............................................................................ 449

I. Introduction

Despite a scientific consensus, the United States political

leadership remains embroiled in a legislative and policy debate

over the existence of sea level rise and the responses to it.1

Meanwhile, homeowners and businesses face real questions and

serious risks when they make long-term investment decisions—

1. See Ryan McNeill, Deborah Nelson & Duff Wilson, As the Seas

Rise, a Slow-Motion Disaster Gnaws at America’s Shores, REUTERS (Sept. 4,

2014, 1:00 PM), http://www.reuters.com/investigates/special-report/waters-edge-

the-crisis-of-rising-sea-levels/ (describing congressional deadlock in the area of

climate change) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


6 WASH. & LEE J. ENERGY CLIMATE & ENV’T 2 (2015) 404

including, significantly, whether and where to buy real estate.2

Rising seas will affect our human habitats, and our densely

developed coastal communities provide the homes, workplaces,

recreational opportunities, and governmental tax bases that drive

our economies.3 The land use development and real estate

professionals, when discussing these matters, have an ethical and

moral responsibility to do better than our political leaders.

Whether climate change is anthropogenic or natural is

irrelevant. The data on and results of sea level rise cannot be

ignored.4 Some places, of course, face greater risks than others.5

Due to its unusual geological features, including geographic

subsidence that accelerates sea level rise, Coastal Virginia faces

huge risks.6 Similarly, Miami-Dade County, Florida has more

people living less than 4 feet above sea level than any U.S. state,

except Louisiana.7 Rising seas threaten all these low-lying coastal

communities.8 Nevertheless, these places continue to build and

2. See id. (identifying sea level change as one threat to the

investment value of a home).

3. See id. (describing the economic importance of coastal

communities).

4. Brian McNoldy, Water, Water, Everywhere: Sea Level Rise in

Miami (October 3, 2014), http://www.rsmas.miami.edu/blog/2014/10/03/sea-

level-rise-in-miami/ (“Like many low-lying coastal cities around the world,

Miami is threatened by rising seas. Whether the majority of the cause is

anthropogenic or natural, the end result is indisputable: sea level is rising and it

is due to climate change. It is not a political issue, nor does it matter if someone

believes in it or not.”) (on file with the WASHINGTON AND LEE JOURNAL OF


5. See Sea Level Rise in Hampton Roads: New Challenges for Bay

Localities, VNLRI, at 3, available at http://www.virginia.edu/ien/vnrli/wp-

content/uploads/2013/09/SLR-Final.pdf. (describing that Hampton Roads VA is

sinking, exacerbating the effects of climate change on the coast) (on file with the


6. See id. (listing the effects of subsidence).

7. See Forbes Tompkins & Christina Deconcini, Sea-Level Rise

And Its Impact On Miami-Dade County, 2014 WORLD RESOURCES INST. 3,

available at

http://www.wri.org/sites/default/files/sealevelrise_miami_florida_factsheet_final.

pdf (noting that with the exception of Louisiana, Miami Dade county has the

largest number of people living four feet above sea level) (on file with the


8. See Ben Strauss, Cities Below Future Seas, CLIMATE CENTRAL

(July 29, 2013) (http://www.climatecentral.org/news/sea-level-rise-locking-in-

quickly-cities-threatened-16296) (noting that sea levels could rise over twenty-


grow, develop and redevelop, perhaps blissfully unaware of the

risks ahead.9 Survey data in Florida shows that a majority of

respondents believe that sea-level rise will not threaten their

coastal property during their lifetime.10

This article explores the concepts of law, ethics,

professionalism, and corporate social responsibility, applying

them in the context of coastal land use development and real

estate. Part II considers the ethical obligations of the various real

estate professions and the client corporations, noting a common

concern for honesty and disclosure to clients and third parties.

Part III then discusses the laws and facts related to sea level rise,

noting the special risks in the coastal communities of South

Florida and Coastal Virginia. Part IV acknowledges the human

rights implications of sea level rise, and ultimately, Parts V and

VI suggest, as a solution, an embrace of ethics, professionalism,

and corporate social responsibility by real estate and land use

development professionals and corporations. In sum, in addition

to openly discussing and disclosing the serious risks of sea level

rise, corporations and individual real estate professionals should

take an active role, confronting the challenges ahead by helping

entire coastal communities to adapt.

II. Truth, Material Facts and Omissions: the Minimum

Professional Standards.

Coastal development is an interdisciplinary human

activity. Investments are made, finances secured.11 Lands are

three feet in the future) (on file with the WASHINGTON AND LEE JOURNAL OF


9. See KEVIN WOZNIAK, GARIN DAVIDSON, & THOMAS ANKERSEN,

FLORIDA’S COASTAL HAZARDS DISCLOSURE LAW: PROPERTY OWNER PERCEPTIONS OF

THE PHYSICAL AND REGULATORY ENVIRONMENT WITH CONCLUSIONS AND

RECOMMENDATIONS 38 (2012), available at

http://nsgl.gso.uri.edu/flsgp/flsgps12001.pdf (finding that the coastal populations

are unaware of the issues presented by coastal development in the listed

communities) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


10. See id. at 33 (listing the findings of a study in which 78.8

percent of respondents said that they did not believe their property would

erode).

11. See Karen Demasters, Rethinking that Beachfront Property,

FINANCIAL ADVISOR (Oct. 1, 2005), http://www.fa-mag.com/news/article-


modified, waters managed.12 Permits are obtained, landscapes or

buildings constructed.13 The whole enterprise requires the

collective effort of corporations and their highly trained

employees such as lawyers, planners, engineers, real estate, and

compliance professionals.14

All of these professions have ethical codes, too.15 The codes

establish essential duties of each profession.16 Of special

significance, these professional duties are not limited to clients.17

Again and again, the various ethical codes all make it clear that

honesty—to everyone—is expected.18 Material facts must be

disclosed and professionals cannot participate in the concealment

of truth, particularly if it leads to fraud or misconduct.19

Florida lawyers, for example, must comply with Chapter 4

of the Rules Regulating the Florida Bar and the Rules of

1232.html (describing the financial aspects of beachfront property investment)


ENVIRONMENT).

12. See SOUTH CAROLINA DEP’T OF HEALTH AND ENVTL. CONTROL,

SOUTH CAROLINA GUIDE TO BEACHFRONT PROPERTY: INSIGHT FOR INFORMED

DECISIONS 11 (Nov. 2014), available at www.sdhec.gov/library/CR-003559.pdf

(listing the requirements for landowners who wish to build on the coastline of

South Carolina) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


13. See id. at 12 (describing the permits required for coastal

construction in South Carolina).

14. See generally id. (overviewing what is required to develop

coastal property in South Carolina).

15. See generally MODEL RULES OF PROF’L CONDUCT (2013) (ethical

rules for lawyers); AICP CODE OF ETHICS AND PROF’L CONDUCT (2009),

https://www.planning.org/ethics/ethicscode.htm (ethical rules for planners) (on

file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT); NSPE CODE OF ETHICS FOR ENGINEERS (2007), available at

http://www.nspe.org/sites/default/files/resources/pdfs/Ethics/CodeofEthics/Code-

2007-July.pdf (ethical rules for engineers) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); NAT’L ASSOC. OF

REALTORS CODE OF ETHICS (2012),

http://www.realtor.org/mempolweb.nsf/pages/code (ethical rules for realtors) (on


ENVIRONMENT).

16. See infra notes 22, 28, and 29.

17. See infra note 34 (describing realtor duties to each other).

18. See infra notes 22, 28, and 29.

19. See infra note 22.


Professional Conduct,20 and Virginia lawyers must adhere to the

Virginia State Bar Rules of Professional Conduct.21 Both systems

of lawyer regulation are modelled after the American Bar

Association’s Model Rules of Professional Responsibility.22

According to these ethical systems, lawyers are not merely

advocates for their client’s desires; rather, the profession has a

higher calling.23 A duty of truthfulness applies, requiring full

disclosure and informed consent in dealings with clients and

candor when dealing with the courts.24 Florida and Virginia also

require lawyers to make affirmative disclosures to third parties

and even opposing parties. For example, the Rules Regulating the

Florida Bar, Rule 4-4.1, states that a lawyer may not “(a) make a

false statement of material fact or law to a third person; or (b) fail

to disclose a material fact to a third person when disclosure is

necessary to avoid assisting a criminal or fraudulent act by a

client,” and Virginia’s parallel rule even omits the term

20. See generally RULES REGULATING THE FLORIDA BAR, RULES OF

PROFESSIONAL CONDUCT (2014) [hereinafter FLORIDA RULES], available at

https://www.floridabar.org/tfb/TFBLawReg.nsf/840090c16eedaf0085256b610009

28dc/4586762990367be185256e4300524284!OpenDocument (listing the

professional responsibilities of lawyers who are members of the Florida Bar) (on


ENVIRONMENT).

21. See generally VIRGINIA STATE BAR RULES OF PROFESSIONAL

CONDUCT [hereinafter VIRGINIA RULES], available at

http://www.vsb.org/docs/2009-10-rpc.pdf (describing the professional

responsibilities of Virginia Lawyers) (on file with the WASHINGTON AND LEE


22. See generally MODEL RULES OF PROF’L CONDUCT (2013)

[hereinafter ABA RULES], (identifying professional duties of an attorney in the

ABA).

23. See FLORIDA RULES, supra note 20, at Preamble (stating that a

lawyer should “strive to attain the highest level of skill”); VIRGINIA RULES supra

note 21, at Preamble (stating that lawyers should “strive to attain the highest

level of skill”); ABA RULES supra note 22, at Scope (stating that a lawyer should

act with a higher motivation than simple compliance with these rules).

24. See, e.g., VIRGINIA RULES, supra note 21, at Rule 1.6; and

FLORIDA Rules, supra note 20, at Rule 4-1.6 (discussing implied, authorized, and

adverse disclosures, even of otherwise confidential information, when required

by law or court order, client fraud, auditors); VIRGINIA RULES, supra note 21, at

Rule 3.3; and FLORIDA RULES, supra note 20, at Rule 4-3.3 (prohibiting false

statements of fact or law to a tribunal, the failure to disclosure certain facts

related to a criminal or fraudulent act by the client, the failure to disclose

controlling legal authority, and offering or continuing to rely upon evidence that

the lawyer knows to be false).


“material,” prohibiting “any false statement of fact or law.”25

While confidentiality is essential in the attorney client

relationship, both Virginia and Florida recognize that an attorney

might, at times, need to elevate a potentially harmful and

unlawful decision to the organizational leadership.26 At some

point, such as when a lawyer becomes embroiled as a participant

in a client’s fraud or misrepresentations, the lawyer might even

have a duty to withdraw from the representation.27

These lawyers can be involved in coastal development

activities in any number of ways. At the beginning of the process,

they might assist with obtaining zonings or variances for a

parcel; at the end of the process, they might engage in review of

the final contract for sale. But the entire process often begins

with a different group of professionals, such as planners and

architects, who create the vision and blueprints for a project and

a community. The American Institute of Certified Planners, in

its mandatory Code of Conduct, states that certified planners

“shall not deliberately or with reckless indifference fail to provide

adequate, timely, clear and accurate information on planning

issues.”28 Meanwhile architects, working within the vision of the

25. FLORIDA RULES, supra note 20, at Rule 4-4.1. See VIRGINIA

RULES, supra note 21, at Rule 4.1 (requiring “Truthfulness In Statements To

Others,” stating that a lawyer may not knowingly “(a) make a false statement of

fact or law; or (b) fail to disclose a fact when disclosure is necessary to avoid

assisting a criminal or fraudulent act by a client.”). The commentary notes that

Virginia found the term “material” to be redundant. Id. at Committee

Commentary. Both states recognize that certain types of statements, such as

estimates of price or value in negotiation, are not statements of fact, while

emphasizing that a lawyer cannot contribute to a client’s crime or fraud or

misrepresentation. Id. at Comment: Statements of Fact; FLORIDA RULES, supra

note 20, at Rule 4-4.1 cmt.: Statements of Fact.

26. See VIRGINIA RULES, supra note 21, at Rule 1.13, (stating that a

lawyer representing a corporation “shall proceed as is reasonably necessary in

the best interest of the organization”); FLORIDA RULES, supra note 20, at Rule 4-

1.13 (stating the requirements of a lawyer in the event he discovers activity that

could harm the corporation).

27. See, e.g., VIRGINIA RULES, supra note 21, at Rule 1.16, (stating

that a lawyer may resign regardless of any material adverse effects on his

client’s interests if the lawyer’s services perpetuate a crime or fraud); FLORIDA

RULES, supra note 20, at Rule 4-1.16 (stating that a lawyer may withdraw

representation is “the client has used the lawyer’s services to perpetuate a crime

or fraud”).

28. See AICP CODE OF ETHICS AND PROF’L CONDUCT § B.1 (2009),

https://www.planning.org/ethics/ethicscode.htm) (describing the rules of conduct


planners, design structures and neighborhoods. According to the

American Institute of Architects Code of Ethics and Professional

Conduct, architects shall not counsel or assist a client in conduct

that the architect knows, or reasonably should know, is

fraudulent or illegal, nor engage in conduct involving the wanton

disregard of the rights of others.29 Similarly, architects speaking

in their professional capacity shall not knowingly make false

statements of material fact.30

Eventually, the visions cast by the planners and the

architects will become a reality, thanks, in part, to the engineers.

Like the other professions involved in land use development and

real estate, engineers also display little tolerance for untruths

and misrepresentations. For example, the American Society of

Civil Engineers Code of Ethics, states that Engineers uphold and

advance the integrity, honor and dignity of the engineering

profession by: (1) using their knowledge and skill for the

enhancement of human welfare and the environment; (2) being

honest and impartial and serving with fidelity the public, their

employers and clients. 31 In addition, the Guidelines associated

with Canon 1.a and 1.b. emphasize that “the lives, safety, health

and welfare of the general public are dependent upon engineering

judgments, decisions and practices incorporated into structures,

machines, products, processes and devices,” and calls upon the

profession to only approve documents “determined to be safe for

public health and welfare in conformity with accepted

engineering standards.”32 The civil engineering Code of Conduct,

for profession planners (on file with THE WASHINGTON AND LEE JOURNAL OF


29. See AM. INST. OF ARCHITECTS, CODE OF ETHICS & PROF’L

CONDUCT, at Rules 2.104 and 2.106 (2012), available at

http://www.aia.org/aiaucmp/groups/aia/documents/pdf/aiap074122.pdf

(instructing architects to avoid fraudulent activity) (on file with the


30. See id. at Rule 4.103 (“Members speaking in their official

capacity shall not knowingly make false statements of material fact.”).

31. See AM. SOC’Y OF CIVIL ENG’R, CODE OF ETHICS, at Canons 1, 6

(2006), http://www.asce.org/code_of_ethics/ (describing the duties of a

conscientious civil engineer) (on file with the WASHINGTON AND LEE JOURNAL OF


32. Id. at Canon 1(a)–(b).


Canon 6, further notes that the profession shall act with “zero

tolerance for bribery, fraud, and corruption.”33

Finally, someone will sell the property. According to the

National Association of Realtor’s Code of Ethics, once again,

honesty is essential.34 Article 1 provides that realtors have an

obligation “to treat all parties honestly,” including, of course,

their client.35 Article 2 says realtors “shall avoid exaggeration,

misrepresentation, or concealment of pertinent facts relating to

the property or the transaction.”36 While realtors are not

obligated to possess expertise in other professional or technical

disciplines, Standard of Practice 2-1 does require them to

“discover and disclose adverse factors reasonably apparent to

someone with expertise in those areas required by their real

estate licensing authority.”37 In Florida, for example, the Natural

Hazards Disclosure law requires the seller or seller’s agent to

disclose property that is located in flood hazard zones,38 and a

case for fraud and malpractice can be based upon the failure to

disclose flood risks.39 In Virginia, realtors also have a duty to

33. Id. at Canon 6.

34. See NAT’L ASSOC. OF REALTORS, CODE OF ETHICS, Art. 1 (2012),

http://www.realtor.org/mempolweb.nsf/pages/code (recognizing a duty for

realtors to “treat all parties honestly”) (on file with the WASHINGTON AND LEE


35. See id. (acknowledging that realtors have a primary obligation

to their clients, but also that all parties must be treated with honesty).

36. Id. Art. 2.

37. See id. Art. 2, Standard of Practice 2-1 (requiring that realtors

identify obvious deficiencies with the property for their clients).

38. See FLA. STAT. § 161.57 (2006) (requiring sellers to inform

purchasers if the real property is in a coastal area “subject to frequent and

severe fluctuation”); see also KEVIN WOZNIAK, GARIN DAVIDSON & THOMAS

ANKERSEN, FLORIDA’S COASTAL HAZARDS DISCLOSURE LAW: PROPERTY OWNER

PERCEPTIONS OF THE PHYSICAL AND REGULATORY ENVIRONMENT WITH

CONCLUSIONS AND RECOMMENDATIONS 8 (July 2012), available at

http://nsgl.gso.uri.edu/flsgp/flsgps12001.pdf (noting that sellers must notify

buyers if the property is in a coastal construction control line) (on file with the


39. See Kaplan v. Kimball Hill Homes Fla., Inc., 915 So.2d 755,

761 (Fla. Dist. Ct. App. 2005) (affirming the trial court’s order granting the

motion to compel arbitration on fraud and fraudulent inducement claims, where

the Kaplans alleged that Kimball Hill failed to disclose pertinent facts

concerning water runoff and drainage from adjacent property onto the

homesite).


disclose the physical condition of a property, including a history

of periodic flooding.40

The ethical mandates must be followed in order for

professionals to maintain their licenses and credentials. But

these professionals also work in and for corporations and

organizations that often have another group of employees—

compliance professionals—whose job is to help the corporations

ensure that they follow all of the governing applicable

requirements and rules of law.41 Companies are expected to

implement and enforce robust compliance programs.42 If a

company fails to implement such a program, and then violates

the law, federal prosecutors will hold the companies and the

40. See Walton v. Aguiliar, Case No. 2010-106, at 3 (16th Jud. Cir.

Oct. 28, 2010) (citing Virginia Code § 54·.1-2131(B)), available at

http://blog.tarleyrobinson.com/wp-content/uploads/2012/03/Walton-v_-

Aguilar.pdf (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


41. See Compliance Professional, ASSOC. CERTIFIED FRAUD

EXAMINERS, http://www.acfe.com/career-path-compliance-professional.aspx (last

visited Apr. 21, 2015) (providing a job description for a compliance officer) (on


ENVIRONMENT).

42. See U.S. SENTENCING GUIDELINES MANUAL § 8B2.1 (2011),

Effective Compliance and Ethics Programhttp://www.ussc.gov/guidelines-

manual/2011/2011-8b21 (The principles of a successful compliance program

have been separately set forth by the U.S. Sentencing Commission. Developed to

identify certain measures expected of corporations and organizations, the first of

the seven principles of self-policing is to establish standards and procedures to

prevent and detect misconduct conduct.) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT). The seven principles of

an effective ethics and compliance program are (1) to establish standards and

procedures to prevent and detect misconduct conduct; (2) to ensure that

organizational leadership, including senior officers and boards, is knowledgeable

of and oversees the compliance program; (3) to take reasonable efforts to exclude

bad actors from managerial ranks; (4) to implement routine education

communications and training programs; (5) to monitor, audit and evaluate the

effectiveness of the program, in part by maintaining a confidential system for

employee reporting of non-compliance; (6) to promote and enforce the program

through appropriate incentives and disciplinary measures; and (7) to take

reasonable steps to respond to and prevent misconduct when it occurs. Id.; see

also Kwamina Williford & Daniel Small, Establishing an Effective Compliance

Program: An Overview to Protecting Your Organization, ASSOCIATION OF

CORPORATE COUNSEL (Jan. 25, 2013),

http://www.acc.com/legalresources/quickcounsel/eaecp.cfm (correlating U.S.

Sentencing Guidelines to corporate compliance programs) (on file with the



executives accountable.43 In addition, companies may have

internal policies and procedures, developed and adhered to by

those compliance professionals.44 According to the minimum

ethical standards set forth in the Rules of Conduct by the Society

for Corporate Compliance and Ethics, truthfulness is

paramount.45 The first two Rules of Conduct provide that

compliance professionals “shall not aid, abet or participate in

misconduct” and “shall take such steps as are necessary to

prevent misconduct by their employing organizations.”46 When

investigating and reporting misconduct, compliance professionals

are further required to pursue their professional activities “with

honesty, fairness and diligence.”47 But when wrongdoing is

discovered, the compliance professionals, like their attorney

counterparts, possess a responsibility to escalate the matter to

the highest governing body, to consider resigning, and to report

the problem to public officials when required by law.48

43. See, e.g., Scott Schools, DOJ Confirms, Once Again, That

Compliance Plans Really Do Matter, LAW.COM (Mar. 31, 2014),

http://www.law.com/sites/scottnschools/2014/03/31/doj-confirms-once-again-that-

compliance-plans-really-do-matter/#ixzz3IgoREB84 (citing a speech by former

head of the DOJ Criminal Division, Acting Assistant Attorney General Mythili

Raman recognizing that strict compliance programs are taken into account

when the DOJ pursues fraudulent activity) (on file with the WASHINGTON AND


44. See, e.g., SEC. INDUS. ASSOC.: COMPLIANCE AND LEGAL DIV.,

WHITE PAPER ON THE ROLE OF COMPLIANCE 4 (2005), available at

http://www.sifma.org/uploadedfiles/societies/sifma_compliance_and_legal_societ

y/role_of_compliance_white_paper%20%282%29.pdf (listing the responsibilities

of compliance professionals in securities firms, including developing internal

policies and procedures to comply with laws and regulations) (on file with the


45. See SOC’Y FOR CORP. COMPLIANCE AND ETHICS, CODE OF

PROFESSIONAL ETHICS FOR COMPLIANCE AND ETHICS PROFESSIONALS, at Rule 3.1,

available at

http://www.corporatecompliance.org/Portals/1/Users/169/29/60329/SCCE%20Co

de%20Of%20Ethics-English.pdf (stating that compliance and ethics

professionals should “pursue their professional activities, including

investigations of misconduct, with honesty, fairness, and diligence”) (on file with


46. Id. at Rules 1.1, 1.2.

47. Id. at Rule 3.1.

48. See id. at Rule 1.4 (describing the duties of a compliance

professional when there is misconduct).


In sum, for many professions, truthfulness is an essential

part of their ethical codes. But when it comes to sea level rise and

coastal development, our real estate professions have lost sight of

the boundaries between and demands of law, truth, and ethics.

III. What is Truth, Anyway?

As a matter of federal case law, the risks of sea level rise

for coastal communities have been acknowledged, though not

necessarily fully adjudicated.49 In Massachusetts v. EPA,50 the

Supreme Court—albeit, sharply divided—held that “the rise in

sea levels associated with global warming has already harmed

and will continue to harm Massachusetts. The risk of

catastrophic harm, though remote, is nevertheless real.”51

Congress has acknowledged sea level rise, too.52 The Global

Climate Protection Act of 1987 recognized the potential for

increased temperatures, altered weather patterns, and

agricultural productivity, and “thermal expansion of the oceans

and partial melting of the polar ice caps and glaciers, resulting in

rising sea levels.”53 Moreover, the U.S. Environmental Protection

Agency, in its findings associated with a Clean Air Act

rulemaking exercise on whether greenhouse gases endangered

public health, explained that evidence of adverse impacts in the

areas of water resources, sea level rise, and coastal areas were of

special concern to current and future generations.54 EPA further

49. See infra note 51 (identifying cases in which sea level rise was

considered by the reviewing court).

50. 549 U.S. 497 (2007).

51. See id. at 526 (describing why the Supreme Court held that

Massachusetts had standing to sue the EPA); see also, Green Mountain Chrysler

Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295, 316–17 (D. Vt. 2007)

(concluding that uncertainty was not a basis for rejecting the expert testimony

of NASA scientist Dr. James Hansen, and stating that “[t]he unprecedented

nature of current human-made forcing means that history is not a perfect guide.

However, that the situation is unprecedented does not mean that scientists may

not testify reliably as to global warming’s likely effects.”).

52. See Global Climate Protection Act, Pub. L. No. 100–204, §

1102, 101 Stat. 1407, 1408 (1987) (developing an action plan for addressing

climate change).

53. See id. (describing the possible causes of global warming and

the studies being conducted by the government).

54. See Endangerment and Cause or Contribute Findings for

Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. at


noted that the “most serious potential adverse effects are the

increased risk of storm surge and flooding in coastal areas from

sea level rise and more intense storms.”55 Other federal agencies,

including the Army Corps of Engineers, Global Climate Research

Program, National Academy of Sciences, the National Research

Council, and the U.S. Navy, have echoed EPA’s concerns.56

Many of these agencies also cite the Nobel Prize-winning

work conducted by the Intergovernmental Panel on Climate

Change (“IPCC”), a multinational scientific body organized under

the auspices of the United Nations.57 The IPCC Forth Assessment

Report considered thermal expansion of the ocean, changes in

salinity and ocean density, glacial and ice cap melting, and the

effects on surface temperatures and precipitation, all while

attempting to account for a dynamic climate system.58 In 2013, an

updated IPCC report on sea level rise increased the estimates for

sea level rise in this century,59 and concluded that “[i]t is

66,498 (Dec. 15, 2009) (to be codified at 40 C.F.R. pt. 1) (identifying coastal

areas as those most obviously at risk in climate change scenarios).

55. See id. at col. 2 (looking at current trends associated with

stronger storms and deeper storm surges and predicting increased damage to

coastal communities)

56. See Keith W. Rizzardi, Sea Level Lies: The Duty to Confront the

Deniers, 44 STETSON L. REV. 75, 98–101 (2014) (summarizing various

government documents on sea level rise).

57. See generally INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE,

UNDERSTANDING CLIMATE CHANGE: 22 YEARS OF IPCC ASSESSMENT (2010)

(explaining the structure of the IPCC and summarizing the reports and progress

made since its inception), available at

https://www.ipcc.ch/pdf/press/ipcc_leaflets_2010/ipcc-

brochure_understanding.pdf (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY, CLIMATE, AND THE ENVIRONMENT). Over time, the IPCC has issued four

reports (1990, 1995, 2001, and 2007), and “[t]housands of scientists and experts

from all over the world contribute to the preparation of IPCC reports as authors,

contributors, review editors and expert reviewers; none of them paid by the

IPCC.” Id. at 2, 5–7.

58. See id. Gerald A. Meehl et al., Global Climate Change

Projections, in CLIMATE CHANGE 2007: THE PHYSICAL SCIENCE BASIS747, 812–816

(Susan Solomon et al. eds. 2007), available at

http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-chapter10.pdf

(addressing sea level change in the Twenty-First Century) (on file with the


59. See John A. Church et al., Sea Level Change, in CLIMATE

CHANGE 2013: THE PHYSICAL SCIENCE BASIS 1137, 1140 (T.F. Stocker et al. eds.

2013), available at http://www.ipcc.ch/pdf/assessment-

report/ar5/wg1/WG1AR5_Chapter13_FINAL.pdf (addressing sea level rise


virtually certain that global mean sea level rise will continue

beyond 2100, with sea level rise due to thermal expansion to

continue for many centuries.”60 The report also emphasized that

risks are localized because sea level change will have strong

regional patterns.61 But the IPCC report has also been criticized

as too conservative, because it failed to take into account critical

tipping points, such as the potential melting of the Greenland ice

cap.62

Recognizing the federal law and the evidence, states have

passed laws related to sea level rise, too.63 To adapt to sea level

rise, communities will eventually need to implement a

combination of four techniques: protection (defensive structures

such as shoreline armoring or beach renourishment);

accommodation (such as altered design of stormwater and flood

control systems to reduce risks); managed retreat (including

removal or relocation of developments); or avoidance (preventing

development in places subject to future risks).64 A vast number of

decisions will need to be made, in both the public and private

sectors, and an equally vast amount of money will be needed to

implement these decisions.

Inevitably, laws and appropriations passed by state

legislators must follow. Yet the evidence overwhelmingly shows

that management of sea level rise necessitates an exercise in risk

projections) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


60. Id.

61. See id. (“It is very likely that in the 21st century and beyond,

sea level change will have a strong regional pattern, with some places

experiencing significant deviations of local and regional sea level change from

the global mean change.”).

62. See JOHN ENGLANDER, HIGH TIDE ON MAIN STREET (2d ed. 2013).

63. See Rizzardi, supra note 56, at 88–93(summarizing various

government documents on sea level rise and discussing statutes, executive

orders, legislative resolutions, and regulations in California, Connecticut,

Maryland, Massachusetts, Louisiana, New York, New Jersey, North Carolina,

Rhode Island, and Washington).

64. See SOUTH FLORIDA REGIONAL PLANNING COUNCIL, ADAPTATION

ACTION AREAS: POLICY OPTIONS FOR ADAPTIVE PLANNING FOR RISING SEA LEVELS

4–5 (Nov. 6, 2013), available at

http://www.southeastfloridaclimatecompact.org/wp-

content/uploads/2014/09/final-report-aaa.pdf (describing four main adaptation

strategies) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,



assessment and a plan for action.65 Waters are rising and with

the floods will come physical risks to our buildings, our

transportation infrastructure, our drinking water systems, and

our sewage treatment systems.

Sea level rise represents a fundamental paradigm shift,

sometimes called the “death of stationarity” by water managers.66

Old data is no longer representative and the once in one hundred

year event may prove to be a far more frequent occurrence.67 In

other words, for low lying coastal communities, the rare floods

could become commonplace. Hard decisions will need to be made.

Which places will society protect and which ones will we

abandon? In considering these questions, the specific risks facing

South Florida and Coastal Virginia deserve special note.

A. Facts and Risks in South Florida

In low-lying South Florida, despite vast evidence of rising

seas68 and even with periodic tidal flooding triggering National

Weather Service flood warnings,69 coastal development continues

65. See id. at 3–5 (noting effects of sea level rise and possible

solutions).

66. See, e.g., P. C. D. Milly et. al., Stationarity Is Dead: Whither

Water Management? 319 SCIENCE 573, 573–574 (Feb. 2008), available at

http://www.sciencemag.org/content/319/5863/573.full (on file with the


67. See Frances Moore, Debunking the Urban Legend of Climate

Change, CLIMATE INSTITUTE, http://www.climate.org/topics/climate-

change/debunking-climate-change-myths.html (last visited Apr. 22, 2015)

(explaining that data based on satellite estimates of tropospheric temperature is

now outdated) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


68. According to the University of Miami’s Rosenstiel School of

Marine and Atmospheric Science, sea levels have trended upward as much as

2.5 inches during the period between 1996 and 2013. McNoldy, supra note 4

(“Simple linear trends drawn through annual averages of all high tides, low

tides, and the mean sea level are shown below, and all three lines are about 4.5″

higher in 2013 than they were in 1996.”)

69. See High Tidal Levels Could Cause Minor Costal Flooding,

EYES ON NEWS: SOUTH FLORIDA EDITION (Oct. 17, 2013),

http://eyesonnews.com/high-tidal-levels-could-cause-minor-coastal-flooding

(stating flooding from just high tide events has become more common and

caused the National Weather Service to issue a coastal flood warning from a

2013 high tide event in Miami-Dade) (on file with the WASHINGTON AND LEE



to boom.70 Numb to the risks ahead, Florida passed the Florida

Climate Protection Act in 2012, a law that repealed the state’s

effort to address greenhouse gas emissions.71 Still, some

measures to address sea level rise remain. Florida’s state land

acquisition efforts are required to address the challenges of global

climate change by providing opportunities to sequester carbon

and to “otherwise mitigate and help adapt to the effects of sea

level rise.”72 Local governments can define an “[a]daptation action

area” to identify “one or more areas that experience coastal

flooding due to extreme high tides and storm surge and that are

vulnerable to the related impacts of rising sea levels for the

purpose of prioritizing funding for infrastructure needs and

adaptation planning.”73 In a 2013 report on the subject, the South

Florida Regional Planning Council explained that this law

provides a tool that can be used by local government to address a

variety of policy options: zoning, floodplains, building codes,

setbacks and buffers, coastal armoring, development and

rebuilding conditions, transfers of development rights, utilities,

fees, and assessments.74

Florida’s governor, unconvinced that the climate change is

real,75 has largely left the task of responding to sea level rise and

70. See, e.g., Jeff Goodell, Goodbye, Miami, ROLLING STONE (June

20, 2013), http://www.rollingstone.com/politics/news/why-the-city-of-miami-is-

doomed-to-drown-20130620 (commenting that Miami’s “skyline is crowded with

construction cranes”) (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY, CLIMATE, AND THE ENVIRONMENT); Sea Level Rise or Not, Coastal

Development in South Florida is Booming, HOMELAND SECURITY NEWS WIRE

(Oct. 23, 2014), http://www.homelandsecuritynewswire.com/dr20141023-sea-

level-rise-or-not-coastal-development-in-south-florida-is-booming (on file with

the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT).

71. See H.R. 4001, 2012 Leg., Reg. Sess. (Fla. 2012) (repealing

Florida’s efforts to implement climate change protections through a Department

of Environmental Protection regulatory program in 2012).

72. See FLA. STAT. § 259.105(18)(d) (2014) (explaining what the

Division of State lands must prioritize annually as a result of the Florida

Forever Act).

73. FLA. STAT. § 163.3164(1) (2011).

74. See SOUTH FLORIDA REGIONAL PLANNING COUNCIL, supra note

64, 13–23 (discussing tools available to local governments to address climate

change).

75. See, e.g., Mary Ellen Klas, Florida Scientists Press Gov. Rick

Scott on Climate Change, TAMPA BAY TIMES (July 15, 2014),

http://www.tampabay.com/news/politics/stateroundup/florida-scientists-press-


planning for adaptation action areas to local governments.76 But

the state, through its Department of Economic Opportunity, has

acknowledged that due to sea level rise, communities may

experience an increase in coastal vulnerability, including

“increased flooding and drainage problems, Destruction of

natural resource habitats, [h]igher storms surge, increased

evacuation areas and evacuation time frames, [i]ncreased

shoreline erosion, [s]altwater intrusion, and [l]oss of

infrastructure and existing development.”77 To deal with these

severe threats, the Department offers guidance, planning tools,

and even funding opportunities.78 Nevertheless, some counties

continue to ignore the issue.79

The governments of Southeast Florida, however, are

clearly aware of the risks ahead, as shown by the partnership

gov-scott-on-climate-change/2188637 (noting Gov. Rick Scott’s noncommittal

stance on climate change) (on file with the WASHINGTON AND LEE JOURNAL OF


76. See, e.g., Chris Mooney, Forget “Bans” on Talking About

Climate. These Florida Republicans are too Busy Protecting Their Coasts, WASH.

POST (Mar. 31, 2015), http://www.washingtonpost.com/news/energy-

environment/wp/2015/03/31/the-unlikely-group-of-republicans-who-are-

preparing-florida-for-climate-change/ (discussing agreements between counties

in Southeast Florida to address climate change) (on file with the WASHINGTON

AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

77. See Apdaptation Planning (Adapting to Sea Level Change),

FLA. DEPT. OF ECON. OPPORTUNITY, http://www.floridajobs.org/community-

planning-and-development/programs/technical-assistance/community-

resiliency/adaptation-planning (last visited Mar. 29, 2015) (highlighting

methods of adapting to sea level change) (on file with the WASHINGTON AND LEE


78. See id. (outlining methods for dealing with sea level change).

79. See, e.g., Steve Doane, Southwest Florida Governments Not

Planning for Sea Rise, NEWS-PRESS.COM (August 2, 2014), http://www.news-

press.com/story/news/2014/08/02/southwest-florida-governments-planning-sea-

rise/13532083/ (noting a lack of preparation in Southwest Florida in response to

rising sea levels) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); but see, Debra Kahn, San Francisco Bay Area

Enacts Sea-Level Rise Policy (October 7, 2011), available at

http://www.scientificamerican.com/article/san-francisco-bay-area-enacts-sea-

level-rise-policy/ (stating the City of San Francisco passed a coastal development

plan allowing the denial of permits in coastal areas susceptible to flooding.

Based on state projections of 16 inches of sea level rise, as much as 180,000

acres of lands could be off-limits to development by 2050) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE AND THE ENVIRONMENT).


between Monroe County (the Florida Keys), Miami-Dade County,

Broward County (home to Fort Lauderdale) and Palm Beach

County to create the Southeast Florida Regional Climate Change

Compact.80 The Compact, signed in 2009, committed the four

counties to participate in annual regional summit meetings, to

work cooperatively to engage in legislative advocacy, and to share

staff resources to create mitigation and adaptation strategies and

a Southeast Florida Regional Climate Action Plan.81

In a sobering effort, the Compact participants carefully

evaluated existing projections and scientific literature to develop

a unified sea level rise projection for Southeast Florida, projecting

one foot of sea level rise beyond the 2010 levels between 2040 and

2070, but noting that a two foot rise is possible by 2060.82 As the

Compact Counties further explained in a vulnerability analysis,

even just one foot of sea level rise brings consequences to

hospitals, schools, power plants, and roads.83 Dangers increase as

80. See SOUTHEAST FLA. REG’L CLIMATE CHANGE COMPACT,

http://www.southeastfloridaclimatecompact.org/ (last visited Mar. 29, 2015)

(listing the members of the compact) (on file with the WASHINGTON AND LEE


81. See SOUTHEAST FLA. REGIONAL CLIMATE CHANGE COMPACT,

WHAT IS THE SOUTHEAST FLORIDA REGIONAL CLIMATE CHANGE COMPACT?,

available at

https://southeastfloridaclimatecompact.files.wordpress.com/2014/05/compact-1-

page-flyer-ia-final-sa.pdf (describing the formation of the Southeast Florida

Regional Climate Change Compact) (on file with the WASHINGTON AND LEE


82. See SOUTHEAST FLA. REG’L CLIMATE CHANGE COMPACT

TECHNICAL AD-HOC WORK GROUP, SOUTHEAST FLORIDA REGIONAL CLIMATE

CHANGE COMPACT COUNTIES, A UNIFIED SEA LEVEL RISE PROJECTION FOR

SOUTHEAST FLORIDA 6–7 (Apr. 2011), available at

http://www.southeastfloridaclimatecompact.org//wp-

content/uploads/2014/09/sea-level-rise.pdf (finding that a 24-inch increase in sea

level is possible by 2060) (on file with the WASHINGTON AND LEE JOURNAL OF


83. See SOUTHEAST FLA. REG’L CLIMATE CHANGE COMPACT

INUNDATION MAPPING AND VULNERABILITY ASSESSMENT WORK GROUP, ANALYSIS

OF THE VULNERABILITY OF SOUTHEAST FLORIDA TO SEA LEVEL RISE 6–11 (Aug.

2012), available at http://www.southeastfloridaclimatecompact.org//wp-

content/uploads/2014/09/vulnerability-assessment.pdf [hereinafter

VULNERABILITY] (discussing separate areas of vulnerability in Southeast Florida)


ENVIRONMENT). With only one foot of sea level rise, four hospitals, 65% of the

schools and 71% of the emergency shelters in the Florida Keys are vulnerable,

power plants properties in Miami-Dade and Broward are exposed, and more


the oceans rise. Responding to this risk analysis, the Compact

Counties developed an action plan.84 The multi-layered plan

recommends modifying existing legal structures and decision-

making, drafting new local government policy documents,

developing goals and progress indicators, coordinated, multi-

disciplinary outreach and education programs, and processes for

focused and prioritized investments.85 The efforts and projections

made by the Compact counties should be considered by every

coastal landowner and the professionals who work on coastal land

use issues.

Coastal flooding is an obvious risk. Historically, in South

Florida, a 7-foot-high storm surge, such as the one seen in Miami-

Dade County during Hurricane Wilma, had a likelihood of

happening once every 76 years.86 However, if sea levels along

Miami-Dade’s coast rise by just one foot, the same 7-foot storm

surge will occur once every 21 years.87 If sea levels rise just over 2

feet, that surge could happen once every 5 years.88 And even

without storm surges, the upper estimate of taxable property

values vulnerable across the region is greater than $4 billion at

just one foot, with values rising to over $31 billion at the 3 foot

scenario.89

than 81 miles of roadway from Miami-Dade County to Palm Beach County are

at elevations below sea level at the one foot scenario. See id.

84. See generally SOUTHEAST FLA. REG’L CLIMATE CHANGE COMPACT

COUNTIES, A REGION RESPONDS TO A CHANGING CLIMATE (October 2012), available

at http://www.southeastfloridaclimatecompact.org//wp-

content/uploads/2014/09/regional-climate-action-plan-final-ada-compliant.pdf

(reviewing the Southeast Florida Regional Climate Compact action plan) (on file

with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT).

85. See id. at vi (noting the modes for implementing the policy

recommendations).

86. See Tompkins & Deconcini, supra note 7, at3 (“The 7-foot-high

storm surge in Miami-Dade County from Hurricane Wilma has a likelihood of

happening once every 76 years”).

87. See id. (“If sea level along Miami-Dade’s coast rises by just

over another foot, the same 7-foot storm surge would have a likelihood of

occurring once every 21 years.”).

88. See id. (“If sea level along Miami-Dade’s coast rises slightly

above 2 feet, the same 7-foot storm surge would have a likelihood of occurring

once every 5 years.”).

89. See VULNERABILITY, supra note 83, at 6 (noting the value of

taxable property at risk from rising sea levels).


In addition to the massive potential for flood damage to be

done to homes and businesses, regional infrastructure is at risk,

too. Of particular significance, water control structures could be

damaged, and sewer systems and septic systems can be

contaminated, creating serious risks to public health long after

the storm event has passed.90 The canals and drainage systems

that keep Florida’s low-lying lands dry will also be affected.91

Smaller storm events will flood yards, swales, and ditches along

roadsides. Moreover, the roads are also designed to flood in larger

storm events.92 But if the flood control system is damaged,

rainfall from a series of small daily thundershowers will drain

more slowly, accumulating on the roads just as a large storm

would, and rendering community mobility difficult and, at times,

impossible.93

In a 2009 analysis, the South Florida Water Management

District, a multi-county governmental entity responsible for the

management of the Central and Southern Florida Flood Control

System, candidly explained these flooding risks, and more.94

90. See SOUTH FLA. WATER MGMT. DIST., CLIMATE CHANGE & WATER

MANAGEMENT IN SOUTH FLORIDA 14–17 (Nov. 9, 2009), available at

http://www.sfwmd.gov/portal/page/portal/xrepository/sfwmd_repository_pdf/clim

ate_change_and_water_management_in_sflorida_12nov2009.pdf (noting

potential implications for regional water treatment plants) (on file with the


91. See id. at 14 (noting the impact of sea level rise on canals).

92. See, e.g., SOUTH FLA. WATER MGMT. DIST., MANAGING FLOOD

WATER BEFORE AND AFTER THE STORM, available at

http://www.sfwmd.gov/portal/page/portal/xrepository/sfwmd_repository_pdf/bts_

before_after_storm.pdf (explaining how storms can affect roads) (on file with the


93. Cf. CCSP, IMPACTS OF CLIMATE CHANGE AND VARIABILITY ON

TRANSPORTATION SYSTEMS AND INFRASTRUCTURE: GULF COAST STUDY, PHASE I. A

REPORT BY THE U.S. CLIMATE CHANGE SCIENCE PROGRAM AND THE SUBCOMMITTEE

ON GLOBAL CHANGE RESEARCH, DEPT. OF TRANSP., 445 (M. J. Savonis, V.R.

Burkett, and J.R. Potter, eds., 2008); FLA. PLANNING AND DEV. LAB, Taking the

High Road: Integrating Hazard Mitigation into Long Range Transportation

Planning, FLA. STATE UNIV. http://fpdl.coss.fsu.edu/Research-

Projects/Integrating-Hazard-Mitigation-into-Long-Range-Transportation-

Planning (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,

AND THE ENVIRONMENT).

94. See Kim Shugar & Jayantha Obeysekera, Climate Change and

Sea Level Rise Planning and Adaptation Strategies, SOUTH FLA. WATER MGMT.

DIST. (Feb. 10, 2010), available at


Flooding conditions could become particularly bad during

hurricane season, as agency scientists have repeatedly explained

to the regional water management leadership in public

presentations.95 Sea level rise will force coastal flood control gates

to close, to avoid the “negative flows” of salt water into the canal

systems and aquifers.96 Closing the gates significantly reduces

coastal spillway’s flood discharge capacity.97 While pumps may

eventually be installed at some locations to move the water,

regional drainage capacity will still be reduced and floods events

will last longer.98

In addition to flood risks, temperature increases

associated with climate change could also alter storm and rainfall

patterns, resulting in droughts that raise the risks of fire,

agricultural decline, and non-functional public water supply

storage and well field systems.99 Rising seas will alter coastal

wetlands and estuaries, changing the environment and coastal

fisheries.100 Tropical storm and hurricane patterns will change,

http://www.sfwmd.gov/paa_dad/docs/F2139791537/W%20Item%208A_Climate%

20Change%20District%20Update%20-

%20J%20Obeysekera%20and%20K%20Shugar.pdf (outlining planning and

adaptation strategies through a joint workshop with the Water Resource

Advisory Commission) (on file with the WASHINGTON AND LEE JOURNAL OF


95. See id. at 3 (showing that storms and hurricanes as well as

rising seas, increasing temperature, and changing precipitation, will affect

regional water management leaders efforts concerning flood control, water

supply, natural systems and water quality).

96. See id. at 10 (continuing the attempt by climate change

scientist to educate policy makers on the effects of climate change on their

localities).

97. See id. (highlighting the impact reduced flood discharge

capacity as particularly harmful in the latter part of hurricane season).

98. See id. at 7 (charting the vulnerability of these coastal regions

to increased flooding and providing several strategies for adapting to these

dangers).

99. See generally UNITED STATES GLOBAL CHANGE RESEARCH

PROGRAM, GLOBAL CLIMATE CHANGE IMPACTS IN THE UNITED STATES (Thomas R.

Karl., J. M. Melillo, & T. C. Peterson eds., 2009) [hereinafter USGCRP],

available at http://downloads.globalchange.gov/usimpacts/pdfs/climate-impacts-

report.pdf (reporting to Congress on behalf of the National Science and

Technology Council summarizing “the science of climate change and the impacts

of climate change on the United States, now and in the future”) (on file with the


100. See id. at 12 (listing the key findings of the comprehensive

study on the impacts of climate change in the United States).


potentially becoming less frequent but more intense.101 Coastal

drinking water supplies will be further impacted by accelerated

saltwater intrusion as salt water seeps into the freshwater

aquifers, jeopardizing drinking water supplies for the

community.102 In sum, sea level rise presents a multi-layered

problem, with no easy solutions.

B. Facts and Risks in Coastal Virginia

Similar difficulties lie ahead for Coastal Virginia. In the

region, properties already experience floods. And, echoing the

Florida experience, despite the floods, properties are rebuilt.103

Paralleling the Florida experience, Virginia’s legislators and

policymakers have also been inconsistent and, at times,

unrealistic about the threats posed by sea level rise.104 The

101. See id. at 24 (“Increases in tropical precipitation are projected

during rainy seasons (such as monsoons)… Certain regions, including the U.S.

West (especially the Southwest) and the Mediterranean, are expected to become

drier. The widespread trend toward more heavy downpours is expected to

continue, with precipitation becoming less frequent but more intense.”).

102. See id. at 12 (explaining how climate change will stress water

resources); see also KRISTIN JACOBS, KATY SORENSON, GEORGE NEUGENT, &

SHELLEY VANA, SOUTHEAST REGIONAL CLIMATE CHANGE COMPACT 1, available at

https://www.broward.org/NaturalResources/ClimateChange/Documents/fourcou

nty_compact.pdf (“[R]ising sea levels could limit the effectiveness of critical

drainage infrastructure, endanger beaches, and coastal natural resources and

increase incidents of saltwater intrusion on the Biscayne Aquifer – putting at

risk the drinking water supply for the entire population of Southeast Florida”)


ENVIRONMENT).

103. See Wendy Koch, Rising Sea Levels Torment Norfolk, Va., and

Coastal U.S., USA TODAY (Dec. 18, 2013, 2:47 PM),

http://www.usatoday.com/story/news/nation/2013/12/17/sea-level-rise-swamps-

norfolk-us-coasts/3893825/ (describing the experience of home owners in

Virginia’s tidewater region who have been offered federal funds to raise their

houses in flood zones despite these homes being classified as “sever repetitive

loss properties”. The government offers to cover up 75% of improvements on

houses that can exceed $100,000) (on file with the WASHINGTON AND LEE


104. See Rebecca Leber, Virginia Lawmaker Says ‘Sea Level Rise’ Is

A ‘Left Wing Term,’ Excises It From State Report On Coastal Flooding, CLIMATE

PROGRESS, (June 10, 2012, 6:59 PM),

http://thinkprogress.org/climate/2012/06/10/496982/virginia-lawmaker-says-sea-

level-rise-is-a-left-wing-term-excises-it-from-state-report-on-coastal-flooding/

(discussing political maneuvers used to downplay the significance of a scientific


Commonwealth’s former Attorney General, a climate change

skeptic, once used his subpoena powers to investigate the alleged

fraud being committed by university climate scientists.105

Nevertheless, the Virginia legislature directed the Virginia

Institute of Marine Science to develop and “offer specific

recommendations for the detailed investigation of preferred

options for adapting to relative sea-level rise” by the start of the

2013 regular legislative session.106

The responsive report ultimately came back with an

analysis of recurrent coastal flooding using four plausible

scenarios of sea-level rise for planning purposes.107 The “historic”

scenario used observed long-term rates of sea-level rise going

back a century or more, with no acceleration of sea level rise,

report on the impact of climate change on Virginia’s coastal regions) (on file with


105. See John Collins Rudolf, A Climate Skeptic With a Bully

Pulpit in Virginia Finds an Ear in Congress, NY TIMES (February 22, 2011),

available at

http://www.nytimes.com/2011/02/23/science/earth/23virginia.html?pagewanted=

all&_r=0 (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,

AND THE ENVIRONMENT); Editorial, Ken Cuccinelli’s Climate-Change Witch Hunt,

WASH. POST (March 11, 2012) http://www.washingtonpost.com/opinions/ken-

cuccinellis-climate-change-witch-hunt/2012/03/08/gIQApmdu5R_story.html

(recounting actions taken by Ken Cuccinelli against Michael E. Mann as a costly

example of governmental overreach) (on file with the WASHINGTON AND LEE


106. See VA H.D.J. Res. 50 (2012) & VA S.J. Res. 76 (2012) (listing

three requirements on the Virginia Institute of Marine Science to create a list of

similar strategies for addressing sea level rise throughout the United States,

look into the feasibility of these studies, and offer recommendations).

107. See Sea-Level-Rise Scenarios, VIRGINIA INST. OF MARINE

SCIENCE, http://www.vims.edu/newsandevents/topstories/slr_scenarios.php (last

visited Mar. 17, 2015) (summarizing the institute’s report on sea level rise

pursuant to the declaration of the Virginia Legislature) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); see

also Dave Malmquist, VIMS Calls for Flexible, Multi-Step Approach to Deal

with Flood Risk, VIRGINIA INST. OF MARINE SCIENCE (January 12, 2013),

available at http://www.vims.edu/newsandevents/_docs/flooding_study.pdf (“The

report makes clear that no single response will fully address the complex web of

social, legal, and environmental issues that contribute to Tidewater’s

vulnerability to coastal flooding. Instead, it calls for a multi-step approach with

enough flexibility to allow policymakers to adapt as conditions change and

knowledge grows.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,



estimating a rise of more than 1.5 feet on the Virginia coast.108

The “low” scenario, based on the conservative assumptions in the

IPCC reports, estimated more than 3 feet of seal level rise.109 The

“high” scenario, using the upper end of projections derived from

global observations of sea level and air temperature, estimated

5.5 feet of sea level rise.110 And the “highest” scenario, based on

ice-sheet loss, glacial melting, and a practical worst-case scenario

based on current understanding, projected more than 7.5 feet of

sea level rise.111 Although topography and population density

varies in Coastal Virginia much more than South Florida, maps

of the projected effects of sea level rise show widespread adverse

impacts.112 Of the 634 miles of estuarine shorelines along the

Chesapeake Bay, approximately 120 square miles of dry land lie

within 3 feet of current tidal lines.113 Moreover, Coastal Virginia

is experiencing substantial land subsidence,114 and the region has

the highest rate of measured sea level rise over the last 100 years

108. See VIRGINIA INST. OF MARINE SCIENCE, RECURRENT FLOODING

STUDY FOR TIDEWATER VIRGINIA 110–12, available at

http://leg2.state.va.us/dls/h&sdocs.nsf/By+Year/SD32013/$file/SD3.pdf

(chronicling the history of sea level rise in Virginia) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY CLIMATE AND THE ENVIRONMENT).

109. See id. at 78 (charting sea level rise scenarios).

110. See id. (depicting historic, low, high, and highest scenarios for

sea level rise).

111. See id.

112. See Maps Depicting Likelihood of Shore Protection Along the

Virginia Coast, SEA LEVEL RISE PLANNING MAPS,

http://plan.risingsea.net/Virginia.html (last visited Mar. 17, 2015) (compiling a

list of maps comparing relative sea level rise in Virginia) (on file with the


113. See J.G. Titus, Carl Hershner, et al., Virginia, in THE

LIKELIHOOD OF SHORE PROTECTION ALONG THE ATLANTIC COAST OF THE UNITED

STATES 691, 701 (James G. Titus & Daniel Hudgens eds., 2010), available at

http://papers.risingsea.net/federal_reports/shore-protection-retreat-sea-level-

rise-Virginia.pdf ((listing the findings of the report) (on file with the


114. See Jack Eggleston & Jason Pope, Land Subsidence and

Relative Sea-Level Rise in the Southern Chesapeake Bay Region, U.S.

GEOLOGICAL SURVEY 1 (2013), available at

http://pubs.usgs.gov/circ/1392/pdf/circ1392.pdf (stating that “The southern

Chesapeake Bay region is experiencing land subsidence and rising water

levels due to global sea-level rise; land subsidence and rising water levels

combine to cause relative sea-level rise.”) (on file with the WASHINGTON AND LEE



of any state on the east coast,115 and an estimated 16 inches of

sea level rise is expected by 2050.116 Whereas the 7 foot storm

surge flood historically occurred once every 28 years, projections

are that 2 foot of sea level rise will mean major flooding every 1.7

years.117 Three feet of sea level rise could trigger major flooding

three times every year.118

In a statement of particular import to all the real estate

professions named in this article, Virginia’s report called for a

comprehensive, multi-level combination of management,

accommodation, and protection measures as the adaptation

strategy to prepare the community to coexist with the rising

seas.119 The report emphasized that “it is possible for Virginia to

have an effective response to increasing flood issues BUT it takes

time (20-30 years) to effectively plan and implement many of the

adaptation strategies.”120 Potential management measures

include zoning policies to discourage development in high-risk

areas and reclamation of flood-prone lands.121 Accommodation

includes raising buildings and roads, establishing emergency

plans, and creating or enhancing storm water systems.122

Protection measures include engineering solutions such as levees,

seawalls, and tidal gates, structures, and even living shorelines,

115. See William A. Stiles, Jr. A “Toolkit” For Sea Level Rise

Adaptation In Virginia, WETLANDS WATCH 1, available at

http://www.wetlandswatch.org/Portals/3/WW%20documents/sea-level-

rise/ASCE%20Meeting%20Paper.pdf [hereinafter Toolkit] (providing a general

over view of the effects of sea level rise in Virginia) (on file with the


116. See Facts and Findings: Sea Level Rise and Storm Surge

Threats for Virginia, CLIMATE CENTRAL, available at

http://slr.s3.amazonaws.com/factsheets/Virginia.pdf (listing projections for sea

level rise in 2050) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


117. See Toolkit, supra note 115, at 4 (predicting rate of sea level

rise).

118. Id.

119. See RECURRENT FLOODING STUDY, supra note 108, at 39

(explaining multi-level adaptation strategies).

120. Id. at vii.

121. See Toolkit, supra note 115, at 10 (citing further examples of

policies that can combat the risk associated with rising sea levels).

122. See id. at 9–10 (explaining that when addressing sea level rise

adaptation one should consider four categories: planning,

incentives/disincentives, direct investment in public infrastructure, and land

use and regulatory).


dunes, and created marshes.123 No solution completely removes

the risks. After the report was issued, educators, and local

governments continued to host listening sessions and information

presentations, raising public awareness of the issues.124

C. Truth, Risk, Insurance and the Uncertainty Conundrum

Similar explanations of the risks of sea level rise could be

offered in other places all across the nation: Boston, Charleston,

New Orleans, New York, Seattle, and Tampa all face serious

threats of coastal flooding.125 In theory, state and local

governments and emergency managers should be protecting the

public by assessing risks, hazards, and potential losses, and by

preparing plans to mitigate those risks.126 To fund these efforts,

the Federal Emergency Management Agency provides grants, too,

which may in the future be withheld from entities that fail to

123. See RECURRENT FLOODING STUDY, supra note 108, at 14–30

(stating suggestions for protecting coast lands from rising sea levels).

124. For example, a Virginia Sea Grant sponsored a series of

programs, including listening sessions and informative presentations on

“Community Resilience in Coastal Virginia,” involving the coordinated efforts of

the University of Virginia, City of Virginia Beach, the Hampton Roads Planning

District Commission, and Glouscester County. Jane Ford, Public Meetings Set to

Explore Ways to Plan for Sea Level Rise in Virginia Beach, UVATODAY (Feb. 5,

2011), https://news.virginia.edu/content/public-meetings-set-explore-ways-plan-

sea-level-rise-virginia-beach (announcing the planning sessions) (on file with the


125. Baden Copeland, Josh Keller & Bill Marsh, What Could

Disappear, N.Y. TIMES (Nov. 24, 2012),

http://www.nytimes.com/interactive/2012/11/24/opinion/sunday/what-could-

disappear.html?_r=0 (depicting the effects of sea level rise in cities across the

United States) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


126. See, e.g., State Mitigation Plan Review Guide Highlights of Key

Concepts, FEMA, at 3 (Sept. 8, 2014), available at http://www.fema.gov/media-

library-data/1410365092470-

4dcaea71807b36f564f8e7841be4ff6b/State%20Mitigation%20Plan%20Review%2

0Guide_Key%20Concepts.pdf (“The purpose of this document is to share key

concepts FEMA is considering changing or 27 strengthening in the updated

version of the ‘Multi-Hazard Mitigation Planning Guidance under the Disaster

Mitigation Act of 2000,’ last issued in January 2008.”) (on file with the



include climate change in disaster planning.127 While federal

agencies must consider climate change and its effects on

flooding,128 the unfortunate truth is that FEMA has failed to

protect the public from the risks of climate change denial,

because it does not mandate the consideration of estimated sea

level rise in hazard mitigation, and the issues remains within the

state or local government’s discretion.129 Eventually, the federal

government might force the states and localities to act, and the

boundaries of federalism will be tested yet again.130 But in the

meanwhile, the state and local process of climate change

planning can be (and has been) painfully and dangerously slow.

Of course, a phased and multi-layered approach can be

reasonable, as the U.S. Army Corps of Engineers explained in a

2014 guidance document on planning for sea level rise. That

document emphasized the need for decisions to be made that

would allow communities to implement projects and measures

127. Federal Emergency Management Agency, State Mitigation

Plan Review Guide, Released March 2015 Effective March 2016 FP 302-094-2

available at http://www.fema.gov/media-library-data/1425915308555-

aba3a873bc5f1140f7320d1ebebd18c6/State_Mitigation_Plan_Review_Guide_201

5.pdf; see discussion in News Staff, Through State Mitigation Guide, FEMA

Acknowledges Possible Penalties for Climate Change Deniers, Emergency

Management (March 20, 2015) available at

http://www.emergencymgmt.com/disaster/State-Mitigation-Guide-FEMA-

Possible-Penalties-Climate-Change-Deniers.html

128. Executive Order Establishing a Federal Flood Risk

Management Standard and a Process for Further Soliciting and Considering

Stakeholder Input (Jan. 30, 2015). https://www.whitehouse.gov/the-press-

office/2015/01/30/executive-order-establishing-federal-flood-risk-management-

standard-and- (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


129. See Incorporating Sea Level Rise (SLR) into Hazard Mitigation

Assistance (HMA) Benefit Cost Analysis Frequently Asked Questions (FAQs),

FEMA, available at http://www.fema.gov/media-library-data/1387903260455-

e6faefb55a3f69d866994fb036625527/HMA+Sea+Level+Rise+FAQ+12-23-

2013.pdf (“Does FEMA mandate including SLR in all HMA applications? No.

FEMA does not mandate the inclusion of estimated SLR for HMA project

applications. The state or local community may use SLR to consider future

conditions in mitigating future flood risk.”) (on file with the WASHINGTON AND


130. The authority of the federal government to coerce state action

through the withholding of grants has been upheld. See, e.g. South Dakota v.

Dole, 483 U.S. 203 (1987) (Congress, through its control of the federal spending

power, can encourage uniformity in the States' drinking ages by attaching

conditions on the receipt of federal funds).


adapting to sea level rise with sufficient lead time for planning

and construction.131 Yet the Corps also recognized the current

conundrum: uncertainty makes it hard to make a decision, but

decision paralysis might be worse.132

Despite the case law discussion, the factual data, the

overwhelming scientific consensus, and the substantial risks

ahead, individuals might continue to insist that sea level rise is

fiction.133 To some degree, truth has different meanings across

the professions. A scientist might accept something as true,

whereas a lawyer might not.134 Climate change is clearly a

concept still being tested in the courts and in the marketplace of

ideas.135 But the fact is that for a great majority of the US

coastline, relative sea level (RSL) has been rising over the past 60

years, a pattern consistent with the global trend.136 Even if future

sea level rise proves not to be as acute as the worst case

projections suggest, the actual data, and the future risks, are

undeniable.137 In fact, in its 2012 assessment of sea level rise,

NOAA frames the entire discussion of sea level rise in terms of

131. See Technical Letter No. 1100-2-1 from James C. Dalton,

Chief, Eng’g & Constr. Div., Dep’t of the Army U.S. Army Corp of Eng’rs, to the

Commander, at 3-1 (June 30, 2014), available at

http://www.publications.usace.army.mil/Portals/76/Publications/

EngineerTechnicalLetters/ETL_1100-2-1.pdf (highlighting the need for proactive

efforts) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND

THE ENVIRONMENT).

132. See id. (addressing the uncertainty in making decisions about

sea level rise).

133. See Karl S. Coplan, Climate Change, Political Truth, and the

Marketplace of Ideas, 2012 UTAH L. REV. 545, 546 (2012) (“[C]limate science

must confront cognitive bias and framing issues in the polity.”).

134. See id. at 550–51 (discussing the ideological schism between

scientists and politicians in the context of “the marketplace of ideas”).

135. See id. at 551 (“When it comes to global climate change . . . the

scientific consensus—that catastrophic global warming is likely . . . has not

achieved popular acceptance.”).

136. See NOAA TECHNICAL REPORT OAD CPO-1, GLOBAL SEA LEVEL

RISE SCENARIOS FOR THE UNITED STATES NATIONAL CLIMATE ASSESSMENT 1 (Dec.

6, 2012), available at

http://cpo.noaa.gov/sites/cpo/Reports/2012/NOAA_SLR_r3.pdf (providing an

executive summary of the study) (on file with the WASHINGTON AND LEE JOURNAL

OF ENERGY, CLIMATE, AND THE ENVIRONMENT).

137. See id. (“Scenarios . . . describe future potential conditions in a

manner that supports decision-making under conditions of uncertainty.”).


risk management.138 Like Florida and Virginia, NOAA assessed

the problem by offering four scenarios: low change, intermediate

low, intermediate high, and high.139 The lowest sea level change

scenario, an 8 inch rise, is based on historic rates of observed sea

level change, but emphasizes that this scenario “should be

considered where there is a high tolerance for risk,” such as

projects with a short lifespan or flexibility to adapt within the

near-term.140 An intermediate-low scenario of 1.6 feet of sea level

rise is based on projected ocean warming, and an intermediate-

high scenario of 3.9 feet of sea level rise is based on projected

ocean warming and recent ice sheet loss.141 Finally, the highest

sea level change scenario of 6.6 foot of sea level rise, “reflects

ocean warming and the maximum plausible contribution of ice

sheet loss and glacial melting. This highest scenario should be

considered in situations where there is little tolerance for risk.”142

Of note, recent analyses have suggested that rates of sea level

rise might even be accelerating faster than previously

calculated.143

Presumably, given their vulnerability to sea level rise and

its effects, South Florida and Coastal Virginia should be

communities with little tolerance for risk. For these places, sea

level rise is an existential matter.144 And the importance of action

by both government and business is further elevated by the

138. See id. (discussing the methodologies of the study and the

purpose of using multiple scenarios).

139. See id. (“[S]pecific probabilities or likelihoods are not assigned

to individual scenarios in this report, and none of these scenarios should be used

in isolation.”).

140. See id. at 2 (discussing uncertainties involved among the

several scenarios).

141. See id. at 1–2 (reporting the results of the study).

142. See id. at 2 (differentiating across the scenarios).

143. Carling C. Hay, Eric Morrow, Robert E. Kopp & Jerry X.

Mitrovica, Probabilistic reanalysis of twentieth-century sea-level rise, Nature

517, 481–484 (22 January 2015) doi:10.1038/nature14093 Last updated: 4 May

2015 19:5:46 EDT available at

http://www.nature.com/nature/journal/v517/n7535/full/nature14093.html

144. See, e.g., Bradley G. Bodiford, Florida’s Unnatural Disaster:

Who Will Pay for the Next Hurricane, 21 U. FLA. J.L. & PUB. POL’Y 147, 148

(2010) (presenting a disastrous scenario if a strong hurricane affects south

Florida).


realities of insurance.145 Historically, people could protect

themselves from the risks of real estate ownership.146 But sea

level rise is changing the insurance world too. In Florida, the

state already bears the risks of wind insurance for many

properties, with state run Citizen’s Insurance providing

coverage.147 In Coastal Virginia, many areas are below the

floodlines, and simply cannot be insured.148

For the insurance industry, there is no doubt that sea

level rise is real.149 Insured losses for the global insurance

industry due to weather related events have risen dramatically:

from $6.4 billion per year in the 1980s to $40 billion for the first

decade of the 2000’s.150 At some point, in some places, the risks

will become uninsurable, and the insurers will withdraw.151

145. See id. at 151–52 (discussing underlying problems caused by

lowering hurricane insurance for political gain).

146. See id. at 152–53 (explaining that homeowner’s insurance for

coastal property in Florida has reached rates that are prohibitively expensive,

lessening protection to coastal real estate compared to what it once was).

147. See id. at 151–53 (explaining Florida’s hurricane insurance

program).

148. See Aaron Applegate, Norfolk Sea Level Rise Takes Shine off

Waterfront Homes, PILOTONLINE.COM, (Sept. 28, 2014),

http://hamptonroads.com/2014/09/norfolk-sea-level-rise-takes-shine-waterfront-

homes (“Homes in the flood plains with mortgages are required by lenders to

have insurance from the subsidized National Flood Insurance Program. . . .

[R]eforms are steadily increasing rates—about 18 percent a year—until they

represent coverage of the true cost of the risk.”) (on file with the WASHINGTON


149. See Eduardo Porter, For Insurers, No Doubts on Climate

Change, N.Y. TIMES (May 14, 2013),

http://www.nytimes.com/2013/05/15/business/insurers-stray-from-the-

conservative-line-on-climate-change.html?pagewanted=all (“[N]atural

catastrophes . . . pounded insurers last year, generating $35 billion in privately

insured property losses, $11 billion more than the average over the last

decade.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


150. See HARVEY RUVIN ET AL., MIAMI-DADE SEA LEVEL RISE TASK

FORCE AND RECOMMENDATIONS 10 (July 1, 2014), available at

http://www.miamidade.gov/planning/library/reports/sea-level-rise-final-

report.pdf (discussing the financial effects of natural disasters on insurance

companies) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


151. See generally Virginia Haufler, Insurance and Reinsurance in

a Changing Climate, WOODROW WILSON INT’L CTR. FOR SCHOLARS (May 18, 2006),

available at http://www.wilsoncenter.org/sites/default/files/Paperhaufler.pdf


Faced with that possibility, concerns about drinking water, roads

or sewer systems seem inconsequential. Lacking insurance, the

owners of the unprotected coastal community homes and

businesses will be left with nothing, and no remedies, when the

predictable catastrophe finally occurs. Indeed, insurance is

becoming a crucial driver of how society responds to the coastal

hazard of sea-level rise.152

Despite the physical and economic risks, the stark reality

remains that, in the United States, our political leaders in these

communities can choose to do absolutely nothing about the risks

of sea level rise.153 Although FEMA may eventually end up

deeply involved in disaster response efforts, neither federal nor

state law mandates large-scale mitigation or prevention

alternatives to evade that foreseeable future. Instead, at best, our

government is engaged in a large scale planning discussion.154

But in the meanwhile, in the private economy, people buy homes,

(addressing the withdrawal of insurance companies after major storms) (on file


ENVIRONMENT).

152. See Insurance Issues, FLORIDA SEA GRANT,

https://www.flseagrant.org/climatechange/coastalplanning/insurance-issues-

coast/ (last visited Apr. 23, 2015) (discussing changes in the National Flood

Insurance Program) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


153. See generally Steve Doane, Southwest Florida Governments not

Planning for Sea Rise, NEWS-PRESS.COM (Aug. 2, 2014), http://www.news-

press.com/story/news/2014/08/02/southwest-florida-governments-planning-sea-

rise/13532083/ (noting that Lee and Collier counties in southwest Florida have

no “specific plans to address the impacts of sea level rise”) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); but

see, Debra Kahn, San Francisco Bay Area Enacts Sea-Level Rise Policy,

SCIENTIFIC AMERICAN (Oct. 7, 2011),

http://www.scientificamerican.com/article/san-francisco-bay-area-enacts-sea-

level-rise-policy/ (explaining that the City of San Francisco passed a coastal

development plan allowing the denial of permits in coastal areas susceptible to

flooding; based on state projects, up to 180,00 acres of land could be precluded

from development by 2050) (on file with the WASHINGTON AND LEE JOURNAL OF


154. See generally FLORIDA DEPT. OF ECON. OPPORTUNITY, HOW

COUNTRIES, STATES, AND FLORIDA ADDRESS SEA LEVEL RISE A COMPENDIUM OF

CLIMATE ADAPTATION RESEARCH 65, available at

http://www.floridajobs.org/fdcp/dcp/AdaptationPlanning/CompendiumNationalS

tateLocalAdaptationProjects.pdf (discussing recommendations for anticipating

sea-level rise impacts on various coastal states) (on file with the WASHINGTON



some committing to 30-year mortgages. Some of these homes are

in places where sea level rise and its consequences present

extraordinary risks that could manifest even before the mortgage

is paid off.155

D. Comparative Risk: Never Again vs. Caveat Emptor

The risks and problems associated with sea level rise are

global.156 Low elevation coastal zones, including South Florida

and Coastal Virginia, represent just 2% of the total landmass of

the earth, but home to 10% of the present world population.157

Sixty-five percent of megacities with more than 5 million

155. See id. at 7–8 (explaining that the study estimates potential

economic damage from environmental phenomena in Florida).

156. See, e.g., Sea-Level Rise in Small Island Nations - Up to Four

Times the Global Average - to Cost US$ Trillions in Annual Economic Loss and

Impede Future Development: Shift to Green Policies and Investment Critical,

UNEP NEWS CENTRE (June 5, 2014),

http://www.unep.org/newscentre/Default.aspx?ArticleID=10879&DocumentID=2

791#sthash.a489Zy9e.dpuf (“Climate change-induced sea-level rise in the

world's 52 small island nations - estimated to be up to four times the global

average - continues to be the most pressing threat to their environment and

socio-economic development with annual losses at the trillions of dollars due to

increased vulnerability.”) (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY, CLIMATE, AND THE ENVIRONMENT); see also R. Kerry Turner et. al.,

Coastal Management for Sustainable Development: Analysing Environmental

and Socio-Economic Changes on the UK Coast, 164 GEOGRAPHICAL J., 269, 270

(Nov. 1998), available at

http://tearai.kete.net.nz/documents/0000/0000/0184/econdev.pdf (describing

threats to coastal zones in England) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); H.E. Pelling, et al, The

Impact of Rapid Coastline Changes and Sea Level Rise on the Tides in the Bohai

Sea, 118 CHINA, J. GEOPHYS. RES. OCEANS, 3462, 3462, available at

http://onlinelibrary.wiley.com/doi/10.1002/jgrc.20258/pdf (discussing tidal

behavior in China over the last thirty-five years) (on file with the WASHINGTON


157. See Anthony Oliver-Smith, Sea Level Rise and the

Vulnerability of Coastal Peoples: Responding to the Local Challenges of Global

Climate Change in the 21st Century, 7 UNU-EHS, at 5, 20–21 (2009), available

at http://d-nb.info/102969186X/34 (discussing human causes and responses

regarding climate change, with a focus on migration) (on file with the



inhabitants are located in these regions, and lands and peoples

will be affected all over the planet.158

Consider, for example, the Netherlands, home to

Amsterdam and Rotterdam, where many communities exist well

below sea level.159 The nation is known for its iconic water-

moving windmills and the complex engineering system that

protects the country from floods.160 The Dutch view on sea level

rise stands in sharp contrast to the United States. Although long

accustomed to water management, a massive flood changed the

national outlook, and the willingness of its people to accept

risk.161 The “Misery of 1953” inspired a fundamental shift in the

national tolerance of flood risk, and “Never Again” became the

Dutch leader’s mantra.162

Unsurprisingly, the Dutch have squarely confronted

climate change and sea level rise, announcing the Delta

Programme in 2014.163 Every year, for the next 40 years, the

Dutch plan to use € 1 billion for flood risk management and fresh

water protection and maintenance, with € 600 million available

158. See id. at 20–21 (explaining that the largest levels of relative

sea level rise is expected to occur in regions of population density—in India and

Bangladesh alone, almost 14 million people would be impacted, in addition to

other Asian coastlines, as well as Arctic areas).

159. See id. at 21 (describing the Netherlands as densely populated

and susceptible to rising sea levels).

160. See id. at 27 (describing the Netherlands as a coastal area

subject to multiple natural and human-induced stresses, such as subsidence or

declining natural defenses).

161. See Molly Moore, Rethinking Defenses Against Sea’s Power

Washington Post Foreign Service, WASH. POST (Sept. 8, 2005),

http://www.washingtonpost.com/wp-

dyn/content/article/2005/09/07/AR2005090702400.html (“On Feb. 1, 1953, a

high-tide storm breached the famed Dutch dikes in more than 450 places.

Nearly 1,900 people died, many as they slept. More than 47,000 homes and

other buildings were swept away or splintered in the icy inundation.”) (on file


ENVIRONMENT).

162. See id. (discussing preventative measures taken by the Dutch

after “The Misery of 1953”).

163. See generally WORKING ON THE DELTA: PROMISING SOLUTIONS

FOR TASKING AND AMBITIONS, DELTA PROGRAMME (2014), available at

http://www.deltacommissaris.nl/english/Images/Delta%20Programme%202014_

English_tcm310-345435.pdf (outlining how to protect coastline in the

Netherlands) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,



for annual infrastructure investments.164 Dutch engineers have

already planned and designed projects and revised safety

standards related to river widening, flood management, and salt

water intrusion and freshwater supplies.165 Unwilling to accept

the risks, the people of the Netherlands are building for a

climate-changed future.166

The American experience is different. While some local

leaders in New Orleans and New York might be convinced of the

need for action, not even the misery of Hurricane Katrina in 2005

or the storm surges from Superstorm Sandy in 2012 convinced

our nation to comprehensively build new infrastructure for sea

level rise.167 Compared with our vulnerable Dutch counterparts,

Americans in many similarly situated coastal communities seem

far behind. Miami still has no clear plans for self-defense from

the rising seas, and officials are still “laying the foundation for

action.”168 In 2014, a task force urgently recommended that the

community must accelerate the adaptation process by selecting

164. See id. at 7 (discussing how the Dutch will allocate funds to

protect their coastline).

165. See id. (outlining methods to reduce the risk of large-scale

flooding in the Netherlands).

166. See id. (“Based on the resources currently available and

extrapolated, the Delta Programme Commissioner believes that implementing

the necessary measures in good time, i.e. before 2050, is a challenge.”).

167. See Hurricane & Storm Damage Risk Reduction System, U.S.

ARMY CORPS OF ENGINEERS,

http://www.mvn.usace.army.mil/Missions/HSDRRS.aspx (last visited Mar. 16,

2015) (charting new flood protection systems in New Orleans, but the Corps

clearly and openly describes them as “Hurricane & Storm Damage Risk

Reduction Systems”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); see also Understanding Risk, U.S. ARMY

CORPS OF ENGINEERS,

http://www.mvn.usace.army.mil/Missions/HSDRRS/RiskReductionPlan/Underst

andingRisk.aspx (last visited Mar. 16, 2015) (“There will always be a risk of

storm damage. There is a risk of flooding every year from rainfall and storm

surge. Everyone shares in the responsibility to "buy down" risk through zoning,

building codes, insurance and other measures.”) (on file with the WASHINGTON


168. See Miami Dade Sea Level Rise Task Force and

Recommendations supra note 150, at 4 (“The Sea Level Rise Task Force

recommends accelerating . . . and formally selecting the engineering and other

relevant expertise needed to develop the robust capital plan, vetting the

elements . . . as well as what measurable indicators will trigger timely

sequencing.”)


engineers, developing a capital plan, and addressing critical

elements such as flood protection, salinity structures, pump

stations, road and bridge designs.169 Instead, in 2015, Floridians

learned that our state governor had an unwritten policy that

prevented state officials from even using the terms “climate

change.”170 In fact, employees were instructed to refer to “sea

level rise” as “nuisance flooding.”171

Paradoxically, as an article in Bloomberg’s Businessweek

cynically explained, the governor’s denials, and the continued

building boom in America’s vulnerable coastal cities might even

be rational – but only in the short term.172 South Florida relies

almost exclusively on real estate taxes to fund public

infrastructure, so communities need to maintain the value of real

estate if they are to have any hope in the future of implementing

measures to adapt to sea level risk.173 In addition, naïve buyers

and sellers in Miami Beach have not yet “connected the dots”

between nuisance flood events and the future consequences of sea

level rise – a connection that would spark a dramatic downturn

in the tax base.174 Political denials, however, will not prevent the

predictable downturn.

From a consumer and public perspective, and especially

when compared with the actions being taken by the similarly

vulnerable people of the Netherlands and elsewhere, the laws

and policies and actions of the United States, Florida, and

Virginia demonstrate an incomplete government commitment to

protecting our coastal communities from sea level rise. Rational

169. See id. (discussing the plan’s goal of reinventing urban

infrastructure).

170. Tristram Korten, In Florida, officials ban term “climate

change”, Miami Herald (Mar. 8, 2015) available at

http://www.miamiherald.com/news/state/florida/article12983720.html

171. Id.

172. See Robert Meyer, How Climate Change Is Fueling the Miami

Real Estate Boom, BUSINESSWEEK (Oct. 20, 2014),

http://www.businessweek.com/articles/2014-10-20/how-climate-change-is-

fueling-the-miami-real-estate-boom#p2 (“South Florida’s best shot at coping

with the long-term environmental threat may be a strategy that no doubt seems

perverse to environmentalists: aggressively foster a collective belief that sea

level rise is not something we urgently need to worry about.”) (on file with the


173. See id. (discussing a controversial remedy for south Florida).

174. See id. (“Controlled ignorance, in some cases, may be a good

thing.”).


or not, it is undeniable that the risks of sea level rise are borne by

the uninformed consumer. The public sector is failing in its basic

duty to protect and secure its people. And in private sector, even

though the ethical traditions of the real estate professions (in

theory) all insist upon truth and honesty for everyone, they seem

to operate (in practice) based on a wholly different principle:

caveat emptor.

IV. Sea Level Rise and Human Rights. From a strictly deontological perspective, some people

might characterize the actions of the real estate professions as

ethical because they are legal. After all, local, state, and federal

laws have evolved to establish certain minimum thresholds: codes

ensure construction projects conform with safety and hurricane

standards; elevated buildings on pilings allow room for

floodwaters; coastal setbacks protect dunes; permits are complied

with and enforced; certificates of occupancy must be issued.

Otherwise, as far as sea level rise is concerned, let the buyer

beware.

The potentially transformative nature of sea level rise,

and the magnitude of the potential problems, renders these

traditional land use development laws and measures insufficient.

Given the material facts of sea level rise, mere disclosure seems

insufficient, too. Taking a consequential view, is it ethical for a

planner, architect, engineer or lawyer to include a small print

disclosure in a document, informing a buyer that their land is

likely to be flooded by rising seas within the life of the buyer’s

mortgage, and then to sell the property anyway? Consider, for

example, the lawyer advising his banker client at the real estate

closing. In a low density coastal neighborhood of Virginia, where

the government is unlikely to make massive investments in

levees and protections from rising seas, the lawyer should caution

the client of the likelihood that the property may be abandoned

and the buyer may default. Moreover, the failure to disclose the

critical risks of sea level rise to the buyer might even be

characterized as an omission of fact that is the equivalent of an

unethical affirmative false statement.175

175. See, e.g., ABA RULES, supra note 22, at Rule 4.1 cmt. (2013)

(“Misrepresentations can also occur by partially true but misleading statements

or omissions that are the equivalent of affirmative false statements.”); VIRGINIA

RULES, supra note 21, at Rule 4.1; FLORIDA RULES, supra note 20, at Rule 4-4.1.


For the people who live and work on the coastlines, the

buyer’s expectation of property ownership as a long-term

investment that accrues equity eventually will be replaced by a

new model of property ownership as a depreciating asset with a

limited time horizon.176 In some coastal communities, sea level

rise may even reflect a threat to human rights.177 Article 25 of the

United Nations’ Universal Declaration of Human Rights suggests

that everyone has a right to housing and security, even in

circumstances beyond our control.178 Article 12 of the

International Covenant on Economic Social and Cultural Rights,

which recognizes a right to physical and mental health, has been

interpreted to include a right to safe drinking water and

sufficient sanitation.179 The United States has ratified the

Universal Declaration of Human Rights—but not the

International Covenant. Nevertheless, both documents provide

insights into the ethical issues associated with the threats posed

by sea level rise.

Given the potential for basic human rights violations, the

conduct of the real estate professionals needs rethinking. The

Republic of the Marshall Islands, fearing the potential loss of

176. See Jason P. Oppenheim, The Waters are Rising! Why Isn’t My

Tax Basis Sinking? Why Coastal Land Should be a Depreciable Asset in Light of

Global Warming and the Rise in Sea Level, 8 U.MASS. L. REV. 228, 238 (2013)

(“[F]ederal courts, the Tax Court, and the IRS—through revenue rulings—have

always stood firm that land is a non-depreciable asset because it does not have a

finite useful life.”).

177. See DELTA PROGRAMME, supra note 163, at 38 (“Social

disruption occurs if there are large groups of casualties where the flood occurs or

if there is a lot of economic damage caused by a flood.”).

178. See Universal Declaration of Human Rights, Art. 25 (1948)

(“Everyone has the right to a standard of living adequate for the health and

well-being of himself and of his family, including food, clothing, housing and

medical care and necessary social services, and the right to security . . . in

circumstances beyond his control.”).

179. See International Covenant on Economic, Social and Cultural

Rights, G.A. Res. 2200A (XXI) (Dec. 16, 1966),

http://www.ohchr.org/en/professionalinterest/pages/cescr.aspx (enumerating the

steps that participating states must take for the full realization of this

standard) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,

AND THE ENVIRONMENT); Comm. on Economic, Social and Cultural Rights,

General Comment 15, 29th Sess., U.N. Doc. E/C 12/2002/11,

http://www1.umn.edu/humanrts/gencomm/escgencom15.htm (reciting the legal

bases of the right to water) (on file with the WASHINGTON AND LEE JOURNAL OF



their national lands as a result of sea level rise, submitted a

resolution to the United Nations decrying the threats to the

human rights to life, property, culture, food, housing, health and

water.180 Similar arguments could be made in South Florida and

Coastal Virginia.

Corporations, and their professionals, should respect

human rights. In a 2008 UN report providing a Framework for

Business and Human Rights, Professor John Ruggie explained

the minimum responsibilities of corporations to ensure that

human rights are realized.181 First, he emphasized governments’

duty to protect against human rights abuses by third parties,

including businesses – which, of course, suggests the need for

corporations to comply.182 Second, he noted businesses’

responsibility to respect all human rights.183 Third, he

acknowledged the need for more effective access to remedies for

people affected by corporate related human rights abuses.184

Applying this Ruggie Framework to a climate changed world, for

example, both government and business must act to protect

aquifers from sea level rise and to maintain the integrity of the

180. See generally Phillip H. Muller, UN Human Rights Council

Res. 7/23, National Communication regarding the Relationship Between Human

Rights & The Impacts of Climate Change (Dec. 31, 2008), available at

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0C

B4QFjAA&url=http%3A%2F%2Fwww.ohchr.org%2Fdocuments%2Fissues%2Fcl

imatechange%2Fsubmissions%2Frepublic_of_the_marshall_islands.doc&ei=XZd

hVKOkFIf8yQT8poLYDA&usg=AFQjCNE-E-

GccfF81_5K1O57u13yfkYV6g&bvm=bv.79189006,d.aWw&cad=rja (on file with


181. See UN HUMAN RIGHTS COUNCIL, PROMOTION AND PROTECTION

OF ALL HUMAN RIGHTS, CIVIL, POLITICAL, ECONOMIC, SOCIAL AND CULTURAL

RIGHTS, INCLUDING THE RIGHT TO DEVELOPMENT 10, available at

http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf (noting that

“some States are beginning to use ‘corporate culture’ in deciding corporate

criminal accountability”) (on file with the WASHINGTON AND LEE JOURNAL OF


182. See id. at 4 (emphasizing “the State duty to protect against

human rights abuses by third parties”).

183. See id. at 8 (recognizing “the corporate responsibility to respect

human rights”).

184. See id. at 4 (stating the ineffectiveness of status quo remedies

for individuals affected by human rights abuses inflicted by businesses and

corporations).

http://www.refworld.org/publisher/UNHRC.html


water infrastructure.185 The human right to water and sanitation

entitles everyone access to a sufficient, safe, physically accessible,

and affordable amount of water for personal and domestic uses.186

And there is an increasing societal expectation that companies

will ensure that their operations do not compromise access to safe

drinking water and sanitation.187 Yet, in the United States,

actions to protect water supplies from sea level rise remain

discretionary; our society seems to be waiting for the catastrophe

to occur.188

But in the meanwhile, it is difficult to reconcile the status

quo and risks ahead with the ethical standards of the various

professions and human rights declarations.189 The risks of sea

level rise in coastal communities are significant, yet development

and the real estate industry marches on.190 Sure, local zoning and

flood control might ensure that houses are developed at a

sufficient height above sea level to reduce the risk of flooding, but

185. See id. (noting that “as economic actors, companies have

unique responsibilities”).

186. See UN HUMAN RIGHTS COUNCIL, REPORT OF THE UNITED

NATIONS HIGH COMMISSIONER FOR HUMAN RIGHTS ON THE SCOPE AND CONTENT OF

THE RELEVANT HUMAN RIGHTS OBLIGATIONS RELATED TO EQUITABLE ACCESS TO

SAFE DRINKING WATER AND SANITATION UNDER INTERNATIONAL HUMAN RIGHTS

INSTRUMENTS 10, available at

http://www2.ohchr.org/english/issues/water/iexpert/docs/A-CHR-6-

3_August07.pdf (emphasizing the importance of access to safe drinking water

and the ramifications of lack of access, including inequality resulting from

disproportionate impacts on women) (on file with the WASHINGTON AND LEE


187. See id. at 16 (“Submissions received by the private sector

during the consultation process also highlight the fact that various private

water providers support recognition of access to safe drinking water as a human

right.”).

188. See Oppenheim, supra note 176, at 230–31 (“Over the next

hundred years the sea level is expected to rise at an accelerated pace due to

global warming. Over 20,000 km2 of coastal land in the eastern United States is

at risk of becoming inundated by a rise in sea level over this period.”).

189. See supra Part I (discussing the ethical obligations of the

various professions that interact with the problems presented by coastal sea

levels).

190. See Oppenheim, supra note 176, at 228 (explaining that “[t]he

rise in sea level means that many coastal property owners will see a decrease in

their property size as the sea inundates the dry land”).


coastal communities will be affected in many other ways.191 What

good is a dry home in a community where the roads are

unpassable, and drinking water is unavailable? And will there be

any remedies for the people whose homes become uninsurable or

valueless?

V. Taking the Higher Ground: Professionalism and

Corporate Social Responsibility.

Professionals have duties to the community of which they

are a part.192 Among them are restrictive duties not to lie, and

affirmative duties to inform.193 Unfounded speculations that

scientists are wrong, and deflections about “scientific

uncertainty,” do not conform with those duties; the ethical

considerations for each profession are certain.194 Are the planners

really providing adequate, timely, clear and accurate information

on planning issues? Are the architects engaged in false

statements of material fact, or conduct involving the wanton

disregard of the rights of others? Are the civil engineers being

honest and impartial and serving with fidelity the public? Have

the realtors concealed pertinent facts relating to the property or

the transaction? And are the compliance professionals really

ensuring that the companies are acting with honesty, fairness

and diligence? And have the lawyers participated in a client’s

fraud, or otherwise failed to disclose material facts to their clients

or third parties?

Professionals and corporations are not being prosecuted

for ethics violations related to sea level rise.195 Our legal and

ethical systems, despite their emphasis upon disclosure of the

191. See McNeil et al., supra note 1 (describing the various dangers

presented by rising sea levels, including dangers to NASA development projects

and also private development).

192. See supra Part I (observing the responsibility and ethics

obligations of professionals).

193. See supra note 24 (explaining that under Virginia law lawyers

are prohibited from making false statements of fact or law to a tribunal and

obligated to disclose certain facts related to criminal or fraudulent acts

committed by their clients).

194. See supra note 175 (establishing certain ethical responsibilities

for lawyers, emphasizing the duty to communicate in honest manner).

195. See UN HUMAN RIGHTS COUNCIL, supra note 181 (advocating

for increased criminal accountability for corporations).


truth, have thus far been inadequate to motivate present-day

actions to protect the public from a climate-changed future.196 To

some degree, the inaction is explained by the nature of the

problem.197 No one profession can hold a single professional

accountable.198 Licensing authorities may be understandably

reluctant to become arbiters of truth on a politically divisive

issue,199 and climate change is a “wicked problem” that defies

simple resolution, presenting enormous interdependencies and

uncertainties.200 Forward-looking and slowly evolving, the

corollary of sea level rise is a matter considered by using

projections and estimates – opening it up to criticisms, evasions

and deceptions, despite its basis in science and data.201 Indeed,

even the U.S. Supreme Court has wrestled with the forecasting

nature of sea level rising with some justices calling the risks

remote but real while others consider them speculative.202

Still, sea level rise will have extraordinary consequences

for coastal communities; people have their life’s savings and

196. See McNeil et al, supra note 1 (observing the lack of

cooperation and bipartisanship in addressing climate change).

197. See id. (discussing the lack of scientific agreement in certain

groups over the accurate levels of danger associated with climate change).

198. See supra notes 22, 28, 29 (recognizing that many different

professions are involved in the discussion of how to address climate change

through enforcement of professional ethics requirements).

199. See James Moliterno, Politically Motivated Bar Discipline, 83

Wash. U. L. Q. 725, 725 (2005) (noting that “the threat of bar discipline has once

again become an overreaction to justifiable fear and turmoil”).

200. See Richard J. Lazarus, Super Wicked Problems and Climate

Change: Restraining the Present to Liberate the Future, 94 Cornell L. Rev. 1153,

1158–59 (2009) (highlighting “the distinct features of the lawmaking

challenges presented by global climate change that render it a ‘super wicked

problem’ for public policy resolution and therefore legal redress”).

201. See McNeil et al., supra note 1 (discussing the nature of the

climate change debate and its reliance on competing information and scientific

methods).

202. See Massachusetts v. EPA, 549 U.S. 497, 526 (2007) (“[A]t

least according to petitioners' uncontested affidavits—the rise in sea levels

associated with global warming has already harmed and will continue to harm

Massachusetts. The risk of catastrophic harm, though remote, is nevertheless

real.”). But see Id. at 542 (Roberts, C.J., dissenting) (rejecting claims that sea-

level rise had caused injury to the State of Massachusetts, and concluding that

any actual loss of coastline was “pure conjecture”).


livelihoods at stake.203 Eventually, inescapably, American society

will finally be forced to change: the “lawmaking moment” will

arrive.204 Perhaps the effects of Superstorm Sandy, which

triggered a dialogue in New York and New Jersey, have marked a

turning point in the United States.205 Some Florida leaders have

begun to discuss the realistic need for robust decision-making,

despite the deep uncertainties involved.206 But elsewhere, the

continuation of coastal land use development and transactions,

and the absence of affirmative disclosures, or other measures to

help communities adapt to the rising seas, may represent an

ethical failure.207

While ambiguities exist as to the enforceability of

professional ethics, the aspirations of each profession provide

greater clarity. To adapt to the coming changes, the real estate

and land use development professionals should reread and

embrace their own professional aspirations. Their employers and

clients must engage in corporate social responsibility, too.

Aspirational elements of the ethical codes for all the professions –

planners, architects, engineers, and yes, even the lawyers –

provide clear direction on how these professionals should

approach the realities of sea level rise.

203. See Oppenheim, supra note 176, at 230–31 (explaining the

devastating consequences of the sea-level rise that will inevitably occur without

significant action to reverse climate change).

204. See Oppenheim, supra note 176, at 230–31 (addressing the dire

need for institutional action to respond to growing climate change threats).

205. See Dan Vergano, Sandy Revives Debate over Sea-Level Rise,

USA TODAY (November 28, 2012, 2:50 PM),

http://www.usatoday.com/story/tech/2012/11/27/sandy-sea-level-rise/1730405/

(“No surprise. The Eastern Seaboard—or any coastal region—occasionally finds

itself in the cross hairs of ferocious ocean storms. But it may have taken Sandy

to drive home the added threat that scientists have been warning about for

years: a rise in the sea level.”) (on file with the WASHINGTON AND LEE JOURNAL


206. See SOUTH FLA. WATER MGMT. DIST., WORKSHOP ON ROBUST

DECISION MAKING UNDER DEEP UNCERTAINTY, at ii (Sept. 5, 2014), available at

http://www.southeastfloridaclimatecompact.org/wp-

content/uploads/2014/12/RDMWorkshop-Sept5th-2.pdf (noting that Robust

Decision Making (RDM) is “a quantitative decision-analytic approach for

supporting decisions under conditions of deep uncertainty) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE. AND THE ENVIRONMENT).

207. See supra Part I (arguing that ethical responsibilities of

professionals require a response to the severe dangers presented by climate

change).


Planners should emphasize the rights of others,

demonstrate concern for the long-range consequences of present

actions, and promote “excellence of design and endeavor to

conserve and preserve the integrity and heritage of the natural

and built environment.”208 The ethical codes of both the architects

and the civil engineers call for a focus upon sustainable

communities: architects should “should advocate the design,

construction, and operation of sustainable buildings and

communities,”209 and civil engineers should “hold paramount the

safety, health and welfare of the public and shall strive to comply

with the principles of sustainable development in the

performance of their professional duties.”210 The engineers’

ethical code even adds a definition of sustainable development:

“the process of applying natural, human, and economic resources

to enhance the safety, welfare, and quality of life for all of society

while maintaining the availability of the remaining natural

resources.”211

As for the lawyers, they have a discretionary duty to

advise their client, rendering candid advice, even on matters of

economics, politics and morality.212 The Preamble to the Rules of

208. See AICP Code of Ethics and Professional Conduct, AM. INST.

OF CERTIFIED PLANNERS, at § A.1 (Oct. 3, 2009),

https://www.planning.org/ethics/ethicscode.htm (stating that “[o]ur primary

obligation is to serve the public interest and we, therefore, owe our allegiance to

a conscientiously attained concept of the public interest that is formulated

through continuous and open debate”) (on file with the WASHINGTON AND LEE


209. See AM. INST. OF ARCHITECTS, 2012 CODE OF ETHICS &

PROFESSIONAL CONDUCT, CANON VI, E.S. 6.2, available at


(encouraging engineers to “promote sustainable design and development

principles in their professional activities”) (on file with the WASHINGTON AND LEE


210. See Code of Ethics, AM. SOC’Y OF CIVIL ENG’R, at Canon 1 (July

23, 2006) http://www.asce.org/code_of_ethics/ (emphasizing the importance of

sustainability in execution of professional duties) (on file with the WASHINGTON

AND LEE JOURNAL OF ENERGY, CLIMATE AND THE ENVIRONMENT).

211. See id. (enumerating the characteristics of sustainable

development, including an explicit focus on quality of life and responsible

management of natural resources).

212. See ABA RULES, supra note 22, at Rule 2.1 (“In representing a

client, a lawyer shall exercise independent professional judgment and render

candid advice. In rendering advice, a lawyer may refer not only to law but to



Professional Conduct for Florida and Virginia (and the American

Bar Association) further notes that lawyers, as members of a

learned profession, “should cultivate knowledge of the law beyond

its use for clients” and “employ that knowledge in reform of the

law.”213

But perhaps the preamble to the realtor’s code of ethics

says it best:

Under all is the land. Upon its wise utilization and

widely allocated ownership depend the survival

and growth of free institutions and of our

civilization. Realtors should recognize that the

interests of the nation and its citizens require the

highest and best use of the land and the widest

distribution of land ownership. They require the

creation of adequate housing, the building of

functioning cities, the development of productive

industries and farms, and the preservation of a

healthful environment.214

In the foreseeable future, our cities might not function,

and some lands may be under the sea.215 When it comes to

confront the truths of sea level rise, the evidence suggests that

other considerations such as moral, economic, social and political factors, that

may be relevant to the client's situation.”).

213. See FLORIDA RULES, supra note 20, at Preamble (emphasizing

the importance of access legal services); see also VIRGINIA RULES, supra note 21,

at Preamble.

214. See Code of Ethics and Standards of Practice, NAT’L ASSOC. OF

REALTORS, at Preamble (Jan. 1, 2012),

http://www.realtor.org/mempolweb.nsf/pages/code (“Such interests impose

obligations beyond those of ordinary commerce. They impose grave social

responsibility and a patriotic duty to which REALTORS® should dedicate

themselves, and for which they should be diligent in preparing themselves.”) (on


ENVIRONMENT).

215. See McNeil et al., supra note 1 (“Tidal waters worldwide have

climbed an average of 8 inches (20 cm) over the past century, according to

the 2014 National Climate Assessment. The two main causes are the volume of

water added to oceans from glacial melt and the expansion of that water from

rising sea temperatures.”).


our many real estate professions are falling far short of their

professional aspirations.216

The professional’s employers and clients must help, too.

Corporations, by law, have many rights and privileges; with them

comes the obligation to meet essential responsibilities.217 Mere

compliance with law is not enough when there are questions as to

whether a company’s real estate endeavors fail to protect human

rights. Principles of corporate social responsibility must apply.

Some critics, continuing to adhere to the notion of caveat

emptor, might insist that real estate related corporations have no

special duties to protect their customers from sea level rise.

Corporate social responsibility, they would claim, is not a

business imperative, and ethics and virtue might not be rewarded

in the marketplace.218 But the ability to make a profit from a

person who ignores the facts of sea level rise does not make it

ethical. And, even without the restraints of ethics and human

rights, the economic case for corporate social responsibility exists,

too.219 An optimistic economic argument can be made that

happier employees lead to better productivity, and happier

customers lead to better corporate reputations.220 Conversely, if

216. See NAT’L ASSOC. OF REALTORS, supra note 214 (listing the

various responsibilities of realtors related to public service, social responsibility,

and non-commercial obligations).

217. See Michael Noer, David M. Ewalt & Tara Weiss, Corporate

Social Responsibility, FORBES (Oct. 17, 2008),

http://www.forbes.com/2008/10/16/corporate-social-responsibility-corprespons08-

lead-cx_mn_de_tw_1016csr_land.html (outlining the purpose and characteristics

of socially responsible corporate behavior) (on file with the WASHINGTON AND LEE


218. See id. (arguing that “firms will gain a competitive advantage

by appealing to the growing numbers of socially and environmental oriented

consumers, investors and employees”).

219. See id. (“We increasingly hear that corporate social

responsibility (CSR) has become a business imperative. “).

220. See, e.g., Devin Thorpe, Why CSR? The Benefits Of Corporate

Social Responsibility Will Move You To Act, FORBES (May 18, 2013) available at

http://www.forbes.com/sites/devinthorpe/2013/05/18/why-csr-the-benefits-of-

corporate-social-responsibility-will-move-you-to-act/(“While each company I

interviewed had varying responses for the benefits of CSR and cause marketing

for the company, 51 of 59 believe that they have happier employees and 45 of

the 59 believe they end up with better employees, either as a result of being able

to attract better talent or that the CSR programs help to develop better

employees.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,



the status quo remains, and the disasters happen, a more

pessimistic approach to economics would note that unhappy

customers (and their lawyers) will search for others to hold

accountable. The corporations that planned, designed, built and

sold the properties, knowing of the risks ahead, will be prime

targets.

Neither the lawsuits, nor even the disasters, have to

happen. In Hans Brinker’s famous story, the Little Dutch Boy –

despite knowing that he would be late for school -- puts his finger

in the dyke, stopping the trickle of water, and saving his

community from a catastrophe. . Professionals and businesses in

real estate related industries need to demonstrate a similar

degree of awareness and self-sacrifice. Collectively, they all need

to focus on the long-term sustainability of the community, even if

it means forgoing a short-term profit opportunity.

Many companies and professionals have already pursued

the ethical and responsible path. Google abandoned its support

for the American Legislative Exchange Council, taking issue with

its opposition to climate change policies.221 Sustainability of the

coastline has been embraced as a principle of corporate social

responsibility, and developers routinely set aside lands for

environmental conservation.222 The Urban Land Institute, an 80-

year old international interdisciplinary organization dedicated to

“creating and sustaining thriving communities worldwide,” even

published its Ten Principles for Coastal Development, offering

guidance for land use developers.223 Many of the principles focus

221. See Brian Fung, Google: We’re Parting with the Climate

Change Skeptics at ALEC, WASH. POST (Sept. 22, 2014),

http://www.washingtonpost.com/blogs/the-switch/wp/2014/09/22/google-were-

parting-with-the-climate-change-skeptics-at-alec/ (“Google had

initially supported ALEC over an ‘unrelated’ issue, Schmidt told Rehm. But

ALEC’s stand on climate change convinced Google to pull its support.”) (on file


ENVIRONMENT).

222. See Kamille Wolff Dean, Corporate Social Responsibility and

Conservation: The Preservation of Ecology and Culture to Sustain the Sea

Islands, 37 WM. & MARY ENVTL. L. & POL’Y REV. 375, 375 (2013) (“Reformed

corporate land use techniques that reflect prudent and sustainable master-

planned communities may result in manageable natural and cultural resource

preservation.”).

223. See MICHAEL PAWLUKIEWICZ, ET AL., URBAN LAND INSTITUTE,

TEN PRINCIPLES FOR COASTAL DEVELOPMENT, at v (2007), available at

www.uli.org/wp-content/uploads/ULI-Documents/Ten-Principles-for-Coastal-


on safety and sustainability.224 The tenth principle – “Commit to

Stewardship That Will Sustain Coastal Areas” – provides a

noteworthy insight on the role of corporations in coastal

development.225 Achieving sustainable development, the Urban

Land Institute explains, requires the corporation to become a

partner with the public sector and the community as a whole:

To effectively implement a program of sustainable

development, the community must share a vision of

its future. This vision involves a strategy for

implementation, which includes funding

mechanisms (public and private), potential

partners (and their responsibilities), and an agenda

or time frame for achieving the vision. One way to

implement the strategy to achieve the vision is to

build partnerships that maximize benefits for the

community and the environment. A partnership is

a process, not a product. Successful navigation

through the process results in benefits for all

parties.226

Development.pdf (“The principles are intended to guide decision makers,

citizens, public officials, planners, developers, and others in the creation of

places that build community, enrich the economy, and protect the

environment.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


224. See id. at 1 “The ten principles are (1) Enhance Value by

Protecting and Conserving Natural Systems; (2) Identify Natural Hazards and

Reduce Vulnerability; (3) Apply Comprehensive Assessments to the Region and

Site; (4) Lower Risk by Exceeding Standards for Siting and Construction; (5)

Adopt Successful Practices from Dynamic Coastal Conditions; (6) Use Market-

Based Incentives to Encourage Appropriate Development; (7) Address Social

and Economic Equity Concerns; (8) Balance the Public’s Right of Access and Use

with Private Property Rights; (9) Protect Fragile Water Resources on the Coast;

and (10) Commit to Stewardship That Will Sustain Coastal Areas.”).

225. See id. at 28 (“Sustainable development respects complexity by

taking into account the fact that ecological, economic, and social systems are

interconnected.”).

226. See id. at 29. (“Public sector entities can leverage and

maximize public assets, increase their control over the development process, and

create a vibrant built environment. Private sector entities are given greater

access to land and receive more support throughout the development process.”).


Unfortunately, the voluntary conduct of an honorable few

will not suffice. In the absence of a well-planned, coordinated,

and comprehensive public and private sector response to the real

threats of sea level rise, the entire community will remain at risk.

Ethical leadership must emerge. Everyone in the real estate

industry – especially in South Florida and Coastal Virginia –

needs to start insisting upon an open and honest dialogue about

the problems that lie ahead, holding each other to the highest

standards of ethics and corporate social responsibility. The status

quo – allowing some to engage in blissful or intentional

ignorance, or worse yet, in tortious misconduct and denials – is

unacceptable. Whether physical or metaphysical, one breach in

the levee means widespread suffering.

VI. Conclusion

Despite deep concerns about climate change and sea level

rise, communities have not abandoned the coastlines: nor should

they. Humanity is inextricably connected to the oceans. It is our

essential natural resource, a provider of air and rain, food and

medicine, energy and minerals, transportation, industry and

recreation. This article is not intended to rewrite our history, to

halt our economy, nor to declare defeat. Rather, it is a call for

caution and conscientious action.

The law has not provided a clear solution to sea level rise.

As a result, many real estate professionals engaged in activities

in South Florida and Coastal Virginia will deflect criticisms by

pointing to their adherence to the legal requirements. But legal

does not mean ethical or moral. Basic human rights are at stake,

as the Republic of the Marshall Islands warned in a petition to

the United Nations. An excerpt from that document, with modest

revisions to the geographical references, applies just as readily to

South Florida and Coastal Virginia:

[Coastal communities] face critical economic and

development challenges. They are highly

vulnerable to the physical impacts of sea level rise,

and these impacts can have a direct and

substantial negative effect upon basic human

rights. While important adaptation strategies are

being pursued, [Florida and Virginia] face financial


and capacity challenges regarding their

implementation. In addition, long-term adaptation

strategies are difficult to realize in the face of

potentially drastic sea level rise predictions.227

Sea level rise presents acute risks to coastal communities.

Eventually, the discussion must transition from abstract risks to

realistic policy. Communities must decide whether and when to

retreat or fortify, and those decisions could mean economic losses

or even financial ruin for local residents and property owners.

Recognizing this future, real estate professionals must live up to

their own mandatory and aspirational professional standards.

The ethics and professionalism of every project must be

considered, taking into consideration not only the short-term

profits on a project, but also the long-term existence of the

community around it. Ethical behavior by the real estate industry

means informing and protecting the people, partnering with the

public sector leaders, and ensuring a resilient community with a

sustainable future.

227. This paragraph echoes the phrasing in the Executive

Summary of the Republic of the Marshall Islands petition to the United

Nations, which read as follows: “The Republic of the Marshall Islands is a small

island developing state which consists of many low-lying atolls. The nation faces

critical economic and development challenges. The nation is highly vulnerable to

the physical impacts of climate change; these impacts have a direct and

substantial negative effect upon basic human rights. While important

adaptation strategies are being pursued, RMI faces financial and capacity

challenges regarding their implementation. In addition, long-term adaptation

strategies are difficult to realize in the face of potentially drastic sea level rise

predictions. As such, to preserve basic human rights, urgent international

action and individual accountability from all nations.”

451

Implementation of the EU Directive

on Environmental Impact Assessment

in the Czech Republic: How Long Can

the Wolf Be Tricked?

Veronika Tomoszkova*

Abstract

After the Velvet Revolution in 1989, the former

Czechoslovakia experienced the most enthusiastic wave of

environmental law drafting in its history.1 The Czech Act on

Environmental Impact Assessment (“EIA Act”) was among the

first new environmental statutes adopted already in 1992

with the intention to harmonize Czechoslovakian law with

European Union (“EU”) law and to prevent exploitation and

pollution of the environment in Czechoslovakia, which in the

early 1990s counted for one of the worst in the world.2 The

hardship of transition process that hit Czechoslovakia in 1992

caused a shift from enthusiastic pro-active environmental

movement towards more pragmatic approach that there must

be first the economic growth before focusing on environmental

protection.3 Unfortunately this approach still dominates the

Czech politics and adversely affects the Czech performance in

meeting the obligations arising from the EU membership,

* The author is an Assistant Professor of Environmental

Law at the Law School, Palacky University in Olomouc, Czech Republic.

This paper is the outcome of the author's Fulbright-Masaryk Scholarship

Visit at Washington and Lee University Law School in Lexington, VA. The

author would like to thank the Fulbright Commission for financial support

and Russell Miller, Maxim Tomoszek, Dan Strong, Cameron Tommey and

Jamison Shabanowitz for their comments and support in writing and

finishing this paper.

1. See Petr Jehlicka & Jan Kara, Ups and Downs of Czech

Environmental Awareness and policy: Identifying Trends and Influences, 4

REGIONAL POLITICS & POLICY 153 (Mar. 1994) (noting that the barriers to

environmentally friendly practices no longer faced barriers after the 1989

revolutionary changes).

2. See id. at 161–63 (indicating an institutional change in the

early 1990s including an investment in environmental causes).

3. See id. at 163 (describing how the split of Czechoslovakia

had negative implications on environmental efforts because the economic

reform was not positive for the economic structure).


namely the obligation to implement the EU environmental

law.4

After more than twenty years of applying EIA, the

Czech law is still not in compliance with the EU law.5 For

more than ten years Czech politicians have successfully

resisted the need for compliance with the EU requirements on

public participation and access to justice.6 This active

resistance is subject of relentless criticism from the

environmental non-governmental organizations (“NGOs”) and

lately also from the EU Commission.7 The Czech attitude

towards its EU membership duties can be characterized by

one Czech proverb that gained popularity during the Soviet

rule: to trick the regime, act cunningly so as the hungry wolf

fills up but the goat he wanted to eat remains unharmed.8 In

this respect the Czechs often act as though they have fulfilled

all their duties properly (so the hungry wolf filled up), but

nothing has in fact changed (the goat remained whole).

This article traces development of environmental

impact assessment law in the Czech Republic during its

preparation for the accession to the EU and then during EU

membership and uses an example of environmental impact

assessment law to show how the post-communist legacy lead

the Czech Republic from an ambition to be a leader in

4. See John F. Casalino, Shaping Environmental Law and

Policy of Central and Eastern Europe: The European Union’s Critical Role,

14 TEMP. ENVTL. L. & TECH. J. 227, 252–53 (1995) (emphasizing that

environmental reforms and political agendas changed with the

predominance of economies along with the reduction of resources from

external programs).

5. See László Szegedi, The Eastern Way of Europeanisation in

the Light of Environmental Policymaking? Implementation Concerns of the

Aarhus Convention-related EU Law in Central and Eastern Europe, 1 ELTE

L.J.117, 130 (2014) available at http://eltelawjournal.hu/wp-

content/uploads/2014/10/8_Laszlo_Szegedi.pdf (explaining that post-

accession compliance still plagues the Czech Republic as indicated by recent

CJEU case law and the Compliance Committee) (on file with the

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT).

6. See id. (stating that the CJEU held that “due to the

general restrictive practice based on the procedural legislation of the Czech

Republic—only a part of public concern had access to judicial review in

environmental matters.”).

7. See id. (describing that NGOs could only state

infringement of procedural rights as indicated in the European Commission

action against the Czech Republic).

8. See id. (explaining that the Czech Reupblic never made

climate change policy a high priority and only part of the public had access

to judicial review in environmental matters).

HOW LONG CAN THE WOLF BE TRICKED? 453

environmental policymaking to a position of a laggard.9 It

concludes that for the post-Communist countries, such as the

Czech Republic, the EU membership plays an important role

of a stabilizing factor and the only driving force for enhancing

environmental standards.10

Table of Contents

I. Introduction ....................................................................... 453

II. Czech Republic Before and After the Velvet Revolution

(1989) ..................................................................................... 458

A. During Communist Regime (1948 – 1989) ................... 459

B. High Hopes and Hard Realities (1990s) ....................... 462

C. Joining the EU and Beyond .......................................... 466

D. Communist Legacy and Post-Communist Culture .... 470

III. Environmental Impact Assessment in the EU ............... 472

A. Context .......................................................................... 474

B. EU Directive on Environmental Impact Assessment ... 477

IV. Czech EIA Law ................................................................ 486

A. EIA Act of 1992 ............................................................. 486

B. EIA Act of 2001 ............................................................. 491

B. Czech EIA Act Under Fire? (C-378/09, ACCC/2010/50 and

infringement no. 2013/2048) .............................................. 498

C. New Amendment of the Czech EIA Law: Major Problems

Finally Addressed? ............................................................ 503

VIII. Conclusion .................................................................... 506

I. Introduction

Behind every law there is more than just words of legal

rules, there is a story and a context in which that particular

law was adopted.11 Since 1992, Environmental Impact

9. See id. at 133–34 (asserting that the implementation of

EIA regulations were reduced to a restrictive use or interpretation, which

resulted in backsliding in certain areas).

10. See id. at 118 (explaining a theory that the adoption of EU-

related laws did not always correlate with the transposition of such laws

and that EIA can indicate whether post-Communist regimes are capable

and willing to fulfill post-accession requirements in their public-

participations and decision-making).

11. See Economic Aspects of Sustainable Development in Czech

Republic, SUSTAINABLE DEVELOPMENT (April 1997),

http://www.un.org/esa/agenda21/natlinfo/countr/czech/eco.htm (describing

the story of environmental legislation in the Czech Republic, which began in


Assessments have been recognized globally as one of the most

important tools for integrating environmental considerations

into decision-making.12 Moreover, the environmental impact

assessment creates opportunities for citizens, local

communities and non-governmental organizations

representing public to express their concerns when a project

with negative impacts on environment or human health is

proposed.13 By bringing all stakeholders together to express

their concerns, interests and wishes the environmental impact

assessment contributes to ‘good governance’ and by

integrating public participation requirements it serves as a

democracy indicator.14

The idea of environmental impact assessment comes

from the U.S. National Environmental Policy Act of 1969

(“NEPA”) which introduced the requirement that all federal

agencies prepare detailed environmental impact statement for

each major federal action significantly affecting the quality of

human environment.15 The U.S. environmental impact

assessment spread all over the world.16 NEPA inspired the

European Economic Community (“EEC,” now “EU”) to adopt

the 1990s, as provided by the Government of the Czech Republic to the 5th

session of the United Nations Commission on Sustainable Development) (on


ENVIRONMENT).

12. See United Nations Conference on Environment and

Development, June 3-14, 1992 The Rio Declaration on Environment and

Development, Principle 17, U.N. Doc. A/CONF.151/26 (“Environmental

impact assessment, as a national instrument, shall be undertaken for

proposed activities that are likely to have a significant adverse impact on

the environment and are subject to a decision of a competent national

authority.”).

13 See United Nations Conference on Environment and

Development, June 3-14, 1992 The Rio Declaration on Environment and

Development, Principle 10, U.N. Doc. A/CONF.151/26 (noting that all

concerned citizens should participate in handing environmental issues).

14. See Szegedi, supra note 5, at 117, 120 (stating that

environmental impact assessment can broaden the “worlds of compliance”

model and channel post-Communist administrative regimes into a decision-

making process of public participation).

15. See National Environmental Policy Act of 1969 §102(C), 42

U.S.C. § 4331 (2014) (“[A]ll agencies of the Federal Government shall . . .

include in every recommendation or report on proposals for legislation and

other major Federal actions significantly affecting the quality of the human

environment, a detailed statement by the responsible official . . . .”).

16. See Jennifer C. Li, Environmental Assessments in

Developing Countries: An Opportunity for Greater Environmental Security?

United States Agency of International Development, Working Paper No. 4, 1

(2008) (explaining that the Environmental Impact Assessment began in the

United States and was adopted by the rest of the world).


the Environmental Impact Assessment Directive17 (“EIA

Directive”) in 1985 although at that time the EEC had no

explicit authority to adopt environmental legislation.18 By

unanimous vote among the EEC Member States, the adoption

of the EIA Directive was justified by the fact that divergence

of environmental impact assessments in the Member States

may produce disparities in investment conditions and create

distortions of competition with negative effects on the

functioning of the common market.19 From the beginning, the

environmental impact assessment in the EU is more a

“flexible procedure designed to ensure consideration of

environmental effects by both the sponsor of a project and the

competent national authority” rather than “a notion of an

impact statement contained in a single document.”20

Adopting the EIA Directive was one of the smartest

and boldest moves the European Union has ever done in

improving environmental decision-making.21 In 2003, the EIA

Directive was significantly amended in regards to the public

participation, primarily due to the ratification of the UNECE

Convention on Access to Information, Public Participation in

Decision-making and Access to Justice in Environmental

Matters (“Aarhus Convention”) by the EU.22 The ratification of

17. See Council Directive 85/337 of 27 June 1985 on the

Assessment of the Effects of Certain Public and Private Projects on the

Environment, 5, 7, 40–48 (1985) (discussing the EU’s environmental

protection plants resulting in Environmental Impact Assessment).

18. See Howard L. Brown, Expanding the Effectiveness of the

European Union’s Environmental Impact Assessment Law, 20 B.C. INT’L &

COMP. L. REV. 313, 351–52 (1997) (noting that the 1957 Treaty of Rome

established the EEC and implicitly recognized EU authority over

environmental issues).

19. See Commission Proposal for a Council Directive

Concerning the Assessment of the Environmental Effects of Certain Public

and Private Projects, Point 10 at 5, COM(80) 313 final, (June 27, 1985).

20. Compare Louis L. Bono, The Implementation of the EC

Directive on Environmental Impact Assessments with the English Planning

System: A Refinement of the NEPA Process, 9 PACE ENVTL. L. REV., 155, 155–

86 (1991), with William Murray Tabb, Environmental Impact Assessment in

the European Community: Shaping International Norms, 73 TUL. L. REV.

923, 923–60 (1999) (comparing the environmental impact assessment in the

U.S. and EU).

21. See William Murray Tabb, Environmental Impact

Assessment in the European Community: Shaping International Norms, 73

TUL. L. REV. 923, 929 (1999) (stating that the EIA Directive was an

important step in international practices of environmental assessments).

22. See Szegedi, supra note 5, at 123–24 (asserting that the EU

law is mobilized as an international fight against global problems through

the Aarhus Convention).


the Aarhus Convention and implementation of its

requirements into the EIA Directive was a turning point in

ensuring environmental justice and “good governance” all over

the EU.23

The environmental impact assessment was

incorporated into the Czech law during the enthusiastic early

1990s with the aim to be ahead with the implementation of

the EU law before the EU accession.24 Since the split of

Czechoslovakia in 1993 till today, the Czech Parliament

merely implemented the EU law.25 Moreover, as this article

attempt to show, meeting the requirements of proper and

correct implementation of EU environmental law usually

takes the Czech Republic more time than mandated, and

when it comes to granting rights to the citizens it takes a lot of

effort from the EU Commission to force the Czech Republic to

comply with the EU standards.26

Although the initiative of the first Czech minister for

environment, Josef Vavroušek, led to the adoption of the

Aarhus Convention, which the Czech Republic signed in 1998,

the implementation of its standards, mandated later by the

EU via the 2003 amendment of the EIA Directive, is still

disputed and opposed by many influential groups.27 The Czech

politicians long neglected or even ignored the notices from the

23. See Jona Razzaque, Environmental Governance in Europe

and Asia: A Comparative Study of Institutional and Legislative

Frameworks, 1 (2013) (“[a]t the heart of any ‘good governance’ is the

engagement of public and inclusive decision-making process with

transparent and accountable policies to reconcile differences among various

interest holders . . . .”).

24. See Casalino, supra note 4, at 248 (describing that the

Czech Republic adopted legislation conforming with the European

Agreements).

25. See id. at 227 (noting the Central and European Eastern

Countries including the Czech Republic entered into European Agreements

to become EU members and must develop environmental legislation based

on EU law).

26. See id. at 249–54 (describing the difficult problems

associated countries encounter in implementing and enforcing

environmental protection based on EU policy such as inadequate policy and

regulatory frameworks, poor monitoring systems, human resource and

institutional weakness, changing political agendas and insufficient

awareness of environmental issues, and scarce financial resources).

27. See Council Directive 2003/35, 2003 O.J. (L 156) (EC)

(seeking to align the provisions on public participation with the Aarhus

Convention on public participation in decision-making and access to justice

in environmental matters); see also Jennifer C. Li, supra note 16, at 4

(stating that EIA’s scope quality, public participation, and actions are

debated worldwide).


EU Commission that the Czech EIA legislation was not in

compliance with the EU law till the European Court of Justice

in 2010 made it clear in its judgment.28 The shortcomings of

the Czech law were also reiterated by the Aarhus Convention

Compliance Committee in 2012.29 Finally in 2013, the

Commission initiated the infringement procedure in which the

Czech Republic faces high financial penalties along with a

threat to lose access to substantial amount of the EU funds for

the ongoing and future major projects such as traffic

infrastructure.30 Under such circumstances the Czech

government proposed a bill that would mend all the

deficiencies.31 But will it finally address them for the sake of

all stakeholders?32

This article analyzes experience of the Czech Republic

as a post-communist EU Member State with implementation

of the EU environmental law and argues that in case of the

Czech Republic the main reasons for struggling with the duty

to implement the EIA Directive result from its post-

communist culture that creates: (1) a disrespect for law and

overly critical attitude towards the European Union; (2)

diminishing value of civil society and treating the active

citizens as a irreconcilable opposition, not a partner; and (3) a

lack of constructive communication among politicians,

administrative authorities, and all stakeholders (citizens,

28. See C-378/09, Comm’n v. Czech Republic, 2010 E.C.R. I-

00078 (holding against the Czech Republic for failing to transpose Article

10a(1-3) of the Council Directive).

29. See Meeting of the Parties to the Convention on Access to

Information, Public Participation in Decision-making and Access to Justice

in Environmental Matters, United Nations Economic and Social Council,

ECE/MP.PP/C.1/2012/11, at 2 (June 29, 2012) available at

http://www.unece.org/fileadmin/DAM/env/pp/compliance/C2010-

50/Findings/ece_mp.pp_c.1_2012_11_eng.pdf (stating that the Czech courts

held that provisions of the Aarhus Convention cannot be directly applicable)

(on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND

THE ENVIRONMENT).

30. See European Parliament, Infringement No. 2013/2048,

Comm’n v. Czech Republic, 2013 available at

http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=P-2014-

006493&language=EN (stating that the Commission opened the

infringement, and that the Court of Justice will carry out the procedure as

soon as possible to identify the impact on the environment).

31. See Zákon č. 39/2015 Sb. (Czech) (amending Czech

licensing proceedings and involving more public participation and changing

Czech Environmental Impact Statement laws to comply with EU EIA law).

32. See Szegedi, supra note 5, at 117 (outlining the

“Europeanisation” of post-communist countries by assessing the impact of

EU requirements specifically the EIA and the Aarhus Convention).


businesses, etc.).33 The EIA is publicly presented as a mere

“hurdle” for the execution of various projects that needs to be

overcome.34 As a result of these practices, the implementation

of the EIA Directive especially in regards to the public

participation seems to be a formal sham.35 On a deeper level,

it mirrors that the Czech political culture is still immature

and sometimes far from the ideals of democracy.36

II. Czech Republic Before and After the Velvet Revolution

(1989)

Czech Republic is a medium-sized country37 located in

Central Europe. Prior to 1918 the Czech lands38 were part of

the Austrian-Hungarian Empire, and they represented the

most economically developed part of the Empire.39 After the

collapse of the Austrian-Hungarian Empire in 1918, the

independent Czechoslovakia came into existence.40 In the

33. See Casalino, supra note 4, at 247–54 (discussing the

success and obstacles of the EU in directing the environmental laws of

Associate Member States).

34. See id. at 253–54 (explaining that the EU funds certain

projects while the country is responsible for environmental compliance).

35. See id. at 245 (describing the problem with the EU’s role in

shaping environmental policy).

36. See id. at 251 (outlining the issues with Eastern European

regulatory and enforcement frameworks).

37. See EUROPEAN ENVIRONMENT AGENCY, COUNTRY FACTSHEET

ON SUSTAINABLE CONSUMPTION AND PRODUCTION POLICIES: THE CZECH

REPUBLIC 4 (2010) (noting that the Czech Republic has slightly over 10

million inhabitants and area of approximately 78000 square kilometers) (on


ENVIRONMENT).

38. See Jaroslav Rousar, The Czech Republic and Its

Professional Armed Forces, MINISTRY OF THE CZECH REPUBLIC 7 (2006)

available at http://www.army.cz/images/id_7001_8000/7420/crapa-en.pdf

(stating that the Kingdom of Bohemia, Margraviate of Moravia and Duchy

of Silesia were three “Czech” lands of the Austrian-Hungarian Empire) (on


ENVIRONMENT).

39. See Petr Jehlicka & Jan Kara, supra note 1, at 154

(emphasizing that the developed parts of the Austro-Hungarian empire

became what is the old industrial region).

40. See Katarina Mathernova, Czecho? Slovakia:

Constitutional Disappointments, 7 AM. U. J. INT’L. L. &POL’Y. 471, 473–74

(1992) (stating that the first Czechoslovakian Republic came into being); see

also Rousar, supra note 38, at 26 (conveying that the representatives of the

Czech lands, namely Tomas Masaryk, had to cooperate with representatives

of Slovak lands, to be able to make a case for their independence in a

common state).


inter-war period, Czechoslovakia was able to maintain

democracy and was one of the leading industrial countries in

Europe.41 After World War II, Czechoslovakia fell into the

Soviet sphere of influence and the communist party seized

political power for forty years.42 This chapter provides

historical, political, and cultural context for the Czech

Republic’s current performance in EU membership duties,

which is deeply influenced by the legacy of the forty years of

totalitarian regime.43

A. During Communist Regime (1948 – 1989)

Since 1948 Czechoslovakia experienced an

authoritarian regime with a centrally planned and controlled

economy oriented on rapid expansion of heavy industry

basically at any expense.44 The heavy industry was fuelled by

low-quality brown coal and lignite.45 Unlike in other

communist countries (e.g. Poland),46 private property in

Czechoslovakia was confiscated, officially banned by the 1960

Constitution,47 and practically reduced only to housing and

personal property.48 All the farmland was declared to be part

of collective property managed by the united agricultural

cooperatives (jednotná zemědělská družstva).49 The state

41. See Petr Jehlicka & Jan Kara, supra note 1 at 154; see also

Andrzej K, Kozminski, Restitution of Private Property: Re-privatization in

Central and Eastern Europe. 30 COMMUNIST AND POST-COMMUNIST STUDIES

95, 99 (1997) (noting that Czechoslovakia remained capitalistic and

democratic).

42. See Kozminski, supra note 38, at 99 (describing how the

communist coup in Czechoslovakia happened in 1948).

43. See Petr Jehlicka & Jan Kara, supra note 1, at 153 (“The

geopolitical settings (including the influence of the EU) with their important

environmental dimension seemed to serve as a stabilizing factor in this

respect; that have no allowed the ‘pendulum’ to swing back fully.”).

44. See id. at 155 (stating that beginning in 1948 the country

experienced an authoritarian regime).

45. See Petr Pavlínek, Czech Republic, in Frank Carter &

David Turnock, ENVIRONMENTAL PROBLEMS IN EAST-CENTRAL EUROPE 119

(2nd ed, 2001) (describing how the heavy industry was fueled).

46. See Kozminski, supra note 38, at 96 (1997).(describing the

anti-private ownership campaigns in other communist countries).

47. See Ústavní zákon ze dne 11. července 1960 č. 100/1960

Sb., Ústava Československé socialistické republiky [Constitution of the

Czechoslovak Socialist Republic].

48. See Kozminski, supra note 38, at 96–97 (1997) (describing

the waves of expropriations and confiscations).

49. See id. at 96 (noting that farmland was often owned

collectively).


owned all natural resources (forests, water, and mineral

resources), means of industrial production (factories), mass

transportation and post offices, banks and insurance

companies, radio, television, film industry, medical care

facilities, schools, and scientific institutes.50 Private

undertaking was not allowed.51 The regime systematically

worked on elimination of elites and intelligence and

intentionally destroyed social hierarchy.52

The socialist state ruled by the communist party built a

social security net for all of its citizens. Everybody had a job53

and wages were not high, but people could make a living.

People “knew they would be hospitalized if needed and would

receive cheap or free medication. Their children could go to

school and even to university for free, and at age of 55 – 60, or

earlier if necessary, they could retire with a modest but

guaranteed pension.”54

With the exception of Nature Protection Act of

1955/1956,55 the legislation that would deal with

environmental protection was not on the agenda.56 During

1960s Czechoslovakia faced stagnation of economic growth, so

the reforms were urged. Then during the late 1960s and early

1970s the first signs of serious environment degradation

began to show up.57 Attention that the environmental

deterioration was catching among the citizens alarmed the

regime leaders because “inability to redress environmental

problems undermined the legitimizing claim of Communist

rule to be the guarantor of human well-being.”58

50. See Constitution of the Czechoslovak Socialist Republic art.

VIII part 2.

51. See Kozminski, supra note 38, at 99 (describing the

legislation’s attack on privatization).

52. See id. at 99 (explaining the way the system got rid of

social hierarchy).

53. See Constitution of the Czechoslovak Socialist Republic art.

VIII part 2. (stating that everybody had to work under the threat of criminal

punishment for social parasitism (příživnictví)).

54. Ivan T. Berend, Social Shock in Transforming Central and

Eastern Europe. Communist and Post-Communist Studies 270, 275 (2007).

55. See Jehlicka, supra note 1, at 156.

56. See id.

57. See id. at 155 (noting that up to 1960 there was economic

development without addressing environmental problems and in the 1960s

the first signals of degradation appeared).

58. Susan Baker & Petr Jehlička, Dilemmas of Transition. The

Environment, Democracy and Economic Reform in East Central Europe 9

(1998).


So the regime started to adopt environmental

legislation that would address the pressing environmental

problems to legislate them away because the environmental

pollution did not fit the socialist ideology.59 Along with the

relatively liberal mood of the 1960s, the Public Health Act of

1966,60 Act on Protection of Farmland61 and the Air Purity Act

of 196762 were adopted. Despite the events of 1968 (Warsaw

pact armies’ invasion of Czechoslovakia) that radically

suppressed liberalization of Czechoslovakia, other

environmental laws were passed, namely Water Act of 197363

and Forestry Act of 1977.64

But no matter how strict the environmental laws

during the communist regime were, they were basically

ineffective for two reasons.65 Every strict rule was followed by

exceptions rendering it virtually ineffective and there was a

lack of enforcement (or will to enforce). 66 Obviously when all

environmental pollution came from the state owned factories

(because there were no other than state owned) and state

activities the environmental laws were not only unenforced,

they were systematically ignored.67 As Pavlínek aptly

describes, the communist government “had not been efficient

in enforcing its own strict pollution limits. The state socialist

planners had always considered production to be primary and

feared that too much environmental consideration would

endanger the plan fulfillment.”68

The environmental crisis culminated in the early 1980s

and the regime could no longer keep the call unanswered,

primarily because the communists realized that

environmental disaster could threaten the regime’s survival.69

59. See Ruth Greenspan Bell, Environmental Law Drafting in

Central and Eastern Europe, 22 E.L.R. 10597 (1992) available at

http://elr.info/sites/default/files/articles/22.10597.htm.

60. See Zákon č. 20/1966 Sb., o péči o zdraví lidu.

61. See Zákon č. 53/1966 Sb., o ochraně zemědělského půdního

fondu.

62. See Zákon č. 35/1967 Sb., o opatřeních proti znečišťování

ovzduší.

63. See Zákon č. 138/1973 Sb., o vodách.

64. See Zákon č. 61/1977 Sb., o lesích.

65. See Jehlicka,, supra note 1, at 156–57.

66. See id. at 156.

67. See id. at 158 (explaining that the activities were not

completely illegal and people could ignore them).

68. Frank Carter & David Turnock, Environmental Problems

in East-Central Europe 119 (2nd ed. 2001).

69. See Interview with Petr Pavlínek, The Communist and the

Environment: Was it All Bad?, RADIO PRAHA (Aug. 8, 2003),


Despite all the efforts to limit pollution, by 1989

Czechoslovakia had the worst environmental conditions in

Europe and one of the most devastated environments

globally.70

B. High Hopes and Hard Realities (1990s)

The so-called Velvet Revolution71 that took place in

November 1989 started the process of transformation and

strong yearning for the West.72 The accession to the European

Union was perceived as the “only chance to modernize and

enter the system of Western values” and “a national priority

and strategic goal”.73

The change of political regime gave rise to many hopes

and expectations.74 Ivan T. Berend accurately describes that

“[p]eople and politicians felt that their country deserved

immediate acceptance by the EU. They felt that financial aid

and help to reach Western living standard should be

forthcoming. They nurtured idealistic views about the West.

They admired attractive consumerism, rich supply and high

living standard.”75 People hoped that the Western economic

success can be instantly replanted in Czechoslovakia and

expected that new democracy will bring greater living

http://www.radio.cz/en/section/curraffrs/the-communists-and-the-

environment-was-it-all-bad (“[T]he regime actually realized in the early

1980s the danger that the environmental disaster could pose for its long-

term survival. So actually in about the mid-1980s the regime decided to

spend a lot of money to improve the environment . . . And I would also argue

that some of the successes in the environmental clean-up that we saw in the

early 1990s were based on the policies that were initiated by the communist

government.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


70. See FRANK CARTER & DAVID TURNOCK, ENVIRONMENTAL

PROBLEMS IN EAST-CENTRAL EUROPE 119 (2d ed. 2001).

71. See TONY JUDT, POSTWAR: A HISTORY OF EUROPE SINCE

1945, at 620 (2006) (describing the Velvet Revolution of 1989 was a non-

violent transition of power from one-party communist regime to democracy

that took place in the former Czechoslovakia in November 1989).

72. See id.

73. Bogdan Góralczyk, The EU Accession and Euro-Atlantic

Integration of Central and Eastern European Countries 2 Y.B. POLISH EUR.

STUD., 57, 57–58 (1998).

74. See Ivan T. Berend, Social Shock in Transforming Central

and Eastern Europe, 40 COMMUNIST AND POST-COMMUNIST STUDIES 271

(2007) (explaining the rise of exaggerated expectations of post-communism

“transformation fatigue”).

75. Id.


standard for all.76 In terms of environmental quality, the

change of regime was perceived as an opportunity to “hit the

ground running,” i.e. clean up the environment building on

experience from the Western democracies and avoiding costly

mistakes to find a new, better path toward sustainable

development.77

From 1990 till 1992, many important environmental

statutes were passed on both federal and state level. The main

reason why the environmental drafting was so plentiful in the

early 1990s was: (1) the urging need to deal with the

communist past “once and for all” and (2) the active political

role of environmentalists.78 The communist regime did not

persecute the environmentalists as harsh as e.g. human rights

activists so they were ready to get involved in politics when

the Velvet Revolution came.79

However the general concern for the environment and

the active political participation of environmentalists did not

last long and was soon replaced by more pragmatic

approach.80 The whole society was shattered by hard

consequences of regime change, and the initial euphoria was

replaced by huge disappointment, partially because the

expectations people had were exaggerated.81 The transition to

constitutional democracy, market economy, and development

of functional democratic government and civil society were not

going to happen “overnight.”82

76. See id. (noting that people disbelieved negative propaganda

about capitalism and wanted the Western-living standard).

77. See Margaret Bowman & David Hunter, Environmental

Reforms in Post-Communist Central Europe: From High Hopes to Hard

Reality, 13 MICH. J. INT’L L. 921, 924 (1991-1992) (urging new lawmakers to

develop systems that would make laws work to invest in democracies and

the environment).

78. See Petr Jehlicka & Jan Kara, supra note 1, at 159

(indicating that the public was more aware of environmental issues after

1989 and the Green party asserted itself concerned with the devastation of

the Bohemia area).

79. See id. at 158 (stating that people wanted to be involved

because of personal passion against the degradation of the environment).

80. See id. at 160 (noting that he pragmatic period of

environmental policy began after the 1992 elections along with the economic

reforms).

81. See id. at 159 (detailing the change from a loose movement

to a central movement and a loss of interest after advocates were not

effective.).

82. See id. at 161–63 (summarizing the changes in the

institution and legislation while environmental concern changed).


With the vision to join the EU as soon as possible, the

law was changing too rapidly and legal system was not

ready.83 As Zdeněk Kühn points out, “[t]he mixture of often

incompetent drafting of post-communist law, the immaturity

of post-communist legal systems and judges adhering to

textual positivism, has produced a deepening of the post-

communist legal crisis.”84 In other words, Czechoslovakia was

just like other post-communist countries in the Central and

Eastern Europe confronted with hard reality of restructuring

the whole economic, political, and social system.85 With this

overwhelming task “a decrease in popular concern for the

environment and increasing political pressure to delay any

new environmental protection measures until the economy

improves. For many environmentalists in the region, the high

hopes for developing an environmentally sustainable economic

system have been replaced with the desire simply to put some

environmental controls in place and worry about improving

the system later.”86

The elections to the Czech National Council in June

1992 clearly demonstrated a shift from politics based on high

values to a more pragmatic approach which assumes

environmental quality depends on economic prosperity and

the economy had to be fixed first.87 It is sad that even 20 years

later the race for economic prosperity is still dominating

Czech politics even though recent economic data shows that

the Czech Republic is economically indistinguishable from

83. See Joann Carmin & Stacy D. Vandeveer, Enlarging EU

Environments: Central and Eastern Europe from Transition to Accession, 13

ENVIRONMENTAL POLITICS 3, 11 (2004) (emphasizing that states and

structures did not have the necessary resources to make the required

changes as highlighted by environmental issues).

84. Zdeněk Kühn, The Application of European Law in the New

Member States: Several (Early) Predictions, 6 GERMAN L. J. 563, 564 (2005);

see also Mark N. Salvo, Constitutional Law and Sustainable Development in

Central Europe: Are We There Yet? 5 S. C. ENVTL L. J. 141 (1996-1997).

85. See Mark N. Salvo, Constitutional Law and Sustainable

Development in Central Europe: Are We There Yet? 5 S. C. ENVTL L. J. 141,

149 (1996-1997) (asserting that the entire region formerly Eastern Europe is

struggling with the legal framework for sustainability).

86. Bowman and Hunter, supra note 77, at 924.

87. See Adam Fagin, Environmental protests in the Czech

Republic: three stages of post-communist development [draft], UNIVERSITY OF

PORTSMOUTH (1999) available at

http://ecpr.eu/Filestore/PaperProposal/16429f9b-b049-450f-89ca-

4967b342ea04.pdf (discussing the history of environmental protest in the

Czech Republic after communism) (on file with the WASHINGTON AND LEE



other countries at comparable stages of economic

development.88

In the 1990s, Czech society, used to egalitarian social

security net from the times of the Communist regime,

struggled with unemployment, lower income, fall of the GDP

level, rise of consumer prices, and decline of agricultural

production.89 Privatization of the state enterprises in

particular led to increased unemployment rates and resulted

in strengthened power of the “old elites” often referred to as

“dinosaurs” or nomenklatura. 90 A new rich class emerged,

which was painful for those who struggled with poverty

because they expected that the events of 1989 would bring

immediate improvement of living standard for everybody.91

The economic hardship that hit the majority of people resulted

in deep disappointment, public skepticism about the reform

process, and a craving for the security of the previous

regime.92 This political environment created the opportunity

for the rise of Communist successor parties who gained

support by blaming capitalism and the reforms for all existing

problems.

88. See Andrei Shleifner & Daniel Treisman, Normal

Countries: The East 25 Years After Communism, (2014) available at

http://www.foreignaffairs.com/articles/142200/andrei-shleifer-and-daniel-

treisman/normal-countries (looking at the development of Eastern European

countries after the fall of communism) (on file with the WASHINGTON AND


89. See Vaclav Klaus, The Economic Transformation of the

Czech Republic: Challenges Faced and Lessons Learned, CATO INST., (2006)

available at http://www.cato.org/publications/economic-development-

bulletin/economic-transformation-czech-republic-challenges-faced-lessons-

learned (summarizing the history of the Czechs after the fall of communism)


THE ENVIRONMENT).

90. See Montree Patthamadilok, A Decade of Conflicts in Czech

Economic Transformation, J. OF ECON. ISSUES 315, 315 (1999) (explaining the

economic issues of post-communist Czechoslovakia) (on file with the


ENVIRONMENT).

91. See Susan Baker & Petr Jehlicka, Dilemmas of Transition:

The Environment, Democracy and Economic Reform in East Central Europe

5 (1998) (discussing the expectations of the working class during the

political reform of the 1990s).

92. Id.


C. Joining the EU and Beyond

Accession to the European Union for post-communist

countries like the Czech Republic was not only important from

an economic perspective of joining the single European market

but also symbolic in terms of separating from the communist

past.93

Czechoslovakia started to negotiate an association

agreement with European Communities shortly after the 1989

political regime change.94 The first association agreement95

between the Czechoslovakian Federal Republic, the European

Communities, and EC Member States was signed on

December 16, 1991 and was approved by the EC Council in

February 1992.96 However, it was never ratified by

Czechoslovakia because of the division of the country into two

independent states in 1993.97 One of the successor states, the

Czech Republic, signed the association agreement (the so-

called Europe Agreement)98 in October 1993 and it entered

into force on February 1, 1995.99

The European Agreement between the EC and the

Czech Republic laid down in Article 69 that “the major

precondition for the Czech Republic’s economic integration

into the Community is the approximation of the Czech

Republic’s existing and future legislation to that of the

Community. The Czech Republic shall endeavor to ensure that

93. See John Phillips & Jerry Wheat, The Hidden Business

Costs of European Union Enlargement: The Case of the Czech Republic, 3

INT’L BUS. & ECON. RESEARCH J. 27, 30 (2004) (explaining the costs and

benefits of the Czech Republic joining the European Union).

94. See id. at 27 (noting that the European Union began

negotiations for many treaties with former Communist countries around

1989).

95. See Tom Lansford, Political Handbook of the World 2014

376 (2014) (giving an overview of the political history of the Czech Republic

and other countries).

96. See id. (noting the status of the first attempted association

agreement).

97. See id. (mentioning the split of the Czechoslovak Federal

Republic into two distinct countries).

98. See Rojer J. Goebel, Joining the European Union: The

Accession Procedure for the Central European and Mediterranean States, 1

Int'l L. Rev. 15, 22 (2004) (noting that Europe Agreements were a standard

form for the pre-accession arrangements with candidates for EC

membership and that such standard forms were devised by the EC Council

in 1991).

99. See Lansford, supra note 95 (summarizing the complicated

process of the Czech Republic joining the European Union).


its legislation will be gradually made compatible with that of

the Community.”100 Article 70 of the European Agreement

specified in which particular areas the approximation of laws

shall take place and included, among other EC law in the area

of the environment, protection of human health and life,

animals and plants, and consumer protection.101

The European Agreement established the official

Association of the Czech Republic with the European

Community.102 The associated countries were required to

satisfy certain conditions for the accession to the EC.103 These

conditions are known as “Copenhagen Criteria” and are

commonly categorized into three groups: (1) political (stability

of institutions guaranteeing democracy, rule of law, human

rights and respect for human rights, and protection of

minorities); (2) economic (functioning market economy and

capacity to cope with competitive pressure and market forces

with the European Union); and (3) relating to the policies and

infrastructure (the ability to take on the obligations of

membership including adherence to the aims of political,

economic and monetary union).104

The associated countries had to satisfy the political

criterion before the opening of the accession negotiations.105

The accession negotiations with the Czech Republic along with

the other eight associated countries were opened in early

1997.106 The final two criteria were to be satisfied by the end

of the negotiations.107 Regarding the economic criterion, the

Commission in its report “Agenda 2000 – For a Stronger and

Wider Union”108 published in 1997, concluded that “[t]he

applicant countries have made considerable progress in the

100. Europe Agreement Between the European Communitites

and the Czech Republic art. 69, Oct. 4, 1993, 34 I.L.M. 3.

101. Id. at art. 70.

102. Id.



INT’L L. REV. 15, 22 (2004) (discussing the requirement procedures for

accession).

104. See id. at 24, 29 (discussing the various conditions that

needed to be met during negotiations to gain admittance into the EC).

105. See id. (noting the requirements of admittance to the EC).

106. See id. (mentioning the timing of the negotiations between

the Czech Republic and the EC).

107. See id. (going over the final two criteria and when they had

to be met).

108. European Commission, AGENDA 2000 For a Stronger and

Wider Union, BULLETIN OF THE EUROPEAN UNION, Supp. 5/97 (2000).


transition to a market economy, including with privatization

and liberalization, although their economic situations vary

considerably. For all of them the break-up of the CMEA, the

former Communist trading bloc, and the beginning of market

reforms implied a major initial shock.”109 Due to economic

mismanagement and reckless fulfillment of the plan dictated

from Moscow, the average Czech GDP per inhabitant in 1997

was still only one third of the EU average.110 The Agenda 2000

concluded that the Czech Republic did not satisfy either of the

two economic criteria.111 Under such circumstances one can

imagine how enormous an effort had to be placed in meeting

the economic criteria for the EU accession.

The third criterion required the candidate countries to

have adequate administrative and judicial infrastructure for

the aims of political, economic and monetary union and the

ability to adopt the acquis communautaire.112 For the

purposes of negotiations, the acquis communautaire was

divided into 31 chapters, which the candidate countries had to

“close” before the EU accession.113

The negotiations concerning the accession of the Czech

Republic to the EU were opened on 31 March 1998 and were

commenced by the screening of the Czech laws regarding its

compatibility with the EU law and evaluation of whether the

Czech Republic would be able to undertake all the EU

membership obligations.114 Based on the results of the

screening and evaluation, the actual talks on the terms of

future Czech membership were started.115 The talks were

concluded at the Copenhagen summit of the Council of Europe

held on 13 December 2002.116 The Treaty of Accession of the

Czech Republic to the European Union was signed on April

109. Id.

110. See id. (explaining why the Czech Republic failed the

economic portion of the negotiation requirements).

111. See id. at 42 (concluding that the Czech Republic failed to

meet all of the accession criteria).



Int'l L. Rev. 15, 34 (2004) (explaining the concept of acquis communautaire).

113. See id. (mentioning the simplification of the process).

114. See id. (describing the process of the negotiations by the

Czech Republic).

115. See id. (outlining the results and process of the overall

negotiation).

116. See id. (discussing the conclusion of the negotiation talks

between the Czech Republic and the EC).


16, 2003 and the Czech Republic officially joined the EU on

May 1, 2004.117

The accession to the EU required that the candidate

countries adopt the whole acquis communautaire comprising

several thousand legislative measures (including over 200

environmental directives and regulations) in many different

fields which demanded many costly changes (institutional,

legal, economic etc.).118 The financial aid became an inevitable

step if the Central and Eastern European Countries were to

join the EU.119 They received financial and technical help from

three pre-accession funds: the PHARE Programme, SAPARD

and ISPA.120 According to official documents, the Czech

Republic received € 212.2 million.121

After the accession to the EU, the new Member States

have been supported in the implementation of the EU

environmental policy and law from the EU funds (e.g. LIFE,

European Regional Development Fund, European Social Fund

or Cohesion Fund).122 The Member States co-operate with the

Commission on allocation of some of these funds to concrete

environmental projects in terms that the funds are first

transferred to the Member States whose authorities

administer project selection; other funds are allocated directly

117. See id. (noting the timetable of the treaty negotiations).

118. See Patrick J. Kapios, Environmental Enlargement in the

European Union: Approximation of the Acquis Communautaire and the

Challenges That It Presents for the Application Countries, 2 SUSTAINABLE

DEV. & POLICY 2, 8 (2002) (explaining the concept of acquis communautaire).

119. See id. (discussing the need for financial aid in order to join

the EC).

120. See id. (explaining that the PHARE Programme was a pre-

accession instrument financed by the European Communities to assist the

candidate countries of Central and Eastern Europe to prepare for joining

the EU. It was created originally in 1989 as “Poland and Hungary:

Assistance for Reconstructing their Economies”, but later it expanded from

Poland to Hungary to include ten countries, eight of them joined the EU in

2004 and the remaining two (Bulgaria and Romania) in 2007).

121. See Comm’n of the European Communities, Report from the

Commission: General Report on Pre-accession assistance (PHARE – ISPA –

SAPARD) in 2002, 844 COM 24 (2003) available at http://eur-

lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:52003DC0844&from=en (noting the

amount of financial aid received by the Czech Republic) (on file with the


ENVIRONMENT).

122. See Jiří Zicha & Oldřich Hájek, Právní souvislosti

legislativy Evropské unie ve vztahu k Operačnímu programu Životní

prostředí v České republice, 35 ČESKÉ PRÁVO ŽIVOTNÍHO PROSTŘEDÍ 39 (2014)

(explaining the EU Environmental policy funding).


by the Commission.123 As of 2013, the Czech Republic has

received 57 billion CZK (approx. € 2.3 billion) for

environmental projects.124 However, the effect of spending

these funds was lowered by the fact that the Czech Republic

was not able to spend all the money allocated to it by the

Commission and this trend unfortunately continues.125

D. Communist Legacy and Post-Communist Culture

The famous Polish historian and former dissident

Adam Michnik once stated that “the worst thing about

communism is what comes after.”126 Even though the

Communist regime in the Czech Republic lasted “only” forty

years, it was successful in destroying the civil society and

deeply affecting peoples’ beliefs.127

The paternalistic socialist state that cherished

egalitarian society with low but guaranteed living standard

and well-functioning social security net “did not require much

individual initiative.”128 Two generations of people who raised

their children during the Communist regime were taught that

if they stayed in line, everything would be just fine.129 And the

Czechs did, because throughout the history they lacked

courage to actively resist the oppression and fight for their

independence and freedom.130 On a more personal level,

people who grew up during Communism lacked skills

necessary for successful performance in competitive market

123. See id. (discussing the terms of the environmental funding

practices).

124. See id. (noting the amount of funds given to the Czech

Republic).

125. See id. (explaining that due to problems with

administering the EU funds in 2013, the Czech Republic lost 6 billion CZK

(approx. € 240 million) allocated for environmental projects). In 2014 it was

another 13 billion CZK (approx. € 520 million) and for 2015 it is estimated

that the Czech Republic will not be able to spent another 5 billion CZK

allocated for environmental projects. Id.

126. TONY JUDT, POSTWAR: A HISTORY OF EUROPE SINCE 1945, at

665 (2006).

127. See Richard Janda, Something Wicked That Way Went:

Law and the Habit of Communism, 41 MCGILL L. J. 253 (1996) (explaining

the true impact of communism even on countries with limited exposure).

128. Ivan T. Berend, supra note 75, at 275.

129. See id. (discussing the effects of communism on peoples‘

behavior and understanding of the world).

130. See id. (mentioning the cultural history of the Czech

Republic and its impact on adapting to communism).


economies.131 The generation who were raised during

Communism also lost the sense for individual land ownership,

especially for farmland.132 After the Communists confiscated

all the farmland and put it into collective management of

united agricultural co-ops, the people whose families had been

farming for generations found jobs in factories and state-

owned enterprises and gradually gave up on returning to long

family living habits.133 When the land was returned to its

owners after 1989, most of them either sold the land or leased

it.134

The Czech experience with the Communist regime and

subsequent hard times of transformation created a culture of

complaint and constant discontent.135 Only a small portion of

society got rich.136 The unscrupulous public appearance and

activities of former members of nomenklatura, who after 1989

became active politicians or managers of privatized

enterprises, kept irritating the ordinary citizens and creating

begrudging feelings.137 General distrust in politics, law, and

government keeps public participation in political life low and

civil society weak.138 Moreover, the politicians on all levels

(national, regional and local) keep the Communist habit of

treating the active citizens as irreconcilable opposition and

not as a partner.139 Just like in the Communist times “the

citizens better stay in the line and let the politicians and

authorities rule.”140

The post-communist culture in the Czech Republic also

disregards the foreign authorities who are treated as the wolf

in proverb “feed the wolf so as that the goat stays unharmed”

131. See id. (explaining the lasting effects of communism on a

post-communist society).

132. See id. (noting the effect of communism on the concept of

property and ownership).

133. See id. (summarizing the history of farmland ownership in

the Czech Republic and the effect of communism).

134. See id. (mentioning the return of property after the end of

communism).

135. See id. (discussing the problems faced by the people who

were used to a communist society).

136. See id. (discussing the ramifications of the fall of

communism in the Czech Republic and other countries).

137. See id. (mentioning the continuing actions of the elite).

138. See id. (noting the general unrest in the population after

the fall of communism).

139. See id. (explaining the ill will generated by the actions of

the political elite).

140. See id. (noting the continued communist policies about

obeying those in power).


or in other words the Czechs participate in the European

project only with a minimal effort.141 If they do what they are

told (by the EU), they always try to find a way around to do it

their way.142 The problems with proper implementation of the

EU Directive on environmental impact assessment (“EIA

Directive”) described in the chapter IV clearly show the Czech

attitude towards the EU – “we like the EU money, and only if

these are at stake we do what we are supposed to.”

III. Environmental Impact Assessment in the EU

An environmental impact assessment is one of the most

important tools for integrating environmental considerations

into decision-making. It was first introduced in the U.S.

National Environmental Policy Act of 1969 (“NEPA”), and it

successfully spread around the world (both horizontally to

other states and vertically to international level).143

The European Community (now EU) adopted the

Environmental Impact Assessment Directive in 1985 although

at that time it did not have any explicit authority to adopt

environmental legislation.144 There were concerns that

diverging regimes of impact assessment that the EEC

Member States started to introduce during 1970s and 1980s

would distort the functioning of the internal market, so the

EEC decided to step in and set the minimum requirements.145

The scope and extent of the original EIA Directive of

1985 expanded over time to set common standards with

regard to types of projects subject to the impact assessment,

duties of developers, content of the assessment, and the

participation of the competent authorities and the public.146

After the 2014 amendment by the Directive 2014/52/EU, the

141. See id. (describing the complex avoidance of obeisance to an

authority higher than the national level).

142. See id. (discussing the efforts of the Czech Republic to

maintain supreme sovereignty).

143. See Jonathan B. Wiener, Something Borrowed for

Something Blue: Legal Transplants and the Evolution of Global

Environmental Law, 27 ECOLOGY L.Q. 1295, 1306 (2001) (outlining NEPA’s

emergence and expansion).

144. See id. (noting the time of the adoption of EIAs).

145. See id. (explaining various concerns about EIA adoption).

146. See European Parliament, European Economic and Social

Committee and the Committee of the Regions on the application and

effectiveness of the EIA Directive 2 COM (2009) 378 (discussing Directive

85/337/EEC, as amended by Directives 97/11/EC and 2003/35/EC).


current EU definition of the environmental impact assessment

(EIA) is included in the Art. 1 par. 2 letter g):

Environmental impact assessment means a process

consisting of:

i. The preparation of and environmental impact

assessment report by the developer;

ii. The carrying out of consultations (with the

competent authorities and with the public);

iii. The examination by the competent authority of

the information presented in the environmental

impact assessment report and any

supplementary information provided, where

necessary, by the developer, and any relevant

information received through the consultations

ad ii.;

iv. The reasoned conclusion by the competent

authority on the significant effects of the project

on the environment, taking into account the

results of the examination ad iii. and where

appropriate, its own supplementary

examination;

v. The integration of the competent authority´s

reasoned conclusion into any decisions that

grant development consent (or in other words

license) for the project in question.147

The EIA Directive does not cover the so-called

“strategic documents,” i.e. various plans and programs. These

are subject to the environmental impact assessment under the

Directive 2001/42/EC (hereinafter referred to as “SEA

Directive“). The SEA Directive covers only public plans and

programs, unlike the EIA Directive it does not apply to

private plans and programs and it does not refer to the

policies.148

Besides two general regimes set up by the EIA

Directive and the SEA Directive, there are several other,

mostly sectorial EU directives that require impact assessment

to be conducted, namely Natura 2000 Directives,149 Water

147. Id.

148. See Directive 2001/42, art. 2(a), Strategic Environmental

Assessment, 2001 O.J. (L 197) (EC) (defining “plans and programs” as

“plans and programmes, including those co-financed by the European

Community).

149. Council Directive 2009/147, 2009 O.J. (L 20/7) (EC);

Council Directive 92/43, 1992 O.J. (L 198) (EEC).


Framework Directive,150 Waste Framework Directive,151

Landfill Directive,152 Industrial Emissions Directive,153 Seveso

II Directive154 and Carbon Capture and Storage Directive.155

Requirements of these sectoral directives shall, on national

level, be integrated into the environmental impact assessment

of both projects as well as of plans and programs.

To set the stage, some general features about the EU

and development of its environmental policy will be

mentioned to provide a necessary context for describing the

EU law on environmental impact assessment.

A. Context

The EU has quite the unique character that blends

supranational and intergovernmental elements. Stephen C.

Sieberson describes this blend in the following way, “[l]ike an

IGO [intergovernmental organization], the Union is treaty-

based and is characterized by voluntary membership and

unanimity requirements for treaty amendments and other key

decisions. Like a vertically stacked national federation, the

EU has an independent and multi-institutional central

government, its laws have primacy over Member State law,

and many of its legislative enactments are approved by a form

of majority vote.”156

The European Court of Justice already in 1964 in the

famous decision Costa v. ENEL stressed that “by creating a

Community of unlimited duration, having its own institutions,

its own personality, its own legal capacity and capacity of

representation on the international plane and, more

particularly, real powers stemming from a limitation of

sovereignty or a transfer of powers from the states to the

Community, the Member States have limited their sovereign

150. Council Directive 2000/60, 2000 O.J. (L 327) (EC).

151. Council Directive 2008/98, 2008 O.J. (L 143/56) (EC).

152. Council Directive 1999/31, 1999 O.J. (L 182) (EC).

153. Council Directive 2010/75, 2010 O.J. (L 182) (EU).

154. Council Directive 96/82, 1996 O.J. (L 010) (EC) (explaining

the control of major-accident hazards involving dangerous substances). This

so-called Seveso II Directive of 1996 will be as of 1 June 2015 replaced by

the Seveso III Directive – Directive 2012/18/EU on the control of major-

accident hazards involving dangerous substances, amending and

subsequently repealing Council Directive 96/82/EC.

155. Council Directive 2009/31, 2009 O.J. (L 211/55) (EC).

156. Stephen C. Sieberson, Inching Toward EU

Supranationalism? Qualified Majority Voting and Unanimity Under the

Treaty of Lisbon, 50 VA. J. INT’L L. 919, 930 (2010).


rights and have thus created a body of law which binds both

their nationals and themselves.”157

The EU exercises the powers conferred upon it by its

Member States in varying extent. In some areas, the EU has

an exclusive power to “legislate and adopt legally binding

acts” while the Member States can do so “only if so empowered

by the Union or for the implementation of Union acts.”158 In

the areas where the European Union shares the legislative

power with the Member States, the Member States “exercise

their competence to the extent that the EU has not exercised

it.”159 Once the EU legislation has been adopted, it must be

applied by all national authorities, even when it has not yet

been transposed into national law.160 In the case of conflict

between national law and EU law, the EU law prevails

because of the principle of supremacy.161

The EU must exercise its competences in accordance

with the principle of subsidiarity and proportionality.162

Under the principle of subsidiarity, in areas which do not fall

within its exclusive competence, the EU shall act only if and

in so far as the objectives of the proposed action cannot be

sufficiently achieved by the Member States, either at central

level or at regional and local level, but can rather, by reason of

the scale or effects of the proposed action, be better achieved

at Union level.163 Under the principle of proportionality, the

content and form of EU action shall not exceed what is

necessary to achieve the objectives of the Founding

Treaties.164

The relationship between EU law and national law is

also governed by the principle of sincere cooperation165 under

which the EU and its Member States collaborate to achieve

157. Case C-6/64, Flaminio Costa v. E.N.E.L., 1964 E.C.R. 585.

158. Consolidated Version of the Treaty on the Functioning of

the European Union art. 2, May 9, 2008, 2008 O.J. (C 115) 47.

159. Id.

160. See Paul Craig & Gráinne de Búrca, EU Law: Text, Cases

and Materials 256-301 (2011) (describing in detail the supremacy principle).

161. See id. (explaining the supremacy principle in terms of the

EU).

162. See id. (noting that all EU countries must follow such

treaties).

163. See Craig, supra note 158, art. 5(3).

164. See id. art. 5(4).

165. See id. art. 4(3).


goals laid down by the Founding Treaties.166 The TFEU

further states that “the Member States shall take any

appropriate measure, general or particular, to ensure

fulfillment of the obligations arising out of the Treaties or

resulting from the acts of the institutions of the Union.”167

The EU embraces fundamental values shared by its

Member States. TFEU enumerates the basic values and

objectives on which the EU is founded. One of the primary

goals of the EU, expressed as early as the 1950s, is the

establishment of an internal market in which the free

movement of goods, persons, services and capital is ensured.168

The European Union “shall work for the sustainable

development of Europe based on balanced economic growth

and price stability, a highly competitive social market

economy, aiming at full employment and social progress, and

a high level of protection and improvement of the quality of

the environment.”169

As Art. 3 par. 3 of TFEU cited above states, the

environmental protection belongs to the EU objectives.

European environmental policy dates back to 1970s. In

October 1972, the heads of the EEC Member States and the

heads of their governments met in Paris. At the Paris

Summit, they agreed on the necessity to draw up the EEC

environmental action program. The Statement from the Paris

Summit declared, “economic expansion is not an end in itself.

Its first aim should be to enable disparities in living

conditions to be reduced. It must take place with the

participation of all the social partners. It should result in an

improvement in the quality of life as well as in standards of

living. As befits the genius of Europe, particular attention will

be given to intangible values and to protecting the

environment, so that progress may really be put at the service

of mankind . . . .”

The first EEC environmental action program was

adopted in the form of a joint declaration by the EEC and its

Member States in 1973. Furthermore, the task force within

the Commission that drew up the first action program

eventually led to the formation of a Directorate General for

166. See id. (noting that the Founding Treaties are

international treaties between EU Member States which establish the

constitutional basis of the European Union.).

167. Id. art. 5.

168. See TFEU supra note 158, at art. 26(2) (describing the

goals of the European Union).

169. Id. art. 3 par. 3.


the Environment (the so-called “DG Environment”). So far,

there are seven EU Environmental Action Programs.170 They

formulate the EU environmental policy for a certain period of

time. Based on Arts. 7 and 11 of the TFEU, the European

Union must ensure consistency between its policies and

activities and see that they integrate environmental

protection requirements (integration clause).171 The EU

Member States are responsible for financing and

implementing them in national environmental policies.172

From a legal perspective, environmental protection did

not feature in the Founding Treaties until 1987 when the

Single European Act was adopted. It amended the Treaty

Establishing the European Economic Community and

officially introduced a new chapter on environment, which

gave the EEC power to adopt environmental legislation.

B. EU Directive on Environmental Impact Assessment

The Directive 85/337/EEC on the assessment of the

effects of certain public and private projects on the

environment (“EIA Directive”) was adopted in 1985. By the

time the EIA Directive entered into force (1988), there were

twelve Member States of the EEC who had to implement it.

Before the EIA Directive was adopted, several Member States

(United Kingdom, Ireland, Germany, Denmark, France and

Luxemburg)173 introduced various models of impact

assessments and the Commission was concerned that different

rules would distort the competition and would adversely affect

the functioning of the common market.

The EIA Directive was based on the Commission´s

proposal from 1980174 which referred to the first two

environmental action programs adopted in 1973 and 1977.

170. See Decision No 1386/2013/EU of the European Parliament

and of the Council of 20 November 2013 on a General Union Environment

Action Programme to 2020 'Living well, within the limits of our planet,' OJ

L 354 (2013) (discussing how the 7th Environmental Action Program guides

the EU environmental policy from 2014 to 2020).

171. See Thomas Schumacher, 3 ENVTL. L. REV. 29, 29–43 (2001)

(discussing integration clause of the Art. 11 TFEU).

172. See TFEU, supra note 158, art. 192(4).

173. See Proposal for a Council Directive Concerning the

Assessment of the Environmental Effects of Certain Public and Private

Projects. COM(80) 313 final 6–7.

174. Proposal for a Council Directive Concerning the

Assessment of the Environmental Effects of Certain Public and Private

Projects. COM(80) 313 final.


The proposal specifically highlighted the need to anticipate

and take into account environmental concerns when the public

authorities license public or private projects with negative

impacts on the environment. It also emphasized that the

economic activities and population put an increasing pressure

on natural resources and result not only in pollution but due

to poor land-use management also in industrial accidents.175

Under such conditions, the system of regulatory instruments

(standard-setting and inspections) that focus only on

remedying the damage done must be complemented by

preventive instruments such as environmental impact

assessment.176

The preamble of the original text of the EIA Directive

clearly gave priority to the harmonization of “disparities

between the laws in force in the various Member States with

regards to the assessment of the environmental effects of

public and private projects” which “may create unfavorable

competitive conditions and thereby directly affect the

functioning of common market” over necessity “to achieve one

of the Community´s objectives in the sphere of the protection

of the environment and the quality of life.”

The EIA Directive required that the development

consent (or in other words license) for public and private

projects177 which are likely to have significant impacts on the

environment shall be only granted after prior assessment of

its “likely significant” environmental impacts. The directive

provided two sets of projects in the Annex I and II. The nine

categories of projects listed in the Annex I were to be

automatically subject to the environmental impact

assessment.178 The twelve categories listed in the Annex II

were subject to the screening set up on the national level to

determine whether the environmental impact assessment will

be required or not.179 Pursuant to the Art. 3 of the EIA

Directive the environmental impact assessment shall

175. See id. at pt. 2 of the Explanatory Memorandum (outlining

the environmental concerns and how they would exacerbate other

pressures).

176. See id. at pt. 3 of the Explanatory Memorandum

(describing possible solutions for the existing regulatory regime).

177. See EIA Directive art. 1(2)(a) (describing the execution of

construction works or of other installations or schemes and other

interventions in the natural surroundings and landscape including those

involving the extraction of mineral resources).

178. Id.

179 Id.


“identify, describe and assess in an appropriate manner, in

the light of each individual case and in accordance with the

Articles 4 to 11, the direct and indirect effects of a project on

the following factors: human beings, fauna and flora; soil,

water, air, climate and the landscape; the inter-action

between the factors mentioned in the first and second indents;

material assets and the cultural heritage.”180

The developers were to be required to provide

“appropriate information” concerning their project181 and this

information was to be supplemented by the additional

information from the public authorities and by the comments

from the public who may be concerned by the project. The EIA

Directive required explicitly that the information provided by

the developer, public authorities, and the public “must be

taken into consideration in the development consent

procedure.”182

Unlike the requirement of preparing the

Environmental Impact Statement (EIS) under the U.S.

National Environmental Policy Act, the EEC regime was

designed more as a process of gathering the information about

the project and its impacts on the environment and assessing

it in the licensing procedure before the license is issued.183 The

EIA Directive allowed the Member States discretion whether

to integrate the process of environmental impact assessment

into the existing licensing procedures or to introduce a

separate EIA procedure.184

As the original EIA Directive was adopted prior to the

Single European Act of 1987, it shared some common features

with the other “early” environmental directives of the 1960’s

and 1970’s. First, the EEC chose a form of a directive which is

binding only upon the Member States who are responsible for

180 Id. art 3.

181. See id. art. 5 (describing: (1) a project description specifying

the site, design and size of the project; (2) a description of measures to avoid,

reduce or remedy significant adverse effects; (3) the date required to identify

and assess the project´s impacts; and (4) a non-technical summary of

information under 1 to 3.)

182. Id. art. 8.

183. See Louis L. Bono, Implementation of the EC Directive on

Environmental Impact Assessments with the English Planning System: A

Refinement of the NEPA Process, 9 PACE ENVTL. L. REV. 1, 174, 175 (1999)

(distinguishing the two environmental impact assessment regimes).

184. See EIA Directive art 2. pt. 2 (noting the flexibility of the

EU’s EIA Directive).


transposing it into national law rather than a regulation

which is directly applicable in all Member States.185

The “early” environmental directives, including the

EIA Directive were based mostly on two provisions of the

TEEC, namely Art. 100a (now Art. 114 TFEU) on

approximation of laws for the purpose of establishment and

functioning of the internal market and the flexibility clause of

the Art. 235 (now Art. 352 TFEU).186 These two provisions

that formed the legal basis of the EEC environmental

directives required unanimous approval from all the EEC

Member States, so they were always a result of a compromise

and set therefore only minimum standards that would “allow

the less advanced Member States to catch up and to increase

their degree of environmental protection” rather than setting

stricter standards for all the Member States.187

The lack of explicit environmental authority also

resulted in lax monitoring of the EU law application, poor

enforcement and high level of tolerating non-compliance of the

Member States by the Commission who is responsible for

initiating the enforcement measures such as the infringement

procedure.188 There were in particular two reasons for these

problems in the area of environmental impact assessment,

namely in the way the EIA Directive was drafted189 - too broad

and general language, especially the categories of projects

subjected to the environmental impact assessment

requirement190 – and the fact that the EEC lacked specific

authority to adopt and therefore enforce the environmental

law. As Ludwig Krämer commented, “[t]he result of this lax

monitoring of the application of Community environmental

law was that the Member States took considerable liberty in

185. See TFEU, supra 158, art. 288 (discussing the mandate of

the TFEU).

186. See id. at art. 352 (“If action by the EU should prove

necessary, within the Framework of the policies defined in the Treaties, to

attain one of the objectives set out in the Treaties, and the Treaties have not

provided the necessary powers, the Council, acting unanimously on a

proposal from the Commission and after obtaining the consent of the

European Parliament, shall adopt appropriate measures.”).

187. Ludwig Kramer, Differentiation of EU Environmental

Policy, 9 EUR. ENVTL. L. REV. 133, 133 (2000).

188. See id. at 135 (outlining that the infringement procedure is

regulated in the Art. 258 and 260 of the TFEU).

189. Richard C. Visek, Implementation and Enforcement of EC

Environmental Law, 7 GEO. INT’L ENVTL. L. REV. 377, 396 (1995)

190. Malcolm Grant, Implementation of the EC Directive on

Environmental Impact Assessment, 4 CONN. J. INT´L L. 463, 465 (1989).


applying or not applying the directives. In part, they

considered directives rather as recommendations than as

legally binding instruments . . . the price for EC-wide

environmental provisions was thus a loose drafting of texts, a

considerable number of legal or factual variations according to

specific situations in Member States, and the absence of any

serious monitoring of the application of the provisions which

had been adopted.”191

The initial EIA Directive of 1985 was amended three

times (1997, 2003, and 2009), then codified (2011) and

amended again (2014). The amendments and dates when they

were adopted and entered into force are summarized in the

following table.

Year Directive Adopted

on:

Entered

into force:

Implemented

by the MSs

by:

1985 Directive 85/337/EEC 27 June

1985

5 July 1985 3 July 1988

1997 1st amendment: Directive

97/11/EC

3 March

1997

3 April 1997 14 March 1999

2003 2nd amendment: Directive

2003/35/EC

26 May

2003

25 June

2003

25 June 2005

2009 3rd amendment: Directive

2009/31/EC

23 April

2009

25 June

2009

25 June 2011

2011 Codification of the Directive 85/337/EEC →

Directive 2011/92/EU

13

December

2011

17 February

2012

No changes in

the text,

therefore no

need to

implement on

national level.

2014 1st amendment of the

codified EIA Directive:

Directive 2014/52/EU

16 April

2014

15 May 2014 16 May 2017

The 1997 amendment was intended to bring the EIA

Directive in line with several other directives192 and with the

UNECE Convention on Environmental Impact Assessment in

a Transboundary Context (Espoo Convention) which the EC

signed in 1991 and ratified in 1997. The 1997 amendment

significantly expanded the list of projects subject to

environmental impact assessment and clarified methods of

screening or determining the projects that shall be subject to

the assessment.

191. Kramer, supra note 187, at 136.

192. Specifically, the Council Directive 92/43/EEC of 21 May

1992 on the conservation of natural habitats and of wild fauna and flora and

the Council Directive 96/61/EC of 24 September 1996 concerning integrated

pollution prevention and control were significant.


The 2003 amendment was a reaction to the ratification

of the UNECE Convention on Access to Information, Public

Participation in Decision-Making and Access to Justice in

Environmental Matters (“Aarhus Convention”) by the EC. The

2003 amendment refined the rules on public participation in

decision-making regarding the project subject to

environmental impact assessment and added the provision on

access to justice in terms of a right to initiate a review

procedure before a court or another independent and

impartial institution established by law to challenge the

substantive or procedural legality of decisions, acts or

omissions associated with the project in question.

The 2009 amendment was based on the Directive

2009/31/EC on the geological storage of carbon dioxide, which

only expanded the lists of projects subject to environmental

impact assessment or screening by clarifying the existing

categories and adding new, e.g. CO2 storage sites.

Already the original version of the EIA Directive

required: (1) the Member States to inform the Commission of

the implementing measures regarding national selection

criteria for projects subject to impact assessment; (2) the

Commission and the Member States to exchange the

experience with applying the EIA Directive; and (3) the

Commission to prepare a report on the application of the EIA

Directive in five years after its official publication.193 Based on

continuous exchange of information with the Member States

and public consultations with other stakeholders, the

Commission is responsible for proposing changes of the EIA

Directive. The last change proposed by the Commission took

place in 2014.

The 2014 amendment intended to simplify the rules for

environmental impact assessment in the EU region and

reduce unnecessary administrative burdens while keeping

high level of environmental protection. It brings more

attention to new challenges and threats (e.g. resource

efficiency, climate change, protection of biodiversity etc.) that

were not appropriately addressed in the previous version of

the EIA Directive. It tries to address the major shortcomings

of the EIA Directive that create incentives for problematic

implementation on national level, e.g. the screening process

which was criticized for leaving too much discretion for the

Member State, overlapping assessment requirements under

193. See the Art. 11 of the EIA Directive.


other EU directives,194 insufficient quality of the EIA process

and the EIA report resulting thereof, lack of specific time

frames creating uncertainty for businesses and other

stakeholders participating in the EIA process or no obligation

for assessing project alternatives.

Although the last amendment of the EIA Directive

clarifies and refines several problematic parts of the EIA

Directive, it is still being criticized for too much detail and for

creating unnecessary administrative burdens rather than

streamlining and lightening the EIA process. The EU Member

States will have to implement the 2014 amendment by May

2017. The new “tightened” rules will sooner or later lead to

new infringement procedures against the Member States who

will not be able to transpose the amended EIA Directive into

their national law properly.

The insufficient or incorrect implementation of the EIA

Directive by the EU Member States constitutes the major

problem and a cause for lower effectiveness of the EU

environmental impact assessment. Despite the fact that the

EIA Directive is in force over 25 years and that there is

numerous case law of the European Court of Justice

interpreting the EIA Directive, the official statistics from 2007

to 2014 show that the infringements in the area of

environmental impact assessment make up around 10% of all

newly opened environmental infringements each year.195

Year Total number

of open env.

infringements

Waste Water Impact

assessment

Air Nature Other

2014 334 102 67 33 51 63 18

2013 353 112 80 29 44 64 24

2012 296 56 79 34 37 69 21

2011 339 76 80 43 35 76 29

2010 445 65 136 42 56 89 57

2009 451 86 90 50 72 92 61

2008 481 111 95 50 65 105 55

2007 479 93 74 57 83 121 51

194. Other impact assessment regimes are created under the

Habitats Directive 92/43/EC, Directive 2001/42/EC on strategic

environmental assessment or under the Directive 2010/75/EU on industrial

emissions.

195. See Legal Enforcement, European Commission,

http://ec.europa.eu/environment/legal/law/statistics.htm (last updated Mar.

25, 2015); see also Legal Enforcement: Statistics on environmental

infringements,

http://ec.europa.eu/environment/legal/law/pdf/statistics_sector.pdf.


The most significant and recurring problem consists in

failures as to the screening process in which the Member

States exercise a wide discretion to determine on a case-by-

case basis and based on national thresholds or criteria

whether an EIA is required for projects listed in the Annex II

of the EIA Directive.196 In too many cases, the Member States

either let the projects with significant environmental impacts

escape the assessment requirement (death by a thousand cuts

approach), or projects with no significant impact are subjected

to the impact assessment, unreasonably increasing not only

the administrative burden, but also the project’s cost.

The official figures presented by the Commission in

2012197 show that the average number of environmental

impact assessments conducted each year in the EU is between

15,000 and 26,000. Each year the average number of

screenings ranges between 27,400 and 33,800 projects. The

EU average duration of the EIA process is 11.6 months and

the average costs borne by the developer due to environmental

impact assessments are estimated to be € 41,000.198 The main

concerns presented by businesses are additional costs due to

project delays and to legal disputes arising from the improper

application of the EIA law.

The implementation of the EU environmental law is

ensured by the Member States and currently presents the

biggest challenge to EU environmental law.199 Of course the

implementation is difficult—environmental protection in the

EU is already subject to extensive EU legislation, with the

196. See Report from the Commission to the Council, the

European Parliament, the European Economic and Social Committee and

the Committee of the Regions on the application and effectiveness of the

EIA Directive (Directive 85/337/EEC, as amended by Directives 97/11/EC

and 2003/35/EC). COM(2009) 378 final, p. 5.

197. See Commission Staff Working Document. Executive

Summary of the Impact Assessment accompanying the document Proposal

for a Directive of the European Parliament and of the Council amending

Directive 2011/92/EU on the assessment of the effects of certain public and

private projects on the environment. COM(2012) 628 final, p. 1.

198. Id.

199. See Marke ta Whelanova, Presentation at Brussels:

Implementation of EU Law in the Czech Legal Order – Methods and

Problems, Jan. 30, 2009, lecture slides available at

http://ec.europa.eu/dgs/legal_service/seminars/cz_whelanova_slides_en.pdf

(explaining the challenges of implementing EU law and proposed methods

for effectively doing so) (on file with the WASHINGTON AND LEE JOURNAL OF



exception of soil protection.200 Much of this legislation is long

established.201 Thus, the main challenge is timely and proper

implementation on the national level.202 As one the recent

Commission report states:

Implementation has a cost. But the cost of non-

compliance is very often much higher . . . The

costs of not implementing current legislation

are broadly estimated at around €50 billion a

year. These relate not just to environmental but

also to human health impacts. For example,

20% to 50% of the European population lives in

areas where air quality breaches European limit

values and the estimated annual costs in terms

of health expenditure or days of work lost run to

billions of Euros.203

The following chapter will describe the evolution of the

Czech law on environmental impact assessment that was

enacted in early 1990s to properly implement the EIA

Directive. The following chapter will further analyze the

difficulties with proper and timely implementation that led

the Commission to initiate two infringement procedures for

non-compliance of the Czech law with the EU law.

200. See EUROPEAN COMMISSION, Soil, EUROPEAN COMMISSION:

ENVIRONMENT, Mar. 18, 2015,

http://ec.europa.eu/environment/soil/index_en.htm (“Soil is not subject to a

comprehensive and coherent set of rules in the Union.”).

201. See EUROPEAN COMMISSION, Legal Enforcement, EUROPEAN

COMMISSION: ENVIRONMENT, Mar. 30, 2015,

http://ec.europa.eu/environment/legal/law/index.htm (providing an overview

of the complex and wide-reaching legislative measures regulating

environmental law) (on file with the WASHINGTON AND LEE JOURNAL OF


202. See EUROPEAN COMMISSION, Implementation, EUROPEAN

COMMISSION: ENVIRONMENT, Mar. 25, 2015,

http://ec.europa.eu/environment/legal/implementation_en.htm (outlining the

necessity for proper and timely implementation) (on file with the


ENVIRONMENT).

203. Communication from the Commission to the European

Parliament, the Council, the European Economic and Social Committee and

the Committee of the Regions Improving the Delivery of Benefits from EU

Environmental Measures: Building Confidence Through Better Knowledge

and Responsiveness, at 2, 3, 11 COM (2012) 095 final (July 3, 2012).


IV. Czech EIA Law

The Czech Republic adopted the EIA legislation in the

early 1990s. In 1992, the first environmental impact

assessment Act was adopted, Act. No. 244/1992 Coll.204 This

Act regulated both EIA and later also the SEA procedure. In

2001, a new act, Act No. 100/2001 Coll., was adopted in order

to fulfill all the requirements set by the EIA Directive.205

Initially, that act regulated only the EIA procedure while Act

No. 244/1992 Coll. contained the legal regulation of the SEA

procedure. In May of 2004, the SEA procedure was integrated

into Act No. 100/2001 Coll., which now regulates both EIA and

SEA procedures.206 Act no. 244/1992 Coll. was abolished.207

A. EIA Act of 1992

After the implementation of the first Czechoslovakian

democratic government in 1989, environmental protection

became a top priority.208 Before the 1992 elections209 and the

204. See IMPLEMENTING STRATEGIC ENVIRONMENTAL

ASSESSMENT, 193–96 (Michael Schmidt, et al., eds., 2006) (providing an

overview of the evolution of Czech EIA and SEA law).

205. See EU Forum of Judges for the Environment Conference

2011, Warsaw Oct. 14–15, 2011, Annual Country Report: Czech Republic, 1

available at

http://www.eufje.org/images/docConf/war2011/CZ%20war2011.pdf

(explaining the implementation of the SEA directive in the Czech Republic)


THE ENVIRONMENT).

206. See BARRY DALAL-CLAYTON AND BARRY SADLER, STRATEGIC

ENVIRONMENTAL ASSESSMENT: A SOURCEBOOK REFERENCE GUIDE TO

INTERNATIONAL EXPERIENCE 194 (2005) (“In 2004, Czech EIA legislation was

consolidated and amended as part of the transposition of the SEA

Directive.”).

207. See Convention on Biological Diversity, Sectoral

Integration of Biodiversity in Czech Republic, RESOURCE MOBILIZATION

INFORMATION DIGEST, 4 (Feb. 2013) (explaining that the 2004 act “regulated

the assessment of environmental impacts of concepts and abolished the

valid Czech National Council Act No. 244/1992 Coll.”).

208. See Marián Čalfa, Program Declaration of the

Czechoslovakian Federal Government at 5, Jun. 27, 1990–July 2, 1992,

http://www.vlada.cz/assets/clenove-vlady/historie-minulych-vlad/prehled-

vlad-cr/1990-1992-csfr/marian-calfa-2/ppv-1990-1992-calfa2.pdf (available in

Czech only) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


209. See INTER-PARLIAMENTARY UNION, Czechoslovakia:

Elections Held in 1992, PARLINE: CZECH REPUBLIC – SENATE 1992,

http://www.ipu.org/parline-e/reports/arc/2084_92.htm (explaining that in

June 1992, elections to the Czech and Slovak National Councils took place)


1993 split of Czechoslovakia, many important environmental

laws were passed based on examples and inspiration from

abroad and with substantial help of foreign experts.210 For

example, the Czech Act on Environment211 was modeled after

the U.S. National Environmental Policy Act (NEPA) as an

“environmental policy act” and was intended to serve as an

“umbrella” environmental law that would define key terms

and set basic principles and rules that shall be reflected in all

implementing laws.212

The federal government planned to introduce the

umbrella Act on Environment to the Federal Assembly for

approval at the end of 1990.213 However, the government did

not meet any of the deadlines set by the Federal Assembly.214

Moreover, the governmental bill was being revised and

supplemented by so many details that it eventually drowned

in the disputes over jurisdictions between the Czech and


THE ENVIRONMENT).

210. See Explanatory Memorandum, Bill No. 921 presented by a

group of deputies. In Czech: Důvodová zpráva k návrhu poslanců Ondřeje

Humla, Miloslava Soldáta, Vladimíra Savčinského a Petra Gandaloviče na

vydání Zákona o životním prostředí.

211. Act No. 17/1992 Coll.,. In Czech: Zákon č. 17/1992 Sb., o

životním prostředí.

212. See Joint Meeting of the House of the People and House of

the Nations of the Federal Assembly of the Czech and Slovak Federal

Republic, 19th Joint Meeting Report,

http://www.psp.cz/eknih/1990fs/slsn/stenprot/019schuz/s019005.htm

(available in Czech only). In Czech: Federální shromáždění České a

Slovenské Federativní Republiky. Zpráva o 19. společné schůzi Sněmovny

lidu a Směnovny národů. 1. den – úterý 3. 12. 1991, bod programu 3: Návrh

zákona o životním prostředí (tisk 921) a návrh usnesení SL a SN (tisk 1062).

213. See Country Factsheet on National SCP Policies: the Czech

Republic, EUROPEAN TOPIC CENTRE ON SUSTAINABLE CONSUMPTION AND

PRODUCTION 4 (Jan. 11, 2010) available at

http://scp.eionet.europa.eu/facts/factsheets_waste/fs_scp/pdf/CZ1 (explaining

that the changes to environmental policy in the early 1990s were intended

“to establish a comprehensive, transparent and consistent system of

environmental legislation) (on file with the WASHINGTON AND LEE JOURNAL


214. See REGIONAL ENVIRONMENTAL CENTER FOR CENTRAL AND

EASTERN EUROPE, Czech Republic: Political, Economic and Social Impacts on

Environmental Protection at the Spring of 1994, STRATEGIC ENVIRONMENTAL

ISSUES IN CENTRAL AND EASTERN EUROPE (Aug. 1994) (Vol. 2),

http://archive.rec.org/REC/Publications/StratIssues/FeeBased/Czech.html

(explaining that the deadlines for implementation were short) (on file with

the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE

ENVIRONMENT).


Slovak Republics.215 In May 1991, a group of deputies

presented their bill. It was quietly held up until December

1991 when it became clear that the federal government would

not present the governmental bill.

The version of the bill presented by the deputies in

December 1991 was based on a biocentric approach to

environment; it introduced the concept of sustainable

development, defined the key terms and principles of

environmental protection, and set the obligations of natural

and legal persons, including the liability for environmental

harm.216 Despite the fact that the Act on Environment was

broadly supported, it became the subject of heated debates

over whether it should include provisions on the

environmental impact assessment.217

One part of the political spectrum supported the idea of

a brief, simple, and general umbrella law on environment,

along with a separate act concerning environmental impact

assessment. The other part of the political spectrum felt the

need to introduce the basics of the environmental impact

assessment already in the Act on Environment to make sure

that at least some rules will be in place before more detailed

legislation is passed. The main concern was that if the rules

on environmental impact assessment were not passed quickly,

Czechoslovakia would be flooded by outdated technologies

that are not permitted in other countries due to strict EIA

rules. The proponents of including the EIA provision in the

Acton Environment also stressed the importance of prompt

transposition of the EU law on environmental impact

assessment (the EIA Directive) and of the United Nations

Economic Commission for Europe Convention on

Environmental Impact Assessment in a Transboundary

Context.218 During debate in Federal Assembly concerning the

215. See id. (stating that the short deadlines for environmental

compliance can prompt poorly thought-out policies to be adopted).

216. See Ladislav Miko, et al., Environmental Enforcement in

the Czech Republic: The EU Pre-Accession Phase, Report from FIFTH

INTERNATIONAL CONFERENCE ON ENVIRONMENTAL COMPLIANCE AND

ENFORCEMENT 117, 119–120 (Nov. 16–20, 1998) available at

http://www.inece.org/5thvol2/cizkova.pdf (detailing the main problems in

environmental enforcement) (on file with the WASHINGTON AND LEE JOURNAL


217. See id. at 118 (outlining the tensions involved with

adopting environmental legislation).

218. See Introduction to Espoo Convention, UNITED NATIONS

ECONOMIC COMMISSION FOR EUROPE (last visited Apr. 4, 2015),

http://www.unece.org/env/eia/eia.html (explaining that the Espoo (EIA)


proposed Act on Environment, Zdeněk Masopust, deputy of

the Federal Assembly from 1990 to 1992 stressed: “We shall

regard this act not only as a way of dealing with our past,

what I personally hold for necessary, but above all as an act of

our, hopefully already European future . . . .”219

The Act on Environment was passed on December 5,

1991, and published in the Collection of Laws of the Czech

and Slovak Federal Republic in January 1992 under the

number 17/1992.220 According to the explanatory

memorandum associated with this law, the Act on

Environment set a new philosophy and built a framework for

a construction of modern environmental law.221 As a reaction

to concerns expressed during the debates in the Federal

Assembly, the Act on Environment was approved with the

provisions on domestic and transboundary environmental

impact assessment and with a list of projects subject to the

EIA requirement. Because the Act on Environment was a

federal law, it anticipated that both national councils would

pass the implementing laws.

The Czech National Council adopted the implementing

law shortly after the Federal Assembly adopted the Act on

Environment. It was presented as a governmental bill, which

was debated in the Czech National Council and approved on

April 2, 1992; it was promulgated in the Collection of Laws on

April 15, 1992, and entered into force on July 1, 1992.222 In

scope, the Czech Act on the EIA was even more progressive

than the EIA Directive. In the Article 1, par. 1, it declared the

constructions and changes thereof, and that other activities

and technologies listed in Annex I are subject to the

Convention “sets out the obligations of Parties to assess the environmental

impact” of state activities at an early stage of the activity planning) (on file


ENVIRONMENT).

219. Joint Meeting, supra note 213.

220. See ED BELLINGER, ENVIRONMENTAL ASSESSMENT IN

COUNTRIES IN TRANSITION, 45–46 (2000) (highlighting the key provisions of

Act No. 17/1992).

221. See “Preamble” Act No. 100/2001, Coll. This Act is still in

force and clearly expresses this new philosophy. The laws enacted during

the enthusiastic early 1990s, including the Act on Environment or the Act

against Animal Torture contain the preambles. These preambles are not

binding part of the law, but express the values and philosophy underlying a

particular piece of legislation. Since 1993, none of the Czech laws contain a

preamble.

222. Act No. 244/1992 Sb., on environmental impact assessment

(in Czech: Zákon č. 244/1992 Sb., o posuzování vlivů na životní prostředí).


environmental impact assessment and development plans,

programs, and products.

The explanatory memorandum accompanying the

Czech Act on environmental impact assessment emphasized

that the Act introduces the environmental impact assessment

as an effective instrument of prevention successfully applied

in developed countries since 1969.223 It also concluded that the

existing Czechoslovakian legislation regarding construction

activities or environmental protection did not explicitly

require the environmental impact assessment. The adoption of

the Act on environmental impact assessment was presented

as a necessary step before Czechoslovakia could become a

party to the Espoo Convention and a requirement for foreign

financial support of environmental projects that was

absolutely indispensable due to the economic crisis that hit

Czechoslovakia in the early years of transition to market

economy. The explanatory memorandum also mentions that

the Czech environmental impact assessment law was inspired

explicitly by the Austrian and Dutch laws with special regard

to the Council Directive 85/337/EEC on environmental impact

assessment (EIA Directive).224

Looking back at the first Czech law on environmental

impact assessment from 1992, it is not hard to notice that the

basics of the procedural design remained the same. The Act on

environmental impact assessment contained a list of projects

subject to the EIA requirement. The list was divided into two

Annexes (1 and 2) based on the competent authority.225

Everyone who intended to construct a building, conduct an

activity, or use a technology listed in Annex 1 or 2 of the Act

on environmental impact assessment had to submit a

notification and EIA documentation to the competent

authority, which separate from the licensing authority.226 The

EIA documentation was to be reviewed by an independent

223. See Explanatory Memorandum Accompanying the

Governmental Proposal of the Act on Environmental Impact Assessment,

http://www.psp.cz/eknih/1990cnr/tisky/t0658_03.htm (available in Czech

only) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


224. Council Directive 85/337, 1985 (EC).

225. See Annex 1–2, Act No. 17/1992, Coll. (explaining that, for

projects listed in the Annex 1, the competent authority was the Ministry of

Environment, and for projects listed in the Annex 2 the competent authority

was the district office).

226. See Annex 1–2, Act No. 17/1992, Coll. (laying out the

process for complying with the Act).


expert chosen by the competent authority. After receiving the

review report, the competent authority had to hold a public

hearing and, afterwards, issue an environmental impact

statement (EIS). The authority responsible for licensing the

project subject to EIA could not grant the license without

considering the EIS.

The Act on environmental impact assessment allowed

the public to inspect the EIA documentation submitted by the

developer and to submit written comments on such

documentation. 227 The members of public could also attend a

public hearing on the issue.228 The Act on environmental

impact assessment specifically mentioned a citizens’ initiative

and a civic association as formalized groups of the public who

could also submit their written comments regarding the EIA

documentation.229 Based on their participation in the EIA

process, the civic association had a standing in the subsequent

licensing process.230

B. EIA Act of 2001

Since 1998, the Czech government started to prepare a

new EIA Act that would reflect major changes of the EIA

Directive as a result of its amendment in 1997.231 The original

version of the governmental bill from January 2000 was

presented to the Parliament in spring 2000. It intended to

transpose the amended EIA Directive and also included

provisions on strategic impact assessment of plans and

programs because, at that time, the EU was preparing the

SEA Directive. However in the legislative process conducted

by two houses of the Czech Parliament the original

governmental bill was changed significantly. 232 The final

version that was passed by the Parliament on February 20,

227. Act No. 17/1992, Coll., Art. 7, Par. 3.

228. Act No. 17/1992, Coll., Art. 10.

229. See Act No. 17/1992, Coll., Art. 8, Par. 1. (stating, at

minimum, 500 members of public older than 18 years could form a citizens’

initiative). The citizens’ initiative was represented by a proxy who could

submit comments on the EIA documentation and attend the public hearing

on behalf of the citizens’ initiative.

230. Act. No. 17/1992, Coll., Art. 8, Par. 5.

231. See Dvořák, Libor, Posuzování vlivů koncepcí na životní

prostředí. In České právo životního prostředí Vol. 27, No. 1/2010, p. 29.

232. The two houses of the Czech Parliament are: the House of

Deputies and the Senate.


2001, and promulgated in March 2001 only conserved the

outdated features of the previous EIA Act of 1992.

The new EIA Act basically copied the regime that only

allowed public participation at the end of the EIA procedure

and had short deadlines and other obstacles that rendered the

public’s participation ineffective and enhanced the risk of

subsequent litigation.233 It was also criticized for being

incompatible with the EIA Directive and with the Aarhus

Convention which the Czech Republic already signed in

1998.234

The provisions on strategic impact assessment were

left out with the reasoning that the SEA Directive had not yet

been adopted, despite the fact that the final text of the SEA

Directive was already known. The SEA Directive was adopted

on June 27, 2001, three months later than the Czech EIA Act

of 2001, and entered into force on July 21, 2001. Instead of

being ahead with the implementation of the EU law, the

Czech politicians decided to conserve the outdated, very brief

version of the strategic impact assessment contained in the

EIA Act of 1992235 and be forced to transpose the SEA

Directive by the latest possible date, which was May 1, 2004,

when the Czech Republic officially joined the EU.

In 2004, the Act of 1992 was abolished. Since then, the

EIA Act of 2001 has regulated both the EIA and SEA. As

indicated above, the whole design of the EIA procedure and its

relation to licensing procedures was copied from the EIA Act

of 1992 without ever trying to come up with a more integrated

version of decision-making that would be more cost-efficient

and less time-consuming for all the stakeholders and public

authorities. The EIA Directive does not specifically dictate

how the EIA fits into the national system of licensing projects;

it gives the Member States a choice. According to the Art. 2,

par. 2 and 2a of the EIA Directive, the environmental impact

assessment may be integrated into the existing licensing

233. See, e.g., Společnost pro trvale udržitelný rozvoj.

Stanovisko č. 91 k projednávání zákona EIA. Available in Czech only at

http://www.stuz.cz/Zpravodaje/Zpravodaj011/75.htm.

234. UNECE Convention on Access to Information, Public

Participation in Decision-making and Access to Justice in Environmental

Matters (Aarhus, 1998).

235. After the project impact assessment was moved to the new

EIA Act of 2001 only curtailed version of the EIA Act of 1992 remained in

force (in particular only Art. 1, 14, 23 and 24). See Dvořák, Libor.

Posuzování vlivů koncepcí na životní prostředí. In České právo životního

prostředí Vol. 27, No. 1/2010, p. 30.


procedures or may be designed as a separate procedure which

shall then be carried out before the license is granted.

Since the first EIA Act of 1992 the Czech

environmental impact assessment is established as a separate

procedural step that has to take place before the

administrative authorities grant a license for a specific

project. The main disease of the Czech licensing system is that

it is overly complicated. It has always been designed in a

piecemeal fashion by adding more and more administrative

steps to be taken before the project might actually be carried

out. In this manner, the Czech Republic implemented all the

relevant EU environmental directives, including the EIA

Directive.

According to the EIA Act of 2001, the EIA procedure

encompasses six stages:

1. Project notification, which is submitted by the

developer to the competent authority with content

specified in Annex 3 of the EIA Act and disclosed to

the public, who is allowed to comment thereon

within set time limit;

2. Screening and/or scoping;

3. EIA documentation with contents specified in

Annex 4 of the EIA Act, which is elaborated by an

authorized expert paid by the developer, submitted

to the competent authority for review, and disclosed

to the public, who is allowed to comment thereon

within set time limit;

4. Expert review of the EIA Documentation, which is

elaborated by an independent expert chosen by the

competent authority. The expert review is also

disclosed to the public and the public can comment

on it within a set time limit;

5. Public hearing, which only takes place if the

competent authority receives at least one justified

written comment criticizing the EIA

documentation;

6. Environmental Impact Statement (EIS), which is

elaborated by the competent authority based on the

EIA documentation, its expert review, and based on

the result of the public hearing, if applicable.236

236. See Veronika Tomoszková, Environmental Impact

Assessment in the Czech Republic, in IMPLEMENTATION AND ENFORCEMENT OF

EU ENVIRONMENTAL LAW IN THE VISEGRAD COUNTRIES, Palacky University in


Based on the Czech law, the Environmental Impact

Statement (EIS) resulting from the EIA procedure does not

constitute a separate administrative decision that may be

appealed or separately challenged before court. It serves as a

mere background material for decision-making of licensing

authority. Until the end of March 2015, the EIS was not

binding as to the licensing authority, which had to consider

the EIS, but could deviate from it. Based on the newest

amendment of the EIA Act, the EIS will be binding for

decision-making of the licensing authority that will have to

respect it. This means if the EIS is negative, stating that

there will be too many significant negative impacts on the

environment, the licensing authority will not be allowed to

grant the license.

The scope of the environmental impact assessment is

determined by the list of the projects subject to EIS

requirement automatically (Category I projects) or subject to

the screening that determines whether the EIS for that

particular project is required (Category II projects).237

Moreover, an impact assessment is obligatory for changes of

the projects listed in Category I if the change, by its own

capacity or extent, reaches or exceeds the limits specified in

for that specific project in Annex 1. The changes of projects in

Category I that do not reach the limits specified in Annex 1

are subject to the screening procedure if their capacity or

extent is significantly increased or if the technologies,

operations control, or usage changes significantly.238

Projects listed in Category II are subject to screening

procedure where the competent authority determines whether

the project needs an EIS.239 In reality, there are also many

projects that do not reach the limits specified in Annex 1 but

might have significant impact on human health or the

environment, especially in connection with already existing

and operating projects. According to Art. 4 par. 1(d) of the

EIA Act of 2001, if the competent authority determines so in

pre-screening, then these so-called under-limit projects are

Olomouc 188-94 (2014) (giving more details on the individual stages of the

Czech EIA procedure).

237. See 100/2001, Coll., Annex 1 (showing the list of projects of

the EIA Act of 2001; it transposes the Annex I and II of the EIA Directive).

238. See Tomoszková, supra note 236, at 185 (2014).

239. See 100/2001 § 4(b) (explaining a fact-finding procedure

pursuant to § 7 is used to determine the need for an EIA under Category II).


subject to screening where it will be determined whether they

require the EIS or not.240

The most contested and criticized part of the EIA Act of

2001 is the provisions on public participation. The criticism

regarding public participation opportunities in the EIA

procedure and in subsequent licensing procedures was not

new; it was heard since the mid-1990s, after some initial

experience with the EIA Act of 1992 in practice.241

Leading experts on environmental policy and law,

including the first federal minister for environment, Josef

Vavroušek, complained in 1994 that the poor design of the

EIA Act of 1992 and the lack of information on the importance

and essence of EIA both contribute to the overall

unpreparedness of those who participate in the EIA. As a

result, the investors or developers view the EIA as an

obstructing formality. Competent authorities lack sufficient

skills and knowledge to manage EIA effectively and by

proceeding in an overly bureaucratic manner they over-

complicate it. Experts elaborating EIA documentation and

reviews see the EIA merely as an opportunity for profit.242

Municipalities more often stand up for the interest of the

investors and developers than for the local communities, and

the local communities remain rather passive.243 The lack of

sufficient and comprehensible information on projects

contributed to the overall agony of the local communities

affected by the investor’s project. Under these circumstances,

the environmental non-governmental organizations (NGOs)

were the last ones with enough courage to stand up for the

240. See id. at 186.

241. See Branis, Martin, The environmental impact assessment

act in the Czech Republic: Origins, introduction, and implementation issues,

14 ENVIRONMENTAL IMPACT ASSESSMENT REVIEW 195 (stating that public

participation is limited, even though it is recognized as an important part of

the Act).

242. See T.C. Telfer et al., Review of environmental impact

assessment and monitoring in aquaculture in Europe and North America,

UN FOOD AND AGRICULTURE ORGANIZATION, 285, 367 (2009) available at

http://www.fao.org/3/a-i0970e/i0970e01d.pdf (“In addition, even where there

is a mechanism for implementation of the EIA procedure, this is over

complicated and often too bureaucratic in many countries.”) (on file with the


ENVIRONMENT).

243. Josef Vavroušek, “Stanovisko č. 22 k proceduře EIA,”

SOCIETY FOR SUSTAINABLE LIFE (Společnost pro trvale udržitelný život), Jan.

14, 1994 available at

http://www.stuz.cz/index.php?option=com_content&view=article&id=33:stan

ovisko-c-22-k-procedure-eia&catid=33&Itemid=33) (available in Czech only).


environment. No matter how noble the intentions of those who

drafted the early Czechoslovakian environmental laws were,

the public affected by the projects and the environmental

NGOs that stood up for them, have always been treated as an

irreconcilable opposition and never as a valuable partner in

decision-making.

Contrary to the requirements of the Aarhus

Convention and the EIA Directive, the Czech EIA Acts never

included a definition of the “public concerned,”244 causing lack

of uniform practices and restrictive interpretation of the scope

of those who are entitled to standing and a right to challenge

decisions of competent authorities. Lack of a precise definition

also paradoxically led to the situation in which natural

persons, as members of the concerned public who would apply

for standing in subsequent licensing procedures, were left out

with no standing right.245

According to the EIA Act of 2001, public participation

during the EIA procedure takes place in form of submitting

comments. Anyone is allowed to submit his or her comment to

the project notification, and to the EIA documentation and its

expert review, if the two latter stages take place. As the EIA

procedure is separate from the licensing procedure, the public

participation requirements of the EIA Directive and the

Aarhus Convention shall stretch out to the licensing taking

place after the environmental impact assessment.246

The EIA Act of 2001 anticipates public participation in

subsequent licensing procedure with the ability to grant

NGOs and affected municipalities standing in such

244. See UNECE Convention on Access to Information, Public

Participation in Decision-Making and Access to Justice in Environmental

Matters, Aarhus, Art. 2, Par. 5 (stating that the “public concerned” means

“the public affected or likely to be affected by, or having an interest in, the

environmental decision-making; for the purpose of this definition, non-

governmental organizations promoting environmental protection and

meeting any requirements under national law shall be deemed to have an

interest”).

245. See Michal Sobotka and Petra Humlíčková, Rozšíření

účasti veřejnosti (?) aneb několik poznámek k jedné zbytečné novele zákona a

posuzování vlivů na životní prostředí, ČESKÉ PRÁVO ŽIVOTNÍHO PROSTŘEDÍ, 96,

2010 (Vol. 27, No. 1/2010); see also Z Adameová, Účast veřejnosti v procesu

EIA – případ České republiky, ČESKÉ PRÁVO ŽIVOTNÍHO PROSTŘEDÍ 9, 2011

(Vol. 30, No. 2).

246. See Ekologický právní servis. Analýza transpozice a

implementace Směrnic ES o posuzování vlivů na životní prostředí (2006)

available at

http://frankbold.org/sites/default/files/publikace/smernice_eia_v_cr_1.pdf

(available in Czech only).


proceedings and, since 2009, the opportunity to access the

courts.247 Based on Art. 23 pt. 9 of the Act on EIA/SEA, a local

office of two types of NGOs,248 must focus on protection of

public interests pursuant to the special laws,249 or

municipality affected by the investor’s project have standing

in subsequent licensing procedure if the following conditions

are cumulatively met:

1. The NGO has submitted a written comment regarding

the project notification, EIA documentation or its

expert review within the set time limits,

2. the competent authority stated in the EIS that the

opinion of that particular NGO is fully or at least

partially included therein, and

3. the licensing authority has not decided that the

interests protected by the NGO in question are not

affected in the permitting procedure.250

The requirement of previous activity in the EIA

procedure complies with the EIA Directive. The other two

requirements, however, are too restrictive and leave too much

discretion to public authorities in determining who is granted

standing in licensing procedure. Since the accession of the

Czech Republic to the EU, the Commission has criticized the

Czech law and practice of public authorities regarding public

participation. In 2006 it launched the first infringement

proceeding against Czech Republic for failure to comply with

the requirements of the EIA Directive, namely of then Art.

10a.251

247. See Act No. 100/2001 Coll. § 9–10, available at

http://faolex.fao.org/docs/html/cze74060.htm (describing opportunities for

review of decisions and setting timelines for opinions and decisions).

248. See id. at § 23 (describing when a civic association may

become part of an action). The EIA Act specifically mentions a civic

association (občanské sdružení) and a generally beneficial society (obecně

prospěšná společnost) as subjects entitled to standing in subsequent

licensing process.

249. See Act No. 114/1992 Coll. (dealing with Nature and

Landscape Protection); see also Act No. 20/1987 Coll. (discussing State

Cultural Monuments Care).

250. Veronika Tomoszková, Environmental Impact Assessment

in the Czech Republic, in VERONIKA TOMOSZKOVÁ ET AL., IMPLEMENTATION

AND ENFORCEMENT OF EU ENVIRONMENTAL LAW IN THE VISEGRAD COUNTRIES,

197 (2014).

251. See Part IV(C) infra (describing the infringement

proceedings brought against the Czech Republic in response to failure to

implement the EIA directive).


B. Czech EIA Act Under Fire? (C-378/09,

ACCC/2010/50 and infringement no. 2013/2048)

Article 10a of the original version of the EIA Directive252

requires that the relevant law in the Member States ensures

that the:

members of the public concerned (a) having a

sufficient interest, or alternatively, (b)

maintaining the impairment of a right, where

administrative procedural law of a Member

State requires this as a precondition, have

access to a review procedure before a court of

law or another independent and impartial body

established by law to challenge the substantive

or procedural legality of decisions, acts or

omissions subject to the public participation

provisions of the EIA Directive.253

The EIA Directive explicitly states that a sufficient

interest and impairment of right shall be defined by the

Member States consistently with the objective of giving the

public concerned wide access to justice.254 NGOs meeting the

national requirements shall be automatically deemed to have

a sufficient interest and rights capable of being impaired.255

The EIA Directive also requires that the review procedure

shall be “fair, equitable, timely and not prohibitively

expensive.”256

On July 3, 2006 the Commission sent its letter of

formal notice concerning an alleged infringement of the Art.

10a par. 1-3 of the EIA Directive and gave the Czech Republic

252. The former Art. 10a of the EIA Directive before its

codification in 2011 is now Art. 11 of the codified EIA Directive (Directive

no. 2011/92/EU). The wording of the former Art. 10a and of the current Art.

11 are the same.

253. Council Directive 2011/92, art. 11, ¶3.

254. See id. (describing the rights of the member states in

relation to implementing the directive).

255. See id. (explain the standing of NGOs within the directive

and their rights according to it).

256. See id. ¶ 4 (including the possibility of administrative

review and maintaining exhaustion requirements before judicial review

procedures).


two months to respond.257 The Czech Republic responded to

the Commission’s letter of formal notice by admitting its

failure and promised to amend the EIA Act.258 However the

amendment was not passed, so on June 29, 2007 the

Commission moved to the next stage of the infringement

procedure and issued the reasoned opinion. The first bill

proposing amendment of the EIA Act was presented to the

Czech Parliament in September 2008, but it was declined in

the third reading in spring 2009. The Czech Republic informed

the Commission and tried to explain why the amendment of

the EIA Act was not passed.

In its letter from March 10, 2009 the Czech Republic

reassured the Commission that new bill will be presented to

the Parliament and hopefully passed soon.259 However then on

March 24, 2009 the Czech Parliament voted down the

government and political crisis froze all attempts to deal with

the infringement. After the last letter from the Czech Republic

sent in March 2009 the Commission did not receive any

update, so on September 23, 2009 it filed an action for failure

of the Czech Republic to fulfil its obligations as an EU

Member State to the European Court of Justice.

In the Czech Republic, parliamentary elections were

about to be held in October 2009. Under time pressure of the

upcoming elections, the third bill proposing the amendment of

the EIA Act was presented to the House of Deputies. During

its last meeting before the elections, the Czech Parliament

finally approved the bill. Unexpectedly, the President of the

Czech Republic (Václav Klaus at that time), who signs all the

bills that are passed by the Parliament, vetoed the bill

amending the EIA Act, despite having knowledge of the action

filed against the Czech Republic. The House of Deputies

257. See Press Release, European Comm’n, Environmental

Impact Assessment: Comm’n Takes Legal Action to Improve

Implementation in 10 Member States (July 3, 2006) (describing the reason

for the letter to the Czech Republic as improper rules restricting the public’s

right to go to court to assert right to participate in EIA procedures).

258. See Czech Republic: New EIA legislation may slow down

the building-permit procedure, SCHOENHERR, available at

http://www.schoenherr.eu/knowledge/knowledge-detail/czech-republic-new-

eia-legislation-may-slow-down-the-building-permit-procedure/ (stating the

Czech Republic’s response) (on file with the WASHINGTON AND LEE JOURNAL


259. See Stejskal, Vojtěch. Rozsudek Soudního dvora EU proti

České Republice ve věci EIA. In České právo životního prostředí. Vol. 27, No.

1/2010, p. 124.


overturned the President’s veto by 117 votes.260 So the bill

amending the EIA Act was finally passed and on December

11, 2009 promulgated under no. 436/2009 Coll.261

Based on the established case law, the European Court

of Justice (ECJ) cannot regard any changes subsequent to

time period laid down in the Commission’s reasoned

opinion.262 Therefore, after the action was filed with the ECJ,

the adoption of the EIA Act amendment was inconsequential

and the ECJ had to rule against the Czech Republic. In its

judgment from June 10, 2010 the ECJ ruled:

by failing to adopt within the time-limit

prescribed the laws, regulations and

administrative provisions necessary to comply

with the Art. 10a par. 1-3 of the Council

Directive 85/337/EEC on the assessment of the

effects of certain public and private projects on

the environment, as amended by Directive

2003/35/EC of the European Parliament and of

the Council of 26 May 2003, the Czech Republic

has failed to fulfill its obligations under that

directive263

and therefore ordered the Czech Republic to pay the

costs.264

In the meantime the EIA Act amendment aiming to set

aside the shortcomings of public participation and access to

260. Overturning the President’s veto according to the Czech

Constitution requires an absolute majority of votes by 200 Deputies, i.e. at

least 101 votes. See Art. 50 pt. 2 of the Constitution of the Czech Republic.

261. See Overview of Legislative Changes in November and

December 2009, NWD LEGAL, 3–4, available at http://www.nwd-

legal.com/data/documents/_135.pdf (giving an overview of 436/2009) (on file


ENVIRONMENT).

262. See, e.g., Case C-111/00 Commission v. Austria, 2001 I-

07555 (“[T]he question whether a Member State has failed to fulfil its

obligations must be determined by reference to the situation in the Member

State as it stood at the end of the period laid down in the reasoned opinion,

. . . the Court may not take account of any subsequent changes.”); see also

Case C-23/05 Commission v. Luxemboug, 2005 I-9535 (stating it is settled

law that the Court must consider the Member State’s situation as it was at

the end of the period and may not consider changes made after that time).

263. Case C-378/09, Comm’n v. the Czech Republic, 2010 E.C.R.

I-00078.

264. See id. (providing a resolution for the Czech Republic’s

infringement).


justice regarding the EIA and subsequent licensing

procedures entered into force.265 From the moment the

amendment was passed the experts on environmental and

administrative law criticized the language of the law. Experts

believed it would not set aside any of the deficiencies that led

to the condemning judgment by the ECJ. Experts predicted

that the Commission would go after the Czech Republic

again.266 As predicted267 the Commission initiated a “second

round” of infringement procedure according to the Art. 260

TFEU.268 In November 2012 the “second round” proceedings

were stopped due to the Commission’s plans to initiate new,

“broader” infringement procedure against the Czech Republic

regarding the incorrect transposition of the EIA Directive. The

“second round” infringement proceedings are limited by the

scope of the action brought by Commission in the “first round”.

If the Commission continued it could only contest the non-

265. See Ceske Noviny, Czech Republic: EIA Law Now Complies

with the EU, ESMERCK, (Jan. 23, 2012) (describing the changes made to the

EIA law and the new provisions for access to justice, while also commenting

on he hopes that the new law would end the four year struggle with the

European Commission).

266. See Press Release, European Comm’n, Env’t: Commission

Asks Czech Republic to Comply with Ruling on Environmental Impact

Assessments (Nov. 24, 2010) (expressing doubts as to the actual

implementation of the directive despite the ruling of the European Court of

Justice).

267. See Sobotka, Michal; Humlíčková, Petra. Rozšíření účasti

veřejnosti (?) aneb několik poznámek k jedné zbytečné novele zákona a

posuzování vlivů na životní prostředí. In České právo životního prostředí. Vol.

27, No. 1/2010. p. 94-98. Stejskal, V. Rozsudek Soudního dvora EU proti

České Republic eve věci EIA. In České právo životního prostředí,.Vol. 27, No.

1/2010, 125 available at

http://www.cspzp.com/dokumenty/casopis/cislo_30.pdf.

268. See Martin Hedemann-Robinson, ENFORCEMENT OF

EUROPEAN ENVIRONMENTAL LAW. LEGAL ISSUES AND CHALLENGES,

ROUTLEDGE-CAVENDISH 27-205 (2007); Pål Wennerås, THE ENFORCEMENT OF

EC ENVIRONMENTAL LAW 251–308 (Oxford University Press, 2007); Jan H.

Jans & Hans H. B. Vedder, EUROPEAN ENVIRONMENTAL LAW: AFTER LISBON,

170–78 (4th ed., Europa Law Publishing, 2012); Ludwig Krämer, EU

ENVIRONMENTAL LAW 406–10 (7th ed., Sweet & Maxwell, 2012). The

infringement proceedings can take place in two litigation rounds. The first

round laid down in the Art. 258 TFEU results in the judgment of the ECJ in

which it determines whether and in what extent the Member State in

question had failed to fulfill its obligations under the TFEU. The Member

State is then ordered to comply with the judgment of the ECJ. If it fails to

do so, the Commission may according to the Art. 260 TFEU bring the matter

back to the ECJ and initiate the second round “infringement proceeding in

which the ECJ may impose the financial sanctions. More on the

infringement proceedings based on the TFEU.


compliance with the Art. 10a of the EIA Directive and nothing

else.

The shortcomings of the Czech EIA Act regarding the

public participation and access to justice were reiterated in

June 2012 by the Aarhus Convention Compliance Committee

in its findings and recommendations with regard to

communication ACCC/2010/50.269 Based on the

communication from one of the Czech environmental NGOs

the Aarhus Convention Compliance Committee found inter

alia that the Czech EIA Act fails to provide for effective public

participation during the whole decision-making process, to

ensure that the outcome of the public participation in the EIA

is duly taken into account in the subsequent licensing

procedures, to ensure that all the members of public

concerned have an access to review procedures, and fails to

ensure that the NGOs meeting the requirements for being

regarded as public concerned can seek review not only on

procedural, but also on substantial grounds.270

On April 25, 2013 the Commission launched the new

infringement action (no. 2013/2048) against the Czech

Republic due to incorrect transposition of the Art. 1, 2, 3, 4, 5,

6, 7, 8, 9, 11 and 13 and Annexes I, II, III and IV of the EIA

Directive in the Czech law. In its formal notice, the

Commission criticized the entire design of the Czech EIA

procedure. The Commission emphasized, in particular, that

the regulation of subsequent licensing procedures did not

reflect the requirements of the EIA Directive. This was

despite the fact that the EIA Directive requirements allow

flexible licensing procedure if the Member State has chosen to

introduce a separate model of the EIA procedure.271 In

269. See U.N. Econ. & Soc. Council [ECOSOC], Sub-Comm’n

Economic Comm’n for Europe, Compliance Comm., Findings and

Recommendations with Regard to Communication ACC/C/2010/50

Concerning Compliance by the Czech Republic, ¶ 1-12, U.N. Doc.

ECE/MP.PP/c.1/2012/11 (Oct. 2, 2012) (outlining the basis for the complaint

and the allegations therein).

270. See id. ¶ 89–90 (explaining the Czech Republic’s

shortcomings in meeting the requirements and offering recommendations on

procedures to amend the failures).

271. See Explanatory Memorandum to the Bill proposing

amendment of the EIA Act elaborated by the Czech Ministry for

Environment. In Czech: Důvodová zpráva k návrhu zákona, kterým se mění

zákon č. 100/2001 Sb., o posuzování vlivů na životní prostředí a o změně

některých souvisejících zákonů (zákon o posuzování vlivů na životní

prostředí), ve znění pozdějších předpisů, a další související zákony.


particular the Commission criticized the most the following

features of the Czech EIA Act:

The outcomes of the EIA procedures are not binding

in its content for the subsequent licensing process.

After the EIA of a project is concluded the project

the Czech law allows for substantial changes of

project during the subsequent licensing procedures

rendering the result of the EIA ineffective.

There are still insufficient guarantees for public

participation in the subsequent licensing

procedures and for timely and efficient access to

justice for members of public concerned.272

The Commission asked the Czech Republic to redress

all the shortcomings mentioned in its formal notice from April

2013 by the end of 2014. All the legislative changes had to be

in force by January 1, 2015 otherwise the Commission would

proceed to the next stage of the infringement procedure, i.e. to

a reasoned opinion. Issuing a reasoned opinion in this matter

would have serious consequences for the Czech Republic

because the Commission indicated that it would stop the

access of the Czech Republic to the money from EU funds not

only for future project, but also for the projects in progress.

Besides that the Czech Republic could also face financial

sanctions for non-compliance of the Czech EIA law with the

EIA Directive. The financial sanctions could amount € 2

million (lump sum) and a penalty payment up to € 10.000 per

day.273 Only under such threatening circumstances did the

Czech politicians finally state that complying with the

requirements of the EIA Directive was the Czech Republic’s

highest priority.

C. New Amendment of the Czech EIA Law: Major

Problems Finally Addressed?

On 3 September 2014 the Czech government approved

the bill proposing amendment of the EIA Act and other

related laws prepared by the Ministry for Environment in

cooperation with other ministries.274 The bill was then

272. Id. at 2.

273. Id. at 5.

274. See Esmerck, Czech Republic: Ministry Prepares Law

Amendment on EIA, ESMERCK, (May 6, 2014) (explaining the legislature’s

adoption of an amendment to the Czech EIA law to be in compliance with


presented to the House of Deputies and afterwards to the

Senate. Both of the houses of Parliament pushed through

some changes of the bill. Finally on February 10, 2015, the

House of Deputies passed the bill by 104 votes from the 168

deputies present. After signature by the President and the

Prime Minister the new law was promulgated under no.

39/2015 in the Collection of Laws (Sbírka zákonů). The

amendment came into force on April 1, 2015.275

The amendment brings significant changes in an

attempt to bring the Czech EIA Act in compliance with the

EIA Directive. After the changes, however, the resulting

amendment has also created several complications not only

for public participation, but also to the licensing system.276 It

is therefore questionable whether it will in effect remedy the

shortcomings criticized by the Commission.

From perspective of this paper, it is interesting to look

at the recording of debates in both of the houses of the Czech

Parliament when the Czech political representation discussed

the EIA amendment. The bill was introduced by the Minister

for Environment who himself stated that the bill was

prepared solely to promptly respond to the requirements of

the EU Commission. The EU Commission had lost its patience

with the Czech Republic and threatened to block EU funds

unless the Czech Republic brought its EIA law in compliance

with the EIA Directive. The Minister for Environment also

assured the Senate that the amendment brought only

temporary changes; the government planned to prepare a

complex conceptual change of project licensing that would

streamline the existing multilayer decision-making into single

licensing procedure.

The main changes that came into force on April 1, 2015

are as follows:

The environmental impact statement (EIS) as a result

of the EIA procedure will be binding in its content for the

licensing authority deciding in the subsequent proceedings

whether to grant a permit or not.

the EU directive) (on file with the WASHINGTON AND LEE JOURNAL OF


275. See id. (stating the effective date as April 1, 2015).

276. See Esmerck, Czech Republic: New EIA Law Perceived

Critically, ESMERCK, (Dec. 15, 2014) (explaining the construction industry’s

discontent with the requirements of the new law) (on file with the


ENVIRONMENT).


The projects will require the so-called coherence stamp.

At least 30 days prior to submitting an application for license

(or permit) the applicant has to submit the project

documentation which will be part of the license application to

the EIA authority who will certify that the project

documentation is in line with the EIS and that the project has

not significantly changed since the EIS was issued. If the EIA

authority finds out that the project has changed it will issue a

negative statement, which will block issuing the license.

The EIA Act explicitly says that the licensing authority

has to take into account the EIA documentation and

eventually also the public comments.

There is finally a definition of public concerned. The

Art. 3 letter i) of the amended EIA Act defines the public

concerned as (1) a person whose rights or duties could be

impaired by licensing the project, or (2) non-profit entity

whose main purpose of activities as defined in the statutes is

protection of environment or public health and which exists at

least three years prior to licensing of the project or which is

supported by at least 200 people. Members of public concerned

have a standing in the subsequent licensing procedure.

The amended EIA Act explicitly mentions that the

members of public concerned may challenge procedural and

substantive legality of the project license in court proceedings.

Without a need to file a motion the court will always have to

consider granting a suspensory effect to the action filed by the

members of public concerned. The governmental bill proposing

amendment of the EIA Act originally included a provision on

automatic suspensory effect of the action filed by public

concerned. This was changed during legislative process. The

court will grant the suspensory effect only if there is a risk

that carrying out the project will lead to serious harm on

environment. The critics of this provision rightly point out

that without any motion filed, the court will have no evidence

as to whether there is a risk of environmental harm so it will

be hard to judge rightly whether to grant the suspensory

effect or not. Therefore the provision on suspensory effect may

not be that effective as originally intended.

The licensing procedures are opened to wide public.

The amended EIA Act sets what documents and information

regarding the subsequent licensing procedure must be

disclosed. Members of wide public do not have a standing in

licensing procedure unless they qualify as public concerned.

The members of wide public may lodge their comments on


documents and information disclosed by the licensing

authority.

Despite the fact that among the EU Member States the

Czech Republic is a straggler when it comes to the

implementation of EU environmental policy and law, the

Czech politicians dared to say publicly when debating over the

EIA Act amendment that “we are again unnecessarily too

strict” and that “it is not necessary to set stricter rules than the

EU commands. We do not have to be more papal than the Pope,

as it is usual here in the Czech Republic . . . .”277 Czech

politicians also warned openly that the amendment gives the

environmental associations and environmental activists too

much power over the fate of various “strategic” projects. The

concern being that the amendment will allow activists to lodge

frivolous court petitions. Some politicians do not even hesitate

to label the environmental NGOs as “eco-terrorists, a special

brand of terrorists who block important projects, e.g.

construction of new highways and by doing so cause damages

worth millions CZK and are responsible for deaths of those

who died in car accidents due to lack of quality

infrastructure.”278 Such a resistance against doing anything

above the EU environmental requirements and ignorance of

democratic values shows that the Czech democracy and

politics are still very immature.

VIII. Conclusion

The environmental impact assessment is globally

recognized to be one of the most important tools for

integrating environmental considerations into decision-

making and by doing that it helps to prevent environmental

harm and contributes to sustainable development.279

Inherently the environmental impact assessment requires the

participation of all stakeholders, including citizens, local

277. See, e.g., Speeches of the Czech senators Pavel Eybert and

Petr Gawlas during Senate debates regarding the amendment of the EIA

Act in Protocol from the 5. 1st day of meeting of the Senate (Jan. 14, 2015).

available at

http://www.senat.cz/xqw/xervlet/pssenat/htmlhled?action=doc&value=74955

(Czech only).

278. Id.; see also speeches of Pavel Eybert, Petr Šilar and

Jaroslav Kubera.

279. See supra Part I (explaining the history and importance of

EIAs and their high regard among nations).


communities and non-governmental organizations.280 The

extent to which the public is allowed to participate in decision-

making and the law enforcement regarding environmental

protection is an important democratic indicator. In the

countries with strong post-Communist culture, the

implementation of public participation standards, including

access to information and legal remedies, proves to be the

hardest part.

History matters, but can forty years of experiencing the

Communist regime’s influence on the country’s democratic

performance so heavily that no other historical experience

matters?281 After the change of regime in 1989 the Czech

Republic experienced a couple of enthusiastic years full of

determination to reconnect with its pride of being once the

most developed part of the Austrian-Hungarian Empire and

living in a prosperous democracy in the inter-war period.282

During a short wave of enlightened law drafting, many

important environmental laws were adopted and the ambition

to be a leader in environmental policymaking was nurtured,

e.g. by initiating process Environment for Europe that led to

the adoption of the UNECE Convention on the Access to

Information, Public Participation in Decision-making and

Access to Justice in Environmental Matters (Aarhus

Convention).283

Soon after 1989 the enthusiasm was replaced by a

culture of constant discontent and blaming others for the

hardship of transformation despite the fact that there was a

substantial foreign financial and technical support. The high

hopes for setting an example in environmental protection were

struck down by a pragmatic politics oriented towards

economic growth. After June 1992 the environmental

protection was no longer a number one priority of the Czech

political representation, but the importance of environmental

protection for the EU accession proved to serve as a stabilizing

factor guaranteeing that the Czechs will have to meet at least

the minimum requirements set by the EU. The changes of

existing laws and adoption of new ones was often too fast and

uncritical transplantation without sufficient time to absorb

280. Id.

281. See supra Part II (providing a background of the Czech

Republic’s political history).

282. See supra Part IV (describing the Czech Republic’s

adoption of E.U. directives regarding EIA law and other environmental

measures).

283. Id.


the changes and gain support from all stakeholders. The

Czech governments have tended to interpret the ‘minimum’

requirements in their own way and instead of exercising

greater effort to implement the EU law correctly they have

kept blaming the EU for redundant administrative burdens

and costly changes of law.

The story of Czech environmental impact assessment

law, especially the part concerning public participation clearly

demonstrates that the Czech democracy is still rather

immature and will need more time and effort to overcome the

old Communist-regime habits that project themselves into

disrespect for law, ignorance of citizens’ view and lack of

constructive communication between public authorities,

businesses and citizens.

509

An Increase in Beach Reconstruction

Projects May Mean a Decrease in

Property Rights: The Need for a Multi-

Factor Balancing Test when Protecting

Waterfront Property

Amy Forman*

Abstract

In recent years, many states have struggled to come up

with an adequate solution to the negative effects of climate

change, specifically rising sea levels and severe storms. The most

common and successful method of protection, erecting barriers on

the waterfront, not only raises its own environmental concerns,

but also forces the government to invade on a homeowner’s

property rights for the sake of protecting the beach. Recent cases

such as the Borough of Harvey Cedars v. Karan, illustrate that

when courts abandon traditional property rights, it becomes

easier to implement protective measures and save their

waterfront properties. This protection comes at a cost, however,

as many of these protective methods end up causing long-term

environmental harm. On the other hand, if courts choose to

respect all traditional property rights, it avoids any detrimental

impact those structures would have on the environment but fails

to offer any protection to waterfront properties. Courts must find

a way to balance both the property concerns and environmental

concerns. This can be done through a multi-factor balancing test,

including the following three questions: (1) are there other more

environmentally friendly alternatives that can be implemented;

(2) does the value of damage done to the environment outweigh

the value of protecting the homeowner receives; and (3) will

* Amy Forman ([email protected]) is a J.D. candidate at

Washington & Lee University School of Law, May 2015, and a Senior Articles

Editor for the Journal of Energy, Climate, and the Environment. Amy would

like to thank Professor Christopher Seaman for his guidance and

encouragement throughout this writing process.

6 WASH. & LEE J. ENERGY CLIMATE & ENV’T 2 (2015)

510

denial of this protective measure cause imminent, rapid, or

sudden loss of property? This test will weigh the interests of both

property and environmental issues to determine when it is

adequate to compromise traditional property rights and which

protective measures are permissible.

Table of Contents

I. Introduction ............................................................................ 510

II. Environmental Concerns/Property Law ............................... 515

A. The Explanation for the Increase in Beach Erosion, Rising

Sea Levels, and More Frequent Coastal Storms: .................. 515

B. Using Property Law as a Response ................................... 519

III. The Borough of Harvey Cedars v. Karan ............................ 523

A. Background ........................................................................ 523

B. Lower Court Decision ........................................................ 525

C. New Jersey Supreme Court Decision ................................ 526

D. Aftermath of Harvey Cedars v. Karan .............................. 527

IV. Why Harvey Cedars Should Not Be Universally Applied ... 529

A. Environmental Concerns ................................................... 529

1. Beach Erosion ................................................................. 530

2. Loss of Habitats .............................................................. 531

3. Expensive and Temporary .............................................. 533

V. More Equitable Solution: Multi-Factor Balancing Test ....... 533

A. Will Denial of this Protective Measure Cause Imminent,

Rapid, or Sudden Loss of Property? ....................................... 536

B. The Multi-Factor Balancing Test ...................................... 540

1. Are There Other More Environmentally Friendly

Alternatives That Can Easily Be Implemented? ............... 540

2. Can the Costs be Justified? ............................................ 544

C. Applying the Multi-Factor Balancing Test to Harvey

Cedars ................................................................................. 549

IV. Conclusion ............................................................................ 551

I. Introduction

It has become increasingly evident that the effects of

climate change on the United States’ beaches and wetlands are

BEACH RECONSTRUCTION

511

creating a crisis.1 Many states today find themselves fighting a

fierce battle in an attempt to deal with the increasing problems

associated with rising sea levels and the increase in devastating

storms. 2 In attempts to prevent further damage, waterfront

property owners have found themselves in court battling over the

issue of protecting their property at the expense of some of their

traditional property rights.3

In recent years, the effects of climate change have been

increasingly detrimental to beaches.4 Climate change has caused

a rise in sea levels and an increase in beach erosion.5 As a result,

both environmental resources and infrastructures are being

destroyed at an alarming rate.6 Additionally, by warming sea

temperatures, climate change is causing an increase in the

frequency and severity of coastal storms.7 These coastal storms

have the power to destroy whole towns.8

1. See Thomas Ruppert, Reasonable Investment-Backed

Expectations: Should Notice of Rising Seas Lead to Falling Expectations for

Coastal Property Purchasers?, 26 J. LAND USE & ENVTL. LAW 239, 239–40 (2011)

(discussing the worsening conditions associated with rising sea levels and the

challenges presented in finding a solution).

2. See James G. Titus, Does the U.S. Government Realize that the

Sea Is Rising? How to Restructure Federal Programs so that Wetlands and

Beaches Survive?, 30 GOLDEN GATE U. L. REV. 717, 733 (2000) (discussing the

primary responses to sea levels rising).

3. See generally Borough of Harvey Cedars v. Karan, 70 A.3d 524

(N.J. 2013) (assessing whether compensation is owed to landowners who

actually benefit from a taking to protect beachfront property).

4. See Elizabeth C. Black, Climate Change Adaptation: Local

Solutions for a Global Problem, 22 GEO. INT’L L. REV. 360, 368 (2010) (discussing

the difficult consequences of climate change).

5. See id. at 374–76 (examining the increase in beach erosion).

6. See J. Peter Byrne, The Cathedral Engulfed: Sea-Level Rise,

Property Rights, and Time, 73 LA. L. REV. 69, 77 (2012) (discussing the

environmental consequences of rising sea levels).

7. See Sea Temperature Rise, NATIONAL GEOGRAPHIC (last visited

Mar. 2, 2014), http://ocean.nationalgeographic.com/ocean/critical-issues-sea-

temperature-rise/ (“Warmer surface water dissipates more readily into vapor,

making it easier for small ocean storms to escalate into larger, more powerful

systems.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


8. See Hurricane Sandy Fast Facts, CNN (Nov. 5, 2014, 12:10

PM), http://www.cnn.com/2013/07/13/world/americas/hurricane-sandy-fast-facts/

(chronicling Hurricane Sandy’s destruction on the east coast) (on file with the



512

Towns located along shorelines are using beach

reconstruction and replenishment projects to fight back against

the damages caused by climate change.9 These projects involve

the state or local government constructing sea walls, dunes, or

some type of barrier on private property and require the

government to obtain an easement from the property owner.10

When the property owner refuses to grant the easement, the

governments must exercise its eminent domain power.11 Issues

surrounding property rights have resulted in an increase in

litigation.12 The increase in litigation combined with the need for

immediate relief has led many courts to compromise or reduce

traditional property rights. 13 Recently, in Borough of Harvey

Cedars v. Karan, the New Jersey Supreme Court dramatically

reduced the amount awarded to beachfront property owners by

altering the traditional calculation method used to determine just

compensation to include general benefits. 14 The New Jersey

9. See Mark Di Ionno, Hurricane Sandy Recovery Still a Work in

Progress, THE STAR-LEDGER (Oct. 30, 2014, 7:04 AM),

http://www.nj.com/news/index.ssf/2014/10/hurricane_sandy_recovery_still_a_wo

rk_in_progress_di_ionno.html (reporting on the beach reconstruction efforts in

New Jersey towns after Hurricane Sandy) (on file with the WASHINGTON AND


10. See Wayne Parry, Fight Over Beach Sand Gets Dirty, NBC

(Apr. 11, 2010, 12:17 PM), http://www.nbcnews.com/id/36390707/ns/us_news-

environment/#.UwuZ6P0qDwI (discussing the need for the U.S. Army Corps of

Engineers to obtain easements from the oceanfront homeowners) (on file with


11. See Rachel S. Meystedt, Note, Stop the Beach Renourishment:

Why Judicial Takings May Have Meant Taking a Little Too Much, 18 MO.

ENVTL. L. & POL’Y REV. 378, 391 (2011) (discussing the government’s power

under the doctrine of eminent domain).

12. See Michael A. Hiatt, Note, Come Hell or High Water:

Reexamining The Takings Clause In a Climate Changed Future, 18 DUKE

ENVTL. L. & POL’Y F. 371, 371 (2008) (examining how large-scale sea level rise is

causing a collision in property rights with the takings clause and public trust

doctrine).

13. See Keith Goldberg, Energy Boom Tests State Eminent Domain

Laws, LAW360 (May 12, 2014, 2:16 PM), http://www.law360.com/articles/535660/energy-boom-tests-state-eminent-domain-laws (discussing an increase in litigation and scrutiny over eminent domain

laws) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND

THE ENVIRONMENT).

14. See Borough of Harvey Cedars v. Karan, 70 A.3d 524, 543 (N.J.

2013) (holding that calculation of just compensation must include benefits that

the homeowner obtained from dunes built for storm protection).


513

Supreme Court and other courts severely overlook the

implications of compromising traditional property rights—both

on property law and the environment.15

When a state or local government is only required to pay a

minimal amount of compensation, it becomes easier for the

government to construct sea walls and other barriers.16 While the

protective barriers provide immediate relief to the oceanfront

property, the environmental damage they cause is extensive and

long-term.17 These protective barriers have been found to actually

increase beach erosion and destroy animal habitat. 18

Additionally, the protective barriers are expensive to construct

and only provide temporary protection.19

Courts need to find a balance between property owner’s

need for immediate relief from the damages caused by climate

change and protecting the environment from further destruction.

When judges alter traditional property rights, making beach

protective barrier construction easier for states, this Note argues

that they ignore long-term environmental costs.20 If, however,

courts continue to follow the traditional just compensation

calculation method, most beach protection projects will be too

expensive to implement.21 Property owners will suffer extreme

damage to their property and possibly lose their beaches all

together.

15. See infra Part V (suggesting a better way to analyze these

cases).

16. See Tracey Samuelson, New Jersey Supreme Court sides with

Harvey Cedars in the Dune Compensation Case, NEW WORKS (July 8, 2013),

http://www.newsworks.org/index.php/local/new-jersey/57029-nj-supreme-court-

sides-with-harvey-cedars-in-dune-compensation-case (discussing the possibility

of beach replenishment projects becoming too expensive to implement if courts

do not consider general benefits) (on file with the WASHINGTON AND LEE JOURNAL


17. See infra Part IV.A (discussing sea walls and other forms of

armoring as a response to climate change).

18. See infra Part IV.A (explaining that erosion actually increases

when sea walls are used).

19. See infra Part IV.A (examining how the costs of sea walls

outweigh the benefits).

20. See infra Part V (discussing a more equitable solution, a multi-

factor balancing test).

21. See infra Part III.D (discussing the aftermath of Borough of

Harvey Cedars v. Karan).


514

When beachfront property owners face a likelihood of an

imminent threat to their property, as a general rule court should

apply the holding in Harvey Cedars. In these cases, courts should

consider general benefits and special benefits when calculating

just compensation. 22 The holding in Harvey Cedars is not

universally applicable to all eminent domain cases involving

beach reconstruction and replenishment projects.23 When denial

of the protective barrier does not cause a likely imminent threat

to the oceanfront property, courts should adopt a multi-factor

balancing test to help weigh the property concerns with the

environmental issues. 24 When applying this multi-factor

balancing test, courts should consider: (1) whether there are

other more environmental friendly alternatives that can easily be

implemented and (2) whether the costs of implementing the

constructive barrier can be justified.25

Part II of this Note will address the causes behind the

destruction of our beaches and how this has developed into the

pressing issue it is today. 26 This Part will also discuss how

property law is intertwined with this issue and how certain

aspects of property law, specifically takings, are being used as a

response to the problem.27 Part III will discuss the recent New

Jersey case Harvey Cedars v. Karan in relation to the issue of

compromising property rights at the expense of the

environment.28 Part IV will critique the legal outcome in Harvey

Cedars and discuss how the courts may have improperly weighed

the competing interests. 29 Part V will discuss a multi-factor

balancing test that presents a more equitable solution to issues

22. See infra Part III (suggesting use of the Court’s reasoning in

Borough of Harvey Cedars v. Karan).

23. See infra Part IV (discussing why Harvey Cedars v. Karan

should not be universally applied).

24. See infra Part IV (discussing the applicability of the Harvey

Cedars v. Karan to other jurisdictions).

25. See infra Part V (proposing a multi-factor balancing test).

26. See infra Part II (explaining the current environmental

concerns and its history).

27. See infra Part II (discussing the intersection of property law

and environmental concerns).

28. See infra Part III (noting the most recent and relevant case to

the subject at hand).

29. See infra Part IV (analyzing the Harvey Cedars v. Karan case).


515

that arise in these situations similar to the one in Harvey

Cedars.30

II. Environmental Concerns/Property Law

A. The Explanation for the Increase in Beach Erosion,

Rising Sea Levels, and More Frequent Coastal Storms

Today state and local governments find themselves forced

to address the inevitable consequences of climate change—which

include rising sea levels and severe storms.31 In the 2009 Climate

Impact Report, the United States Global Change Research

Program stated that climate change is caused by the emission of

greenhouse gases and the accumulation of these gases in the

atmosphere. 32 Scientists have determined the emissions of

carbon dioxide and other gases will significantly warm the Earth

in the next century.33 Greenhouse gases allow energy from the

sun into the Earth’s atmosphere but prevent it from escaping—

thus causing polar ice to melt, a reduction in the reflection of

sun’s rays, and warmer seawater through the absorption of more

of the sun’s energy.34

30. See infra Part V (proposing a better, more relevant test than

the one suggested in Harvey Cedars v. Karan).

31. See Black, supra note 4, at 368–73 (providing examples of how

New York City, Cape Town, and London have addressed climate change).

32. See U.S. GLOBAL CHANGE RESEARCH PROGRAM, GLOBAL CLIMATE

CHANGE IMPACTS IN THE UNITED STATES 19 (2009), available at

http://ccsl.iccip.net/climate-impacts-report.pdf (discussing the causes of climate

change) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


33. See WORKING GROUP I, INTERGOVERNMENTAL PANEL ON CLIMATE

CHANGE, CLIMATE CHANGE 1995: THE SCIENCE OF CLIMATE CHANGE, 84–85 (1996)

[hereinafter IPCC] (stating that “all models” create such a projection); see also

James G. Titus, Does the U.S. Government Realize that the Sea is Rising? How

to Restructure Federal Programs so that Wetlands and Beaches Survive?, 30

GOLDEN GATE U. L. REV. 717, 718 (2000) (“Scientists throughout the world, as

well as the U.S. Government, have concluded that emissions of carbon dioxide

and other gases will warm the Earth 1.03.05 degrees Celsius in the next

century.”).

34. See U.S. GLOBAL CHANGE RESEARCH PROGRAM, supra note 32,

at 17–18.


516

As a result of melting ice and increased water

temperatures, the Intergovernmental Panel on Climate Change

estimated that sea levels will rise approximately two feet per

century for the next few hundred years, with the possibility of

rising as much as fifteen feet by the year 2200.35 This rise in the

sea level is significant enough to destroy both environmental

resources and infrastructures by eroding or inundating beaches

and coastal wetlands.36

In addition to rising sea levels, the United States is faced

with the threat of increasing coastal storms.37 As a consequence

of the rise in sea temperatures, coastal storms are expected to

increase in number and severity. 38 Specifically, the warmer

surface water dispels more readily into vapor, making smaller

storms become larger and more powerful.39 Future storms will

have “larger peak wind speeds and more heavy precipitation.”40

As a result, the greenhouse warming will cause more intense

hurricanes with a higher rainfall rate.41 “With climate change,

35. See IPCC, supra note 33 (discussing the future effects of rising

sea levels).

36. See Byrne, supra note 6, at 77 (discussing the environmental

consequences of rising sea levels).

37. See Black, supra note 4, at 364 (discussing the dangers of

flooding with the increase in coastal storm severity).

38. See Sea Temperature Rise, supra note 7 (listing stronger

storms as an effect of higher sea temperatures).

39. See id. (“Warmer surface water dissipates more readily into

vapor, making it easier for small ocean storms to escalate into larger, more

powerful systems.”).

40. See INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, SUMMARY

FOR POLICYMAKERS, in CLIMATE CHANGE 2007: THE PHYSICAL SCIENCE BASIS 2

(2007), available at http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-

spm.pdf [hereinafter IPCC 2] (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY, CLIMATE, AND THE ENVIRONMENT); see also John R. Nolon, Regulatory

Takings and Property Rights Confront Sea Level Rise: How Do They Role, 21

WIDENER L. REV. 735, 741 (2012) (“Specifically, these future tropical cyclones

will have ‘larger peak wind speeds and more heavy precipitation associated with

ongoing increases of tropical sea-surface temperature.”).

41. See Nolon, supra note 41 (“Current research on climate change

and hurricanes has indicated that ‘it is likely that greenhouse warming will

cause hurricanes in the coming century to be more intense globally and have

higher rainfall rates than present-day hurricanes.”).


517

what traditionally have been ‘100-year floods’ may become 10-

year floods.”42

The consequences of rising sea levels and these powerful

coastal storms are troubling. On the environmental side, there

has been an increase in the erosion and loss of costal islands,

wetlands, and sand dunes.43 Although the exact impact of sea

level rise is uncertain, in recent years it has been discovered that

the effects of rising sea levels on coastal wetlands are more

destructive than previously thought. 44 Additionally, several

coastal property owners are now faced with threats of flooding

due to the increase in frequency and severity of coastal storms.45

This flooding also has the ability to damage dams, levees, roads,

sewers, subways, and airports.46

Coastal communities who choose to ignore the rising sea

levels do so “at their own peril.”47 Without state action, it is

inevitable that private and public property will be physically

destroyed. 48 Many of the consequences of climate change are

irreversible.49 It is difficult to determine what the actual effects of

climate change will be or predict the scale on which they will

42. MICHAEL HUBER, REFORMING THE UK FLOOD INSURANCE

REGIME: THE BREAKDOWN OF A GENTLEMAN’S AGREEMENT 9 (ESRC Centre for

Analysis of Risk and Regulation, Discussion Paper No. 18, 2004), available at

core.ac.uk./download/pdf/219237.pdf (on file with the WASHINGTON AND LEE


43. See Byrne, supra note 6, at 77 (discussing the consequences of

rising sea levels).

44. See Niki L. Pace, Wetlands or Seawalls? Adapting Shoreline

Regulations to Address Sea Level Rise and Wetland Preservation in the Gulf of

Mexico, 26 J. LAND USE & ENVTL. L. 327, 333 (2011) (discussing a new study

released in 2010 suggesting “that coastal wetlands are more sensitive to

destruction by rising sea levels than previously thought”).

45. See Black, supra note 4, at 364 (“Flooding already is a

significant threat, and its risks will only increase as severe storms become more

frequent.”).

46. See id. at 365 (discussing the damage storm-related flooding

can have).

47. See Pace, supra note 44, at 330 (discussing the visible impacts

of climate change).

48. See Byrne, supra note 6, at 69 (discussing the effects

inundation and storm surges will have on property).

49. See Black, supra note 4, at 360 (“[T]he consequences of climate

change are already irreversible.”).


518

occur.50 Additionally, sea levels are predicted to continue rising

at a steady pace in the future. 51 Thus, state and local

governments are forced to come up with effective solutions to this

problem immediately.52

In response, waterfront property owners, as well as state

governments, have chosen to fight back and protect their

property through methods such as beach nourishment and

armoring. 53 Beach nourishment involves replacing additional

sand on eroded beaches. 54 Numerous states have initiated

programs to place additional sand on their beaches.55

Armoring involves building hard structures, such as

bulkheads, sea walls, groins, and revetments, along the

shoreline.56 Armoring is used to forestall the negative effects of

climate change by acting as a barrier to the sea. 57 These

structures “eliminate the intervening beach, wetlands, and other

intertidal zones, but leave the dry land relatively unaffected.”58 In

many coastal areas, such as California, coastal landowners have

relied largely on armoring to protect their property.59 There are

two different types of armoring: hard armoring and soft

armoring. Hard armoring involves the use of constriction

50. See id. at 360 (“[I]t is extremely difficult to predict what the

actual effects will be and on what scale they will occur.”).

51. See David Rusk, Comment, Fix It or Forget It: How the

Doctrine of Avulsion Threatens the Efficacy of Rolling Easements, 51 HOUS. L.

REV. 291, 298 (2013) (“Sea levels have risen over the last decades and are

projected to continue rising at a steady pace.”).

52. See Black, supra note 4, at 368 (discussing the difficult

consequences of climate change and rising sea levels).

53. See Pace, supra note 44, at 328 (“[W]aterfront property owners,

in hopes of beating back erosion and rising seas, are frequently erecting hard

structures along the water’s edge.”).

54. See id. at 337 (discussing the practice of beach nourishment).

55. See Titus, supra note 33, at 733 (explaining the primary

responses to sea level rise).

56. See Pace, supra note 44, at 338 (discussing shoreline armoring

and its impact on the environment).

57. See Meg Caldwell & Craig Holt Segall, No Day At The Beach:

Sea Level Rise, Ecosystem Loss, And Public Access Along The California Coast,

34 ECOLOGY L.Q. 533, 540 (2007) (explaining how armoring leaves beaches

unable to retreat before the rising sea).

58. Titus, supra note 33, at 733.

59. See Todd T. Cardiff, Comment, Conflict in the California

Coastal Act: Sand and Seawalls, 38 CAL. W. L. REV. 255, 255 (2001) (“Coastland

landowners in California are building seawalls at an alarming rate.”).


519

materials, such as steel and concrete.60 Soft armoring, however,

involves the use of natural and living materials to restore

beaches and build sand dunes.61 Towns have found themselves

dealing heavily in property law as a result of this new reliance on

armoring.62

B. Using Property Law as a Response

Numerous towns located along the shorelines facing

erosion and destructive coastal storms hope to implement beach

reconstruction and replenishment projects immediately. In order

to be effective, these protective measures will have to intrude into

private oceanfront property. States are required to obtain the

consent of oceanfront homeowners to a loss of their land.63 Thus,

the homeowners’ property rights and the state’s authority under

the Constitution to take private land play a vital role in beach

reconstruction projects.

The Takings Clause of the Fifth Amendment of the United

States Constitution provides that no “private property be taken

for public use, without just compensation.” 64 Essentially, the

Fifth Amendment grants the government right to physically take

possession of property, under the conditions that it is for public

use and the property owner receives just compensation.65 The

60. See Byrne, supra note 6, at 86 (discussing hard armoring and

the materials used in its creation).

61. See id. (discussing soft armoring and the materials used in its

creation).

62. See id. (stating that towns are finding themselves using

property law for this purpose)

63. See Parry, supra note 10 (stating that the United States Army

Corps of Engineers cannot move forward with its beach project until all

oceanfront property owners have signed easements permitting new sand to be

pumped onto their personal property).

64. See U.S. CONST. amend. V (“[N]or shall private property be

taken for public use, without just compensation”).

65. See Byrne, supra note 6, at 85 (stating that the Fifth

Amendment was “intended to condition the exercise of eminent domain on

compensation. Understandably it was extended to require compensation when

the government otherwise physically takes possession of property without the

formalities of condemnation.”).


520

government may take private property either through a

regulatory taking or through the right of eminent domain.66

One type of regulatory taking, a per se taking, occurs when

the government permanently invades on a private property

owner’s right to exclusive possession or the owner’s right to

exclude others from his private property.67 Eminent domain is the

government’s sovereign power to take property from private

landowners.68 If the government takes private property for public

use, but pays the property owner just compensation, the taking is

considered constitutional under the government’s eminent

domain authority.69 States have begun to exercise their power

that flows from the per se takings doctrine and eminent domain

to compel waterfront property owners to permit the town to build

“shields” from the destructive effects of rising sea levels and

devastating storms on private property.70

These projects cannot begin until all oceanfront property

owners have signed easements permitting the state to either

pump additional sand onto their property or build protective

structures along the edge of their property.71 Many oceanfront

property owners willingly sign the easements. 72 Numerous

people, however, have refused to sign the easements fearing the

government might find other uses for their property, such as

66. See Meystedt, supra note 11, at 386 (“Under current property

law, the government may take the property of an individual either through a

regulatory taking or through the right of eminent domain.”).

67. See id. at 386 (discussing and defining the two types of

regulatory takings).

68. See Tiffiny Anne Douglas, Note, Florida’s Take on Takings: An

Appeal to Re-Balance the Individual’s Rights and the State’s Needs, 4 FL.

COASTAL L.J. 207, 207 (2003) (discussing the power of eminent domain and its

constitutional limits).

69. See Meystedt, supra note 11, at 387 (“If the government takes

private land for public use but pays the property owner just compensation, the

taking is constitutional under the right of eminent domain.”).

70. See Kate Zernike, Trying To Shame Dune Holdouts At Jersey

Shore, N. Y. TIMES, Sept. 4, 2013 (discussing the Army Corps solution to the

damaging effects of Hurricane Sandy in New Jersey).

71. See Parry, supra note 10 (discussing delays in beginning

construction are the result of hold out homeowners).

72. See id. (identifying that nearly half of the homeowners had

signed the easements).


521

building boardwalks. 73 Additionally, many people fear the

government is taking away their property rights.74 When these

property owners refused to grant the easements, it often leaves a

gap in the protective structure, which negates the structure’s

ability to defend against severe weather.75 As a result, several

towns have started eminent domain proceedings against those

property owners who refused to willingly sign easements.76

To begin an eminent domain proceeding, the government

must meet both the public use requirement and the just

compensation requirement.77 The public use requirement is not

an issue in these cases. 78 The second requirement, just

compensation, has presented obstacles for many states, resulting

in an increase in litigation.79 Because the states are asserting

control over private land for a public use, there is no argument

this is a taking. 80 This taking imposes a significant financial

burden on the state to provide private property owners with the

73. See id. (stating that many homeowners are holding out on

signing easements out of fear the government will build boardwalks, parking

lots, or public restrooms next to their homes).

74. See id. (stating that many reasonable person have developed a

fear that the government is trying to take away their property rights).

75. See Zernike, supra note 70 (discussing the damage caused to

homes because of gaps in the dunes left by neighbors).

76. See MaryAnn Spoto, Toms River to Start Eminent Domain

Proceedings Against 16 Oceanfront Property Owners, THE STAR LEDGER (last

visited Mar. 24, 2015),

http://www.nj.com/ocean/index.ssf/2013/10/toms_river_votes_to_start_eminent_d

omain_proceedings_against_16_oceanfront_property_owners.html (stating that

following similar action taken by Mantoloking, Toms River, New Jersey council

has voted to start eminent domain proceedings against 16 oceanfront property

owners who have refused to sign easements for a massive federal dune

construction project) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY

CLIMATE AND THE ENVIRONMENT).

77. See Byrne, supra note 6, at 85 (stating that the requirements

for a taking under the Fifth Amendment are both public use and just

compensation).

78. See Michael A. Hiatt, Come Hell or High Water: Reexamining

The Takings Clause In a Climate Changed Future, 18 DUKE ENVTL. L. & POL'Y F.

371, 371 (2008) (explaining the primary concern of public trust doctrine is not

public use).

79. See id. (discussing the impracticability of just compensation in

all of these situations).

80. See id. (“[T]he state action . . . where the government either

takes title to private land or subjects it to the public trust—has been considered

an undisputed taking.”).


522

appropriate compensation.81 Additionally, because a substantial

amount of private land is required to fight against these

problems, it may be impracticable for the state to adequately

compensate the numerous property owners involved.82

In partial takings cases, the land owner is “entitled to be

compensated not only for the value of the land taken but also for

any diminution in the value of the remaining land which may be

attributable to the taking.” 83 The traditional rule when

calculating just compensation is that only special benefits can be

deducted from compensation or damages in takings cases. 84

Under the traditional rule, general benefits are not to be

considered to reduce the amount of compensation awarded. 85

General benefits are “those produced by the improvement which

a property owner may enjoy in the future in common with all

other property owners in the area.”86 Special benefits are those

that “differ in kind, rather than in degree, from the benefits

which are shared by the public at large.”87 Special benefits are

benefits particular to the property that is the subject of the

condemnation and not the type of benefit that was the object of

the project.88 These benefits are usually incidental benefits and

may result from physical changes in the land.89

81. See id. (discussing the financial difficulties states face when

implementing a large scale beach reconstruction project).

82. See id. at 371 (explaining the high cost of compensation is

impractical in light of the massive nature of these projects).

83. See Ridgewood v. Sreel Inv. Corp., 28 N.J. 121, 125 (1958)

(explaining the necessity of including benefits to the homeowner in the

calculation of just compensation).

84. See E. H. Schopflocher, Annotation, Deduction of Benefits in

Determining Compensation or Damages in Eminent Domain, 145 A.L.R. 7 (1943)

(distinguishing between general and special benefits in calculating just

compensation).

85. See Borough of Harvey Cedars v. Karan, 70 A.3d 524, 526

(2013) (“[O]nly special benefits, not general benefits, flowing from a public

project can be considered in calculating the enhanced value to the remaining

property.”).

86. Id. at 532.

87. Id.

88. See id. at 529 (describing special benefits as ones which

directly increase the value of the tract, rather than the neighborhood as

a whole).

89. See id. (indicating that a special benefit generally isn’t one

planned for or accounted for as part of the taking).


523

Following this traditional compensation rule, the general

benefit cannot be used to offset the amount of compensation a

homeowner received.90

“When one considers the possibility that tens of

thousands of square miles of land containing

valuable coastal properties and entire cities such as

Miami and New Orleans could become submerged,

it seems impracticable for the states to protect and

extend the public trust if they are required to

provide full compensation to all private property

owners.”91

Therefore, some courts have begun to alter this rule to include

both general benefits and special benefits in calculating just

compensation. 92 This reduces the amount of compensation a

waterfront property owner will receive, making it easier and

more affordable for states to implement these projects.93

III. The Borough of Harvey Cedars v. Karan

A. Background

The New Jersey Supreme Court recently held in Borough

of Harvey Cedars v. Karan that calculation of just compensation

for a taking under the Fifth Amendment was required to include

the benefit that property owners obtained as a result of storm

protection provided by dunes. 94 The U.S. Army Corps of

Engineers and the New Jersey Department of Environmental

90. See id. at 526 (“[O]nly special benefits, not general benefits,

flowing from a public project can be considered in calculating the enhanced

value to the remaining property.”).

91. See Hiatt, supra note 78, at 381–82.

92. See Harvey Cedars, 70 A.3d at 536–37 (including general

benefits as part of the calculation process in certain circumstances).

93. See id. at 531 (noting that the jury awarded the Karans

$375,000, which would make projects unfeasible if the state was forced to pay

that amount to every homeowner).

94. See id. at 541 (holding that calculation of just compensation

was required to include benefits that homeowner obtained as a result of storm

protection by dunes).


524

Protection implemented a public project to provide protection to

waterfront residents from beach erosion and threatening

storms.95 One part of the project involves pumping a massive

amount of sand onto the beach to extend the shoreline seaward

by 200 feet. 96 A second part of the project involved beach

nourishment every seven years over a period of fifty years. 97

Lastly, the project called for construction of dunes along the

entire length of the shore.98 The dune construction part of the

project required the town to obtain easements on properties

bordering the ocean.99 The town of Harvey Cedars in New Jersey

was able to obtain sixty-six easements by voluntary consent of

the oceanfront property owners. 100 Sixteen property owners,

however, refused to consent to the construction of the dunes on

their property.101

The Karans were one of those sixteen owners of beachfront

property in the Borough of Harvey Cedars.102 The Karans rejected

Harvey Cedar’s offer of $300 as compensation for both the land

taken and any devaluation of the remaining property. 103 The

Borough of Harvey Cedars exercised its eminent domain

authority to take a portion of the Karan property to build a

protective dune that connects with other dunes on neighboring

waterfront property that runs the entire length of Long Beach

95. See id. at 527 (explaining the beach and storm protection

project involved, which included beach replenishment and sand dunes).

96. See id. (discussing movement of sand back to the shore as part

of the of the beach reconstruction project).

97. See id. (explaining how they would continue to replenish the

beaches every seven years).

98. See id. (discussing the necessity of dune construction as part of

the beach reconstruction project).

99. See id. (noting that takings are required to follow the process

of eminent domain).

100. See id. (“The Borough acquired sixty-six easements by

voluntary consent of the property owners.”).

101. See id. (stating that the owners of sixteen beachfront

properties did not consent).

102. See id. (identifying the Karans as one of the withholding

property owners).

103. See id. at 528 (“The Karans rejected the Borough's offer of $300

as compensation for both the land taken and any devaluation of the remaining

property.”).


525

Island in Ocean County, New Jersey.104 All parties agree that the

Karans were entitled to “just compensation” for this taking of

their property for a public project.105 The dispute centered on the

proper way to calculate this “just compensation” when the taking

could lessen and enhance the value of the property as a whole.106

The essential question: whether the calculation of just

compensation should consider only special benefits, or should

general benefits be included in the calculation as well.107

B. Lower Court Decision

The trial court refused to permit Harvey Cedars the

opportunity to show that the dune increased the Karans’ property

value by protecting it from the damage potentially caused by

future storms.108 The court determined that general benefits were

not to be included in the “just compensation” calculation. 109 The

court reasoned the storm protection benefit was a general benefit

because these dunes not only protect all property owners in

Harvey Cedars but also add value to all of the included

property. 110 The Karans were awarded $375,000 in damages,

based primarily on the loss of their oceanfront view. 111 The

104. See id. at 526 (“The Borough of Harvey Cedars exercised its

power of eminent domain to take a portion of the beachfront property of Harvey

and Phyllis Karan to construct a dune that connects with other dunes running

the entire length of Long Beach Island in Ocean County.”).

105. See id. (noting that the Karans entitlement to “just

compensation” for the taking of a portion of their land was never in question).

106. See id. (stating that the focus of this case was how to properly

calculate “just compensation” when the taking of the Karans property both

decreased in part and increase in part the value of the remaining land).

107. See id. at 534 (stating that the issue before the court was solely

an issue of law—“how to compute “just compensation” in a partial takings

case”).

108. See id. at 526 (“The trial court, however, denied Harvey Cedars

the opportunity to show that the dune enhanced the value of the Karans’

property by protecting it from the damage and destruction that is wrought by

powerful storms and ocean surges.”).

109. See id. (stating that general benefits could not be included in

the calculation).

110. See id. (classifying the storm protection benefit as a general

benefit as it helped the community at large).

111. See id. (“The jury awarded the Karans $375,000 in damages,

premised mostly on the loss of their oceanfront view.”).


526

Appellate Division affirmed, agreeing with the trial courts

conclusion that the protection afforded to the Karans’ property by

the dune construction was a general benefit.112 The Appellate

Court concluded that “while defendant’s property may be

benefited in somewhat ‘greater . . . degree’ than its inland

neighbors, because it is closer to the ocean and therefore in

somewhat greater danger of incurring storm damage, that is not

a legally cognizable ‘special benefit’ for purposes of valuation in a

condemnation case.”113

C. New Jersey Supreme Court Decision

The New Jersey Supreme Court reversed, concluding that

“when a public project requires the partial taking of property,

‘just compensation’ to the owner must be based on a consideration

of all relevant, reasonably calculable, and non-conjectural factors

that either decrease or increase the value of the remaining

property.”114 The Court reasoned that the calculation used by the

Appellate Division, which does not consider a public project’s

general benefits, led to a compensation award that did not reflect

the owner’s true loss. 115 The Court acknowledged that the

benefits of the dune project extended beyond the Karans to their

neighbors further from the shoreline. 116 The Court argued,

however, that it was clear the properties “most vulnerable to

dramatic ocean surges and larger storms are frontline properties,

such as the Karans.”117 Therefore, the Court concluded that the

Karans benefited to a greater degree than their westward

neighbors. 118 The Court stated that “reasonably calculated

benefits—regardless of whether those benefits are enjoyed to


App. Div. 2012), overruled by Borough of Harvey Cedars v. Karan, 70 A.3d 524

(2013) (affirming trial court’s decision that benefit was a general benefit).

113. Id.

114. Harvey Cedars, 70 A.3d at 526–27.

115. See id. at 527 (noting that the lower court essentially

pretended the benefits did not exist).

116. See id. at 541 (“Unquestionably, the benefits of the dune

project extended not only to the Karans but also to their neighbors further from

the shoreline.”).

117. Id.

118. See id. (“Therefore, the Karans benefitted to a greater degree

than their westward neighbors.”).


527

some lesser or greater degree by others in the community—that

increase the value of property at the time of the taking should be

discounted from the condemnation award.”119 The Court held that

calculation of just compensation was required to include benefit

that homeowners obtained as a result of storm protection

provided by dunes.120

D. Aftermath of Harvey Cedars v. Karan

This decision breaks from the long-standing common law

distinction between general benefits and special benefits.121 The

traditional rule holds that in the ordinary condemnation case,

compensation is based on the value of the property at the time of

the taking, disregarding depreciation or inflation attributable to

the proposed improvement—the special benefits. 122 Thus, the

New Jersey Supreme Court decided that, despite the damage

caused to the Karans’ property, the protective benefit that the

Karans received should be considered in calculating “just

compensation,” thus reducing the amount they would originally

have received. 123 With this new formula for calculating just

compensation, the Karans settled for merely $1, as opposed to the

$375,000 they were initially awarded.124

The New Jersey Supreme Court emphasized that without

the dune project the Karans property had only a 27% chance of

119. Id. at 543.

120. See id. at 526 (holding that such benefits both uniquely and

generally benefit the property).

121. See id. at 533 (discussing calculation methods of just

compensation).


Super. Ct. App. Div. 2012) (“The applicable rule in the ordinary condemnation

case is that the proper basis of compensation is the value of the property as it

would be at the time of the taking disregarding depreciation or inflation

attributable to the proposed improvement.”).

123. Harvey Cedars, 70 A.3d at 533 (discussing the inclusion of

protective benefit in calculation).

124. See MaryAnn Spoto, Harvey Cedars Couple Receives $1

Settlement for Dune Blocking Ocean View, THE STAR LEDGER (last visited Mar.

24, 2014),

http://www.nj.com/ocean/index.ssf/2013/09/harvey_cedars_sand_dune_dispute_s

ettled.html (discussing the Karans settlement deal) (on file with the



528

surviving fifty years without any storm damage. 125 The court

stated “just compensation does not entitle a landowner to a

windfall from a partial taking of property.”126 Therefore, in the

eyes of the New Jersey Supreme Court, the fact that the dune

would greatly protect the property increased the value and should

be considered in calculating the compensation.127

The Karans were no longer entitled to the original award

of $375,000.128 This decision is likely to decrease the amount of

compensation of similarly situated homeowners when their

properties are needed for beach replenishment or armoring

projects.129 If the court had sided with the Karans, the result

would likely be that these projects would be too expensive to

implement. 130 This case deals with “soft” armoring because it

involves a beach replenishment project of building dunes. 131

Although the effects of soft armoring are less detrimental on the

environment than hard armoring, such projects still pose

environmental risks to the shoreline ecosystem.132 Therefore, the

Harvey Cedars decision resulted in a loss of compensation to the

Karans from $375,000 to $1. 133 This minimal compensation

award makes it much easier for the town to build the dunes, but

ignores the environmental impact.134 If the outcome had been in

125. See Harvey Cedars, 70 A.3d at 529 (“Without the dune project,

the Karans’ property had only a 27% chance of surviving fifty years without any

storm damage.”).

126. Id. at 541.

127. See id. at 533 (discussing the Court’s calculations).

128. See Samuelson, supra note 16 (discussing the Court’s rejection

of the jury award).

129. See id. (“The decision will likely decrease the amount of

compensation awarded to homeowners for use of their land for beach

replenishment projects in the future, to the relief of shore municipalities

considering the use of eminent domain against homeowners who are reluctant

to allow dune construction on their property.”).

130. See id. (“If the court had sided with the Karans, many

proponents of dune construction worried that projects would become

prohibitively expensive.”).

131. See Byrne, supra note 6, at 93 (defining soft armoring).

132. See id. (discussing the negative effects of soft armoring as

compared with hard armoring).

133. See Borough of Harvey Cedars v. Karan, 70 A.3d 524, 531–32

(reducing calculation of trial court award from $375,000 to $1).

134. See Samuelson, supra note 16 (discussing the benefit to towns

of reduced jury award).


529

favor of the Karans, it is likely several towns, like Harvey

Cedars, would be unable to afford these reconstruction projects

and it would be inevitable that the town and oceanfront property

would suffer severe physical and financial damage.135

IV. Why Harvey Cedars Should Not Be Universally Applied

The Harvey Cedars decision raised the question of “who

should pay” in beach reconstruction cases: the town or the

individual. The New Jersey Supreme Court answer to that

question resulted in a shift in property law that required

beachfront property owners to bear a substantial cost of

protecting the whole beach, while at the same time making it

much easier for state to implement their desired protection

methods.136 The New Jersey Supreme Court failed to address the

issue that by altering traditional common law property rights,

such as the amount received for just compensation, it is now

easier for states to implement protective projects that have

increasingly been found to cause environmental damage.137 Thus,

the reduction in property rights comes at a greater cost than

originally thought. This decision fails to take into consideration

other factors, focusing instead on finding a “quick fix” to the

problem of rising sea levels and beach erosion.138 The public has

developed an unrealistic expectation that beaches will always

remain where they are and in the condition they are currently in

and in efforts to maintain their beaches, society has often

overlooked the damage that is actually being caused by

structures that are supposed to be protective.139

A. Environmental Concerns

135. See id. (explaining the prohibitive cost of upholding the jury

award).

136. See Harvey Cedars, 70 A.3d at 527 (discussing holding that

shifts the financial burden to homeowners).

137. See Cardiff, supra note 59, at 271–72 (summarizing case law

that allowed for state construction of protective projects).

138. See id. at 256–57 (explaining the environmental impacts

generally not considered when implementing beach projects).

139. See id. at 277 (discussing how, furthermore, the public may not

even realize that degradation is occurring).


530

In the United States, sea walls and other forms of

armoring have been a popular response to the problems brought

on by climate change.140 If the compensation calculation employed

in the Harvey Cedars decision is adopted nationally, states will

quickly move forward with beach protection projects because they

will be able to implement these projects at a much lower cost.141

The problem then presented is that “as more and more of the

nation’s bays and estuaries are armored, the American public is

losing important habitat, ecosystem services, and the tradition of

public access to the shoreline.”142 It has been said that: “seawalls

damage virtually every beach they are built on. If they are built

on eroding beaches—and they are rarely built anywhere else—

they eventually destroy the beach.”143

1. Beach Erosion

Shoreline armoring has the potential to permanently alter

the dynamic of the coastline.144 This erosion control method has

been found to have numerous unintended and destructive

environmental effects.145 In fact, sea walls do nothing to limit

beach erosion, and instead actually increase the rate at which

beaches erode.146 Construction of sea walls, or other armoring

methods, results in the loss of beaches between the seawall and

the shoreline.147 Specifically, “[h]ard armoring will eliminate the

intertidal area as seas rise, and it often increases erosion of

neighboring properties by increasing current and wave action

140. See Black, supra note 4, at 375 (stating that the United States

has historically responded to coastal erosion problems by building sea walls).

141. See Harvey Cedars, 70 A.3d at 527 (explaining a compensation

calculation where the homeowner bears the financial burden).

142. Pace, supra note 44, at 328.

143. Cardiff, supra note 59, at 255.

144. See Pace, supra note 44, at 338 (“This popular erosion control

tool, however, is forever altering the dynamic of the nation’s coastline.”).

145. See id. at 338 (discussing the unintended environmental

impact shoreline armoring has on beaches).

146. See id. at 375 (“Although sea walls may be effective at

protecting the building directly behind them, they do nothing to limit beach

erosion and are generally understood to actually increase the rate of erosion.”).

147. See Pace, supra note 44, at 337 (“As is well understood by

coastal engineers, constructing a seawall along a receding shoreline will result

in the loss of the sandy beach between the seawall and the water’s edge.”).


531

laterally against unprotected shoreline.” 148 Soft armoring has

been found to cause less significant environmental damage, but it

may not be able to preserve ecological functions performed by

natural shorelines.149 In a sense, shoreline armoring only truly

benefits a small minority of property owners, while it decreases

access to the millions of people wishing to use the beach

recreationally.150

Shoreline armoring causes both passive erosion and active

erosion.151 Passive erosion is the narrowing of the part of the

beach located in front of the seawall due to the fact that the

seawall fixes in place at the back end of the beach, preventing the

retreat of the shoreline, while the lower portion of the beach

continues to erode.152 Active erosion, on the other hand, is “sand

loss caused by waves rebounding off of the seawalls themselves

and scouring away the sand.”153 Therefore, in attempts to protect

the oceanfront property, towns are actually further harming the

beach by increasing erosion.

2. Loss of Habitats

Even without considering the damage done to animal

habitats by building some of these protective structures,

endangered species are already at risk due to rising sea levels.154

148. Byrne, supra note 6, at 87.

149. See id. at 87 (comparing the environmental impacts of both

hard and soft armoring).

150. See Cardiff, supra note 59, at 256 (“Shoreline armoring only

benefits the incredibly small minority of the population that owns property

directly on the coast, while it decreases access to the millions of people who flock

to the beach every year.”).

151. See Cardiff, supra note 59, at 258 (discussing the main ways in

which shoreline armoring destroys beaches, namely occupation loss, active

erosion, and passive erosion).

152. See id. at 258 (defining passive erosion).

153. Id.

154. See Center for Biological Diversity, Deadly Waters; How Rising

Seas Threaten 23 Endangered Species (Dec. 2013), available at

http://www.biologicaldiversity.org/campaigns/sea-

level_rise/pdfs/SeaLevelRiseReport_2013_print.pdf (discussing the threat rising

sea levels bring to endangered species) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY CLIMATE AND THE ENVIRONMENT).


532

As beaches disappear, so do the habitats located on them.155 The

United States is home to 1,383 threatened and endangered

species, a disproportionate number of which rely on coastal

habitats.156 As sea levels rise, seventeen percent of the nation’s

endangered animals will face increasing environmental

pressures. 157 Rising sea levels will harm these species by

submerging and eroding their habitats. 158 Additionally,

groundwater habitats will be contaminated by saltwater

intrusion, resulting in the die-off and conversion of plant

communities.159

The traditional approach of armoring the shoreline causes

a serious loss of those habitats and ecosystems as well.160 For

example, certain beach restoration projects replace eroded sands

with new sand that differs in the nature and quality.161 This

“new” sand deprives animals of critical qualities they relied on in

the natural sand.162 It has also been discovered that sea turtles

are capable of adapting to the natural erosion of beaches and

effects of devastating coastal storms, but have a much harder

time acclimating to human-caused changes in the beach sand.163

The continued use of armoring will result in the loss of numerous

155. See Caldwell, supra note 57, at 540 (“As the beaches vanish, so

does habitat for wildlife . . . .”).

156. See Center for Biological Diversity, supra note 154 (discussing

how endangered species are affected by changes to the coastline).

157. See id. (discussing the effect of sea-level rise in the United

States on threatened and endangered species).

158. See id. (noting the deleterious effect of rising sea-levels on

certain endangered species).

159. See id. (identifying some of the damage that will be done to

animal habitats by rising sea levels).

160. See Pace, supra note 44, at 329 (“Traditional approaches to

defend or armor the shoreline against the rising sea do not take into account

loss of estuarine habitat and ecosystem services provided by wetlands.”).

161. See Craig Anthony Arnold, Legal Castles in the Sand: The

Evolution of Property Law, Culture, and Ecology in Coastal Lands, 61 SYRACUSE

L. REV. 999, 1018 (2010) (discussing some of the problems associated with some

beach restoration projects).

162. See Arnold, supra note 161, at 1018 (discussing the impact on

sea turtle habitats).

163. See id. (“While sea turtles naturally adapted to the natural

erosion of beaches, effects of hurricanes and storms on beaches, and landward

migration of coastlines, they have a much harder time adapting to human-

caused alterations of beaches . . . .”).


533

near-shore species, as well as diminish diversity among those

that remain.164

3. Expensive and Temporary

Armoring is extremely costly. 165 It is economically

unfeasible to protect entire coasts through armoring.166 Often, the

costs of maintaining the sea wall over time are considerably more

than the value of the property the sea wall is attempting to

protect.167 An important factor to consider when evaluating these

projects is the fact that these protective measures are

temporary.168 In fact, the increase in the beach width may only

last one season.169 In essence, shoreline armoring “fixes” the back

of the beach, which then stops natural shoreline erosion.170 Thus,

the beach is unable to migrate inwards as the sea level rises.171

The destructive impact of this process is that the sea level

continues to rise, covering the existing beach, and the process

prevents new beaches from being created.172

V. More Equitable Solution: Multi-Factor Balancing Test

If courts continue to follow the traditional calculation of

just compensation, most beach protection projects will be too

164. See Pace, supra note 44, at 339 (“Bulkheads eventually

eliminate all intertidal habitat and significantly reduce both the abundance and

diversity of many near-shore species.”).

165. See id. (discussing the negative effects of armoring).

166. See Byrne, supra note 6, at 87 (“Plainly, armoring the entire

coast will never be economically feasible or even rational.”).

167. See Black, supra note 4, at 375 (discussing the financial costs

of shoreline armoring).

168. See Cardiff, supra note 59, at 256 (stating that these methods

only increase the width of the beach for a very short period of time).

169. See Cardiff, supra note 59, at 259 (discussing the temporary

benefits of beach replenishment).

170. See Caldwell, supra note 57, at 540 (“Armoring fixes the back

of the beach, stopping natural shoreline erosion that would otherwise cause

beaches to migrate inland as the water rises.”).

171. See id. (“Armoring fixes the back of the beach, stopping natural

shoreline erosion that would otherwise cause beaches to migrate inland as the

water rises.”).

172. See id. (discussing the effects of passive erosion on the beaches

and shorelines).


534

expensive to implement and many property owners will suffer

extreme damage to their property or lose the beaches

altogether. 173 “The drafters of the Fifth Amendment did not

intend to protect private property owners from climate change

and its effects.” 174 The climate change and environmental

concerns today were unimaginable at the time the Takings

Clause was drafted.175 Simply because the large-scale effects of

climate change were not threatening society when the Fifth

Amendment was ratified does not mean that the takings clause

should not address these new concerns. 176 “[T]he protections

provided by the takings clause . . . should be carefully reexamined

when technological or societal change recasts the nature of the

right, freedom, or liberty that is protected.”177

When deciding between calculating just compensation the

traditional way (i.e. only considering special benefits, thus

making beach reconstruction more expensive/impractical for the

states) or the Harvey Cedars way (i.e. considering both special

and general benefits, thus reducing traditional property rights

and increasing the long-term harm to the environment, but

allowing states to easily implement a much needed protective

structure), courts should refrain from adopting one set approach.

Instead, courts should apply a multi-factor balancing test.

As shown above, this threat of rising sea levels and

disastrous coastal storms creates a dispute between property

rights and protection of the environment. 178 In cases such as

173. See Hiatt, supra note 78, at 384 (identifying the financial

issues associated with government taking of private lands due to rising sea

levels and erosion).

174. See Hiatt, supra note 78, at 386 (discussing the discrepancy in

scientific knowledge between 1791 and present day, and how that difference

should affect the interpretation of the drafters’ intent).

175. See id. (“It would likely have been inconceivable to the drafters

of the takings clause that thousands of square miles of American land and

private property would become submerged by the ocean because human activity

altered the Earth’s climate and caused sea level rise to then unfathomable

levels.”).

176. See id. (stating that the takings clause should still provide

protection against governmental takings whose causes were unanticipated at

the time it was ratified).

177. Id.

178. See Hiatt, supra note 78, at 386 (discussing the dichotomy

between private property interests and broader environmental concerns).


535

Harvey Cedars, where the courts modify the common law

application of just compensation, 179 it becomes easier to

implement protective measures, such as armoring, that often

cause greater long-term harm to the environment.180 On the other

hand, if the New Jersey Supreme Court had followed the

traditional approach in Harvey Cedars, holding instead that the

protective function of the dune to the Karans’ property should not

be considered in calculating compensation, it becomes

significantly more expensive and therefore unfeasible to build

these structures. This method, however, avoids any detrimental

impact those structures would have on the environment.181 The

problems associated with rising sea levels and disastrous storms

are predicted to greatly increase over the years182 and thus, a

proper balance must be found between when it is appropriate to

reduce traditional property rights at the risk of harming the

environment further, and respecting traditional property rights

at the risk of not being able to build the protective structures.

It is illogical to conclude that decisions that decrease

property rights, as was the case in Harvey Cedars, should never

be adopted simply because of environmental concerns. If this

were the case, the government would be left in some instances

with few options to help oceanfront properties, exposing property

owners to great loss.183 One cannot ignore, however, that many of

these protections dramatically increase the harm done to our

environment.184 Both factors need to be taken into consideration

when deciding if it is appropriate for the government to decrease

179. See Borough of Harvey Cedars v. Karan, 70 A.3d 524, 544 (NJ.

2013) (holding that calculation of just compensation was required to include

benefit that homeowners obtained as a result of storm protection provided by

dune).

180. See Thomas Ruppert, Reasonable Investment-Backed

Expectations: Should Notice of Rising Seas Lead to Falling Expectations For

Coastal Property Purchasers?, 26 J. LAND USE & ENVTL. LAW 239 (discussing the

current trend of rising sea levels).

181. See Pace, supra note 44, at 338 (discussing the unintended

environmental impact shoreline armoring has on beaches).

182. See Caldwell, supra note 57, at 329 (“Sea level is rising and the

rate of this rise is increasing.”).

183. See Pace, supra note 44, at 336 (discussing financial impact of

deteriorating shoreline on property owners).

184. See id. (discussing the negative effects of some coastal

projects).


536

or reduce compensation in a takings case in order to build a

potentially environmentally destructive structure to ensure

protection to the community and beachfront homeowners.185 To

adequately determine this, courts should adopt a multi-factor

balancing test to weight the property concerns with the

environment issues. Courts should first look to see if denial of the

protective measure could cause a likelihood of imminent threat to

the waterfront property. If this is the case, then courts should

adopt as a general rule the Harvey Cedars holding and include

general benefits in the calculation of just compensation. If,

however, there is no likelihood of imminent threat, courts should

apply a multi-factor balancing test. This would include the

following two steps: determining if more environmentally friendly

alternatives are available and determining if the costs can be

justified.

A. Will denial of this protective measure cause imminent,

rapid, or sudden loss of property?

In cases where the property owner will risk imminent,

rapid, or sudden loss of their property without the protective

structures, the court may be justified in following the Harvey

Cedars approach to calculating just compensation. Without doing

so, the property owner will inevitably lose their property or

experience such severe damage that it will be substantially

reduced in value.186 Thus, it makes sense to reduce compensation

in cases that require quick state action to protect oceanfront

property.

In Hach v. Zoning Bd. Of Appeals, the petitioner was an

owner of a “beachfront home in East Hampton.”187 Petitioner,

Hach, sought a natural resources special permit from the

respondent, the Zoning Board of Appeals of the Town of East

Hampton (ZBA), to construct a rock revetment measuring 247

feet in length, 42 feet in width, and 14 feet in height parallel to

185. See id. (identifying factors that must be taken into

consideration when policymaking).

186. See Harvey Cedars, 70 A.3d 524, 526 (2013) (discussing the

necessity of government involvement to preserve value of the property).

187. Hach v. Zoning Bd. of Appeals, 287 A.D.2d 500, 500 (2001).


537

the waterline on his land.188 Hach believed a rock revetment was

needed in order to protect his oceanfront property and home from

the effects of natural coastal erosion and to generally protect his

home from storm surge damage.189 Prior to requesting permission

to build a rock revetment, petitioner had spent approximately

$40,000 on soft armoring solutions that proved to be insufficient

to provide relief after they were destroyed by storms. 190

Petitioner, along with experts, believed this permanent rock

revetment was essential in protecting his home.191

The ZBA denied Hach’s request for a natural resources

special permit, expressing concern that if Hach did not maintain

this revetment, the beach erosion would only worsen.192 The ZBA

did, however, acknowledge that the revetment would efficiently

protect his property.193 The Appellate Division found the ZBA’s

decision was arbitrary and capricious and unsupported by

substantial evidence.194 The Court relied on the East Hampton

Town Code § 255-5-50(6), which states that in order to obtain a

natural resource permit, the petitioner is required to demonstrate

that his property was in imminent danger absent a coastal

erosion structure and that the proposed structure is the

minimum necessary to control erosion.195 The Court found that

petitioner had clearly demonstrated his property was in

imminent danger absent a coastal erosion structure by the fact

that the ZBA had approved all his neighboring properties for

188. See id. (describing petitioner’s revetment).

189. See id. (discussing petitioner’s reasoning for requesting the

natural resources special permit).

190. See id. (“The petitioner has expended approximately $40,000 in

years past on so called ‘soft solutions,’ which consisted of additions of sand

alone, but these proved to be insufficient to provide relief as they were washed

out by storms.”).

191. See id. (“The petitioner, with corroborative expert evidence, is

thus of the opinion that a revetment, a more permanent ‘hard solution’ is

essential to prevent his home from being destroyed.”).

192. See id. (discussing the ZBA’s reasoning in its decision to deny

the permit).

193. See id. (discussing the ZBA’s decision to deny the permit).

194. See id. at 501 (“This determination was arbitrary and

capricious and unsupported by substantial evidence.”).

195. See id. (discussing the East Hampton Town Code requirements

for obtaining the permit).


538

revetments. 196 The court found this signaled recognition of

imminent peril. 197 Further, the petitioner had already spent

$40,000 on other protective structures, none of which could

adequately protect his property, and all of which had been

destroyed by previous storms.198

While this case involves a situation in which the

homeowner was seeking permission to build the structure, it

illustrates that in cases where the property is in imminent peril,

exceptions must be made to protect the house. A town should be

able to reduce compensation to implement beach reconstruction

projects when it faces imminent danger of losing all oceanfront

property.

In Allen v. Strough, Susan Allen, fearing a future

hurricane or severe storm would damage or destroy her house,

applied for permission to construct a “tapered transitional rock

armor revetment.”199 Allen wished to build a steel bulkhead that

was 310 feet by 28 feet that would call for the placement of

approximately 6,000 cubic years of sand over the revetment, and

for the planting of beach grass. 200 While deciding whether to

grant Allen permission to build this structure, the participants in

the hearing questioned what, if anything, could be done to save

the homes that were at risk and whether the measures necessary

to save such homes may be taken only at an unacceptable cost of

destroying the beaches further.201 Out of fear that Allen’s project

would have an adverse impact on the public’s right to pass along

196. See id. (stating that the petitioner had clearly met the burden

set forth in the East Hampton Town Code §255-5-50(6)).

197. See id. (“[T]he ZBA approved revetments for neighboring

properties, signaling a clear recognition of imminent peril.”).

198. See id. (“Furthermore, the petitioner has already spent

$40,000 on unsuccessful soft solutions and under the circumstances of this cases

there is no rational basis for requiring him to spend more money on a proven

ineffective solution.”).

199. See Allen v. Strough, 301 A.D.2d 11, 13 (2002) (“Fearing that a

future hurricane or severe storm could damage or destroy her house, Allen

applied to the Board for permission to construct a ‘tapered transitional rock

armor revetment.’”).

200. See id. at 13 (describing the protective structure Allen wished

to construct).

201. See id. at 14 (discussing the deliberation process concerning

Allen’s proposal).


539

the beach area, the Board denied her application. 202 Allen

appealed and the case eventually reached the New York

Appellate Division.203 The Court recognized the ongoing debate

over the extent to which these hard structures might increase the

rate of erosion and questioned whether the interest by the

property owner should yield to the more diffuse interest of the

general public in preserving recreational beaches.204 The Court,

however, relied on previous cases in which permits such as the

one at issue here were authorized for revetments only where

denial would make it likely that there would be imminent, rapid,

or sudden loss of the property.205 In the previous New York case,

Hach, the New York Appellate Division concluded that

substantial evidence established that the petitioner’s property

was in imminent danger and thus granted the application.206 The

Court differentiates this case from Hach, concluding that Allen’s

property did not face imminent danger and thus was not in need

of the “hard” protective structure at the expense of the beach.207

The issue was also considered by the New York Appellate

Division in Poster v. Strough.208 In this case, the Board denied

Poster’s application to build a hard protective future, reasoning

that this structure would have an adverse impact to both the

environment and the rights and resources of the public.209 Poster

alleged that since 1998, his property had undergone substantial

erosion, that the dune which had stood between the ocean and his

house had essentially disappeared, and that the eroded area of

the beachfront had come to within “a few feet” of his house,

placing it at risk of collapsing.210 As in Allen v. Strough, the Court

202. See id. at 16 (discussing the Board’s decision to deny Allen’s

application).

203. See id. at 17 (outlining the procedural posture of the case).

204. See id. at 20 (discussing some of the critical policy issues

involved in the decision).

205. See id. (discussing the holding in Hach).

206. See id. at 20 (discussing the reasoning behind the court’s

holding in Hach).

207. See id. at 20 (identifying the court’s differentiation between

the circumstances in Hach and Allen).

208. See Poster v. Strough, 299 A.D.2d 127, 128 (2002) (dealing

with identical issues seen in Hach and Allen).

209. See id. at 129 (discussing the issues in the case).

210. See id. at 130 (illustrating the damage already done to the

property by rising sea level and storms).


540

held that Poster failed to submit any evidence that damage to his

house was imminent, or that alternative methods of avoiding any

such potential damage, such as moving the house, were

unfeasible.211 He was not permitted to build the structure for lack

of the possibility of imminent, sudden, or rapid harm.212

These three cases illustrate that when the property is not

in imminent danger, the court should respect the traditional

property rights. In these cases, the court should not follow the

Harvey Cedars court in including general and specific benefits in

compensation calculations. It is true that other factors may play

into using this form of calculation. When there is no imminent

risk of losing property, however, the court should require other

factors before abandoning the traditional calculation method.

B. The Multi-Factor Balancing Test

1. Are There Other More Environmentally Friendly

Alternatives That Can Easily Be Implemented?

While traditional beach protective structures may seem to be

the most effective and efficient way to protect property, there are

other options that cause substantially less environmental damage

and may require fewer invasions into one’s property rights.

Retreat, dewatering, living shorelines, and re-vegetating present

viable alternatives to sea walls and other harmful structures.

A. Retreat

Retreat is a protection method used to avoid natural hazards

by withdrawing from the shoreline.213 It requires relocation of

infrastructure further inland when it is positioned in hazardous

211. See id. at 143 (discussing the court’s reasoning in denying

Poster’s request).

212. See id. at 143 (discussing the court’s final ruling).

213. See Martin Randall, Coastal Development Run Amuck: A Policy

of Retreat May Be The Only Hope, 18 J. ENVTL. L. & LITIG. 145, 168 (2004)

(“Retreat is the avoidance of natural hazards through the withdrawal from the

shoreline in lieu of protection.”).


541

areas of the coast.214 The absence of building and developing on

the shoreline would greatly reduce the harm suffered to property

as a result of coastal storms.215 By preventing development in

areas with high risk of coastal damage, retreat will reduce public

costs of defending and responding to this crisis, in addition to

permitting natural landscape features by providing “valuable

ecological services to migrate landward.”216 The most effective

way to implement a retreat method is to combine direct

regulation with financial incentives. 217 For example, property

owners could be mandated to move inland and given tax

incentives for relocation to lower risk areas. 218 This solution

avoids the problems associated with a single course of action such

as using eminent domain to condemn property.219

Retreat can be extremely expensive.220 The government has

three options with regard to effectuating retreat: (1) purchase

undeveloped coastal land; (2) forbid development of privately

owned land; or (3) prohibit the reconstruction of structures

destroyed by storms or erosion.221 Any of these three actions can

cost a state an extensive amount of money in either acquisition or

legal fees.222 Therefore, when considering if a retreat is the most

viable method, governments should compare the costs of

protecting the buildings and property on the shoreline to the costs

of the actual retreat, such as the costs associated with relocating

structures and acquiring property. In cases where factors exist

such as: investment in structures is low, relatively inexpensive

214. See Pace, supra note 44, at 334 (“A retreat approach to sea

level rise necessitates relocation of costly infrastructure further inland . . . .”).

215. See Randall, supra note 213, at 168 (discussing the benefits

and disadvantages of retreat).

216. Byrne, supra note 6, at 96.

217. See Black, supra note 4, at 376 (pontificating on the merits of

retreat).

218. See id. (discussing the most successful examples of mandated

retreat).

219. See id. (discussing the methods used in successful mandated

retreat).

220. See Randall, supra note 215, at 168 (discussing the benefits

and disadvantages of retreat).

221. See id. (stating the three actions a government must take to

implement a retreat method).

222. See id. (further discussing actions a government must take to

implement a retreat method).


542

land is available nearby, regulations explicitly prevent erosion

control structures and favor or require relocation, there is a low

density of development, retreat may be an acceptable and

effective option. 223 Overall, the environmental and economic

arguments for retreat in areas of rising sea level and areas prone

to coastal storms are compelling, at least in areas not intensely

developed.224 Unfortunately, retreat is often seen as the more

feasible option after a disaster actually occurs.225

B. Dewatering Projects

Dewatering systems present a cost-effective,

environmentally friendly, and sustainable solution to beach

erosion.226 Dewatering projects are said to be a reliable solution to

insufficient beach drainage.227 When the tide comes in, the beach

fills with water, and as the tide goes out, the beach drains.228 A

beach typically drains slower than the receding tide, which

results in a saturated beach during a falling tide, which is more

prone to erosion. 229 Over time, better draining can result in

reduced erosion and better deposition of sand.230 Gradually, the

beach will grow wider, higher, and provide better protection

against coastal storms. 231 Dewatering projects are designed to

increase a beach’s ability to drain, allowing beaches to drain

223. See id. at 215, at 169 (discussing the viability of retreat and

circumstances under which it is most reasonable).

224. See Byrne, supra note 6, at 96 (“The environmental and

economic arguments for retreat before sea-level rise are compelling, at least for

many coastal areas not intensely developed.”).

225. See Black, supra note 4, at 376 (“Unfortunately, mandated

retreat becomes more politically feasible in the wake of a disaster.”).

226. See BMT Designers and Planners, Inc., Coastal Erosion

Mitigation, BMT DESIGNERS & PLANNERS, available at

http://www.dandp.com/media/4583393/BMT%20D&P%20Coastal%20Erosion%2

0Mitigation.pdf (describing dewater as an alternative) (on file with the


227. See id. (“[D]esigned to enhance a beach’s ability to drain and

can be used on natural beaches and in conjunction with beach replenishment

projects. The passive dewatering system is not detectable by the beach visitor

and does not adversely affect habitat critical to coastal wildlife . . . .”).

228. See id. (describing how dewatering projects operate).

229. See id. (describing the dewatering process).

230. See id. (discussing the results of better draining).



543

more rapidly than those without the system.232 The system works

by removing excess water.233 This system would not be noticeable

to the public and it does not have a negative impact on coastal

wildlife’s habitats.234

B. Living Shorelines

Shoreline armoring does little to protect coastal areas in

the long-run, and instead have immense destructive impacts on

coastal areas.235 An emerging approach to protect shorelines is

the use of “living shorelines.”236 This approach is seen as a more

“natural” defense approach when compared with traditional

techniques.237 Living shorelines have been described as “a suit of

bank stabilization and habitat restoration techniques to reinforce

the shoreline, minimize coastal erosion, and maintain coastal

processes while protecting, restoring, enhancing, and creating

natural habitat.”238

Living shorelines use plants, sand, and rocks to provide

shoreline protection, at the same time maintaining coastal

wildlife habitats.239 “Living shoreline projects utilize a variety of

structural and organic materials, such as wetland plants,

submerged aquatic vegetation, oyster reefs, coir fiber logs, sand

fill, and stone.” 240 Living shorelines provide a more practical

approach to dealing with erosion by controlling erosion,

maintaining natural coastal processes, and sustaining

232. See id. (describing the benefits of dewatering projects).



235. See Pace, supra note 44, at 340 (“Current popular defense

mechanisms do little to protect wetland areas and, in the case of armoring, may

actually lead to the destruction of existing wetland areas along the coastline.”).

236. Id.

237. National Oceanic and Atmospheric Administration, Living

Shorelines, NOAA HABITAT CONSERVATION,

http://www.habitat.noaa.gov/restoration/techniques/livingshorelines.html

[hereinafter NOAA] (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY

CLIMATE AND THE ENVIRONMENT).

238. See Pace, supra note 44, at 340 (explaining the theory behind

living shorelines.).

239. See NOAA, supra note 241 (discussing how to implement the

living shoreline methods).

240. Id.


544

biodiversity.241 Another beneficial aspect of living shorelines is

the fact that this method is usually more economical than hard

armoring and requires less maintenance in the long-run.242

D. Re-Vegetation

Re-vegetation is a lost-cost, simple shoreline protection

method that can be implemented by the landowner. 243 It is

important to note that it can only be used in cases of lawns or

bare shorelines with low to moderate erosion.244 Re-vegetation

involves re-planting native vegetation that naturally stabilizes

the shoreline.245 The plant’s deep roots help protect the shoreline

from erosion by tightly binding the earth below.246

2. Can the Costs be Justified?

There are certain situations that require courts to reduce

the amount of compensation awarded in beach reconstruction

takings cases because the damage that would be caused

otherwise outweighs any concerns over reduced compensation.

The two main situations in which this may be the case are in

urban settings and areas that rely on tourism for their main

source of income.

A. Urban Areas

241. See Pace, supra note 44, at 340 (discussing the benefits of

living shorelines over hard armoring).

242. See id. (“Additionally, some studies suggest that construction

and maintenance of living shorelines is more economical than armoring with

hard structures and also requires less maintenance over time.”).

243. See Department of Environmental Conservation, Shoreline

Stabilization Techniques (July 2010), available at

http://www.dec.ny.gov/docs/permits_ej_operations_pdf/stabiltechguid.pdf

introducing “softer” shoreline protection methods) (on file with the WASHINGTON

AND LEE JOURNAL OF ENERGY CLIMATE AND THE ENVIRONMENT).

244. See id. (“Re-vegetation works in the case of lawns or bare

shorelines with low to moderate erosion.”).

245. See id. (describing re-vegetation methodology).

246. See id. (“The deep roots of these plants bind the earth below

tightly, effectively protecting your shoreline from erosion.”).


545

Two-thirds of the world’s cities that have populations over

five million are located in areas that have been deemed to be

“high risk” areas for flooding.247 In certain urban settings, sea

walls are the best erosion control device. 248 Often, there are

minimal protective options cities can implement due to the

specific characteristics of a city, attributable to existing shoreline

development, or in densely populated cities such as New York, to

the value of the property being protected.249 The value of this

property often outweighs the cost of constructing and

maintaining the seawall, thus making it the better economical

choice.250 Retreating is not a reasonable option in big cities.251 It

is impractical for a large city to stop development or buy up all

the property in danger of flooding.252 Additionally, many large

cities anticipate continuous growth over the next few decades

making it impossible to stop development.253 For example, New

York anticipates another million residents over the next two

decades.254 As Rafael Pelli, a Manhattan architect who serves on

a climate-change committee that advises the New York

Department of City Planning, stated, “If you have to relocate

247. See Consequences of Climate Change on the Oceans, CLIMATE

INSTITUTE, http://www.climate.org/topics/sea-level/index.html (“[T]wo-thirds of

the world’s cities that have populations over five million are located in these at-

risk areas.”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY CLIMATE


248. See Black, supra note 4, at 375 (discussing sea walls as

potentially the only alternative in urban areas).

249. See id. (“The lack of feasible options may be attributed to

existing shoreline development or, in densely populated cities such as London or

New York, to the value of protected property outweighing the costs of

constructing and maintaining a sea wall.”).

250. See id. (discussing the comparative viability of sea walls in

urban areas).

251. See Mireya Navarro, New York is Lagging as Seas and Risks

Rise, Critics Warn, N.Y. TIMES, Sept. 10, 2012, available at

http://www.nytimes.com/2012/09/11/nyregion/new-york-faces-rising-seas-and-

slow-city-action.html?pagewanted=all&_r=0 (explaining why big cities cannot

use retreat as a method for dealing with climate change) (on file with the


252. See id. (“Curbing development or buying up property in flood

plains . . . is too impractical here.”).

253. See id. (discussing the growth of big cities).

254. See id. (“[T]he city anticipates another million residents over

the next two decades.”).


546

10,000 people, how do you do that?”255 Additionally, in cities, such

as Manhattan, there is no beach therefore the environmental

concern is not present and economic concerns can take priority.256

It is extremely expensive for cities to construct sea

walls. 257 If cities are forced to compensate homeowners the

traditional way, several cities simply will not be able to afford

providing this protection. For example, New York City plans on

spending over $2 billion on these projects in the next eighteen

years.258 It fact, it has been estimated that installing barriers for

New York will cost $10 billion.259 If the city does not find a way to

make constructing these sea walls less expensive, the city will be

billions of dollars short of armoring itself.260 Another example of

a city in trouble is Boston. Over the next century, damage in

Boston could exceed $20 billion, depending on the cities response

to rising sea levels.261

Cities unable to build these protective structures city

could face financial devastation beyond what is expected in

smaller towns.262 For example, potential flooding in New York

could paralyze transportation, cripple the low-lying financial

district, and temporarily drive hundreds of thousands of people

from their home.263 Additionally, residents of cities with large

industrial waterfronts with chemical-manufacturing plants, oil-

storage sites, or garbage-transfer stations face serious safety

255. Id.

256. See id. (explaining that the lack of beaches reduces erosion

concern).

257. See id. (discussing the costs of building sea walls in cities).

258. See id. (“Overall, the city is hoping to funnel more than $2

bullion of public and private money to such environmental projects over the next

18 years . . . .”).

259. See id. (discussing what the cost would be to protect New York

City from climate change).

260. See id. (discussing the consequences of not altering sea wall

construction methods).

261. See Craig LeMoult, Tufts Civil Engineer Predicts Boston’s

Rising Sea Levels Could Cause Billions Of Dollars In Damage (Feb. 16, 2013),

available at http://www.eurekalert.org/pub_releases/2003-02/tu-tce021403.php

(discussing the effects of climate change on Boston) (on file with the


262. See Navarro, supra note 251 (discussing the financial impact of

climate change on New York City).

263. See id. (elaborating on climate change and the economy).


547

risks if the city is not protected from storm.264 Sea walls are

required in these areas to prevent contamination from the

hazardous materials.265

It is impossible to fully insulate a city from environmental

harms, but implementing a more costly method of building sea

walls, and reducing the amount homeowners receive for just

compensation, will provide cities with a chance to protect its

residents and property.

B. Tourism

In certain areas, beaches are vital to the state’s

economy. 266 Eighty-five percent of all United States tourism

revenues occur in coastal states.267 If those states are unable to

afford building beach protective structures, the state could face

losing a substantial amount of money.268 Tourism infrastructure

will be heavily damaged, resulting in local economic depressions

for communities that depend heavily on the industry. 269 For

example, California generates fourteen billion tourism dollars per

year. 270 From an economic viewpoint, California’s beaches are

considerable more important to the overall economy than the

property being protected.271 If California is unable to afford beach

protection due to the high landowner compensation costs, the

state will lose a substantial portion of its tourism industry and

264. See id. (stating the environmental concerns for areas like the

South Bronx which have large industrial waterfronts).

265. See id. (concluding that sea walls are required on large

industrial waterfronts).

266. See Arnold, supra note 161, at 1018 (“Coastal areas are highly

popular places to live and visit. Over half of the U.S. population lives in coastal

areas, even though coastal areas constitute only seventeen percent of the total

area in the contiguous forty-eight states.”).

267. See id. at 1019 (“[E]ighty-five percent of all U.S. tourism

revenues occur in coastal states.”).

268. See id. at 1019–20 (listing the cultural impact these tourist

areas have and how reliant they are on tourism).

269. See Byrne, supra note 6, at 79 (“Tourism infrastructure will

also be heavily damaged, resulting in local economic depressions for

communities that depend heavily on the industry.”).

270. See Cardiff, supra note 59, at 256 (discussing the impact on

California).

271. See id. (discussing the impact on California).


548

associated revenue.272 The Pacific Ocean is estimated to rise 55

inches by 2100, causing Venice Beach to lose up to and estimated

$440 million in tourism and tax revenue.273 It is expected Zuma

Beach and Broad Beach in Malibu will experience a drop in

visitors, costing Malibu nearly $500 million in revenue.274

Certain states have adopted legislation addressing this

issue. South Carolina's legislature found that the dune system

along its coast was “extremely important” to the state as “a storm

barrier” contributing to “shoreline stability,” by “generating

approximately two-thirds of the state's annual tourism industry

revenue.”275 Furthermore, “Florida adopted the Beach and Shore

Preservation Act . . . in 1961.”276 This Act declared beach erosion

“a serious menace to the economy and general welfare of the

people.” Florida’s legislative response to widespread beach

erosion was to pronounce it a “necessary governmental

responsibility to properly manage and protect Florida beaches”

and to “make provision for beach restoration and nourishment

projects.”277 Florida declared that the funding of the state's beach

management plan is justified by the legislative finding that

erosion of the beaches is detrimental to tourism.278

It is important to note here that in the context or armoring

cities, soft armoring should be used over hard armoring.279 Long-

272. See id. at 281 (“It is impossible to ignore the fact that 150

miles of seawalls is, at the very least, having a disastrous cumulative impact

on . . . recreational beach. Yet, the emotional appeals of homeowners are also

impossible to ignore. Ultimately, compromise is not possible.”).

273. See Tony Barboza, Rising Sea Levels Could Take Financial

Toll on California Beaches, LOS ANGELES TIMES (Sept. 13, 2011), available at

http://latimesblogs.latimes.com/greenspace/2011/09/rising-sea-levels-could-take-

financial-toll-on-california-beaches.html (“Venice Beach could lose up to $440

million in tourism and tax revenue if the Pacific Ocean rises 55 inches by 2100

as scientists predict, according the study commissioned by the California

Department of Boating and Waterways.”) (on file with the WASHINGTON AND LEE

JOURNAL OF ENERGY CLIMATE AND THE ENVIRONMENT).

274. See id. (“A drop in visitors to an eroded Zuma Beach and Broad

Beach in Malibu would cost nearly $500 million in revenue . . . .”).

275. Caldwell, supra note 57, at 573.

276. Nolon, supra note 40, at 744.

277. Id. at 744–45.

278. See id. at 744–45 (elaborating on Florida’s legislative

response).

279. See Byrne, supra note 6, at 87 (stating that soft armoring is

better environmentally for the beaches).


549

term effects of hard armoring consist of loss of the sandy beach

between the seawall and the water’s edge. 280 Soft armoring

causes less environmental damage to the beach because it mimics

natural shorelines.281 In order to preserve the beach in its most

natural form, states should use soft armoring techniques such as

dune replenishment.282

C. Applying the Multi-Factor Balancing Test to Harvey

Cedars

It is not disputed that without the dune-construction

project, the Karans and other shoreline homeowners could

experience substantial damage to their property if a storm

occurred in the future. 283 The Borough of Harvey Cedars

presented expert testimony from Randall A. Wise of the Army

Corps of Engineers, a civil engineer specializing in coastal

engineering.284 Wise stated that over a thirty-year period, without

the dune-construction project there was a 56% chance a storm

could completely damage the Karans’ shoreline home. 285 The

expert testimony focused on the long-term damage, concluding

that the Karans would likely suffer damage within thirty years.286

It is questionable whether it was necessary to drastically reduce

compensation awarded to the Karans because no testimony was

provided that the dune was needed immediately or that Harvey

Cedars would be unable to build the dune if the Court followed

the traditional approach to calculating just compensation. 287

Rather, Harvey Karan testified that his home was built in 1973

280. See Pace, supra note 44, at 337 (discussing the negative

implications of utilizing hard armoring).

281. See Byrne, supra note 6, at 87 (“Soft armoring causes less

environmental harm because it mimics natural shorelines . . . .”).

282. See id. (discussing soft armoring techniques).

283. See Borough of Harvey Cedars v. Karan, 70 A.3d 524, 529

(discussing the expert testimony concerning the damage that would result to

shoreline properties without a dune-construction project).

284. See id. (introducing Wise as an expert).

285. See id. (discussing the findings of the expert testimony).

286. See id. (“[T]he court concluded that the financial benefits of the

beach-replenishment and storm-protection project were shared . . . by the larger

community of Harvey Cedars and therefore were general benefits.”).

287. See id. (“Without the dune project, the Karans' property had

only a 27% chance of surviving fifty years without any storm damage.”).


550

and since that time he had not a “lick of water” invade the living

quarters of his home.288

Without the likelihood of an imminent threat to the

property, the Court should have applied the multi-factor

balancing test. The first step would require the New Jersey

Supreme Court to determine if more environmentally friendly

alternatives existed. There was no mention in the lower court or

in the New Jersey Supreme Court concerning the environmental

damages that are associated with the dune-construction

project.289 Therefore, it appears that the Court overlooked the fact

that the town of Harvey Cedars may have ignored other possible

alternatives. If more environmental friendly alternatives exist, a

court should be reluctant to alter the traditional property rights

of a homeowner to allow a town to implement a project that will

provide immediate relief, but long-term damage.

The Court should have also considered whether the

damage that would be caused without the dune-construction

project outweigh the costs of implementing the project. Harvey

Cedars is a small, primarily residential, town located along the

New Jersey shore with a minimal population.290 Most visitors of

Harvey Cedars come to relax in their summer homes.291 In fact,

there are no hotels in the town for tourists to stay. 292 The

problems mentioned above associated with urban areas and areas

that rely on tourism do not apply to Harvey Cedars. This is not to

say that the dunes should not be built – there is still a need to

protect the shoreline property in Harvey Cedars. Rather, the

state interest in protecting this shoreline is less compared to

those of urban and tourism areas. Therefore, if the state is to

proceed with the dune-construction project, it should follow the

traditional calculation of just compensation that has always been

used in the past. A town should be required to show additional

288. See id. at 530–31 (discussing Harvey Karan’s testimony).

289. See id. at 529–34 (showing there has not been a discussion

concerning potential environmentally negative effects from dune construction).

290. See Harvey Cedars, New Jersey, LONG BEACH ISLAND JOURNAL

(last visited Mar. 29, 2015),

http://www.longbeachislandjournal.com/communities/harvey-cedars (describing

the area discussed in Karans) (on file with the WASHINGTON AND LEE JOURNAL OF

ENERGY CLIMATE AND THE ENVIRONMENT).

291. See id. (discussing local tourism).

292. See id. (explaining consumer infrastructure).


551

reasons for reducing a homeowner’s property rights, aside from

the fact that the project is expensive if the town is to follow the

traditional just compensation calculation method.

IV. Conclusion

It has become clear that due to increasing sea levels and

more frequent coastal storms, the government may not have any

option but to compromise certain traditional property rights in

order to protect the towns and communities faced with the

dangers associated with these problems. The issue is not as clear

as protecting environmental rights before property rights or vice

versa. Instead, in order to effectively and efficiently protect both

property interests and environmental interest, courts should

adopt a multi-factor balancing test. The test should weigh the

interests of both property and environmental issues to determine

when it is adequate to compromise traditional property rights

and which protective measures are permissible.

552

NECESSARY CHANGE:

RE-CALCULATING JUST

COMPENSATION FOR ENVIRONMENTAL

BENEFITS

Scott Salmon*

Abstract

This Note is about the recent New Jersey Supreme Court

case, Borough of Harvey Cedars v. Karan, and how other courts

should adopt its holding of allowing all reasonably certain and

calculable benefits to be considered in determining partial

takings just compensation. Furthermore, it addresses the impact

that the decision will have on environmental takings and its

importance to the future of both property and environmental law.

Table of Contents

I. Introduction ............................................................................ 553

II. History of Eminent Domain .................................................. 555

III. Calculation of Just Compensation ....................................... 560

A. Theoretical Conception of Just Compensation .................. 560

B. Value Plus Damage Method ............................................... 562

C. Before-and-After Method .................................................... 564

D. Defining Special and General Benefits .............................. 566

IV. Impact on Environmental Takings ...................................... 573

V. Borough of Harvey Cedars v. Karan ..................................... 576

VI. Proposed Change and Its Effects ......................................... 582

VII. Arguments and Alternatives .............................................. 584

VIII. Conclusion ......................................................................... 591

* Scott Salmon ([email protected]) is a J.D. candidate at

Washington and Lee University School of Law, May 2015, and the Executive

Managing Editor of the Journal of Energy, Climate, and the Environment. Scott

would like to thank Professor Jill Fraley for advising him on this Note. He

would like to thank his parents, Jon and Meryl Salmon, and his sisters, Dr.

Barie Salmon, and Dr. Tracy Salmon, for their love and support.

NECESSARY CHANGE 553

I. Introduction

“In a partial-takings case, homeowners are entitled to the

fair market value of their loss, not to a windfall.1

-Justice Barry T. Albin, Supreme Court of New Jersey

Under the Fifth Amendment to the Constitution of the

United States, colloquially known as the Takings Clause, the

federal government may take private property for public use

through the doctrine of eminent domain, provided that the owner

is reimbursed with “just compensation.”2 The calculation of this

compensation is generally dictated by statute, which differs by

jurisdiction and type of taking.3

Unfortunately, most methods of calculation currently in

practice hinder government partial takings for environmental

purposes, because the costs are unfairly weighted towards the

landowner.4 For example, if the government wishes to use its

eminent domain authority to condemn a section of an individual’s

property to replenish a beach, build a dam, or raise a windmill,

the intangible benefits of the project to the public are generally

not considered in calculating the compensation to the landowner.5

As a result of the inability to calculate such benefits, the

proposed project may be prohibitively costly for the government

with no financial offset for the benefits.6 As the general goal of

1. Borough of Harvey Cedars v. Karan, 70 A.3d 524, 527 (N.J.

2013).

2. See U.S. CONST. amend. V (“[N]or shall private property be

taken for public use, without just compensation.”).

3. See RESTATEMENT (THIRD) OF PROP.: SERVITUDES, § 2.18, cmt. h

(2000) (“Federal and state constitutions require that the servitude be acquired

for some public purpose and that just compensation be paid.”); see also infra

Part III for a more detailed discussion of calculation methods.

4. See Harvey Cedars, 70 A.3d at 527 (stating that in a formula

used to determine damages of a partial taking, the court did not consider the

benefits of that increased the value of the remaining property in a partial

taking).

5. See id. at 535–36 (citing prior cases where any benefit to the

landowner as a result of he taking is not considered in calculating the amount of

compensation due to the landowner).

6. See infra note 218 and accompanying text. [Press release,

Jerry Patterson]


eminent domain compensation serves to make the property owner

whole,7 these calculations are by definition focused on benefitting

the private individual rather than the condemnor, the public

acting through the government.8

The failure of most compensation models to account for

general public benefits may make an environmental enterprise

impossible for the government if the compensation costs are

unreasonably high. 9 This Note argues for modifying partial

takings jurisprudence in the mold of the recent New Jersey

Supreme Court decision, Borough of Harvey Cedars v. Karan,

such that just compensation to private owners would be

calculated using the before-and-after method, offset by both

reasonably calculable general and special benefits.10

First, this Note will set the stage for the current

understanding of takings jurisprudence by discussing the history

of eminent domain. 11 Then, this note will go deeper into a

discussion of eminent domain and how just compensation is

actually calculated in partial takings, by exploring the various

methods and manners of calculation.12 It will then look at how

these calculations affect environmental takings13 before looking

at the specific case of Borough of Harvey Cedars v. Karan.14 The

decision forms the basis of the proposed modification to takings

jurisprudence that this Note advocates.15 Finally, this Note will

7. See 26 AM. JUR. 2D Eminent Domain § 224 (2014)

(“[C]ompensation should be designed to place the owner in a position as good as,

but not better than, the position the owner is in before the taking occurs.”).

8. See id. (describing that compensation should reimburse a

landowner to the full extent of their loss).

9. See infra note 218 and accompanying text. [Press release,

Jerry Patterson].

10. See Harvey Cedars, 70 A.3d at 526–27 (“We now conclude that

when a public project requires the partial taking of property, ‘just compensation’

to the owner must be based on a consideration of all relevant, reasonably

calculable, and non-conjectural factors that either decrease or increase the value

of the remaining property.”).

11. See infra Part II.

12. See infra Part III.

13. See infra Part IV.

14. See infra Part V.

15. See id. at 384 (holding that the just compensation calculation

must include benefits that homeowners obtained from storm protection that a

constructed dune provided).


look at the proposed change and its effects, along with the

opinions of both advocates and detractors.16

II. History of Eminent Domain

In 1897, the Supreme Court incorporated the Takings

Clause of the Fifth Amendment to the Due Process Clause of the

Fourteenth Amendment, 17 which meant that the just

compensation requirement of eminent domain applied to the

states, in addition to the federal government.18 The Court held in

Chicago, Burlington & Quincy Railroad Co. v. City of Chicago

that:

[the] judgment of a state court, even if it be

authorized by statute, whereby private property is

taken for the state or under its direction for public

use, without compensation made or secured to the

owner, is, upon principle and authority, wanting in

the due process of law required by the fourteenth

amendment of the constitution [sic] of the United

States.19

Chicago involved the taking of land by private individuals, along

with the Chicago, Burlington & Quincy Railroad Company for the

purpose of widening a road.20 In that instance, the Court awarded

a nominal amount of $1 to the condemnees, which they found

constituted just compensation. 21 As a result of the Supreme

Court’s decision, when a state or a local jurisdiction decides to use

their eminent domain authority, they must not only provide the

16. See infra Parts VI and VII.

17. See U.S. CONST. amend. XIV (“[N]or shall any State deprive

any person of . . . property, without due process of law.”).

18. See Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S.

226, 241 (1897) (affirming that the Due Process Clause of the Fourteenth

Amendment extends just compensation obligations to the states).

19. Id.

20. See id. at 230 (explaining that the city of Chicago petitioned to

the circuit court of Cook county for the condemnation of land for the

improvement and sought just compensation for private property taken or

damaged).

21. See id. (noting that the jury determined $1 to be just

compensation for the railroad company’s portion of the right of way).


same procedural due process the Fourteenth Amendment

requires, but must also provide just compensation, even if the

appropriate amount is merely a nominal fee.22

Until 1922, courts interpreted the Takings Clause literally

as it was written, so property had to be physically taken for

public uses to qualify under the doctrine of eminent domain.23 In

Pennsylvania Coal Co. v. Mahon, the Supreme Court expanded

the definition of takings by holding that regulation of property

beyond a certain point constitutes a regulatory taking and

required just compensation.24

In that matter, the Kohler Act prohibited mining that

would cause subsidence of homes and surfaces near residential

properties.25 The Pennsylvania Coal Company proceeded to mine

underneath the homes based on the explicit terms of the deeds to

the homes, which only granted the landowners the rights to the

surface, and not the ground beneath their land.26 The contractual

agreement through the deeds conflicted with the Kohler Act, so

the Court found that the statute’s regulatory powers necessarily

constituted a taking because they were so restricting upon the

Pennsylvania Coal Company’s rights as owner the land beneath

the property.27

22. See id. at 247 (stating that the state court has a duty to guard

and protect the constitutional right of due process enjoined by the Fourteenth

Amendment).

23. See JOSEPH W. SINGER, INTRODUCTION TO PROPERTY 678 (2d ed.

2005) (“Before 1922, the takings clause was interpreted fairly literally. A taking

would be found when a state or the federal government exercised its eminent

domain power to take property for public uses.”).

24. See Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922)

(“The general rule at least is that while property may be regulated to a certain

extent, if regulation goes too far it will be recognized as a taking.”).

25. See id. at 416–17 (“The Kohler Act prohibits, under certain

conditions, the mining of anthracite coal within the limits of a city in such a

manner or to such an extent ‘as to cause the . . . subsidence of . . . any dwelling

or other structure used as a human habitation, or any factory, store, or other

industrial or mercantile establishment in which human labor is employed.’”)

(Brandeis, J., dissenting).

26. See id. at 412 (“The deed conveys the surface but in express

terms reserves the right to remove all the coal under the same and the grantee

takes the premises with the risk and waives all claim for damages that may

arise from mining out the coal.”).

27. See id. at 414 (“It is our opinion that the act cannot be

sustained as an exercise of the police power, so far as it affects the mining of


As the Court stated, “The general rule at least is that

while property may be regulated to a certain extent, if regulation

goes too far it will be recognized as a taking.”28 Regulations that

essentially deprive landowners of their property rights thus

qualify as a regulatory taking.29 After Pennsylvania Coal Co., a

taking could be either physical or regulatory, both of which would

require just compensation.30

Eminent domain jurisprudence changed significantly

again in 1978 with the Supreme Court’s decision in Penn Central

Transportation Co. v. New York City, which called for an ad hoc

determination of various factors in considering whether or not a

regulatory taking has occurred. 31 In this case, the landowner

owned Grand Central Terminal and wanted to build a multistory

office building on top. 32 However, the terminal had been

designated a landmark under New York’s Landmark

Preservation Law. 33 The landmark status of the building

prevented such construction, so the owner sued, alleging that the

restrictive nature of the statute constituted a regulatory taking

which demanded just compensation under the Takings Clause.34

coal under streets or cities in places where the right to mine such coal has been

reserved.”).

28. See id. at 415.

29. See SINGER, supra note 23, at 680 (“Justice Holmes reasoned

[in Pennsylvania Coal] that regulations that deprive owners of the value of their

property were as harmful to the legal rights and justified expectations of owners

as outright seizure of their land.”).

30. See Pennsylvania Coal, 260 U.S. at 415 (stating that if a

regulation goes too far then it is a taking and the constitutional way of paying

for the change must be upheld).

31. See SINGER, supra note 23, at 687 (“Instead of a clear rule, the

Court engages in ‘essentially ad hoc, factual inquiries’ into the ‘particular

circumstances’ of the case . . . .”); see also Penn Cent. Transp. Co. v. New York

City, 438 U.S. 104, 124 (1978) (“In engaging in these essentially ad hoc, factual

inquiries, the Court’s decisions have identified several factors that have

particular significance.”).

32. See Penn Central, 438 U.S. at 104 (“[A]ppellant Penn Central

entered into a lease with appellant UGP Properties, whereby UGP was to

construct a multistory office building over the Terminal.”).

33. See id. (“Under the Landmarks Law, the Grand Central

Terminal (Terminal), which is owned by the Penn Central Transportation Co.

and its affiliates (Penn Central) was designated a “landmark” and the block it

occupies a ‘landmark site.’”).

34. See id. (“[A]ppellants brought suit in state court claiming that

the application of the Landmarks Law had “taken” their property without just

compensation in violation of the Fifth and Fourteenth Amendments and


The Court ruled that the ad hoc factors to be considered

included the “economic impact of the regulation on the claimant,”

and the extent of the government’s regulatory interference,

among others.35 As a result, it took a holistic view in considering

whether or not a regulatory taking had occurred, and looked at

the substance rather than the form of the regulations.36

Although this Note does not focus on regulatory takings,

there is currently an enormous amount of discussion about the

subject in conjunction with environmental issues relating to land

conservation, wetlands management, endangered species,

mining, and industrial air pollution, making the subject relevant

in a corollary manner.37

The most recent major development in complete takings

law came in 2005 with the Supreme Court’s decision in Kelo v.

City of New London, in which the Court held that the government

may transfer private property to another private party, with

proper compensation, and qualify as a legitimate public taking.38

Furthermore, the defining characteristic seemingly emphasized

by Justice Stevens was the “public purpose” of the taking:

“Without exception, our cases have defined that concept broadly,

reflecting our longstanding policy of deference to legislative

judgments . . . .”39 Kelo was concerned primarily with complete

arbitrarily deprived them of their property without due process of law in

violation of the Fourteenth Amendment.”).

35. See id. at 124 (describing the specific significant ad hoc factors

of relevant consideration).

36. See id. (acknowledging that the Court has been “unable to

develop any ‘set formula’”).

37. See Jennifer Koons, Supreme Court’s Regulatory Takings Case

Draws Widespread Interest, N.Y. TIMES (Oct. 6, 2009),

http://www.nytimes.com/gwire/2009/10/06/06greenwire-supreme-courts-

regulatory-takings-case-draws-w-78107.html (noting the widespread interest

from then-Solicitor General Elena Kagan, attorney generals from twenty-six

states, the National Association of Counties, the National League of Cities, the

U.S. Conference of Mayors, and others, in Stop the Beach Renourishment v.

Florida, a regulatory takings case that involved a plan to create a state-owned

public beach between private waterfront land and the Gulf of Mexico) (on file


ENVIRONMENT).

38. See Kelo v. City of New London, 545 U.S. 469, 490 (2005)

(holding that the city’s exercise of eminent domain power on ground takings met

the constitutional “public use” requirement).

39. See id. at 480 (rejecting a narrow test for the universal test to

determine public purpose).


takings, and the specific question has not come before the

Supreme Court with regards to partial takings, so it is unclear if

the Court would view the public purpose requirement as broadly

and necessary as in partial takings.40 However, the lack of a

distinction made in Kelo between types of takings would indicate

the requirement would apply similarly to partial takings.41

The only significant federal case addressing partial

takings is Bauman v. Ross, which came before the Supreme Court

soon after the Chicago, Burlington & Quincy Railroad Co. v. City

of Chicago decision in 1897.42 In that matter, the Court dealt with

the expansion of Washington, D.C. and the necessity of partially

taking property under eminent domain to build the streets of the

city. 43 Justice Horace Gray wrote of the constitutionality of

partial takings, and that in calculating compensation, for federal

purposes, only special benefits may be set off from the

compensation award, and not general benefits.44 This distinction

is discussed in more detail in Section III, but it fits within the

majority view of the subject.45

From the time the Fifth Amendment was ratified in 1791

to the Kelo decision in 2005, courts have changed the accepted

40. See id. at 479 (noting that the public use test was difficult to

administer because the definition of public use was unclear on the issue of

public purpose).

41. See id. at 480 (reaffirming the broad interpretation of public

use as “public purpose”).

42. See Bauman v. Ross, 167 U.S. 548, 561 (1897) (“[A] jury of

seven was summoned . . . and the introduction of evidence by the petitioners

and by the respondents, rendered a verdict, in the form prescribed by the court,

setting forth a description of each parcel of land affected, the number of square

feet in the parcel, the number of square feet taken, the number of square feet

not taken . . . .”).

43. See id. at 550 (“Congress accordingly, by the act of August 27,

1888 (chapter 916), entitled ‘An act to regulate the subdivision of land within

the District of Columbia,’ authorized the commissioners of the District of

Columbia to make and publish general orders regulating the platting and

subdividing of all lands and grounds in the District . . . .”).

44. See id. at 581–82 (“We, of course, exclude the indirect and

general benefits which result to the public as a whole . . . But, if the proposed

road or other improvement inure to the direct and special benefit of the

individual out of whose property a part is taken, he receives something which

none else of the public receive, and it is just that this should be taken into

account in determining what is compensation.”).

45. See infra Part III.D (providing a more detailed discussion of

special and general benefits).


interpretation of the Takings Clause in a staggered manner from

a literal interpretation to a much more complex tool that can be

used for public use and private individuals through varying

methods.46

III. Calculation of Just Compensation

A. Theoretical Conception of Just Compensation

When the government takes an entire property either

physically or through regulation, the just compensation owed to

the condemnee is calculated by a simple appraisal of the property

to determine its fair market value, which is then paid to them by

the government. 47 For a complete taking, the Takings Clause

does not require compensation for anything other than the taken

property, not even consequential or future damages. 48 As the

Supreme Court said in Boston Chamber of Commerce v. Boston,

the Fifth Amendment “merely requires that an owner of property

taken should be paid for what is taken from him.”49

However, the simple compensation rule for complete

takings does not extend to partial takings, where the government

seeks only a section of the privately owned property.50 A typical

example would be if the government condemned a strip of land

within a larger plot to build a highway.51 This would constitute a

46. See Kelo, 545 U.S. at 483 (noting that public use jurisprudence

changed from rigid formulas to favoring an approach giving legislatures broad

latitude).

47. See WILLIAM B. STOEBUCK & DALE A. WHITMAN, THE LAW OF

PROPERTY 539 (3d ed. 2000) (“In the usual kind of taking case [a complete

taking] . . . the remedy is monetary damages . . . measured by the owner’s loss,

the fair market value of the land . . . .”).

48. See BARLOW BURKE, ANN M. BURKHART & R.H. HELMHOLZ,

FUNDAMENTALS OF PROPERTY LAW 747 (3d ed. 2010) (“For example, the Takings

Clause does not require compensation for consequential damages, such as

relocation costs.”).

49. Boston Chamber of Commerce v. Boston, 217 U.S. 189, 195

(1910).

50. See 1 LEWIS ORGEL, VALUATION UNDER THE LAW OF EMINENT

DOMAIN § 47 (2d ed. 1953) (describing the various scenarios in which a partial

taking may be confused with a complete taking).

51. See State ex rel. State Highway Comm’n v. Nickerson, 578

S.W.2d 916 (Mo. 1979) (illustrating an example of a partial taking).


partial conveyance, whereas the condemning the entire plot of

land to construct a nature preserve would be a complete taking.52

Determining the value of a partially taken property brings

difficult questions.53 If the piece taken contains the majority of

the value of the property, or if the remaining property is

worthless without the section that was taken, valuation becomes

a balancing test of different factors with no precise answer.54 If a

partial taking will increase the value of the remaining property

instead of decreasing it, that presents problems because an

individual should not be expected to pay the government for the

privilege of having their property taken.55 As a result, there are a

number of issues facing any calculation that must be addressed

in a proposed formula.

Although a variety of methods have been postulated,56 as a

matter of practice, there are two principal methods of calculating

just compensation in partial takings.57 The first method, known

as “value plus damage” (“VPD”), calculates the value of the part

taken, plus any damages to the remainder. 58 Currently, a

majority of jurisdictions use VPD.59 The second method, known as

“before-and-after” (“BAA”), takes the difference between the fair

market value of the entire property before and after the taking,

52. See Dep’t of Pub. Works & Bldgs. v. Keller, 335 N.E.2d 443,

446 (Ill. 1975) (illustrating such an example as a complete taking).


(N.J. 2013) (stating that the Court must consider all “relevant, reasonably

calculable, and non-conjectural factors” to determine the value of the remaining

property).

54. See Dep’t of Transp. v. Gunnels, 340 S.E.2d 12, 15 (Ga. 1986)

(“A partial taking (hypothetically, of a narrow strip) might indeed render a

remainder, still within the ownership of the condemnee, nearly worthless.”).

55. See United States v. 101.88 Acres of Land, 616 F.2d 762, 769

(5th Cir. 1980) (“If, instead, the taking increases the value of the remainder, the

increment in value may be set off against the compensation awarded for the

land condemned.”).

56. See ORGEL, supra note 50, § 48 (listing three possible

formulae). But see AM. JUR. supra note 7, § 373 (listing four possible formulae).

57. See ORGEL, supra note 50, §§ 50–51 (describing the “value plus

damage” method and the “before-and-after” method).

58. See id. § 52 (describing the application of the VPD formula in

case law).

59. See id. § 50 (“This formula is perhaps more often used than

any other.”); see also AM. JUR., supra note 7, § 324 (“In most states, the

condemnee’s compensation for a partial taking is calculated under some

variation of the ‘value plus damage’ rule . . . .”).


minus any benefits to the property as a result.60 Both methods

are composed of two steps, which will be discussed in more detail

below.

B. Value Plus Damage Method

The finder of fact calculates VPD through two steps.61 The

first step requires the valuation of the piece of property taken.62

This usually involves hearing testimony from appraisal experts

and other forms of extrinsic evidence. 63 Following the initial

valuation, the second step is to add the value of any damages to

the remaining part of land, which may be offset by special

benefits.64

The valued damages to the remainder of the property are

known as “severance damages.”65 Severance damages are broadly

defined as “the depreciation in the ‘market value’ (or ‘fair market

value’) of the remainder resulting from, or due to, the taking of

that portion of the owner’s property that is expropriated.”66 As

one court stated, “[s]everance damage in an expropriation case

may be defined as a diminution in the value of the landowner's

remaining, unexpropriated property.”67 If the government were to

condemn part of an individual’s property to take an easement for

the construction of a natural gas pipeline and this were to

increase the difficulty of developing or selling the remaining land,

60. See ORGEL, supra note 50, § 51 (introducing the basic

components of the BAA formula).

61. See AM. JUR., supra note 7, § 324 (“[T]he condemnee should

receive compensation equal to the total of: (1) the value of the property actually

taken, and (2) any net damages to the property remaining, after offsetting

special benefits to the remaining property.”).

62. See id. (listing the first step of calculating under VPD).

63. See id. § 229 (explaining methods used to determine the

valuation of the property).

64. See id. § 324 (listing the second step of calculating under VPD);

see also infra Part III.D (providing a more detailed discussion of special

benefits).

65. See SINGER, supra note 23, at 750 (“The reduction in the value

of the remaining [property] is called severance damages.”).

66. ORGEL, supra note 50, § 53.

67. See State Dept. of Transp. and Dev. v. Regard, 567 So. 2d 1174,

1176 (La. Ct. App. 1990).


the value of these damages will increase the intrinsic value of the

taken property as a measure of severance damages.68

Furthermore, “[w]hatever is reasonably certain to follow

as an incident to such construction and operation, which in an

appreciable degree depreciates the value of the remaining land, is

a proper element of damages to be considered by the jury in

arriving at its verdict.” 69 Courts have held that severance

damages must “proximately arise” as a consequence of the

taking.70 There is wide acceptance of the importance that every

type of damage may be considered.71 Courts have held that there

should be broad admissibility of evidence,72 and that “[a] court

may consider all factors indicative of the value of the property,

and which would have been present in the minds of a willing

buyer and a willing seller.”73

Courts have also been clear that the damages admitted

must be real and may not be “too speculative or remote,” which

would make them “not a necessary, natural, or proximate result

of the taking.”74 If the possibility of a specific damage may occur

but is unlikely, the value of such damages may not be considered

in the final valuation of just compensation.75

68. See Portland Natural Gas Transp. Sys. v. 19.2 Acres of Land,

318 F.3d 279, 284 (1st Cir. 2003) (“[T]he Requirements supports the court’s

determination that [it] would decrease the price a reasonable buyer was willing

to pay. . . . [T]he encumbered land may not be used for structure, storage, or

trees. . . . [A] landowner must submit proposed plans to the Pipeline Companies

for authorization before beginning any work on or near the easement.”).

69. Idaho & W. Ry. Co. v. Coey, 131 P. 810, 810 (Wash. 1913).

70. See Cent. Ga. Power Co. v. May, 72 S.E. 900, 901 (Ga. 1911)

(“The measure of such consequential damages is the diminution in the market

value of the remainder of the property proximately arising from the causes just

mentioned.”).

71. See AM. JUR., supra note 7 § 224 (“[I]t is proper to consider all

factors indicative of the value of the property and which would have been

present in the minds of a willing buyer and a willing seller if the peroperty were

offered in a free market exchange.”).

72. See United States v. L.E. Cooke Co., 991 F.2d 336, 341 (6th

Cir. 1993) (“[Federal] Rule [of Evidence] 702 should be broadly interpreted on

the basis of whether the use of expert testimony will assist the trier of fact.”).

73. Kurth v. Iowa Dept. of Trans., 628 N.W.2d 1, 6 (Iowa

2001)(citing 26 AM. JUR. 2D, Eminent Domain § 294 (1996)).

74. See id. (noting that a jury can consider things that may entice

a buyer to purchase the property) (citing 26 AM. JUR. 2D, Eminent Domain § 294

(1996)).

75. See ORGEL, supra note 50, § 59 (describing how potential,

speculative, and remote damages may not be considered); see also AM. JUR.


Finally, any benefits or increase in value to the remaining

property may not be subtracted from the compensation for the

taken property as part of the first step.76 If a hypothetical new

highway would increase the value of a farm due to easier export

of crops, for example, that value may not be used to offset the

valuation of the property taken. 77 At most, benefits to the

remainder “may be deducted from the consequential or severance

damages.”78 If the benefits so completely overwhelm the damages,

“the condemnor does not have to provide compensation for any

severance damages.”79 But even if the severance damages are

completely negated by the listed benefits, the initial valuation of

the property taken may not be touched; that amount is

guaranteed to the condemnee.80

C. Before-and-After Method

Although the majority of jurisdictions do not use BAA,81

there are some specific advantages to the method over VPD,

supra note 7, § 281 (“While severance damages may be awarded for real

diminution of value sustained by a remainder, recovery may not be based on

speculative, remote, imaginary, contingent, or merely possible events.”).

76. See AM. JUR., supra note 7, § 324 (“Under the value plus

damage rule, a property owner must receive just compensation for the entire

value of the part of the land that is taken, regardless of the fact that the

remaining land is benefitted by the project.”); see also Alabama Power Co. v.

1354.02 Acres, More or Less, of Land in Randolph County, Ala., 709 F.2d 666,

668 (11th Cir. 1983) (“[T[here is a distinction . . . between the land taken and

the land remaining. The property owner must receive ‘just compensation’ for

condemned property, without regard to any enhancement of the remaining land.

Damage to remaining land...may be offset by enhancement in the value of

that land.”).

77. See Ivy Inn, Inc., v. Metro. Atlanta Rapid Transit Auth., 340

S.E.2d 600, 601 (Ga. 1986) (elaborating about how the incremental benefit to the

adjacent land because of the use of nearby land for a MARTA station “cannot be

deducted from the value of the land actually taken.”).

78. See AM. JUR., supra note 7, § 324 (explaining that the special

benefit “may not be deducted from value of the part taken”).

79. See id. (observing that courts base the “value plus damage”

rule on constitutional or statutory requirement of just compensation).

80. See Westgate Ltd., v. Texas, 843 S.W.2d 448, 456 (Tex. 1992)

(stating that “the landowner is in all cases entitled to at least the market value

of the part taken”).

81. See Jerome P. Pesick, Eminent Domain: Calculating

Compensation in Partial Taking Condemnation Cases, 82 MICH. BAR J. 12, 35


which will be outlined. Calculation of this method occurs through

two steps, the first of which involves determining the difference

between the fair market value of the property before and after

the taking.82 This can be done through appraisals and real estate

experts as a question for a finder of fact.83 Once the difference

between the fair market value of the property before and after

the taking is determined under the BAA model, the second step

grants deductions for “benefits which may also accrue to the

condemnee.”84

Although at least one theorist has stated that BAA may

simply be another way of expressing the VPD method without

any actual difference, he later noted that the application seems to

take a more realistic value of the damages, rather than the

artificial nature of the VPD. 85 With the VPD method, “an

appraiser is prone to exaggerate both elements of

compensation . . . [T]he formula encourages him to make

allowance for damages though none in fact may have been

sustained.”86 Instead, the BAA method, by definition, efficiently

incorporates any damages into the final valuation, leaving less

room for human error.87 As a result, BAA ensures more accurate

and fair results.

(2003) (“Generally, just compensation is measured by determining the market

value of the property that is taken.”).

82. See AM. JUR., supra note 7, § 237 (“Under this so-called ‘before-

and-after’ rule, the measure of damages or compensation in such a case is the

difference between the value of the whole tract, lot, or parcel of land

immediately before the taking, and the value of the remaining part immediately

afterward.”); see also ORGEL, supra note 50, § 51 (stating that one possible

formula includes the “[d]ifference between the [f]air [m]arket [v]alue of the

[p]roperty before and after the [t]aking).

83. See AM. JUR., supra note 7, § 237 (describing how the “before”

and “after” valuations must also be calculated using the same method).

84. See id. § 335 (“[B]enefits accruing primarily to property not

owned by the condemnee cannot be considered even though some incidental

benefit may also accrue to the condemnee.”).

85. See ORGEL, supra note 50, § 51 (“Whether or not it is simply

another mode of expressing “value of the land taken plus damages to the

reminder” is a difficult question . . . it is at least more satisfactory than the more

usual formula, for it recognizes the artificial nature of the dichotomy required

by the latter.”).

86. Id. § 64.

87. See AM. JUR., supra note 7, § 283 (“In the case of a partial

taking, if the before and after measure of compensation is properly submitted to

the jury, there is no occasion for counsel or the trial court to talk about


D. Defining Special and General Benefits

Broadly, benefits incorporated into a just compensation

award may be either “special” or “general.” 88 Although the

difference between the two has been characterized as “nebulous

at best,”89 special benefits tend to be specific to the remaining

property, while general benefits are those “which affect the entire

community or neighborhood.” 90 In fact, it has been stated that

“[g]eneral benefits are those the adjoining landowner shares in

common with the general public, and special benefits are those

resulting from a public work that enhances the value of the lands

not taken because of their advantageous relation to the

improvement.”91

One theorist has highlighted the differences by stating

that “benefits which the public enjoys as a result of the

improvement are classified as general benefits; benefits which

inure to an individual landowner as a private advantage by

reason of the direct relation of his remaining property to the

improvement are classified as special benefits.” 92 Finally, the

United States Court of Appeals for the Federal Circuit has noted

that distinguishing between the two is not always an easy task,

stating that, “as a general matter, special benefits are those that

inure specifically to the landowner who suffered the partial

taking and are associated with the ownership of the remaining

land. In contrast, benefits that inure to the community at large

are considered general.”93

“severance damage” as such, and indeed it may be confusing to do so. The

matter is taken care of automatically in the ‘before and after’ submission.”).

88. See id. § 345 (defining special and general benefits).

89. Id. § 342.

90. Sullivan v. N. Hudson Cnty. R.R. Co., 18 A. 689, 690 (N.J.

1889). But see AM. JUR., supra note 7, § 345 (stating that a condemnee may

receive a special benefit even if the entire neighborhood benefits from the

taking).

91. AM. JUR., supra note 7, § 338.

92. Comment, Special Benefits and Just Compensation: Ensuring

Fair Treatment of Landowners in Partial Taking Cases, 27 ME. L. REV. 279, 281

n.9 (1975) (citing 3 NICHOLS, EMINENT DOMAIN § 8.6202 (3d ed. 1974)).

93. See Hendler v. United States, 175 F.3d 1374, 1380 (Fed. Cir.

1999) (citations omitted).


Although these concepts may seem distinct in theory, they

can become clouded in practice. 94 If a partial taking for the

creation of a railroad will help the community but helps the

landowner the most, it would be considered a general benefit

even though it also gives special benefits to the landowner.95

Conversely, even if a general benefit helps the community

equally, the benefits to the individual landowner are not lost,

despite the general community advantage.96

Specifically, in forty-four states 97 and the federal

government,98 “compensation for a partial taking will be reduced

94. See AM. JUR., supra note 7, § 343 (noting that because the

distinction can be confusing, many courts have rejected it).

95. See AM. JUR., supra note 7, § 348 (observing that a rationale for

this classification is that it “allow[s] setoff against the compensation for those

whose land has been partially taken, but [does] not . . . require any payment

from others in the neighborhood who benefit from the improvement but whose

property has not been taken.”).

96. See id. (noting that these are not special benefits and cannot

be deducted).

97. See generally Marion McRea v. Marion Cnty., 133 So. 278 (Ala.

1931); Weber v. Kenai Peninsula Borough, 990 P.2d 611, 612 (Alaska 1999);

Taylor v. Arizona, 467 P.2d 251 (Ariz. 1970); Arkansas State Highway Comm’n

v. Phillips, 398 S.W.2d 899 (Ark. 1966); E-470 Pub. Highway Auth. v. 455 Co., 3

P.3d 18 (Colo. 2000); Connecticut Ry. & Lighting Co. v. Waterbury, 18 A.2d 700

(Conn. 1941); Acierno v. Delaware, 643 A.2d 1328 (Del. 1994); Caspersen v. W.

Coast Inland Nav. Dist., 198 So. 2d 65 (Fla. Dist. Ct. App. 1967); Williams v.

State Highway Dep’t 85 S.E.2d 616 (Ga. 1971); Hawaii v. Midkiff, 516 P.2d

1250 (Haw. 1973); State ex rel. Symms v. Collier, 454 P.2d 56 (Idaho1969); Dep’t

of Public Works & Bldgs. v. Barton, 19 N.E.2d 395 (Ill. 1939); Gradison v.

Indiana, 300 N.E.2d 67 (Ind. 1973); Horak Prairie Farm, L.P. v. Cedar Rapids,

748 N.W.2d 504 (Iowa 2008); Davis v. Leawood, 893 P.2d 233 (Kan. 1995); Dep’t

of Highways v. Sherrod, 367 S.W.2d 844 (Ky. 1963); Dep’t of Highways v.

Trippeer Realty Corp., 276 So. 2d 315 (La. 1973); J.A. Rapaport Family Ltd.

P’ship v. Brewer, 877 A.2d 1077 (Me. 2005); Washington Metro. Area Transit

Auth. v. One Parcel of Land in Montgomery Cnty, 691 F.2d 702 (4th Cir. 1982);

Hilbourne v. Suffolk Cnty., 120 Mass. 393 (1876); Michigan Dep’t of Transp. v.

Tomkins, 749 N.W.2d 716 (Mich. 2008); Minnesota v. Strom, 493 N.W.2d 554

(Minn. 1992); Adcock v. Mississippi Transp. Comm’n, 981 So. 2d 942 (Miss.

2008); State Highway Comm’n v. Gatson, 617 S.W.2d 80 (Mo. Ct. App. 1981);

Lewis & Clark Cnty. v. Nett, 263 P. 418 (Mont. 1928); Prudential Ins. Co. v.

Cent. Nebraska Pub. Power & Irrigation Dist., 296 N.W. 752 (Neb. 1941); Dep’t

of Highways v. Haapanen, 448 P.2d 703 (Nev. 1968); Lebanon Hous. Auth. v.

Nat’l Bank of Lebanon, 301 A.2d 37 (N.H. 1973); State Highway Dep’t v. Kistler-

Collister Co., 529 P.2d 611 (N.M. 1975); Lineburg v. Sandven, 21 N.W.2d 808

(N.D. 1946); Hurst v. Starr, 607 N.E.2d 1155 (Ohio Ct. App. 1992); Williams

Natural Gas Co. v. Perkins, 952 P.2d 483 (Okla. 1997); State Highway Comm’n

v. Hooper, 488 P.2d 421 (Or. 1971); Appeal of Philadelphia Elec. Co. (PECO),


by the value of any special benefits to be conferred on the

remaining land, but not by the value of any general benefits,”

presumably so the condemnee isn’t forced to solely bear the cost

of the surrounding neighborhood’s gain. 99 Such consideration

precludes the offset of general benefits against the compensation

award.100

The Oregon Court of Appeals highlighted these special

benefits in holding that “[a]ny devaluation of property retained

by a condemnee can be offset by the value of any ‘special benefit’

that is conferred on the remaining property by the taking.”101

Other courts have agreed, with one stating that “only ‘special’

benefits can be deducted from any compensation due; ‘general’

benefits cannot be deducted.”102 The Missouri Court of Appeals

for the Southern District has been even more specific, noting,

“special benefits to a condemnee’s remaining real estate may be

set off against an award of compensation for the real estate that

is taken, but general benefits may not be set off.”103

In Bauman v. Ross, the Supreme Court held that for

federal takings:

580 A.2d 424 (Pa. 1990); Capital Props, Inc. v. Rhode Island, 636 A.2d 319

(1994); Robinson v. Richland Cnty. Council, 358 S.E.2d 392 (S.C. 1987); State

Highway Comm’n v. Emry, 244 N.W.2d 91 (S.D. 1976); Dep’t of Transp. v.

Brevard, 545 S.W.2d 431 (Tenn. Ct. App. 1976); Texas v. McCarley, 247 S.W.3d

323 (Tex. App. 2007); Utah v. Harvey Real Estate, 57 P.3d 1088 (Utah 2002);

Howe v. State Highway Bd., 187 A.2d 342 (Vt. 1963); Washington v. Green, 578

P.2d 855 (Wash. 1978); Hietpas v. Wisconsin, 130 N.W.2d 248 (Wis. 1964);

State Highway Comm’n v. Rollins, 471 P.2d 324 (Wyo. 1970).

98. See Bauman v. Ross, 167 U.S. 548, 582 (1897) (noting that “the

rule has been applied where the special benefits equaled or exceeded the

damages, so that the owner of the land received nothing”).

99. See AM. JUR., supra note 7, § 338; Jagow v. E-470 Pub.

Highway Auth., 49 P.3d 1151, 1157 (Colo. 2002) (limiting the offset to special

benefits, not general benefits); see also Moyer v. Nebraska City Airport Auth.,

655 N.W.2d 855, 863 (Neb. 2003) (limiting the offset to special benefits, not

general benefits).

100. See AM. JUR., supra note 7, § 352 (describing that benefits that

are common to the entire “community may not be deducted from a

condemnation award.”).

101. State of Oregon v. Fullerton, 34 P.3d 1180, 1181 (Or. Ct. App.

2001).

102. Hendler v. United States, 175 F.3d 1374, 1380 (Fed. Cir. 1999).

103. See Brandon v. Estate of LaFavre, 9 S.W.3d 755, 758 (Mo. Ct.

App. 2000).


[I]f the proposed road or other improvement inure

to the direct and special benefit of the individual

out of whose property a part is taken, he receives

something which none else of the public receive,

and it is just that this should be taken into account

in determining what is compensation.104

In contrast, the Court would “exclude the indirect and

general benefits which result to the public as a whole, and

therefore to the individual as one of the public; for he pays in

taxation for his share of such general benefits.”105 This decision

was based upon the majority of states’ own holdings.106

In contrast, six states—California,107 New Jersey,108 New

York, 109 North Carolina, 110 Virginia 111 and West Virginia, 112 —

104. Bauman v. Ross, 167 U.S. 548, 581–82 (1897).

105. Id. at 581.

106. See id. at 583 (“[I]n the greater number of the states, unless

expressly forbidden by constitution or statute, special benefits are allowed to be

set off, both against the value of the part taken, and against damages to the

reminder . . . .”).

107. See Los Angeles Cnty. Metro. Transp. Auth. v. Cont’l Dev.

Corp., 941 P.2d 809, 809 (Cal. 1997) (“A rule permitting offset of all reasonably

certain, immediate and nonspeculative benefits has the virtue of treating

benefits and severance damages evenhandedly.”).


(N.J. 2013) (“[W]hen a project calls for the construction of dunes along the entire

public project requires the partial taking of property, ‘just compensation’ to the

owner must be based on a consideration of all relevant, reasonably calculable,

and non-conjectural factors that either decrease or increase the value of the

remaining property.”).

109. See Chiesa v. New York, 324 N.E.2d 329, 333 (N.Y. 1974) (“The

New York rule . . . may be formulated as follows: Value of land taken

consequential damages to remainder minus general and special benefits = just

compensation.”).

110. See Bd. of Transp. v. Jones, 255 S.E.2d 185, 187 (N.C. 1979)

(“Where only a part of a tract is taken, the measure of damages for said taking

shall be the difference between the fair market value of the entire tract

immediately prior to said taking and the fair market value of the remainder

immediately after said taking, with consideration being given to any special or

general benefits resulting from the utilization of the part taken for highway

purposes.”) (quoting N.C. GEN. STAT. § 136-112 (1959)).

111. See Long v. Shirley, 14 S.E.2d 375, 377–78 (Va. 1941) (stating

that the intent of the Virginia legislature was to disregard the differences

between special and general benefits).

112. See Guyandotte Valley Ry. v. Buskirk, 50 S.E. 521, 522 (W.Va.

1905) (“Benefits, whether general and common to all property affected by the


reject the distinction between special and general benefits, and

incorporate any reasonably calculable benefit that increases the

fair market value of the remaining property, regardless of

whether the benefit has a larger impact on the community as a

whole.113 Notably, all six jurisdictions employ the BAA method of

just compensation calculation.114

The earliest of these cases, Guyandotte Valley Railway Co.

v. Buskirk, was decided in 1905, however Los Angeles County

Metropolitan Transportation Authority v. Continental

Development Corporation (California) and Borough of Harvey

Cedars v. Karan (New Jersey) have both been decided in the past

twenty years.115 Furthermore, Chiesa v. New York (New York)

and Board of Transportation v. Jones (North Carolina) were

decided in the 1970s, making the disregard for the distinction

between general and special benefits a seemingly relatively

recent movement.116

Other than Harvey Cedars, which will be discussed in Part

V, the primary case considering both special and general benefits

is Continental Development Corporation. 117 In that case, the

California Supreme Court overruled a century’s worth of

precedent in a matter over the construction of an elevated light

rail.118 The light rail reduced the landowner’s view, but it also

work of improvement, or peculiar to it, when material, can obviously be

considered for but one purpose, namely, deduction from the damages to the

property.”).

113. See AM. JUR., supra note 7, § 325, (stating that under a strict

interpretation of the before-and-after rule, any benefit is taken into

consideration if it affects the value of the taking); see also id. § 343 (some courts

find the distinction so confusing they’ve abolished it, and that other jurisdictions

have abolished the distinction by statute).

114. See id. § 325 (noting that both special and general benefits are

included into consideration).

115. See generally Guyandotte Valley Ry. v. Buskirk, 50 S.E. 521

(W.Va. 1905); Los Angeles Cnty. Metro. Trans. Auth. v. Cont’l Dev. Corp., 941

P.2d 809 (Cal. 2002); Borough of Harvey Cedars v. Karan, 70 A.3d 524 (N.J.

2013).

116. See generally Chiesa v. New York, 324 N.E.2d 329 (N.Y. 1974);

Bd. of Transp. v. Jones, 255 S.E.2d 185 (N.C. 1979). But see Long v. Shirley, 14

S.E.2d 375 (Va. 1941).

117. 941 P.2d 809 (Cal. 2002).

118. See Continental Dev. Corp., 941 P. 2d at 811–12 (“Here, the

Los Angeles County Metropolitan Transportation Authority (the MTA) brought

a condemnation action to acquire a narrow strip of land for an easement along

one side of a parcel owned by Continental Development Corporation


provided the benefit of access to quicker and easier

transportation.119 As a result, the Court found that since the goal

of the Takings Clause is to make condemnees whole, and nothing

more, true and complete indemnity requires the offset of all

benefits actually received . . . including general benefits.120

In addition, some states have rejected the distinction

between special and general benefits only in certain

circumstances and for specific types of takings.121 In at least one

jurisdiction, the special benefits alone may count as just

compensation, without any financial remuneration necessary.122

While VPD typically doesn’t allow benefits to detract from the

valuation of the taken property, merely the severance damages to

the remainder, it’s possible under the BAA context that

effectively no compensation will be required if the benefits to the

remaining property are large enough as to completely overwhelm

the loss of the property.123 For example, if the construction of a

dune is the only thing that can prevent a beach house from

(Continental) for the construction of a portion of an elevated light rail line

known as the Green Line.”).

119. See id. at 812 (relaying that the trial court did not allow the

evidence because the court reasoned “that proximity to the transit

station was not a special benefit because it was shared by

numerous properties in the vicinity”).

120. See id. at 824 (“A rule permitting offset of all reasonably

certain, immediate and nonspeculative benefits has the virtue of treating

benefits and severance damages evenhandedly.”).

121. See AM. JUR., supra note 7, § 343 (rejecting the distinction

because of the confusion caused); see also Crum v. Mt. Shasta Power Corp., 4

P.2d 564, 573 (Cal. 1931) (“In eminent domain cases, other than those which

involve rights of way, both general and special benefits which accrue to either

the portion taken or that which remains, may be considered and set off against

the damages assessed.”).

122. See AM. JUR., supra note 7, § 338 (“Special benefits conferred

on a property owner’s remaining property as a direct result of a taking may

constitute just compensation”); see also Kavanau v. Santa Monica Rent Control

Bd., 941 P.2d 851, 864 (Cal. 1997) (“More explicitly, the court has long held that

the special benefits conferred on a property owner's remaining property as a

direct result of a taking may constitute just compensation.”).

123. See MaryAnn Spoto, Harvey Cedars Couple Receives $1

Settlement for Dune Blocking Ocean View, THE STAR-LEDGER (Sep. 25, 2013, 1:21

PM),

http://www.nj.com/ocean/index.ssf/2013/09/harvey_cedars_sand_dune_dispute_s

ettled.html (stating that the initial settlement offer was for $300, but the case

eventually settled for $1) (on file with the WASHINGTON AND LEE JOURNAL OF



guaranteed destruction, that special benefit, if calculable in

financial terms, may completely offset the extent to which the

government must provide just compensation.124

Others have looked to an “increase in the market value of

the remaining property [as] the sole test by which a court

ascertains the deductibility of a benefit,” where “the distinction

between general and special benefits becomes meaningless, since

a finding of market value necessarily includes value contributed

by any kind of benefit, general as well as special.”125 Therefore,

general benefits are included because they recognize the gain

realized by the landowner that he would undoubtedly receive,

regardless of the gain others will also obtain.126

All jurisdictions agree that any benefit, either special or

general, must be real and cannot be speculative, which is true of

damages in both the VPD and BAA context.127 Like damages,

future benefits can only be used if they are certain, or reasonably

certain to be realized. 128 These benefits must additionally be

calculable and measurable in financial terms so they may be

deducted from the compensation award.129

For example, if the benefit of a storm protective dune and

extended beach would save the remaining property from almost

certain destruction, the benefit can be reasonably calculated.130

As a corollary, if a highway might help a farm but it is unclear

124. See id. (detailing how dunes the dunes were created after

Hurricane Sandy for protection by the Army Corp of Engineers).

125. AM. JUR., supra note 7, § 339; Illinois State Toll Highway Auth.

v. American Nat. Bank & Trust Co. of Chicago, 624 N.E.2d 1249, 1255 (Ill. 1994)

(stating that any benefits that are not speculative or conjectural may be

considered).

126. See AM. JUR., supra note 7, § 353 (“[B]enefits resulting from an

improvement generally are not deductible from the damage award where the

condemnee's remaining land has been or will be assessed for the cost of the

improvements.”).

127. See id. § 281 (“[R]ecovery may not be based on speculative,

remote, imaginary, or merely possible events.”).

128. See id. § 331 (noting that future benefits can only be used if a

finder of fact is certain they will be realized).


(N.J. 2013) (“We now conclude that when a public project requires the partial

taking of property, ‘just compensation’ to the owner must be based on a

consideration of all relevant, reasonably calculable, and non-conjectural factors

that either decrease or increase the value of the remaining property.”).

130. See id. at 529 (demonstrating how storm protection benefits

may be calculable).


how much or the benefits cannot be quantified in economic terms,

those benefits may not be included in the final compensation

award. While VPD protects the condemnee by adding damages,

BAA makes takings easier, or at least less costly, for the

government, as there can be a greater deduction for benefits from

the valuation.131

IV. Impact on Environmental Takings

Since 2005, Hurricane Katrina destroyed New Orleans,132

An Inconvenient Truth exposed the practical impact of global

warming, 133 the explosion at Deepwater Horizon released 4.9

million barrels of oil into the Gulf of Mexico,134 and Hurricane

Sandy caused severe damage to the northeastern coast of the

United States.135

The legal ramifications of these crises are endless,

involving questions of tort liability, criminal negligence, and

property claims, among others.136 Environmental and property

law have become increasingly intertwined as a result of

increasing land use and zoning regulations, which can dictate

liability and responsibility for preventative and post-

environmental crisis cleanup measures. 137 Property law may

131. See ORGEL, supra note 50, §§ 50–51 (listing the requirements

and benefits of each method).

132. See In re Katrina Canal Breaches Litig., 696 F.3d 436, 443 (5th

Cir. 2012) (noting the extent of damage caused by Hurricane Katrina).

133. AN INCONVENIENT TRUTH (Lawrence Bender Prods. 2006).

134. JANE LUBCHENCO ET AL., BP DEEPWATER HORIZON OIL BUDGET:

WHAT HAPPENED TO THE OIL? 1 (U.S. Geological Survey 2010), available at

http://www.usgs.gov/foia/budget/08-03-

2010...Oil%20Budget%20description%20FINAL.pdf (stating that 4.9 million

barrels of oil were released) (on file with the WASHINGTON AND LEE JOURNAL OF


135. Superstorm Sandy Slams Northeast, Triggers Massive

Blackouts and Flooding, CBS NEWS & ASSOCIATED PRESS (Oct. 30, 2012, 2:00

AM) www.cbsnews.com/news/superstorm-sandy-slams-northeast-triggers-

massive-blackouts-and-flooding/ (describing the extent of the damage in the

northeast) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,

AND THE ENVIRONMENT). 136. See In re Katrina Canal, 696 F.3d at 443 (listing plaintiff’s

claims against the federal government for damages caused by Hurricane

Katrina).

137. See John Schwartz, Accord Reached Settling Lawsuit Over BP

Oil Spill, N.Y. TIMES (Mar. 2, 2012),


dictate if beachfront property owners are responsible for building

levees to prevent Hurricane Katrina destruction, or if such

actions are within the purview of the government.138 Likewise,

property law has helped determine responsibility for the

Deepwater Horizon oil spill cleanup.139

While environmental jurisprudence has developed

significantly over the past forty years,140 the law of takings has

remained relatively unchanged, with the notable exception of

Kelo v. City of New London.141 Since the founding of the United

States, there have been few notable changes in our

understanding of eminent domain, just one of which was related

to partial takings.142 This has left the field underdeveloped in

certain aspects.143

Eminent domain’s staggered development is not

necessarily flawed, but its slow evolution creates a problem when

planning for the future.144 The jurisprudence of eminent domain

highlights how legal regimes that seek to remedy past wrongs in

a static world are insufficient when faced with prospective issues

that can have severe consequences in the future. If the

government is expected to take action to prevent coastal

http://www.nytimes.com/2012/03/03/us/accord-reached-settling-lawsuit-over-bp-

oil-spill.html?_r=0 (stating that British Petroleum would be responsible for

paying for the cleanup in the wake of the Deepwater Horizon spill) (on file with


138. See 50 AM. JUR. 2D. Levees and Flood Control § 3 (2014)

(discussing federal powers and responsibilities in relation to flood prevention

measures).

139. See Schwartz, supra note 137 (summarizing the settlement

reached by British Petroleum, who owned the Deepwater Horizon well).

140. See References/Links: Environmental Laws & Treatises,

NATIONAL RESOURCES DEFENSE COUNCIL, http://www.nrdc.org/reference/laws.asp

(indicating that a majority of federal environmental statutes have been enacted

since 1972) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


141. See SINGER, supra note 23, at 678–92 (providing a historical

background of takings law indicating that takings jurisprudence has not

changed much since Penn Central).

142. See id. (discussing how takings jurisprudence is historically

static).

143. See supra Part II (summarizing the history of eminent

domain).

144. See SINGER, supra note 23 (outlining three issues as a result of

takings jurisprudence: (1) the Supreme Court has developed different tests over

time; (2) precedent; and (3) issues of fairness and justice).


destruction caused by the projected increase in tropical storms,145

it should not be forced to rely on property law developed decades

before such a crisis could have been predicted. If even one

property is left unprotected because of disagreements over just

compensation, the entire area is at risk of destruction by a coastal

storm.146

The current partial takings jurisprudence consequently

gives to the individual undue priority over society, limiting the

government’s ability to respond to future environmental

challenges. This misalignment of priorities has and will continue

to give rise to scenarios in which the government cannot take

necessary protective measures due to overwhelming costs.147 As a

result, it is necessary to ease the burden on the government in

the case of partial takings for the good of society as a whole.

The current methods of calculating just compensation in

partial takings cases are outdated in most jurisdictions and do

not allow for the increased need for government to confront

environmental issues head-on.148 These issues are, in many cases,

not predictable, and will strain the status quo to a breaking

point. 149 The modification proposed will lessen the burden on

jurisdictions trying to get a step ahead of the curve, whereas

current statutory regimes such as VPD have the effect of

protecting the individual when it is the general public that needs

greater protection in the face of impending environmental

145. See Future Climate Change, UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY, http://www.epa.gov/climatechange/science/future.html

(last visited March 15, 2015) (stating that climate change will cause an increase

in tropical storms) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,



2013) (explaining the importance of a dune in front of the Karan’s beachfront

property).

147. See Anthony F. DellaPelle & Richard P. DeAngelis, Jr.,

Commentary, New Jersey’s New View on Parital Takings Compensation, 65

PLAN. & ENVTL. L. J. 4 (Nov. 2013) (raising the issue as to whom should pay for

partial takings).

148. See supra Part II. B (defining the value plus damage method to

calculate just compensation and its shortcomings).

149. See AM. JUR., supra note 7, § 324 (commenting that under VPD

the landowner will get just compensation for the entire value of the property

taken regardless of any benefit to the landowner as a result of the taking).


challenges. 150 As a result, a widespread adoption of the BAA

method for calculating just compensation in partial takings cases

is the best solution, provided the award can be offset for both

reasonably calculable and definite special and general benefits.

V. Borough of Harvey Cedars v. Karan

In 2013, the Supreme Court of New Jersey significantly

altered its partial takings jurisprudence with its decision in

Borough of Harvey Cedars v. Karan. 151 The environmental

concerns it addressed highlight the challenges faced by courts

attempting to balance the rights of property owners with the need

for state action, notably in an environmental context.

In 2008, the U.S. Army Corps of Engineers began

collaborating with the New Jersey Department of Environmental

Protection and local municipalities on a beach-restoration and

storm-protection project on Long Beach Island, New Jersey.152

The plan consisted of extending the shoreline by 200 feet into the

ocean to prevent beach erosion, maintaining the amount of sand

every five to seven years, and building trapezoidal dunes twenty-

two feet high and thirty feet wide at the top, to protect the island

from future storms capable of destroying homes and businesses in

the region.153

As part of the project, the Borough of Harvey Cedars

sought to secure eighty-two perpetual easements along the shore,

upon which the dunes would be built.154 Sixty-six property owners

granted their voluntary consent, 155 and when the remaining

sixteen property owners balked, the Borough adopted an

158. See Superstorm Sandy Slams Northeast, supra note 135

(explaining the last minute changes in forecasting for the scope of the storm).

151. See New Jersey’s New View, supra note 147 (“This decision

represented a departure by the court form a long-standing doctrine known as

the ‘special benefits’ doctrine, which had controlled the valuation of properties

in partial takings cases for decades.”).


(N.J. 2013) (providing background to the dune restoration project at issue).

153. See id. at 527 (describing the planned beach restoration and

dune construction).

154. See id. (“The Borough’s obligation was to secure eighty-two

perpetual easements over the portions of private beachfront properties closest to

the ocean on which the dunes would be built.”).

155. See id. at 527–28 (“The Borough acquired sixty-six easements

by voluntary consent of the property owners.”).


ordinance taking from each the sliver of property under its

statutory eminent domain authority.156 Harvey and Phyllis Karan

were the owners of one of the holdout properties, and contested

the nominal amount of $300 offered by the government in

recompense for the land taken and the devaluation of the

remaining property.157

At the trial and appellate levels, the New Jersey courts

found that “merely because ‘differing property owners enjoy the

benefit to different degrees does not convert a general benefit into

a special benefit,’”158 and subsequently disregarded the general

benefits provided to the Karans.159 Furthermore, the trial court

instructed the jury to only consider damages, which consisted

mostly of a reportedly decreased view of the ocean, and special

benefits, plus the value of the taken land in the award.160 The

jury was not allowed to consider general benefits, of which the

storm protection was the key feature.161

Without the project, Randall A. Wise of the U.S. Army

Corps of Engineers determined there was only a 27% chance of

the Karan’s’ property surviving fifty years without storm

damage.162 Furthermore, over a thirty-year period, there was a

56% likelihood of a storm “totally” damaging their property

without the creation of the dunes.163 With the project completed,

the Karan’s property would likely survive the next 200 years’

worth of storms.164 Wise, a civil engineer specializing in coastal

156. See id. at 528 (“However, the owners of sixteen beachfront

properties, including the Karans, did not consent. As a result, in July 2008, the

Borough adopted an ordinance authorizing it to acquire easements over those

sixteen properties through its statutory powers of eminent domain.”).

157. See id. (“The Karans rejected the Borough’s offer of $300 as

compensation for both the land taken and any devaluation of the remaining

property.”).

158. Id. at 529.

159. See id. at 529–30 (noting the trial and appellete courts

disregard of the general benefits given to the Karans).

160. See id. at 531 (“However, the court advised the jury to

disregard, in valuing the Karans’ remainder property, any general benefit

flowing from the public project.”).

161. See id. (citing jury instructions state that the jury not consider

general benefits).

162. See id. at 529 (presenting statistics related to the value added

from the dune construction).

163. See id. (discussing the probability of future damage).

164. See id. (noting the benefits of the project).


engineering, calculated this information using statistical analysis

that determined decreasing levels of risk for each “line” of homes

stretching away from the ocean.165

Wise’s analysis became reality, much more quickly than

he could have ever predicted. Hurricane Sandy devastated Long

Beach Island in 2012, inflicting an estimated $700,000,000 in

damage. 166 Notably, the places where the Army Corps of

Engineers’ dunes had been created were spared from the

destruction.167 “There are the places that had a protective dune

system installed and, as a result, sustained minimal damage.

Then there are the areas where there were no tall dunes, where

Sandy made its destructive powers known.”168 Hurricane Sandy,

in effect, justified Wise’s proposal and solidified the preventative

measures as a valuable public purpose.

The project budget was roughly $25,000,000, with the

Borough responsible for just $1,000,000 of the total amount.169

The jury calculated compensation using the previous New Jersey

method of calculation, which was the BAA method but did not

allow for consideration of general benefits.170 Using this model,

165. See id. (listing Randall A. Wise’s qualifications and role as an

expert).

166. See Ryan Hutchins, Long Beach Island Officials Shocked at

Extent of Damage from Hurricane Sandy, THE STAR-LEDGER (Oct. 31, 2012, 8:43

PM),

http://www.nj.com/news/index.ssf/2012/10/lbi_hurricane_sandy_damage.html

(“It will take at least $700 million to remake this 18-mile strip of land, an

estimate that could certainly surpass $1 billion as more is learned.”) (on file


ENVIRONMENT).

167. See Ryan Hutchins & Seth Augenstein, N.J. Sand Dunes

Protected Shore Towns from Hurricane Sandy’s Wrath, THE STAR-LEDGER (Nov.

6, 2012, 7:05 AM),

http://www.nj.com/news/index.ssf/2012/11/nj_sand_dunes_protected_shore.html

(describing the difference in damage from Hurricane Sandy when comparing

areas that had dune construction and those that had not) (on file with the


168. Id.

169. See Harvey Cedars, 70 A.3d at 530 (“The cost of the project was

approximately twenty-five million dollars, with the Borough bearing

approximately one million dollars of the cost, the State approximately seven-

and-one-half million dollars, and the federal government the balance.”).

170. See id. at 531 (“The trial court charged the jury that the

Karans were entitled to ‘just compensation’ for the easement acquired by the

Borough ‘measured by the difference between the fair market value of the entire


and unable to consider the storm protection benefits the Karan’s

would receive because they were deemed general and would help

the island as a whole, the jury level calculated the just

compensation of the taken property, plus damages to the

remainder, at $375,000.171 The damages mostly consisted of the

loss of some view due to the large dunes.172

If the $375,000 amount were to be prorated to the

remaining fifteen properties, the Borough would have had to pay

$6,000,000, or six times its portion of the budget of the project,

simply to acquire the easements.173 This does not even take into

consideration the other sixty-six property owners who would

likely demand similar compensation and not acquiesce towards a

much smaller figure, as they did.174 Furthermore, that $6,000,000

figure does not include the actual construction costs, which would

drive the number significantly higher. 175 As such, full

compensation would have made the costs of the project incredibly

high, and if the lower court’s decision had stood, likely impossible

to carry out. Following the decisions in favor of the Karans by the

trial and appellate levels, the Borough appealed to the New

Jersey Supreme Court.176

The New Jersey Supreme Court held that just

compensation in partial-takings “must be based on a

consideration of all relevant, reasonably calculable, and non-

conjectural factors that either decrease or increase the value of

the remaining property.” 177 As such, the Court removed the

distinction between general and special benefits, finding them to

be outdated, contradictory, and impossible to distinguish. 178

property . . . immediately before the taking and the fair market

value . . . immediately after the taking.”).

171. See id. (“The jury returned an award of $375,000 as

compensation for the easement and for any damages to the remainder of the

Karans’ property.”).

172. See id. at 528 (discussing the damages from the taking).

173. See id. (discussing the scope of the Borough’s project).

174. See id. at 527–28 (noting that some of the other property

owners gave the easements without “just compensation”).

175. See id. at 528 (noting the initial compensation offered only

considered compensation for the value of the land taken and any loss of value to

the remaining property).

176. See id. at 532 (discussing the procedural history of the case).

177. Id. at 526–27.

178. See id. at 539–40 (“As to this distinction, it has been said that

more rules, different from and inconsistent with each other, have been laid


Instead, the Court simply looked at the fair market value of the

property before and after the taking by considering all non-

speculative factors that any real buyer would consider,179 with

the end goal that compensation “in a partial-takings case must be

‘just’ to both the landowner and the public.”180

The Court held that a formula that “does not permit

consideration of the quantifiable benefits of a public project that

increase the value of the remaining property” due to general

benefits that increase value to the neighborhood as a whole is not

just and does not reflect the owner’s true loss.181 The practical

effect of this change allows the finder of fact to consider general

benefits in the calculation process because they aided the public

and not just the landowner.182

As its rationale, the New Jersey Supreme Court focused

on the different degrees of benefit shared by the landowners that

make the storm protection a special benefit, rather than a

general benefit.183 The Court also heavily focused on the difficulty

courts have had in distinguishing between general and special

benefits, with contradictory results that have led to confusion.184

By erasing the distinction between the two, the Court chose to

simplify the determination to any factor that would be considered

in a typical arms-length negotiation.185

down on this point than upon any other point in the law of eminent domain.”)

(citing Daniels v. State Rd. Dep’t, 170 So.2d 846, 854 (Fla. 1964)).

179. See id. at 540 (“Benefits that both a willing buyer and willing

seller would agree enhance the value of property should be considered in

determining just compensation, whether those benefits are categorized as

special or general.”).

180. See id. at 527 (discussing the intent behind compensation and

the ultimate goal that the award be just).

181. See id. (explaining the shortcomings of the calculations used by

the courts below).

182. See id. at 537 (noting the general definition of general benefits)

183. See id. at 541 (“Unquestionably, the benefits of the dune

project extended not only to the Karans but also to their neighbors further from

the shoreline. . . . Therefore, the Karans benefitted to a greater degree than

their westward neighbors.”).

184. See id. at 539 (“The task of distinguishing between special and

general benefits—as defined by case law in New Jersey and other jurisdictions—

is difficult ‘even for trained legal minds.’”).

185. See id. at 543 (“The Borough should not have been barred from

presenting all non-speculative, reasonably calculable benefits from the dune

project—the kind that a willing purchaser and willing seller would consider in

an arm’s length transaction.”).


To calculate the final valuation amount, finders of fact

may hear testimony from real estate appraisal experts as to the

value of these general benefits upon the specific property

owner.186 If the property is likely to be damaged or destroyed

without the completed government project, the resulting

compensation will be lowered accordingly to reflect the project’s

necessity.187

To that end, a court may choose to award nominal

damages if the reasonably calculable benefits vastly outweigh the

severance damages. 188 In fact, Harvey and Phyllis Karan

eventually settled for $1 in nominal damages following Hurricane

Sandy and the destruction of much of Long Beach Island, despite

the initial offer of $300 by the Borough.189

The decision in Harvey Cedars presents a dramatic shift in

eminent domain law by allowing use of eminent domain in

natural disaster prevention projects that would otherwise be

prohibitively expensive. 190 Without the decision, the Borough

would likely have been unable to complete the project, at least

within the apportioned budget, placing all of Long Beach Island

at continued risk from severe storms.191

186. See id. at 544 (“At that trial, the Borough will have the

opportunity to present evidence of any non-speculative, reasonably calculable

benefits that inured to the advantage of the Karans’ property at the time of the

taking.”).

187. See id. (“In short, the quantifiable decrease in the value of

their property—loss of view—should have been set off by any quantifiable

increase in its value—storm-protection benefits.”).

188. See id. at 530 (“Dr. Molliver determined that the Borough’s

taking of 3,381 square feet of the Karan’s property had a de minimis value of

only $300.”).

189. See Harvey Cedars Couple Receives $1, supra note 123 (stating

the initial and final settlement offers).

190. See Daniel D. Barnhizer, Givings Recapture: Funding Public

Acquisition of Private Property Interests on the Coasts, 27 HARV. ENVTL. L. REV.

295, 295–97 (2003) (describing the increase in government “givings” actions that

increase the value of coastal private property).

191. See Harvey Cedars, 70 A.3d at 527 (noting that “[t]he dune-

construction project required the securing of easements on properties bordering

the ocean”).


VI. Proposed Change and Its Effects

This Note proposes that other jurisdictions adopt the

aforementioned holding in Harvey Cedars and should modify

their just compensation calculation formulas to include both

general and specific benefits as part of the BAA analysis.192 As

the Harvey Cedars Court noted, the two categories of benefits are

often interpreted in a contradictory manner, and even the most

trained of legal minds struggle to identify the difference in

practice.193

In Harvey Cedars, the rest of the neighborhood shared, in

varying degrees, the general benefit of protection against the

destruction from a future storm.194 Although the benefits received

from this protection are practical, such as the continued security

of a home, and not exclusively financial, such as an increase in

business due to a new highway, the price and financial value of

that home is still calculable. 195 As the storm protection was

classified as a general benefit shared by the neighborhood, the

benefits afforded by the dunes could not be calculated under the

old formula of disallowing general benefits to be considered.196

However, the old New Jersey formula ignores the fact that Karan

received a disproportionate special benefit within the general

benefit, and does not grant the government leeway if their project

192. See AM. JUR., supra note 7, §§ 290, 343 (stating that some

jurisdictions effectively disregard the distinction between general and special

benefits in deducting from the total just compensation, either statutorily or

effectively).

193. See Harvey Cedars, 70 A.3d at 539 (“The task of distinguishing

between special and general benefits—as defined by case law in New Jersey and

other jurisdictions—is difficult ‘even for trained legal minds.’”).

194. See id. at 529 (“[C]ertain storms would cause damage to

frontline properties but not to properties further from the ocean. Risk of storm

damage drops significantly the further a property is from the ocean . . . .”).

195. See id. at 543–44 (“The jury in this case should have been

charged that the determination of just compensation required calculating the

fair market value of the Karans' property immediately before the taking and

after the taking (and construction of the twenty-two-foot dune).”).

196. See id. at 544 (“The trial court’s charge required the jury to

disregard even quantifiable storm-protection benefits resulting from the public

project that increased the fair market value of the Karans’ property.”).


will save an entire neighborhood from certain environmental

destruction.197

Instead, the new formulas include all benefits and

damages that are reasonable calculable, and which may increase

or decrease the value of the remaining property.198 In so doing,

courts will likely award compensation that closely resembles an

arms-length exchange where the condemnee sells the taken piece

of property at the true fair market price. 199 As a result, the

compensation award will be significantly fairer to the

government and will result in fewer windfalls for the

condemnee.200

In Harvey Cedars, the Court discussed the historical

development of general and special benefits, and noted that the

distinction, at least in New Jersey, came from railroads in the

1800s that took property to build tracks and gave only nominal

damages as compensation.201 The railroads argued that increased

population and commerce were enough to essentially eliminate

any compensation.202 The effect of this new formula, however,

would preclude such an unfair result to the landowner, as the

benefits considered must be reasonably calculable and cannot

have the same indefinite timeline or assistance that the railroads

197. See id. at 527 (“A formula . . . that does not permit

consideration of the quantifiable benefits of a public project that increase the

value of the remaining property in a partial-takings case will lead to a

compensation award that does not reflect the owner’s true loss.”).

198. See id. at 526–27 (“We now conclude that when a public project

requires the partial taking of property, ‘just compensation’ to the owner must be

based on a consideration of all relevant, reasonably calculable, and non-

conjectural factors that either decrease or increase the value of the remaining

property.”).



project—the kind that a willing purchaser and willing seller would consider in

an arm’s length transaction.”).

200. See id. at 527 (“In a partial-takings case, homeowners are

entitled to the fair market value of their loss, not to a windfall, not to a payout

that disregards the home’s enhanced value resulting from a public project.”).

201. See id. at 536–37 (noting that railroads justified low

compensation amounts on the benefits transportation development conferred on

communities).

202. See id. at 536 (“[R]ailroads argued that the benefits from

increased population and commerce . . . made the remainder property more

valuable.”).


preferred.203 Simply put, “[t]he historical reasons that gave rise to

the development of the doctrine of general and special benefits no

longer have resonance today.” 204 With the allowance of any

quantifiable yet definite benefit to be considered, the problem of

unfair results to the landowner may be limited, if not

eliminated.205

Certainly in cases like Harvey Cedars, when the property

will almost undoubtedly be destroyed without action, 206 full

consideration should be left to the finder of fact since the

remainder may be worthless without the government’s taking,

regardless of general or specific benefit determination.207 Ideally,

the proposed modification, through simple fairness, would

encourage the government to partially take property for

environmentally friendly purposes, such as beach replenishment,

storm protection, alternative energy creation, among other goals,

as there will be a financial incentive for projects due to a lower

economic cost.208

VII. Arguments and Alternatives

Like many other debates, the proposed change here has its

advocates and detractors; the government on one side, and

landowners on the other. 209 Despite concerns over individual

203. See id. at 542 (explaining why the railroad formula is not

workable today).

204. Id.

205. See id. at 544 (concluding that decreases in property values

should be offset by value increases resulting from storm-protection benefits

because those affected by government takings “are entitled to just

compensation, a reasonable calculation of any decrease in the fair market value

of their property after the taking”).

206. See id. at 529 (“Without the dune project, the Karans’ project

had only a 27% chance of surviving fifty years without any storm damage.”).

207. See id. at 533 (“’[T]he gate keeping function of the trial court is

to determine if evidence is reliable and not speculative, and once determined to

be reliable, it is for the jury to determine what, if any, impact the evidence

presented has on just compensation.’”) (citing State v. Caoili, 693 A.2d 275 (N.J.

1994)).

208. See Barnhizer, supra note 190, at 297 (stating that the

“government must increase its emphasis on property acquisition as a response

to repetitive flood losses and heightened flood risks on coastal floodplains”).

209. See Harvey Cedars, 70 A.3d at 526–27214 N.J. at 388–89

(describing the tension between a compensation method that incorporates


rights, landowners have been increasingly in favor of such a

change following the destruction caused by Hurricane Sandy,210

when the need for partial takings to build storm protection at

cost-effective prices became more important than maximizing

financial compensation for the landowner.211 As a result, it is

important that just compensation be fair to both the government

and the landowner.212

Supporters of the Harvey Cedars decision might argue

that the rule change acts as an incentive for the government to

take property for the environmental benefit of the public.213 When

building storm protection, alternative forms of energy creation, or

even a proliferation of oil pipelines to cheapen prices, among

other possible scenarios, the landowners are the ultimate

beneficiaries.214 The inclusion of general benefits, as recognized

speculative future benefits and one that is limited to immediately ascertainable

benefits).

210. See Erin O’Neill, Harvey Cedars Neighbors Say Dune

Protection Outweighs Obstruction of Ocean Views, THE STAR-LEDGER (July 9,

2013, 6:29 AM),

http://www.nj.com/news/index.ssf/2013/07/karan_harvey_cedars_dunes. html

(“Lalevee—a 78-year-old Bergen County resident—said his views of the crashing

waves along the shoreline were obstructed by the dune project, but ‘I rather

have that than have a lot of other problems.’”) (on file with the WASHINGTON AND


211. See MaryAnn Spoto, Toms River to Start Eminent Domain

Proceedings Against 16 Oceanfront Property Owners, THE STAR-LEDGER (OCT. 22,

2013, 8:31 PM),

http://www.nj.com/ocean/index.ssf/2013/10/toms_river_votes_to_start_

eminent_domain_proceedings_against_16_oceanfront_property_owners.html

(“‘If this dune system was in place during Hurricane Sandy, the devastation

that impacted our community would not have occurred,’ Wittmann said. ‘It

would not have occurred because the dune would have protected the township.’”)


ENVIRONMENT).

212. See Harvey Cedars, 70 A.3d at 527 (“In a partial-takings case,

homeowners are entitled to the fair market value of their loss, not to a windfall,

not to a payout that disregards the home’s enhanced value resulting from a

public project.”).

213. See Barnhizer, supra note 190, at 295–99 (discussing

government takings actions designed to protect coastal property and the

incentives provided to landowners by “landowners who receive compensation for

the value of past governmental givings in addition to whatever value the

landowner may have created in the property through individual actions related

to real market risks”).

214. See id. at 300 (“At the center of the controversy is the

inevitable tension between the rights and duties . . . This tension has long been


by the Harvey Cedars decision, would therefore recognize their

beneficiary status as an alternative means of compensation.

Furthermore, without such environmentally or energy focused

takings, society suffers as a result. 215 When the government

cannot afford to build storm protection to shelter a number of

houses along the coastline from being destroyed, it does not

matter how much a landowner believes their view is worth.216

As federal, state, and local governments increasingly seek

to perform takings for environmental or energy purposes, the

idea of being unable to afford projects is a real possibility.217 The

inability to effectuate takings within reasonable financial limits

has forced the State of Texas to cancel a $40 million beach

restoration project similar to the one in Harvey Cedars and

necessary to prevent high erosion rates from destroying

infrastructure,218 in the wake of ongoing litigation in Severance v.

Patterson.219

recognized in Fifth Amendment takings jurisprudence as the extent to which

private individuals should bear burdens intended to benefit the community at

large.”).

215. See Barnhizer, supra note 190, at 310 (“[W]e may reach a

point—if indeed we have not already passed it—where it will be too expensive to

pull back, even if the cost of not doing so includes enormous economic and

human losses and catastrophic environmental damage.”).

216. See id. at 313 (“Over time, beaches, dunes, and barrier islands

alter their size, shape, location, and topography in reaction to erosive and

accretive forces of wave action, storm surge, and rising sea levels. Each of these

changes alters the ability of the coastal floodplain to protect inland areas from

flooding.”).

217. See Heather Smith, Crude Awakening: As Keystone Opens in

Texas, Neighbors Fight to Protect their Water, GRIST (Jan. 23, 2014),

http://grist.org/climate-energy/oil-and-water-as-texas-keystone-pipe-opens-

neighbors-organize-to-protect-their-aquifer/ (stating that increased litigation

delay and may end proposed eminent domain projects) (on file with the


218. See Press Release, Jerry Patterson, Land Comm’r, Texas Gen.

Land Office, West Galveston Island Beach Project Is Cancelled: Timing and

Legal Issues from Court Decision Spells End for Project (Nov. 15, 2010),

available at http://www.glo.texas.gov/glo_news/press_releases/2010/

NOVEMBER/West-Galveston-Island.pdf (“Patterson said a recent Texas

Supreme Court opinion in a case brought forward by California-based Pacific

Legal Foundation has muddied the legal waters enough to delay the beach

project indefinitely.”) (on file with the WASHINGTON AND LEE JOURNAL OF


219. 370 S.W.3d 705 (Tex. 2012).


Furthermore, cases in California in recent years have

indicated, “acquiring property through eminent domain is an

increasingly costly prospect for the government.”220 As another

example, California is seeking to build a high-speed rail system,

which could have “devastating, irreversible effects on the state’s

environment,” and which will require at least separate partial

takings, which could be prohibitively expensive.221 The financial

feasibility of these projects, especially in the environmental

context, remains an important factor to consider.

There remains a logical fallacy to say that the individual

bears the burden for society when their compensation is reduced

due to general benefits.222 If the dunes had not been built, Karan

would have suffered to a greater degree than most, as evidenced

by Hurricane Sandy.223 In many cases, simply because a general

benefit assists the public does not mean the value does not exist

to the particular property owner, who may benefit

disproportionately.224 If the taking of property for a windmill will

lower energy costs or a local park will benefit the neighborhood

by raising property values, the degree to which the condemnee

220. Paul Shigley, Eminent Domain Acquisitions Grow More

Expensive, CALIFORNIA PLANNING & DEVELOPMENT REPORT (Jan. 30, 2008, 4:26

PM), http://www.cp-dr.com/node/1915 (“Courts have issued four recent court

decisions regarding eminent domain that suggest that acquiring property

through eminent domain is an increasingly costly prospect for the government.”)


ENVIRONMENT).

221. Joe Guzzardi, Judge Sends High-Speed Rail Plan Off the

Tracks, LODI-NEWS SENTINEL (Jan. 4, 2014, 12:00 AM),

http://www.lodinews.com/opinion/ columnists/joe_guzzardi/article_b2365b98-

2c0e-593b-8c93-7109fb544d94.html (“[T]he rail would have devastating,

irreversible effects on the state’s environment, encourage further unsustainable

population growth and, despite its huge cost, have no guarantee of ridership.”)


ENVIRONMENT).


2013) (explaining the requirement of providing “just compensation” to

individuals whose property has been taken through eminent domain

proceedings).

223. See id. at 527 (observing the protective nature of the dunes

constructed to prevent property destruction).

224. See AM. JUR., supra note 7, § 324 (“A special benefit conferred

on the remaining parcel may not be deducted from the value of the part taken,

therefore, but it may be deducted from consequential or severance damages.”).


benefits may be equal or greater to that of the rest of the

neighborhood.

In contrast, opponents of the proposed change advocate for

an emphasis in the word “just” in just compensation. 225 The

landowner must be fairly and justly compensated for their loss,

and should not bear the cost of society’s gain. 226 In addition,

opponents in Beveridge v. Lewis noted:

The chance that land will increase in value as

population increases and new facilities for

transportation and new markets are created is an

element of value quite generally taken into

consideration in the purchase of land in estimating

its present market value. This chance for gain is

the property of the land-owner. If a part of his

property is taken for the construction of the

railway, he stands in reference to the other

property not taken like similar property-owners in

the neighborhood. His neighbors are not required

to surrender this prospective enhancement of value

in order to secure the increased facilities which the

railroad will afford.227

In short, everyone in a neighborhood receives the benefit of the

general benefits, but while neighbors’ property may appreciate in

value, the same cannot be said of the landowner that lost their

225. See DellaPelle, supra note 151 (noting the premium paid for

beachfront properties in the Harvey Cedars case); see also SINGER, supra note

23, at 677 (highlighting issues of justice and fairness as factors that have been

considered in prior takings cases).

226. See Penn Cent. Transp. Co. v. New York, 483 U.S. 104, 148

(1978) (“[T]he Fifth Amendment's guarantee . . . [is] designed to bar

Government from forcing some people alone to bear public burdens which, in all

fairness and justice, should be borne by the public as a whole.”) (quoting

Armstrong v. United States, 364 U.S. 40, 49 (1960)).

227. Beveridge v. Lewis, 70 P. 1083, 1086 (Cal. 1902), overruled by

Los Angeles Cnty. Metro. Transp. Auth. v. Cont’l Dev. Corp., 941 P.2d 809, 825

(Cal. 1997) (“On balance, and acknowledging that Continental’s position is not

without some force, we overrule Beveridge, supra, 137 Cal. 619, to the extent it

holds that only “special” benefits may be offset against severance damages.”).


property to the partial taking.228 As a result, the neighbors get

the general benefit in addition to the increased value, while the

condemnee gets merely the increased value.229 However, as the

California Supreme Court in Continental Development said, this

argument fails because those neighbors do not also receive the

severance damages that the condemnee receives, making the

ultimate difference in benefits received insubstantial.230

Opponents against the proposed change have noted that it

may be difficult to calculate with reasonable certainty the

positive environmental general benefits.231 If the general benefits

cannot be calculated non-speculatively, they would not be

admitted into court, which would lead to the same result as

before.232 Consequently, there would be no practical change from

the adoption of the Harvey Cedars decision.233

One additional concern that the general benefits of a

public project may be so great as to entirely offset any

compensation owed to a condemnee, leaving a landowner with no

financial recompense. 234 If so, the benefits would unfairly

foreclose the just compensation award to which the landowner is

228. See Harvey Cedars, 70 A.3d at 526–27 (observing the

protective benefits of the dune creation project and the simultaneous

disadvantage to those whose property was taken as a result of the project).

229. See id. (describing the calculation of benefits provided to

homeowners affected by partial takings).

230. See Continental, 941 P.2d 809, 820 (Cal. 1902) (“Continental’s

equal protection argument is flawed in that it fails to account for a significant

difference, in terms of the availability of compensation for the detrimental

effects of the Green Line . . . . Continental is entitled to severance damages,

whereas its neighbors are not.”).

231. See id. at 826 (discussing condemnee’s objection to a somewhat

vague standard of what is to be considered reasonable).

232. See DellaPelle, supra note 151 (“[U]nless and until the benefit

can be proven, as a reasonably calculable sum by objective market data, the

mandate of the Karan court will not necessarily lead to lower condemnation

awards.”).

233. See Harvey Cedars, 70 A.3d at 544 (“[T]he quantifiable

decrease in the value of their property—loss of view—should have been set off

by any quantifiable increase in its value—storm-protection benefits. The Karans

are entitled to just compensation, a reasonable calculation of any decrease in the

fair market value of their property after the taking.”).

234. See Spoto, supra note 123 (noting the Karan’s eventually

settled for $1 of just compensation).


constitutionally entitled.235 If the landowner has their land taken

from them and receives nothing tangible in return, there is a

certain unjust quality at play. 236 Although Susette Kelo did

receive compensation in the Kelo case, she described a similar

plight to the one just described by stating, “My name is Susette

Kelo and the government stole my home.”237 A landowner that

loses part of their property without financial compensation in

return might feel similarly.

Despite this possibly unjust nature, the Harvey Cedars

case eventually settled for $1, far less than the nominal $300

offered to the Karans.238 As a result, at least one court remains

satisfied with nominal compensation, despite concerns stated

above.239 In addition, it should be noted that the Constitution

does not require just compensation to be paid in monetary forms

by its very terms; the notion of benefits in itself constitutes

compensation outside of currency. 240 This is why conceptual,

although certain, general benefits should be considered and as an

offset to real damages to the remaining property, because even

though they are a more ephemeral concept than visible damages,

general benefits still have real consequences and are

calculable.241



constitute just compensation”).

236. See U.S. CONST. amend. V (stating the constitutional

prohibition against unjust takings compensation).

237. Susette Kelo, The Government Stole My Home, Policy Report,

31 CATO INSTITUTE (Mar./Apr. 2009), available at http://object.cato.org/policy-

report/marchapril-2009/government-stole-home (on file with the WASHINGTON


238. See Spoto, supra note 123 (identifying the insignificant

settlement amount of the Karan case).

239. See supra note 123 and accompanying text.



constitute just compensation”). But see Paducah & Memphis R.R. Co. v. Stovall,

59 Tenn. 1, 5 (1873) (“In the case of Woodfolk v. The Nashville & Chattanooga

Railroad Co., 2 Swan, 422, it was settled that the ‘just compensation’ of the

Constitution was the fair value of the land appropriated, which must be actually

paid in money, and can not be discharged in benefits or ameliorations.”).


2013) (explaining the necessity of using a compensation method that accurately

identifies general benefits).


VIII. Conclusion

Every state and the federal court should adopt the New

Jersey Supreme Court’s holding in Harvey Cedars, which allows

for just compensation in partial takings to be calculated

according to the before-and-after method, mitigated by non-

speculative and reasonably calculable general and special

benefits.242 The applied effect of the change would be to lower

economic costs for states and municipalities in creating

environmentally friendly projects that benefit the general

populace, and to recognize the benefits realized in practice by

landowners of such projects.243

In addition, development of partial takings jurisprudence

would allow the government to be better suited to take

unpredictable and unforeseeable environmental concerns that

may pop up in the future, without being forced to rely on property

law developed in the 1800s, as is the case with Bauman.244 In the

end, federal, state, and local jurisdictions will be in a better

financial position to take partial tracts of land for the betterment

of the public as a whole, in keeping with the fundamental public

use doctrine that eminent domain demands.245



project . . . . Those benefits are part of the fair-market equation, regardless of

whether they are enjoyed by others in the community.”).

243. See Barnhizer, supra note 190, at 295–97 (discussing the need

for environmentally motivated takings actions).

244. See Bauman v. Ross, 167 U.S. 548, 563 (1897) (applying

underlying property law principles to the Fifth Amendment’s Takings Clause).

245. See Barnhizer, supra note 190, at 297–99 (advocating for more

aggressive takings actions based on the necessity of public planning and

response to environmental concerns).

592

Moving Military Energy

“Behind the Fence:”

Renewable Energy Generation on U.S.

Defense Lands

Cameron E. Tommey

Abstract

“The [Department of Defense] uses over

30,000,000 MegaWatt Hours (“MWH”) of

electricity per year, at a cost of over $2 billion a

year. Almost 98 percent of the electricity

supplied to [Department of Defense]

installations comes from the civilian market,

which also makes it highly susceptible to the

increasing spate of large-scale outages (caused

by accidents, over-demand, as well as cyber-

attack). Indeed, the Defense Science Board

described the national power grid as ‘fragile and

vulnerable,’ and noted that the reliance placed

on it by the [Department] put ‘critical military

and homeland defense missions at unacceptable

risk of extended outage.’”

Fueling the Balance, Brookings

Institute1

The United States Department of Defense stands as the world’s

single largest consumer of energy—domestic consumption alone

Cameron Tommey ([email protected]) is a J.D. candidate

at Washington & Lee University School of Law, May 2015, and a Senior Articles

Editor for the Journal of Energy, Climate, and the Environment. Cameron

would like to thank Professor Albert V. Carr for his invaluable support and

guidance and to members of the Journal of Energy, Climate, and the

Environment for their review and comments.

1. JERRY WARNER & P.W. SINGER, THE BROOKINGS INSTITUTION,

FUELING THE “BALANCE:” A DEFENSE ENERGY STRATEGY PRIMER 3 (2009).

BEHIND THE FENCE

593

by the Department amounts to nearly one percent of the United

States’ total energy consumption and nearly eighty percent of the

energy consumed by the Federal Government. Although a cadre

of statutes, Executive Orders, and agency priorities set high goals

for the introduction of renewable energy into the Department’s

portfolio, it has historically failed to meet both its target for

reducing facility energy use and its target for renewables

integration. This Note suggests moving the Department’s energy

production “behind the fence,” fixing technology to place to

increase security and reduce environmental and economic

impacts. To do so, however, a mountain of challenges will have to

be overcome, including federal permitting restrictions on new

energy projects, high capital costs for increased generation, a

number of technological challenges with emerging renewable

energy sources, and the existing contracts with traditional energy

producers. Ultimately, a comprehensive and expansive initiative

that couples site-specific technologies with agency-wide

coordination will help the Department both meet its statutorily

mandated targets for energy efficiency and production and also

effect positive change in the environmental impact of our nation’s

single largest energy consumer.

Table of Contents

I. Introduction ............................................................................. 594

A. Background ......................................................................... 596

B. Politically Opportune .......................................................... 600

II. Federal Action on Renewable Energy .................................... 601

A. Legislation ........................................................................... 603

B. Executive Action ................................................................. 605

III. Benefits of Renewable Energy to the .................................... 606

Department of Defense ............................................................... 606

A. Security ............................................................................... 608

B. Environmental .................................................................... 609

C. Economic ............................................................................. 611

IV. Department Integration of Renewable to Date .................... 612

V. Fixing Technology to Place ..................................................... 614

A. Case Study I: Biomass in the U.S. Northeast .................... 616

B. Case Study II: Solar in the U.S. Southwest ....................... 618

C. Microgrids and Smart Grids ............................................... 620

D. Microgrids in the Military .................................................. 622


VI. Challenges and Recommendations ....................................... 623

A. Federal Permitting Restrictions ......................................... 624

B. Lack of Short Term Incentives ........................................... 625

C. Generation vs. Acquisition .................................................. 626

D. Shifting Land Management ................................................ 628

E. Technological Challenges.................................................... 629

F. Existing Contracts .............................................................. 630

VII. Conclusion ............................................................................ 632

I. Introduction

The Department of Defense (“DOD”) currently represents

the world’s single largest consumer of energy, with a larger

energy footprint from its daily activities than any public or

private entity and more than 100 countries.2 Not only does this

represent a significant expenditure for our nation’s defense

budget, but it also highlights a sweeping opportunity to alter the

face of energy consumption and conservation on a mass scale in

the United States. 3 Pursuant to federal legislation, executive

orders, and DOD policies and practices, the U.S. military has

made steps toward developing more robust renewable energy

standards for the agency as a whole and for individual military

branches.4

With the roll out of the President’s Climate Action Plan in

the summer of 2013, the military became a key piece of our

nation’s shift towards cleaner, greener energy while also

advancing energy security in an increasingly politically unstable

global environment.5 In highlighting the nexus between energy

consumption and a changing climate, the Climate Action Plan

noted that “climate change is no longer a distant threat – we are

2. See id. at 2 (describing the energy usage of the DOD in relation

to the entire federal government).

3. See id. (comparing the excessive energy usage of today’s

military to the energy usage issues presented in the Civil War).


5. See WARNER, supra note 1, at 2 (“The long-term implications of

this energy consumption on national security as a whole are manifold, from

bolstering illiberal regimes that control oil reserves and indirectly financing

terrorist groups to driving climate change that endangers global stability and

the American economy.”).

BEHIND THE FENCE

595

already feeling its impacts across the country and the world.”6

This Note argues that the Department of Defense installations

and bases represent the key piece of the puzzle in advancing a

program of renewable energy sources for electricity generation

and acquisition.

In Part I, this Note reviews where the Department of

Defense has focused its time and funding with regards to

renewable energy to date.7 It then assesses where it could go with

the remaining term of a President eager to integrate renewable

technologies into the operations of the federal government.8

Part II reviews the various legislative, executive, and

agency actions that place special requirements upon the DOD to

consider a transition to renewable energy sources. 9 Part III

summarizes the clear and significant benefits of renewable

energy integration by the DOD, including increased mission

security, positive environmental impacts, and economic

incentives.10 After reviewing the progress of the DOD to date in

Part IV, Part V considers the myriad benefits of decentralizing

energy systems.11 Special attention will be paid to the untapped

opportunity to use locally sourced and regionally appropriate

renewables technologies12—in conjunction with Smart Grid and

other developing transmission uses—to create a large-scale

renewable energy portfolio for the federal military through use of

small-scale generation.13

Finally, Part VI will highlight some of the major

challenges to a rapid transition from traditional energy sources to

6. See EXECUTIVE OFFICE OF THE PRESIDENT, THE PRESIDENT’S

CLIMATE ACTION PLAN 4, available at

http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionpl

an.pdf (July 2013) [hereinafter CLIMATE ACTION PLAN] (adding the Department

of Defense’s new goals and mechanisms for attaining renewable energy use

across the Department, including wind, solar, biomass, and geothermal) (on file


ENVIRONMENT).




10. See infra Part III and accompanying text.

11. See infra Part V and accompanying text.

12. See infra Part V for discussion of particular renewable

electricity generation technologies that take advantage of regionally abundant

resources to increase efficiency and decrease transportation costs.



more renewable forms of electricity generation and acquisition.14

Given the current funding opportunities, the private sector

interest in renewables investment, and developing federal

permitting structures to favor renewables, the time to capture the

DOD’s renewable energy opportunity is now.15

Ultimately this paper endeavors to highlight the

particular opportunity for “behind the fence” electricity

generation—that is, electricity generated and used within the

physical boundaries of a military installation.16 As later Parts

discuss, however, a number of challenges stand in the way of

facilitating this significant departure from historical and current

practice; the transition to a renewable energy portfolio for our

military will neither be instant nor simple.17

A. Background

The Department of Defense’s energy footprint makes it the

world’s largest single consumer of energy—more than any other

public or private entity and more than one hundred individual

countries.18 Looking only at domestic energy consumption—both

electricity and other fuels and uses—this amounts to nearly one

percent of the United States’ total energy consumption and

nearly eighty percent of the energy consumed by the Federal

Government.19 To put this in perspective, “the Department of

Defense burns 395,000 barrels of oil per day—about as much as

the entire country of Greece.”20

The same pattern of considerable energy consumption

happens at the installation and base level as well. “The DoD uses

over 30,000,000 MegaWatt Hours (“MWH”) of electricity per year,

at an [annual] cost of over $2 billion.”21 Significantly, as recently

as 2010, “[a]lmost 98 percent of the electricity supplied to [DOD]

14. See infra Part VI and accompanying text.



17. See infra Part IV and accompanying text.

18. See WARNER, supra note 1, at 1 (noting the duel issues

presented by such massive energy demands: environmental and security).

19. See id. at 2 (adding that energy consumption per person in the

United States has increased 57 percent in the last four decades).

20. Id.

21. Id. at 3.

BEHIND THE FENCE

597

installations comes from the civilian market,” leading to high

susceptibility to large-scale outages resulting from accidents,

weather events, increased demand, and new threats of cyber-

attack.22 Recognizing the risks involved in procuring nearly 100

percent of its electricity needs from the civilian grid, the Defense

Science Board described the national power grid as “fragile and

vulnerable” and noted that “critical national infrastructure places

critical military and Homeland defense missions at an

unacceptably high risk of extended disruption.”23

Although much of this consumption falls within the

broader categories of strategic defense, both internal and external

studies of the Department of Defense’s energy use reveal that

energy efficiency and a lack of comprehensive energy

consumption plans are just as important as problems of

electricity acquisition and generation.24 This Note endeavors to

focus on the latter of these problems: the sources of energy

acquisition by the U.S. military and the opportunities for the

incorporation of renewable sources 25 to positively shift the

strategic, environmental, and economic impacts of energy use.26

22. See id. (characterizing the military’s “exceptional appetite for

energy, which is becoming untenable for our future security.”).

23. MORE FIGHT, LESS FUEL: REPORT OF THE DEFENSE SCIENCE

BOARD TASK FORCE ON DOD ENERGY STRATEGY, OFFICE OF THE UNDER SECRETARY

OF DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS 3–4 (2008), available

at http://www.acq.osd.mil/dsb/reports/ADA477619.pdf [hereinafter MORE FIGHT,

LESS FUEL] (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


24. See WARNER, supra note 1, at 4 (noting that while energy self-

sufficiency for bases is a worthy aim, the DOD’s approach has been ad hoc and

does not address energy consumption by vehicles and operations); see also

DEPARTMENT OF DEFENSE, OFFICE OF THE DEPUTY UNDER SECRETARY OF DEFENSE,

INSTALLATIONS AND ENVIRONMENT, 0-3C82BA1, ANNUAL ENERGY MANAGEMENT

REPORT, FISCAL YEAR 2012 (2013) [hereinafter 2012 ANNUAL ENERGY REPORT]

(containing a detailed analysis of energy use by the Department of Defense in

2012 as well as a comprehensive assessment of energy initiatives across the

Department).

25. See 2012 ANNUAL ENERGY REPORT, supra note 24, at 35 (stating

that currently, the DOD recognizes seven main technologies for renewable

electricity generation: geothermal, ground source heat pumps, biomass, solar

thermal, solar photovoltaic (PV), and wind).

26. See WARNER, supra note 1, at 1 (“This is not just a matter of

recognizing the energy and climate issue on the threats side of the ledger. In

order to drive actual programming and yield resources, a defined and realistic


This area shares the criticism of lacking comprehensive oversight

and coordination.27 Despite a strong increase in activity related to

energy efficiency and consumption in the military, the overall

impact remains “spotty and lacks a broad, cohesive strategy that

cuts across the [DOD] as a whole. The programming tends to be

ad-hoc and often focused on the lowest-hanging fruit.”28

Spending billions of dollars annually on energy

acquisition, the DOD has the potential both to reduce these costs

substantially through resource-neutral renewable sources 29 as

well as infuse huge investments into new and developing

technologies. 30 History has shown that military research and

development can lead to breakthroughs in technology, in part

because of the formidable budgets and research and development

resources of the DOD.31 The challenge, however, lies in creating a

targeted and sweeping program that ensures the efficacy of this

target finally needs to be enunciated for the Department of Defense in the

energy usage realm.”).

27. See 2012 ANNUAL ENERGY REPORT, supra note 24, at 5 (calling

for “Department-wide integration of energy-informed analyses into decision-

making and business processes.”); see also WARNER, supra note 1, at 6

(suggesting that the DOD designate a “point person” to research and compile an

annual report for the Secretary of the DOD and Congress, reviewing progress

towards annual and long-term goals and standardizing the reporting

mechanisms).

28. WARNER, supra note 1, at 4 (noting that plans to push military

bases to operate as “net zero,” for example, producing all energy necessary for

base consumption, has to date only reached a small fraction of the total domestic

installations).

29. See OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY, U.S.

DEPARTMENT OF ENERGY, 2012 RENEWABLE ENERGY BOOK 120 (2013) [hereinafter

RENEWABLE ENERGY BOOK] (defining renewable energy sources and qualifying

resource methods). Renewable electric energy sources are naturally replenishing

but flow-limited. Id. They are virtually inexhaustible in duration but limited in

the amount of energy that is available per unit of time. Id. Renewable energy

resources include biomass, hydropower, geothermal, solar, wind, and ocean

energy. Id.

30. See WARNER, supra note 1, at 6 (stating that the DOD has

developed revolutionary technology in response to adversity in the past).

31. See Jeremy S. Scholtes, On Point for the Nation: Army and

Renewable Energy, 34 ENERGY L.J. 55, 61 (2013) (noting that the various

military branches have “acted as a crucible for social and technological

advancement many times since their very inception.”).

BEHIND THE FENCE

599

research and development and facilitates technology flow to

agencies and parties outside of the DOD.32

Myriad external factors at play push the Department to

embrace renewable technologies domestically, including

“acknowledgment of evolving cyber-attack capabilities across the

globe that could impact [military] operations at installations . . .

[and] the need to develop operational plans and sound

infrastructure that will endure through changing environmental

conditions.”33

Furthermore, the structure and reach of the Department

of Defense makes it perhaps the most well positioned federal

agency to move for sweeping changes in energy management.34

With more than 500 permanent installations overseas and in the

United States, military lands “contain more than 300,000

buildings and 2 billion square feet of space.”35 That means [the

DOD’s] footprint is 4 times that of Wal-Mart and 10 times that of

the General Services Administration (“GSA”).”36 Together, these

installations, comprising nearly 20 million acres, offer a “clear

target for [the DOD] to promote energy efficiency and reduce

energy costs,” often through alternative energy sources.37 Each

32. See id. at 101 (identifying Navy and Army practices which

make a unified energy initiative difficult to create).

33. Id. at 61.

34. See WARNER, supra note 1, at 7 (providing reasons why the

DOD is in a unique position among entities to effectuate a cleaner and more

environmentally friendly energy policy).

35. See Energy Management and Initiatives on Military

Installations Before the H. Readiness Subcomm. Of the H. Comm. On Armed

Services, 111th Cong. 4 (2010) (statement of Dr. Dorothy Robyn, Deputy Under

Secretary of Defense for Installations and Environment, U.S. Department of

Defense) (outlining the size of the military complex).

36. See id. (stating that this analogy to the GSA is an important

indicator of the relative size of the Department of Defense compared to the

remaining entirety of the Federal Government).

37. See U.S. DEPARTMENT OF DEFENSE, OFFICE OF THE DEPUTY

UNDER SECRETARY FOR INSTALLATIONS & ENVIRONMENT, BASE STRUCTURE

REPORT, FISCAL YEAR 2010 BASELINE (A SUMMARY OF DOD’S REAL PROPERTY

INVENTORY) 36–78, available at

http://www.acq.osd.mil/ie/download/bsr/bsr2010baseline.pdf [hereinafter DOD’S

REAL PROPERTY INVENTORY] (cataloguing all Department of Defense’s owned and

managed lands in each state and territory) (on file with the WASHINGTON AND

LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); see also 2012

ANNUAL ENERGY REPORT, supra note 24, at 6 (calling facility energy

management a “force multiplier” in the support of military readiness).


DOD base or installation presents the unique opportunity to act

as a lab of hyper-local technologies, using resources in regionally

specific contexts.38 With all of these factors at the forefront of the

minds of DOD leadership, steps have already been taken to

coordinate among the military branches.39

B. Politically Opportune

The increase in attention given to environmental and

climatic issues since President Obama took office could lead to

the assumption that these are inherently Democratic issues;

executive actions alone have led to some of the most significant

advances in government sustainability in recent years. 40 A

broader perspective of these issues, however, reveals strong

bipartisan recognition of the threats—strategic, environmental,

and economic—of waning fossil fuel resources and increasing

global political complexity. 41 Given this political climate in

Washington and a President keen on setting a legacy of

environmentalism, the Department of Defense sits poised to

initiate new measures now to set into motion long-term

38. See infra Part V for a discussion of regionally specific

renewable sources, including case studies.

39. See WARNER, supra note 1, at 6 (“Part of achieving success is

having the metrics on hand to implement measurable standards across the

[Department] and know what type of progress (or not) is being made in usage on

an annual basis.”); see also 2012 ANNUAL ENERGY REPORT, supra note 24, at 9–13

(listing high level officials in each military branch along with their respective

titles and subordinate governance structure with regards to energy

management).

40. See EXECUTIVE OFFICE OF THE PRESIDENT, THE PRESIDENT’S

CLIMATE ACTION PLAN 4, available at

http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionpl

an.pdf (July 2013) [hereinafter CLIMATE ACTION PLAN] (“In 2009, President

Obama made a commitment to reduce U.S. greenhouse gas emissions in the

range of 17 percent below 2005 levels by 2020.”) (on file with the WASHINGTON

AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); see also infra

Part II and accompanying discussion of Executive Orders and Memoranda.

41. See WARNER, supra note 1, at 5 (“When asked to name a key

issue to solve, the one commonality between GOP, swing, and Democratic

primary voters in the 2008 election was to cut America’s dependency on foreign

oil.”).

BEHIND THE FENCE

601

investment in developing energy technologies and establish

renewable energy standards.42

Indeed, the White House Climate Action Plan released in

the summer of 2013 directly highlights the incorporation of

renewable energy into Department of Defense strategies and the

DOD’s own Annual Energy Management Report singles out

renewables as one of the four core principles of a balanced, secure

energy plan.43 With new federal regulations attacking some forms

of fossil fuel-based energy generation, such as forthcoming

Environmental Protection Agency (“EPA”) limits on carbon

emissions from coal facilities, the DOD will advantage itself by

finding alternative sources to replace these fuels relative to the

cost of retrofitting into compliance.44

II. Federal Action on Renewable Energy

The renewable-friendly political climate discussed above

has led to a spectrum of actions—legislation, executive orders,

and agency initiatives—to position the federal government as a

laboratory for the development and promulgation of renewable

energy technologies. 45 Many of these federal initiatives, in

42. See CLIMATE ACTION PLAN, supra note 40, at 5 (recognizing the

numerous steps already taken by President Obama’s administration by

“highlight[ing] progress already set in motion by the Obama Administration to

advance these goals and set[ing] forth new steps to achieve them.”).

43. See id. at 7 (summarizing the aggressive renewable goals of

the Department and the significance of these goals given the Departments

position as “the single largest consumer of energy in the United States . . . .”);

see also 2012 ANNUAL ENERGY REPORT, supra note 24, at 6 (summarizing the

four core principles as: reducing demand, expanding supply, enhancing security,

and advancing new technologies).

44. See EPA Proposes Carbon Pollution Standards for New Power

Plants/ Agency takes important step to reduce carbon pollution from power

plants as part of President Obama’s Climate Action Plan, U.S. ENVIRONMENTAL

PROTECTION AGENCY NEWSROOM (Sept. 20, 2013),

http://yosemite.epa.gov/opa/admpress.nsf/0/da9640577ceacd9f85257beb006cb2b6

!OpenDocument (announcing the new rulemaking with a mission to “cut carbon

pollution from new power plants in order to combat climate change and improve

public health”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); see also CLIMATE ACTION PLAN, supra note 40,

at 5 (heralding “tough new rules to cut carbon pollution” in line with the

Administration’s goals).

45. See Congressional Research Service, Renewable Energy and

Energy Efficiency Incentives: A Summary of Federal Programs, 1–2 (Mar. 22,


tandem with a collection of state initiatives, have created an

environment in which public-private partnerships can thrive.46

For example, the Department of Energy’s Office of Renewable

Energy and Efficiency (“DOE-OREE”) and the National

Renewable Energy Laboratory (“NREL”) cultivate private sector

appetite for renewable energy development. 47 DOE-OREE

supports deployment of new renewable technologies and

encourages energy efficiency initiatives. 48 Similarly, NREL,

another division of the Department of Energy (“DOE”), acts as

the government’s main laboratory for new and emerging

renewable energy technologies.49

These various agencies work together to develop

renewable energy solutions for the federal body and beyond.50

2013) (discussing numerous actions toward the modern federal approach to

renewable energy technology) (on file with the WASHINGTON AND LEE JOURNAL OF


46. See NAT’L RENEWABLE ENERGY LAB., DEP’T OF ENERGY, §1603

TREASURY GRANT EXPIRATION: INDUSTRY INSIGHT ON FINANCING AND MARKET

IMPLICATIONS, at iii (June 2012) (“The §1603 Program entitled project developers

to receive 30% of a project’s capital cost in the form of a cash payment, thus

freeing developers of having to rely on tax equity investors to monetize the tax

credits.”).

47. See NAT’L RENEWABLE ENERGY LAB., DEP’T OF ENERGY,

Leadership (last visited Feb. 13, 2015),

http://www.nrel.gov/about/leadership.html (identifying NREL as a sub-unit of

the DOE-OREE) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); see also infra notes 49–50 and accompanying

text (discussing the aligned roles of NREL and the DOE-OREE).

48. See OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY,

DEP’T OF ENERGY, About Us, http://energy.gov/eere/about-us (last visited Apr. 12,

2014) (noting that DOE-OREE “accelerates development and facilitates

deployment of energy efficiency and renewable energy technologies and market-

based solutions that strengthen U.S. energy security, environmental quality,

and economic vitality”) (on file with the WASHINGTON AND LEE JOURNAL OF


49. See NAT’L RENEWABLE ENERGY LAB., DEP’T OF ENERGY, About

NREL (last visited Apr. 12, 2014), http://www.nrel.gov/about/overview.html

(describing its work as developing “renewable energy and energy efficiency

technologies and practices, advance[ing] related science and engineering, and

transfer[ing] knowledge and innovations to address the nation's energy and

environmental goals”) (on file with the WASHINGTON AND LEE JOURNAL OF


50. See NAT’L RENEWABLE ENERGY LAB., DEP’T OF ENERGY, National

Laboratory Impact Initiative Team (last visited Apr. 12, 2015),

http://energy.gov/eere/national-laboratory-impact-initiative-team (outlining a

DOE-OREE program to “[i]ncrease and enhance laboratory-private sector

BEHIND THE FENCE

603

The following sections will look at specific legislative and

Executive actions that have pushed for further renewable energy

integration and now set goals—some mandatory, others

aspirational—applicable to the Department of Defense.

A. Legislation

A collection of legislative actions has created various goals

for Federal agencies in terms of sustainability and integration of

renewable energy.51 The result is a somewhat confusing array of

definitions and benchmarks.

The Energy Policy Act of 2005 (“EPACT05”) 52 directs

federal agencies to consume three percent of their electrical

energy from renewable sources for the years 2007 through 2009,

increasing progressively to seven and one-half percent in 2013.53

According to EPACT05, progress towards these goals should

proceed as “economically feasible and technically practicable.”54

Adding to this, the Energy Independence and Security Act of

relationships[s],” “[i]ncrease and streamline access to national laboratory

capabilities[,]” and “[d]emonstrate the value of lab-developed science and

technology”) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); see also NAT’L RENEWABLE ENERGY LAB., DEP’T

OF ENERGY, Missions and Programs (last visited Apr. 12, 2015),

http://www.nrel.gov/about/mission-programs.html (identifying NREL as “the

only federal laboratory dedicated to research, development, commercialization,

and deployment of renewable energy and energy efficiency technologies”) (on file


ENVIRONMENT).

51. See OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY,

DEP’T OF ENERGY, Laws and Requirements (last visited Apr. 12, 2015),

http://energy.gov/eere/femp/laws-and-requirements-0 (describing the Federal

Energy Management Program which “analyzes energy management legal

authorities, develops guidance documents, and publishes notices and rules”

necessary to support agency compliance with numerous federal energy laws and

requirements) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,

CLIMATE, AND THE ENVIRONMENT); see generally Congressional Research Service,

supra note 46 (cataloging numerous federal goals and citing underlying

legislative authorities).

52. 42 U.S.C. §§ 15801–16524 (2012) [hereinafter EPACT05].

53. See id. § 15852 (establishing a number of renewable energy

priorities for the entire federal government).

54. Id.


2007 (“EISA07”)55 introduced a required reduction in fossil fuel

use in new and renovated buildings by fifty-five percent in 2010,

increasing to one hundred percent in 2030. 56 An important

qualifier for this requirement carried over from Executive Order

13423, which stated that at least half of the renewable energy

contributing towards EISA07 goals must come from “new”

sources.57 Both of these legislative sources of renewable energy

goals emphasize a preference for on-site generation facilities,

which can contribute both to production efficiency and supply

security.58

From 2009 through 2013, the Department of Defense fell

short of its EISA07 mandated energy intensity goals.59 Also, the

Department of Defense failed to attain its 2013 EPACT05 goal for

renewable electricity consumption: the DOD consumed 5.0% of its

electricity from renewable sources, short of its 7.5% target.60 In

pursuing EISA07 targets, the DOD approached the annual goal—

a 24% reduction in facility energy intensity—with a 17.2%

reduction in energy consumer per gross square foot of facility

space.61 One area of promising development—the production of

electric energy from renewable sources—revealed that 11.8% of

the total facilities electricity consumption in 2013 came from

55. Pub. L. No. 110-140, 121 Stat. 1492 (codified at 42 U.S.C. §§

17001–17386 (2012)) [hereinafter EISA07].

56. See 42 U.S.C. § 6834(a)(3)(D)(i)(I) (2012) (displaying a

timetable for reduction in federal fossil fuel consumption); see also 42 U.S.C. §

17131 (2012) (permanently authorizing a financing vehicle called Energy

Savings Performance Contracts (ESPCs) which allow for a combination of

appropriated funds and private funds).

57. See Exec. Order No. 13,423, 77 Fed. Reg. 17 (Jan. 25, 2007)

(defining a “new” source as coming from a renewable energy generator coming

into service after January 1, 1999).

58. See 42 U.S.C. § 15852 (offering double renewable energy

credits for on-site generation); see also 42 U.S.C. § 6834 (requiring solar hot

water technology to provide “not less than 30 percent of the hot water demand

for each new Federal building or Federal building undergoing a major

renovation” if “lifecycle cost-effective”).

59. See OFFICE OF THE DEPUTY UNDER SEC’Y OF DEF., DEP’T OF DEF.,

0-3C82BA1, ANNUAL ENERGY MANAGEMENT REPORT, FISCAL YEAR 2013, 19 (2014)

(showing graphically in figure 3-4 Department of Defense performance relative

to EISA07 goals).

60. See id. at 7 (charting “FY 2013 DoD Progress Toward Facility

Energy and Water Goals” in table 1-1).

61. See id. (marking DOD progress in reduction of energy

consumption).

BEHIND THE FENCE

605

renewable energy.62 This shows progress towards the goal of 25%

in 2025.63

B. Executive Action

In a broad inclusion of all federal agencies, Executive

Order 13423—Strengthening Federal Environmental, Energy,

and Transportation Management—called for improvements in

energy efficiency and set long terms goals with annual

benchmarks.64 In part, the Executive Order called for agencies to:

(a) improve energy efficiency and reduce

greenhouse gas emissions of the agency, through

reduction of energy intensity by (i) 3 percent

annually through the end of fiscal year 2015, or

(ii) 30 percent by the end of fiscal year 2015,

relative to the baseline of the agency’s energy use

in fiscal year 2003;

(b) ensure that (i) at least half of the statutorily

required renewable energy consumed by the

agency in a fiscal year comes from new renewable

sources, and (ii) to the extent feasible, the agency

implements renewable energy generation projects

on agency property for agency use.65

In the summer of 2013, President Obama released a

comprehensive Climate Action Plan, outlining the

62. See id. at 33 (noting that the “EPAct 2005 goal measures total

renewable electricity consumption as a percentage of total facility electricity

consumption.”).

63. See id. at 7 (reflecting DOD 2013 performance against 2025

goals).

64. See Exec. Order No. 13,423, 77 Fed. Reg. 17 (Jan. 25, 2007)

(asserting goals after declaring general policy for federal conduct to occur in “an

environmentally, economically and fiscally sound, integrated, continuously

improving, efficient, and sustainable manner”).

65. See id. (defining “new renewable sources’’ as only those “placed

into service after January 1, 1999” and ‘‘renewable energy’’ as “produced by

solar, wind, biomass, landfill gas, ocean[,] . . . geothermal, municipal solid waste,

or new hydroelectric generation capacity . . . .”) (emphasis added); see also

Executive Order No. 13,514 (Oct. 5, 2009) (regarding federal agency greenhouse

gas emissions).


Administration’s vision for addressing climate change via the

actions of the government and, in particular, federal agencies.66

While the overall goals of the Climate Action Plan focused on

combatting climate change across sectors and markets, some of

the most tangible goals set forth by the Administration came in

the form of promoting American leadership in renewable energy

development.67 In order to meet a goal of doubling renewable

energy production by 2020, the Climate Action Plan proposed to

issue permits for ten Gigawatts of renewable energy on public

lands by 2020.68 This includes a commitment by the Department

of Defense to deploy three Gigawatts of renewables on military

installations by 2025. 69 These goals will be analyzed more

thoroughly below.70

III. Benefits of Renewable Energy to the

Department of Defense

The transition from traditional, fossil fuel sources of

electricity generation carries numerous advantages, both in the

civilian world and in the military. 71 The recognition of these

benefits has spread from a small section of the environmental

66. See CLIMATE ACTION PLAN, supra note 40, at 5 (describing a

“broad-based plan to cut the carbon pollution that causes climate change and

affects public health”).

67. See id. at 4–6 (“Climate change represents one of our greatest

challenges of our time, but it is a challenge uniquely suited to America’s

strengths. . . To ensure America’s continued leadership position in clean energy,

President Obama has set a goal to double renewable electricity generation once

again by 2020.”).

68. See id. at 7 (summarizing the progress towards previous

presidential goals of renewable energy goals on public lands); see also infra Part

VI and accompanying text (discussing emerging issues of public land

management among federal agencies).

69. See id. (classifying the Department of Defense as the “single

largest consumer of energy in the United States”).

70. See infra Part VI and accompanying text (discussing hurdles to

federal renewable energy goal accomplishment).

71. See CLIMATE ACTION PLAN, supra note 40, at 5 (commenting on

interests pertaining to the general public in climate change and health); see also

DEPARTMENT OF DEFENSE, supra note 59, at 33 (noting the DOD’s interest in

cost-efficiency as well as energy security).

BEHIND THE FENCE

607

community to a much wider spectrum of the country.72 And given

the size and distribution of domestic military installations, such

benefits are multiplied across the largest federal agency. 73

Furthermore, the technology transfer from the DOD to other

civilian applications stands as an additional benefit of aggressive

and rapid development of renewable energy technologies in

military settings.74

A Memorandum of Understanding between the DOE and

DOD placed strong focus on the potential benefits of a transition

to renewable energy to the United States military.75 In doing so,

the DOD may “improve energy security and operational

effectiveness, reduce greenhouse gas (“GHG”) emissions in

support of U.S. climate change initiatives, and protect the [DOD]

from energy price fluctuations.”76 These three broad benefits—

72. See Ned Resnikoff and Amanda Sakuma, The Largest Climate

March in History, MSNBC (Sept. 21, 2014),

http://www.msnbc.com/msnbc/largest-climate-march-history-kicks-new-york#

(stating that “[m]ore and more people are seeing how climate change affects

them” as stated by one interviewee); see also ENVTL. PROT. AGENCY, Renewable

Energy (last updated Aug. 13, 2014),

http://www.epa.gov/statelocalclimate/state/topics/renewable.html (counting the

benefits of renewable energy to include “[g]enerating energy that produces no

greenhouse gas emissions from fossil fuels and reduces some types of air

pollution[,] [d]iversifying energy supply and reducing dependence on imported

fuels[,] [and] [c]reating economic development and jobs”).

73. See NAT’L RENEWABLE ENERGY LAB., DEP’T OF ENERGY,

Department of Defense Energy Programs (last updated Jan. 20, 2015),

http://www.nrel.gov/defense/projects.html (asserting that “energy efficiency and

renewable energy strategies can be replicated across the DOD”) (on file with the


74. See id. (suggesting that DOD renewable energy advances shift

to “other federal agencies, setting the stage for broad market adoption”).

75. See Memorandum of Understanding between The U.S.

Department of the Energy and The U.S. Department of Defense 1–2 (July 22,

2010), available at http://www.energy.gov/sites/prod/files/edg/media/Enhance-

Energy-Security-MOU.pdf [hereinafter DOE Memorandum of Understanding]

(including in its purpose “to strengthen coordination of efforts to enhance

national energy security, and demonstrate Federal Government leadership in

transitioning America to a low carbon economy.”).

76. Id.; see also ENVTL. AND ENERGY STUDY INST., Fact Sheet: DoD’s

Energy Efficiency and Renewable Energy Initiatives 1 (July 2011), available at

http://files.eesi.org/dod_eere_factsheet_072711.pdf (outlining major energy

efficiency and renewable energy initiatives underway by the Department of

Defense, Army, Navy, Marine Corps, and Air Force) (on file with the



security, environmental, and economic—are analyzed

individually below.

A. Security

A domestic transition to renewable energy sources will

contribute to long-term security of U.S. military interests. 77

Working towards shifting base and installation electricity

generation to renewable sources and away from fossil fuel sources

will lessen the dependence on foreign supplies of these resource

extractive fuels.78 One report calling for a more comprehensive

military energy plan points out, “[m]oving the [Department of

Defense] away from reliance on petroleum will also ultimately

address the long-standing irony” of sourcing our military energy

needs from conflict regions.79

Aside from reducing the need for conflict intervention to

preserve fossil fuel sources, focusing energy acquisition on local

sources of fuels reduces the risk of terroristic disruptions of

energy to domestic military installations. 80 The DOD acts in

accordance with specific legislative requirements to reach what it

calls “energy security.” 81 Essentially, the military must work

towards “having assured access to reliable supplies of energy and

77. See DOE Memorandum of Understanding, supra note 75, at 2

(defining energy security as “having assured access to reliable supplies of energy

and the ability to protect and deliver sufficient energy to meet operational and

Installation energy needs” and considering energy efficiency “as a force

multiplier, increasing the range and endurance of forces”).

78. See Renewable Energy, supra note 73 (“[R]educing energy

costs, decreasing reliance on foreign oil and increasing energy security is part of

the DOD mission.”).

79. See WARNER, supra note 1, at 1 (adding that a shift away from

foreign oil will “give our military forces greater freedom of maneuver and

reduced lines of communication across the entire spectrum of warfare from

Expeditionary Operations to Disaster Relief and Humanitarian Operations.”).

80. See id. at 6 (suggesting a commission should be tasked with

looking at each step in the process of energy development, acquisition, and

generation “to determine energy security implications of issues such as import

dependency, rare metals mining, and bio-based materials”).

81. See 10 U.S.C. § 2924 (“In selecting facility energy projects that

will use renewable energy sources, pursuit of energy security means the

installation will give favorable consideration to projects that provide power

directly to a military facility or into the installation electrical distribution

network.”).

BEHIND THE FENCE

609

the ability to protect and deliver sufficient energy to meet mission

essential requirements.”82 As the department mandate states, the

driving force behind energy security is found in “mission essential”

considerations.83 As described by the Office of the Deputy Under

Secretary of Defense for Installations and Environment, this goal

of energy security manifests as three key objectives.84

First, the development of more energy-efficient facilities,

investment in economical energy sources—including alternative

energy—and considerations across the DOD of energy use and

conservation support the energy security of the Department of

Defense’s mission and assets. 85 Second, the Department

recognizes that this mandate requires promotion of energy

security of non-military infrastructure, “to monitor energy-

related dependencies and promote the restoration and resilience”

of other public and private sector equities.86 Finally, technological

innovation must drive the Department to achieve the security of

future defense forces and missions.87

B. Environmental

Some critics may conclude that a transition to renewable

energy represents the narrow goals of environmental groups. But

the looming potential realities of climate change and finite

resources have caught the attention of organizations and agencies

seemingly removed from the environmental dialogue. The

military itself has acknowledged climate change as a real and

82. See id. (stating that “facility energy projects . . . should be

prioritized to provide power for assets critical to mission essential requirements

on the installation in the event of a disruption in the commercial grid”).

83. See id. (defining energy security relative success in mission

essential requirements).

84. See 2012 ANNUAL ENERGY REPORT, supra note 24 (emphasizing

that these key objectives span “across the Department”).

85. See id. (adding a recommendation that energy-informed

analyses become integrated into all levels of decision making and business

processes within the Department).

86. See id. (listing such entities as other federal departments and

agencies, state and local governments, and private sector partners).

87. See id. at 5–6 (noting the need for support from both various

Department subdivisions—Science, Technology, Engineering, and

Environmental—as well as resources and expertise across the Government and

the private sector).


pressing threat both to our society as a whole and to the ongoing

operations of the military specifically.88 A military advisory board

recently stated that the “nature and pace of climate change being

observed today and the consequences projected by the consensus

scientific opinion are grave and pose equally grave implications

for our national security.”89 The Department of Defense’s own

Quadrennial Defense Review noted:

Assessments conducted by the intelligence

community indicate that climate change could have

significant geopolitical impacts around the world,

contributing to poverty, environmental

degradation, and the further weakening of fragile

governments . . . . While climate change alone does

not cause conflict, it may act as an accelerant of

instability or conflict, placing a burden to respond

on civilian institutions and militaries around the

world.90

Therefore, any effort by the DOD and its component

branches will “help to reduce greenhouse gas emissions and

protect our natural resources in order to slow, stabilize, or

reverse climate change.”91

88. See On Point for the Nation, supra note 31, at 58–59 (2013)

(noting the national security implications of climate change).

89. See MILITARY ADVISORY BD., THE CNA CORP., NATIONAL

SECURITY AND THE THREAT OF CLIMATE CHANGE 1 (2007), available at http://

www.cna.org/sites/default/files/National%20Security%C20and%C20the%C20Thr

eat%C20of%C20Climate%C20Change%- %20Print.pdf (on file with the


90. Department of Defense, Quadrennial Defense Review Report

85 (Feb. 2010) [hereinafter QDR 2010], available at

www.defense.gov/qdr/images/QDR_as_of_ 12Feb10_1000.pdf (emphasis added)


ENVIRONMENT).

91. See On Point for the Nation, supra note 31, at 59 (positing that

the breadth and depth of the military’s national presence can begin to effect

change across industries, leading to more investment in renewable

technologies); see also Stan Alcorn, Why The Military Is Pushing to Green the

Government, FAST COMPANY (Oct. 10, 2013, 11:26 AM), available at

http://www.fastcoexist.com/3019332/heres-an-idea/why-the-military-is-pushing-

to-green-the-government (explaining how the Department of Defense must “be

onboard” in order to meet the President’s goal of having 20% of the Federal

BEHIND THE FENCE

611

As the Climate Action plan pointed out, the military has

an important role to play in our nation’s progress in reducing

greenhouse gas emissions association with traditional fossil fuel

use. 92 However, given the varied and broad benefits which

renewables can offer the DOD, a comprehensive and strategic

plan must guide agency-wide actions and efforts.

C. Economic

Across the board, federal agency budgets have steadily

declined while energy costs of all forms continue to fluctuate. At

the same time, the costs associated with various renewable

energy technologies decrease as innovation and development

drive market competition.93

For example, “the average price of a completed [solar

photovoltaic] system has declined by more than 40%” in the last

three years.94 Similar trends have occurred in other renewable

energy generation fields.95 The ability of the DOD to sign long-

term contracts for these developing technologies allows it to

hedge against volatile energy costs. 96 The economic

Government’s energy come from renewable sources by 2020) (on file with the


92. See CLIMATE ACTION PLAN, supra note 40 and accompanying

text.

93. See RENEWABLE ENERGY BOOK, supra note 29, at 4 (noting that

“in the United States, renewable electricity has been capturing a growing

percentage of new capacity additions during the past few years”). In 2012,

renewable electricity accounted for more than 56% of all new electrical capacity

installations in the United States—a large change from 2004 when all

renewable electricity captured only 2% of new capacity additions. Id.

94. SOLAR ENERGY INDUS. ASS’N, ENLISTING THE SUN: POWERING THE

U.S. MILITARY WITH SOLAR ENERGY 7 (2013) [hereinafter ENLISTING THE SUN].

95. See Silvio Marcacci, Analysis: 50% Reduction in Cost of

Renewable Energy Since 2008, CLEANTECHNICA (Sept. 11, 2013), available at

http://cleantechnica.com/2013/09/11/analysis-50-reduction-in-cost-of-renewable-

energy-since-2008/ (reviewing reports of lower capital costs for renewable energy

technologies across all types between 2008 and 2012). The report found that

some sources, such as wind and solar, are “now cost-competitive with many

fossil fuel generation sources at an unsubsidized [levelized cost of energy], even

before factoring in externalities like pollution or transmission costs.” Id.

96. See ENLISTING THE SUN, supra note 94, at 9 (“the military signs

a contract to purchase the energy produced by the solar installation at a price

that is below local utility rates, which can save the DOD and taxpayers millions

of dollars over the life of the system”).


considerations will be analyzed more fully in Part VI which

considers some challenges of a transition away from traditional

energy suppliers in an effort to boost renewable energy

consumption.

IV. Department Integration of Renewable to Date

The military services have demonstrated a

willingness to be early adopters of new technologies

and enablers of renewable and alternative energy

projects. [T]hey work towards net zero installations,

adopt advanced metering technologies, investigate

microgrid technologies, and partner with the

private sector to develop wind, solar, geothermal

and waste-to-energy systems, just to name a few.97

Despite this clear Congressional statement of confidence

in the DOD’s ability to achieve rapid integration of renewable

energy technologies, the on-the-ground reality reveal this process

easier said than done. A patchwork of legislative mandates,

executive orders, and internal agency initiatives has created a

somewhat opaque goal for the Department of Defense. 98 The

legislative sources described above, in fact, create conflicting

long-term goals in terms of the adoption of renewable energy

sources, including different definitions of qualifying electricity

sources.99

While EPACT05 and EISA07 apply broadly across the

federal government, specific language in Title 10 of the U.S. Code

97. Energy Management and Initiatives on Military Installations:

Hearing Before the H. Readiness Subcomm. Of the H. Comm. On Armed

Services, 111th Cong. 1 (2010) (opening statement of Hon. Solomon P. Ortiz, A

Representative from Texas, Chairman, Readiness Subcommittee).

98. See Part II, infra and accompanying text.

99. Compare EPACT05, supra note 52, at § 203 (defining

qualifying sources as “electric energy generated from solar, wind, biomass,

landfill gas, ocean (including tidal, wave, current, and thermal), geothermal,

municipal solid waste, or new hydroelectric generation capacity achieved from

increased efficiency or additions of new capacity at an existing hydroelectric

project”), with EISA07, supra note 55, at § 803(a)(4) (defining the term

“renewable energy project” as one generation commercial electricity from: solar,

wind, geothermal, ocean, biomass (as defined by EPACT05), landfill gas, or

Alaska small hydroelectric power”).

BEHIND THE FENCE

613

requires further specific actions by the Department of Defense.100

The renewable energy goal found there measures the total

renewable energy (electric and non-electric) production and

procurement as a percentage of the total facility electricity

consumption.101 From this, the Code sets a goal of fifteen percent

renewables by 2018, increasing to twenty-five percent by 2025.102

Additionally, selected service branches have established

independent goals of installing one gigawatt of renewable energy

on or near their installations.103

The DOD’s most recent Annual Report on energy

management outlines the progress made towards these goals.104

Looking broadly, in fiscal year 2013 the DOD failed to meet both

its target for reducing facility energy use and its target for

renewable energy consumption. 105 Additionally, in its goal of

attaining twenty-five percent renewable source generation by

2025, the DOD reached 11.8% in 2013. 106 This data can be

somewhat misleading, however, because of large variances

between individual DOD branches. For example, the Marine

Corps and Air Force have exceeded the EPACT05 goals of

renewable energy consumption (11.7% and 8% respectively) while

the Army and Navy have fallen short (1.1% and 1.7%

respectively). 107 Conversely, the Navy has led the field in

100. See 10 U.S.C. § 2911(e) (mentioning specific energy production

targets and establishing interim goals for FY 2018).

101. See 10 U.S.C. § 2911(e)(2) (describing interim goals to be

established for FY 2018).

102. See 10 U.S.C. § 2911(e) (noting production requirements for FY

2025).

103. See 2012 ANNUAL ENERGY REPORT, supra note 24, at 31

(including various target years for branch-specific attainment).

104. See DEP’T OF DEF., OFFICE OF THE DEPUTY UNDER SEC’Y OF DEF.,

INSTALLATIONS AND ENVIRONMENT, 0-3C82BA1, ANNUAL ENERGY MANAGEMENT

REPORT, FISCAL YEAR 2013 (June 2014) (containing a detailed analysis of energy

use by the Department of Defense in 2013 as well as a comprehensive

assessment of energy initiatives across the Department).

105. See id. at 7, D-1 (noting a 17.2% reduction in facility energy

use towards a goal of 24%, and total renewable consumption of 5% out of the

goal of 7.5%).

106. See id. (reporting Department of Defense energy produced

from renewable sources in fiscal year 2013).

107. See id. (showing the performance gap between branches).


renewable energy production, producing a total of 26.6% of total

facility electricity consumed from renewable sources.108

As later sections of this Note will look at the specific fuels

used in various renewable energy applications, it is worth noting

the dominant fuel types used to date by the DOD.109 Although

solar (photovoltaic and thermal) comprise the largest portion of

installation renewable energy projects by number of projects, the

largest contributor to overall energy generation comes from

geothermal projects. 110 One project—the Navy’s China Lake

geothermal power plant in California—supplies nearly half of all

of the DOD’s renewable energy production.111 Large generation

sites such as this may skew the overall spread of renewable

energy generation within the DOD. But these projects also make

the most significant advances to reaching statutory and agency

benchmarks.112

V. Fixing Technology to Place

As noted above, both legislative mandates and agency

policies favor on-site generation versus mere acquisition from

outside renewable generators. 113 This method encourages both

the utilization of local resources and the technologies that have

108. See id. (listing the total renewable energy produced or

procured as a percentage of total facility energy for the Department of Defense).

It is important to note that almost all of the Navy’s qualifying renewable

electricity comes from the large China Lake geothermal project, discussed

below. Id. at 37.



(providing, in Figure 4-3, a graphical breakdown of renewable energy supply

mix by technology type).

111. See id. (listing the top eleven sources of renewable energy

generation, totaling nine major projects generating greater than 100 BBtu and

approximately four-hundred and fifty smaller projects generating less than 100

BBtu electricity).

112. See id. at 37 (highlighting a 6.2% decrease in electricity

generation capacity in FY2012). “Although there have been numerous

improvements resulting in more efficient use of the geothermal resource at

China Lake over the past 25 years, a decline in power production is typical for a

liquid-dominated geothermal resource with long‐ term continuous liquid

production.” Id.

113. See supra Part IV and accompanying text.

BEHIND THE FENCE

615

been developed to capture those resources.114 With each year, the

spectrum of renewable energy technologies broadens; new and

more efficient technologies continue to come into the market,

allowing for some form renewable energy to be best suited to any

particular geographic area. Given the near-ubiquitous presence of

U.S. military bases and installations across the country, the

Department of Defense is positioned to take advantage of

regionally suited renewable energy technologies to meet its

electricity generation needs.115

For example, a biomass energy facility located in a region

dominated by forested lands already produces the secondary

wood wastes necessary for biomass generation—the tree tops and

bark from harvesting and mill waste from milling. 116 Woody

biomass energy production uses these products to generate

electricity.117 Therefore, an existing market can be sustained or

grown while closing the loop on one of the waste products of

timber processing. Similarly, a region rich with geothermal

resources118 will create what amounts to neutral supply chains,

taking advantage of the resource in-situ.119

114. U.S. DEP’T OF ENERGY, THE POTENTIAL BENEFITS OF

DISTRIBUTED GENERATION AND RATE-RELATED ISSUES THAT MAY IMPEDE THEIR

EXPANSION: A STUDY PURSUANT TO SECTION 1817 OF THE ENERGY POLICY ACT OF

2005 ii (2007) [hereinafter DOE DISTRIBUTED GENERATION STUDY] (noting that

the implementation of Section 210 of the Public Utilities Regulatory Policy Act

of 1978 “sparked a new era of highly energy efficient and renewable [distributed

generation] for electric utility system applications”).

115. See DOD’S REAL PROPERTY INVENTORY, supra note 38, at 36–78

(providing a detailed list of the nearly 20 million acres of DOD’s owned or

managed lands in the United States).

116. See NREL Biomass Maps, NATIONAL RENEWABLE ENERGY

LABORATORY [hereinafter NREL Biomass Maps],

http://www.nrel.gov/gis/biomass.html (providing county-level maps of the

availability of primary and secondary mill wastes to be used in biomass

electricity production) (on file with the WASHINGTON AND LEE JOURNAL OF


117. See Biomass Energy Basics, NATIONAL RENEWABLE ENERGY

LABORATORY, http://www.nrel.gov/learning/re_biomass.html (outlining the

technical basics of biomass electricity generation) (on file with the WASHINGTON


118. See RENEWABLE ENERGY BOOK, supra note 29, at 4 (including a

map of geothermal resources in the United States).

119. Geothermal Technologies, NATIONAL RENEWABLE ENERGY

LABORATORY (last updated Aug. 28, 2014), http://www.nrel.gov/geothermal/

(summarizing the mechanics of geothermal energy) (on file with the


Fixing renewable technologies to a geographic place has

produced some of the most successful projects to date. 120 In

addition to the large China Lake geothermal power plant in

California, numerous other geothermal projects have tapped rich

geothermal resources with the help of analyses by other federal

agencies. 121 Similarly, branch projects in the Southeast and

Northeast—historically timber rich regions—make biomass one

of the most viable forms of renewable energy production.122 By

using local resources, the DOD can both ensure the security of its

energy supply chains as well as approaching the goals of

producing all energy “behind the fence.”

A. Case Study I: Biomass in the U.S. Northeast

Numerous federal agencies are working on increasing the

foundational knowledge of renewable energy resources and

potential in the United States.123 The DOE’s National Renewable

Energy Laboratory (“NREL”) has completed extensive mapping

projects to identify regions where certain renewable energy

technologies would be best suited. 124 To ground-truth these

WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND THE ENVIRONMENT); see

also Leslie Blodgett, Geothermal Visual: Power Capacity and Potential at

California Geothermal Fields, RENEWABLE ENERGY WORLD (Feb. 7, 2014)

http://www.renewableenergyworld.com/rea/blog/post/2014/02/geothermal-visual-

power-capacity-and-potential-at-california-geothermal-fields?cmpid=WNL-

Wednesday-February12-2014 (providing data of geothermal “resource rich”

regions) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE,


120. See supra Part IV and accompanying text.

121. See RENEWABLE ENERGY BOOK, supra note 29, at 4 (including a

map of geothermal resources in the United States).


(highlighting biomass projects in Georgia and Kentucky as two of the top ten

renewable energy-producing sites nationally).

123. See Energy Research Knowledge Center, United States,

STRATEGIC ENERGY TECHNOLOGIES INFORMATION SYSTEM (last visited Feb. 15,

2015), http://setis.ec.europa.eu/energy-research/country/united-states

(describing the various agencies involved in energy resource in the United

States) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY, CLIMATE, AND

THE ENVIRONMENT).

124. See generally United States Department of Energy, Research,

NATIONAL RENEWABLE ENERGY LABORATORY (last visited Apr. 12, 2015),

http://www.nrel.gov/research/ (providing detailed information about a variety of

BEHIND THE FENCE

617

surveys to determine viability, the NREL completed a set of case

studies to analyze the potential of various technologies at specific

sites.125

One such study involved the EPA’s RE-Powering

America’s Land initiative—a program to use contaminated sites

for renewable energy generation. 126 The study focused on a

timber rich region of Vermont where timber markets used to

drive the local industry.127 The closure of local mills and other

manufacturing facilities left the area with an abundance of wood

biomass resources. 128 Similar wood-based energy generation—

both for electricity and for combined heat and electricity—would

utilize local resources in heavily forested areas of the Eastern

United States, ranging from Florida to Maine.129

The NREL study highlighted the potential of biomass

technologies, particularly biomass-fired combined heating and

electricity generation, as a viable and promising option for the

former timber mill community. 130 Issues highlighted included

“biomass availability and cost, equipment sizing and cost, and

operation and maintenance costs.”131 Similar site-specific studies

would need to be completed at any potential installation where

biomass presented a viable option for renewable transition. In

addition, in moving “behind the fence,” these and other sourcing

energy technologies, including mapping and research studies, which focuses on

clean energy).

125. See id. (describing in detail each individual project under

consideration).

126. See RE-Powering America’s Land, U.S. ENVIRONMENTAL

PROTECTION AGENCY (last visited Feb. 15, 2015), http://www.epa.gov/oswercpa/

(describing a process by which the EPA “identifies the renewable energy

potential of . . . sites and provides other useful resources for communities,

developers, industry, state and local governments or anyone interested in

reusing these sites for renewable energy development.”).

127. See NATIONAL RENEWABLE ENERGY LABORATORY, PUTNEY

BASKETVILLE SITE BIOMASS CHP ANALYSIS, iv (Oct. 2013) [hereinafter NREL

BIOMASS STUDY] (explaining the characteristics of the Putney site for biomass

projects).

128. See id. at 4 (detailing the history and ownership of the

Basketville site).

129. See NREL Biomass Maps, supra note 120 (providing GIS data

for county-level biomass resource capabilities).

130. See NREL BIOMASS STUDY, supra note 132, at iv (summarizing

the recommendations for the Basketville project).

131. Id. at v.


and cost challenges would likely become more complex,

threatening the sustained viability of small-scale electricity

generation projects.132

B. Case Study II: Solar in the U.S. Southwest

Another NREL study looked at the feasibility of solar

photovoltaic cells at the Ft. Hood Military Base in Texas.133 The

purpose of the study was to “assess the site for possible [solar

energy] installations and estimate the cost, performance, and site

impacts” of different solar options.134 In doing so, Ft. Hood sought

to increase “behind the fence” generation using a locally available

resource—ample land to introduce solar arrays.135

Factors for determining an appropriate site for a solar

project on the base included: available area for the solar array,

solar resource analysis, distance to transmission lines, and

distance to major roads. 136 Aside from these technical

requirements, any renewable energy project generating on an

active military installation requires consideration of the base’s

operating status, ground conditions, and restrictions associated

with future development of the base.137

The study noted that Ft. Hood is slated for future

expansion. 138 Therefore, the feasibility study accounted for

“construction projects on and around the base as buildings are

132. See infra Part VI and accompanying text (reviewing a number

of technical, legal, and practical challenges to similar “behind the fence”

electricity production).

133. See NATIONAL RENEWABLE ENERGY LABORATORY, FEASIBILITY

STUDY OF ECONOMICS AND PERFORMANCE OF SOLAR PHOTOVOLTAICS AT THE FT.

HOOD MILITARY BASE OUTSIDE KILLEEN, TEXAS (Oct. 2013) [hereinafter NREL

SOLAR STUDY] (“A Study prepared in partnership with the Environmental

Protection Agency for the re-powering America’s land Initiative . . . .”).

134. Id. at iv.

135. See id. at iv (describing Foot Hood as the largest active-duty

armored post in the United States at 159,000 acres).

136. See id. at 9 (pointing out that these and other factors are

similar for rooftop mounted solar systems as well as those freestanding on the

ground).

137. See id. at iv (adding further to the need to consider applicable

local building code requirements with respect to snow, wind, and seismic zones).

138. See id. at 20 (estimating future energy cost and the amount of

energy available to be used on site or sold to local companies).

BEHIND THE FENCE

619

upgraded regularly”139 and “existing build-out plans”140 to expand

operations. Even taking these future variables into consideration,

the nature of military strategy and planning—potentially

expanding or reducing operations over the course of short time

periods—rapid integration of “behind the fence” electricity

generation will be further challenged by the rapid change

inherent in military operations.141

The study identified approximately fifty acres on the Ft.

Hood base for carport roof-mounted solar systems, a method of

applying the solar technology to best fit with the operations and

restrictions of the military installation.142 Even considering the

economic incentives available at the time of the study, 143

however, the low retail rate of electricity in the region led NREL

to conclude that solar renewable energy projects “would not be

recommended for the site at the current utility price.”144 Looking

beyond pure economics, the base would need to consider other

factors such as grid independence and supply guarantees,

potentially making a solar project more beneficial in the long

term.145 Beyond solar, the Ft. Hood site has potential renewable

energy prospects in the form of biomass power and biomass-based

fuels and on- or off-site wind turbines.146

139. See NREL SOLAR STUDY, supra note 133, at iv.

140. Id.

141. See U.S Army War College, Energy Security in the 2010s and

Implications for the U.S. Military, STRATEGIC STUDIES INSTITUTE, 27 (2014)

(analyzing the steps involved in satisfying the U.S. Military’s energy needs in

the 2010s).

142. See NREL SOLAR STUDY, supra note 133, at iv (noting that

much of the installation’s acreage was excluded from the study due to the need

for open space for field operations).

143. See id. at v (including the Solar and Wind Energy Business

Franchise Tax Exemption; the Renewable Energy Property Tax Exemption; an

incentive program through the local energy company; and the Federal

Investment Tax Credit).

144. See id. at v (showing a table that diagrams the various

incentives evaluated when making this determination).

145. See id. at iv (analyzing the number of average American

households that could be powered off such a system and corresponding

estimated job creation).

146. See id. at 2 (summarizing the compelling reasons for a diverse

energy plan to reduce dependence on outside fuel sources and to increase supply

security).


C. Microgrids and Smart Grids

The increasing use of smart grid and microgrid

technologies, combined with a shift from centralized energy

generation to decentralized, small scale facilities better fits the

structure and geographic distribution of Department of Defense

installations. 147 A smart grid involves “an automated electric

power system that monitors and controls grid activities, ensuring

two-way flow of electricity and information between private

power plants and consumers—and all points in between.” 148

Proponents of smart grid technology note that it represents a

technical improvement over traditional grid systems by using

information technology to improve the movement of electricity

from producers to consumers, allowing consumers to interact

with the grid, and integrating new and improved technologies

into the operation of the grid.149

Ultimately, smart grid technology can increase the

efficient distribution of electricity based on real-time demand and

react to power outages and other energy disturbances.150 In the

renewable energy context, the benefits are equally large: “[a]

smart grid will allow for better integration of renewable energy

147. See Jeff St. John, The Military Microgrid as Smart Grid Asset,

GREEN TECH GRID (May 17, 2013),

http://www.greentechmedia.com/articles/read/the-military-microgrid-as-smart-

grid-asset (assessing the benefits of microgrid technologies as applied to the

Department of Defense); see also Jeff St. John, The Military Connects

Microgrids for a ‘Secure Cluster’ of Power Network, GREEN TECH GRID (August

26, 2013), http://www.greentechmedia.com/articles/read/connecting-the-military-

microgrid-dots (showing a map of U.S. Department of Defense work on

microgrids).

148. See FADRS, What is Smart Grid?, FADRS CORP. (last visited

Apr. 12, 2015), http://fadrs.com/what-is-smart-grid.html (explaining how a

smart grid works and the benefits these grids provide in our evolving energy

sector) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY CLIMATE AND

THE ENVIRONMENT).

149. See RED MOUNTAIN INSIGHTS, MILITARY MICROGRIDS: MARKET

POTENTIAL, CASE STUDIES, PROVIDER PROFILES 7 (2013) [hereinafter MILITARY

MICROGRIDS] (outlining the various technical requirements to fit the smart grid

nomenclature, including ability to self-heal from power disturbance events,

active customer feedback in demand response, and resiliency against physical

and cyber-attacks).

150. See id. (suggesting that a smart grid increases the efficiency of

intermittent renewable technologies by controlling demand of traditional power

sources during periods of high winds or strong solar activity).

BEHIND THE FENCE

621

sources” because of “smarter control over these intermittent

power sources,” leading to economic and environmental

benefits.151

Microgrids operate much the same as smart grids on a

smaller scale.152 Like the smart grids described above, microgrids

improve energy efficiency and accelerate the integration of

renewable energy through the following mechanisms: facilitating

demand management during normal operating hours; “islanding”

the microgrid from the main grid if and when an upstream fault

is detected; allowing for priority of loads during emergencies; and

coordinating energy distribution to optimize the various energy

streams. 153 During normal operations, a microgrid “increases

energy efficiency by relying more heavily on non-continuous

sources of power when they are available, such as wind and solar,

and decreasing the use of generator or power from the civilian

grid.”154

For the Department of Defense, these characteristics of

microgrid technology all contribute to the long term renewable

energy goals in a number of ways. First, the demand

management and feedback will help the DOD increase its overall

energy efficiency, addressing the goals of reducing overall

electricity use.155 Second, use of microgrids will work towards a

more independent and secure energy supply, contributing to the

security and defense goals of the military’s energy plans. 156

Finally, because of a microgrids ability to integrate renewable

energy sources by handling non-continuous sources of power

when they are available, such as wind and solar, a microgrid will

151. See id. (adding that smart grid technology can contribute to

energy storage capacities, important for new electric and hybrid vehicles).

152. See Toby Considine, William Cox, & Edward G. Cazlet,

Understanding Microgrids as the Essential Architecture of Smart Energ, Grid

Interop Forum 1 (2012) (describing how microgrids and smart grids operate and

the current landscape for the smart energy industry).

153. See MILITARY MICROGRIDS, supra note 149, at 7 (describing the

process by which microgrids adapt and respond to energy disturbances).

154. Id. at 8.

155. See 2012 ANNUAL ENERGY REPORT, supra note 24, at B-1–B-5

(listing the statutory and agency defined goals of energy reductions).

156. See id. at 57 (noting that smart grid technology offers “a more

robust and cost effective approach to ensuring installation energy security than

the traditional approach of backup generators tied to single critical loads.”).


facilitate the DOD’s renewable energy goals into the future.157

This last benefit may stand as the key factor in the transition to

renewable energy, allowing for transient electricity supplies to

become more normalized and reliable for operational needs.

D. Microgrids in the Military

Recognition of the benefits of microgrids and other means

of decentralizing energy generation goes beyond federal entities

focused on renewable energy. The Federal Energy Regulatory

Commission (“FERC”) acknowledges the myriad benefits of

distributed generation. 158 Similarly, a DOE study conducted

pursuant to EPACT05 highlighted the benefits of distributed

energy, which included: increased electric system reliability,

reduction of peak power requirements, provision of ancillary

services such as reactive power, improvements in power quality,

reductions in land use effects and rights-of-way acquisition costs

associated with centralized power, and a reduction in

vulnerability to terrorism and improvements in infrastructure

resilience.159

The DOE report concluded that distributed generation

“will continue to be an effective energy solution under certain

conditions and for certain types of customers, particularly those

with needs for emergency power, uninterruptible power, and

combined heat and power.”160 In particular, the study highlighted

the potential for distributed power systems to reap the benefits of

localized renewable energy generation, such as biomass, because

of their ability to maintain an energy supply to local consumers

157. See MILITARY MICROGRIDS, supra note 149, at 7 (pointing out

that more efficient integration of intermittent renewable power sources through

smart grid technology will reduce the use of traditional sources, therefore

cutting greenhouse gas emission and lowering costs).

158. See FERC Regulatory Change Could Boost Distributed Solar in

the U.S., CLEAN TECHNICA (Jan. 18, 2013),

http://cleantechnica.com/2013/01/18/ferc-regulatory-change-could-boost-

distributed-solar-in-the-us/ (highlighting aspects of the FERC guidelines

intended to “streamline the grid interconnection process for mid-sized solar

projects that meet certain technical standards . . . [with the potential to] double

the amount of solar qualifying for “fast track” interconnection in the US.”).

159. See DOE DISTRIBUTED GENERATION STUDY, supra note 114, at i

(summarizing the focus areas of the study).

160. Id. at iv.

BEHIND THE FENCE

623

even in the face of a regional blackout.161 An ability to operate

despite regional disturbances or other large-scale issues with a

centralized grid represents a huge advantage to military

installations because of the benefits of autonomy and security.162

Showing the impact of this study, recent regulatory

reforms by FERC, the federal agency responsible for regulating

the interstate commerce of electricity and other fuels, show

further support for distributed forms of renewable energy. 163

These reforms were intended to streamline the grid

interconnection process for mid-size solar projects that meet

certain technical standards. 164 These and other reforms could

double the amount of solar qualifying for “fast track”

interconnection, allowing for expedited projects favoring

renewable energy.165

A combination of on-site, “behind the fence” electricity

generation and new and evolving microgrid technologies to

facilitate distributed energy make strides towards weaning the

DOD off of traditional fossil fuels while also bolstering the three

broad benefits highlighted above. This transition, however, will

not come without challenges and legal, logistical, and practical

hurdles. The diversity of installation characteristics and grand

size of the DOD itself combine to challenge the realities of

potential transition programs. Recognizing these challenges, the

last Part of this paper breaks down some of the major hurdles to

rapid integration of renewable energy in the form of “behind the

fence” electricity generation.

VI. Challenges and Recommendations

161. See id. at iii (adding that this increased reliability in the face

of interruption will affect many sectors of the federal government, including

telecommunications, chemicals management, agriculture and food, and

government other facilities).

162. See id. (noting a cadre of benefits addressing the National

Infrastructure Protection Plan (NIPP) issued by the Department of Homeland

Security).

163. See CLEAN TECHNICA, supra note 158 and accompanying text.

164. See id. (stating that reforms would update orders from 2005,

which first established procedures for interconnectivity).

165. See id. (indicating the importance of issuing new orders by

explaining that the earlier FERC orders created barriers to bringing new

projects online).


While renewable energy may present numerous benefits

the Department of Defense—strategic, environmental, and

economic—and facilitate successful fulfillment of statutory

mandates across federal agencies, various hurdles remain in the

way of immediate change. These challenges—including a

cumbersome process of federal contracting and securing financing

for large projects, a lack of incentive to address long term goals on

an annual basis, the necessity to maintain back-up electricity

supplies (either behind the fence or localized), and the barrier to

new renewable acquisition given existing electricity contracts—

detracts from the viability of integrating renewable energy into

the greater DOD energy portfolio. While variable other challenges

remain outstanding, the following sections represents a non-

exhaustive analysis of some of the major legal hurdles to rapid

and fluid renewable energy integration.

A. Federal Permitting Restrictions

Despite the announcement in the Climate Action Plan of

an expedited permitting process for new renewable energy project

on federal lands, a lingering reality of any large-scale federal

project is the cumbersome process of contracting with private

parties. 166 Guidelines known as the Federal Acquisition

Regulation (“FAR”) “makes the process lengthy and limits

industry's ability to research and lean forward on project

development.”167 Therefore, issues of timing and considerations of

viability are necessarily affected by the ability of any individual

military installation to study a site, develop a plan, secure

financing, and commence construction.168 New Executive action

addresses this problem, but the environment for public-private

166. See On Point for the Nation, supra note 31, at 101 (describing

the “rule-laden government contracting process that starts upon the submission

of the application”). The Federal Acquisition Regulation (“FAR”) standards are

demanding and leave very little maneuver room for the federal agency to

deviate from the pattern contracting process. Id. The selection process takes

months to complete and the applying company has absolutely no indication of

what the project may be or whether it will be profitable. Id. at 102.

167. Id. at 102.

168. See id. at 101 (listing the requirements companies proposing to

address solar, wind, biomass or geothermal needs must demonstrate).

BEHIND THE FENCE

625

partnerships still demands a great deal of time.169 Once again,

these factors make on-site development of renewable energy

generation more favorable to off-site projects or leasing

installation lands to private developers.

B. Lack of Short Term Incentives

The current goals—and the lack of incentives to meet

them on an annual basis—hold back rapid development in the

renewables field for the Department of Defense. As seen in the

2013 Annual Report, the DOD as a whole fell short of its annual

goals for both energy efficiency and renewable electricity

consumption.170 With the exception of the Air Force, every branch

individually fell short of the performance standards set forth for

the year. 171 Without any incentive to meet these annual

standards, individual branches may fall behind on the long-term

goals and fail to pursue active integration of renewable energy

into their overall energy portfolios.

These shortsighted decisions will often be made on the

basis of economics. A cadre of observers has made it clear,

however, that a successful move towards more renewable energy

in the military must focus on the diverse advantages.172 Mission

security, supply reliability, and environmental considerations all

contribute to the long-term advantages of a transition to

renewables.173

169. See Christopher J. Aluotto, Privatizing and Combining

Electricity and Energy Conservation Requirements on Military Installations, 30

PUB. CONT. L.J. 723, 725 (2001) (examining the privatization of military electric

utility systems in response to “the deteriorating condition of military systems”

and to streamline the timeline of development).

170. See 2012 ANNUAL ENERGY REPORT, supra note 24, at D-1

(identifying the percent decrease in energy intensity as 17.7%, falling short of

the goal of 21% for 2012, and a Department-wide introduction of 3.96% total

renewable energy use, falling short of the annual goal of 5%).

171. See id. at 7 (highlighting the Air Force’s energy intensity

reduction of 22.3% and increase of renewable consumption as 8% of total energy

consumption, both exceeding the respective 24% and 7.5% goals for the year).

172. See WARNER, supra note 1, at 1–2 (describing the two

complementary objectives of renewable energy integration).

173. See id. at 7 (observing that, by setting clear and defined goals,

the Department “will be signaling to industry that it is serious, allowing them to

make the needed changes in their structures and research”).


C. Generation vs. Acquisition

As Department of Defense reports show, one of the largest

sources of renewable energy currently used to reach agency goals

has been through the purchase of renewable energy from outside

producers and through obtaining renewable energy certificates

from other generators. 174 While this short-term approach may

help achieve the interim benchmarks set forth in the EPACT05

and EISA07, acquisition of renewable energy from outside

generators simply represents a shift in electricity sourcing rather

than adoption of renewable energy practices. 175 In fact, both

legislative mandates encourage and favor on-site generation in

place of such external acquisition. 176 A number of existing

funding mechanisms facilitate the construction and operation of

on-site energy generation facilities. 177 By using these funding

mechanisms now, the DOD will work towards building its total

on-site generation capacity and focus on site-specific renewable

projects.178

In 2013, the Department of Defense had nearly seven

hundred renewable energy projects that represented seventy-five

percent of the total amount of renewable electricity used.179 For

many of these projects, three main funding mechanisms were

used: Energy Production Facility Agreements (“EPFA”), Energy


(highlighting that the second and fourth largest “sources” of renewable energy

in 2012 were through these methods of acquisition rather than through on-site

generation).

175. See id. at 31 (listing goals for EPACT05 and EISA07).

176. See id. (demonstrating the increase in renewable and other

forms of distributed, on-site electricity generation for cost-effective solutions).

177. See id. at 71–78 (enumerating and describing the various

sources of energy funding).

178. See id. at 6 (stating fixed installations are a vital component of

the military’s ability to win wars and the importance of reducing energy costs by

using renewable energy sources).

179. See id. at 34 (describing the remaining 25% of renewable

energy procurement as purchases of renewable energy from third parties or

through renewable energy certificates (REC)); see also Loni Silva, Note, The

Problems with Using Renewable Energy Certificates to Meet Federal Renewable

Energy Requirements, 41 PUB. CONT. L.J. 985, 988 (2012) (suggesting RECs

should only be “a short-term, stop-gap way to meet the [EPACT05]

requirements while agencies build the facilities needed to actually consumer

renewable energy”).

BEHIND THE FENCE

627

Enhanced Use Leases (“EULs”), and Power Purchase Agreements

(“PPA”).180 The first two of these mechanisms, EPFAs and EULs,

heavily favor on-site construction of energy generation

facilities.181

Power Purchase Agreements (“PPAs”) function essentially

as a traditional agreement to purchase energy, only in this

context from a renewable source.182 PPAs allow “a developer to

build, own, operate, and maintain a renewable generation

systems on, or near, a customer’s property” and then sell the

power to that customer.183 This approach to electricity generation

would allow the DOD to rapidly reach its goals of renewable

energy integration without having to bear the financial and

technological burdens that comes with bringing energy

generation facilities on line.184

PPAs also ensure these investments in generation

facilities and distribution by private parties will “create jobs,

foster a marketplace which allows for innovative technologies to


(defining and elaborating on these three funding mechanisms, including

defining the source of statutory authority); see also Kevin McAllister, BARRIER

TO MILITARY INSTALLATIONS UTILIZING DISTRIBUTED GENERATION FROM

RENEWABLE ENERGY RESOURCES: THIRD PARTY POWER PURCHASE AGREEMENTS

(2011) [hereinafter BARRIER TO MILITARY DISTRIBUTED GENERATION] (describing

Power Purchase Agreements and their role in military energy acquisition).

A third party Power Purchase Agreement (PPA) allows a

developer to build, own, operate and maintain a renewable

energy (RE) generation system on, or near, a customer’s

property; and sell power, and possibly renewable energy

credits (REC) to that customer. The developer provides a

majority of the initial capital, and operation and maintenance

expenses. The customer receives the benefits of local

generation and possibly, depending on the contract language,

the RECs associated with the renewable energy generated. Id.

at 2.


(defining the functions of EPFAs and EULs and indicating their location in the

US Code).

182. See BARRIER TO MILITARY DISTRIBUTED GENERATION, supra note

180, at 2 (describing the relationship between the energy source developer and

potential customers, including the benefits to each party).

183. Id. at 2.

184. See ENLISTING THE SUN, supra note 94, at 9 (explaining a PPA

is an attractive financing option because of the Federal Investment Tax Credit

and the ability to use on-site renewable energy generation, avoiding up-front

costs).


be developed, maximize the benefit to taxpayers . . . and allow the

[DOD] to maintain a mission critical focus while meeting its

requirements for renewable energy sources, energy efficiency,

and energy security.”185 The disadvantages of PPAs, however, lie

in the reliance on external sources of electricity, exacerbating the

challenges of security and reliability highlighted above.186

Significantly, although many states have legislative

barriers to the use of PPAs, “effectively eliminating the ability of

rate payer in the state to enter into power purchase agreements

with third party developers/operations of distributed generation,”

the DOD appears to have a way around these state laws through

statutory mechanisms. 187 Section 591 of Title 40 and Section

2922(a) of Title 10 “seem to resolve this issue by granting the

Department of Defense . . . the ability to enter into contracts with

energy providers regardless of state law.”188

D. Shifting Land Management

Another emerging issue challenging a transition to on-site,

“behind the fence” electricity generation results from a subtle

trend to withdraw Department of Defense lands to management

by the Department of the Interior (“DOI”).189 This results in a net

decrease in land area managed by the military and its

branches. 190 Various factors have contributed to the more

frequent practice of transferring management of some

Department of Defense land to the Department of Interior.191

185. Id. at 1.

186. See supra Part III and accompanying text (describing the

benefits of renewable energy to the DOD).


180, at 1 (suggesting the DOD’s office of General Counsel needs to clarify

certain statutory provisions that could potentially resolve the issue).

188. Id.

189 See Memorandum of Understanding between The Department

of Defense and The Department of the Interior 1 (July 20, 2012) [hereinafter

DOD/DOI MOU] (proposing a partnership between the Department of the

Interior and the DOD to create renewable energy sources on withdrawn lands).

190 See Ross W. Gorte et al., FEDERAL LAND OWNERSHIP: OVERVIEW

AND DATA 15 (2012) (reporting a 1 million acre decrease in land area for the

DOD between 2010 and 2012, while acreage of land controlled by departments

of the DOI has increased).

191. See id. (stating the DOD may dispose of unwanted lands that it

deems surplus to its purposes).

BEHIND THE FENCE

629

To address this issue, the DOI partnered with the DOD to

meet the dual goals of helping “the [DOD] develop renewable

energy in the interest of greater installation energy security and

reduced installation energy costs and to help meet [DOI] goals of

increasing renewable energy production from public lands.” 192

This partnership seeks not only to “encourage a dialogue” with

energy developers and the agencies, but it also attempts to

“investigate existing contract and management authorities to

achieve mutual renewable energy goals and identify required

changes in existing authorities” to facilitate a more streamlined

permitting process.193 In essence, the partnership will allow for

increased interagency coordination to address the complex siting

and permitting issued discussed in earlier sections.194

The Department of Defense is concurrently developing

programs to increase land under its management to combat

urban encroachment and to meet conservation goals. 195 The

overall trend, however, is less land for potential energy projects—

particularly those requiring large land areas such as solar and

wind—and more complex inter-agency processes for permitting

and development of renewable energy projects on land held by

non-defense agencies.196

E. Technological Challenges

Another clear challenge of “behind the fence” generation

arises when military installations attempt to incorporate new or

192. DOD/DOI MOU supra note 189, at 2.

193. See id. at 2 (outlining a plan for the partnership between the

DOD and the DOI).

194. See id. at 1 (showing the DOD and DOI’s commitment to

partnership to work together to create safer, cleaner, and more secure energy

supplies).

195. See Readiness and Environmental Protection Integration

(REPI) Program, U.S. DEPARTMENT OF DEFENSE, SUSTAINABLE RANGES

INITIATIVE, http://www.denix.osd.mil/sri/repi/ (describing the land acquisition

program as a partnership to “acquire easements or other interests in land from

willing sellers to preserve compatible land uses and sustain wildlife habitat

near installations and ranges where the military operates, tests, and trains”)


ENVIRONMENT).

196. See id. (stating that the REPI program is part of a larger

initiative not only to promote military readiness but also preserve the habitat

through various means).


under-tested technologies to reach renewable goals. Additional

resource challenges will arise, such as the external requirements

of any form of energy production. For example, “biomass

programs, geothermal projects, and to a more limited extent the

solar programs . . . must have sufficient supplies of water.

Additionally, in order to transport and manage water, the energy-

dependent water utilities infrastructure must also have

sufficiently reliable electricity.”197 While these resource barriers

would be present with any form of energy generation and

transport, the renewables context may present additional

technological hurdles for military integration of renewables

versus well-known traditional forms.198 As highlighted above, this

aspect of facility-specific generation may make offsite “neighbor”

generation facilities a more practical manifestation to achieve

renewables integration. 199 Power Purchase Agreements “allow

federal agencies to implement on-site renewable energy projects

with no upfront capital costs.”200 This, in turn, provides a secure

source of renewable electricity for a known period of time while

leaving lifetime ownership, operation, and maintenance of the

system to the developer.201

F. Existing Contracts

The Power Purchase Agreements (“PPA”) mentioned

earlier in this Part stand as one of the largest roadblocks to the

introduction of new renewable energy projects on military

installations.202 The traditional energy market relies on long-term

purchase agreements to meet the up-front capital investment to

197. On Point for the Nation, supra note 31, at 75–76.

198. See Project Financing Analysis, NATIONAL RENEWABLE ENERGY

LABORATORY (last visited Apr. 12, 2015),

http://www.nrel.gov/analysis/key_activities_finance.html?print (“Development of

projects relying on newer or innovative technologies that lack extensive

operational track records may be slowed because many tax equity investors are

seen as highly averse to technology risk.”) (on file with the WASHINGTON AND LEE


199. See id. (summarizing aspects of renewable resource project

finance that may be problematic for potential investments).

200. On Point for the Nation, supra note 31, at 78.

201. See id. at 78–79 (stating the costs and benefits for agencies and

developers in the contractual relationship).

202. See supra Part VI(C) and accompanying text.

BEHIND THE FENCE

631

bring new energy generation on-line. 203 Without such

agreements, it would be very difficult for new energy projects to

ever obtain the capital to build a new facility—investors are

weary to provide start-up capital without some promise of long-

term profits.204 This is just as true for renewable energy projects

as it has been for traditional energy projects.205

As a result of these existing variables, even if the capacity

for renewables were established on all military installations in

the near future, the transition to all renewable electricity or even

net-zero installations would depend heavily on the lifespan of

existing contracts and the potential ability of the DOD to opt out

of existing contracts. 206 This may involve negotiations with

current generators and producers. The trickle-down effect of

these negotiations could been seen in the willingness of states or

regions to allow increased renewable production; if large military

installations cease to purchase large quantities of electricity from

their local traditional energy producer, other users may realize

significant rate increases.

While the opportunity for rapid renewable energy through

“behind the fence” electricity generation stands large for the

Department of Defense, a number of hurdles remain, including

federal permitting challenges, lack of short term incentives,

myriad challenges of transitioning to on-site generation from

traditional acquisition agreements, and potential challenges by

local providers and state governments. 207 It will be through

partnerships such as the DOD/DOI Renewable Energy

Partnership Plan, however, that interagency action will both


180, at 2 (describing the traditional financing relationship in a PPA).

204. See id. at 1 (emphasizing the importance of leveraging third

party investors and building on previous contracting schemes).

205. See id. at 2 (describing the Army’s desire to use renewable

technologies yet recognizing the high costs to implement it and increased

private capital required to pay for the new systems).

206. See id. at 8 (giving the example of North Carolina, where

customers of existing electric utility monopoly must get permission from those

suppliers to enter into PPAs with third parties).

207. See supra Part VI and accompanying text (detailing the

challenges presented to the DOD in implementing new policies).


facilitate rapid integration and alleviate the issues raised

above.208

VII. Conclusion

As the largest single global consumer of energy and

electricity, the U.S. Department of Defense stands to contribute a

great amount in the shift towards renewable energy.209 The past

decade has included a wealth of action from the executive and

legislative branches, as well as activity within the agency itself,

to create aspirational benchmarks of renewable energy

production and use.210 The realities of the challenges of financing,

siting, and procuring the technologies necessary to get these

projects online caused the Department of Defense to fall short of

its goals in the 2012. However, progress has been made—

increasing total use of renewable electricity use by the DOD to

4% and an increase in energy efficiency, decreasing use across the

board by 17%.

To quicken integration of renewable sources into the

DOD’s overall energy portfolio, two mechanisms should be

adopted. First, energy production for use on military installations

should be distributed and decentralized, increasing efficiency and

gaining the benefits of energy security and reliability.211 Related

to this, the DOD should also quickly assess the availability and

efficiency of place-specific renewable fuel sources such a

geothermal and biomass.212 Together, these two mechanisms will

expedite getting new energy generation on-line and will remove

the complicated issues of transmission and scale.

One of the largest challenges that stands in the way of

progress is long term procurement and generation contracts

already in place on many military installations.213 With the DOD

208. See DOD/DOI MOU, supra note 189 (documenting a

partnership between the DOD and DOI to commit to renewable energy projects).

209. See supra Part I and accompanying text.

210. See supra Part II and accompanying text.

211. See supra Part V(C) (describing the benefits of microgrids and

smartgrids and their fit into the DOD systems).

212. See supra Part V (outlining potential technologies that could

promote local energy generation).

213. See supra Part VI(F) (explaining why existing contracts can

delay or increase costs of renewable energy projects).

BEHIND THE FENCE

633

trying to reduce its use across the agency and to replace existing

sources with renewable sources, many of these existing contracts

will have to either be renegotiated or not renewed. 214

Additionally, the high costs of instituting new energy generation

projects—even on a small scale—make adoption across the entire

Department of Defense huge challenge.215

Ultimately, the benefits of transitioning to renewable

energy sources are great for the Department of Defense. A

comprehensive and expansive initiative that couples site-specific

technologies with agency-wide coordination will help the DOD

both meet its statutorily mandated targets for energy efficiency

and production and also effect positive change in the

environmental impact of our nation’s single largest energy

consumer.

214. See id. (describing challenges existing contracts pose for

changing technology).

215. See id. (explaining the investment trends in energy projects

and why renewable energy projects have unique problems).

634

The Shifting Use of the So-Remote-as-

to-be-Negligible Standard for Qualified

Conservation Contributions

Ashley H. Waterbury*

Abstract

Qualified conservation contributions, also known as

conservation easements, have become a subject of close scrutiny

under the Internal Revenue Service within the past decade. One

reason for such scrutiny is that conditions are being imposed on

these contributions, testing the perpetuity requirement for

conservation easement deductions. In order for a condition on the

donation to survive, the condition must be “so remote as to be

negligible.” The judicial interpretation of the so-remote-as-to-be-

negligible standard has fluctuated since its addition to the

Treasury Regulations in 1939. Most recently, the Tax Court in

Graev v. Commissioner, explored the meaning of the so-remote-

as-to-be-negligible standard outside of the traditional

grantor/grantee relationship by assessing the likelihood of IRS

action. By denying the deduction in Graev, the Tax Court

highlighted that a condition based on IRS action, namely the

allowance of a deduction, should not be a permissible condition

for qualified conservation contributions. This Note will argue that

further clarification of the so-remote-as-to-be-negligible standard

should be included in the Treasury Regulations. In particular,

conditions based on the IRS allowance of a deduction should be

explicitly barred from consideration under the so-remote-as-to-be-

negligible standard.

* Ashley H. Waterbury ([email protected]) is a J.D.

candidate at Washington & Lee University School of Law, May 2015, and the

Executive Editor for the Journal of Energy, Climate, and the Environment.

Ashley would like to thank Professor Brant Hellwig for his valuable guidance

while writing this Note.

SHIFTING USE

635

Table of Contents

I. Introduction ............................................................................ 635

II. The Code and Regulations on the Qualified Conservation

Easement Deduction .................................................................. 639

A. The Code............................................................................. 639

B. Treasury Regulations ......................................................... 641

III. The Case Law Development of the So-Remote-as-to-be-

Negligible Standard ................................................................... 642

A. Estate Tax Origins ............................................................. 642

1. Commissioner v. Estate of Sternberger ......................... 643

2. United States v. Dean ..................................................... 646

3. Estate of Woodworth v. Commissioner .......................... 648

4. Hamilton National Bank of Chattanooga v. United States

............................................................................................. 651

B. Federal Income Tax Cases ................................................. 654

1. Early Cases Addressing the So-Remote-as-to-be-Negligible

Standard ............................................................................. 655

2. Case Law on Conservation Easements and the So-Remote-

as-to-be-Negligible Standard .............................................. 659

V. Graev v. Commissioner, an Overview ................................... 661

A. Background ........................................................................ 662

B. Tax Court’s Opinion ........................................................... 664

VI. Lessons from Graev v. Commissioner .................................. 670

VII. Conclusion ........................................................................... 673

I. Introduction

In 1980, Congress passed section 170(h) of the Internal

Revenue Code (“Code”), creating the current qualified

conservation contribution structure.1 A qualified conservation

contribution is defined as “a qualified real property interest to a

qualified organization exclusively for conservation purposes,” and

is commonly known as a conservation easement.2 In allowing

1. See Act of Dec. 17, 1980, Pub. L. No. 96-541, 94 Stat. 3204

(codified as amended at 26 U.S.C. § 170(h) (2014)) (allowing qualified

conservation easement deductions, but only if the easements meet one of three

exceptions).

2. See STAFF OF THE JOINT COMM. ON TAXATION, 109TH CONG.,

OPTIONS TO IMPROVE TAX COMPLIANCE AND REFORM TAX EXPENDITURES, JCS-2-05,


636

deductions for donations of conservation easements, Congress

wanted to create incentives for landowners to preserve

environmentally and historically important property.3 Since then,

conservation easements have become a source of donations

resulting in large deductions.4 For example, from 2003–2006, the

average value of a donated conservation easement was $491,068,

making conservation easements the highest valued per-donation

value by over $300,000.5 As conservation easements amounted to

such large deductions, the Internal Revenue Service (“IRS”)

raised concerns over conservation easement deductions.6 IRS

Notice 2004-41 alerted donors that the IRS might issue penalties

for improper use of the deduction.7 Improper uses have included

inflated valuation of the easement, not creating an easement in

perpetuity, and requests to return easements after the donation

has already been made.8

This Note will specifically address one aspect of the

perpetuity requirement for conservation easements. While

at 277 (Comm. Print 2005) [hereinafter OPTIONS TO IMPROVE TAX COMPLIANCE],

available at http://www.jct.gov/s-2-05.pdf (defining qualified conservation

contribution) (on file with the WASHINGTON AND LEE JOURNAL OF ENERGY,


3. See S. REP. NO. 96-1007, at 9 (1980) (explaining that the

Senate wanted to expand deductions for conservation easements in recognition

of the “important role” easements play to further conservation goals).

4. See Josh Eagle, Notional Generosity: Explaining Charitable

Donors’ High Willingness to Part with Conservation Easements, 35 HARV. ENVTL.

L. REV. 47, 48 (2011) (“Americans give away easements in enormously valuable

chunks in comparison to other kinds of real and personal property.”).

5. See id. at 49 (providing a graph which illustrates the contrast

between the high value of qualified conservation easement donations and other

donations).

6. See I.R.S. Notice 2004-41, 2004-28 I.R.B. 31, available at

http://www.irs.gov/pub/irs-tege/n2004_41.pdf (addressing awareness of the

improper use of charitable contribution deductions for conservation easements

and an intention to penalties for such improper deductions) (on file with the


7. See id. (“[I]n appropriate cases, the Service intends to disallow

such deductions and may impose penalties and excise taxes.”).

8. See Steven T. Miller, Comm’r, Tax Exempt and Government

Entities, Internal Revenue Serv., Remarks Before the Land Trust Alliance

Public Spring Public Lands Conference (March 28, 2006), available at

http://www.landtrustalliance.org/policy/tax-matters/rules/remarks-of-steven-t.-

miller-march-2006 (addressing the current issues with charitable contributions

of conservation easements) (on file with the WASHINGTON AND LEE JOURNAL OF


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conservation easements generally must exist in perpetuity, the

Treasury Regulations allow for the consideration of a remote

future event in conservation easement deeds.9 These remote

future events will not violate the perpetuity requirement so long

as the likelihood of the event occurring is “so remote as to be

negligible.”10 This standard originated in the estate tax

provisions, but it has been applied in federal income tax law since

1959.11 The regulations themselves do not further clarify the

standard.12 Hence, the task of articulating the level of remoteness

requisite for the standard has been left to case law.13

A recent Tax Court case, Graev v. Comissioner,

interpreted the so-remote-as-to-be-negligible standard in the

context of a façade easement.14 In Graev, the grantee provided a

side letter separate from the conservation easement agreement

whereby it agreed to refund the easement to the taxpayer grantor

if the IRS disallowed a deduction for the grantor.15 The Tax Court

held that this side letter created a condition of a remote future

event on the easement and that the likelihood of this event was

9. See, e.g., Treas. Reg. §§ 1.170A-1(e), -7(a)(3), -14(g)(3) (2014)

(addressing the issue of conditions based on the occurrence of future events).

10. See Treas. Reg. §§ 1.170A-1(e), -7(a)(3), -14(g)(3) (2014)

(allowing deductions for conservation easements which have conditions on

remote future events as long as these future events are “so remote as to be

negligible”).

11. See Graev v. Comm’r, 140 T.C. 377, 389 (2013) (providing a

history of Treas. Reg. §1.170A-1(e)).

12. See Satullo v. Comm’r, 66 T.C.M. (CCH) 1697, 6 (1993) (“The

regulations offer no specific guidance for determining whether a possibility of

occurrence is so remote as to be negligible . . . .”).

13. See id. (explaining that the regulations do not define the so-

remote-as-to-be-negligible standard, so the standard is defined through case

law).

14. See Graev, 140 T.C. at 377–78 (“The question now before the

Court is whether deductions for Mr. Graev’s contributions of cash and the

easement to NAT [National Architectural Trust] should be disallowed because

they were conditional gifts. The answer depends on whether . . . the chance that

the condition would occur was ‘so remote as to be negligible.’”). Façade

easements are a type of conservation easement which preserve historic

properties. INTERNAL REVENUE SERV., FAÇADE EASEMENT CONTRIBUTIONS,

FAÇADE EASEMENT BRIEF (Aug. 2009).

15. See Graev, 140 T.C. at 383 (describing the contents of the side

letter).


638

more than negligible.16 This holding raises questions as to how

the so-remote-as-to-be-negligible standard should be applied, as

well as how taxpayers are to prepare for successful conservation

easement deductions.17

The goal of this Note is to evaluate the evolution of the so-

remote-as-to-be-negligible standard, particularly as a result of its

use in Graev. To begin, Part II will discuss the details of the

Internal Revenue Code and Treasury Regulations, which allow

for conservation easements. Following that, Part III will examine

prior case law using the so-remote-as-to-be-negligible standard

and address how its definition has changed. With that

background, Part IV will then address the Graev case in detail,

discussing the oddities of the case. In particular, it will highlight

the grantor’s use of a condition solely for tax purposes. Lastly,

Part V will discuss the future of the so-remote-as-to-be-negligible

standard in light of Graev.

This Note recommends that the Treasury promulgate

regulations to further define the so-remote-as-to-be-negligible

standard. The current definitions developed by case law are

overly broad and allow for conditions that do not primarily serve

the purpose of conservation.18 Grantors of qualified conservation

easements should not be permitted to include “tax insurance”

clauses along with their donations.19 Rather, these donations

should be irrevocable on tax deductibility grounds. The ability to

16. See id. at 398 (explaining that the issuance of the side letter

“implies a non-negligible risk”).

17. See Michelle L. Vesole, Listen to the Warnings: Contingent

Charitable Contribution Deduction is Disallowed, BLOOMBERG BNA ESTATE TAX

BLOG (July 18, 2013), http://www.bna.com/listen-warnings-contingent-

b17179875304/ (highlighting the tension between the Graev holding and the

application of the so-remote-as-to-be-negligible standard) (on file with the


18. See Timothy L. Jacobs, Kaufman—Another Sad Chapter in the

Service’s Assault on Façade Easements, TAXATION OF EXEMPTS, July/August

2014, at 16 (2014), http://www.hunton.com/files/Publication/8956f103-d3ea-4468-

b4d5-a6ecba26f4b7/Presentation/PublicationAttachment/cd2aa9de-5188-470a-

8e2b-780e318ec2df/Kaufman_Another_Sad-

Chapter_In_The_Services_Assault_On_Facade_Easements.pdf (illustrating how

cases in the area of façade easements are unpredictable in the wake of Graev

and subsequent cases) (on file with the WASHINGTON AND LEE JOURNAL OF


19. I would like to thank Professor Brant Hellwig for the

suggestion to use the term “tax insurance.”

SHIFTING USE

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refund conservation easement donations suggests that the

donation is being made solely for tax benefits, as opposed to

conservation purposes.20 These tax driven donations are the ones

most likely to lead to aggressive valuation, one of the biggest

issues with conservation easements today.21 Disqualifying

conditions that allow refunds upon a denial of a deduction attack

what could be considered the most aggressive conservation

easement transactions.22

II. The Code and Regulations on the Qualified Conservation

Easement Deduction

A. The Code

Section 170(a) of the Code provides a deduction for any

charitable contribution.23 Yet, this general rule of allowance is

subject to a host of conditions.24 One such restriction, section

170(f)(3), applies to partial interests in property.25 Initially, one

would think that a conservation easement would be disallowed

because it is a partial interest in property; it is an agreement

between the landowner and the holder of the easement to restrict

use on the property, and it does not provide any other ownership

20. See Remarks of Steven T. Miller, supra note 8 (highlighting

situations where taxpayers petition for the return of the easement they donated

upon discovering that the tax credit they received was not marketable).

21. See Theodore S. Sims, Qualified Conservation Restrictions:

Recollections of and Reflections on the Origins of Section 170(h), 33 UTAH ENVTL.

L. REV. 41, 57 (2013) (explaining the widespread propensity for conservation

easements to be valued “aggressively”).

22. See id. at 58 (illustrating a proposed system that makes

disclosure of the deduction amount a prerequisite to claiming a deduction and

acknowledging that such a system “could by itself function as a deterrent to the

most egregiously aggressive positions, by substantially simplifying the process

of detection and reducing the costs of enforcement.”)

23. See I.R.C. § 170(a)(1) (2014) (“There shall be allowed as a

deduction any charitable contribution . . . payment of which is made within the

taxable year.”).

24. See I.R.C. § 170(f) (2014) (providing for “disallowance of

deductions in certain cases,” as well as providing other “special rules”).

25. See I.R.C. § 170(f)(3) (2014) (allowing deductions for

contributions of partial interests in property “only to the extent that the value of

the interest contributed would be allowable as a deduction under this section if

such interest had been transferred in trust”).


640

rights.26 Section 170(f)(3)(B)(iii), however, provides an exception

to the partial interest rule, allowing a deduction for “a qualified

conservation contribution.”27 Conservation easements fall into

this category.28

The Code provides a definition in section 170(h) for a

qualified conservation contribution: it must be a contribution of

(1) a “qualified real property interest,” 2) “to a qualified

organization,” and (3) “exclusively for conservation purposes.”29 A

“qualified property interest” includes a conservation easement

because it is “a restriction (granted in perpetuity) on the use

which may be made on the real property.”30 Common grantees of

conservation easements, charities and non-profit organizations,

meet the requirements for a “qualified organization.”31

Conservation easements will meet the “exclusively for

conservation purposes” requirement as long as the “conservation

purpose is protected in perpetuity.”32 Thus, in order to qualify for

a deduction on one’s conservation easement, two perpetuity

requirements must be met: (1) the easement must be granted in

perpetuity, and (2) the purpose of the easement must remain in

perpetuity.33 This dual requirement highlights the priority of

26. See Eagle, supra note 4, at 53 (quoting Nancy A. McLauglin,

The Role of Land Trusts in Biodiversity Conservation on Private Lands, 38

IDAHO L. REV. 453, 453 (2002)) (defining conservation easements).

27. See I.R.C. § 170(f)(3)(B)(iii) (2014) (allowing an exception to the

general rule for deductions for qualified conservation contributions).

28. See OPTIONS TO IMPROVE TAX COMPLIANCE, supra note 2, at 277

(placing conservation easements into the category of qualified conservation

contributions).

29. I.R.C. § 170(h)(1)(A)–(C) (2014).

30. See I.R.C. § 170(h)(2)(C) (2014) (defining qualified real

property interests).

31. See OPTIONS TO IMPROVE TAX COMPLIANCE, supra note 2, at 277

(“Qualified organizations include certain governmental units, public charities

that meet certain public support tests, and certain supporting organizations.”);

I.R.C. § 170(h)(3) (2014) (defining “qualified organization”); I.R.C. § 170(b)(1)(A)

(2014) (outlining types of organizations to which individuals may make

deductible charitable contributions).

32. See I.R.C. § 170(h)(5)(A) (2014) (requiring the conservation

easement to be protected in perpetuity in order to qualify as “exclusively for

conservation purposes”).

33. See Ann Taylor Schwing, Perpetuity is Forever, Almost Always:

Why it is Wrong to Promote Amendment and Termination of Perpetual

Conservation Easements, 37 HARV. ENVTL. L. REV. 217, 221 (2013) (explaining

the perpetuity requirements for qualified conservation easements).

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641

perpetuity when seeking to qualify for a deductible conservation

contribution.34 Perpetuity is crucial for donations of conservation

easements because it makes the easement holder’s use restriction

enforceable against others.35 Without perpetuity, the use and

purpose of the property could change easily, giving no value to

the easement itself.36

B. Treasury Regulations

The statute does not address how perpetuity is defined for

charitable contributions.37 Rather, that issue is left to

administrative guidance.38 The Treasury Regulations do not

insist on absolute perpetuity.39 Instead, the regulations allow for

consideration of a remote future event in the conservation

agreement, so long as that remote future event is so remote as to

be negligible.40 The regulations use this terminology three times:

34. See id. at 243 (explaining that “[t]he whole purpose of a

conservation easement is to remain binding despite changes in circumstances,

such as enhanced profitability of land for development.”).

35. See Nancy A. McLaughlin, Internal Revenue Code Section

170(h): National Perpetuity Standards for Federally Subsidized Conservation

Easements, Part I: The Standards, 45 REAL PROP., TR. & EST. L. J. 473, 482

(2010) (noting that the perpetuity requirement allows the conservation purpose

to be protected against all other parties in interest, including successors in

interest).

36. See Jessica E. Jay, When Perpetual is Not Forever: The

Challenge of Changing Conditions, Amendment, and Termination of Perpetual

Conservation Easements, 36 HARV. ENVTL. L. REV. 1, 3 (2012) (explaining that

perpetual conditions restricting the use of land “protect[s] conservation values”).


(requiring the use of the so-remote-as-to-be-negligible standard, but not defining

it).

38. See Nancy A. McLaughlin, Extinguishing and Amending Tax-

Deductible Conservation Easements: Protecting the Federal Investment after

Carpenter, Simmons, and Kaufman, 13 FLA. TAX REV. 217, 290–92 (2012)

(noting the IRS’s “helpful”, but still inadequate, guidance of the perpetuity

standard through the issuance of information letters).

39. See Treas. Reg. §§ 1.170A-14(g)(1)–(3) (2014) (indicating that

the possibility of a so-remote-as-to-be-negligible standard contemplates the fact

that absolute perpetuity is not required).

40. See Treas. Reg. § 1.170A-1(e) (describing situations when

conditions dependent upon future events are allowed).


642

(1) to apply to conditional transfers,41 (2) to apply to contributions

of partial interests in property,42 and (3) to apply to conservation

easements specifically.43 All three regulations require that the

standard be applied at the time the gift is made.44 Outside of this,

there is no other guidance from the regulations on how to apply

this standard or how it is defined.45 Because of this, the courts’

application and definition of the standard have changed over

time.46 It also allowed for the grantor in Graev v. Commissioner to

attempt to include a refund condition dependent on the allowance

of a tax deduction.47

III. The Case Law Development of the So-Remote-as-to-be-

Negligible Standard

A. Estate Tax Origins

Use of the so-remote-as-to-be-negligible standard first

appeared in the estate tax regulations in 1939 for conditional

41. See Treas. Reg. § 1.170A-1(e) (2014) (“If as of the date of a gift

a transfer for charitable purposes is dependent upon the performance of some

act or the happening of a precedent event . . . no deduction is allowable unless

the possibility that the charitable transfer will not become effective is so remote

as to be negligible.” (emphasis added)).

42. See Treas. Reg. § 1.170A-7(a)(3) (2014) (“A deduction shall not

be disallowed under section 170(f)(3)(A) and this section” because of an event

happening so long as “if on the date of the gift it appears that that the

possibility that such act or event will occur is so remote as to be negligible”).

43. See Treas. Reg. § 1.170A-14(g)(3) (2014) (“A deduction shall not

be disallowed under section 170(f)(3)(B)(iii) and this section merely because the

interest which passes to, or is vested in, the donee organization may be defeated

by the performance of some act of the happening of some event, if on the date of

the gift it appears that the possibility that such act or event will occur is so

remote as to be negligible.”).


(requiring that the condition be assessed on the “date of the gift”).

45. See Satullo v. Comm’r, 66 T.C.M. (CCH) 1697, 6 (1993)

(acknowledging no guidance exists for the application of the standard, but also

noting that there is no need for the court to provide any at this time because it

is clear from the facts that likelihood of event was more than negligible).

46. See McLaughlin, supra note 38, at 225–29 (2012) (outlining

various courts’ struggle to determine the standard and implications of the so-

remote-as-to-be-negligible standard).

47. See Graev v. Comm’r, 140 T.C. 377, 385 (2013) (quoting the

conditions of the easement set forth by the grantor in the conservation deed).

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charitable deductions.48 Early cases interpreted the regulations

to state that a deduction would be disallowed if the possibility the

charity would not take was more than so remote as to be

negligible.49 These regulations shifted the focus of evaluation onto

the likelihood of the charity taking in light of the other facts and

circumstances, including each devise related to the condition.50

The ultimate decision of whether the condition would be allowed

rested on whether the charity would be able to take upon

operation of the condition.51

1. Commissioner v. Estate of Sternberger

The Supreme Court first interpreted the so-remote-as-to-

be-negligible standard in 1955 in Commissioner v. Estate of

Sternberger.52 In Sternberger, the decedent left a wife (62 years

old) and daughter (27 years old) surviving him.53 Under the terms

of his will, if his daughter died without descendants surviving her

or her mother, then a charitable bequest would be made.54 At the

time of decedent’s death, the daughter was divorced and had no

48. See Treas. Reg. § 81.46(a) (1949) (stating that for estate tax

purposes, if there is a conditional transfer to a charity, “no deduction is

allowable unless the possibility that charity will not take is so remote as to be

negligible”); see also Treas. Reg. § 20.2055-2(b)(1) (2014) (stating that

deductions for charitable transfers are not “allowable unless the possibility that

the charitable transfer will not become effective is so remote as to be

negligible”); Hamilton Nat’l Bank of Chattanooga v. United States, 236 F. Supp.

1005, 1012 (E.D. Tenn. 1965) (explaining the adoption of the 1949 regulation

into the current regulations).

49. See Hamilton Nat’l Bank, 236 F. Supp. 1005, 1012 (“To be

entitled to a charitable deduction prior to 1939 in the case of a transfer to a

charity subject to a condition, the estate had to prove that it was impossible for

the charity not to take.”)

50. See id. at 1012–13 (outlining the evolution of the interpretive

shift in focus).

51. See id. at 1010 (requiring a finding that the charity’s

remainder interest in a decedent’s estate be capable of valuation, proving that

the charity would take).

52. See Comm’r v. Estate of Sternberger, 348 U.S. 187, 194 (1955)

(describing estate tax regulations before the allowance of conditions for remote

future events under the so-remote-as-to-be-negligible standard).

53. See id. at 188 (providing background information on the

decedent’s surviving heirs).

54. See id. (describing the terms of the testamentary trust).


644

children.55 The executor of the decedent’s estate made a deduction

for the charitable bequest, and assumed that the daughter would

not have any children.56 The Commissioner disallowed the

deduction, and the estate petitioned the Tax Court to determine

whether the possibility a charity would not take under the

decedent’s will was so remote as to be negligible.57 The Tax Court

reversed the Commissioner’s determination.58 The Court of

Appeals for the Second Circuit affirmed, and the case then went

to the Supreme Court.59 This Supreme Court opinion was the

first to define the so-remote-as-to-be-negligible standard

originally promulgated in 1939.60

Keeping in mind that prior to 1939, the regulations did not

allow for conditional donations,61 the Court defined so remote as

to be negligible to be “negligible” or “highly improbable.”62 The

Court imposed this high level of scrutiny because it did not want

a condition which prevented the charity from taking, but still

allowed the taxpayer to get a deduction.63 The Court in

Sternberger focused the application of the so-remote-as-to-be-

negligible standard on the grantee/charity, instead of the grantor:

the grantor may be able to give, but it was important that the

55. See id. (describing factors which would affect the decedent’s

daughter receiving the residuary estate).

56. See id. at 188–90 (describing the actions of the executor of the

estate).

57. See id. at 188–93 (presenting the procedural history and issue

of the case).

58. See id. at 189 (describing the Tax Court’s treatment of the

case).

59. See id. (describing the Second Circuit’s treatment of the case).

60. See id. at 195–99 (noting that a similar issue arose in Humes v.

United States, 276 U.S. 487 (1928), but it was not specifically interpreting the

so-remote-as-to-be-negligible standard because it had not yet been

promulgated).

61. See id. at 194 (“The predecessor of § 81.46 confined charitable

deductions to outright, unconditional bequests to charity.”); see also Hamilton

Nat’l Bank of Chattanooga v. United States, 236 F. Supp. 1005, 1012 (E.D.

Tenn. 1965) (discussing that the “so remote as to be negligible” language did not

become a part of the charitable contribution deduction regulations until 1939).


(“Section 81.46(a) today yields to no condition unless the possibility that charity

will not take is ‘negligible’ or ‘highly improbable.’”).

63. See id. (reiterating that the encouragement of bequests to

charity is one of the main reasons why a charitable deduction is allowed).

SHIFTING USE

645

grantee had the opportunity to take.64 The Court evaluated the

ability of the charity to take based on the self-interest of the

daughter to remarry.65 If the daughter did remarry, then the

condition affording the charity the opportunity to take would not

occur.66 The Court calculated that she would have a “$2,000,000

inducement to remarry.”67 The Court deviated from evaluating

satisfaction of the condition solely through actuarial tables,

suggesting that the so-remote-as-to-be-negligible standard should

be evaluated through more subjective factors related to the

parties involved in the transaction.68

Sternberger also emphasized that the charity must take

fully in order to get the deduction; the amount of the deduction

cannot be based on the proportional likelihood of the charity

taking.69 The so-remote-as-to-be-negligible standard is an all or

nothing requirement.70 If a condition’s occurrence would inhibit

the grantee’s ability to take but is nonetheless so remote as to be

negligible, then the deduction is still allowed.71 Ultimately, the

deduction in Sternberger was disallowed because the possibility

that the charity would not take was more than negligible.72

64. See id. at 193 (emphasizing that the focus of the so-remote-as-

to-be-negligible test is on whether the charity is truly assured the grantor’s

bequest).

65. See id. at 198 (noting under the terms of the will, the daughter

had a $2,000,000 incentive to remarry and have children).

66. See id. at 188 (providing the terms of the trust).

67. See id. at 198 (explaining the daughter’s incentive to remarry,

illustrating that the chances the charity won’t take are not very remote).

68. See id. (noting that the actuarial tables become less

dependable to the extent a person can defeat a condition of the charity taking).

69. See id. at 199 (“This Court finds no statutory authority for the

deduction from a gross estate of any percentage of a conditional bequest to

charity where there is no assurance that charity will receive the bequest or

some determinable part of it.”).

70. See id. (“Where the amount of a bequest to charity has not

been determinable, the deduction properly has been denied.”).

71. See id. (“Where the amount has been determinable, the

deduction has, with equal propriety, been allowed where the designated charity

has been sure to benefit from it.”).

72. See id. at 199 (disallowing the deduction because the charity

had a more than negligible chance of not receiving the bequest).


646

This case set the stage for future definitions and

applications of the so-remote-as-to-be-negligible standard.73 Not

only did it define the so-remote-as-to-be-negligible standard as

“negligible” or “highly improbable”, but it also addressed how and

to whom the standard would be applied.74 According to the

Sternberger Court, the focus should be on the grantee/charity and

the likelihood of the condition occurring should be evaluated

through subjective factors, not just actuarial tables.75

2. United States v. Dean

Shortly after Sternberger, the Court of Appeals for the

First Circuit further addressed how the so-remote-as-to-be-

negligible standard should be defined.76 In United States v. Dean,

the decedent’s estate would make bequests to charity if the

decedent’s sister, age 82 at the time of the decedent’s death,

survived the decedent’s daughter, age 67, and daughter-in-law,

age 68.77 Using actuarial tables, the court provided the likelihood

of the sister surviving the daughters was one in eleven.78

Ultimately the court held the likelihood of the sister surviving

was not so remote as to be negligible and disallowed the

deduction.79

73. See U.S. v. Dean, 224 F.2d 26, 29 (1st. Cir. 1955) (explaining

the Sternberger analysis and using Sternberger as a basis for the Court’s own

analysis).

74. See Comm’r v. Estate of Sternberger, 348 U.S. 187, 193–94

(1955) (defining so-remote-as-to-be-negligible and explaining that the focus of

the standard is on the grantee’s odds of taking).

75. See id. at 194, 198 (explaining that the focus of the so-remote-

as-to-be-negligible is on the grantee’s chance of taking and placing more weight

on subjective factors than less reliable actuarial tables).

76. See Dean, 224 F.2d at 29 (applying the so-remote-as-to-be-

negligible standard).

77. See id. at 27 (providing the terms of the condition on the

testamentary gift).

78. See id. (calculating the likelihood that the 82-year-old woman

would survive the 67- and 68-year-old women).

79. See id. at 29 (deciding that one in eleven is not so remote as to

be negligible).

SHIFTING USE

647

The court in Dean acknowledged the difficulty of

articulating when a condition is so remote as to be negligible.80

Because of this inability to draw lines, the court suggested

applying the standard on a case-by-case basis.81 During this case-

by-case evaluation, a court must only consider Congress’s intent

to encourage testators to give to charities.82 Applying this

suggested analysis, the Dean court compared the facts in

Sternberger to those in Dean.83 It found the element of volition to

be the main distinction between the two conditions.84 In

Sternberger, the element of volition was that the donation to

charity would not be made if the decedent’s daughter remarried

and left issue.85 The condition in Dean, however, was contingent

upon the longevity of a person, which the court said has no

volitional element.86 The court reasoned that this lack of volition

allowed the court to rely more on statistical evidence, like

actuarial tables.87

The Dean court also attempted to provide its own

definition for the so-remote-as-to-be-negligible standard.88

Warning that its definition is subjective, the court defined “so

remote as to be negligible” to mean “a chance which persons

generally would disregard as so highly improbable that it might

80. See id. (“The line between those chances which are so remote

as to be negligible and those which are not lies somewhere between these

extremes. We cannot say exactly where.”).

81. See id. (endorsing the evaluation of cases individually to see

whether a condition is so remote as to be negligible).

82. See id. (“And there is no standard to guide us except our

estimate of the extent of the encouragement tax-wise which Congress wished to

give testators to make gifts to charity.”).

83. See id. at 28 (“. . . the Sternberger case [does not] rule this one,

for here the chance that charity will take does not depend upon the probability

of anyone having issue, a matter involving an element of volition.”).

84. See id. (comparing the evaluation of the condition in

Sternberger with the facts in Dean).

85. See id. (distinguishing the Dean condition from the Sternberger

condition); see also Comm’r v. Estate of Sternberger, 348 U.S. 187, 197–98

(1955) (discussing the “inducement to remarry”).

86. See Dean, 224 F.2d at 28 (“In this case the chance that charity

will benefit depends entirely upon the relative longevity of three persons, a

matter unaffected by volition or personal inducement . . . .”).

87. See id. (noting that in this case “statistical data is not subject

to distortion by any individual’s self-interest”).

88. See id. at 29 (defining the so-remote-as-to-be-negligible

standard).


648

be ignored with reasonable safety in undertaking a serious

business transaction.”89 This definition does raise the question,

however, of why a condition would exist in the agreement, if it

could reasonably and safely be ignored in a business transaction?

Despite this irony, this definition based on a propensity to ignore

or dismiss is applied in several other cases dealing with the so-

remote-as-to-be-negligible standard.90

3. Estate of Woodworth v. Commissioner

The Tax Court in Estate of Woodworth v. Commissioner

supplied a slightly different definition of the so-remote-as-to-be-

negligible standard to supplement the Dean definition.91 The

Woodworth court defined the so-remote-as-to-be-negligible

standard as: “a chance which every dictate of reason and common

sense would justify an intelligent person in disregarding as so

highly improbable and remote as to be lacking in reason and

substance.”92 Like the Dean definition, this definition raises the

question as to why the condition would exist in the agreement if

it is “so highly improbable” to occur.

The decedent in Woodworth directed her trustees to use

her estate to build a hospital in Spartanburg, South Carolina,

where no hospital currently existed.93 This term implied that she

did not imagine a condition where the hospital would not exist.94

The direct instruction to establish the hospital would create the

89. See id. (emphasizing the high improbability that is required to

meet the so-remote-as-to-be-negligible standard).

90. See, e.g., Hamilton Nat’l Bank of Chattanooga v. United

States, 236 F. Supp. 1005, 1016 (E.D. Tenn. 1965) (defining the so-remote-as-to-

be negligible standard to include a chance “so highly improbable that it might be

ignored with reasonable safety in undertaking a serious business transaction”);

Estate of Woodworth v. Comm’r, 47 T.C. 193, 197 (1966) (defining the standard

based on what an intelligent person could disregard as being so highly

improbable that it lacks any substance).

91. See Woodworth, 47 T.C. at 197 (comparing the court’s

definition in Dean to the definition provided by the Tax Court).

92. Id.

93. See id. at 195 (presenting a condition of the trust).

94. See id. at 196 (noting the estate transfer was a certainty upon

Woodworth’s death).

SHIFTING USE

649

charity that could take the gift.95 When the co-executors of the

decedent’s estate filed the estate tax return, they claimed a

charitable deduction for the amount in the trust allocated for the

establishment of the hospital.96 The Commissioner filed a notice

of deficiency however because “it has not been shown that there

has been or will be an effective transfer of funds” to establish the

hospital.97 So in Woodworth, the condition depended upon

whether a hospital would actually be established in

Spartanburg.98 The court found the possibility of no hospital was

more than negligible, because the charity itself (the hospital) had

not yet been established.99

The implied condition requiring the actual establishment

of the hospital necessitated an application of the so-remote-as-to-

be-negligible standard.100 The previous cases examined thus far

included express conditions.101 With this introduction of implied

conditions, the court provided a new definition for the so-remote-

as-to-be-negligible standard, based on high improbability, and so

“remote as to be lacking in reason and substance.”102

Interestingly, the court also noted “there is nothing absolute or

certain with respect to the fact that a Catholic hospital might or

might not come into existence and, therefore, is not so remote as

to be negligible.”103 This emphasis on certainty seems to

95 See id. (explaining that the donation would be an

unconditional gift to help in building a Catholic hospital in Spartanburg).

96. See id. at 195 (discussing the executor’s action in response to

the terms of the trust).

97. See id. (explaining the reasoning of the Commissioner when he

issued a notice of deficiency against the estate).

98. See id. at 195–96 (“[S]ince the trustees could not use the fund

for purposes other than those stated in the will and until steps were taken to

establish a Catholic hospital, the fund would lie idle and for the use of no one.”).

99. See id. at 196 (discussing why the condition did not meet the

so-remote-as-to-be-negligible standard).

100. See id. (establishing that if the bequest is conditional the so-

remote-as-to-be-negligible standard is applied).


(noting the express condition in the will that must be met before the charitable

donation transfers); see also United States v. Dean, 224 F.2d 26, 27 (1st. Cir.

1955) (explaining the express condition in the decedent’s will).

102. See Woodworth, 47 T.C. at 197 (defining the so-remote-as-to-

be-negligible standard).

103. See id. (noting the uncertainty of the hospital ever actually

coming into existence).


650

contradict the court’s earlier statements that the so-remote-as-to-

be-negligible standard is associated with high improbability.104

The court in Woodworth was the first to raise the idea of

certainty when evaluating with the so-remote-as-to-be-negligible

standard.105 It was the lack of certainty here which caused the

denial of the deduction.106 Yet, if an outcome is uncertain, like the

establishment of a hospital, does it not create a lesser likelihood

of it occurring? The court’s emphasis on lack of certainty confuses

the prior applications of the standard seen in Sternberger and

Dean.107 In those cases, there was not a focus on certainty, but

rather a focus on the types of factors which may influence the so-

remote-as-to-be-negligible evaluation, like the likelihood of the

charity/grantee taking, and whether an element of volition is

required in order to meet the condition.108 The actual text of the

definition of the so-remote-as-to-be-negligible standard offered in

104. See id. (including improbability in the definition of the so-


105. See id. at 197–98 (evaluating the charitable deduction based

on a lack of certainty that the hospital would ever be built or that a fund would

ever be created to do so).

106. See id. at 196 (“Thus the bequest had no semblance of

certainty unless action was taken to establish either a hospital or a fund to

build one.”).


(“Section 81.46(a) today yields to no condition unless the possibility that charity

will not take is ‘negligible’ or ‘highly improbable.’”); see also United States v.

Dean, 224 F.2d 26, 29 (1st. Cir. 1955) (defining the standard to mean “a chance

which persons generally would disregard as so highly improbable that it might

be ignored with reasonable safety in undertaking a serious business

transaction”).

108. See Sternberger, 348 U.S. at 194, 198 (explaining that the focus

of the so-remote-as-to-be-negligible is on the grantee’s chance of taking and

other subjective factors); see also Dean, 224 F.2d at 28 (discussing the role of

volition in evaluating the so-remote-as-to-be-negligible standard).

SHIFTING USE

651

Woodworth,109 however, is similar to the definition in Dean.110

The application of the standard is where they differ.111

4. Hamilton National Bank of Chattanooga v. United States

Hamilton National Bank of Chattanooga v. United States

sheds light both on the history of the definition of the so-remote-

as-to-be-negligible standard and its application.112 In contrast to

Woodworth, it emphasized that the standard should not rely on

precision or certainty.113

The decedent in Hamilton left his son a life interest in a

testamentary trust.114 Upon the son’s death, one-fourth of the

trust corpus was to go to the issue of his son, and the other three-

fourths were to go to designated charities, and the trust would

terminate.115 The decedent’s son died two years after his father

with no surviving issue.116 The trustee filed an estate tax return

after the son’s death, claiming a deduction for charitable

contributions, but the Commissioner assessed a deficiency

against the trustee, claiming the possibility of the son having

issue after the death of his father did not meet the so-remote-as-

to-be-negligible standard.117 The court held in favor of the trustee,

109. See Woodworth, 47 T.C. at 197 (defining the so-remote-as-to-

be-negligible standard as “a likewise chance which every dictate of reason and

common sense would justify an intelligent person in disregarding as so highly

improbable and remotes as to be lacking in reason and substance”).

110. See Dean, 224 F.2d at 29 (defining the so-remote-as-to-be-

negligible standard as “a chance which persons generally would disregard as so

highly improbable that it might be ignored with reasonable safety in

undertaking a serious business transaction”).

111. See Woodworth, 47 T.C. at 197–98 (denying the charitable

deduction based on an analysis that focused on the certainty of a condition being

met).

112. See Hamilton Nat’l Bank of Chattanooga v. United States, 236

F. Supp. 1005, 1012–14 (E.D. Tenn. 1965) (discussing the history and use of the

so-remote-as-to-be-negligible standard).

113. See id. at 1014 (stating that the standard is not met by

showing impossibility, but rather negligible possibility).

114. See id. at 1006–07 (providing the terms of the trust).

115. See id. at 1007 (describing the condition subsequent of the

trust).

116. See id. (describing the absence of issue at the son’s death).

117. See id. (describing the actions of the trustee, and the

Commissioner in response, after the son’s death).


652

stating the condition was so remote as to be negligible based on

testimony from doctors who had examined the son and said that

he suffered from cancer and would have a shorter life

expectancy.118

The Government in this case tried to argue that the so-

remote-as-to-be-negligible standard really meant impossibility.119

The government argued impossibility because it was an earlier

standard used before the so-remote-as-to-be-negligible standard

was included in the regulations.120 It also applied a definition

from a 1935 case, where impossibility was defined as a “negligible

chance of not vesting.”121 The court in Hamilton did not accept

the Government’s reasoning.122 Considering the Sternberger case,

the court noted that the impossibility argument did not arise in

the Supreme Court.123 Additionally, it provided its own logic to

explain why impossibility and so remote as to be negligible are

not the same thing: “[w]hile ‘impossibility’ and ‘no possibility’

may be accurate synonyms, and while ‘impossibility’ and

‘possibility’ may be accurate antonyms, ‘negligible possibility’ is

not an accurate synonym of either.”124

The Government also tried to argue that in order to meet

the so-remote-as-to-be-negligible standard, there must be some

“precise predictability” with the condition to determine if it is so

remote as to be negligible.125 This followed the Woodworth

118. See id. at 1017 (explaining that the likelihood of the son having

issue was so remote as to be negligible and providing reasons for this

evaluation).

119. See id. at 1012 (contending the so-remote-as-to-be-negligible

standard to be equivalent to the former impossibility test used before the so-

remote-as-to-be-negligible language was included in the regulations).

120. See id. (citing case law decided before the so-remote-as-to-be-

negligible standard was promulgated which defined impossibility as “a

‘negligible’ chance of not vesting”).

121. See id. (citing City Bank Farmers’ Trust Co. v. United States,

74 F.2d 692 (C.A.2d 1935), for this definition of impossibility).

122. See id. at 1014 (asserting that the court does not “interpret

pre-1939 cases relied upon by the Government as defining ‘impossibility’ to

mean ‘possibility . . . so remote as to be negligible’”).

123. See id. at 1013 (“This Court does not interpret the Sternberger

case as holding that ‘possibility . . . so remote as to be negligible’ is the same as

‘impossibility.’”).

124. See id. at 1014 (explaining why impossibility and so-remote-as-

to-be-negligible cannot be applied as the same standard).

125. See id. at 1010 (outlining the government’s arguments).

SHIFTING USE

653

emphasis on certainty about the completion of the hospital, as

well as other cases that used actuarial tables to quantify the

condition.126 However, the Hamilton court rejected this

correlation.127 Instead it explained that the so-remote-as-to-be-

negligible standard operates independently of any precise

predictability because it would make the so-remote-as-to-be-

negligible standard rather useless.128 The predictability itself

would negate the possibility of some condition being so remote as

to be negligible.129

The court in Hamilton also presented a third possible

definition for “so remote as to be negligible:”

A negligible possibility is a possibility that would in

the ordinary and reasonable affairs of men be

disregarded in arriving at a present valuation of a

future remainder interest in a serious business

transaction, with no reduction in the value of the

remainder interest being made by reason and the

existence of such possibility.130

This definition, in comparison to the others offered in Sternberger

and Dean, emphasized valuation as a factor when reviewing the

condition.131 Additionally, the Hamilton court clarified that

impossibility does not define the so-remote-as-to-be-negligible

standard.132 All definitions provided thus far incorporated some

element of reasonable dismissal from the parties involved in

126. See id. (noting the other cases that the Government relied on

for its argument that the so-remote-as-to-be-negligible standard had to show

precise predictability).

127. See id. at 1011 (rejecting the use of “presently ascertainable”

when evaluating under the so-remote-as-to-be-negligible standard).

128. See id. (“If the survival or non-survival of issue is ‘precisely

predictable’ or even ‘reliably predictable’ then it is either clearly possible or

clearly impossible, in which event ‘negligible possibility’ becomes meaningless.”).

129. See id. (providing an additional reason as to why the use of

precise predictability is not appropriate when applying the so-remote-as-to-be-


130. Id. at 1016.

131. See id. (noting the importance of the present valuation in

defining the so-remote-as-to-be-negligible standard).

132. See id. at 1014 (emphasizing that impossibility is not the same

as possibility so remote as to be negligible).


654

drafting the terms of the condition.133 A drafting party would

have no reason to include a condition if the occurrence of the

condition was so remote as to be negligible. This subsequently

raises the question of when an express condition would ever meet

the standard. Expressing the condition implies that the drafting

parties thought it was reasonable to include it in the agreement.

These three definitions (Sternberger, Dean/Woodworth, and

Hamilton) provided the background for defining the so-remote-as-

to-be-negligible standard in the federal income tax context for

qualified conservation contributions.134

B. Federal Income Tax Cases

Even though the Treasury Regulations did not allow for

deductions for conservation easements until 1980,135 they

included the so-remote-as-to-be-negligible standard for other

charitable donations reliant on conditions.136 These cases, and

those specifically addressing conservation easements, developed

the definitions and applications of the so-remote-as-to-be-

negligible standard and set the background leading into Graev v.

Commissioner.137

133. See id. at 1016 (defining the standard to mean a reasonable

disregard of the condition in a contract or transaction because the chances of the

condition happening are so remote); Estate of Woodworth v. Comm’r, 47 T.C.

193, 197 (1966) (defining the standard to mean reasonable disregard of the

condition); U.S. v. Dean, 224 F.2d 26, 29 (1st. Cir. 1955) (defining the standard

to mean reasonable disregard of the condition); Comm’r v. Estate of Sternberger,

348 U.S. 187, 194 (1955) (defining the standard to mean “negligible” or “highly

improbable”).

134. See Briggs v. Comm’r, 72 T.C. 646, 656–57 (1979) (citing many

of these cases in the estate tax context as instructive for federal income tax

cases).

135. See Act of Dec. 17, 1980, Pub. L. No. 96-541, 94 Stat. 3204

(codified as amended at 26 U.S.C. § 170(h) (2014)) (allowing deductions for

conservation easements).

136. See Treas. Reg. § 1.170A-1(e) (1972) (utilizing the so-remote-

as-to-be-negligible standard for conditional charitable donations); Treas. Reg. §

1.170A-7(a)(3) (1972) (stating that deductions are not disallowed simply because

of the conditional nature of the donation because of the so-remote-as-to-be-


137. See Graev v. Comm’r, 140 T.C. 377, 390–94 (2013) (referencing

cases such as Briggs and Sternberger in support of the court’s analysis).

SHIFTING USE

655

1. Early Cases Addressing the So-Remote-as-to-be-Negligible

Standard

a) Briggs v. Commissioner

One of the earliest federal income tax cases to address the

so-remote-as-to-be-negligible standard was Briggs v.

Commissioner.138 This 1979 case did not deal specifically with

conservation easements, but rather with a donation of land in fee

simple subject to a condition subsequent.139 If the condition was

not met, the original landowner would have right of reentry or

the power to terminate the donation.140 The condition was that

property would be donated to a group of Native Americans to be

used for establishment of a cultural, educational, and medical

center.141

The Briggs court evaluated the donation of the land under

the so-remote-as-to-be-negligible standard used in section

1.170A-1(e).142 It defined the standard with the definitions seen

in the estate tax cases above, including both the Dean and

Sternberger definitions.143 The court evaluated the condition

based on the reasonableness of the grantor and grantee’s

actions.144

In this case especially, the court examined possibility of

satisfying the condition through the grantor and grantee’s

interests and their ability to sustain the goal of the condition: to

138. See Briggs, 72 T.C. at 656–57 (1979) (considering the so-

remote-as-to-be-negligible standard in the federal income tax context)).

139. See id. at 655 (explaining that the petitioner’s gift contained a

condition subsequent).

140. See id. (“Petitioner has the right of reentry or power of

termination if the condition is broken.”).

141. See id. at 649 (explaining the terms of the condition).

142. See id. at 653 (applying the so-remote-as-to-be-negligible

standard found in section 1.170A-1(e)).

143. See id. at 656–57 (providing estate tax background on the so-


144. See id. at 657–58 (applying the Dean and Woodworth definition

to the grantor’s and grantee’s reasonable ability to maintain and protect the

easement).


656

build a cultural, educational, and medical center.145 With respect

to the grantor, the court emphasized that the grantor did little to

ensure that the center would be built on the property: it provided

no funds for the creation of the center, and when the gift was

made, no form of financing was available.146 Turning to the

grantees, the court found they possessed no experience in

fundraising or receiving grants.147 With this review, the court

held that the likelihood of the condition being left unsatisfied was

more than so remote as to be negligible.148 Along with both

parties lacking the business acumen to establish a center, the

court asserted that the petitioner had the intention to take back

the property if the condition was not satisfied.149 It also predicted

that the grantee would easily dissolve if it had difficulty

satisfying the condition.150 So the court, in reviewing the

likelihood of the condition, looked at the financial and managerial

acumen of the parties, as well as their intentions.151

b) 885 Investment Co. v. Commissioner

Another major Tax Court case to address charitable

contribution deductions was 885 Investment Co. v.

145. See id. at 656–59 (addressing the terms of the condition and

the grantor and grantee’s ability to fulfill the request to establish a cultural,

educational, and medical center).

146. See id. at 657 (“[P]etitioner did not provide funds for the

establishment of the center, and at the time the gift was made, no

financing . . . was readily available. . . . Petitioner failed to produce any new

evidence that funds to establish the center were forthcoming; there was a good

chance that the center might never come into existence.”).

147. See id. at 658 (describing the lack of business and managerial

experience for the individuals acting on behalf of the grantee).

148. See id. (“We conclude, however, that on the date of the gift

there was more than a negligible possibility that the desires of the board of

directors [for the grantee] might become frustrated by the conditions

imposed . . . .”).

149. See id. at 656 (“If ANIOFI [grantee] failed to use the ranch for

the establishment of the center, petitioner [grantor] intended to retake the land

and hold out for another group which was willing and able to establish the

center.”).

150. See id. at 658 (predicting the ANIOFI board of directions may

dissolve if unable to carry out condition).

151. See id. at 656–59 (assessing both the grantor’s and grantee’s

ability to fulfill the condition).

SHIFTING USE

657

Commissioner.152 The taxpayer wanted to donate a portion of its

property to the city of Sacramento to develop a scenic corridor.153

It donated with the expectation that it would not have to

maintain or develop the property.154 Aware of this expectation,

the city included a condition into the agreement.155 If the city

were unable to get the funding from the state to maintain and

develop the highway, the property would be returned to

taxpayer.156 The fact that the grantee, rather than the grantor

imposed the condition is unique.157 The Tax Court found the

grantee-imposed condition significant.158

Like the Briggs case, the court applied the so-remote-as-

to-be-negligible definitions from Dean and Woodworth.159

Ultimately, the court held that the condition was not so remote as

to be negligible.160 Resting its reasoning on the fact that the

grantee had asked for the condition,161 the court saw this as

evidence of a “realistic possibility” that the property would be

152. See 885 Inv. Co. v. Comm’r, 95 T.C. 156 (1990) (considering the

so-remote-as-to-be-negligible standard in the context of a charitable

contribution).

153. See id. at 158 (presenting the facts of the case).

154. See id. (“885 offered to donate to the city that portion of land

within its scenic corridor; the donation was based upon 885’s understanding

that it would not have the responsibility for developing and maintaining the

scenic corridor.”).

155. See id. at 159 (describing the condition which the grantee

requested to have in the agreement).

156. See id. at 159, 161 (describing how the condition allows for the

grantee to revert the property back to the owner if the property is not used for a

scenic corridor).

157. See id. at 159 (explaining that the city required the provision

to potentially deed the property back to the grantor).

158. See id. at 162 (placing weight in the fact that the city put in

this provision as an indication that the return of the property wasn’t so remote

as to be negligible).

159. See id. at 161–62 (defining the so-remote-as-to-be-negligible

standard as they were used in Dean and Woodworth).

160. See id. at 162 (asserting the possibility of the property being

returned to the grantors was not so remote as to be negligible).

161. See id. (“The city insisted that 885 accept the return of the

property if the city could not use it as a scenic corridor. . . [I]n light of the

financial and legal uncertainties the city harbored, [this] is a clear indication

that the return of the donated property to 885 was not so remote as to be

negligible.”).


658

returned.162 As addressed earlier in the Dean case, the insertion

of these conditions, which are cautionary of future events,

ultimately provide a tipping point for the “so remote as to be

negligible” analysis.163 Because the standard is defined as “highly

improbable,” the fact alone that a condition was included based

on a future event seems to set up the conditional contribution

deduction for failure.164

Both Briggs and 885 Investment Co. introduce new

approaches to applying the so-remote-as-to-be-negligible

standard.165 The Briggs court not only evaluated whether the

grantee would be able to take, but also whether the grantor was

committed to carrying out the condition.166 This deviates from the

original purpose for the standard seen in the estate tax cases; the

so-remote-as-to-be-negligible standard was implemented to

prevent grantors from receiving deductions even if the

grantee/charity did not take.167 The 885 Investment Co. court

highlighted that the grantee asked for the condition.168 This

request, in comparison to a grantor’s inclusion of a condition,

seemed to further sway the court into finding that the condition

did not meet the so-remote-as-to-be-negligible standard.169 The

162. See id. (analyzing the city’s lack of funds in addition to its

request for the condition to establish that the likelihood of the property being

returned to 855 was more than negligible).

163. See id. at 162 (saying that the fact that the city was dependent

on funding and included these provisions proved that the reversion was not

“remote”).

164. See id. at 161 (defining “highly improbable” as a circumstance

in which the ordinary businessperson would not consider the occurrence as a

possibility of the deal).

165. See id. at 162 (evaluating the intent of the grantee in adding a

condition in order to determine whether the standard is met); see also Briggs v.

Comm’r, 72 T.C. 646, 656–59 (1979) (looking at financial and managerial

acumen of the parties, as well as their intentions).

166. See Briggs, 72 T.C. at 654 (evaluating whether the grantor’s

ability to take a reversionary interest in the donated property was actually “so

remote so as to be negligible”).

167. See supra notes 48–51 and accompanying text (explaining the

original purpose behind the so-remote-as-to-be-negligible standard).

168. See 885 Inv. Co. v. Comm’r, 95 T.C. 156, 161 (1990) (stating

that the “so remote as to be negligible” standard could not be applied if a

reversion to the grantor was not actually remote).

169. See id. at 162 (stating that the grantee’s request that the

reversion clause be included meant that the grantee could foresee the donation

being returned to the grantor).

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grantee’s act represented a more intentional desire to include the

condition.170 This pulled the condition further away from the so-

remote-as-to-be-negligible requirement that a future event be so

improbable that no reasonable party would consider it.171

2. Case Law on Conservation Easements and the So-Remote-

as-to-be-Negligible Standard

a) Commissioner v. Simmons

Unlike what was seen in Briggs and 885 Investment Co.,

in Commissioner v. Simmons, the D.C. Circuit Court of Appeals

found that the conditional qualified conservation easement

deduction met the so-remote-as-to-be-negligible standard, and

allowed the deduction.172 In this case, the grantor donated two

façade easements to L’Enfant Trust (grantee), a tax-exempt

organization in Washington, D.C. dedicated to historic

preservation.173 The easement agreements included a clause

allowing the grantee to abandon or make changes to the

easements.174 The Commissioner argued this clause violated the

perpetuity requirement under section 170(h)(5).175 The D.C.

Circuit rejected the Commissioner’s position.176

The court held the change and abandonment clause did

not violate the perpetuity requirement, but rather created a

170. See id. (providing the fact that the grantee may have foreseen

the property reverting back to the grantor when they requested the condition’s

inclusion).

171. See id. (explaining that the fact that the condition was

included by the grantee made the reversion possible).

172. See Comm’r v. Simmons, 646 F.3d 6, 10–11 (D.C. Cir. 2011)

(explaining why the right to abandon does not obviate the satisfaction of

perpetuity and still allows the easement to stand up against the so-remote-as-

to-be-negligible standard).

173. See id. at 8 (providing factual background).

174. See id. (“The deeds allow L’Enfant ‘to give its consent—e.g., to

changes in a Façade—or to abandon some or all of its rights thereunder.”).

175. See id. at 9 (describing the Commissioner’s arguments).

176. See id. at 10 (“We conclude the easements meet the

requirement of perpetuity in § 170(h)(5)(A).”).


660

safety net for the grantee.177 If a change ever arose where the

grantee would need to alter the property (i.e. to have people live

there), the clause would allow for those changes while still

permitting the grantee to maintain as much of the conservation

purpose as possible.178 The court also noted any grantee may fail

on its obligation regardless of the abandonment clause seen

here.179 The court even specifically acknowledged that the

grantee (L’Enfant) could abandon its rights altogether, but based

on its prior practice, it was so remote as to be negligible that the

grantee would do so.180 The court also cited D.C. historic

preservation laws, stating the laws bound the grantee of the

conservation easement and allowed for the grantor’s easement to

be protected.181

In addition to reaching a different conclusion, the D.C.

Circuit in Simmons applied the so-remote-as-to-be-negligible

standard in a different manner.182 The court cited neither the

Dean nor the Sternberger definition.183 Instead it simply defined

the standard as a “remote possibility.”184 In its analysis, the court

put considerable weight into the reputation of the grantee, but

barely discussed the grantor in the so-remote-as-to-be-negligible

breakdown.185 The fact that there was only a change and

abandonment clause on the conservation easement seems to be

what allowed the so-remote-as-to-be-negligible argument to

177. See id. (“The clauses permitting consent and abandonment,

upon which the Commissioner so heavily relies, have no discrete effect upon the

perpetuity of easements . . . .”).

178. See id. (asserting that change and abandonment clauses can

aid in maintaining the overall conservation purposes).

179. See id. (explaining that abandonment does not just occur as a

result of a clause which allows it).

180. See id. (“L'Enfant has been holding and monitoring easements

in the District of Columbia since 1978, yet the Commissioner points to not a

single instance of its having abandoned its right to enforce.”).

181. See id. (describing the role D.C. historic preservation law plays

in conservation easements).

182. See id. (requiring that any donated land must be subject to a

perpetuity requirement for both the donor and the donee).

183. See id. (outlining the fact that the donated land must remain

consistent with conservation purposes specified in the Code).

184. See id. at 10–11 (defining the so-remote-as-to-be-negligible

standard).

185. See id. at 10–12 (upholding the deduction based on the

grantee’s prior practices).

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succeed.186 Both the reputation of the grantee and the supportive

D.C. laws for historic preservation played a role in making any

implied condition from the change and abandonment clause

condition a remote possibility.187

V. Graev v. Commissioner, an Overview

In June 2013, the Tax Court issued its opinion on Graev v.

Commissioner.188 It held that a façade conservation easement

donation was not tax deductible because the donation included a

side letter creating a conditional gift.189 The condition in the side

letter allowed the grantee to return the grantor’s easement

donation if the IRS decided that the donation was not

deductible.190 The possibility of this condition arising was found

to be more than so remote as to be negligible.191

The court applied the so-remote-as-to-be-negligible

standard to the IRS, a party outside of the immediate

grantor/grantee relationship.192 The condition itself rested on the

decision of the IRS, and guaranteed that the conservation

easement agreement would dissolve should the deduction be

denied.193 This reliance on an outside third party, along with a

condition that allows for an unraveling of the whole agreement,

encourages aggressive use of qualified conservation

contributions.194 A condition centered solely around tax

deductions, and allowing for a refund if the deduction is denied,

186. See id. at 11 (stating that the “remote possibility” that donated

property would be returned to the donee would not disallow the deduction).

187. See id. at 10–11 (noting the grantee’s interest in preserving the

easement for conservation purposes and highlighting that even if the grantee

dissolved, the easements will be transferred to another conservation

organization).

188. See Graev v. Comm’r, 140 T.C. 377 (2013).

189. See id. at 409 (denying the deduction because the side letter

established a condition which was not so remote as to be negligible).

190. See id. at 383 (describing the contents of the side letter).

191. See id. at 409 (arguing the side letter did not meet the so-


192. See id. at 394–95 (analyzing the likelihood of the IRS to

disallow the deduction).

193. See id. at 383 (providing the terms of the condition).

194. See Sims, supra note 21, at 59 (stating the process of allowing

“before” and “after” valuations for contributions encourages valuations that do

not adequately reflect the fair market value of the donation).


662

encourages aggressive valuation.195 Graev demonstrates that this

type of “tax insurance” clause for conservation easements should

not be permitted because it does not perpetuate any greater

conservation purpose. These conditions only cater to the concerns

of the grantor. In light of the Graev outcome, conservation

easement donations should be irrevocable on the terms of

deductibility.

A. Background

The National Architectural Trust (“NAT”) reached out to

Mr. Graev in the summer of 2004 and asked if he would be

interested in donating a façade easement on one of his historic

properties in New York City.196 Mr. Graev responded, expressing

interest, but also concern because his accountants had alerted

him of a recent IRS Notice that warned of “penalties and excise

taxes” to those who make improper conservation easement

donations.197 NAT assured Mr. Graev that the IRS Notice would

not apply to the type198 of conservation easement donations that

NAT offered.199 NAT even told Mr. Graev that it had been in

contact with the IRS and that it had “no reasons to expect that

[NAT] or any of the donations [NAT] has received (easement or

cash) w[ould] be reviewed.”200

195. See id. at 58 (requiring that the deduction amount taken must

match the amount of valuation on the return in order to promote the public

interest).

196. See Graev v. Comm’r, 140 T.C. 377, 381 (2013) (describing

NAT’s solicitation of Mr. Graev).

197. See id. at 8 (describing Mr. Graev’s concern as a result of the

IRS Notice); see also IRS Notice 2004-41, supra note 6 (alerting taxpayers that

abusive use of qualified conservation contributions could lead to penalties and

excise taxes).

198. The IRS highlights two main types of problematic qualified

conservation easements: (1) those that do not serve a valid public purpose or

those where donor receives a greater financial benefit from the easement than

the public, and (2) easements donated to charitable organizations where there

charity in turn sells the easement for profit. See IRS Notice 2004-41, supra note

6 (addressing current issues with qualified conservation contributions).

199. See Graev, 140 T.C. at 382 (providing NAT’s assurances to Mr.

Graev that his type of donation was not addressed in the IRS Notice).

200. See id. at 382–83 (contrasting NAT activities with those

activities that usually caused IRS review).

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Around this time, Mr. Graev also requested a “side letter”

from NAT.201 He had neighbors who had donated façade

easements to NAT and had received these letters as a part of

NAT’s standard policy.202 NAT supplied him with a side letter

which guaranteed: “In the event the IRS disallows the tax

deduction in their entirety, we will promptly refund your entire

cash endowment contribution and join with you to immediately

remove the façade conservation easement from your property’s

title.”203 The conservation easement deed did not include the

promise made in this side letter.204

A few months after Mr. Graev had donated his easement

to NAT, NAT contacted Mr. Graev to tell him that the Senate

Committee on Finance planned to implement reforms on

deductions for façade easements.205 Several months after that,

NAT wrote Mr. Graev again, telling him that the “refund offer” in

the side letter might adversely impact the deductibility of his

donation and that he should seek tax advice on the refund

offer.206 NAT also offered to rescind the refund offer to potentially

preserve the deductibility of the easement.207 Mr. Graev chose not

to withdraw the refund.208 The facts in the case did not elaborate

as to why Mr. Graev chose not to withdraw.209

201. See id. at 383 (highlighting when Mr. Graev submitted his

façade easement application to NAT, he also requested NAT write him a side

letter emphasizing the standard NAT policy that there will be a refund if the

donor’s deduction is disallowed).

202. See id. (“In a cover letter to NAT transmitting the application,

Mr. Graev stated: ‘I will also be looking or the NAT to issue the ‘side’ letter we

discussed (similar to the one being issued to my neighbors across the street).’”).

203. See id. (providing the text of NAT’s side letter to Mr. Graev).

204. See id. at 385 (“The deed did not expressly refer to the side

letter or incorporate its terms.”).

205. See id. at 386 (describing NAT’s first communication to Mr.

Graev after his donation that the Senate Committee on Finance planned to look

in depth at the valuation of façade easements).

206. See id. (describing NAT’s second communication to Mr. Graev

after his donation which warned him that the side letter’s refund offer may

“adversely affect the deductibility of the cash contribution as a charitable gift”).

207. See id. (“Of course, if you determine that you would prefer that

we withdraw the refund offer, which according to our attorney should restore

the deductibility of your cash contribution, the Trust will promptly do so.”).

208. See id. (noting that Mr. Graev chose not to withdraw the

refund).

209. See id (showing that such evidence is not included in the

record).


664

This case arose in the Tax Court because Mr. Graev and

his wife claimed deductions on the conservation easement

donation.210 The IRS issued a notice of deficiency to the Graevs

arguing “the noncash charitable contribution of a qualified

conservation contribution is disallowed because it was made

subject to subsequent event(s).”211 The issue before the Tax Court

was whether Mr. Graev’s contributions to NAT would be

deductible because they were conditional gifts.212

B. Tax Court’s Opinion

The Tax Court found in favor of the Commissioner,

holding that the side letter created a conditional gift, whose

condition was more than so remote as to be negligible.213 The

court began its opinion by stating the law which qualifies Mr.

Graev’s donation as a conservation contribution, including the

three regulations which address the so-remote-as-to-be-negligible

standard.214

In addition to including the so-remote-as-to-be-negligible

definitions seen in Dean and Briggs (citing Woodworth), the court

also emphasized the so-remote-as-to-be-negligible analysis should

be made in light of “all the facts and circumstances.”215 This

suggests an expansion from what had been seen in earlier cases

where the analysis rested heavily on the actions and intentions of

the grantee and grantor only.216 In fact, the Graev court began its

210. See id. at 386–87 (explaining why the IRS issued a notice of

deficiency against the Graevs).

211. Id. at 387.

212. See id. (“The question now before the Court is whether

deductions for Mr. Graev’s contributions of cash and the easement to NAT

should be disallowed because they were conditional gifts.”).

213. See id. at 409 (“[W]e conclude that at the time of Mr. Graev’s

contributions to NAT, the possibility that the IRS would disallow the Graev’s

deductions for the contributions and, as a result, that NAT would promptly

refund Mr. Graev . . . was not ‘so remote as to be negligible.’”).

214. See id. at 387, 393 (explaining Treas. Reg. §§ 1.170A-1(e), -

7(a)(3), -14(g)(3) and why they are relevant to Mr. Graev’s case).

215. See id. at 394 (presenting prior case law definitions of the so-

remote-as-to-be-negligible standard and adding that “all facts and

circumstances” should be considered).

216. See id. (adding “all facts and circumstances” to the analysis of

whether the grantee’s reception of the easement would be defeated).

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so-remote-as-to-be-negligible analysis with the IRS’s likelihood of

disallowing the deduction and its intention to scrutinize

conservation easements more closely.217 By beginning its analysis

with the IRS’s actions and intentions, the court suggested the

grantor and grantee are not the only parties who influence the

determination of whether a condition is so remote as to be

negligible.218

The court quickly noted that “it is self-evident that the

risk of IRS disallowance was not negligible.”219 The court

explained that Mr. Graev clearly foresaw the issue of

deductibility, and that is why he requested the side letter.220 Mr.

Graev’s actions did not fit in to the traditional definition of so-

remote-as-to-be-negligible that establishes a standard of

disregarding or ignoring the possibility of the condition

occurring.221 Mr. Graev foresaw this issue of deductibility because

he was aware of the increased IRS scrutiny on conservation

easement contributions, from both the IRS Notice and the letters

from NAT.222 While the IRS Notice did not specifically address

the type of contribution Mr. Graev made, the court explained that

the notice served to alert all grantors and grantees of qualified

conservation contributions of the IRS’s heightened scrutiny.223

Mr. Graev’s initial email to NAT about the notice also supported

the assertion that the IRS Notice applied to others outside of the

specific examples the IRS cited.224

The side letter, instead of the conservation easement

agreement, ended up being what activated the application of the

217. See id. (discussing the possibility that the IRS will disallow the

deduction).

218. See id. (highlighting the potential for the IRS to disallow the

deduction and for NAT to return the easement was not so remote as to be

negligible).

219. Id. at 394.

220. See id. at 394–95 (explaining how Mr. Graev’s insistence on

the side letter showed his ability to foresee the IRS denying deductibility).

221. See id. at 395 (“[Mr. Graev] did not ‘disregard’ or ‘ignore’

it, . . . but rather went out of his way to address it and hedge against it.”).

222. See id. (asserting that the IRS Notice indicated increased IRS

scrutiny to all conservation easements).

223. See id. (emphasizing that the IRS Notice was a general

warning against “improperly claiming charitable contribution deductions”).

224. See id. at 395–96 (asserting Mr. Graev’s email to NAT

requesting a side letter indicates Mr. Graev’s understanding that the deduction

could be disallowed).


666

so-remote-as-to-be-negligible standard.225 It also simultaneously

destroyed Mr. Graev’s chances at meeting the so-remote-as-to-be-

negligible standard.226 Mr. Graev wanted the side letter to ensure

that he would not be harmed as a result of his transaction with

NAT.227 At the same time, the fact that he wanted this letter

shows that IRS disallowance of the deduction was a possibility.228

“[T]he risk that his corresponding deductions might be disallowed

could not be (and was not) ‘ignored with reasonable safety in

undertaking a serious business transaction.’”229 The fact that

NAT issued these side letters as a matter of standard policy also

shows that the grantee, not just the grantor, saw the

disallowance of the deduction as a non-negligible risk.230

After establishing the disallowance of the deduction was

more than so remote as to be negligible, the court then addressed

NAT’s reliability to its promise if the condition was satisfied.231

Essentially, the court then asked if NAT could be expected to

promptly refund Mr. Graev in light of a disallowance.232 The court

believed that NAT would refund because along with the promise

made in the side letter, the easement deed included a clause

which allowed for NAT to abandon the easement.233 This is

similar to the language seen in Simmons.234 Because the side

letter represented an ability to act upon that right to abandon,

the letter itself could be included as a part of the conservation

225. See id. at 404–05 (discussing the role of the side letter in

triggering the application of the standard).

226. See id. (noting that “the possibility that NAT would actually

abandon its rights was more than negligible”).

227. See id. at 398 (discussing the motives behind the side letter

and its purposes).

228. See id. (“The very essence of a comfort letter implies a non-

negligible risk.”).

229. Id. (citing 885 Inv. Co. v. Comm’r, 95 T.C. 156, 161 (1990)).

230. See id. (highlighting that it was standard policy for NAT to

issue comfort letters to its donors).

231. See id. at 401 (assessing whether NAT would uphold the terms

of its side letter to Mr. Graev).

232. See id. (analyzing whether or not the refund could be

anticipated if the IRS disallowed the deduction).

233. See id. at 404 (holding that NAT would uphold the terms of the

side letter because the “subscribed and recorded deed . . . reserved for NAT the

power to do so”).

234. See Comm’r v. Simmons, 646 F.3d 6, 10 (D.C. Cir. 2011)

(discussing the importance of clauses permitting abandonment).

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easement.235 The court even argued that NAT would uphold its

promise to refund if the side letter was found to be

unenforceable.236 Regardless of this letter’s enforceability, NAT

would voluntarily return the easement in the case of

disallowance, and Mr. Graev would not have to make any

affirmative actions to get his property returned to him as fee

simple interest.237 The court found that there was no “non-

negligible possibility” that NAT would fail to uphold its promises

to Mr. Graev.238 According to the Tax Court, both the chance of

disallowance and the chance of NAT upholding its promises was

more than negligible, preventing the conditional contribution

from meeting the so-remote-as-to-be-negligible requirement.239

Mr. Graev did try to mitigate the strength of the side

letter by relying on Commissioner v. Procter.240 He attempted to

argue that the side letter was unenforceable as a result of

Procter.241 On its face, this 1944 case from the Court of Appeals

for the Fourth Circuit appears to be a corollary to Graev.242 The

donor in Procter assigned his children remainder interests in two

trusts, and these children were to receive their interests upon the

death of the donor’s grandmother.243 The condition at issue in

Procter was if a “federal court of last resort” determined that any

part of the transfer in trust was subject to the gift tax, then that

235. See Graev v. Comm’r, 140 T.C. 377, 405–06 (explaining why

the side letter can be considered a part of the conservation easement

agreement).

236. See id. at 408–09 (describing NAT’s willingness to voluntarily

remove the easement and interest in upholding its professional reputation).

237. See id. at 409 (“To decide that there was no non-negligible

possibility that NAT would voluntarily extinguish the easement and return the

cash would require us to find that, in order to induce Mr. Graev to make his

contributions, NAT made cynical promises that it fully intended to break. Our

record will not support such a finding . . . .”).

238. See id. (evaluating NAT’s ability to uphold the easement).

239. See id. (explaining how the actions of NAT and the side letter

itself establish that the condition did not meet the so-remote-as-to-be-negligible

standard).

240. See id. at 406 (discussing Mr. Graev’s use of Comm’r v. Procter,

142 F.2d 824 (4th Cir. 1944)).

241. See id. (noting how Mr. Graev attempts to use Procter to

invalidate the side letter).

242. See Comm’r v. Procter, 142 F.2d 824, 827 (4th Cir. 1944)

(discussing why the terms of the transfer could not avoid the gift tax).

243. See id. at 825 (explaining the terms of the trust).


668

transfer would not occur.244 This case is similar to Graev in that

both conditions require the actions of parties outside of the

grantor/grantee relationship and hinge on tax consequences.245

The Procter court rejected this condition for three different public

policy reasons: (1) it discouraged the collection of the gift tax

because attempts to enforce the tax would only inhibit collection

of the tax; (2) it would “obstruct the administration of justice by

requiring the courts to pass upon a moot case” in order to

maintain the gift tax; and (3) the final judgment of the court

under this condition would merely undo the gifts and

subsequently, the judgment of the court itself to assess gift tax.246

The Graev court specifically defeated all three of these

policy reasons in the context of Mr. Graev’s condition.247

Addressing the first reason, the court stated that the conditions

in the NAT side letter would not prevent the collection of tax.248

Instead, the side letter allowed for a restoration to status quo,

hardly creating a discouragement for the grantor.249 The court

defeated the second reason by noting the reversion to the grantor

would not defeat the court’s holding like it would in Procter.250

Mr. Graev was merely prevented from taking the deduction.251 He

would not be able to escape tax liability altogether as a result of

the IRS’s decision.252 Similarly, the Graev court defeated the third

Procter reason by stating the reversion of the property as a result

of the side letter would not inherently reverse the judgment of

244. See id. at 827 (describing the condition provided in the trust).

245. Compare Graev v. Comm’r, 140 T.C. 397, 394–95 (2013)

(outlining the role of a potential disallowance of the deduction in determining

the outcome) with Procter, 142 F.2d at 825 (4th Cir. 1944) (commenting on the

role of the court as a third-party in determining the validity of the transaction).

246. See Procter, 142 F.2d at 827–28 (asserting why the condition is

invalid on public policy grounds).

247. See Graev, 140 T.C. at 406–08 (providing an explanation as to

why the Procter reasoning does not apply the side letter).

248. See id. at 406–407 (arguing that the side letter would not

prevent the collection of tax).

249. See id. at 407 (explaining how the side letter’s condition would

not contradict a holding to either allow or disallow a deduction).

250. See id. (“However, in this case, unlike Procter, the reversion to

the donor would not be inconsistent with the court’s holding . . . .”).

251. See id. at 409 (explaining that the deduction was disallowed).

252. See id. (advising that the IRS would challenge the Graevs’

deduction).

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the IRS.253 The IRS denial of a deduction would still operate

regardless of the reversion of the façade easement to Mr.

Graev.254

Mr. Graev’s use of Procter to argue the side letter was

unenforceable is puzzling. He initially insisted on the side

letter.255 Even after NAT offered to withdraw the offer of the side

letter to potentially preserve the deduction, Mr. Graev chose to

keep the side letter as a part of the agreement.256 His about-face

arguing the letter unenforceable eliminates any reasoning as to

why he insisted on the side letter in the first place.257 This switch

appears to highlight Mr. Graev’s sole concern of tax

deductibility.258 If the side letter were rendered unenforceable, it

would eliminate the tax deduction condition evaluated under the

so-remote-as-to-be-negligible standard.259 But by drawing a

corollary between Procter and his own case, he only highlights

that his motivations were similar to the grantors in Procter: he

wanted the best tax situation possible.260

With this Procter corollary denied, the court concluded

that “there was a substantial possibility that the IRS would

challenge Graev’s conservation easement deductions.”261 This

denial of deductions was likely because the IRS was on

253. See id. at 408 (explaining why the situation in Graev does not

match up with the third policy rationale from Procter).

254. See id. (noting the return of the easement “would have no

effect on the Graevs’ tax liabilities”).

255. See id. at 383 (requesting the side letter).

256. See id. at 386 (noting that Mr. Graev chose to keep the side

letter after NAT offered to rescind it).

257. See id. at 401 (“The Graevs argue, however, that as a matter of

law NAT could not be held to the promises it made in its side letter”).

258. See id. (suggesting that Mr. Graev is principally concerned

with the tax consequences of the transaction).

259. See id. at 402–03 (explaining Graev’s argument, which was

that the side letter was unenforceable and his contributions were not

conditional as a result).

260. See Wendy C. Gerzog, Graev: Conditional Façade Easement,

140 TAX NOTES 1607, 1609 (2013), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2333211 (“It is ironic that

the taxpayers in Graev cited to Procter to sustain their position. If anything, the

facts in Graev reflect the very behavior so repugnant to the Procter court.”) (on


ENVIRONMENT).

261. See Graev v. Comm’r, 140 T.C. 377, 409 (2013) (opining on the

likely IRS treatment of the deduction).


670

heightened notice of abusive claims for conservation easement

deductions, the condition was solely dependent upon tax

consequences, and the court found that NAT was very likely to

satisfy the condition of the side letter if the deduction was

denied.262

VI. Lessons from Graev v. Commissioner

Within the scope of the existing cases that examine the so-

remote-as-to-be-negligible standard, Graev was the only case

which used a document outside of the conservation easement

agreement to establish the condition, and the condition itself

focused solely on tax consequences.263 Ironically, the side letter

was meant to protect against disallowance of a deduction, not

establish a greater likelihood of it occurring.264 This irony raises

the question of what should a taxpayer do if it wants to get a

deduction for a conservation easement? This paper argues that in

order to justify a deduction for the high value conservation

easements, these donations should be irrevocable based on tax

consequences. Instead of failing to meet the so-remote-as-to-be-

negligible standard, these conditions should be explicitly

disallowed in the Treasury Regulations. The possibility of the IRS

denying a deduction should not be considered a “remote future

event.”265

Yet, insisting on irrevocability could weaken the incentive

system of conservation easements altogether.266 Mr. Graev was

trying to ensure that his donation was deductible; otherwise it

seems he would have been unlikely to part with some of his

ownership rights in the façade.267 Mr. Graev’s extensive efforts to

262. See Gerzog, supra note 260, at 1609 (discussing why the IRS

disallowed the deduction).

263. See Graev, 140 T.C. at 383 (outlining the contents of the side

letter).

264. See Gerzog, supra note 260, at 1609 (noting the purpose of the

side letter).


(explaining that the so-remote-as-to-be-negligible standard is applied when

conditions rely on future events).

266. See Gerzog, supra note 260, at 1609 (discussing the

implications of factoring motive into allowing charitable deductions).

267. See Graev, 140 T.C. at 384–85 (detailing the structure of Mr.

Graev’s contribution).

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671

get the deduction raise the issue of whether blatantly seeking out

tax deductions is a sound policy for making charitable

contributions.268 Laura Gerzog’s review of Graev acknowledges

that most people donate to charity in hopes that their donation

creates a deduction.269 This desire encourages taxpayers like Mr.

Graev to seek out opportunities for revocable donations based on

deductibility.270 This revocability creates “tax insurance” for the

grantor.271 A “tax insurance” system for qualified conservation

contributions would encourage grantors to place aggressive

valuations on their easements because they would only be

returned to the status quo if the deductions were denied.272 This

low risk of loss would encourage grantors to make qualified

conservation contributions, but this low risk of loss would only

continue to perpetuate the problems with conservation easements

today including overvaluation.273

An allowance for revocable donations based on

deductibility would create further inefficiencies to the charitable

contribution system.274 If there were a surge of these conditional

donations, charities would be subject to the decisions of the IRS

and unable to fully utilize the property until the IRS had decided

on the deduction or the statute of limitations period ran out.275 If

deductibility were contested, then the charitable organizations

may also feel obligated to support the taxpayer in litigation in

order to preserve the charitable gift they now hold.276 Lastly, to

268. See Gerzog, supra note 260, at 1609 (questioning the prudence

of the current policy on charitable deductions).

269. See id. (explaining the policy rationale behind conditioning

donations based on deductibility).

270. See Remarks of Steven T. Miller, supra note 8 (commenting on

the misuse of revocable donations).

271. See supra note 19 and accompanying text.

272. See Remarks of Steven T. Miller, supra note 8 (discussing the

propensity of taxpayers to overvalue easements).

273. See id. (highlighting valuation as one of the problems with

qualified conservation contributions).

274. See Gerzog, supra note 260, at 1609 (implying that allowing

donors to alter donations after the IRS disallowed a deduction would be

undesirable).

275. See id. (explaining that charities “would not know if they were

receiving funds and could not rely on using those ‘donations’ until several years

into the future”).

276. See id. (“If all charitable gifts were conditional on receiving a

tax deduction, that limitation would place a heavy burden on charities.”).


672

allow revocability based on tax deductions for conservation

easements would continue to expand the perpetuity issues

surrounding conservation easements.277 The easement would be

unable to exist in perpetuity until the issue of deductibility was

resolved, and the original legislative purpose of conserving land

for the public benefit would be diminished.278 Instead, the private

benefit of the taxpayer would surpass the public benefit.279

Irrevocability on the other hand would force qualified

conservation contributions subject to deductibility conditions to

focus on conditions related to conservation in perpetuity. In

establishing the risk that the contribution may not be deductible,

grantors would be less aggressive in valuation and would be more

likely to have the “donative intent . . . central to allowing a

charitable deduction.”280 The burden on the taxpayer as a result

of overvalued conservation easements may decrease with less

aggressive transactions.281 The insistence upon irrevocability for

tax purposes would also allow for a more concise definition of the

so-remote-as-to-be-negligible standard.282 The Graev case

highlighted the circular nature of a tax dependent condition: by

focusing solely on deductibility, the issue became more than

negligible thereby eliminating the possibility for a deduction.283

Excluding revocable, tax dependent conditions would help bring

the focus so-remote-as-to-be-negligible analysis back to the ability

277. See generally Jay, supra note 36 (addressing the perpetuity

issues with conservation easements particularly related to subsequent changes

to the easement).

278. See S. REP. NO. 96-1007, at 9 (1980) (explaining the importance

of conservation U.S. “natural resources and cultural heritage”).

279. See Sims, supra note 21, at 753 (acknowledging that many

conservation easements benefit the grantor more than the public).

280. See Gerzog, supra note 260 at 1609 (citing United States v.

American Bar Endowment, 477 U.S. 105, 117–18 (1986)) (explaining the key

component of a charitable deduction).

281. See Sims, supra note 21, at 729 (noting that the taxpaying

public suffers the costs from overvalued conservation easements).

282. See id. at 764 (commenting on the requirements for perpetual

conservation restrictions).

283. See Graev v. Comm’r, 140 T.C. 377, 401 (2013) (“Given that

non-negligible risk, Mr. Graev's contributions fell afoul of the section 170

regulations implementing the statutory requirements that a gift be effectively

‘made’, that it consist of an ‘entire interest’, and that it be a ‘qualified

conservation contribution’”).

https://a.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1012823&cite=26USCAS170&originatingDoc=I7eb2bb34dd9e11e28503bda794601919&refType=LQ&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search)

SHIFTING USE

673

of the grantee charity to maintain the conservation easement in

perpetuity.284

VII. Conclusion

The so-remote-as-to-be-negligible standard applied to

qualified conservation contributions is only defined by case law,

and as a result, has been applied broadly and inconsistently.285

Its original use in estate tax issues emphasized that reviewing

courts should focus on whether the grantee charity will be able to

take as a result of the condition.286 If the possibility of the charity

not taking was so remote as to be negligible, then a deduction

would be allowed for the charitable contribution.287

While federal income tax cases used the definitions of the

so-remote-as-to-be-negligible standard supplied from its estate

tax predecessors, the courts also began evaluating the role of the

grantor under the standard.288 Deductibility not only depended on

the grantee’s ability to maintain the easement.289 It also

depended upon the grantor’s donative commitment to the

easement.290 Evidence of a grantor seeking an easy refund, as

opposed to a commitment to conservation, convinced courts to

deny deductions.291

Graev v. Commissioner confused things because the

condition subject to the so-remote-as-to-be-negligible standard


(discussing the underlying purpose of the so-remote-as-to-be-negligible standard

is to ensure that if a taxpayer gets a deduction, the charity will take also).

285. See Graev, 140 T.C. at 393–94 (outlining precedent relevant to

the so-remote-as-to-be-negligible standard).

286. See id. (“The “so remote as to be negligible” phrase is the

familiar term first used in the 1949 estate tax regulations . . . .”).

287. See id. (explaining how the so-remote-as-to-be-negligible

standard developed).

288. See Briggs v. Comm’r, 72 T.C. 646, 659 (1979) (noting the

importance of the grantor’s desire in making the gift).

289. See id. at 657–58 (discussing the grantee’s ability to comply

with the conditions of the gift).

290. See id. at 659 (looking to the donor’s ultimate intent in

determining the allowance of the deduction).

291. See generally id. (explaining the grantor’s intention to take

back the property if the grantee failed to carry out the condition); Graev, 140

T.C. 377 (2013) (emphasizing Mr. Graev’s primary desire to have a tax

deduction).


674

related solely to deductibility.292 The court did not even address

the grantor or grantee’s ability to maintain the easement because

the condition had nothing to do with the property itself.293 The

Tax Court found that the deduction should be denied under the

so-remote-as-to-be-negligible standard.294 Because of heightened

IRS scrutiny, the court reasoned the denial of the deduction to be

more than negligible.295 Also, the grantor’s efforts to preserve the

deduction only highlighted that his concern about a greater than

negligible chance that the deduction for the easement would be

denied.296

The situation present in Graev raises the issue as to

whether the so-remote-as-to-be-negligible standard and

conditions for remote future events should be permitted when the

condition is focused solely on deductibility.297 These conditions

seem to benefit the grantor taxpayer, not to the public.298 Because

these tax insurance conditions seem to extract any sort of

altruistic donative intent from the transaction, the Treasury

should promulgate regulations that prohibit revocability of the

donations on the grounds of a denial of deduction.

292. See Graev, 140 T.C. at 401–02 (2013) (analyzing the possibility

of a return of the contribution).

293. See id. at 408 (reviewing the terms of the easement).

294. See id. at 409 (explaining the court’s conclusions).

295. See id. at 397 (discussing the increased IRS scrutiny of these

transactions).

296. See id. (commenting on Mr. Graev’s concerns with the

deductibility of the easement and his subsequent actions).

297. See id. at 394 (“What is determinative under the section 170

‘remote’ regulations is the possibility, after considering all the facts and

circumstances, that NAT's reception and retention of the easement and cash

would be defeated”).

298. See Gerzog, supra note 260, at 1609 (implying that permitting

gifts to be conditioned on deductibility is not sound public policy).