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PLAINTIFFS’ REPLY IN SUPPORT OF THEIR MOTION TO STAY BRIEFING ON DEFENDANT’S SUPPLEMENTAL MOTION TO DISMISS INTRODUCTION The Government does not deny that, irrespective of whether this Court were to grant the Government’s supplemental motion to dismiss, this Court would retain subject matter jurisdic- tion over this case and discovery would move forward. That was our principal argument for stay- ing briefing on the Government’s supplemental motion, and it is a conclusive basis for granting our requested relief. There is no reason for this Court to resolve a motion that will have no effect on its jurisdiction over this case or on the progression of discovery, and there is no reason to rule on a supplemental motion that could be rendered completely irrelevant when this Court ad- dresses all jurisdictional issues after the close of discovery. This Court should not waste any more time than it has already been forced to expend on the Government’s supplemental motion. ARGUMENT It is black letter law that “the presence of one party with standing is sufficient to satisfy Article III’s case-or-controversy requirement.” Rumsfeld v. Forum for Academic & Inst. Rights, Inc., 547 U.S. 47, 52 n.2 (2006); see also Bowsher v. Synar, 478 U.S. 714, 721 (1986). In our motion, we pointed out that, because the Government concedes that its supplemental motion
does not affect Berkley Insurance Company’s standing, it is clear that there is a live “contro- versy” under Article III, and this Court’s jurisdiction over this case would not be affected even if the Government’s motion were granted. The Government’s response does not argue otherwise. It is undisputed, then, that this Court’s subject matter jurisdiction over this case will not be affected by resolution of the Government’s supplemental motion. Instead, the Government stresses that Article III requires standing “for each claim.” See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). But no one disputes that Plaintiffs must have standing for their respective claims; the question is whether that standing inquiry must occur right now or can instead be adjudicated as part of the other jurisdictional disputes that this Court will address after discovery. For this reason, the Government’s attempt to distinguish Rumsfeld v. Forum for Academic & Institutional Rights, Inc. (“FAIR”) and its citations to im- puted-standing cases miss the point. See Gov’t Resp. to Pls.’ Motion to Stay Briefing on Def.’s Supp. Mot. to Dismiss at 3–4 (July 6, 2015), Doc. 182 (“Gov’t Resp.”). Plaintiffs are not arguing that FAIR permits the standing of Berkley Insurance Company to be imputed to the other Plain- tiffs. Rather, the point is that, under FAIR, this Court will have jurisdiction over this case even if individual Plaintiffs do not have standing (of course, they do have standing, see infra pages [[X– X]]), which the Government does not deny. The only question at issue, then, is when the Court will make its standing determination as to individual Plaintiffs. And because it is undisputed that this Court will have jurisdiction to proceed with discovery and rule on the other jurisdictional questions regardless of the Government’s supplemental motion, there is nothing to be gained by adjudicating the Government’s supplemental motion now. That is particularly true because, as the Government notes in footnote 2 of its response, the Government’s principal motion to dismiss argues that all Plaintiffs lack standing. Gov’t
Resp. 4 n.2. If, when this Court addresses jurisdictional issues after discovery, it were to agree with the Government on this point (which, we respectfully submit, would be error), the Govern- ment’s supplemental motion would be entirely superfluous. The Government offers no substan- tive response to these efficiency arguments; it simply asserts that they should not matter because standing can be raised at any time. See Gov’t Resp. 8–9. But just because standing can be raised now does not mean it should be adjudicated now. The decision to stay briefing is about timing,1 and Plaintiffs’ efficiency arguments demonstrate the senselessness of adjudicating this dispute now. On a motion to stay, that should be decisive. Cf. San Francisco Tech., Inc. v. The Glad Prods. Co., 2010 WL 2943537, at *3 (N.D. Cal. July 26, 2010) (staying proceedings after de- fendant moved to dismiss for lack of standing “because a stay will promote judicial economy, prevent unnecessary expenditure of resources and cause no prejudice to Plaintiff”). Moreover, the Government misunderstands our argument that staying briefing will permit a more orderly presentation of the issues and that it would be premature to resolve the Govern- ment’s supplemental motion while discovery on related issues is ongoing. We pointed out that it will be far more efficient to cover all dispositive legal questions with a single briefing schedule once all relevant facts have been revealed through discovery. See Pls.’ Mot. to Stay Briefing on Def.’s Supp. MTD at 4 (June 17, 2015), Doc. 164 (“Pls.’ Mot. to Stay”). At that point, Plaintiffs intend to move for leave to amend their complaint to account for such facts, and the Government would presumably have an opportunity to respond. The Government never engages with this point; rather, it claims that it can simultaneously argue that the taking occurred on August 17, 1 The Government says that it failed to raise this standing issue until now because it only learned about the basis for its motion during discovery. See Gov’t Resp. 8. Obviously, nothing prevented the Government from filing a supplemental motion to dismiss—precisely what it has done here—when it first learned of the underlying information over a year ago. See Pls.’ Mot. to Stay 2. 2012, and deny that the timing of the taking is even knowable. See Gov’t Resp. 4–5. But Plain- tiffs were not charging the Government with inconsistency; we were pointing out that the timing of the taking has been a subject of dispute that prompted this Court’s discovery order. It would be premature to adjudicate a motion that depends on issues being developed in discovery. In light of these considerations, it makes sense that this Court has rejected the Govern- ment’s piecemeal approach to litigation in the past, a track record that the Government tries to diminish by calling it “iron[ic]” that Plaintiffs seek a stay here based on this Court’s denial of a stay of discovery. Id. at 8–9. But a stay here would be consistent with this Court’s denial of a dis- covery stay: both actions reject the Government’s efforts to slow or interfere with the discovery ordered by this Court.2 Finally, the Government insists that this Court could rule in its favor quickly because the standing question is an “easy one.” Gov’t Resp. 6. Yet, for all the space the Government spends describing the facts of Palazzolo v. Rhode Island, 533 U.S. 606 (2001), and Bailey v. United States, 78 Fed. Cl. 239 (2007), its only argument distinguishing those cases is that they “both in- volved challenges to land-use regulations, which are subject to unique considerations regarding when a Fifth Amendment takings claim can accrue.” Gov’t Resp. 6. Curiously, the Government never gets around to explaining what those “unique considerations” are or how they distinguish this case. Nor does the Government point out that, just last month, the Supreme Court emphati- cally rejected the notion that real property and personal property are subject to different levels of protection under the Takings Clause, at least in the context of appropriation of property. Horne v. 2 The Government never responds to Plaintiffs’ other example of this Court rejecting a piecemeal approach: this Court’s decision to order jurisdictional discovery despite the Govern- ment’s insistence that some issues could be resolved without discovery. See Pls.’ Mot. to Stay 3– 4.
Department of Agric., 2015 WL 2473384, at *5 (U.S. June 22, 2015) (“[The Takings Clause] protects ‘private property’ without any distinction between different types.”). Even a casual perusal of Palazzolo or Bailey dispels the notion that this standing issue is straightforward. In Palazzolo, the Supreme Court rejected the idea that passage of title to prop- erty necessarily extinguishes the successor’s regulatory takings claim: “It suffices to say that a regulation that otherwise would be unconstitutional absent compensation is not transformed into a background principle of the State’s law by mere virtue of the passage of title.” 533 U.S. at 629–30. To hold otherwise, in the Court’s view, would have “work[ed] a critical alteration to the nature of property” in which the State “secure[s] a windfall for itself” when property is trans- ferred. Id. at 627. Bailey relied upon Palazzolo in holding that a property owner had standing to challenge a pre-acquisition regulatory taking. 78 Fed. Cl. at 271. And, contra the Government’s argument, the whole point of Bailey was that, even as to land, a regulatory taking claim may, in at least some circumstances, be maintained by an individual who acquired the land after the tak- ing commenced. Id. at 268–75.3 The Bailey Court reaffirmed that analysis even after the Federal Circuit’s decision in CRV Enterprises, Inc. v. United States, 626 F.3d 1241 (2010), see Bailey v. United States, 116 Fed. Cl. 310, 317–18 (2014), upon which the Government relies, see Gov’t 3 The Government states that Bailey held that the plaintiff could not bring a takings claim for lots he did not own at the time of the taking. See Gov’t Resp. 7. This claim is erroneous. As the Government’s parenthetical quoting Bailey indicates, the Court held that the plaintiff could not bring a takings claim for property he owned neither at the time of the taking nor at the time he brought the case. See id. (“Plaintiff neither held a property interest in lots 7, 8, and 11 at the various times he alleged that a taking had transpired nor since.” (quoting Bailey, 78 Fed. Cl. at 275 (emphasis added))). But the Court held that the plaintiffs could bring a takings claim for property he acquired after the taking. See Bailey, 78 Fed. Cl. at 274.
Resp. 6–7. The Government’s portrayal of the standing inquiry as “easy” is, therefore, quite mis- taken, and this Court should defer adjudicating this complicated question until it examines all ju- risdictional issues after discovery.4 CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that this Court enter an order staying all briefing on the Government’s Supplemental Motion to Dismiss, Doc. 161, until the Court lifts its stay on the Government’s principal Motion to Dismiss, Doc. 20. Date: July 16, 2015 Of counsel: Vincent J. Colatriano David H. Thompson Peter A. Patterson Brian W. Barnes COOPER & KIRK, PLLC 1523 New Hampshire Avenue, N.W. Washington, D.C. 20036 [phone] [phone] (fax) Respectfully submitted, s/ Charles J. Cooper Charles J. Cooper Counsel of Record COOPER & KIRK, PLLC 1523 New Hampshire Avenue, N.W. Washington, D.C. 20036 [phone] [phone] (fax) [e-mail]