(CN) - The government's decision to designate the waters around a small Pacific island as a wildlife refuge did not violate the constitutional rights of commercial fishing companies, the Federal Circuit ruled.
The Palmyra Atoll, at less than five square miles, is an isolated island about 1,100 miles south of Hawaii and 1,400 north of Samoa, with not much in between.
The United States used the tiny reef as a naval base during World War II. After the war, the Fullard-Leo family won a court battle with the government over ownership rights to the island.
The family later granted exclusive commercial fishing rights to Palmyra Development Co., which entered a licensing agreement with Palmyra Pacific Seafoods.
Around the same time, The Nature Conservancy sought to establish a nature conservancy and eco-tourism camp with the help of the U.S. government. It bought much of the emerged land from the Fullard-Leo family in 2000. A year later, the Secretary of the Interior designated the Palmyra's tidal lands, submerged lands and surrounding waters out to 12 nautical miles as a wildlife refuge, banning commercial fishing in that area.
The commercial fishing companies challenged the order in Federal Claims Court, arguing that the government had "directly confiscated, taken, and rendered wholly and completely worthless" their fishing licenses.
The district court dismissed the action for failure to state a claim. It noted that the plaintiffs' licenses never included the right to use the submerged land, just the dry part of the island.
The Washington, D.C.-based federal appeals court backed the decision, stressing that a takings claim must assert a protectable property interest.
"In attempting to define the property right that was purportedly taken by the regulation at issue in this case," Judge Bryson wrote, "the plaintiffs have provided little beyond the general assertion that the Interior Department interfered with their 'exclusive right to use Palmyra as a commercial fishing base.'
"The problem with that argument is that the Interior Department's regulation does not prohibit commercial fishing operations on Palmyra - it merely prohibits commercial fishing activity in the surrounding waters," Bryson added.
"The fact that the government's regulation of activities in the waters surrounding Palmyra may have adversely affected the value of their contract rights to engage in activities on shore is not sufficient to constitute a compensable taking."
The court affirmed dismissal of the case.
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