Great facts don’t always win a taking case. To win a taking case against the United States, you must make sure your legal theory accounts for and can defeat any jurisdictional and procedural defenses you will inevitably encounter. Otherwise, the merits of your taking case may never see the light of day.

One plaintiff recently learned too late that its taking claim arising from the denial of a coal mining permit, a claim valued at $1.3 billion, would not be heard on the merits because of a jurisdictional defense.

The taking claim involved a coal lease in the Otter Creek coal property in Powder River County, Montana. After being denied permission to mine the coal, Great Northern Properties, L.P., challenged the denial by filing a taking claim against the United States in the U.S. Court of Federal Claims.

The jurisdictional hurdle Great Northern faced—in a motion to dismiss—was that it appeared that the taking was the result of state—not federal—action. Under the federal Surface Mining and Control and Reclamation Act states can assume “exclusive jurisdiction” over regulation of surface coal mining and reclamation activities—so long as the state law meets minimum federal standards —as the Montana law did. The federal government therefore deemed Montana a “primacy” state and turned over permitting authority for coal mining to Montana.

Great Northern argued that the United States was still responsible for the state’s denial of its coal permit application because the federal government’s influence over the state’s actions was “coercive” and because the state acted as the federal government’s agent.

The Court of Federal Claims and a three-judge panel (in a decision authored by Judge Dyke) rejected these arguments. The Federal Circuit noted that the facts showed that the federal government played no role in Montana’s permitting decisions. And because the federal government maintained no control over the state’s coal permitting program, the facts also did not support an agency theory.

The Federal Circuit affirmed the Court of Federal Claims’ dismissal of Great Northern’s taking claim for lack of jurisdiction. Because the Court of Federal Claims has jurisdiction to hear taking claims only against the United States—the trial court lacked subject matter jurisdiction over the taking claim.

Were the facts of this taking case great? We’ll never know because the taking claim foundered on a jurisdictional defense.

Read full Federal Circuit decision here.