A recent case on conservation easements from the Court of Federal Claims has got me thinking about a topic I have been mulling over for a while: how should we interpret conservation easements? Do we look at them like contracts? Like property interests? Like environmental protection instruments? And what does it matter – how do different characterization of conservation easements change attitudes or outcomes? Only a few have chimed in on this debate.
In Telzrow v. US, the plaintiffs brought a breach of contract action against the USDA asserting it did not uphold the end of its conservation easement bargain. The Telzrows participated in the USDA’s Wetlands Reserve Program. In 1997, the Telzrows conveyed a conservation easement to the USDA in exchange for $289,750. Note, this is a purchased conservation easement and there is no need for it to comply with requirements of the Internal Revenue. (In fact, it need not comply with state conservation easement law either.)
- Before I even get into the details of the case, let’s try to figure out what law we look at? Do we look to state law of property? Generally, when considering property law, the rules of the state govern. However, this may not be true where the federal government is the holder of the property right (might the Property Clause of the Constitution come into play for federally held partial property rights?) or where the conservation easement arose as part of a federal scheme (see cases from North Dakota where feds were able to enforce conservation easements that did not comply with the state conservation easement enabling act because the CE was part of a federal scheme to protect habitat). If we instead look at the case as one involving contract law, then courts have applied federal law regarding government contracts (see Keydata case holding that a lease was a contract and therefore governed by federal law instead of Massachusetts property law).