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ATTORNEY FOR APPELLANTS Steven K. Huffer Indianapolis, Indiana ATTORNEYS FOR AMICUS CURIAE PACIFIC LEGAL FOUNDATION F. Bradford Johnson Indianapolis, Indiana Scott M. Dutcher Sacramento, California

ATTORNEYS FOR APPELLEE BAA INDIANAPOLIS, LLC Nelson Nettles Richard Norris Indianapolis, Indiana ATTORNEYS FOR APPELLEE INDIANAPOLIS AIRPORT AUTHORITY Edward W. Harris, III Scott R. Alexander Michael D. Chambers Indianapolis, Indiana

In the

Indiana Supreme Court
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No. 32S05-0602-CV-33 ANDREW BIDDLE, JEANETTE BIDDLE, TODD FAKES, ROSALYN FAKES, TAMMY GARDNER, WILLIAM GARDNER, BRENDA JAY, JEFFREY JAY, KHOUSAR KHEIRI, ARIF KHEIRI, BRYAN MEYER, JUDITH MEYER, RAYMOND SHANNON, SHERRY SHANNON, CATHY SMILEY, AND ROBERT SMILEY, Appellants (Plaintiffs below), v. BAA INDIANAPOLIS, LLC AND INDIANAPOLIS AIRPORT AUTHORITY, Appellees (Defendants below). _________________________________ Appeal from the Hendricks Superior Court, No. 32D01-0202-PL-15 The Honorable Matthew G. Hanson, Special Judge _________________________________ On Petition to Transfer from the Indiana Court of Appeals, No. 32A05-0409-CV-505 _________________________________ January 23, 2007 Shepard, Chief Justice.

Homeowners near Indianapolis International Airport contend that noise from airplanes passing over or near their property amounts to a taking within the meaning of the Fifth Amendment. The homeowners also say the Airport should be compelled to offer them financial settlements similar to those offered to earlier litigants. judgment for the Airport, and we affirm. The trial court granted summary

Facts and Procedural History The Appellants ("Homeowners") 1 live in Hawthorne Ridge, a subdivision within three miles of Indianapolis International Airport. Indianapolis Airport Authority ("IAA"), a municipal corporation created by the City of Indianapolis, owns the Airport. BAA Indianapolis, LLC ("BAA") operates the Airport under a contract with IAA. The Airport's Runway 5L-23R opened for aircraft operations in January 1996. 2 Aircraft departing from Runway 23R and landing on Runway 5L pass over or near Hawthorne Ridge, southwest of the Airport. Both large passenger jets and cargo aircraft, among others, use the runway. Landing aircraft fly about 1,300 to 1,500 feet above ground level as they pass

Hawthorne Ridge. Departing aircraft fly 2,000 to 4,800 feet above the ground as they pass Hawthorne Ridge.

Obviously, these flights subject Hawthorne Ridge to aircraft noise. Many Homeowners claim the noise disturbs the use and enjoyment of their property by disrupting activities such as sleeping, talking, watching television or listening to the radio, hosting outdoor parties, reading, and opening windows. Some claim their property value has decreased between fifteen and thirty-three percent.

The original plaintiffs were eight couples. By the time the Homeowners filed their Petition for Transfer, only the Fakes, Jays, Kheiris, and Shannons remained. 2 Runways at airports are named for their magnetic headings. Each runway also has a dual name representing the two possible approach directions. For example, a runway named 23 has a magnetic heading of 230 degrees. The opposite direction is 50 degrees, corresponding to a name of 5. (Appellee's App. at 96-97.)

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Addressing the impact of the Airport's operations on neighboring communities, IAA has elected to participate in three federal programs: the Sales Assistance Program, Sound Insulation/Purchase Assurance Program, and Guaranteed Purchase Program. 3 These programs cover nine residential developments. For example, sixty-one Hawthorne Ridge households have participated in the Sales Assistance Program. Under this scheme, IAA pays qualifying

homeowners ten percent of the selling price of their home when it is sold to a third party. In return, homeowners agree to include a "Noise Disclosure Statement" in the deed of conveyance.

Homeowners allege that during public meetings in 1997 and 1998, representatives of IAA and BAA made statements about the Airport's policy for "dealing with the damage caused by excessive noise through financial settlement or otherwise." (Appellants' App. at 205.) These representatives indicated that the Airport would "treat neighbors alike" and would not "break up a neighborhood." (Id.) The representatives also made statements to the effect "IAA has a policy of not splitting neighborhoods" for the purposes of IAA's land use programs. 4 (Id. at 206.) None of the present Homeowners were present at these meetings.

In 1999, some forty residents of Hawthorne Ridge, not including these Homeowners, filed suit against IAA and BAA ("Backs lawsuit"). The parties settled on terms that included a $16,000 payment to each plaintiff in exchange for an "avigation" easement in favor of the Airport. The settlement also provided if the plaintiffs could not sell their homes for what the market price would be without airport influence, IAA would make up the difference or purchase the home.

See 14 C.F.R. pt. 150 (2007). These regulations prescribe methods and procedures for planning and implementing airport noise compatibility programs. 4 The Hendricks County Flyer published an article about a July 1997 public meeting in which IAA or BAA representatives apparently made such a statement. In relevant part, the article states: Other information disclosed at the meeting includes: . . . . The IAA has a policy of not splitting neighborhoods. If one part of the neighborhood falls in the 65 DNL the rest of the neighborhood is offered purchase assurance as well. Sycamore Estates is an example. Only four streets fall in the 65 DNL, but because of this policy, the whole neighborhood will be offered purchase assurance. (Appellants' App. at 206-07.)

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Homeowners sued IAA and BAA in 2001. Homeowners asserted multiple claims, but withdrew many of them in the course of the hearing on the defendants' motions for summary judgment. The trial court granted judgment to the defendants on those that remained: inverse condemnation, nuisance, and promissory estoppel. On the inverse condemnation claim, the trial court concluded that Homeowners did not suffer a special injury and that the flights were too high to constitute a taking. Relying on standard Fifth Amendment doctrine, it found that the flights did not cause "practical destruction" of the Homeowners' properties. (Appellants' App. at 55-56.) As for the promissory estoppel claim, the court found those Homeowners not present at the public meetings where promises were allegedly made could not maintain they received a promise. 5

Homeowners left the nuisance claim behind and appealed only the inverse condemnation and promissory estoppel claims. The Court of Appeals reversed and remanded for a trial on the merits. 6 Biddle v. BAA Indianapolis, LLC, 830 N.E.2d 76 (Ind. Ct. App. 2005), vacated. We granted transfer. 7

I. Takings by Noise from Aircraft Flights

Homeowners claim they have shown that aircraft departing from and landing at the Airport effect a taking of Homeowners' properties by the noise the aircraft produce when they fly nearby. Homeowners also claim to have shown they suffer a special injury in accordance with the requirements of our prior inverse condemnation cases.

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Homeowners argued before the trial court that third parties, other than the direct promisee, may assert a promissory estoppel claim in reliance on the same promise, even if the third parties were not present when the promise was made. The trial court stated in its Conclusions of Law that it did not believe that "third parties can raise the claims in this case under promissory estoppel." (Appellants' App. at 58.) 6 The Court of Appeals affirmed dismissal of the Fakes' inverse condemnation claim, however, citing the "Noise Disclosure Statement" appearing in the Fakes' purchase agreement and deed. The language specifically gave notice of the noise from airport operations, intending to prevent the Fakes from seeking compensation from IAA. Biddle v. BAA Indianapolis, LLC, 830 N.E.2d 76, 87 (Ind. Ct. App. 2005), vacated. 7 Prior to our granting transfer, the parties stipulated to the dismissal with prejudice of the Fakes and BAA. Thus, we denied BAA's Petition for Transfer. Only appellants Jays, Kheiris, and Shannons, and appellee IAA remain.

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IAA argues that because flights within the navigable airspace do not cause a taking, Homeowners cannot succeed on their inverse condemnation claim.

A. Standard of Review

Summary judgment is appropriate when there is no genuine issue of material fact and the movant shows he is entitled to judgment as a matter of law. Ind. Trial Rule 56(C).

Whether a taking occurred can be subject to summary judgment. Taylor-Chalmers, Inc. v. Bd. of Comm'rs of LaPorte County, 474 N.E.2d 531, 536 (Ind. Ct. App. 1985) (Hoffman, J., concurring) ("Although takings cases may be extremely fact sensitive, the ultimate application of constitutional provisions to an established set of facts involves a pure question of law." (citing Indiana Supreme Court cases)). Accord Beck v. City of Evansville, 842 N.E.2d 856, 863-64 (Ind. Ct. App. 2006) (finding no taking of homeowners' property on review of trial court's grant of summary judgment to city).

And, as several other states have held, appellate review of whether a taking occurred is proper. Wild Rice River Estates, Inc. v. City of Fargo, 705 N.W.2d 850, 854 (N.D. 2005) (whether a taking occurred is question of law fully reviewable on appeal); Eberth v. Carlson, 266 Kan. 726, 731, 971 P.2d 1182, 1186 (1999) (whether there has been a compensable taking is a question of law permitting "unlimited" appellate review); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 932-33 (Tex. 1998) (citing United States v. Causby, 328 U.S. 256, 259 (1946)) ("the ultimate determination of whether the facts are sufficient to constitute a taking is a question of law," implying that de novo review is appropriate). But see Thornburg v. Port of Portland, 233 Or. 178, 192, 376 P.2d 100, 106-07 (1962) (trier of fact makes determination as to when aircraft noise becomes so burdensome as to constitute a taking).

Once a taking is found, the question of how much compensation to award is then appropriate for a trier of fact.

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B. First Principles: Origins of the Fifth Amendment

In the American colonial period, law in the colonies was that the Crown could revoke at will its grant of property. During the Revolution, there was widespread belief in the power of the common good (called "republicanism") and in the trustworthiness of legislatures. The newly independent states adopted constitutions granting nearly plenary power to legislatures. None of the first state constitutions contained provisions for just compensation; indeed, only three included clauses regulating government taking of property. 8 require that seizure occur only by act of the legislature. 9 When colonial draftsmen did

perceive the need to restrain the seizure of real property, they thought it adequate simply to

It was not until the summer of the Philadelphia constitutional convention that the idea of compensation for taking real property became a part of the national government's political agenda. The Confederation Congress, meeting in New York, placed such a provision in the Northwest Ordinance of 1787. 10 clause. 11 By this time, excesses even by the Continental military

fomented a discontent that eventually led to the adoption of the Fifth Amendment takings

See Note, The Origins and Original Significance of the Just Compensation Clause of the Fifth Amendment, 94 Yale L.J. 694, 698 n.15 (1985) (the states were Maryland, New York, and North Carolina). 9 George Mason's draft of the Virginia Declaration of Rights, for example, provided that men could not be "deprived of their property for public uses, without their own consent, or that of their representatives." Original Draft of the Virginia Declaration of Rights, 1776, reprinted in B. Schwartz, The Bill of Rights: A Documentary History 73, 242 (1971). 10 Article 2 of the Northwest Ordinance read in part: No man shall be deprived of his liberty or property, but by the judgment of his peers, or the law of the land, and should the public exigencies make it necessary, for the common preservation, to take any person's property, or to demand his particular services, full compensation shall be made for the same. Northwest Ordinance of 1787, art. 2, reprinted in 1 P. Kurland & R. Lerner, The Founder's Constitution 28 (1987). The Revolutionary War was underway but two years when prominent citizens began to complain about seizure of property. John Jay submitted a complaint to the New York legislature about "the Practice of impressing Horses, Teems, and Carriages by the military, without the Intervention of a civil Magistrate, and without any Authority from the Law of the Land." John Jay, A Freeholder, A Hint to the Legislature of the State of New York, Winter 1778, reprinted in 5 P. Kurland & R. Lerner, supra note 10, at 312. The shift in sentiment among propertied classes who wrote the Constitution and the Bill of Rights is fully described in Note, supra note 8, at 704-05.
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Thus, the Fifth Amendment to the Constitution states: "[N]or shall private property be taken for public use, without just compensation." U.S. Const. amend. V.

The amendment's principal author, James Madison, believed government should take a reverent view toward the property of its citizens by refraining from harming their property in any way. For example, in his "Speech Opposing Paper Money" before the Virginia Assembly, Madison argued that because paper money depreciates, it "affects Rights of property as much as taking away equal value in land." Its use, he added, is like the "case of land p[ai]d for down [and] to be convey[e]d in [the] future, [and] of a law permitting conveyance to be satisfied by conveying a part only

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