United States v. 50 Acres of Land

PETITIONER: United States
RESPONDENT: 50 Acres of Land
LOCATION: United States Courthouse

DOCKET NO.: 83-1170
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 469 US 24 (1984)
ARGUED: Oct 02, 1984
DECIDED: Dec 04, 1984

ADVOCATES:
H. Louis Nichols - on behalf of Respondent
Joshua I. Schwartz - on behalf of Petitioner

Facts of the case

Question

Media for United States v. 50 Acres of Land

Audio Transcription for Oral Argument - October 02, 1984 in United States v. 50 Acres of Land

Warren E. Burger:

We'll hear arguments next in United States against 50 Acres of Land.

Mr. Schwartz.

Joshua I. Schwartz:

Thank you, Mr. Chief Justice, and may it please the Court:

This case is here on writ of certiorari to the United States Court of Appeals for the Fifth Circuit.

The question presented is whether when the United States takes property belonging to a state or local government for federal use it is obliged by the just compensation clause of the Fifth Amendment to pay compensation measured by reference to the cost of a substitute facility rather than the usual standard in condemnation cases, the fair market value of the property that was taken by the United States, even though in the particular case a market exists for the kind of property that was taken and it is found that the fair market value measure is reasonably ascertainable in the particular case.

The Court of Appeals answered the question in the affirmative; the government contends that the answer should be no.

The case arises from the taking of a 50 acre site occupied by a sanitary landfill, occupied by the Respondent, the city of Duncanville, Texas.

That site was taken, along with an adjacent site which was in private ownership prior to the taking to accommodate a Corps of Engineers flood control project, the site would be flooded by the project, and therefore the United States was obliged to pay compensation for it.

The taking was carried out pursuant to the so-called quick take provisions of the Declaration of Taking Act, which was effective on October 3, 1978.

Estimated just compensation of just under $200,000 was deposited into the registry of the court, and it was later released to Respondent.

Following the taking, Respondent employed a temporary landfill site which was in private ownership for an interim period and later, approximately two years later, began to use a new site located in Ellis County, Texas, consisting of somewhat over 113 acres that it had purchased and used as a substitute site.

The usable capacity of the substitute site, according to the uncontradicted evidence, was somewhat greater than three times that of the site that the United States had acquired from the City of Duncanville.

A dispute arose in the District Court between the parties as to the proper measure of compensation for the taking.

The government contended that the usual fair market value standard should be applied.

Respondent claimed that it was entitled to recover the entire sum that it alleged it had expended and would in the future expend in improving... in acquiring and improving the substitute site in Ellis County.

The District Court was unwilling to resolve the issue at the threshold.

Instead, it determined to allow both theories to go to the jury.

Both parties were allowed to present evidence in support of their respective theories.

The jury was asked by special questions to return alternative verdicts: one, the finding of substitute facilities standard of compensation; the other, the fair market value measure of compensation.

The jury's verdicts were $723,000, a bit over $723,000 for a substitute facilities measure, and $225,000 for the fair market value measure.

The District Court then proceeded to enter judgment against the United States, but on the government's theory as to the amount of just compensation, the District Court held that in a case such as this where fair market value is ascertainable and it is found that a market exists for the property of the kind taken, that is the measure that is required to be employed under this Court's decisions; and furthermore, the District Court found that the Respondent had not ever carried its burden of presenting... had not in any event presented a prima facie case as to what a reasonable substitute facilities compensation award might be, the District Court observing that the only testimony proffered by Respondent pertained to the site they had actually acquired, a site that was three times as large as the site that was taken, and the District Court also observing that the testimony suggested that Respondent had paid in excess of fair market value for its substitute site.

The Court of Appeals reversed.

The Court of Appeals conceded that this case was, in their language, rather different from a typical substitute facilities case in that in this case fair market... there was no claim that fair market value was either unavailable or unworkable; nevertheless concluded that Respondent was entitled to have its compensation measured by reference to the cost of the substitute facility.

The Court of Appeals did attach a significant caveat, however, to that holding.

It held that Respondent was not entitled to the benefit of the advantages that accrued from purchasing a larger site, and that on remand, the case was remanded for a new trial so that on remand the jury could be instructed to make an appropriate deduction from the substitute facility cost to wash out the windfall that might otherwise result from the fact that the Respondent had purchased a more, a larger and more capacious landfill site.

The government's position, as it has been throughout this case, is that the fair market value standard, which is ordinarily preferred in this Court's cases, is the proper measure of compensation for the taking of Respondent's landfill site.

In the final analysis, our submission is that what is lacking in the Court of Appeals rationale and in Respondent's argument is any explanation of what is... what is defective about the Preferred fair market value standard of compensation.

It does not seem to be controverted that the Court's decisions establish that the fair market value standard is the preferred mechanism.

The Court's cases make two essential points in support of that proposition.

The first is that market value assists, in an economy such as ours, measures what Justice Frankfurter called the external... has in it what Justice Frankfurter called the external validity of values that make it a fair measure of public obligation to compensate the loss incurred by a property owner as a result of the taking of his property for public use.