RESPONDENT: 564.54 Acres of Monroe and Pike County Land
LOCATION: Adult Store
DOCKET NO.: 78-488
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Third Circuit
CITATION: 441 US 506 (1979)
ARGUED: Mar 27, 1979
DECIDED: May 14, 1979
H. Ober Hess - for respondents
Stephen R. Barnett - for petitioner
Facts of the case
Media for United States v. 564.54 Acres of Monroe and Pike County Land
Audio Transcription for Oral Argument - March 27, 1979 in United States v. 564.54 Acres of Monroe and Pike County Land
Warren E. Burger:
Case is submitted.
We'll hear arguments next in United States against Land in Monroe and Pike County.
Mr. Barnett, I think you may proceed whenever you're ready.
Stephen R. Barnett:
Thank you, Mr. Chief Justice, and may it please the Court.
The question in this case is whether when the government condemns facilities that are operated on a not-for-profit basis by a church or another private entity, the measure of just compensation that the Fifth Amendment requires is the fair market value of facilities taken or whether, on the other hand, it is the cost of constructing substitute facilities.
The respondent, the Southeastern Pennsylvania Synod of the Lutheran Church in America, owned three separate parcels of land, totaling about 300 acres on the Delaware River in northeastern Pennsylvania which had used those three summer camps for the young people.
Harry A. Blackmun:
Attachment to the original 564?
Stephen R. Barnett:
The 564 acres, Mr. Justice Blackmun, included a number of tracks besides the three owned by the Synod.
At the beginning of the appendix, you'll find the declarations of taking applicable to all the tracks, and the Synod tracks are three of them.
In June of 1970, the United States condemned these three parcels for a river project.
Six years before, in 1964, anticipating that the land would be condemned, respondent had purchased some 3,800 acres of land in the nearby Pocono as a replacement site for its camps.
When the land on the river was taken, the Government offered to pay $485,000.00 as the fair market value of the camps taken.
Respondent, however, rejected the offer, claiming that the cost of developing equivalent camps at the new site would be something in excess of $5 million.
Respondent accordingly asked the Court to rule that the appropriate standard was the cost of constructing the new facilities, not the fair market value of the old facilities.
The District Court ruled against that contention.
The respondent took an interlocutory appeal and the Fourth Circuit ruled that the substitute facility's measure of compensation is available to private owners of non-profit community facilities in certain cases, as well as to public owners, that is governmental entities, as it had previously recognized -- been recognized to be available.
William H. Rehnquist:
Am I right, gener -- I'm thinking that this Court has even applied that doctrine to public.
Stephen R. Barnett:
That is true.
This Court has never endorsed the Substitute Facilities Doctrine even for public entities.
The Brown case, which is cited in the briefs, was a case in which Congress, after one town was flooded by a public project, Congress appropriated money to condemn another area as a substitute site and the question was the constitutional validity of that subsequent taking, whether that was a public use under the Fifth Amendment.
The Court held that it was and the Court's language talked about how it's a reasonable thing to substitute a new town for the old town, but the question was not the scope of compensation for a taking.
So, this Court has never approved the Substitute Facilities Doctrine.
In any event, the Third Circuit here, in its first opinion, said that the doctrine can be applicable to a private non-profit entity in certain circumstances.
It described the key circumstance as one in which the facilities taken are reasonably necessary to public welfare.
On remand, the trial was divided into two phases.
The issue in the first phase was whether the substitute facility's measure of compensation applied to the taking of these camps.
After a 10-day trial, the jury returned a verdict, by special interrogatory, finding that the doctrine did not apply here.
The second phase of the trial was devoted to the issue of the fair market value of the condemned camps.
Respondent sought to establish the fair market value by what is called the cost approach.