Georgia Power Co. v. Sanders

• Decision Date: 27 May 1980
• Docket Number: 77-1776 and 77-1777,Nos. 77-1775,s. 77-1775
• Citation: 617 F.2d 1112
• Parties: GEORGIA POWER COMPANY, Plaintiff-Appellee, v. 138.30 Acres of Land, situate, lying and being in Land Lot 327 of the 3rd Land District 389th G. M. District, Putnam County, Georgia, Defendant, Mildred B. SANDERS, a/k/a Mrs. Karl D. Sanders, Jr., et al., Defendants-Appellants. GEORGIA POWER COMPANY, Plaintiff-Appellee, v. 377.61 Acres of Land, situate, lying and being in Land Lots 367, 368, 369, 377, 378, 379, 380, 381, 382 and 383 of the Third Land District, 389th G. M. District, Putnam County Georgia, Defendant, Mrs. Nellie W. LARMAN, et al., Defendants-Appellants. GEORGIA POWER COMPANY, Plaintiff-Appellee, v. 532.82 Acres of Land, situate, lying and being in the 145th G. M. District, Greene County, Georgia, Defendant, Clifford H. DYAR, Jr., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1112

617 F.2d 1112

51 A.L.R.Fed. 903

GEORGIA POWER COMPANY, Plaintiff-Appellee,

v.

138.30 Acres of Land, situate, lying and being in Land Lot

327 of the 3rd Land District 389th G. M. District,

Putnam County, Georgia, Defendant,

Mildred B. SANDERS, a/k/a Mrs. Karl D. Sanders, Jr., et al.,

Defendants-Appellants.

GEORGIA POWER COMPANY, Plaintiff-Appellee,

v.

377.61 Acres of Land, situate, lying and being in Land Lots

367, 368, 369, 377, 378, 379, 380, 381, 382 and

383 of the Third Land District, 389th G.

M. District, Putnam County

Georgia, Defendant,

Mrs. Nellie W. LARMAN, et al., Defendants-Appellants.

GEORGIA POWER COMPANY, Plaintiff-Appellee,

v.

532.82 Acres of Land, situate, lying and being in the 145th

G. M. District, Greene County, Georgia, Defendant,

Clifford H. DYAR, Jr., et al., Defendants-Appellants.

Nos. 77-1775, 77-1776 and 77-1777.

United States Court of Appeals Fifth Circuit.

May 27, 1980.

George D. Lawrence, Jr., Eatonton, Ga., for defendants-appellants in all cases.

Charles H. Brown, Statesboro, Ga., for defendants-appellants in 77-1775.

Wallace Miller, Jr., W. Warren Plowden, Jr., Macon, Ga., for Georgia Power Co. in all cases.

Kenneth L. Millwood, Bruce H. Beerman, Atlanta, Ga., for defendants-appellants in 77-1776.

Appeals from the United States District Court for the Middle District of Georgia.

Before COLEMAN, Chief Judge, BROWN, AINSWORTH, RONEY, GEE, TJOFLAT, HILL, FAY, RUBIN, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., GARZA, HENDERSON, REAVLEY, POLITZ, HATCHETT, RANDALL, TATE, SAM D. JOHNSON, and THOMAS A. CLARK, Circuit Judges. ^*

RANDALL, Circuit Judge:

These condemnation cases present the issue whether compensation should be determined under federal law or under the law of the state where the condemned property is located when a licensee of the Federal Energy Regulatory Commission (the Commission) ¹ exercises the power of eminent domain in federal court as authorized by Section 21 of the Federal Power Act, 16 U.S.C. § 814 (1976). If federal law is chosen, then the next issue for determination is whether the court should apply uniform national law or should apply, as federal law, the law of the state where the property is located. The panel held that federal law governed and the measure of compensation was to be determined under uniform national law. Georgia Power Co. v. 138.30 Acres of Land, 596 F.2d 644, 649 (5th Cir. 1979) (hereinafter referred to as Larman, the name of one of the landowners in the proceeding). In so doing, the panel was bound by our prior decision in Georgia Power Co. v. 54.20 Acres of Land, 563 F.2d 1178 (5th Cir. 1977), cert. denied, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979) (hereinafter referred to as Dodson, the name of one of the landowners in that proceeding). Because of the importance of the question at issue, we decided to have Larman reheard en banc (thereby vacating the panel opinion, 5th Cir. R. 17), to reconsider our holding in Dodson. Georgia Power Co. v. 138.30 Acres of Land, 602 F.2d 1243 (5th Cir. 1979). It is the opinion of a majority of the en banc court that Dodson was, in part, wrongly decided and, in that respect, should be overruled. We agree with Dodson that the source of law is federal but we now hold, contrary to Dodson, that the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for determining the measure of compensation when a licensee of the Commission exercises the power of eminent domain pursuant to Section 21 of the Federal Power Act.

Parts I and II of the panel opinion in Larman, denominated "Right to a Jury Trial" and "Discretion to Appoint a Commission," (up to Part III, "Applicability of Federal Law," 596 F.2d at 648), are unaffected by our present decision on the choice of law issue and are, accordingly, approved and adopted by the court en banc. In Part IV of Larman, under the heading "Alleged Errors in the Commission's Final Report," the panel first set forth general principles relevant to commissions' reports, then discussed the commission's findings with respect to each of the properties involved and, finally, remanded for further fact findings and reevaluation of the compensation awarded each of the landowners. The portion of that section outlining general principles relevant to commissions' reports, (up to the subheading "Sanders Taking," 596 F.2d at 649), is unaffected by our present decision and is, therefore, approved and adopted by the court en banc. The balance of the discussion in that section, however, insofar as it is dependent upon the commission's application of federal common law to the determination of the amount of compensation, is rendered inapplicable by our holding that Georgia law supplies the appropriate federal standard and is superceded to that extent. Part III of the panel opinion, denominated "Applicability of Federal Law," is superceded in its entirety by this opinion.

In both Dodson and Larman, Georgia Power Company, a privately owned Georgia utility, instituted condemnation proceedings against Georgia landowners in federal court to acquire land for the Lake Wallace hydroelectric power generating project in Georgia. These proceedings were instituted pursuant to Section 21 of the Federal Power Act, authorizing persons or entities licensed by the Commission under Section 4(e) of the Federal Power Act, 16 U.S.C. § 797(e), ² to exercise the right of eminent domain under specified circumstances. Section 21 provides as follows:

When any licensee cannot acquire by contract or pledges an unimproved dam site or the right to use or damage the lands or property of others necessary to the construction, maintenance, or operation of any dam, reservoir, diversion structure, or the works appurtenant or accessory thereto, in conjunction with an improvement which in the judgment of the commission is desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such land or other property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.

The district judge appointed a three-member commission to determine the amount of compensation due the landowners. See Fed.R.Civ.P. 71A(h). The judge's instructions to the commission embodied federal rules for determining just compensation. The landowners' requests to substitute for those instructions ones in accord with Georgia rules were denied. If Georgia law were applied, the amount awarded the landowners would be greater than it would be under federal law. ³ Under Georgia law, the value of any benefits accruing by virtue of the project to any part of the landowner's land which is not taken may be offset only against the recovery for damages to that remainder, if any, and not against the recovery for the value of the land actually taken. See Ga.Code Ann. § 36-504 (1970). Under federal law, the value of any benefits accruing by virtue of the project to the portion of the tract not taken may be offset against the recovery for the value of the land actually taken. Bauman v. Ross, 167 U.S. 548, 17 S.Ct. 966, 42 L.Ed. 270 (1897); United States v. Trout, 386 F.2d 216 (5th Cir. 1967). Furthermore, under Georgia law, just compensation might include any increase in the value of the property caused by general knowledge of the project. See Hard v. Housing Authority of Atlanta, 219 Ga. 74, 132 S.E.2d 25 (1963). Under federal law, just compensation does not include any such increase in the value of the property. United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943). ⁴

We think it clear that the source of the eminent domain power at issue here is federal. Since Section 21 licensees derive their authority to exercise the power of eminent domain from the Federal Power Act, which was passed in the exercise of a " 'constitutional function or power,' " see United States v. Kimbell Foods, Inc., 440 U.S. 715, 726, 99 S.Ct. 1448, 1457, 59 L.Ed.2d 711 (1979) (quoting Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S.Ct. 573, 574, 87 L.Ed. 838 (1943)), their rights, as well, should derive from a federal source. 440 U.S. at 726, 99 S.Ct. at 1457. We think that, in this context, federal interests are "sufficiently implicated to warrant the protection of federal law." Kimbell Foods, 440 U.S. at 727, 99 S.Ct. at 1457-1458. Since the statute does not specify the appropriate rule of decision, the task of interstitial federal lawmaking falls upon the federal judiciary in this case " 'to declare the governing law in an area comprising issues substantially related to an established program of government operation.' " United States v. Little Lake Misere Land Co., 412 U.S. 580, 593, 93 S.Ct. 2389, 2397, 37 L.Ed.2d 187 (1973) (quoting Mishkin, The Variousness of "Federal Law": Competence and Discretion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797, 800 (1957)). Thus, the question which remains is whether the court should choose federal common law or state law as the applicable federal rule. See, e. g., Kimbell Foods, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711; Clearfield Trust, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838.

The answer to this question is largely dependent upon whether one begins with the position that state law should be adopted unless it is shown that legislative intent or other sufficient...