Grand River Dam Authority

• Decision Date: 22 November 1948
• Docket Number: GRAND-HYDRO,No. 6,6
• Citation: 335 U.S. 359,69 S.Ct. 114,93 L.Ed. 64
• Parties: GRAND RIVER DAM AUTHORITY v
• Court: U.S. Supreme Court

335 U.S. 359

69 S.Ct. 114

93 L.Ed. 64

GRAND RIVER DAM AUTHORITY

v GRAND-HYDRO.

No. 6.

Argued Oct. 12, 13, 1948.

Decided Nov. 22, 1948.

Rehearing Denied Dec. 20, 1948.

See 335 U.S. 900, 69 S.Ct. 298.

Mr. Howard E. Wahrenbrock, of Washington, D.C., for The United States as amicus curiae.

Mr. Robert L. Davidson, of Tulsa, Okl., for petitioner.

[Argument of Counsel from page 360 intentionally omitted] Messrs. Robert Dade Hudson, of Tulsa, Okl., and S. Frank Fowler, of Knoxville, Tenn., for respondent.

Mr. Justice BURTON delivered the opinion of the Court.

The federal question in this action for condemnation under Oklahoma law is whether the Federal Power Act¹ had so far affected the use or value of certain land for power site purposes as to render inadmissible expert testimony which gave recognition to that land's availability for a power site. We hold that it had not. We thus see no adequate reason to reverse the Supreme Court of Oklahoma which had held that such testimony was properly admitted in a state condemnation proceeding.

This action was brought by the petitioner, Grand River Dam Authority, in the District Court for Mayes County, Oklahoma, to condemn and to award damages for the taking of 1,462.48 acres of that land from the respondent, Grand-Hydro. Four hundred and seventeen of these acres have been used by the petitioner as a site for its hydroelectric project, near Pensacola, on the Grand River in Oklahoma. The Commissioners, appointed by the court to assess the damages sustained by the appropriation of these lands, awarded the respondent $281,802.74. Each party, however, objected and demanded a jury trial. That trial resulted in a verdict and judgment for $136,250. On appeal, the Supreme Court of Oklahoma reversed the judgment and remanded the case for a new trial in conformity with its opinion. That opinion is important in determining the issues before us. 192 Okl. 693, 139 P.2d 798. Six judges concurred in the opinion, one in the result and two dissented.

In 1945, the new trial resulted in a verdict and judgment for $800,000, together with interest on $518,197.26 from January 19, 1940, which was the date on which the amount fixed by the Com issioners had been paid into court. The Supreme Court of Oklahoma affirmed this judgment, seven to two. 201 P.2d 225. We denied certiorari, 332 U.S. 841, 68 S.Ct. 263, but, on rehearing, granted it, 333 U.S. 852, 68 S.Ct. 729, because of the possible significance of the case in relation to the Federal Power Act. The United States filed a brief as amicus curice, at each stage of the proceedings, supporting the contentions of the petitioner.²

The petitioner is a conservation and reclamation district, created in 1935 by the Oklahoma Legislature. It is a corporate agency of the State with power to develop and sell water power and electric energy in the Grand River Basin.³ The respondent is a private corporation, organized in 1929 under the laws of Oklahoma. It has the usual powers of a public utility, including the power to develop and use the waters of the Grand River, construct dams, generate and distribute electricity and acquire by right of eminent domain, purchase or otherwise, real and personal property for its purposes. The Grand River is treated as a nonnavigable stream, tributary to the Arkansas River which is a navigable stream.

Long prior to this litigation the respondent acquired the acreage in question for use in its proposed development of hydroelectric power on the Grand River. In 1931, it obtained from the State Conservation Commission a state license and permit to appropriate the waters of Grand River for beneficial use, to construct a dam on that river, and there to develop hydroelectric power for sale.⁴ The respondent, however, never has filed with the Federal Power Commission any declaration of intention or application for a federal license relative to this project.

In February, 1934, the City of Tulsa filed an action in an Oklahoma court against the respondent and others seeking an adjudication of certain water rights in Spavinaw Creek and in the Grand River near Pensacola. During the pendency of that action the Oklahoma Legislature created the Grand River Dam Authority, petitioner herein, and granted to it exclusive authority to develop the Grand River in the manner described in the Act. In effect, the petitioner thus acquired a state priority over the respondent, although the respondent held title to certain water rights and to the land needed for the project. The petitioner thereupon was made a party to the Tulsa action. However, before filing its answer and cross-petition, the petitioner entered into an agreement for the voluntary assignment to it by the respondent of the latter's rights to appropriate certain river waters for the project.⁵ It likewise secured from the respondent the latter's title to 45 acres essential to the dam site. In due course, judgment was rendered aw rding to the petitioner a prior right to control and appropriate the required water from the river and stating that the respondent had no right therein. The petitioner secured from the respondent a voluntary conveyance of title to ten additional acres and also of certain rights of entry upon 362 acres. These made up the 417 acres referred to as the dam site. As later found by the Supreme Court of Oklahoma—

'The conveyances of the land were made on condition that the consideration would later be determined by agreement or condemnation and the assignment was on the condition provided for therein:

"It is understood, however, that this assignment and conveyance shall not, in any way, affect or impair the title of Grand-Hydro to any lands owned by it, or any interests therein, and if any lands or interest therein owned by the said Grand-Hydro, are acquired by the Grand River Dam Authority by purchase or condemnation, the value thereof or damage thereto shall be ascertained and determined as though this assignment and conveyance had never been made." Grand River Dam Authority v. Grand-Hydro, 201 P.2d 227.

The parties being unable to agree upon the price for the land, the petitioner filed the present action in February, 1939. The petition made no reference to the Federal Power Act or to rights claimed thereunder. The petitioner, on the other hand, based its claim upon the right to acquire the land by condemnation 'in the manner provided by general law with respect to condemnation' which had been granted to the petitioner by the Grand River Dam Authority Act.⁶ The project was to be located on the upper reaches of the Grand (or Neosho) River, near Pensacola, above the river's confluence with Spavinaw Creek. In the meantime, on December 15, 1937, the petitioner had filed with the Federal Power Commission a declaration of intention under § 23(b) of the Federal Power Act. ⁷ In that declaration the petitioner stated that—

'The construction of said project will probably not affect present or prospective navigation for the reason that the Grand River is not a navigable stream in law or in fact, and the navigability of the Arkansas and Mississippi rivers will not be appreciably affected thereby. The construction of said project will not affect any public lands or reservations of the United States, or the interests of interstate or foreign commerce.'

If the Commission had agreed with the foregoing statement, § 23(b) would have permitted construction of the dam merely upon petitioner's compliance with state laws. However, on February 11, 1938, the Commission found that—

'(c) The co struction and operation of said project as proposed by the declarant will affect navigable stages of the Arkansas River, a navigable water of the United States, to which said Grand River is tributary;

'The Commission therefore finds that:

'The construction and operation of said project in the manner proposed by the declarant will affect the interests of interstate commerce.'

Thereupon, the petitioner sought and, on July 26, 1939, secured from the Commission the federal license required for the project as one affecting navigable waters and reservations of the United States. The petitioner however, has not, by amendment or otherwise, based its right of condemnation in the present case upon the Federal Power Act or upon any federal license issued thereunder.

This proceeding was brought in an Oklahoma court, by a government agency of Oklahoma, to exercise a right of condemnation granted by Oklahoma. It does not seek to condemn or to award damages for water rights. It seeks only to condemn certain land and to assess damages due to the taking of that land. At the original trial, the court excluded from the jury evidence of the value of the land insofar as such evidence was based upon the availability of that land for a dam site. On appeal, the Supreme Court of Oklahoma held that such exclusion constituted reversible error and it remanded the case for retrial in conformity with its opinion. That opinion stated the law of Oklahoma as follows:

'The measure of compensation in such case is the fair market or cash value of the land condemned. City of Tulsa v. Creekmore, 167 Okl. 298, 29 P.2d 101, 102. In that case the court, speaking of the elements to be considered in determining market value, said:

"It is the market value that is the test and not its value for some particular use to which it might be subjected, although its adaptability to this particular use may be considered as one of the factors in ascertaining the market value when they enter into and affect the cash market value of the property. Revell v. City of Muskogee, 36 Okl. 529, 121 P. 833; Public Service Co. v. Leatherbee, 311 Ill. 505, 143 N.E. 97.'

'And in the syllabus by the court the fair cash or market value of land taken in eminent domain is defined as follows:

"By fair market value is meant the amount of money which a purchaser willing but not obliged to buy the property would pay to an owner willing but not obliged...