Hogan v. U.S.

Decision Date10 May 2005
Docket NumberNo. 03-4637.,03-4637.
Citation407 F.3d 778
PartiesAllen HOGAN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

David R. Kostreva II, Curry, Roby, Schoenling & Mulvery, Columbus, Ohio, for Appellant. Steven M. Talson, United States Department of Justice, Washington, D.C., for Appellee.

ON BRIEF:

Robert S. Roby, Curry, Roby, Schoenling & Mulvery, Columbus, Ohio, James D. McNamara, Columbus, Ohio, for Appellant.

Before: SUHRHEINRICH and GILMAN, Circuit Judges; ACKERMAN, District Judge.*

OPINION

GILMAN, Circuit Judge.

Allen Hogan, the owner of a 27-acre tract of land in Mansfield, Ohio, brought suit under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 1346(b), to recover for damages he allegedly suffered when his property was contaminated by radioactive scrap metal that he purchased from the United States Air Force. The government conceded liability, but denied the existence of any damages. Following a three-day bench trial on the sole issue of damages, the district court entered judgment in favor of the government.

Hogan argues on appeal that the district court erred in (1) finding that there had been no diminution in the value of his property as a result of the radioactive contamination, and (2) failing to separately value the sandstone deposits located on the land in determining the overall loss of the property's value. For the reasons set forth below, we AFFIRM the judgment of the district court.

I. BACKGROUND
A. Factual background

Hogan owns a 27-acre, irregularly shaped tract of land situated between U.S. Route 30 and Ohio State Route 545 in Mansfield, Ohio. The property is zoned for light industrial use. Nearby is a major electrical substation, and Hogan's property is crossed at various points by high-voltage power lines and towers. The majority of the land is quite rugged, with dramatic changes in elevation. A unique variant of sandstone is located on the rugged portion of the property. The tract was in fact used as a quarry nearly 100 years ago, with the effects of this previous mining activity still visible on the land. One corner of the property is relatively flat, however, and for years Hogan used this land as the site of his automobile salvage yard and scrap metal business.

This lawsuit arises out of Hogan's 1994 purchase of approximately 2,900 pounds of scrap metal from the Air Force at an auction. He brought the metal to his property in Mansfield, where he added it to crushed automobiles to increase their weight before selling them to automobile recyclers. In November of 1996, a recycler who had bought several automobiles from Hogan called to inform him that a routine test had revealed that the crushed vehicles purchased from Hogan's yard were emitting radiation. Hogan then contacted the Air Force, which inspected the Mansfield property the following month. The Air Force determined that it had inadvertently sold Hogan scrap metal containing a magnesium-thorium alloy (mag-thor) used in the production of missile nose cones.

Thorium is a radioactive element that exists naturally in the environment. It is found in the soil and in a number of foods, including vegetables and dairy products, and it is used in many consumer goods, such as light bulbs and microwave ovens. Because thorium emits radiation very slowly and in very small amounts, it is not an external radiation hazard. A person can receive a harmful dose of thorium radiation from the mag-thor alloy only by inhaling it. The alloy may be handled without gloves and can be in contact with the skin for prolonged periods of time without posing a health risk.

In June of 1997, the Air Force hired a private contractor to remove the mag-thor alloy from Hogan's property. This extensive cleanup effort took three-and-a-half weeks, cost the government over $80,000, and was overseen by officials from both the United States Nuclear Regulatory Commission (NRC) and the Ohio Department of Health (ODH). The metal that Hogan purchased from the Air Force had been crushed prior to sale into thousands of pieces, some of which were quite small. Hogan had piled the metal in several different locations on his property. Because mag-thor is only weakly radioactive, as little as one inch of soil can prevent small pieces from being detected. Complete cleanup of the property was therefore impossible, and the Air Force does not dispute that some mag-thor remains on the property. Accordingly, the Air Force provided Hogan with a special barrel to collect and store additional mag-thor pieces discovered after the cleanup.

Hogan has since recovered about 50 pounds of mag-thor, including one large piece that he found under a pile of other scrap metal. Even though the land could not be completely restored, the NRC and the ODH issued reports stating that the residual mag-thor on Hogan's property does not pose a threat to human health.

B. Procedural background

In January of 1999, Hogan filed an administrative claim with the Air Force, seeking $115,000 for property damage and $1.2 million for personal injuries. He filed a second claim in April of 1999, seeking an additional $10 million in nuisance damages. The Air Force denied the claims in June of 1999 on the basis that Hogan had failed to file within the applicable two-year statute of limitations.

Hogan then brought suit against the Air Force in the United States District Court for the Southern District of Ohio, seeking recovery under the FTCA for personal injuries and property damage. The district court dismissed Hogan's claims, finding that the two-year statute of limitations had expired. This court affirmed the district court's dismissal of Hogan's personal-injury claim, but held that equitable tolling applied to his property-damage claim. Hogan v. United States, No. 01-3073, 2002 WL 1774227 (6th Cir. July 31, 2002) (unpublished).

On remand, the government conceded liability for the contamination of Hogan's property, but denied that any permanent damage had occurred. A three-day bench trial was held on the sole issue of damages. Both parties presented expert testimony regarding the effect of the mag-thor on the value of Hogan's property. The district court entered judgment in favor the United States after concluding that the property had suffered no diminution in value as a result of the contamination. This timely appeal followed.

II. ANALYSIS
A. Standard of review

Whether Hogan suffered a diminution in the value of his property is a factual finding of the district court that may be set aside only if clearly erroneous. See Fed R. Civ. P. 52(a); Hoffman v. Prof'l Med Team, 394 F.3d 414, 417 (6th Cir.2005) (applying the clearly erroneous standard in reviewing the district court's factual findings). And where, as here, "findings are based on determinations regarding the credibility of witnesses, . . . even greater deference to the trial court's findings" is warranted. Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). Whether Hogan's sandstone deposits may be valued separately from his land, however, is a question of law that we review de novo. See Palmer v. United States, 146 F.3d 361, 366 (6th Cir.1998) (reviewing de novo a claim that the district court erred in calculating damages under the FTCA).

B. The district court's finding that there had been no diminution in the value of Hogan's property was not clearly erroneous

The main thrust of Hogan's argument on appeal is that the presence of the residual mag-thor on his property has permanently contaminated the land and rendered it essentially unmarketable. He does not contend, however, that the district court employed the wrong test for determining the value of the property under Ohio law. See Reeser v. Weaver Bros., Inc., 78 Ohio App.3d 681, 605 N.E.2d 1271, 1274 (1992) (stating the Ohio "rule that if the land has sustained a permanent or irreparable injury, damages are limited to the difference in the market value of the property, including improvements, before and after the injury") (citing Ohio Collieries Co. v. Cocke, 107 Ohio St. 238, 140 N.E. 356, 359 (1923)). Rather, Hogan insists that the district court erred in determining that the value of his property has not been diminished by the mag-thor contamination.

The district court credited the government's evidence, however, and found that the residual mag-thor on the Hogan property presents no threat to human health. This evidence included letters from the NRC and the ODH, which conclude that the contamination has been remediated. A government radiation expert also testified that the thorium radiation on the property is no different than normal background levels, and that the land could be used for residential or commercial uses without governmental restriction. Based on this evidence, the district court found that "[a]fter the clean-up of Hogan's property, thorium could be detected only at normal background levels of 1 pico-curie per gram," and that the "NRC standard for clean-up is 10 pico-curie per gram, or ten times the amount which could be detected by instruments on the Hogan property following the clean-up." Because Hogan presented no evidence that the remaining mag-thor was harmful or present in quantities any greater than that admitted by the government, the district court's finding that the remaining mag-thor on the property is "residual" and "not a threat to human health" is not clearly erroneous.

Hogan also alleges that the district court erred in relying on the testimony of the government's appraiser, who found that the mag-thor radiation had not caused any diminution in the value of Hogan's property. According to Hogan, "common sense and every day experience" suggest that the remaining mag-thor "certainly would have some affect [sic] upon the purchase price." Although Hogan's position has a certain intuitive appeal, the evidence...

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