Kirby Forest Industries, Inc v. United States

• Citation: 81 L.Ed.2d 1,467 U.S. 1,104 S.Ct. 2187
• Decision Date: 21 May 1984
• Docket Number: No. 82-1994,82-1994
• Parties: KIRBY FOREST INDUSTRIES, INC., Petitioner v. UNITED STATES
• Court: United States Supreme Court

467 U.S. 1

104 S.Ct. 2187

81 L.Ed.2d 1

KIRBY FOREST INDUSTRIES, INC., Petitioner

v UNITED STATES.

No. 82-1994.

Supreme Court of the United States

Argued Feb. 22, 1984.

Decided May 21, 1984.

Syllabus

Petitioner manufacturer of forest products owns substantial timberland in Texas. On August 21, 1978, after negotiations to acquire over 2,000 acres of this land for a national preserve had broken down, the United States filed a "straight-condemnation" complaint under 40 U.S.C. § 257. Shortly thereafter, the United States filed a notice of lis pendens, notifying the public of the institution of the proceeding. The District Court referred the matter to a special commission to ascertain the compensation due petitioner. Trial before the commission began on March 6, 1979, and after hearing competing testimony as to the fair market value of the land, the commission entered a report recommending compensation in the amount of $2,331,202. The District Court entered judgment awarding petitioner compensation for that amount, plus 6% interest for the period from the date the complaint was filed to the date the Government deposited the adjudicated value of the land with the court. On March 26, 1982, the United States deposited the amount of the judgment in the District Court's registry, and, on that same date, acquired title to the land. The Court of Appeals reversed the award of interest to petitioner, holding that the date of the taking should be deemed the date on which the compensation award was paid and that hence no interest was due on that award. The court also ruled that the commission inadequately explained its valuation of the land, and accordingly remanded the case to the District Court for further findings regarding the value.

Held:

1. The taking of petitioner's land occurred on March 26, 1982, and because the award was paid on that date, no interest was due thereon. Pp. 9-16.

(a) That the date of taking in "straight-condemnation" proceedings must be deemed the date on which the United States tenders payment to the landowner is amply supported by this Court's prior decisions and by indications of congressional intent derived from the structure of the pertinent statutory scheme and Federal Rule of Civil Procedure 71A. Rule 71A(i) permits the United States to dismiss a condemnation suit at any time before compensation has been determined and paid, unless the United States has previously acquired title or taken possession. The Government's capacity in this fashion to withdraw from the proceeding would be difficult to explain if a taking were effectuated prior to tendering of payment. And the option given to the Government in 40 U.S.C. § 258a of peremptorily appropriating land prior to final judgment would have been superfluous if a taking occurred upon the filing of a complaint in a § 257 suit. Pp. 11-13.

(b) Prior to payment of the condemnation award in this case, there was no interference with petitioner's property interests severe enough to give rise to a taking entitling petitioner to just compensation under the Fifth Amendment. Until title passed to the United States, petitioner was free to make whatever use of its property it pleased. The Government never forbade petitioner to cut trees on the land or develop it in some other way. Nor did the Government abridge petitioner's right to sell the land. While the initiation of condemnation proceedings, publicized by the lis pendens notice, may have reduced the selling price of the land, impairment of the market value of property incident to otherwise legitimate governmental action ordinarily does not result in a taking, and did not do so here. Pp. 13-16.

2. Petitioner's constitutional entitlement to the value of its land on the date of the taking can be accommodated by allowing petitioner, on remand, to present evidence pertaining to change in the market value of the property during the substantial delay between the date of valuation and the date the Government tendered payment. Other condemnees who find themselves in petitioner's position may avail themselves of Federal Rule of Civil Procedure 60(b), which empowers a district court, upon motion of a party, to withdraw or amend a final judgment for "any . . . reason justifying relief from the operation of the judgment." Pp. 16-19.

696 F.2d 351 (CA 5 1983), affirmed.

Joe G. Roady, Houston, Tex., for petitioner.

Harriet S. Shapiro, Washington, D.C., for respondent.

Justice MARSHALL delivered the opinion of the Court.

Title 40 U.S.C. § 257, in conjunction with Rule 71A of the Federal Rules of Civil Procedure, prescribes a procedure pursuant to which the United States may appropriate privately owned land by eminent domain. The central issue in this case is whether the manner in which the value of the land is determined and paid to its owner under that procedure comports with the requirement, embodied in the Fifth Amendment, that private property not be taken for public use without just compensation.

I

A.

The United States customarily employs one of three methods when it appropriates private land for a public purpose. The most frequently used is the so-called "straight-condemnation" procedure prescribed in 40 U.S.C. § 257. Under that statute, an "officer of the Government" who is "authorized to procure real estate for the erection of a public building or for other public uses" ¹ makes an application to the Attorney General who, within 30 days, must initiate condemnation proceedings. The form of those proceedings is governed by Federal Rule of Civil Procedure 71A.² In brief, Rule 71A requires the filing in federal district court of a "complaint in condemnation," identifying the property and the interest therein that the United States wishes to take, followed by a trial before a jury, judge, or specially appointed commission—of the question of how much compensation is due the owner of the land. The practical effect of final judgment on the issue of just compensation is to give the Government an option to buy the property at the adjudicated price. Danforth v. United States, 308 U.S. 271, 284, 60 S.Ct. 231, 236, 84 L.Ed. 240 (1939). If the Government wishes to exercise that option, it tenders payment to the private owner, whereupon title and right to possession vest in the United States. If the Government decides not to exercise its option, it can move for dismissal of the condemnation action. Ibid.; see Fed.Rule Civ.Proc. 71A(i)(3).

A more expeditious procedure is prescribed by 40 U.S.C. § 258a.³ That statute empowers the Government, "at any time before judgment" in a condemnation suit, to file "a declaration of taking signed by the authority empowered by law to acquire the lands [in question], declaring that said lands are thereby taken for the use of the United States." The Government is obliged, at the time of the filing, to deposit in the court, "to the use of the persons entitled thereto," an amount of money equal to the estimated value of the land.⁴ Title and right to possession thereupon vest immediately in the United States. In subsequent judicial proceedings, the exact value of the land (on the date the declaration of taking was filed) is determined, and the owner is awarded the difference (if any) between the adjudicated value of the land and the amount already received by the owner, plus interest on that difference.

Finally, Congress occasionally exercises the power of eminent domain directly. For example, when Congress thinks that a tract of land that it wishes to preserve inviolate is threatened with imminent alteration, it sometimes enacts a statute appropriating the property immediately by "legislative taking" and setting up a special procedure for ascertaining, after the appropriation, the compensation due to the owners.⁵

In addition to these three statutory methods, the United States is capable of acquiring privately owned land summarily, by physically entering into possession and ousting the owner. E.g., United States v. Dickinson, 331 U.S. 745, 747-749, 67 S.Ct. 1382, 1384-1385, 91 L.Ed. 1789 (1947). In such a case, the owner has a right to bring an "inverse condemnation" suit to recover the value of the land on the date of the intrusion by the Government. United States v. Dow, 357 U.S. 17, 21-22, 78 S.Ct. 1039, 1044, 2 L.Ed.2d 1109 (1958).⁶

The Government's selection amongst and implementation of these various methods of acquiring property is governed to some extent, by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4601 et seq. That statute enjoins federal agencies, inter alia, to attempt to acquire property by negotiation rather than condemnation, and whenever possible not to take land by physical appropriation. §§ 4651(1), (4), (8). In addition, the statute requires a court with jurisdiction over a condemnation action that is dismissed or abandoned by the Government to award the landowner an amount that will reimburse him for "his reasonable costs, disbursements, and expenses" incurred in contesting the suit. § 4654(a).⁷ The statute does not, however, regulate decisions by the Government whether to employ the "straight-condemnation" procedure prescribed in § 257 or the "declaration of taking" procedure embodied in § 258a.

B

Petitioner, a manufacturer of forest products, owns substantial tracts of timberland in Texas. This case arises out of a protracted effort by the United States to appropriate 2,175.86 acres of that land.

In the mid-1960's, several studies were made of the desirability of establishing a national park or preserve to protect an area of relatively untrammeled wilderness in eastern Texas. One of those studies, conducted in 1967 by the National Park Service, recommended the creation of a 35,500-acre Big Thicket National Park. The Texas Forestry Association, of which petitioner is a member, endorsed that proposal and declared a voluntary moratorium on logging in the designated area. Since 1967, petitioner has...