Rands v. United States, 20280.

• Decision Date: 07 October 1966
• Docket Number: No. 20280.,20280.
• Citation: 367 F.2d 186
• Parties: R. B. RANDS et ux., Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

367 F.2d 186 (1966)

R. B. RANDS et ux., Appellants, v. UNITED STATES of America, Appellee.

No. 20280.

United States Court of Appeals Ninth Circuit.

October 7, 1966.

Alex L. Parks, Lloyd B. Ericsson, Dusenbery, Martin, Beatty & Parks, Portland, Or., Robert B. Abrams, Mahoney & Abrams, Heppner, Or., for appellants.

Edwin L. Weisl, Jr., Asst. Atty. Gen., Roger P. Marquis, A. Donald Mileur, Attys., U. S. Dept. of Justice, Washington, D. C., Sidney I. Lezak, U. S. Atty., Joseph E. Buley, Asst. U. S. Atty., Portland, Or., for appellee.

Corey, Byler & Rew, Pendleton, Or., George W. Mead, Portland, Or., for amicus curiae, Pendleton Grain Growers.

Before BARNES, KOELSCH and DUNIWAY, Circuit Judges.

DUNIWAY, Circuit Judge.

Appellants owned two tracts of land along the Columbia River, about six miles upstream from the present John Day Dam. On November 1, 1962, they leased this and other property to the state of Oregon, which wanted it for an industrial park. That industrial development, for maximum utility, required access to the Columbia River; because two railroads and the United States owned most of the land along the river, appellants' property was especially valuable as a port site. The lease agreement gave Oregon an option to purchase the land. Most of the land was priced, under the option, at $150 per acre; the balance, denominated "port site property" in the agreement, was priced at $400 per acre.

The option was never exercised. On August 13, 1963, the United States filed a Declaration of Taking in the United States District Court, condemning this and other property in connection with the river development project of which the John Day Dam is a part. On September 25, 1963, the Secretary of the Army granted this and other land to the State of Oregon by a federal deed. Its use passed to a private corporation under a lease from the state of Oregon dated July 2, 1963. The record does not show and we are not told how much of the sale price or rents paid for the whole block of land involved are attributable to the two tracts in suit.

In response to the notice of taking, appellants filed a notice of appearance on September 3, 1963, contesting the amount of proposed compensation and requesting partial distribution of funds. On September 27 they filed a motion requesting permission to call their earlier appearance an answer and to amend it to raise defenses to the taking of their property. They assign as error the district court's refusal, under Rule 71A, F.R.Civ.P., to permit variance, under the excusable neglect provisions of Rules 6(b) and 60(b) from the requirement of Rule 71A that objections to the taking itself be filed within 20 days from service of the notice of taking. Upon trial of the compensation issue, the district court held, relying on United States v. Twin City Power Co., 1956, 350 U.S. 222, 76 S.Ct. 259, 100 L.Ed. 240, and United States v. Virginia Elec. & Power Co., 1961, 365 U.S. 624, 81 S.Ct. 784, 5 L.Ed. 2d 838, that that element of value of the land arising from its utility as a port site is noncompensable under the Fifth Amendment. Appellants say that that holding too is erroneous.

I. Late Amendment under Rule 71A, F.R.Civ.P.

Rule 71A(e) provides that "If a defendant has any objection or defense to the taking of his property, he shall serve his answer within 20 days after the service of notice upon him." Part (a) of the same Rule makes the other rules of civil procedure applicable to condemnation actions "except as otherwise provided in this rule." The question, therefore, is whether the 20-day period is absolute, giving the district court no authority to extend it in cases of excusable neglect, or whether the excusable neglect provisions of Rules 6(b) (2) and 60(b) (1) confer such discretion.

District courts have held that Rule 6(b) is not applicable to mitigate the time bar of Rule 71A(e), United States v. 4.724 Acres of Land, E.D.La.1962, 31 F.R.D. 290, but that Rule 60(b) is so applicable, United States v. 140.80 Acres of Land, E.D.La.1963, 32 F.R.D. 11, 14, United States v. 1,108 Acres of Land, E.D.N.Y.1960, 25 F.R.D. 205, see also City of Davenport v. Three-Fifths of an Acre of Land, S.D.Ill.1957, 147 F.Supp. 794. The language of the rules themselves offers little guidance. The court below, in concluding that the word "shall" in 71A(e) should be construed to be mandatory, found guidance in the fact that subsection (c) (2) of the rule provides that a defendant "may answer as provided in subdivision (e) of this rule," and thought it persuasive that the word "shall" as used in Rule 59(b) has been construed as mandatory. But the inference drawn from use of both "may" and "shall" is unwarranted; if "shall" had been used in subdivision (c) (2), a defendant would be required to file an answer, while if "may" had been used in subdivision (e), in practical terms no due date would apply to the answer other than those provided by other rules. Nor is the fact that the "shall" in Rule 59(b) has been said to be mandatory, see Hulson v. Atchison, T. & S. F. Ry., 7 Cir., 1961, 289 F.2d 726, conclusive. Rule 6(b) is by its own terms inapplicable to Rule 59(b), while Hulson held Rule 60(b) to be applicable to Rule 59(b) upon a showing of "extraordinary circumstances".

A strong case can be made for the proposition that "shall", as used in 71A (e), is permissive. The rule itself contains no language requiring a different conclusion. The Advisory Committee's note to subdivision (e) manifests no intent that the twenty-day limit be absolute — on the contrary, it seems to reflect an intent to cut off pleadings preliminary to the answer, not subsequent to it, and states that "the general standard of pleading is governed by other rules * * * and this subdivision (e) merely prescribes what matters the answer should set forth." Rule 6(b) lists the other rules to which it is inapplicable, without including Rule 71A in that list. And the rules are to be construed in a liberal manner which effectuates their purpose "to secure the just, speedy, and inexpensive determination of every action" (Rule 1); here the Government itself conceded that appellants should be permitted to file a late answer.¹

But we need not finally decide here whether the rule is mandatory or permissive, for in either case we think the result below was correct. The trial judge held alternatively that, assuming that he had discretion in the matter, he would deny the motion because "the defendants made no attempt to raise the question until after a substantial portion of the property had been transferred to the State of Oregon." Where, as here, the only "excusable neglect (Rule 6(b)) or "mistake, inadvertence, surprise, or excusable neglect" (Rule 60(b)) alleged is the defendant's original attorney's lack of knowledge of possible defenses to the taking, a substantial quantity of the land taken has been reconveyed after the 20-day period has elapsed and before a late answer is attempted to be filed, and the prima facie right to take is as clear as it is here,² we think that denial of the motion was within the scope of the district judge's discretion.

II. Port Site Value.

In support of its proposition that the port site value of land riparian to navigable water is not required to be paid upon condemnation, the Government relies principally upon United States v. Commodore Park, Inc., 1945, 324 U.S. 386, 65 S.Ct. 803, 89 L.Ed. 1017; United States v. Twin City Power Co., 1956, 350 U.S. 222, 76 S.Ct. 259; and United States v. Virginia Elec. & Power Co., 1961, 365 U.S. 624, 81 S.Ct. 784 ("VEPCO"). In Commodore Park, land situated on a navigable inlet whose water was kept fresh by tidal flows was rendered less valuable when the government turned the inlet into a "stagnant pool" by dumping dredged material, accumulated in the course of rendering the connecting navigable bay more suitable for military vessels, across the mouth of the inlet. It was held that the resulting loss was noncompensable because "a riparian owner does not acquire a unique private right distinct from that held by all others, to have access to and enjoyment of navigable waters and to recover compensation from the government because deprived of that privilege by an authorized governmental change in a stream. * * * Whatever market value of riparian lands may be attributable to their closeness to navigable waters does not detract from the government's `absolute' power, in the interests of commerce, to make necessary changes in a stream. In short, as against the demands of commerce, an owner of land adjacent to navigable waters, whose fast lands are left uninvaded, has no private riparian rights of access to the waters to do such things as `fishing and boating and the like', for which rights the government must pay. Riparian rights of access to navigable waters, cannot, as against the government's power to control commerce, be bought and sold." 324 U.S. at 390-391, 65 S.Ct. at 805-806.

In Twin City, the defendant power company owned land on the banks of a navigable river and on which it intended to build a private power facility, which the government took for the same use. In response to the power company's claim that the power plant site element of value of the land was compensable, it was held that "the flaw * * * is that the landowner here seeks a value in the flow of the stream, a value that inheres in the Government's servitude and one that under our decisions the Government can grant or withhold as it chooses. * * * That special location value is due to the flow of the stream * * * and in this case it is the water power that creates the special value, whether the lands are above or below ordinary high water. * * * It is no answer to say that these private owners had interests in the water that were recognized by state law. We deal here with the federal domain, an area which Congress can completely pre-empt, leaving no vested private claims that constitute `private...