RJ Widen Company v. United States

• Decision Date: 18 March 1966
• Docket Number: No. 80-62.,80-62.
• Citation: 357 F.2d 988
• Parties: R. J. WIDEN COMPANY v. The UNITED STATES and COMMONWEALTH OF MASSACHUSETTS, Third-Party Defendant.
• Court: U.S. Claims Court

357 F.2d 988 (1966)

R. J. WIDEN COMPANY v. The UNITED STATES and COMMONWEALTH OF MASSACHUSETTS, Third-Party Defendant.

No. 80-62.

United States Court of Claims.

March 18, 1966.

Jerome P. Facher, Boston, Mass., for plaintiff; A. Frederick Richard, Boston, Mass., attorney of record. Hale & Dorr, Boston, Mass., of counsel.

Howard O. Sigmond, Washington, D. C., with whom was Asst. Atty. Gen. Edwin L. Weisl, Jr., for defendant.

Robert L. Meade, Asst. Atty. Gen., Commonwealth of Massachusetts, for third-party defendant; John S. Bottomly, Asst. Atty. Gen., attorney of record. Edward W. Brooke, Atty. Gen., of counsel.

Before COWEN, Chief Judge, WHITAKER, Senior Judge, and LARAMORE, DAVIS and COLLINS, Judges.

PER CURIAM:^*

In this suit plaintiff seeks to obtain just compensation under the Fifth Amendment (1) for injuries to its personal property and business resulting from governmental action in connection with construction of a flood control project, and (2) for the rental value of its lands that were occupied by the government during the initial phases of that project.

The Flood Control Act of 1936, as amended in 1941, authorized federal construction of various flood control projects, including one on the Hoosac River in North Adams, Massachusetts.¹ It also provided that "no money appropriated under authority of this Act shall be expended on the construction of any project until States, political subdivisions thereof, or other responsible local agencies have given assurances satisfactory to the Secretary of War that they will (a) provide without cost to the United States all lands, easements, and rights-of-way necessary for the construction of the project * * *; and (b) hold and save the United States free from damages due to the construction works; * * *."² In accordance with these requirements and pursuant to State-enabling legislation, the Commonwealth of Massachusetts, in November 1950, executed an agreement with the United States specifying in part that the Commonwealth would provide, without cost to the United States, all land and easements necessary for the North Adams flood control project and would indemnify the United States for any damages due to the construction work. Thereafter, in January 1957, the Army Corps of Engineers awarded a contract in the amount of some $5,400,000 for construction of the project and in the following month directed the contractor to proceed with work at the physical site.

Plaintiff was the owner of property in North Adams, Massachusetts, situated on the north bank of the Hoosac River, a non-navigable stream. The property consisted of some 50 acres of land on which was located a tannery plant which was specifically designed for the manufacture of specialty leathers, i. e., leathers used for a variety of purposes other than shoe leather. Plaintiff's property also included a dam constructed across the Hoosac River about one-half mile upstream from the main tannery plant and a set of headgates behind the dam to control the flow of water from the river into a canal belonging to plaintiff. The canal carried water from the upstream part of the river to the tannery plant and also carried effluent away from the plant to the downstream part of the river. The water from the river was used by the tannery in huge quantities in the processing and manufacture of leather and in the washing away of the effluent, and without such water it was not possible to produce specialty leathers.

In the latter part of March 1957, the Corps of Engineers' contractor, pursuant to the directive to start work at the site, entered upon plaintiff's property without its permission, cut trees, bulldozed the land, removed soil, used the land as a dumping ground, and destroyed plaintiff's dam and headgates, thus diverting the course of the water from the Hoosac River away from the canal leading to the tannery.³ This caused the plaintiff to lose its vital water supply, as a result of which it suffered losses of various kinds. Many hides that it had on hand rotted and could not be used in manufacture. Other hides had to be processed in a makeshift manner or to be contracted out to other firms for finishing, resulting in losses or reduced profits to the plaintiff. The lack of water also had a deleterious effect on certain wooden machinery and equipment which dried out and deteriorated without constant moisture. Also, with the termination of its water supply from the river, the plaintiff was effectively forced to abandon the production of specialty leather and alter its operations so as to manufacture lower-grade leather products, thus causing it to lose orders, profits, and customers and to incur expenses in having to redirect its activities.

On July 2, 1957, the Commonwealth of Massachusetts (which as previously indicated had agreed with the United States to acquire all the land, easements, and rights-of-way necessary for the construction of the flood control project and to save the United States harmless from all claims for damages) made a formal taking of a part of plaintiff's real estate. In 1958 the plaintiff brought suit in the State Superior Court against the Commonwealth for damages resulting from the latter's taking of its land, easements and water rights. At the trial of that case, a stipulation was entered into between the parties that the dam and water rights were intact on July 2, 1957, the date of the formal taking, and that water from the dam was then available to plaintiff. The stipulation was contrary to the actual facts, inasmuch as the dam had been destroyed and the water to plaintiff's plant cut off by the Corps of Engineers' contractor in March; the assumption was, however, agreed upon to shorten and simplify the trial by fixing one certain date (i. e., the date of the formal taking) upon which the Commonwealth agreed it would be liable for the damage to the real estate caused by the taking of a portion of plaintiff's property and of its water rights.⁴

After completion of the testimony, the Judge instructed the jury, in accordance with applicable Massachusetts law, that the plaintiff was entitled to receive the fair market value of that portion of the real estate formally taken, and severance damages for the diminution in value of the remainder of the property not actually taken, which latter item represented the difference in market value of plaintiff's remaining real estate before and after the destruction of its water supply from the river.⁵

Plaintiff obtained a jury verdict in the amount of $171,090.20, and this amount was paid by the Commonwealth. Thus, the plaintiff concededly has been fully compensated for damages to its real estate as a result of the July 1957 taking by the Commonwealth of its land, water rights, and dam, and as a result of the diminution in value of its remaining real estate caused by the cut-off of its source of water from the river.⁶ However, the applicable Massachusetts law did not authorize recovery for incidental or consequential damages resulting from the Commonwealth's taking (see infra, p. 995) and, therefore, no award of damages was recoverable by plaintiff in the Superior Court proceeding and no issue was actually litigated therein for: (1) damage to any personal property, including spoilage of hides; (2) damage to movable machinery and equipment; (3) business expenses incurred as a result of the loss of water; or (4) loss of profits. Plaintiff seeks here to recover for these items,⁷ contending that the destruction of its personal property and injury to its business as a result of the action of the Corps of Engineers' contractor in March 1957 constituted a direct "taking" by the United States for which compensation is due under the Fifth Amendment or under an implied promise to pay for property appropriated.⁸

For the reasons indicated below, it is concluded that the government contractor's entry in March 1957 upon plaintiff's land and its destruction of the dam and headgates, without plaintiff's permission, were authorized acts of government and hence constituted a taking by the United States of plaintiff's real estate and water rights. It is further concluded that there was no taking in the constitutional sense of plaintiff's personal property and business and that the damages thereto, all of which were occasioned by the termination of plaintiff's water supply from the river, were incidental to, or the consequences of, the government's taking of the real estate and water rights, and as such are not compensable.

It seems clear at the outset that the action which was taken here — the entry upon plaintiff's land and the destruction of its water rights without its permission — was a governmental act (through an authorized contractor) performed pursuant to Congressional authorization under the Flood Control Act of 1936, as amended. See United States v. Lynah, 188 U.S. 445, 465-466, 23 S.Ct. 349, 47 L.Ed. 539 (1903); Portsmouth Harbor Land and Hotel Co. v. United States, 260 U.S. 327, 330, 43 S.Ct. 135, 67 L.Ed. 287 (1922); North American Transp. & Trading Co. v. United States, 253 U.S. 330, 333, 40 S.Ct. 518, 64 L.Ed. 935 (1920). Cf. Hooe v. United States, 218 U.S. 322, 31 S.Ct. 85, 54 L.Ed. 1055 (1910). For while that Act prohibits the expenditure of flood control funds on a project until the state or a local subdivision or agency has given assurance that it will provide the land without cost and indemnify the United States for damages, it also provides that "where the total authorization for a project heretofore * * * authorized by Congress is not sufficient to complete plans that may have been made the Chief of Engineers is authorized in his discretion to * * * make expenditures on preparations for the project, such as the purchase of lands and easements * * *." See footnote 2, supra. As the legislative history indicates, this latter provision was inserted in order to give the Chief of Engineers broad authority to begin and prosecute needed...