State of California v. United States

Decision Date22 May 1968
Docket NumberNo. 21291.,21291.
PartiesSTATE OF CALIFORNIA et al., Appellant, v. UNITED STATES of America, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Miriam E. Wolff (argued), Deputy Atty. Gen., Thomas C. Lynch, Atty. Gen., San Francisco, Cal., for appellant.

Edmund B. Clark (argued), Roger P. Marquis, Attys., Dept. of Justice, Washington, D.C., Edwin L. Weisl, Jr., Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Cecil F. Poole, U. S. Atty., J. Harold Weise, Asst. U. S. Atty., Lands Division, San Francisco, Cal., for appellee.

Before BARNES, HAMLIN and BROWNING, Circuit Judges.

BROWNING, Circuit Judge:

The United States initiated proceedings to condemn certain lands in the City and County of San Francisco for the expansion of San Francisco Naval Shipyard. The State of California claimed title to part of the lands and sought compensation for their loss. The district court awarded nominal damages. The State appealed.

It is stipulated that all of the condemned lands, including those claimed by the State, were tide or submerged lands which passed to the State upon its admission to the Union in 1850.1 In 1868 the State authorized the survey and division of the lands into lots and blocks, reserving "so much thereof (as might be required) for streets, docks, piers, slips, canals, drains, or other use necessary for the public convenience and the purposes of commerce." In 1869 the State approved and published a map showing the lots, blocks, and reserved areas. Subsequently the State sold the lots to private parties.

We reviewed this history in some detail in State of California v. United States, 169 F.2d 914 (9th Cir. 1948), and held that under State law the submerged lands marked on the 1869 map as "streets" were dedicated to use as public thoroughfares. We further held that the State was entitled to no compensation for the "streets" involved in that case.

The lands involved in the present appeal, as described on the 1869 map, are as follows. The largest parcel taken constitutes a large "U"-shaped area opening into San Francisco Bay, marked "South Basin," with a 200-foot wide strip, marked "reserved for an open canal," (referred to as the "channel") projecting from "South Basin" into the area platted as blocks and lots, plus two narrower strips on each side of the "channel" marked "Twenty Third Avenue" and "Twenty Fourth Avenue." A smaller parcel of lands taken is located within "India Basin," an area similar to "South Basin," marked "Dedicated to and reserved for Docks, Piers, Slips, and Basins, and other purposes of Commerce." A portion of "India Street," bordering this basin, was also taken.2

The parties requested the district court to make a pretrial determination of the standards to be applied in fixing the value of (1) the street segments, and (2) the "basins" and "channel."

As to the street segments, the court held that under our decision in State of California v. United States, supra, "the State is entitled to compensation for their taking only to the extent that, as a result of the taking, the State is compelled to construct a substitute." The court concluded that on the undisputed facts the State would not be required to build substitute streets for those condemned.

The court also held that the "substitute facilities" rule was applicable to the "basins" and "channel," under the decision of the Court of Appeals of the Second Circuit in United States v. City of New York, 168 F.2d 387 (1948). However, since the record did not establish whether substitutes would be required for these facilities, the court ordered a trial to determine "the legal necessity to provide substitute facilities for navigation or commerce made necessary as a result of the taking of said Basins and the `Channel.'" The evidence was to be "limited to the necessity for the substitution of the facilities that existed at the time of taking"; and "not * * * to show a hypothetical utilization of the subject areas in the future development of the Port of San Francisco."

Following entry of this order, the parties filed an agreed statement of facts reciting that at the time of the taking there "were no wharves, docks or other facilities constructed by the State of California" on the condemned lands, and that the State "has not been required to substitute or relocate any of its facilities for navigation or commerce as a result of the taking."

The district court then entered the judgment appealed from, finding the facts as agreed upon, concluding "as a matter of law that there is no legal necessity to provide substitute facilities for navigation or commerce as a result of the taking," and adjudging "that the compensation to be awarded for the taking of said parcels * * * save and except for filled land that may be found within,3 is nil."

The State contends that "The Court erred * * * in concluding the State of California was not entitled to monetary compensation for the taking of its underwater parcels unless and until the State could prove the need for substitute facilities." We agree. We conclude that, though substitute facilities were not required, the State may still have suffered damage which is compensable under the Fifth Amendment. We therefore reverse and remand for further proceedings.

We start, as did the district court, with the proposition that the Fifth Amendment protects the property of the State from appropriation by the United States without "just compensation."4 This is true even when the property has been dedicated by the State to public use.5 Since property belonging to the State of California has been taken, the only issue is the amount of compensation which is "just."

We also accept the district court's premise that under California law6 the land reserved on the 1869 map for "basins" and an "open canal" or "channel" was as effectively dedicated by the State to the purposes indicated as was the land reserved for "streets." The reasons given in State of California v. United States, supra, encompass both; and section 1781 of the California Harbors and Navigation Code expressly provides that "China, Central, South, India, and Dry Dock basins * * * and the canal opening into South Basin, as far as the ebb and flow of tide in them, are dedicated to public use for the purposes of commerce and navigation." (emphasis added). Finally, we accept the stipulated facts that the State had constructed no facilities on the dedicated lands and has not been required to substitute or relocate facilities for commerce and navigation because of the taking.

But it does not follow that the United States could appropriate these lands without payment. Neither our decision in State of California v. United States, supra, 169 F.2d 914, nor the decision of the Court of Appeals for the Second Circuit in United States v. City of New York, supra, 168 F.2d 387, supports a rule which would permit the United States to take property having provable value to the State without paying for it.

The decision in State of California v. United States was premised upon the "well-settled rule that it is the owner's loss, not the taker's gain, which is the measure of the value of the property taken," citing United States ex rel. and for Use of T.V.A. v. Powelson, 319 U.S. 266, 281, 63 S.Ct. 1047, 87 L.Ed. 1390 (1943) and United States v. Causby, 328 U.S. 256, 261, 66 S.Ct. 1062, 90 L.Ed. 1206 (1946). 169 F.2d at 923, note 3. Our inquiry was "directed solely to the question of how much the appellant lost by being forced to give up these tracts of land * * *" 169 F.2d at 924. We concluded that because the lands dedicated as streets in that case could not be used for any purpose which would bring the State profit, the correct measure of compensation was the cost of providing substitute facilities; and because there was no need for the State to build streets elsewhere to take the place of those condemned,7 the taking resulted in no loss to the State.8 This was not a holding that absence of need for substitute facilities would alone have justified denial of compensation.

The portion of the decision in United States v. City of New York, supra, 168 F.2d 387, relied upon by the district court sustained an award of nominal damages for the taking of City land underlying certain waterways. The opinion of the trial court in that case discloses that no substitute facilities were rendered necessary by the taking. It also discloses, however, that the lands were subject to easements for navigation, that the United States had "reserved free use of the Basin" in originally ceding the lands to the City, and that there was "no proof to sustain the fixing of more than nominal damages." United States v. 25.4 Acres of Land, 71 F.Supp. 255, 256 (E.D.N.Y. 1947). In affirming, the Court of Appeals wrote, "The City likewise objects to the nominal awards made for its land under water, but it offers no evidence as to value of the taking. The waterways involved were subject to easements of the United States for water commerce, and it appears that no substitute waterway facilities were required." 168 F.2d at 391 (emphasis added). In the present case, the district court quoted and relied upon the second sentence to support its holding that no compensation need be paid unless substitute were required for the "basins" and "channel." But it appears from the preceding sentence that damages would not have been denied merely because substitute facilities were not required if the City had established that the submerged land had value to the City despite the burden of the easements.9

The principles controlling the determination of "just compensation" were restated by the Supreme Court in United States v. Virginia Electric & Power Co., 365 U.S. 624, 633, 81 S.Ct. 784, 790, 5 L.Ed.2d 838 (1961):

The guiding principle of just compensation is reimbursement to the owner for the property interest taken. "He is entitled to be put in as good a position pecuniarily as if
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