U.S. v. 2,175.86 Acres of Land, More or Less, Situated in Hardin and Jefferson Counties, State of Tex.

• Decision Date: 24 January 1983
• Docket Number: 81-2471,Nos. 81-2402,s. 81-2402
• Citation: U.S. v. 2,175.86 Acres of Land, More or Less, Situated in Hardin and Jefferson Counties, State of Tex., 696 F.2d 351 (5th Cir. 1983)
• Parties: UNITED STATES of America, Plaintiff-Appellant Cross Appellee, v. 2,175.86 ACRES OF LAND, MORE OR LESS, SITUATED IN HARDIN AND JEFFERSON COUNTIES, STATE OF TEXAS, et al., Defendants, Kirby Forest Industries, Inc., Defendant-Appellee Cross Appellant. UNITED STATES of America, Plaintiff-Appellant, v. 13.32 ACRES OF LAND, MORE OR LESS, SITUATE IN JEFFERSON COUNTY, STATE OF TEXAS, Bob C. Mabry, et al. and Unknown Owners, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 351

696 F.2d 351

UNITED STATES of America, Plaintiff-AppellantCross Appellee, v.2,175.86 ACRES OF LAND, MORE OR LESS, SITUATED IN HARDIN ANDJEFFERSON COUNTIES, STATE OF TEXAS, et al., Defendants,Kirby Forest Industries, Inc., Defendant-AppelleeCross Appellant.

UNITED STATES of America, Plaintiff-Appellant, v.13.32 ACRES OF LAND, MORE OR LESS, SITUATE IN JEFFERSON

COUNTY, STATE OF TEXAS, Bob C. Mabry, et al. and

Unknown Owners, Defendants-Appellees.

Nos. 81-2402, 81-2471.

United States Court of Appeals Fifth Circuit.

Jan. 24, 1983.

Claire L. McGuire, Dept. of Justice, Lands Div., Edward J. Shawaker, Atty., Washington, D.C., for plaintiff-appellantcross appellee.

Sheinfeld, Maley & Kay, Robbin Dawson, Joyce Cox, Attys., Houston, Tex., for defendants in No. 81-2402.

Gilbert T. Adams, Beaumont, Tex., for defendants-appellees in No. 81-2471.

Appeals from the United States District Court for the Eastern District of Texas.

Before RUBIN, RANDALL and JOLLY, Circuit Judges.

RANDALL, Circuit Judge:

These two consolidated cases present the question whether the United States is obligated to pay interest on an award in a straight condemnation proceeding, and if it is, from what date the interest should accrue.The first of these cases, United Statesv. 2,175.86 Acres of Land, also involves a challenge to the sufficiency of the commission's findings concerning the actual award.For the reasons set forth below, we reverse, 520 F.Supp. 75, and remand for proceedings consistent with this opinion.

I.FACTUAL AND PROCEDURAL BACKGROUND.

On October 11, 1974, Congress established the Big Thicket National Preserve in southeast Texas, and authorized the Secretary of the Interior to acquire the land within the boundaries of the preserve.16 U.S.C. Sec. 698(1976).These cases involve the acquisition of 2,175.86 acres of land located in Hardin and Jefferson Counties, Texas, and approximately 13.32 additional acres in Jefferson County, Texas.

The larger tract was owned by Kirby Forest Industries.On August 21, 1978, the United States filed a complaint in condemnation seeking to condemn the Kirby tract.The action was referred to a commission appointed pursuant to Fed.R.Civ.P. 71A.The trial was held in March of 1979.On March 3, 1980, the commission entered its report recommending an award of $2,331,202.00.Both the United States and Kirby filed objections to the commission's report in April, 1980.The district court held a hearing to consider these objections in January, 1981, and entered a judgment on August 13, 1981, awarding Kirby the amount proposed by the commission plus interest at the rate of six percent from August 21, 1978(the date the complaint was filed), until the date of deposit of the award.The United States filed a notice of appeal on October 8, 1981, and Kirby filed its notice on the 9th.Payment was made on March 26, 1982.

At the opening of the trial before the commission, the parties stipulated that "today is the date of taking" so that the trial date could serve as the date on which market value could be determined.Both sides presented expert testimony concerning the highest and best use of the property and the physical description of the land.

The United States filed a second complaint in condemnation to obtain the smaller tract owned by Bob C. Mabry and his associates.The landowners filed an answer, demanding an award of just compensation, expenses, attorneys' fees and interest on the award.As in the first case, the action was tried before a commission.On January 24, 1980, the district court entered judgment in the amount of $94,998.24, as recommended by the commission.The judgment was vacated in February, 1980, and an amended judgment entered on April 3, 1980, which reserved for consideration the landowners' request for attorneys' fees, expenses and interest.On April 17, 1980, the government deposited the full amount of the award with the court.On September 28, 1981, the court denied the landowners' claim for expenses, but granted interest on the award at the rate of six percent from the date the complaint in condemnation was filed.Upon a motion of the landowners filed on October 9, 1981, the court amended its judgment to allow interest at the rate of nine percent, as provided by state law.The United States filed two notices of appeal.

II.INTEREST FROM THE TIME OF TAKING.

The government may appropriate property for public use in a number of ways: by physical occupation, United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311(1945); by the bringing of condemnation cases as in the present case, United States v. Bodcaw Co., 440 U.S. 202, 99 S.Ct. 1066, 59 L.Ed.2d 257(1979)(per curiam); or by vesting in the government immediate title to the property through legislative action.Miller v. United States, 209 Ct.Cl. 135, 531 F.2d 510(1976).When the government proceeds by condemnation, it generally employs one of two methods: (1) a declaration of taking or (2)"straight condemnation."Under the Declaration of Taking Act, 40 U.S.C. Sec. 258a(1976), the government obtains title to the land immediately upon filing a declaration of taking and depositing the estimated amount of just compensation with the court.If just compensation as judicially determined is greater than the deposit, the government must deposit the difference with interest from the date of taking.¹

In the cases before us, the government employed the "straight condemnation" method by filing a complaint in condemnation pursuant to 40 U.S.C. Sec. 257(1976).Unlike section 258a,section 257 does not state that title shall vest immediately in the United States once the action is commenced.The question before us is when the government proceeds by straight condemnation, what is the date of taking.

We note at the outset that both parties agree, as indeed they must, that where there is a delay between the time of taking and the time of payment, the landowner is entitled to interest as a part of just compensation.This entitlement is constitutionally mandated by the fifth amendment for just compensation "is the full and perfect equivalent of the property taken."Seaboard Airline Railway Co. v. United States, 261 U.S. 299, 304, 43 S.Ct. 354, 355, 67 L.Ed. 664(1923).This rule "rests on equitable principles and it means substantially that the owner shall be put in as good a position pecuniarily as he would have been if his property had not been taken."Id.;see alsoUnited States v. Rogers, 255 U.S. 163, 41 S.Ct. 281, 65 L.Ed. 566(1921).Where a taking precedes payment, the landowner "is entitled to such addition as will produce the full equivalent of that value paid contemporaneously with the taking.Interest at a proper rate is a good measure by which to ascertain the amount so to be added."Seaboard, 261 U.S. at 306, 43 S.Ct. at 356.We must turn then to the question of when the takings occurred in these cases.

The district court awarded interest from the date the complaints were filed until the time that payment was made, reasoning that the commencement of condemnation proceedings "effectively denied [the landowners] economically viable use and enjoyment of [their] property ...."Recordat 573.Mabry would have us adopt the date the Big Thicket National Preserve was established by statute as the date of taking, on the ground that the statute represented the government's commitment to the project.In essence, he maintains that the statute was actually a legislative taking.Kirby concedes that it can find no support for the district court's position; it argues instead that the date of taking was the date of trial.The government contends, relying on Danforth v. United States, 308 U.S. 271, 60 S.Ct. 231, 84 L.Ed. 240(1939), that a taking did not occur until the date of payment, in which case no interest was due.We agree with the government that no interest was due in these cases.

Mabry's argument is easily disposed of.The legislative history of 16 U.S.C. Sec. 698 indicates that Congress did not intend the statute to be a legislative taking; in fact, the Senate committee specifically deleted the legislative taking provision because it felt that "legislative taking is an extraordinary measure which should be invoked only in those instances in which the qualities which render an area suitable for national park status are imminently threatened with destruction.The Committee does not believe that the Big Thicket area represents such an instance."S.Rep. No. 875, 93d Cong., 2d Sess.(1974), reprinted in 1974 U.S.Code Cong. & Ad.News 5554, 5558.²

In Danforth, the Supreme Court held that the mere enactment of legislation which authorizes condemnation could not be a taking, because "[s]uch legislation may be repealed or modified, or appropriations may fail."308 U.S. at 286, 60 S.Ct. at 237(footnote omitted).The Court went on to hold that for an action to constitute a taking, "it must result in an appropriation of the property to the uses of the Government."Id.(footnote omitted).No such appropriation occurred through the enactment of 16 U.S.C. Sec. 698.Mabry has not demonstrated that the enactment of the statute interfered with his enjoyment of his property or his present expectations for its use.SeeAgins v. Tiberon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106(1980);Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631(1978).The property was purchased as an investment, and it has remained in the same condition throughout the condemnation proceedings.Accordingly, we hold that the enactment of the statute establishing the preserve was not a taking within the confines of the fifth amendment.

Similarly, the mere commencement of straight condemnation proceedings, where the government does not enter into possession during those proceedings, does not constitute a taking.Agins, supra, 447 U.S. at 255 n. 9, 100 S.Ct. at 2138 n. 9, 65 L.Ed.2d...