U.S. v. 341.45 Acres of Land, More or Less, Located in St. Louis County, State of Minn., s. 03-117

• Citation: 751 F.2d 924
• Decision Date: 28 December 1984
• Docket Number: Nos. 03-117,83-1519,60-117,Nos. 82-1919,No. 69-114,No. 303,60-122,s. 03-117,69-114,303,s. 82-1919
• Parties: UNITED STATES of America, Appellee, v. 341.45 ACRES OF LAND, MORE OR LESS, LOCATED IN the COUNTY OF ST. LOUIS, STATE OF MINNESOTA, Edward M. Essling, et al., Appellants. TractUNITED STATES of America, Appellee, v. 21.90 ACRES OF LAND, MORE OR LESS, LOCATED IN the COUNTY OF KOOCHICHING, STATE OF MINNESOTA, Iona M. Dobis, et al., Appellants. TractUNITED STATES of America, Appellee, v. 234.55 ACRES OF LAND, MORE OR LESS, SITUATE IN UNION COUNTY, STATE OF ARKANSAS, et al., and Unknown Owners Salmar Oil Corporation, Appellant. Tract
• Court: U.S. Court of Appeals — Eighth Circuit

Page 924

751 F.2d 924

UNITED STATES of America, Appellee, v. 341.45 ACRES OF LAND, MORE OR LESS, LOCATED IN the COUNTY OF

ST. LOUIS, STATE OF MINNESOTA, Edward M. Essling,

et al., Appellants.

Tract Nos. 03-117, 60-117, 60-122.

UNITED STATES of America, Appellee, v. 21.90 ACRES OF LAND, MORE OR LESS, LOCATED IN the COUNTY OF

KOOCHICHING, STATE OF MINNESOTA, Iona M. Dobis, et

al., Appellants.

Tract No. 69-114.

UNITED STATES of America, Appellee, v. 234.55 ACRES OF LAND, MORE OR LESS, SITUATE IN UNION COUNTY,

STATE OF ARKANSAS, et al., and Unknown Owners

Salmar Oil Corporation, Appellant.

Tract No. 303.

Nos. 82-1919, 83-1519.

United States Court of Appeals,

Eighth Circuit.

Submitted May 16, 1983.

Decided Dec. 28, 1984.

Robert V. Light, Little Rock, Ark., for appellant Salmar Oil Corp.

David Essling, St. Paul, Minn., for appellants.

James M. Rosenbaum, U.S. Atty., Donald F. Paar, Asst. U.S. Atty., Minneapolis, Minn., Robert L. Klarquist, Thomas H. Pacheco, Attys., Dept. of Justice, Washington, D.C., W. Asa Hutchinson, U.S. Atty., J. Michael Fitzhugh, Asst. U.S. Atty., Fort Smith, Ark., Carol E. Dinkins, Asst. Atty. Gen., Raymond N. Zagone, Robert L. Klarquist, Virginia P. Butler, Attys., Dept. of Justice, Washington, D.C., for appellee.

Before McMILLIAN, JOHN R. GIBSON and FAGG, Circuit Judges.

McMILLIAN, Circuit Judge.

These cases have been consolidated for purposes of appeal. In each case the district court denied the property owner's motion for costs, attorney's fees and expenses incurred in connection with the litigation of a condemnation action under the Equal Access to Justice Act (hereinafter the Act or the EAJA), 28 U.S.C. Sec. 2412 (Supp. V 1981). In each case the district court held that the Act did not apply to condemnation actions and denied the motions. For reversal appellants in each case argue that the Act does apply to condemnation actions and that the position of the United States was not substantially justified. For the reasons discussed below, we affirm the orders of the district court.

No. 82-1919

In June 1977 and March 1978, the United States filed in the District Court ¹ for the District of Minnesota complaints in condemnation ² to acquire the fee title to certain lands located in the northern part of Minnesota for the Voyageurs National Park. Included in these lands were the Bassett tract (consisting of approximately 60 acres of land and including a 1.5 acre island), the Essling tract (approximately 23.75 acres), and the Dobis tract (approximately 21.9 acres). Based upon its appraisers' valuations in 1977, the government offered the property owners $34,000 for the Bassett tract, $6,000 for the Essling tract, and $2,200 for the Dobis tract.

The property owners were not satisfied with the government's offers and the Bassett and Essling cases proceeded to trial in October 1979. The government's expert witness testified that the Bassett tract was worth $76,000; the property owner's expert witnesses testified that the tract was worth between $275,000 and $300,000. With respect to the Essling tract, the government's expert witness testified that it was worth $16,500; the property owner's expert witness valued it at $81,000. The jury verdict for the Bassett tract was $232,480 and for the Essling tract $56,100. The government appealed these judgments, arguing that the district court erroneously permitted the jury to consider evidence that the highest and best use of the property taken was for residential subdivisions and condominiums. This court agreed and remanded for new trial. United States v. 341.45 Acres of Land, 633 F.2d 108, 111-13 (8th Cir.1980), cert. denied, 451 U.S. 938, 101 S.Ct. 2017, 68 L.Ed.2d 324 (1981).

The question of just compensation for the Bassett and Essling tracts was retried with the Dobis tract case in 1981. The government's expert witnesses valued the Bassett tract at $118,000, the Essling tract at $18,500, and the Dobis tract at $16,900. The property owners' expert witnesses testified that the land was worth considerably more than the government's estimates and valued the Bassett tract at $244,000-$300,000, the Essling tract at $62,000-$84,000, and the Dobis tract at $40,000-$44,000. The jury awarded $204,500 for the Bassett tract, $36,400 for the Essling tract, and $25,500 for the Dobis tract. Except for small amounts withheld from the Bassett and Essling awards to pay real estate taxes, the government in March 1982 paid the property owners the amounts awarded by the jury.

Counsel for the property owners then filed a motion for costs, attorney's fees and expenses incurred in connection with the litigation of the condemnation actions under the Act, 28 U.S.C. Sec. 2412, seeking a total amount of $98,744.76. In the affidavit filed in support of the motion, counsel included a statement made by a National Park Service land acquisition officer at a public meeting in Voyageurs National Park in August 1977:

My job is to acquire this land for the National Park Service. I hope to acquire it for about 30 [cents] on the dollar. If the landowners cannot accept our reasonable offers, we let the matter ride for a few years. Then if necessary, we go to Court, including trials and appeals. This procedure is very expensive for the landowners. If we cannot agree on our terms, the landowners can hire lawyers at one-third [referring to contingency fee arrangements] and pay the court costs in addition. All of this takes some several years.

Counsel also noted in the affidavit that he attempted to settle the claims, offering before trial to settle the Bassett tract claim for $191,000 and the Dobis tract claim for $21,000 and to negotiate on the Essling tract claim, but never received any response from the government.

The district court held that the property owners could not recover costs against the government in connection with these condemnation actions under 28 U.S.C. Sec. 2412(a) (formerly 28 U.S.C. Sec. 2412); that the property owners could not recover attorney's fees and litigation expenses against the government under the EAJA, 28 U.S.C. Sec. 2412(d)(1)(A), (B), because the Act does not apply to condemnation cases; and that the property owners could not recover attorney's fees against the government under another provision of the EAJA, 28 U.S.C. Sec. 2412(b), because the property owners had not shown bad faith. United States v. 341.45 Acres of Land, 542 F.Supp. 482, 484-87 (D.Minn.1982) (order). Although the district court denied the property owners any relief, the district court was nonetheless sympathetic to the property owners' position because they had "introduced evidence indicating that the Interior Department purposely bids in at an artificially low dollar amount and if the land owner becomes recalcitrant, the Department makes things expensive by delaying matters and then litigating to the hilt." Id. at 486 (footnote omitted). This appeal followed.

No. 83-1519

In November 1978, the government filed a complaint in condemnation and declaration in taking and deposited the estimated amount of just compensation in the District Court ³ for the Western District of Arkansas to acquire certain lands in connection with the Felsenthal Wildlife Refuge. Included in the property subject to condemnation were any mineral interests except for oil and gas; oil and gas interests were declared subordinate to the government's right to flood the land in operating the Felsenthal Wildlife Refuge. Salmar Oil Corp. (Salmar) owned 107 acres of subsurface mineral interests. The amount of the deposit attributable to Salmar's 107 acres of subsurface mineral interests and subordinated oil and gas interests was $965.76. Salmar's claim was tried in August 1982 with that of another property owner whose leasehold interest in part of the land had been condemned as well; the other property owners' claims were settled. The jury awarded Salmar a total amount of $19,350. Following several post-trial motions about the deposit and rate of interest, the district court entered a final judgment awarding Salmar just compensation in the amount of $19,350, plus interest at the applicable commercial market rate since the date of the filing of the declaration of taking, allowing the government to deduct the deposit and interest accruing on the deposit only after June 1981 (on the ground that Salmar did not have notice of the condemnation proceedings until that time), for a total award of approximately $30,000.

Salmar then filed a motion for attorney's fees and expenses under the EAJA. ⁴ The district court denied the motion, holding that the EAJA did not apply to condemnation cases and, alternatively, even if the EAJA did apply to condemnation cases, Salmar was not entitled to an award of attorney's fees and expenses because the position of the United States was substantially justified, that is, the government's offer had been made in good faith on the basis of its expert witness' appraisal. United States v. 234.55 Acres of Land, No. 78-1078, slip op. at 2-3 (W.D.Ark. Feb. 28, 1983) (order). This appeal followed.

The property owners in both appeals filed a joint motion to consolidate the appeals. The court granted this motion to consolidate and will address the property owners' arguments as if jointly submitted.

Arguments of the Parties

First, appellants argue that the plain language of the EAJA applies to condemnation actions and that application of the EAJA to condemnation actions is consistent with the Act's purpose and legislative history. Appellants specifically argue that the exception clause and the savings provision discussed below do not preclude the application of the Act to condemnation actions. Second, appellants argue that property owners whose land or property interests have been taken in condemnation and who either do not dispute the authority of the government to take the property or, if they do dispute the authority of the government to take the property, lose on that issue, but who win,...