United States v. 38.307 Acres of Land, More or Less
| Decision Date | 22 February 2022 |
| Docket Number | Civil Action 7:20-cv-00242 |
| Court | U.S. District Court — Southern District of Texas |
| Parties | UNITED STATES OF AMERICA, Plaintiffs, v. 38.307 ACRES OF LAND, MORE OR LESS; CASCADE REAL ESTATE OPERATING, L.P., Defendants. |
UNITED STATES OF AMERICA, Plaintiffs,
v.
38.307 ACRES OF LAND, MORE OR LESS; CASCADE REAL ESTATE OPERATING, L.P., Defendants.
Civil Action No. 7:20-cv-00242
United States District Court, S.D. Texas, McAllen Division
February 22, 2022
OPINION AND ORDER
Micaela Alvarez, United States District Judge.
The Court now considers “Defendant Cascade Real Estate Operating, LP's Brief on Just Compensation and Anticipated Evidence for Requested Jury Trial;”[1] Defendant Cascade Real Estate Operating, LP's (“Cascade”) “Daubert Challenge and Motion to Exculde [sic] Testimony of Steve Robinson;”[2] “United States of America's Brief on Just Compensation;”[3] “United States of America's Response to Defendant's Daubert Challenge and Motion to Exclude Testimony of Steve Robinson;”[4] “United States Motion to Exclude, in Part, Expert Testimony of Matthew G. White & Joshua M. Korman Regarding Tract TGV-MCS-3003;”[5] “Defendant Cascade Real Estate Operating, LP's Response to United States' Motion to Exclude, in Part, Expert Testimony of Matthew G. White and Joshua M. Korman Regarding Tract RGV-MCS-3003;”[6] and “United States' Reply to Defendant's Response to USA's Motion to Exclude, in Part, Expert Testimony of
Matthew G. White & Joshua M. Korman Regarding Tract RGV-MCS-3003.”[7] After considering the motion, record, and relevant authorities, the Court DENIES Defendant's motion[8] and DENIES Plaintiffs motion.[9]
I. Background and Procedural History
This is an eminent domain case brought under the Declaration of Taking Act[10] concerning Tracts RGV-MCS-2219 and RGV-MCS-3003 as described in the United States' Schedule C and D.[11] The two tracts are located within and adjacent to the Sharyland Plantation which encompasses some 6, 000+ acres which has been developed into a master-planned, multi-use community.[12] In 2019 over 3, 500 acres, composed of various tracts, of the undeveloped land was sold to Defendant.[13] Tract RGV-MCS-2219 is a 4.008-acre tract[14] and Tract RGV-MCS-3003 is a 34.299-acre tract both within the 3, 500 acreage.[15] This Tract designation is Plaintiffs manner of identifying the land it has taken. There is no dispute that Cascade Real Estate Operating, L.P. is the only interested party to the tracts.[16] However, each party obj ects to the other's experts' opinions as to the valuation of Tract 3003.[17]
The motions are ripe for consideration. The Court turns to its analysis.
II. Discussion
a. Legal Standards
1. Just Compensation
Under the Fifth Amendment to the United States Constitution, private property shall not be taken “for public use, without just compensation.”[18] Compensation is to be just to the landowner and to the public which must pay for the condemnation by eminent domain.[19] “Just compensation . . . means in most cases the fair market value of the property on the date it is appropriated.”[20] “[T]he underlying principle is that the dispossessed owner ‘is entitled to be put in as good a position pecuniarily as if his property had not been taken. He must be made whole but is not entitled to more.'”[21] “Under this standard [of fair market value], the owner is entitled to receive what a willing buyer would pay in cash to a willing seller at the time of the taking.”[22] “[I]n general, comparable sales constitute the best evidence of market value . . . the more comparable a sale is, the more probative it will be of the fair market value of the condemned property.”[23] The best evidence is “sales from a willing seller to a willing buyer of similar property in the vicinity of the taking at or about the same time as the taking.”[24] Other evidence of fair market value can come
from evidence of other comparable sales and from expert testimony as to the value of the subject property.[25] Appraisals are conventional and acceptable evidence.[26]
“In determining the market value, this Court must look not only at the present use of the property, but also at the highest and best use for which the property is adaptable and needed.”[27]“Ordinarily, the highest and best use for property sought to be condemned is the use to which it is subjected at the time of the taking. This is true because economic demands normally result in an owner's putting his land to the most advantageous use.”[28] When a condemnee[29] attempts to claim that the highest and best use for the property taken is something other than what the property is currently used for, the burden is on the condemnee to produce credible evidence that, at the time of taking, the use claimed was “practicable” and that “there was a reasonable likelihood that [the property] would be so used in the reasonably near future.”[30] Evidence of highest and best use that is not credible, for example an assertion that residential development is the highest and best use when the property in question is next to an airfield and has poor access and stagnant population growth, should be rejected.[31] The governing rule is that if “a proffered potential use is not reasonably practicable or probable, so that no reasonably minded trier of fact faithfully applying
the law could find that it represents an element of fair market value, ” the evidence will not be considered.[32]
When a taking acquires only a portion of the condemnee's property, the Fifth Circuit “requires the exclusive use of the before-and-after method of valuation.”[33] This method “computes damages as the value of the actual land taken plus the diminution in the value of the remaining land in the parent tract . . . [e]quivalent to the sum of money obtained by subtracting the fair market value of what remains after the taking, from the fair market value of the whole immediately before the taking.”[34] In simpler terms, “[u]nder the before-and-after rule, the value of the entire tract is found prior to the taking, the value of the remainder is evaluated after the taking, and the difference equals the amount to which the owner is entitled.”[35] In ascertaining what constitutes the parent tract or larger parcel, “[t]hree factors are particularly helpful in ascertaining whether property taken is part of a single, larger tract: physical contiguity, unity of ownership, and unity of use, ” with an integrated use such as pastureland serving as key evidence.[36]
Compensation in a partial taking may be offset by special benefits, “those which are direct and peculiar to the particular property” but not from general benefits “which do not offset recovery.”[37] The Fifth Circuit has provided that:
[t]he most satisfactory distinction between general and specific benefits is that the general benefits are those which arise from the fulfillment of the public object which justified the taking, and special benefits are those which arise from the peculiar relation of the land in question to the public improvement. Ordinarily the foregoing test is a satisfactory one, though sometimes difficult to apply. In other words, the general benefits are those which result from the enjoyment of the facilities provided by the new public work and from the increased general prosperity resulting from such enjoyment. The special benefits are ordinarily merely incidental and may result from physical changes in the land, from proximity to a desirable object, or in various other ways.[38]
2. Expert Opinion Admissibility
“[T]he Federal Rules of Evidence control the admission of expert testimony.”[39] The Rules and judicial scrutiny extend to all experts, whether scientific or otherwise.[40] “[P]reliminary factual and legal issues are the Court's responsibility under [Federal Rule of Civil Procedure 71.1(h)], whether trial is had before a jury or a commission.”[41] When an expert's “factual basis, data, principles, methods, or their application” are sufficiently called into question, [42] the Court must undertake a “preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.”[43] “The gatekeeping role of the district court is particularly pronounced in condemnation proceedings under Rule 71.1. While the jury tries issues of valuation, the trial judge must screen the proffered” evidence.[44] The Court must first determine, under Federal Rules of Evidence 104(a) and 402, that the expert's proposed testimony is relevant and would
assist with determining a fact at issue.[45] Evidence that is not both is not admissible.[46] “Expert testimony which does not relate to any issue in the case is not relevant and, ergo, non-helpful. Similarly, low probative value, or a total lack of it, will render proposed expert testimony unhelpful and, therefore, inadmissible under Federal Rule of Evidence 702.”[47] The Court scrutinizes proposed expert testimony more searchingly than lay witness testimony for its pertinency and potential prejudice.[48]
Additionally, “[u]nder the Rules[, ] the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.”[49] “Experts qualified by knowledge, skill, experience, training or education may present opinion testimony to the jury”[50]only if “(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of
reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.”[51] The proponent of the proffered expert testimony “must prove by a preponderance of the evidence that the testimony is reliable” and cannot rest on generic assurances.[52] Under the first element, “the existence of sufficient facts . . . is in all instances mandatory.”[53] Unsubstantiated factual assertions will bar expert testimony, [54] as will “altered facts and speculation designed to bolster [the proponent's] position.”[55] Expert opinions that are...
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