United States v. 5.00 ACRES OF LAND, ETC., Civ. A. No. B-78-170-CA-1547-3

• Decision Date: 29 January 1981
• Docket Number: Civ. A. No. B-78-170-CA-1547-3,B-78-176-CA-1547-3 and B-78-169-CA-1547-3.
• Citation: 507 F. Supp. 589
• Court: U.S. District Court — Eastern District of Texas
• Parties: UNITED STATES of America v. 5.00 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and the Firestone Tire & Rubber Company et al. UNITED STATES of America v. 6.90 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and the Firestone Tire & Rubber Company et al. UNITED STATES of America v. 8.41 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and KWW Associates et al.

507 F. Supp. 589

UNITED STATES of America v. 5.00 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and the Firestone Tire & Rubber Company et al.

UNITED STATES of America v. 6.90 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and the Firestone Tire & Rubber Company et al.

UNITED STATES of America v. 8.41 ACRES OF LAND, MORE OR LESS, SITUATE IN ORANGE COUNTY, STATE OF TEXAS, and KWW Associates et al.

Civ. A. Nos. B-78-170-CA-1547-3, B-78-176-CA-1547-3 and B-78-169-CA-1547-3.

United States District Court, E. D. Texas, Beaumont Division.

January 29, 1981.

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John H. Hannah, Jr., U. S. Atty., Tyler, Tex., Harry W. McKee, Asst. U. S. Atty., Beaumont, Tex., Thomas P. Carolan, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., for plaintiff.

George W. Brown, Jr. and Earl S. Hines, Brown & Hines, Beaumont, Tex., for defendants.

MEMORANDUM OPINION AND ORDER

JOE J. FISHER, District Judge.

This is an eminent domain case. Presently before the Court are the Amended Report and Findings of the Condemnation Commission (Report) appointed to determine the issue of just compensation in this cause, the objections to the Report filed by the parties, and two motions filed by the Defendants. As will appear more clearly below, the Court will approve the Report, as amended, with one modification. The Motion of the Defendants to Award Costs of Suit will be denied and their Motion to Award Interest will be granted.

On March 7, 1978, the United States of America as Plaintiff filed a complaint and declaration of taking and obtained an order of immediate possession and a judgment vesting title pursuant to the Declaration of Taking Act, 40 U.S.C. § 258a et seq. That same day the Plaintiff deposited into the Registry of the Court the sums of thirty-thousand, eight hundred eighty-eight dollars ($30,888.00) as the amount of estimated just compensation for the taking of tracts nos. 313E-1 and E-2, eight thousand, one hundred ninety-five dollars ($8,195.00) for tracts nos. 314E-3 and E-4, and ten thousand, seven hundred sixty-nine dollars ($10,769.00) for tracts nos. 338E-1 and E-2.

These tracts are located in a highly industrialized portion of Orange County, Texas. The estate acquired by the Plaintiff was a perpetual, assignable fifty-foot easement for multiple pipelines and a twenty-five-foot temporary work easement for a period of three years, beginning on the date of the taking. The authority for the taking was recited to be the Declaration of Taking Act, 40 U.S.C. § 258a et seq., the general authorization statute, 40 U.S.C. § 257, and the Energy Policy and Conservation Act, 42 U.S.C. § 6201, et seq., as modified by the Department of Energy Organization Act, 42 U.S.C. § 7101 et seq. Funds for the acquisition of these lands were appropriated by the Acts of Congress approved June 1, 1976, Pub.L.No.94-303, and July 31, 1976, Pub.L. No.94-373. The tracts were taken for the purpose of establishing the Strategic Petroleum Reserve and related facilities, specifically, for the construction of multiple oil pipelines.

The issue of just compensation for the taking was referred to a condemnation commission (Commission) appointed pursuant to Rule 71A of the Federal Rules of Civil Procedure¹ and these three actions were consolidated for trial. In ruling on the objections of the parties to the Report of the Commission, the Court is to apply the clearly erroneous standard governing the reports of special masters. Rules 71A(h), 53(e)(2). Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 689, 66 S.Ct. 1187, 1193, 90 L.Ed. 1515 (1946); Livas v. Teledyne Movible Offshore, Inc., 607 F.2d 118, 119 (5th Cir. 1979). This is the same standard governing review by a court of appeals of findings of fact by a district court. NLRB v. Sequoia District Council of Carpenters, 568 F.2d 628, 631 (9th Cir. 1977); Oil, Chemical and Atomic Workers International Union v. NLRB, 547 F.2d 575, 580 (D.C. Cir. 1976), cert. denied, 431 U.S. 966, 97 S.Ct. 2923, 53 L.Ed.2d 1062 (1977). Thus, the findings of the Commission "come here well armed with the buckler and shield" of the clearly erroneous rule. Horton v. United States Steel Corp., 286 F.2d 710, 713 (5th Cir. 1961). This standard has been described as follows:

The findings of the master come with a strong presumption of validity but they are not given the effect of a verdict of a jury. The parties are entitled to a real review by the court to determine whether the findings were clearly erroneous. A finding by the master is clearly erroneous when, although there is evidence to support it, the court on the entire evidence is left with the definite and firm conviction that a mistake has been made. * * * A finding may be set aside even though it is supported by substantial evidence if the court is convinced that it is clearly wrong. At the same time a finding must stand, even though the court thinks it is against the preponderance of the evidence, if the court does not consider it clearly erroneous.

9 C. Wright & A. Miller, Federal Practice and Procedure § 2614 at 810-11 (1971) (footnotes omitted). Under this standard, the Court will proceed to rule on the objections of the parties.

The Plaintiff's Objections:

A.

The subject property is a fifty-foot wide strip of land located immediately adjacent to an existing pipeline corridor. The Commission found that the highest and best use of the property was the use to be made of it by the Plaintiff, i. e., pipeline right-of-way and easement. The Plaintiff has objected to this finding, and asserts that it is clearly erroneous. This objection need not detain us for long.

By highest and best use is meant either some existing use on the date of taking, or one which the evidence shows was so reasonably likely in the near future that the availability of the property for that use would have affected its market price on the date of taking and would have been taken into account by a purchaser under fair market conditions. Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236 (1934); United States v. 320.0 Acres of Land, 605 F.2d 762, 781 (5th Cir. 1979). Normally, because of economic pressures, the existing use of the subject property represents its highest and best use. United States v. Buhler, 305 F.2d 319, 328 (5th Cir. 1962). Here, the subject tracts abut on an existing pipeline corridor.² The evidence shows that the property was used for pipeline purposes as early as 1956, transcript at 113, and that at the time of the taking there were twelve pipelines already in place in the corridor. Transcript at 243. The Commission's finding as to highest and best use is not merely not clearly erroneous; it is eminently correct. The Plaintiff's objection will be overruled.

B.

The Plaintiff has also objected to the method used by the Commission in valuing the subject tracts, urging that the failure to use the before and after method was clear error. The before and after method is normally employed where the condemnor takes only a portion of a larger tract.

Stated generally, the correct measure of value in a case involving condemnation of part of a tract is the fair market value of the entire tract immediately before the taking less the fair market value of the remainder immediately afterwards.

United States v. Trout, 386 F.2d 216, 219 (5th Cir. 1967). See United States v. 101.88 Acres of Land, 616 F.2d 762, 768-69 (5th Cir. 1980). The choice of method of valuation is a legal conclusion and, if wrong, is not entitled to the shield of the clearly erroneous rule. United States v. Mississippi Valley Generating Co., 364 U.S. 520, 526, 81 S.Ct. 294, 297, 5 L.Ed.2d 268 (1961); SprayBilt, Inc. v. Ingersoll-Rand World Trade, Ltd., 350 F.2d 99, 103 (5th Cir. 1965). However, it must be remembered that the before and after method is appropriate only where part of a larger tract is taken.

The Commission found that such was not the case here. Its finding was that

the Commission was faced with the problem of a piece of property, admittedly attached to and adjacent to a larger tract of property owned by the same land owner, however, having been severed by uses inconsistent with the use of the balance of the property. The particular tracts under consideration have been effectively severed from the main body of the ownership by previous easements and grants given to others. These easements caused an alienation of the use of the particular tracts here condemned. They are in this particular alley being used for pipelines. * * * The Commission has taken into consideration that the usual way of appraising property is to take the parent tract's valuation and subtract therefrom the value of the part left in the land owner, thus giving credit for enhancement or devaluation of surrounding property still in the hands of the land owner. It is felt in this particular situation that this method of appraisal is inappropriate in that by the granting of easements which are perpetual in nature, the land owner has previously severed these tracts from the parent tract leaving a remainder that must stand on its own feet.

Report at 6. The Report continues:

Thus the Commission feels that the Government's contention that the proper method of evaluation is the appraisal of the entire parent tract and then of the remainder thus leaving the value of the taken part is not accepted by the Commission as it is felt that for all practical purposes there was a severance by previous conveyance and the tract here under consideration is a separate, distinct, free-standing pipeline corridor.

Id. at 9-10. The party attacking a finding of the Commission has the burden of demonstrating that such finding is clearly erroneous. In re Multiponics, Inc., 622 F.2d 709, 723 (5th Cir. 1980); Goodman v. Highlands Insurance Co., 607 F.2d 665, 667 (5th Cir. 1979). The Plaintiff has failed to carry its burden of persuasion. Its...