United States v. 50 Acres of Land

• Decision Date: 04 December 1984
• Docket Number: No. 83-1170,83-1170
• Citation: United States v. 50 Acres of Land, 469 U.S. 24, 105 S.Ct. 451, 83 L.Ed.2d 376 (1984)
• Parties: UNITED STATES, Petitioner, v. 50 ACRES OF LAND, etc., et al
• Court: U.S. Supreme Court

469 U.S. 24

105 S.Ct. 451

83 L.Ed.2d 376

UNITED STATES, Petitioner,

v 50 ACRES OF LAND, etc., et al.

No. 83-1170.

Argued Oct. 2, 1984.

Decided Dec. 4, 1984.

Syllabus

In connection with a flood control project, the United States filed proceedings in Federal District Court to condemn approximately 50 acres of land owned by respondentcity of Duncanville, Tex., that had been used as a sanitary landfill.The court awarded compensation in the amount of the condemned property's fair market value as determined by the jury, rather than the larger amount fixed by the jury as the reasonable cost to the city of acquiring and developing a substitute facility, which was larger and better than the condemned facility.The court found no basis for departing from the normal market value standard for determining the amount of compensation, but the Court of Appeals reversed and remanded.

Held: The Fifth Amendment does not require that the United States pay a public condemnee compensation measured by the cost of acquiring a substitute facility that the condemnee has a duty to acquire, when the market value of the condemned property is ascertainable and when there is no showing of manifest injustice.Pp. 29-36.

(a)"Just compensation" under the Fifth Amendment normally is to be measured by the market value of the property at the time of the taking, and this case is not one in which an exception is required because fair market value is not ascertainable.The testimony at trial established a fairly robust market for sanitary landfill properties.Nor is an award of compensation measured by market value here fundamentally inconsistent with the basic principles of indemnity embodied in the Just Compensation Clause.Pp. 29-31.

(b) The text of the Fifth Amendment does not mandate a more favorable rule of compensation for public condemnees than for private parties.The reference to "private property" in the Takings Clause of the Fifth Amendment encompasses the property of state and local governments when it is condemned by the United States, and under this construction the same principles of just compensation presumptively apply to both private and public condemnees.P. 31.

(c) When the dictum in Brown v. United States,263 U.S. 78, 44 S.Ct. 92, 68 L.Ed. 171—which is the source of the "substitute-facilities doctrine"—is read in the context of the decision in that case, it lends no support to the suggestion that a distinction should be drawn between public and private condemnees.Nor does it shed any light on the proper measure of compensation in this case.Brown merely indicates that it would have been constitutionally permissible for the Federal Government to provide the city with a substitute landfill site instead of compensating it in cash.Pp. 31-33.

(d) The city's legal obligation to maintain public services that are interrupted by a federal condemnation does not justify a distinction between public and private condemnees for the purpose of measuring "just compensation."The risk that a private condemnee might receive a "windfall" if its compensation were measured by the cost of a substitute facility that was never acquired or was later sold or converted to another use is not avoided by the city's obligation to replace the facility.If the replacement facility is more costly than the condemned facility, it presumably is more valuable, and any increase in the quality of the facility may be as readily characterized as a "windfall" as the award of cash proceeds for a substitute facility that is never built.Moreover, the substitute-facilities doctrine, if applied in this case, would diverge from the principle that just compensation must be measured by an objective standard that disregards subjective values which are only of significance to an individual owner.Pp. 33-36.

706 F.2d 1356(CA51983), reversed.

Joshua I. Schwartz, Washington, D.C., for petitioner.

H. Louis Nichols, Dallas, Tex., for respondents.

Justice STEVENSdelivered the opinion of the Court.

The Fifth Amendment requires that the United States pay "just compensation"—normally measured by fair market value ¹ —WHenever it takes private property for public use.²This case involves the condemnation of property owned by a municipality.The question is whether a public condemnee is entitled to compensation measured by the cost of acquiring a substitute facility if it has a duty to replace the condemned facility.We hold that this measure of compensation is not required when the market value of the condemned property is ascertainable.

I

In 1978, as part of a flood control project, the United States condemned approximately 50 acres of land owned by the city of Duncanville, Texas.³The site had been used since 1969 as a sanitary landfill.In order to replace the condemned landfill, the city acquired a 113.7-acre site and developed it into a larger and better facility.⁴In the condemnation proceedings, the city claimed that it was entitled to recover all of the costs incurred in acquiring the substitute site and developing it as a landfill, an amount in excess of $1,276,000.The United States, however, contended that just compensation should be determined by the fair market value of the condemned facility and deposited $199,950 in the registry of the court as its estimation of the amount due.

Before trial the Government filed a motion in limine to exclude any evidence of the cost of the substitute facility, arguing that it was not relevant to the calculation of fair market value.Record, Doc. No. 62.The District Court denied the motion, noting that this Court had left open the question of the proper measure of compensation for the condemnation of public property.SeeUnited States v. 564.54 Acres of Land,441 U.S. 506, 509, n. 3, 99 S.Ct. 1854, 1856, n. 3, 60 L.Ed.2d 435(1979)(Lutheran Synod).The court concluded that "a complete factual record should be developed from which an independent determination of the appropriate measure of compensation can be made."Record, Doc. No. 111.

At trial, both parties submitted evidence on the fair market value of the condemned property ⁵ and on the cost of the substitute landfill facility.⁶Responding to special interrogatories, the jury found that the fair market value of the condemned property was $225,000, and that the reasonable cost of a substitute facility was $723,624.01.Record, Doc. Nos. 199, 200.The District Court entered judgment for the lower amount plus interest on the difference between that amount and the sum already paid.⁷529 F.Supp. 220(ND Tex.1981).The District Court explained that the city had not met its "burden of establishing what would be a reasonable cost of a substitute facility."⁸In addition, the court was of the view that "substitute facilities compensation should not be awarded in every case where a public condemnee can establish a duty to replace the condemned property, at least where a fair market value can be established."Id., at 222.The court found no basis for departing from the market value standard in this case, and reasoned that the application of the substitute-facilities measure of compensation would necessarily provide the city with a "windfall."⁹

The Court of Appeals reversed and remanded for further proceedings.706 F.2d 1356(CA51983).It reasoned that the city's loss attributable to the condemnation was "the amount of money reasonably spent . . . to create a functionally equivalent facility."Id., at 1360.If the city was required, either as a matter of law or as a matter of practical necessity, to replace the old landfill facility, the Court of Appeals believed that it would receive no windfall.The court, however, held that the amount of compensation should be adjusted to account for any qualitative differences in the substitute site.Finding that the trial judge's instructions had not adequately informed the jury of its duty to discount the costs of the substitute facility in order to account for its increased capacity and superior quality, see n. 4, supra,the Court of Appeals remanded for a new trial.¹⁰We granted the Government's petition for certiorari,¹¹465 U.S. 1098, 104 S.Ct. 1590, 80 L.Ed.2d 122(1984), and we now reverse with instructions to direct the District Court to enter judgment based on the jury's finding of fair market value.

II

The Court has repeatedly held that just compensation normally is to be measured by "the market value of the property at the time of the taking contemporaneously paid in money."Olson v. United States,292 U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236(1934)."Considerations that may not reasonably be held to affect market value are excluded."Id., at 256, 54 S.Ct., at 709.Deviation from this measure of just compensation has been required only "when market value has been too difficult to find, or when its application would result in manifest injustice to owner or public."United States v. Commodities Trading Corp.,339 U.S. 121, 123, 70 S.Ct. 547, 549, 94 L.Ed. 707(1950);Kirby Forest Industries, Inc. v. United States,467 U.S. 1, 10, n. 14, 104 S.Ct. 2187, 2194, n. 14, 81 L.Ed.2d 1(1984).

This case is not one in which an exception to the normal measure of just compensation is required because fair market value is not ascertainable.Such cases, for the most part, involve properties that are seldom, if ever, sold in the open market.¹²Under those circumstances, "we cannot predict whether the prices previously paid, assuming there have been prior sales, would be repeated in a sale of the condemned property."Lutheran Synod,441 U.S., at 513, 99 S.Ct., at 1858.In this case, however, the testimony at trial established a fairly robust market for sanitary landfill properties, see n. 5, supra, and the jury's determination of the fair market value of the condemned landfill facility is adequately supported by expert testimony concerning the sale prices of comparable property.Cf.441 U.S., at 513-514, 99 S.Ct., at 1858-1859...