United States v. Pope & Talbot, Inc.

• Decision Date: 02 August 1961
• Docket Number: No. 16801.,16801.
• Citation: 293 F.2d 822
• Parties: UNITED STATES of America, Appellant, v. POPE & TALBOT, INC., a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

293 F.2d 822 (1961)

UNITED STATES of America, Appellant, v. POPE & TALBOT, INC., a corporation, Appellee.

No. 16801.

United States Court of Appeals Ninth Circuit.

June 14, 1961.

Rehearing Denied August 2, 1961.

Perry W. Morton, Asst. Atty. Gen., Roger P. Marquis, A. Donald Mileur, Attys., Dept. of Justice, Washington, D. C., Clarence E. Luckey, U. S. Atty., Portland, Or., for appellant.

Mautz, Souther, Spaulding, Kinsey & Williamson and John L. Schwabe and James B. O'Hanlon, Portland, Or., and John E. Jaqua, Eugene, Or., for appellee.

Before JERTBERG, MERRILL and KOELSCH, Circuit Judges.

MERRILL, Circuit Judge.

The United States appeals from an award of compensation for lands of Pope & Talbot, Inc., taken in eminent domain. It contends that in two respects the jury improperly was invited to take into consideration elements of severance damage as to which Pope & Talbot was not entitled to compensation.

The proceeding is for the condemnation of 1,454.10 acres of timberland located in Lane County, Oregon, for use in connection with the construction and operation of the Hills Creek Dam Project on the middle fork of the Willamette River, a federal navigation and flood control project. The land consisted of fifteen different tracts located upon both sides of the river and interspersed in checkerboard fashion with federal forest service lands. The taking occurred May 31, 1957.

Appellee, in 1946, acquired 31,254 acres in this area which at that time was a completely undeveloped forest area. Appellee entered upon a long range program to utilize its timber acquisitions. Sawmills, wood products plants, housing facilities and machine shops were built at the entrance to the basin. A road system was laid out with the cooperation of the government to serve the needs of both. It was agreed that the appellee would construct the road, with the cost to be shared in ratio to the ownership of timber within the basin: 71% by the government and 29% by the appellee. Appellee granted an easement to the government for that portion of the road which passed over its lands and the government issued a revocable use permit to appellee covering that portion of the road passing over government lands. The floor of the valley is flat, but the terrain paralleling it is steep, rugged, mountainous country. The main road through the basin, as constructed by appellee, ran along the floor of the valley near the river. The Hills Dam Project flooded the lands of appellee appropriated by the government, including the roadway.

The dam itself was located about a mile upstream from appellee's plant. It is over three hundred feet high and backs up a lake approximately forty miles in circumference which forms a large artificial barrier squarely in the midst of appellee's operations. New roads of necessity took to the side hills and circled the lake.

The judgment of the district court, pursuant to jury verdict, awarded compensation in the sum of $595,000.00. In the district court the United States had contended that appellee's operations in this basin did not constitute a unitary and integrated use. The jury found against the United States on this contention¹ and the point is not now pressed.

The principal issue upon appeal relates to appellee's right to compensation for injury resulting from the flooding of the original road.

Appellee in the district court contended that it owned a property interest in the road and was entitled to compensation for the taking of that interest. The district court ruled against appellee in this respect. The jury was told:

"The Court has ruled that the defendant was using the access as it existed at the time of the taking as a permittee only. And that the defendant\'s use thereof was subject to the paramount right of the government to deny anyone further use. Therefore, it was without a duty to pay compensation for any loss or damage which might result to the defendant by reason of the closure of the route and cancellation of the permit."

The court did, however, recognize that appellee was entitled to compensation for severance damage to its remaining lands caused by loss in market value by virtue of reduced accessibility due to the barrier which the lake formed. The jury was so instructed. The government assigns as error the giving of this instruction and the introduction of evidence as to the extent of damage due to reduced accessibility.

Upon this appeal the government reverts to its contention that appellee is not entitled to compensation for the taking of any interest in the flooded road. In the light of the district court ruling on this point, we find no issue with respect to it.

The question, as we view it, is whether appellee is entitled to severance damage for loss in market value of its remaining lands due to the use to which the government has put the land taken.

In United States v. Grizzard, 1910, 219 U.S. 180, 31 S.Ct. 162, 55 L.Ed. 165, it was held that compensation for a taking in eminent domain must include not only the market value of the part appropriated but also the damage to the remainder resulting from such taking, embracing injury due to the use to which the part appropriated is to be put. The court stated at page 184 of 219 U.S. at page 164 of 31 S.Ct.:

"If, as the court below found, the flooding and taking of a part of the plaintiffs\' farm has depreciated the usefulness and value of the remainder, the owner is not justly compensated by paying for only that actually appropriated, and leaving him uncompensated for the depreciation over benefits to that which remains."

Further, at page 185 of 219 U.S., at page 164 of 31 S.Ct., the court stated:

"To say that such an owner would be compensated by paying him only for the narrow strip actually appropriated, and leaving out of consideration the depreciation to the remaining land by the manner in which the part was taken, and the use to which it was put, would be a travesty upon justice."

In Campbell v. United States, 1924, 266 U.S. 368, 45 S.Ct. 115, 69 L.Ed. 328, light was cast on the Grizzard rule. In that case the United States had taken 1.81 acres of land to be part of the site for a nitrates plant. The entire tract, including lands acquired from others, comprised 1,300 acres. After placing on the tract substantial improvements incidental to industrial use, the government project was abandoned and the property put up for sale. The trial court allowed as separate items of damages the value of the area taken, the damages to the remainder resulting from the...