United States v. Rands, 54

• Decision Date: 13 November 1967
• Docket Number: No. 54,54
• Parties: UNITED STATES, Petitioner, v. R. B. RANDS et ux
• Court: U.S. Supreme Court

389 U.S. 121

88 S.Ct. 265

19 L.Ed.2d 329

UNITED STATES, Petitioner,

v R. B. RANDS et ux.

No. 54.

Argued Oct. 18, 1967.

Decided Nov. 13, 1967.

Robert S. Rifkind, Washington, D.C., for petitioner.

Alex L. Parks, Portland, Or., for respondents.

Mr. Justice WHITE delivered the opinion of the Court.

In this case the Court is asked to decide whether the compensation which the United States is constitutionally required to pay when it condemns riparian land includes the land's value as a port site. Respondents owned land along the Columbia River in the State of Oregon. They leased the land to the State with an option to purchase, it apparently being contemplated that the State would use the land as an industrial park, part of which would function as a port. The option was never exercised, for the land was taken by the United States in connection with the John Day Lock and Dam Project, authorized by Congress as part of a comprehensive plan for the development of the Columbia River. Pursuant to statute¹ the United States then conveyed the land to the State of Oregon at a price considerably less than the option price at which respondents had hoped to sell. In the condemnation action, the trial judge determined that the compensable value of the land taken was limited to its value for sand, gravel, and agricultural purposes and that its special value as a port site could not be considered. The ultimate award was about one-fifth the claimed value of the land if used as a port. The Court of Appeals for the Ninth Circuit reversed, apparently holding that the Government had taken from respondents a compensable right of access to navigable waters and concluding that 'port site value should be compensable under the Fifth Amendment.' 367 F.2d 186, 191 (1966). We granted certiorari, 386 U.S. 989, 87 S.Ct. 1308, 18 L.Ed.2d 334, because of a seeming conflict between the decision below and United States v. Twin City Power Co., 350 U.S. 222, 76 S.Ct. 259, 100 L.Ed. 240 (1956). We reverse the judgment of the Court of Appeals because the principles underlying Twin City govern this case and the Court of Appeals erred in failing to follow them.

The Commerce Clause confers a unique position upon the Government in connection with navigable waters. 'The power to regulate commerce comprehends the control for that purpose, and to the extent necessary, of all the navigable waters of the United States * * *. For this purpose they are the public property of the nation, and subject to all the requisite legislation by Congress.' Gilman v. City of Philadelphia, 3 Wall. 713, 724—725, 18 L. Ed. 96 (1866). This power to regulate navigation confers upon the United States a 'dominant servitude,' FPC v. Niagara Mohawk Power Corp., 347 U.S. 239, 249, 74 S.Ct. 487, 493, 98 L.Ed. 686 (1954), where extends to the entire stream and the stream bed below ordinary high-water mark. The proper exercise of this power is not an invasion of any private property rights in the stream or the lands underlying it, for the damage sustained does not result from taking property from riparian owners within the meaning of the Fifth Amendment but from the lawful exercise of a power to which the interests of riparian owners have always been subject. United States v. Chicago, M., St. P & P.R. Co., 312 U.S. 592, 596—597, 61 S.Ct. 772, 775, 85 L.Ed. 1064 (1941); Gibson v. United States, 166 U.S. 269, 275—276, 17 S.Ct. 578, 580, 41 L.Ed. 996 (1897). Thus, without being constitutionally obligated to pay compensation, the United States may change the course of a navigable stream. State of South Carolina v. State of Georgia, 93 U.S. 4, 23 L.Ed. 782 (1876), or otherwise impair or destroy a riparian owner's access to navigable waters, Gibson v. United States, 166 U.S. 269, 17 S.Ct. 578 (1897); Scranton v. Wheeler, 179 U.S. 141, 21 S.Ct. 48, 45 L.Ed. 126 (1900); United States v. Commodore Park, Inc., 324 U.S. 386, 65 S.Ct. 803, 89 L.Ed. 1017 (1945), even though the market value of the riparian owner's land is substantially diminished.

The navigational servitude of the United States does not extend beyond the high-water mark. Consequently, when fast lands are taken by the Government, just compensation must be paid. But 'just as the navigational privilege permits the Government to reduce the value of riparian lands by denying the riparian owner access to the stream without compensation for his loss, * * * it also permits the Government to disregard the value arising from this same fact of riparian location in compensating the owner when fast lands are appropriated.' United States v. Virginia Elec. & Power Co., 365 U.S. 624, 629, 81 S.Ct. 784, 788, 5 L.Ed.2d 838 (1961). Specifically, the Court has held that the Government is not required to give compensation for 'water power' when it takes the riparian lands of a private power company using the stream to generate power. United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 73—74, 33 S.Ct. 667, 676, 57 L.Ed. 1063 (1913). Nor must it compensate the company for the value of its uplands as a power plant site. Id., at 76, 33 S.Ct. at 677. Such value does not 'inhere in these parcels as upland,' but depends on use of the water to which the company has no right as against the United States: 'The government had dominion over the water power of the rapids and falls, and cannot be required to pay any hypothetical additional value to a riparian owner who had no right to appropriate the current to his own commercial use.' Ibid.

All this was made unmistakably clear in United States v. Twin City Power Co., 350 U.S. 222, 76 S.Ct. 259, 100 L.Ed. 240 (1956). The United States condemned a promising site for a hydroelectric power plant and was held to be under no obligation to pay for any special value which the fast lands had for power generating purposes. The value of the land attributable to its location on the stream was 'due to the flow of the stream; and if the United States were required to pay the judgments below, it would be compensating the landowner for the increment of value added to the fast lands if the flow of the stream were taken into account.' 350 U.S., at 226, 76 S.Ct., at 261.

We are asked to distinguish between the value of land as a power site and its value as a port site. In the power cases, the stream is used as a source of power to generate electricity. In this case, for the property to have value as a port, vessels must be able to arrive and depart by water, meanwhile using the waterside facilities of the port. In both cases, special value arises from access to and use of, navigable waters. With regard to the constitutional duty to compensate a riparian owner, no distinction can be drawn. It is irrelevant that the licensing authority presently being exercised over hydroelectric projects may be different from, or even more stringent than, the licensing of port sites. We are dealing with the constitutional power of Congress completely to regulate navigable streams to the total exclusion of private power companies or port owners. As was true in Twin City, if the owner of the fast lands can demand port site value as part of his compensation, 'he gets the value of a right that the Government in the exercise of its...