Morton Thiokol, Inc. v. United States

4 Cl. Ct. 625, 1984 U.S. Claims LEXIS 1481
CourtUnited States Court of Claims
DecidedFebruary 22, 1984
DocketNo. 317-83L
StatusPublished
Cited by16 cases

This text of 4 Cl. Ct. 625 (Morton Thiokol, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morton Thiokol, Inc. v. United States, 4 Cl. Ct. 625, 1984 U.S. Claims LEXIS 1481 (cc 1984).

Opinion

OPINION

NETTESHEIM, Judge.

This inverse condemnation case is before the court after argument on defendant’s motion for summary judgment arid plaintiff’s motion for partial summary judgment on the issue of liability.

FACTS

The facts either have been stipulated or they have not been contested in accordance with RUSCC 56(e).1 Morton Thiokol, Inc. (“plaintiff”), of which Morton Salt is an unincorporated division, owns and operates a salt mine at Weeks Island, Iberia Parish, Louisiana. On October 7,1977, the Federal Energy Administration (the “FEA”), predecessor of the Department of Energy (the “DOE”), contracted to buy a salt mine cavern from plaintiff for use as an oil storage facility in connection with the Strategic Petroleum Reserve Program. It was the parties’ intention that the FEA would purchase only certain defined stratified interests in plaintiff’s salt dome, consisting of the cavern itself and a 300-foot thickness or “sill” of salt (hereinafter referred to as the “original sill”) to serve as a buffer between the cavern and a new salt mine which, it was agreed, plaintiff would begin immediately below the sill. The Mining Enforcement Safety Administration (“MESA”) had notified plaintiff that a 300-foot sill appeared to be adequate for safety purposes, subject to the results of “geotechnical and finite analysis studies in progress and to be conducted.”

An Operating Agreement incorporated into the Offer To Sell Real Property (the “Contract”) provided at paragraph 4:

It is expressly understood ... that MORTON has retained fee simple title to all of its Weeks Island property, except with respect to the specific property interests being conveyed ... and, accordingly, that MORTON has the full right and title with respect to the remainder of its property at Weeks Island, to utilize the same for any and all business purposes, including — but not limited to — the construction of the New Mine, free from any interference from the activities of the UNITED STATES in connection with the oil storage program, except to the extent expressly set forth in this Agreement.

The Contract recited that plaintiff was to convey for $30 million “title only to the properties ... specifically described” and that plaintiff did not relinquish “its fee simple title, ownership or any appurtenances thereto with respect to its present fee simple title ownership of Weeks Island outside, either vertically or horizontally, of the said properties.”

Because Louisiana law did not recognize a fee simple in a horizontal stratum, such as the parties wished to convey between them, and would have forced the FEA to acquire either fee simple title of the salt dome to the center of the earth or an easement in a horizontal section, the parties agreed that the United States would institute condemnation proceedings in federal district court to acquire the stratum defined in the Contract. The Contract recited that Louisiana law did not affect the ability of the United States to acquire by condemnation fee simple title to the described interest “without, in the process, acquiring fee simple title or any other property interests to any areas outside those described ... which, by such specific descriptions, limits the scope of the properties intended to be acquired by the UNITED STATES.”

The Operating Agreement, inter alia, provided for the coordination of the parties’ activities and, in paragraph 5, that each party would

(b) [ejxercise due care and undertake all prudent precautions so as not to endanger [627]*627person or property or cause injury, death, loss or property damage at Weeks Island; (c) Comply with all applicable requirements of MESA, or its successor; (d) Coordinate their facilities and activities so as to avoid any injury, death, loss or property damage, and so as to minimize any disruption of activities at Weeks Island, except to the extent expressly provided for in this Agreement.

Owing to government time constraints, the Operating Agreement was concluded and condemnation proceedings instituted before the results were published of the geotechnical survey commissioned by the FEA to determine the necessary sill thickness between the storage cavern and the new mine. An FEA memorandum dated June 1, 1977, covering a meeting between officials of the FEA and plaintiff, supports plaintiff’s assertion that a pressing timetable existed for the commencement of oil storage. The General Accounting Office in a report issued on August 14, 1978, entitled “Questionable Suitability of Certain Salt Caverns and Mines for the Strategic Petroleum Reserve” [hereinafter cited as the “GAO Report”], also stated that officials of MESA’s successor, the Mine Safety and Health Administration (“MSHA”), had found that the FEA’s “mine testing program was not adequate.”

The FEA-commissioned survey, published in November 1977, after the district court’s order for delivery of possession on October 20, 1977, advised against mining below the storage cavern; moreover, another study undertaken by MESA’s successor MSHA concluded in July 1978 that at least a 650-foot sill was necessary to protect against the danger to the cavern of “blowouts” unless facts were provided which would assure the adequacy of a lesser thickness. Blowouts, which were not foreseen by the parties in agreeing to the original sill, are holes in the ceilings of salt mines, some hundreds of feet high, which result when blasting in gas-bearing salt formations causes more salt to be broken than planned. Such an occurrence is unpredictable, and if one of these holes were to extend up to the oil storage cavern, an obvious catastrophe would result. Before the Louisiana court ordered delivery of the property conveyed on October 20, 1977, however, plaintiff had commenced construction on the new mine within the additional 350-foot area which, together with the original sill, would have formed the 650-foot recommended sill. (This additional 350-foot area will be referred to hereinafter as the “additional sill.”)

In a memorandum to the Secretary of Labor, MSHA Assistant Secretary Robert B. Lagather stated in mid-1978, referring to DOE’s operating the oil reserve facilities without adequate buffers, that “[s]hould the present course of action be continued by DOE, we will have no recourse other than to issue withdrawal orders as mandated by ... the Federal Mine Safety and Health Act of 1977....”

Among other efforts to persuade MSHA that the additional sill was not necessary, plaintiff commissioned its own study to assess whether the additional sill was required to guard against blowouts. The study results failed to persuade MSHA that a lesser sill was adequate, although MSHA officials as of early 1979 indicated their willingness to discuss the matter further with plaintiff and to review any other tests or studies plaintiff wished to submit. The parties agree that MSHA’s position concerning the minimum 650-foot sill is the same today as it was in 1978-79. By letter of May 18, 1979, plaintiff advised MSHA that, as a result of the MSHA study, plans for an alternate mine had been developed and demanded compensation for the additional sill. Thereafter, plaintiff filed an amended answer in the condemnation action claiming additional compensation for its loss.

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Bluebook (online)
4 Cl. Ct. 625, 1984 U.S. Claims LEXIS 1481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morton-thiokol-inc-v-united-states-cc-1984.