United States v. 50 Acres of Land

469 U.S. 24, 105 S. Ct. 451, 83 L. Ed. 2d 376, 1984 U.S. LEXIS 162, 53 U.S.L.W. 4001, 15 Envtl. L. Rep. (Envtl. Law Inst.) 20117, 21 ERC (BNA) 2105
Supreme Court of the United States·Decided December 4, 1984·No. 83-1170·Published·Cited by 187 cases

Opinions

Justice Stevens

delivered the opinion of the Court.

The Fifth Amendment requires that the United States pay “just compensation” — normally measured by fair market value1 — whenever it takes private property for public [26] use.2 This 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.3 The 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.4 In 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 [27] 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. See United States v. 564-54 Acres of Land, 441 U. S. 506, 509, n. 3 (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 property5 and on the cost of the substitute landfill facility.6 Responding to special interrogatories, the jury found that the fair market value of the [28] 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.7 529 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.”8 In 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 (CA5 1983). 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 [29] 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.10 We granted the Government’s petition for certiorari,11 465 U. S. 1098 (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 (1934). “Considerations that may not reasonably be held to affect market value are excluded.” Id., at 256. 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 (1950); Kirby Forest Industries, Inc. v. United States, 467 U. S. 1, 10, n. 14 (1984).

[30] 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.12 Under 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. 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.

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United States v. 50 Acres of Land, 469 U.S. 24, 105 S. Ct. 451, 83 L. Ed. 2d 376, 1984 U.S. LEXIS 162, 53 U.S.L.W. 4001, 15 Envtl. L. Rep. (Envtl. Law Inst.) 20117, 21 ERC (BNA) 2105 (1984).

469 U.S. 24 (United States v. 50 Acres of Land) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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