Kirby Forest Indus. v. United States, 467 U.S. 1 (1984)

Kirby Forest Industries, Inc. v. United States

No. 82-1994

Argued February 22, 1984
Decided May 21, 1984
467 U.S. 1

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

Syllabus

Petitioner manufacturer of forest products owns substantial timberland in Texas. On August 21, 1978, after negotiations to acquire over 2,000 acres of this land for a national preserve had broken down, the United States filed a "straight condemnation" complaint under 40 U.S.C. § 257. Shortly thereafter, the United States filed a notice of lis pendens, notifying the public of the institution of the proceeding. The District Court referred the matter to a special commission to ascertain the compensation due petitioner. Trial before the commission began on March 6, 1979, and after hearing competing testimony as to the fair market value of the land, the commission entered a report recommending compensation in the amount of $2,331,202. The District Court entered judgment awarding petitioner compensation for that amount, plus 6% interest for the period from the date the complaint was filed to the date the Government deposited the adjudicated value of the land with the court. On March 26, 1982, the United States deposited the amount of the judgment in the District Court’s registry, and, on that same date, acquired title to the land. The Court of Appeals reversed the award of interest to petitioner, holding that the date of the taking should be deemed the date on which the compensation award was paid, and that, hence, no interest was due on that award. The court also ruled that the commission inadequately explained its valuation of the land, and accordingly remanded the case to the District Court for further findings regarding the value.

Held:

1. The taking of petitioner’s land occurred on March 26, 1982, and because the award was paid on that date, no interest was due thereon. Pp. 9-16.

(a) That the date of taking in "straight condemnation" proceedings must be deemed the date on which the United States tenders payment to the landowner is amply supported by this Court’s prior decisions and by indications of congressional intent derived from the structure of the pertinent statutory scheme and Federal Rule of Civil Procedure 71A. Rule 71A(i) permits the United States to dismiss a condemnation suit at any time before compensation has been determined and paid, unless the United States has previously acquired title or taken possession. The Government’s capacity in this fashion to withdraw from the proceeding would be difficult to explain if a taking were effectuated prior to tendering of payment. And the option given to the Government in 40 U.S.C. § 258a of peremptorily appropriating land prior to final judgment would have been superfluous if a taking occurred upon the filing of a complaint in a § 257 suit. Pp. 11-13.

(b) Prior to payment of the condemnation award in this case, there was no interference with petitioner’s property interests severe enough to give rise to a taking entitling petitioner to just compensation under the Fifth Amendment. Until title passed to the United States, petitioner was free to make whatever use of its property it pleased. The Government never forbade petitioner to cut trees on the land or develop it in some other way. Nor did the Government abridge petitioner’s right to sell the land. While the initiation of condemnation proceedings, publicized by the lis pendens notice, may have reduced the selling price of the land, impairment of the market value of property incident to otherwise legitimate governmental action ordinarily does not result in a taking, and did not do so here. Pp. 13-16.

2. Petitioner’s constitutional entitlement to the value of its land on the date of the taking can be accommodated by allowing petitioner, on remand, to present evidence pertaining to change in the market value of the property during the substantial delay between the date of valuation and the date the Government tendered payment. Other condemnees who find themselves in petitioner’s position may avail themselves of Federal Rule of Civil Procedure 60(b), which empowers a district court, upon motion of a party, to withdraw or amend a final judgment for "any . . . reason justifying relief from the operation of the judgment." Pp. 16-19.

696 F.2d 351, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court.