United States v.

50 ACRES OF LAND 469 U.S. 24 (1984)

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Nature of the Case

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Facts

The United States condemned approximately 50 acres of land owned by the city of Duncanville, Texas. 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. 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 condemned facility and deposited $199,950 in the registry of the court as its estimation of the amount due. 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. 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. The jury found that the fair market value of the condemned property was $225,000 and that the reasonable cost of a substitute facility was $723,624.01.The District Court entered judgment for the lower amount plus interest on the difference between that amount and the sum already paid. 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.' 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.' The Court of Appeals reversed and remanded for further proceedings. It reasoned that the city's loss attributable to the condemnation was 'the amount of money reasonably spent . . . to create a functionally equivalent facility.' The Court of Appeals believed that the City 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. The Supreme Court granted certiorari.