Court Opinion

ID: 8887848
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:22:55.593431+00
Date Added: 2024-06-11T17:07:01.521919
License: Public Domain

HOLLOWAY, Circuit Judge
(concurring and dissenting):
I agree with the Court’s opinion in all respects except as to the well plugging issue, on which I respectfully dissent.
I agree that the Government is liable for any plugging costs. The fact that the interests were taken did not precipitate the plugging responsibility so as to impose that burden on the leasehold owners. However, I believe that this does not decide the issue on the well plugging matter before us. The issue is, I feel, whether this well plugging burden and its weight, if ány, influencing market value at the time of the taking may be considered.
On our record I believe that there was substantial proof that production on the properties was approaching the end of its commercially feasible operation. It is, of course, undisputed that upon abandonment the then owner would be required to plug the wells under the Commission’s supervision. Moreover, there was proof that the burden of plugging expense is taken into account between willing buyers and sellers. Further, under the engineering appraisal method of valuation, there was testimony that the plugging costs were properly chargeable as an expense to arrive at the appraised fair market value.
The District Court’s instructions to the Commission permitted taking proof on the well plugging matter but directed that market value should be determined without considering this element. While it might be determined from the proof at trial that abandonment and the plugging burden were too remote to consider, I think the Commissioners should not have been instructed as a matter of law before trial to disregard the well plugging factor entirely. Instead, I feel they should have been instructed that if they found that abandonment and the plugging expense were not remote or speculative, and that they would have been considered by a willing purchaser, then they should take into account the influence on fair market value, if any, that the future plugging obligation was exerting at the time of taking. Such consideration of the proof was called for, I feel, by the rule broadly favoring admissibility of relevant evidence showing what the market value was as between a willing buyer and seller. See United States v. Sowards, 370 F.2d 87, 90 (10th Cir.).
Such influences of administrative regulations on market values have been considered in condemnation proceedings, taking into account likely future events or modifications of regulations. See, e. g., Rapid Transit Co. v. United States, 295 F.2d 465, 466 (10th Cir.), cert. denied, 369 U.S. 819, 82 S.Ct. 831, 7 L.Ed. 2d 785; H & R Corporation v. District of Columbia, 122 U.S.App.D.C. 43, 351 E.2d 740, 742-743; and Fairfield Gardens, Inc. v. United States, 306 F.2d 167, 170 (9th Cir.). Likewise I feel proof on the well plugging matter was a proper factor for the Commission to weigh.