Court Opinion

ID: 8914712
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:32:16.280872+00
Date Added: 2024-06-11T17:08:52.239560
License: Public Domain

WALLACE, Circuit Judge,
dissenting:
The majority has decided that when the government proceeds under the general condemnation statute, 40 U.S.C. § 257, a distinction must be made, for purposes of determining when a taking occurs, between improved property and unimproved property. In the case of unimproved property, the majority rejects the long-standing rule that absent a taking by physical possession or by statutory provision, no taking occurs until payment of the condemnation award. Danforth v. United States, 308 U.S. 271, 284, 60 S.Ct. 231, 236, 84 L.Ed. 240 (1939); United States v. Johns, 146 F.2d 92 (9th Cir. 1944); United States v. Mahowald, 209 F.2d 751 (8th Cir. 1954). The majority holds that in the case of unimproved property, the entry of the condemnation judgment itself effectively “takes” the owner’s property by denying him any practical economic use of his land. The obvious purpose of this new rule is to reduce the financial burden on unimproved property owners which occurs when the government waits a period of time after the entry of a condemnation judgment before deciding whether to proceed with the condemnation. As I see it, the effect of a condemnation judgment on the unimproved property owner is not sufficiently different *341from that on the improved property owner to justify a departure from the general rule that the taking occurs upon the payment of a condemnation award. Therefore, I respectfully dissent.
The majority assumes that the unimproved property owner is necessarily in a far worse position than the improved property owner upon the entry of a condemnation judgment. There are, of course, some differences but they appear to me to be differences in degree, not in kind, and not of the magnitude to require the distinction. For example, after the condemnation judgment is entered, the unimproved property owner cannot, as a practical matter, sell his land or make substantial improvements upon it. Ante at 339-340. However, the condemnation judgment has exactly the same effect upon the owner of improved property; the fact that property is income-producing or has improvements upon it which can be utilized by the owner does not change the fact that when the government can take the property at an already settled price, there is little incentive to make improvements and little hope of finding an interested buyer. Thus, the only difference can be that during the period of time in which the government decides whether to finalize the condemnation of the property, the improved property may be contributing to costs if it is income-producing, or may be used by the owner in some way. Aside from possible recreational use, or some other use of the land that' does not require capital expenditures which would be lost upon condemnation, the unimproved property owner is forced to carry the property’s liabilities until the government decides what action it will take.
In deciding whether such a difference is great enough to rise to the level of a constitutional taking, however, it must be emphasized that this is exactly the same position that the unimproved property owner was in prior to the entry of the condemnation judgment. The unimproved property owner cannot claim that the government’s actions have permanently removed the opportunity to sell or develop the property. If he holds the land for investment, his return may be delayed. If he plans to improve during the time of delay, there will be an interference. However, as to delay of sale, the improved property owner is similarly delayed, and it is mere speculation to assume that his present return on investment or the imputed return from the use of the property adequately compensates him for this delay. As to temporary interference with the owner’s ability to develop his property, the improved property owner may suffer a similar deprivation if there are plans to develop further the property which must now be held up until the government makes its decision.
Thus, close examination of the effects of the condemnation judgment on the two types of property demonstrates no real certainty that there is any practical economic result which is substantially different. Neither type of property is made permanently nonsalable or nondevelopable. Both types of landowners are forced to postpone whatever development plans may exist. If the government ultimately condemns the property, both owners have “lost” the income or return which could have been earned from investing the condemnation award. The reason that the unimproved property owner, unlike the improved property owner, cannot offset any losses caused by the government’s delay is that, prior to the condemnation judgment, it had obviously not been economically feasible to make similar improvements upon the land. Just as the Supreme Court has held that, absent extraordinary delay, “[m]ere fluctuations in value” resulting from preeondemnation activities constitute “incidents of ownership” and “cannot be considered as a ‘taking’ in the constitutional sense,” Agins v. City of Tiburon, 447 U.S. 255, 263 n.9, 100 S.Ct. 2138, 2142, 65 L.Ed.2d 106 (1980), any increased burden on the unimproved property owner caused by postcondemnation delay is best viewed simply as one of the incidents of ownership of unimproved property. This temporary and partial interference is fundamentally different from the kinds of substantial deprivations which have heretofore been recognized as constitutional “takings.” *342See, e.g., Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922); Kaiser Aetna v. United States, 444 U.S. 164, 100 S.Ct. 383, 62 L.Ed.2d 332 (1979); Richmond Elks Hall Ass’n v. Richmond Redevelopment Agency, 561 F.2d 1327 (9th Cir. 1977). If relief is to be provided for unimproved property owners, therefore, it must come from Congress rather than the federal courts. I would affirm the judgment of the district court and deny the award of interest from the date of judgment.