Court Opinion

ID: 8595806
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:59.716284+00
Date Added: 2024-06-11T16:54:55.644745
License: Public Domain

SkeltoN, Judge,
concurring in part and dissenting in part:
I concur in all the per curiam opinion, except the award of interest of 6% percent for the period 1966-1970 and the award of interest of Uf¿ percent for the period 1971 to date of payment. I think the interest awarded for these years is too high and should be reduced to six percent for the entire period of 1966 to date of payment. This would be in line with 16 UjS.C. § 79c(b) (2) (1970) which provides in pertinent part:
The United States will pay just compensation to the owner of any real property taken * * * including interest at the rate of 6 per centum per annum from the date of taking the property to the date of payment therefor; * * *
It is true that this statute refers to the taking of real property for the Redwood National Park, nevertheless, it deals with a fifth amendment taking of property by the Govern-*205meat and provides the payment of an appropriate rate of interest.
Also, the Declaration of Taking Act, 40 U.'S.C. § 258a (1970), 46 Stat. 1421, provides in pertinent part with reference to just compensation for a taking by the United 'States of any land or easement or right of way in land for public use:
* * * [A]nd the said judgment shall include, as part of the just compensation awarded, interest at the rate of 6 per centum per annum * * *.
These two statutes establish guidelines for the payment of interest in fifth amendment takings of real property by the United States. While the instant case does not involve real property, it does involve fifth amendment takings by the Government. I think that in the absence of adequate and convincing proof otherwise, we should follow the above statutes and award six percent interest for the above-indicated period.
In the case before us, the majority approves the decision of the trial judge in awarding 6% and 7y2 percent interest for the designated.period based on Moody’s Composite Index of Yields on Long Term Corporate Bonds. In my opinion, this is not a proper yardstick to measure or determine the amount of interest to 'be awarded in a fifth amendment taking by the Government. We are not dealing with corporate bonds, which may be speculative as to yield as well as to risk of default, but with an obligation of the United States which usually bears a lower interest rate than that applicable to other borrowers, is not speculative 'as to yield and bears no risk of default.
The Ninth Circuit Court of Appeals discussed this very point in United States v. Blankinship, 543 F. 2d 1272 (9th Cir. 1976), in considering the proper way to determine the amount of interest to be paid for a fifth amendment taking by the Government under the Declaration of Taking Act cited above. The court held:
However, we also hold that the trial court in this case, acting as the trier of fact, did not consider evidence we believe to be of great importance in establishing the proper and reasonable rate. Specifically, the trial court did not have before it certain highly relevant evidence with the result that the rates selected may have been *206improperly skewed. The evidence 'before it was inadequate to establish tbe rate of interest that would have been available to the person from whom the property has been taken had he, ¡at the date of taking, invested the total amount of any deficiency in the original deposit in a marketable public debt security issued by the United States Treasury having a duration commencing with the date of taking and ending with the deposit in the registry of the court of the entire deficiency with proper interest. Evidence tending to establish such a rate is necessary to fix fairly the just compensation to which the person deprived of his land is entitled. Without evidence of such a rate the rates selected very likely may have been unduly influenced by rates applicable to loans more speculative than one to the United States. * * *
*>::***
* * * [W]e are convinced that the proper interest rate applicable to an obligation of the United States may well be lower than that applicable to other borrowers. Moreover, this lower rate is particularly relevant here because the obligation to pay the deficiency is an obligation of the United States, a creditor whose obligation embodies no risk of default. Seizure of land under the Declaration of Taking Act is an act by the United States by which it substitutes for ownership of land, together with the risks attendant thereto, an obligation of the United States which is free of the risk of default. * * *
* * * We believe that the trial court should have focused more on that type of marketable public debt security which constitutes a direct obligation of the United States Treasury having a duration approximating the period during which the deficiency was unpaid. Data of this type appears in the Treasury Bulletin 4 and the Federal Reserve Bulletin.
I agree with the decision of the Ninth Circuit Court in the above case. The method of determining the rate of interest in that case was not the procedure followed by our trial judge. It does not appear that there was any evidence at the trial of the yield of public securities of the United States during the designated period. It is true that the defendant suggested at the trial that the interest rate should be “an amount equal to the average annual yields on a series of hypothetical long term Government bonds which defendant *207constructs subjectively.” Of course, such a yardstick is speculative and is not the proper way to establish the correct interest rate.
It does not appear that there was any evidence at the trial showing the rate of interest that would have been available to the plaintiff if it had invested, on the dates of taking, the total amounts due it in marketable public debt securities issued by the United States Treasury during the periods involved here. Without such evidence, we are not justified in awarding interest of more than six percent as specified in the two statutes cited above.
The case of Arcata National Corp. v. United States, No. 771-71, report filed July 25,1974, wherein the court approved interest of 6.6 percent in a taking case, is not applicable here, because the parties agreed to the 6.6 rate and the court merely approved their agreement. The majority agrees that this is true.
Neither is Pub. L. No. 93-625, § 7, 88 Stat. 2108 of January 3, 1975, providing for payment by the Government of interest of nine percent per annum on overpayments of internal revenue taxes, cited by the majority, controlling in this case. There is not the slightest evidence or indication that Congress intended the Act to apply in any way to eminent domain cases. Besides, there is a big difference between interest on an overpayment of taxes and interest in a taking case. An overpayment of taxes allows the Government to use the taxpayer’s money until a refund is made and the nine percent interest is payment by the Government for such use. Whereas, in a taking case, interest is not paid for use of money belonging to the party whose property is taken, but is awarded to him as a part of his damages in the form of delayed compensation.

 Of particular significant is the table setting forth “Yields of Treasury Securities” which appears regularly in the monthly Treasury Bulletin.
E.g., Treas. Bull., July, 1976 at 79.