United States v. Pewee Coal Company/Concurrence Reed

Mr. Justice REED, concurring.

I agree that in this case there was a 'taking' by eminent domain that requires the Government to pay just compensation to the owner of the property for its use. However, it is impossible for me to accept the view that the 'taking' in this case requires the United States to bear all operating losses during the period it controls the property without the owner's consent or agreement. Such a view would lead to disastrous consequences where properties necessarily taken for the benefit of the Nation have a long record of operating losses, e.g., certain railroads, coal mines, or television broadcasting stations. The question of who bears such losses is not, I think, 'conceptually distinct' from the question of just compensation. Losses or profits on the temporary operation after the declaration or judgment of taking are factors to be taken into consideration in determining what is just compensation to the owner.

This is a temporary taking. The relatively new technique of temporary taking by eminent domain is a most useful administrative device: many properties, such as laundries, or coal mines, or railroads, may be subjected to public operation only for a short time to meet war or emergency needs, and can then be returned to their owners. However, the use of the temporary taking has spawned a host of difficult problems, e.g., United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311; United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729; Kimball Laundry Co. v. United States, 338 U.S. 1, 69 S.Ct. 1434, 93 L.Ed. 1765, especially in the fixing of the just compensation. Market value, despite its difficulties, provides a fairly acceptable test for just compensation when the property is taken absolutely. See United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336; United States v. John F. Felin & Co., 334 U.S. 624, 68 S.Ct. 1238, 92 L.Ed. 1614; United States v. Toronto H. & B. Navigation Co., 338 U.S. 396, 70 S.Ct. 217, 94 L.Ed. 195; United States v. Commodities Trading Corp., 339 U.S. 121, 70 S.Ct. 547, 94 L.Ed. 707. But in the temporary taking of operating properties, e.g., Marion & Rye Valley R. Co. v. United States, 270 U.S. 280, 46 S.Ct. 253, 70 L.Ed. 585; United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884, market value is too uncertain a measure to have any practical significance. The rental value for a fully functioning railroad for an uncertain period is an unknowable quantity. This led to a government guarantee of earnings in the First World War, 40 Stat. 451. Cf. United States v. Westinghouse Electric & Mfg. Co., 339 U.S. 261, 70 S.Ct. 644, 94 L.Ed. 816. The most reasonable solution is to award compensation to the owner as determined by a court under all the circumstances of the particular case.

Temporary takings can assume various forms. There may be a taking in which the owners are ousted from operation, their business suspended, and the property devoted to new uses. United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311; United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729; Kimball Laundry Co. v. United States, 338 U.S. 1, 69 S.Ct. 1434, 93 L.Ed. 1765. A second kind of taking is where, as here, the Government, for public safety or the protection of the public welfare, 'takes' the property in the sense of assuming the responsibility of its direction and employment for national purposes, leaving the actual operations in the hands of its owners as government officials appointed to conduct its affairs with the assets and equipment of the controlled company. Examples are the operation of railroads, motor carriers, or coal mines. Marion & Rye Valley R. Co. v. United States, 270 U.S. 280, 46 S.Ct. 253, 70 L.Ed. 585; United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 667, 91 L.Ed. 884.

When, in a temporary taking, no agreement is reached with the owners, the courts must determine what payments the Government must make. Whatever the nature of the 'taking,' the test should be the constitutional requirement of 'just compensation.' However, there is no inflexible requirement that the same incidents must be used in each application of the test.

So far as the second kind of temporary 'taking' is concerned, the Government's supervision of a losing business for a temporary emergency ought not to place upon the Government the burden of the losses incurred during that supervision unless the losses were incurred by governmental acts, e.g., if the business would not have been conducted at all but for the Government, or if extra losses over what would have been otherwise sustained were occasioned by Government operations. Where the owner's losses are what they would have been without the 'taking,' the owner has suffered no loss or damage for which compensation is due. Cf. Marion & Rye Valley R. Co. v. United States, 270 U.S. 280, 46 S.Ct. 253, 70 L.Ed. 585. The measure of just compensation has always been the loss to the owner, not the loss or gain to the Government. Boston Chamber of Commerce v. Boston, 217 U.S. 189, 195, 30 S.Ct. 459, 460, 54 L.Ed. 725.

Here the Court of Claims has correctly applied these principles in a case of a losing operation in a temporary taking. It has found that a certain sum was expended without legal or business necessity so to do. This sum was the extra allowance paid at the direction of the United States under a certain War Labor Board recommendation that had no legal sanction. 50 U.S.C.App. § 1507, 50 U.S.C.A.Appendix, § 1507; E.O. 9017, 3 CFR Cum.Supp. 1075, 50 U.S.C.A.Appendix, § 1507 note. I would not overturn its finding in this case and would therefore affirm.

Mr. Justice BURTON, with whom THE CHIEF JUSTICE, Mr. Justice CLARK and Mr. Justice MINTON concur, dissenting.