United States v. Reynolds (397 U.S. 14)/Opinion of the Court

The United States brought this suit in the United States District Court for the Western District of Kentucky to condemn more than 250 acres of the respondents' land for a federal development known as the Nolin Reservoir Project located in that State. An important issue in the case was raised by the respondents' claim that 78 acres of the land, taken for construction of recreational facilities adjacent to the reservoir, had not been within the original scope of the project. A jury awarded the respondents $20,000 as just compensation for all the land taken. Upon an appeal by the respondents, the Court of Appeals for the Sixth Circuit reversed the judgment and ordered a new trial, finding that the District Judge in his instructions to the jury had erroneously referred to matters disclosed outside the jury's presence. The trial and appellate courts were in agreement, however, in rejecting the Government's contention that the 'scope-of-the-project' issue was for the trial judge to decide and should not, therefore, have been submitted to the jury at all. There being a conflict between the circuits on this question, we granted certiorari to consider a recurring problem of importance in federal condemnation proceedings. 396 U.S. 814, 90 S.Ct. 54, 24 L.Ed.2d 66.

The Fifth Amendment provides that private property shall not be taken for public use without just compensation. And 'just compensation' means the full monetary equivalent of the property taken. The owner is to be put in the same position monetarily as he would have occupied if his property had not been taken. In enforcing the constitutional mandate, the Court at an early date adopted the concept of market value: the owner is entitled to the fair market value of the property at the time of the taking. But this basic measurement of compensation has been hedged with certain refinements developed over the years in the interest of effectuating the constitutional guarantee. It is one of these refinements that is in controversy here.

The Court early recognized that the 'market value' of property condemned can be affected, adversely or favorably, by the imminence of the very public project that makes the condemnation necessary. And it was perceived that to permit compensation to be either reduced or increased because of an alteration in market value attributable to the project itself would not lead to the 'just compensation' that the Constitution requires. On the other hand, the development of a public project may also lead to enhancement in the market value of neighboring land that is not covered by the project itself. And if that land is later condemned, whether for an extension of the existing project or for some other public purpose, the general rule of just compensation requires that such enhancement in value be wholly taken into account, since fair market value is generally to be determined with due consideration of all available economic uses of the property at the time of the taking.

In United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336, the Court gave full articulation to these principles:

'If a distinct tract is condemned, in whole or in part, other     lands in the neighborhood may increase in market value due to      the proximity of the public improvement erected on the land      taken. Should the Government, at a later date, determine to     take these other lands, it must pay their market value as      enhanced by this factor of proximity. If, however, the public     project from the beginning included the taking of certain      tracts but only one of them is taken in the first instance,      the owner of the other tracts should not be allowed an      increased value for his lands which are ultimately to be      taken any more than the owner of the tract first condemned is      entitled to be allowed an increased market value because      adjacent lands not immediately taken increased in value due      to the projected improvement.

'The question then is whether the respondents' lands were     probably within the scope of the project from the time the      Government was committed to it. If they were not, but were     merely adjacent lands, the subsequent enlargement of the      project to include them ought not to deprive the respondents      of the value added in the meantime by the proximity of the      improvement. If, on the other hand, they were, the Government     ought not to pay any increase in value arising from the known      fact that the lands probably would be condemned. The owners     ought not to gain by speculating on probable increase in value due      to the Government's activities.' 317 U.S., at 376-377, 63      S.Ct., at 281.

There is no controversy in the present case regarding these basic principles. The parties agree that if the acreage in issue was 'probably within the scope of the project from the time the Government was committed to it,' substantially less compensation is due than if it was not. For if the property was probably within the project's original scope, then its compensable value is to be measured in terms of agricultural use. If, on the other hand, the acreage was outside the original scope of the project, its compensable value is properly measurable interms of its economic potential as lakeside residential or recreational property.

The issue between the parties is simply whether the 'scope-of-the-project' question is to be determined by the trial judge or by the jury. There is no claim that the issue is of constitutional dimensions. For it has long been settled that there is no constitutional right to a jury in eminent domain proceedings. See Bauman v. Ross, 167 U.S. 548, 593, 17 S.Ct. 966, 983, 42 L.Ed. 270. As Professor Moore has put the matter:

'The practice in England and in the colonies prior to the     adoption in 1791 of the Seventh Amendment, the position taken      by Congress contemporaneously with, and subsequent to, the      adoption of the Amendment, and the position taken by the      Supreme Court and nearly all of the lower federal courts lead      to the conclusion that there is no constitutional right to      jury trial in the federal courts in an action for the      condemnation of property under the power of eminent domain.'

It is not, therefore, to the Seventh Amendment that we look in this case, but to the Federal Rules of Civil Procedure. Rule 71A(h) provides that, except in circumstances not applicable here, 'any party' to a federal eminent domain proceeding 'may have a trial by jury of the issue of just compensation,' unless the court in its discretion orders that that issue 'shall be determined by a commission of three persons appointed by it. * *  * Trial of all issues shall otherwise be by the court.' The Rule thus provides that, except for the single issue of just compensation, the trial judge is to decide all issues, legal and factual, that may be presented. The critical inquiry is thus whether 'the issue of just compensation,' as that phrase is used in the Rule, is broad enough to embrace the question whether the condemned property was probably within the scope of the federal project.

Although the matter could be decided either way without doing violence to the language of Rule 71A(h), we think the Rule's basic structure makes clear that a jury in federal condemnation proceedings is to be confined to the performance of a single narrow but important function-the determination of a compensation award within ground rules established by the trial judge. The Rule gives the trial court discretion to eliminate a jury entirely. And when a jury is afforded, the sweeping language of the final sentence of the Rule discloses a clear intent to give the district judge a role in condemnation proceedings much broader than he occupies in a conventional jury trial. It is for him to decide 'all issues' other than the precise issue of the amount of compensation to be awarded. It follows that it is for the judge to tell the jury the criteria it must follow in determining what amounts will constitute just compensation, and that in order to do so he must decide the 'scope-of-the-project' issue as a preliminary matter. We therefore approve and adopt the procedural rule announced by the Court of Appeals for the Fifth Circuit in Wardy v. United States, 402 F.2d 762, and hold that it is for the judge and not the jury to decide whether the property condemned was probably within the project's original scope.

Finally, the Government asks us to take this occasion to 'clarify' the 'scope-of-the-project' test. We think the test was stated with admirable clarity by a unanimous Court in Miller: if the 'lands were probably within the scope of the project from the time the Government was committed to it,' no enhancement in value attributable to the project is to be considered in awarding compensation. As with any test that deals in probabilities, its application to any particular set of facts requires discriminating judgment. The rule does not require a showing that the land ultimately taken was actually specified in the original plans for the project. It need only be shown that during the course of the planning or original construction it became evident that land so situated would probably be needed for the public use.

The judgment of the Court of Appeals is vacated, and the case is remanded to the United States District Court for the Western District of Kentucky for further proceedings consistent with this opinion.

It is so ordered.

Vacated and remanded.

Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concurs, dissenting.