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Solved by verified expert:I need Annotated Bibliography for 13 articles attached, I need 7 pages each article take half of the page. I mean each page will have to annotated bibs.Annotate the articles depending on my research paper question which is:
How Should “Just Compensation” of
The Eminent Domain Be Measured and Valued?
My outline will have some of the eminent domain history, just compensation history, just compensation measuring and how it valued. Please annotate the articles in a good grammar and write why the article is relevant to the paper and provide comparison if found in the annonation
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Citation:
W. Harold Bigham, Fair Market Value, Just Compensation
and the Constitution: A Critical View, 24 Vand. L.
Rev. 63 (1970)
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“Fair Market Value,” “Just
Compensation,” and the Constitution:
A Critical View
W. Harold Bigham*
Fair market value is… the amount of money which a purchaser willing but not
obligated to buy the property would pay to an owner willing but not obligated to sell
it, taking into consideration all uses to which the land was adapted and might in
reason be applied.’
‘[M]arket value’ is not an end in itself, but merely a means to an end, the ultimate
object being the ascertainment of “just compensation.” Ordinarily, where the value
of the land is to be ascertained, and it is of such kind and so situated as to be
available for sale in the ordinary course of dealing, market
value is perhaps the best
2
test and under such circumstances is generally adopted.
I.
INTRODUCTION
It has become almost an article of faith that “fair market value”
constitutes the only fair and workable measure of damages for a
landowner whose real property has been taken for public use. 3 The courts
apply it woodenly;’ the magic words are solemnly intoned to jurors,
* Professor of Law, Vanderbilt University. B.A., 1954, University of the South; J.D., 1960,
Vanderbilt University.
The writer is a member of a land condemnation commission appointed under Federal Rule of
Civil Procedure 71(A)(h) by the former chief judge of the United States District Court for the
Middle District of Tennessee, the Honorable William E. Miller, now a member of the United States
Court of Appeals for the Sixth Circuit. The views expressed herein are not those of the Commission,
nor, to the extent that they reflect variations from existing law, do they represent the principles
applied by the author in the carrying out of his duties as a member of the Commission, under the
explicit instructions of the court. This paper was prepared, in part, under the terms of a grant from
the Urban and Regional Development Center of Vanderbilt University and the author gratefully
acknowledges the help and encouragement of the Center.
I. 4 P. NICHOLS, THE LAW OF EMINENT DOMAIN § 12.2[l] (rev. 3d ed. J. Sackman 1962)
(footnotes omitted).
2. Id. § 12.2 (footnotes omitted). See, e.g., Berger & Rohan, The Nassau County Study: An
Empirical Look into the Practicesof Condemnation, 67 COLUM. L. REV. 430 (1967); Hershman,
Compensation-Justand Unjust, 21 Bus. LAW 285 (1966).
3. See, e.g., Crouch, Valuation Problems and Procedures Under Eminent Domain, in
AMERICAN BAR ASSOCIATION NATIONAL
INSTITUTE, CONDEMNATION,
COMPENSATION AND THE
31 (1969); Dolan, Just Compensation:Indemnity or Market Value?, 34 APPRAISAL J. 353
(1966); MacLeod, Adequacy of Compensation in Condemnation, 31 APPRAISAL J. 477 (1963);
Sengstock & McAuliffe, What isthe Priceof Eminent Domain?,44 J. URBAN L. 185 (1966).
4. “For purposes of the compensation due under the Fifth Amendment, of course, only that
‘value’ need be considered which is attached to ‘property,’ but that only approaches by one step the
COURTS
64
VANDERBILT LA W REVIEW
[Vol. 24
commissioners, and arbitrators. 5 Even the learned scholars in the field
problem of definition. The value of property springs from subjective needs and attitudes; its value to
the owner may therefore differ widely from its value to the taker. Most things, however, have a
general demand which gives them a value transferable from one owner to another.” Kimball
Laundry Co. v. United States, 338 U.S. 1, 5 (1949). See also United States ex rel. TVA v. Powelson,
319 U.S. 266 (1943); United States v. Miller, 317 U.S. 369 (1943); McCandless v. United States,
298 U.S. 342 (1936); Olson v. United States, 292 U.S. 246 (1934); United States v. New River
Collieries Co., 262 U.S. 341 (1923); Seaboard Air Line Ry. v. United States, 261 U.S. 299 (1923).
5. A fair example, and a correct statement of the law, is the following extract from the
Instructions to Commissionersgiven by Judge William E. Miller.
“The method by which to determine the just compensation to be paid to the property
owner for the taking of a part of his property is, as a general rule, to compare the fair market
value of the property before and after the taking; that is to say, by subtracting the fair market
value of what remains after the taking from the fair market value of the whole immediately
before the taking.
“Just compensation is not a question of the value of the property in question to the
defendant, on the one hand, nor its value to the Government on the other. Therefore, in
determining the fair market value of the property in question on the date of taking you shall
not consider or be influenced by the fact that the United States needs the property or that these
proceedings are pending, nor shall you consider or in any way be influenced by the fact that the
United States is able and willing to pay for the property or that the defendant is or may be
unwilling to sell. It would be improper for you to permit such matters to affect your findings.
“In every condemnation proceeding the problem is to determine what the property owner
has lost as a result of the taking, and not what the Government may have gained.
“Just compensation is intended to cover the loss caused the owner by the taking of his
property for public use and not the value of the property as applied to the public use. How
much the property taken may be worth to the public for those purposes to which it will be
applied is not to be considered by you in any way in arriving at the fair market value of the
property at the date of the taking by the Government.
“So, in determining fair market value at the time of the taking, you are not to consider
the fact that the Government intends to take the land; instead you are to fix the fair market
value on the date of taking at a time immediately before the taking, without regard either to
the imminency of the taking or the pendency of any proceedings to take the land.
“In determining the fair market value of the estate or interest taken, you may not
consider the Government’s need for the property, nor whether or not the defendant owner
wanted to sell it. Your task is to find what was the fair market value of the tract involved in
this trial, as of the time of the taking, uninfluenced in any way by either the necessities of the
Government or the wishes or wants or desires of the owners.
“By fair market value is meant the price in cash or its equivalent that the property would
have brought at the time of the taking, considering its highest and most profitable use, if then
offered for sale in the open market in competition with other similar properties at or near the
location of the property, with a reasonable time allowed to find a purchaser.
“You are to assume that the purchaser in such a
transaction was desirous of buying the
seller
was
desirous of selling the property, but not
and
that
the
forced
to
buy,
but
not
property,
forced to sell; and that both buyer and seller were fully informed on that date as to all
circumstances and factors favorable and unfavorable with respect to the property, and as to all
uses to which the property was then being put, and as to the highest and best use and all other
uses for which the property was at that time actually and potentially suitable and adaptable.
“In arriving at your estimate of fair market value, you should take into account all factors
1970]
EMINENT DOMAIN
give it at least implicit recognition. 6 Moreover, it continues to flourish
despite widespread public dissatisfaction with both the substantive test
for damages and the procedures through which the land is obtained. 7 The
taking of private property for the federal interstate highway and urban
renewal programs, for example, has left a trial of unhappy landowners
who have lost all faith in the ability or willingness of government to deal
fairly with its citizens.
The discontent with existing condemnation compensation practices
stems from the failure of condemning authorities using the fair market
Value test to make whole those who are forced to give up their property
for public use.8 The fifth amendment’s command that “private property
which could fairly be suggested by the seller to increase the price paid, and all counterarguments which the buyer could fairly make to reduce the price to be paid by him, to the
extent that you believe such matters would have been considered in the bargaining as to price.
Your determination is to be made in the light of all facts affecting value as shown by the
evidence, together with any facts which, although not shown by the evidence, are of such
general knowledge in the community as not to require proof.” (Judge Miller’s order of instruction is retained on file in the federal district court for the Middle District of Tennessee.)
6. E.g., AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS, CONDEMNATION APPRAISAL
PRACTICE 4-8 (1961); L. ORGEL. VALUATION UNDER THE LAW OF EMINENT DOMAIN §§ 11-15, 17
(2d ed. 1953).
7. Even the courts recognize the hardship. See United States v. General Motors Corp., 323
U.S. 373, 382 (1945); City of Newark v. Cook, 99 N.J. Eq. 527, 538, 133 A. 875, 879 (Ch. 1926).
During 1963 and 1964, hearings were conducted around the country by the Select
Subcommittee on Real Property Acquisition of the Committee of Public Works of the United
States House of Representatives. These hearings, dealing with real property acquisition practices
and adequacy of compensation in federal and federally assisted programs, revealed a deep, pervasive
distrust of governmental motives and practices in land acquisition programs. See Hearingson Real
Property Acquisition Practicesand Adequacy of Compensation in Federaland Federally Assisted
Programs Before the Select Subcomm. on Real Property Acquisition of the House Comm. on
Public Works, 88th Cong., 2d Sess. (1964). The study, a considerable portion of which is
reproduced in PRACTICING LAW INSTITUTE, REAL ESTATE VALUE IN CONDEMNATION 255-98 (1969),
points out that present practices are not doing substantial justice to the condemnees, and it suggests
that the market value standards limiting compensation to the value of the property taken were
adopted by the courts in a comparatively uncomplicated time in our nation’s history when land was
plentiful and government acquisitions skirted cities and by-passed homes and businesses, causing
few displacements and relatively little damage. The gist of the report is that it is the responsibility of
the Congress to determine whether other losses suffered by public owners or tenants should be
absorbed by the public. See also Slaritt, More Inequities and Injustices of Condemnation Practice,
43 CONN. B.J. 89 (1969).
8. For a vivid description of the adverse psychological effect see Fried, Grievingfor a Lost
Home: Psychological Costs of Relocation in J. WILSON, URBAN RENEWAL: THE RECORD AND THE
CONTROVERSY 359 (1966). See also Weisl & Cohen, Federal Condemnation Law and the Public
Interest, in 1968 INSTITUTE ON EMINENT DOMAIN 45. Not all of the dissatisfaction, however, lies
with the landowners. Governmental officials sometimes believe that the public is forced to pay more
for the property than is fair. See, e.g., United States v. Merchants Matrix Cut Syndicate, Inc., 219
F.2d 90 (7th Cir.), cert. denied, 349 U.S. 945 (1955); United States v. 0.84 Acres of Land, 112 F.
Supp. 828 (N.D. Cal. 1953). Then, too, courts themselves are becoming aware that present
VANDERBILT LA W REVIEW
[Vol. 24
[shall not] be taken for public use, without just compensation” has been
construed to mean that the condemnor must pay only for the property
taken. The adoption of the fair market value standard for valuing
property, coupled with judicial interpretation of the terms “property”
and “taken,” has resulted in denial of recovery for sundry incidental
damages. For instance, compensation is not allowable for the unwillingness of the owner to part with his property, 9 the loss of business or
future profits, 10 the frustration of the owner’s plans, loss of opportunities, or other so-called consequential or indirect damages.”
Although the fair market value test has been widely utilized,
another view of the extent of the government’s obligation to the
dispossessed landowner may reasonably be evolved from an
accommodation of the constitutional power of eminent domain and the
constitutional right to just compensation. This is the theory that the
landowner has the right to be made whole-to be put in as good a
pecuniary position as he would have been in if his property had not been
taken.12 This approach, known pejoratively as the “indemnity theory,”
frames the question in terms of “what has the owner lost, not what has
the taker gained.”‘ 3 When the interests of society are balanced against
those of the condemnee, it seems clear that there is no compelling
justification for not completely indemnifying the landowner for his loss.
The object of the fifth amendment’s just compensation clause is to effect
a distribution of certain losses inflicted by public improvements among
the public generally rather than upon those whose property is taken.”4 It
condemnation practices and damage-measuring procedures do not even approximate the rendering
of justice:
“In this era of the law explosion no phase of judicial administration is more ripe for
reform than eminent domain valuation. Trial judges, lawyers and appraisers are willy-nilly
players in a super-charged psychodrama designed to lure twelve mystified citizens into a
technical decision transcending their common denominator of capacity and experience. The
victor’s profit is often less than the public’s cost of maintaining the court during the days and
weeks of trial.” State v. Wherity, 275 Cal. App. 2d 279, 290, 79 Cal. Rptr. 591, 598 (Ct. App.
1969) (Friedman, J., dissenting).
9. United States v. Miller, 317 U.S. 369 (1943).
16. Omnia Commercial Co. v. United States, 261 U.S. 502 (1923); Bothwell v. United
States, 254 U.S. 231 (1920); United States v. Honolulu Plantation Co., 182 F.2d 172 (9th Cir.
1950).
11. See generally United States v. Petty Motor Co., 327 U.S. 372 (1946); Mitchell v. United
States, 267 U.S. 341 (1925).
12. Monongahela Navigation Co. v. United States, 148 U.S. 312 (1893).
13. Chamber of Commerce v. City of Boston, 217 U.S. 189, 195 (1910).
14. There are many losses to redistribute. For example, the cost of the rights of way on the
41,000 mile interstate highway system has been conservatively estimated to be 5 billion dollars.
H.R. Doc. No. 300, 85th Cong., 2d Sess. 1, 6 (1958).
1970]
EMINENT DOMAIN
is sometimes said that the law does not require the condemnee to bear
more than his fair share of the burden of the public improvement for
which his land is being taken. To the extent that the existing use of the
fair market value test prohibits compensation for consequential
damages, however, the landowner’s compensation is inadequate, and he
is in fact paying more than his fair share.
While it is recognized that a few state and federal statutes have
provided some relief from the procrustean bed that is the test of fair
market value, it is the thesis of this article that the time is rapidly
approaching when merely peripheral and palliative remedies will no
longer suffice to suppress the widely-held view that government is
unconstitutionally refusing to “pay the piper” in its public operations
requiring the taking of private property. The purpose of this article is to
consider the areas in which it appears that the “fair market value” test
fails to give the condemnee “just compensation” and to suggest
procedural reforms in condemnation administration. Additionally,
alternative valuation standards will be examined through a review of the
expropriation procedures of several foreign countries.
II.
“FAIR MARKET VALUE” AND THE RELUCTANT LANDOWNER
A.
In General
With respect to the fifth amendment’s prohibition against the
taking of property without just compensation, former Attorney General
Ramsey Clark has said: “There is no more vital concept in the
Constitution, for it protects the citizen in his property, and freedom
cannot exist in a propertyless state. Property affords the opportunity for
the exercise of liberty.”‘ 5 It is an axiom of basic property law that the
ownership of real property involves a bundle of rights. If the government
is to compensate for only a portion of the bundle, then it should be
forthright enough to admit it. If the courts believe that the Constitution
requires only that government pay what it can afford for public-use
property, it would be less of an irritation for them to say so than to
continue to mouth pious incantations about “fair market value.” At the
same time, however, “there is as much, if not more, need for thoughtful
consideration to be given as to how best the entire public interests can be
protected as there is for concern about the individuals whose property is
acquired for public use.” 16 One has little patience or sympathy, for
15. Attorney General Clark’s statement is reprinted in WeisI & Cohen, Federal
Condemnation Law and the Public Interest, in PROCEEDINGS OF THE EIGHTH INSTITUTE ON
EMINENT DOMAIN 45 (1968).
16. Weisl & Cohen, supra note 15, at 51.
VANDERBILT LA W REVIEW
[Vol. 24
instance, with the kind of grasping landowner described in United
States v. Merchants Matrix Cut Syndicate, Inc.:
All too frequently, profit seeking motives creep into condemnation cases. This
observation, no doubt, will be distasteful to those who envisage the public treasury
as fair game in such proceedings. Though competitive existence in our society may
stimulate such desires,
just compensation, only, remains the yardstick in eminent
7
domain proceedings.
Lack of public planning18 and failure to anticipate the need for public
property can result in apparent raids on the public treasury, particularly
when the value of land is steadily appreciating.
With the foregoing perspective, the discussion now turns to some of
those areas in which the fair market value test results not only in an
inability to do substantial justice, but also in a failure to meet the
constitutional imperative of “just compensation.”
B.
Disruption, Disturbance,and Demoralization
The definition of “fair market value” assumes valuation based on
the “highest and best use”‘ 9 to which the property can be put as of the
date of taking. At least at this point it is clear, however, that the
condemnee is not constitutionally entitled to compensation for the
incidental taking of his business. Since the landowner presumably can
carry on his business elsewhere, a requirement that the condemning
authority “pay for the business” would result in an exorbitant
condemnation value. Moreover, since the property’s highest potential is
a factor in determining market value, and since the present use of the
property may represent its highest potential, it has been argued that the
landowner is, in fact, indirectly compensated for the loss of his
business. 0 If, for example, the landowner is using the property to operate
a service station, and if the property would be valued higher in the
market place for that than for any other potential use, then the
landowner’s compensation should make him whole since the value of the
service station is included in the valuation of the land. This reasoning,
however, ignore …
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