Eminent domain has been defined as “the power of the sovereign to take property for public use without the owner’s consent upon making just compensation.” Although the Constitution does not expressly grant the power of eminent domain to the federal government, the Supreme Court has nevertheless held that “such an authority is essential to its independent existence and perpetuity.” In addition, the fifth amendment of the Constitution implicitly recognizes the power of eminent domain by requiring the payment of just compensation upon the taking of private property by the federal government.
In an attempt to fulfill the fifth amendment mandate, courts have labored to find a satisfactory standard by which to measure the value of condemned land. At least three possible standards are available: the value to the condemnor, the value to the condemnee, and the market value. Courts have rejected the standard of the value of the condemned property to the condemnor because of the fear that the Government might have to pay an inflated price for land needed for public projects, one which the Supreme Court has labelled the “hold-up” price. As early as 1893 the Court rejected the value to the condemnee when it observed that “just compensation .. is for the property, and not to the owner ….[T]he personal element is left out and the ‘just compensation’ is to be a full equivalent for the property taken. Thus, while the market value of the land seems to have become the prevailing mea- sure of compensation, courts have nevertheless alternated between awarding the market value and full indemnity to the owner for all losses incurred, a measure which is less than the value of the land to the condemnee but greater than its market value.
Although the articulated standard is market value, courts have been known to depart from that measure in situations where paying market value alone would be inequitable. On the other hand, commentators have long noted that the concept of eminent domain is inconsistent with the notion of full indemnity., The mere act of the Government’s taking may cause the condemnee to sustain real losses or costs that are not compensable by the measure of market value-for example, moving or relocation costs, brokerage fees, legal expenses, increased cost of financing or renting a new dwelling, fencing in an area when there has been a partial taking, loss of income, loss of good will, loss of rental due to anticipated taking and loss of profits. However difficult it may be for a court to endorse full indemnity as the measure of just compensation, there are cases where restoring the condemnee to the position he was in before the taking can justifiably exceed fair market value without subjecting the Government to payment of “hold-up” value. Two such cases were recently before the Supreme Court.
In Almota Farmers Elevator & Warehouse Co. v. United States, the Supreme Court offered an unambiguous directive by holding that when the Government condemns a leasehold, just compensation to the lessee must include the value of the improvements erected by the lessee, which is to be determined by their useful life regardless of the lease term. However, before any tribunal had an opportunity to implement Almota, the Court on the same day narrowed the scope of just compensation in United States v. Fuller. By refusing to allow a jury to consider the availability of grazing permits on nearby public land in determining just compensation, even though the permits were not disturbed during the condemnation proceedings,” the Court in Fuller cast doubt upon the prospects for evenhanded application of the just compensation doctrine. Although the standard established in Almota would seem to be fair and workable, by departing from that standard in Fuller, the Court appears to have created a double standatd in eminent domain law where the condemned land abuts public land.
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