Lassen v. Arizona ex rel. Ariz. Highway Dep't

In Lassen v. Arizona ex rel. Ariz. Highway Dep't, 385 U.S. 458, 464, 87 S. Ct. 584, 17 L. Ed. 2d 515 (1967), the Highway Department argued that, under the rules promulgated by the State Land Department, no actual compensation was required because enhanced value could be presumed. Id. at 465. The United States, as amicus curiae, advocated a similar position, except that it suggested enhanced value could be prospectively calculated, rather than presumed, and used to offset the amount that would be owed to the trust. Id. The Supreme Court rejected both positions, concluding that "the terms and purposes of the Enabling Act do not permit Arizona to diminish the actual compensation, meaning thereby monetary compensation, payable to the trust by the amount of any enhancement in the value of the remaining trust lands." Id. at 466. In reaching this conclusion, the Court examined the requirements of the Enabling Act in some detail. It noted that the Act "unequivocally demands" that the trust receive the full value of transferred lands and that the compensation be used exclusively for the purposes of the land trust. Id. at 466-67. The Court reviewed the legislative history of the Act to elucidate the purpose of these restrictions, focusing on the increased rigidity of these types of legislation as more states were admitted to the Union. Id. at 467-68. Ultimately, the Court found that both the presumption and the particularized showing of enhanced value were insufficient to satisfy the requirements of the Enabling Act, because "the purposes of Congress require that the Act's designated beneficiaries 'derive the full benefit' of the grant," and neither method could "adequately assure fulfillment of that purpose, particularly in the context of lands that are as variegated and far-flung as those comprised in this grant." Id. at 468. Therefore, the Court held the state "must actually compensate the trust in money" for easements obtained over state trust lands. Id. at 469. However, in a footnote to its opinion, the Court noted: We are informed by counsel that over a period of years Arizona has obtained the use of large areas of trust lands on bases that may not have accorded with those set forth in this opinion. We wish to make it plain that we do not reach either the validity of such transfers or the obligations of the State, if any, with respect thereto. Id. at 470 n.22. In Lassen, the United States Supreme Court determined that the Arizona Highway Department was required to pay the full appraised value for ROWs located on state trust lands. 385 U.S. at 469. Relying on the purposes of the Enabling Act, the court rejected the State's argument that the trust would benefit because the construction of highways would enhance the value of the remaining trust lands. Id. at 465, 468.