Kirby Forest Indus., Inc. v. United States

In Kirby Forest Indus., Inc. v. United States, 467 U.S. 1 (1984), the government argued that the value of condemned land had to be given a fixed date. Id. Because it was unknown when the United States would exercise its option to purchase a property, and because it is "notoriously difficult" to predict the value of land at a future date, the Court rejected that approach. Id. The Supreme Court in Kirby stressed that "the owner is entitled to interest thereon sufficient to ensure that he is placed in as good a position pecuniarily as he would have occupied if the payment had coincided with the appropriation." Id. at 10. Kirby rejected the idea of a mandated amount of interest for all condemnations because "change in the market value of particular tracts of land over time bears only a tenuous relationship to the market rate of interest. Some parcels appreciate at rates far in excess of the interest rate; others decline in value." Id. at 17. In addition, Kirby acknowledged that value could be affected by other issues, such as an expansion of residential areas surrounding the condemned land at issue. Id. at 18 n.28. Kirby searched for some type of procedure which could modify a condemnation award when there was a "substantial delay between the date of valuation and the date the judgment is paid, during which time the value of the land changes materially," but the Court refused to institute a rule compelling a specific amount of interest; Kirby stopped short of prescribing a particular method of redress. Id. at 18. Instead, Kirby suggested, but did not mandate, that a Fed. R. Civ. P. 60(b) motion to amend a final order be used to amend a condemnation award. Id. The parties at a hearing would not be allowed to question the adjudicated value of the land at the date of the original valuation and would be limited to presenting evidence on the market value between the date of the original valuation and the date on which the judgment was paid. Id. at 18-19. Further refinements were left up to the courts. Id. at 19. In Kirby Forest Indus., Inc. v. United States, the United States sought to acquire land owned by the petitioner. Under 40 U.S.C. 257, a statute governing the procedure for "straight-condemnation" proceedings, an officer of the Government must make an application to the Attorney General who then files a complaint with the federal district court. Kirby, 467 U.S. at 3. The district court then issues a final judgment that determines the compensation due to the owner of the land. Id. at 4. Afterwards, the Government may exercise its option to tender payment to the land owner and acquire title to the land. Id. In Kirby, after the United States filed its complaint in condemnation, the District Court "referred the matter to a special commission to ascertain the compensation due to the petitioner." Id. at 7. That commission entered a report recommending compensation in the amount of $2,331,202. Id. at 7-8. Both parties objected to this amount, and two years later, after holding a hearing on those objections, the District Court entered judgment and awarded the petitioner $2,331,202 plus interest from the date the complaint had been filed "to the date the Government deposited the adjudicated value of the land with the court." Id. Seven months later, the United States deposited the total amount and acquired title to the land. Id. On appeal, the petitioner contended $2,331,202 plus interest was insufficient compensation under the Fifth Amendment because that award "represents the commission's best estimate of the value of the land on March 6, 1979." Id. at 16. Petitioner argued that he was denied just compensation in an amount equivalent to the difference between the value of the land on the date of the taking and $2,331,202. Id. The Court agreed, holding that the Petitioner is "entitled to the value of its land on the date of the taking, not on the date of valuation." Id. at 19.