Kimball Laundry Company v. United States/Dissent Douglas

by William O. Douglas

United States Supreme Court

338 U.S. 1

Kimball Laundry Company  v.  United States

 Argued: Dec. 7, 8, 1948. --- Decided: June 27, 1949

Mr. Justice DOUGLAS, with whom THE CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice REED concur, dissenting.

The United States took this plant in order to run a laundry for the Army, not for the public. The trade-routes were wholly useless to it. It never used them. Yet it is forced to pay for them under a new constitutional doctrine that is forged for this case.

Heretofore it was settled that the owner could not receive compensation under the Fifth Amendment for the destruction of a business which resulted from the taking of his physical property, even though the business could not be reestablished elsewhere. Mitchell v. United States, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644; Bothwell v. United States, 254 U.S. 231, 41 S.Ct. 74, 65 L.Ed. 238. That result followed from the rule that consequential damages resulting from the taking were not compensable. See United States ex rel. T.V.A. v. Powelson, 319 U.S. 266, 281-283, 63 S.Ct. 1047, 1055-1056, 87 L.Ed. 1390; United States v. Petty Motor Co., 327 U.S. 372, 377-378, 66 S.Ct. 596, 599, 90 L.Ed. 729.

And so in this case if the United States had taken this plant for a permanent laundry to run for the Army and not for the public ^[1] it need not pay for the trade-routes. As Justice Brandeis said in Mitchell v. United States, supra, 267 U.S. at page 345, 45 S.Ct. at page 294, 69 L.Ed. 644, 'If the business was destroyed, the destruction was an unintended incident of the taking of land.' As much seems to be conceded by the Court in the present case. That concession is necessary if precedent is to control. For in United States v. General Motors Corp., 323 U.S. 373, 383, 65 S.Ct. 357, 361, 89 L.Ed. 311, 156 A.L.R. 390, we said that a temporary taking and a permanent taking were to be treated alike in that respect. In that case the cost of moving out and preparing the space for the new occupancy was allowed insofar as it bore on the market value of the temporary occupancy. But we ruled that 'proof of value peculiar to the respondent, or the value of goodwill or of injury to the business of the respondent' must in that case 'as in the case of the condemnation of a fee,' be excluded from the reckoning, 323 U.S. at page 383, 65 S.Ct. at page 362. The Court today repudiates that ruling when it holds that the United States must pay for the trade-routes of petitioner when its taking of the laundry was only temporary. There would be a complete destruction of the trade-routes if the taking of the plant were permanent and a depreciation of them (I assume) where it is temporary. Why the latter is compensable when the former is not is a mystery. Even the academic dissertation on valuation which the opinion imports into the Fifth Amendment from accounting literature conceals the answer.

The truth of the matter is that the United States is being forced to pay not for what it gets but for what the owner loses. The value of trade-routes represents the patronage of the customers of the laundry. Petitioner, I assume, lost some of them as a result of the government's temporary taking of the laundry. But the government did not take them. There was indeed no possible way in which it could have used them. Hence the doctrine that makes the United States pay for them is new and startling. It promises swollen awards which Congress in its generosity might permit but which it has never been assumed the Constitution compels.

Petitioner has received all that it is entitled to under the Constitution. It has obtained after three years and seven months of use of its plant by the United States a sum of money equal to almost half the market value of the fee. That award was based on the market rental value of the plant ^[2] plus an allowance to restore the property to its original condition. ^[3] Under the authorities that award cannot be increased unless we are to sit as a Committee on Claims of the Congress and award consequential damages.

Notes

1. As respects payment for the going-concern value when the government takes over a business to run it as such see City of Omaha v. Omaha Water Co., 218 U.S. 180, 202-203, 30 S.Ct. 615, 619 620, 54 L.Ed. 991, 48 L.R.A.,N.S., 1084.
2. That is the measure of compensation for the taking of a temporary interest in property. United States v. General Motors Corp., 323 U.S. 373, 382, 65 S.Ct. 357, 361, 89 L.Ed. 311, 156 A.L.R. 390; United States v. Petty Motor Co., 327 U.S. 372, 378, 66 S.Ct. 596, 599, 90 L.Ed. 729.
3. Compensation for ordinary wear and tear is included in fixing the market rental value of the property. But wear and tear above that amount is separately compensable. See In re Condemnation of Lands, D.C., 250 F. 314, 315; United States v. Certain Parcels of Land, D.C., 55 F.Supp. 257, 263; United States v. 5,901.77 Acres of Land, D.C., 65 F.Supp. 454; United States v. 14.4756 Acres of Land, D.C., 71 F.Supp. 1005.