United States v. Westinghouse Electric & Manufacturing Company/Dissent Jackson

by Robert H. Jackson

United States Supreme Court

339 U.S. 261

United States  v.  Westinghouse Electric & Manufacturing Company

 Argued: Oct. 13-14, 1949. --- Decided: April 17, 1950

Mr. Justice JACKSON, dissenting.

Difficulties in resolving the controversy over removal costs are caused by a condemnation policy under which the Government, in taking temporary use of property, also condemns an option to renew or shorten the period of use. While we have decided cases in which questions concerning options were raised, United States v. General Motors Corp., 322 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311, 156 A.L.R. 390; United States v. Petty Motors Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729, I think that the Court has not fully faced up to the implications of the optioning policy.

Valuation problems of the past have been simple contrasted to those the new policy imposes upon courts. Condemnation in the main was of title to physical properties, and the problem of just compensation was one of asecrtaining the equivalent in money at the date of appropriation-a date that had already arrived. The courts were dealing with a single point of time and with facts and conditions which were at least in experience, not prophecy.

In recent years, the Government embarked upon a new type of condemnation. ^[1] It does not take title to the property and put into the pockets of the owners the current money equivalent. Instead, it keeps the owners' capital tied to their investments and pays them only an estimated value of its future use. This requires courts to predict values over a period of time.

Valuing time is the essence of much business and of most speculation. All options, futures, insurance contracts, leases, investments, deferred deliveries and commitments involve an appraisal of time. And though it takes us into the realm of pure conjecture, it may be possible, however unsatisfactorily, to fix values for rights of future occupancy if the period of the occupancy can be known.

The Government, however, has adopted the policy of expropriating for a 'flexible term' by condemning a right to shorten or to extend the use from time to time as may please it. This type of condemnation denies courts even a defined time period to evaluate, and it is small wonder that the Court concludes this leaves the factors too contingent and unique 'to permit rational assessment.' This raises the question whether Congress ever authorized a type of expropriation that can not be rationally compensated.

The statute upon which the taking in this case rests-one of the broadest of its kind ever enacted by Congress-authorizes various officers '* * * to acquire by condemnation, any real property, temporary use thereof, or other interests therein, together with any personal property located thereon or used therewith, that shall be deemed necessary, for military, naval, or other war purposes * * *.' 56 Stat. 177. Its legislative history provides no explanation of the language which authorizes taking 'any real property, temporary use thereof or other interest therein,' ^[2] nor does it offer any reason for its inclusion. ^[3] But Congress had no apparent expectation that it would authorize condemnations for unstated periods of time. ^[4] The announced purpose of the legislation was to increase the number of federal officials authorized to institute condemnation proceedings, to authorize the possession and use of property prior to the completion of condemnation proceedings, and to eliminate uncertainties regarding the taking in the same proceeding of personalty located upon or used along with the real property being condemned. ^[5] And though authority for condemning less than a fee had existed theretofore, the whole question of taking temporary uses was in some doubt. ^[6]

It is plain that Congress contemplated only such takings as were necessary. We should give this a broad construction; we may even go so far as to say that the necessity for a taking is a political or policy question not usually subject to judicial review. But the statute implies some foundation in necessity and nothing can be less necessary than condemnation of an option to take property or its possession.

The United States needs no such option, for its inherent condemnation power, by its very nature, is a perpetual option to take, at any time, any property it needs. The effect of condemning an option to take at some future time is to increase the element of uncertainty and speculation in the liquidation of an award. Furthermore, such purpose is wholly one-sided. If, let us say, the price level should fall, the Government, even though it wants the property, is not bound to keep it on the option terms. That is the essence of option. But it may abandon the option and take the property under a new declaration, thereby getting a new valuation in the light of the lower price level. If, however, prices go up, the Government can use its condemned option to keep the owner from enjoying the rising value of his property as other owners may do. The taking of a term with an option to lengthen is therefore no more than a hedge against inflation.

This same one-sidedness inheres in the policy of taking a term with an option to shorten. Specific authority exists for Government officials to dispose of surplus properties taken for war purposes; ^[7] indeed such authority is contained in the very statute under consideration. ^[8] Various officials are given power to 'lease, sell, or otherwise dispose of' any properties taken by condemnation which become surplus or unnecessary. And so, if the Government condemned for a term with an option to shorten, and then determined that the property so taken was no longer necessary, it would sell, lease, or otherwise dispose of the remainder of the term at the then current market price. This it would certainly do if the price level had risen. But if prices had fallen, it could avoid the loss of trading on the open market by exercising the option to shorten, cut down the term and put on the owner the burden of salvaging its surplus property. The taking of a term with an option to shorten is therefore no more than a hedge against deflation.

It seems unlikely that Congress intended to authorize such speculative transactions as result from an option to increase or decrease the time period. If we change the terms of the taking so that the time is known but the space is indefinite, the hazard to the Government becomes quickly apparent; if we had a declaration taking such part of a property as from time to time the Government would want, we would have to compensate on the basis that the taking was of the maximum within its terms. Such indefinite takings invite excessive awards, for the speculation involved is involuntary with the claimant and its outcome controlled by, and hedged in the interest of, the Government. Cf. United States v. Certain Parcels of Land, etc., D.C., 55 F.Supp. 257, 265.

The Court gives up the effort to value what is taken and determines to postpone determination of compensation to await the event. This expedient recognizes, but does not fairly solve, the problem engendered by this type of condemnation. If there is a present taking, the property owner is entitled to pocket his compensation. It seems hardly fair that the owner, dispossessed for a time which he cannot learn, must wait indefinitely to be paid anything except bare rental, regardless of the other expense he may be put to. How can the owner know whether to sell his removable property, store it, or perhaps to liquidate his business, or seek a new location, without knowing the length of time for which the Government is taking his premises? The property owner cannot await the happening of the event to make these essential business judgments. To let the Government take an option and pay for it only if it decides to exercise it, is to give the Government a 'Heads I win; Tails you lose' position in a gamble the property owner has not willingly joined. ^[9]

I think we should hold the effort to condemn options to be a nullity for want of congressional authorization and determine claims for just compensation on the basis of the fixed term specified in the declaration. If the Government, upon expiration of the fixed term, desires to continue in possession, it may file a new declaration of taking and have the value of that term fixed in the light of conditions that then prevail. If it abandons the property before the fixed term expires, it has surplus property on its hands to dispose of as it may choose. These are not, of course, very satisfactory results, but they would come nearer obeying the constitutional mandate of 'just compensation' than the delayed decision course adopted by the Court.

Notes

1. See Just, Condemnation Procedure During World War II, 12 Geo.Wash.L.Rev. 286; Dolan, Present Day Court Practice in Condemnation Suits, 31 Va.L.Rev. 9.
2. E.g., cf. S.Rep.No.989, 77th Cong., 2d Sess. 4 (1942). (The bill covers interests in real property, including easements and other rights appurtenant thereto.) Hearings before Committee on the Judiciary on S. 2208, 77th Cong., 2d Sess. 15 (1942). (It would enable the acquisition of leaseholds or of any other property.)
3. Title II of the Second War Powers Act, 56 Stat. 177, 50 U.S.C.A.Appendix, § 632, the statute here involved, was amendatory to the Act of July 2, 1917, 40 Stat. 241, To Authorize Condemnation Proceedings of Lands for Military Purposes. As originally introduced, the 1917 Act contained authorization for only the condemnation of 'any land, * * * or right pertaining thereto.' 55 Cong.Rec. 3632 (1917). But upon the unexplained recommendation of the then Secretary of War, the words 'temporary use thereof or other interest therein' were inserted after the word 'land.' See H.R.Rep.No.83, 65th Cong., 1st Sess. (1917); 55 Cong.Rec. 3991, 4130-4131, 4263 (1917). These words were carried over by the amendatory Act without comment.
4. See, e.g., testimony of Attorney General Biddle in Hearings before the House Committee on the Judiciary on S. 2208, n. 2, supra, at 19:
5. E.g., Committee Print, n. 3, supra, at 6; S.Rep.No.989, n. 3, supra, at 4; Hearings, n. 3, supra, at 10, 15-23; H.R.Rep.No.1765, n. 3, supra, at 6.
6. See 88 Cong.Rec. 1644-45, 1647-48, 1653. See also n. 4, supra.
7. E.g., 54 Stat. 712, 50 U.S.C.A.Appendix, § 1171(b).
8. 54 Stat. 713; 56 Stat. 177. And see 88 Cong.Rec. 1648.
9. It is unnecessary, if Congress has not authorized such condemnations, to rely on any constitutional doubts concerning them. But we should note that a local scheme not too unlike the Government's condemnation policies has been successfully challenged on constitutional grounds in at least one jurisdiction. The General City Law of New York provides that city planning boards may file master plans providing for the development of the city, and 'for the purpose of preserving the integrity of such official map' no permits, as a general matter, will issue for building in the bed of any street or highway laid out on the map; and this, despite the fact that the map may at all times be modified and the proposed construction may never be carried out. N.Y. General City Law, McK.Consol.Laws, c. 21, §§ 26-39. This law empowers a municipality to restrict the use of private property which it may at some future time decide to take. See Matter of the City of New York, 196 N.Y. 255, 259, 89 N.E. 814, 815-816, 36 L.R.A.,N.S., 273, 17 Ann.Cas. 1032. It grants, in effect, a form of restrictive option. And although it was drafted with an eye to avoiding the pitfalls which brought invalidation upon an earlier similar scheme, see Forster v. Scott, 136 N.Y. 577, 32 N.E. 976, 18 L.R.A. 543, it has already been subjected to a preliminary constitutional skirmish. See Platt v. City of New York, 196 Misc. 360, 92 N.Y.S.2d 138, reversed on other grounds, 276 App.Div. 873, 93 N.Y.S.2d 738. And other courts have indicated that, where a right is so vague that a judicial determination cannot be made of just compensation for its taking, the right to expropriate fails, see Albright v. Sussex County Lake and Park Comm., 71 N.J.L. 303, 307-308, 57 A. 398, 400-401, 69 L.R.A. 768, 108 Am.St.Rep. 749, 2 Ann.Cas. 48, and that certain personal rights are not subject to condemnation. Hamilton, Glendale & Cincinnati Traction Co. v. Parrish, 67 Ohio St. 181, 192-193, 65 N.E. 1011, 1014, 60 L.R.A. 531. These cases do not govern us, but they indicate that we are on the very fringes of unconstitutionality and might well indulge in an interpretation of the statute which will keep us clearly out of it.