US v. 1.57 Acres of Land

US District Court, S.D. California, No. 12cv3055-LAB (MDD), September 8, 2015: Non-economic value of conservation easement excluded in valuation of taking.

This decision is about excluding evidence in a trial to determine how much the United States must compensate the County of San Diego for taking a small parcel of land subject to a conservation easement. The taking was part of a project to secure the US/Mexico border.  The relevant deed recites that the conservation easement “possesses wildlife and habitat values . . . of great importance to [the County]. . . .” The County argued that the intended US use of this roughly 0.43 acre area for a vehicle turnaround renders that portion unsuitable for habitat conservation purposes and destroys burrowing owl habitat. The County said this deprives it of its interest in the property and affects it’s compliance with a “Multiple Species Conservation Program” agreement (“MSCP”) between it, the US Fish and Wildlife Service, and the California Department of Fish and Game.

The United States argued that just compensation is determined by private market value, so the Court should preclude evidence relating to the value of habitat conservation, public interest, or other non-economic considerations.

The County didn’t contest that market value is generally the relevant measure for just compensation. Instead, it argued that its conservation easement does have a private market value.  The court quoted from the County’s argument:

“[C]onservation easement property interests, which protect certain wildlife, habitats, and biological species, are freely traded in private, as well as public markets. These easements are valued based on their demand by willing buyers. . . . So while habitat properties do have a government demand that results in a public value, they also have a private demand that results in an economic value. . . . It is the County’s position that the highest and best use of the property being condemned is its use as a conservation easement and that value is based on the habitat contained on it. This particular property contains burrowing owl habitat, a rare commodity, and serves the last viable population of burrowing owls in San Diego County.”

The court agreed with the US that it is appropriate to limit the County’s evidence to matters relating to market value, and therefore granted that portion of the US motion to exclude evidence of non-economic value.

The US also sought to exclude evidence relating to replacement cost of a substitute facility because the MSCP force majeure clause says the County isn’t obligated to replace the condemned property. The MSCP says that when “the County is wholly or partially prevented from performing obligations … because of unforeseeable causes beyond the reasonable control of and without the fault or negligence of the County . . . including but not limited to . . . actions of federal or state agencies …, the County shall be excused from whatever performance is affected … to the extent so affected….”  The court agreed with and granted that portion of the US motion to exclude evidence of the cost of a substitute facility.

Decision available at http://law.justia.com/cases/federal/district-courts/california/casdce/3:2012cv03055/403326/40/.

1 comment to US v. 1.57 Acres of Land

  • Jon Haber

    I was intrigued by this case, and I would be interested in what you think its significance is, especially since there were no facts before the court.

    Rather than closing the door to plaintiffs by granting the U.S. motion, the court seemed inclined to accept plaintiff’s argument that “the conservation easement may have nontrivial economic value,” which might be based on its burrowing owl habitat. It certainly seems that mitigation banks have created a market and economic value for certain conservation attributes. Would it be earthshaking for the court to find that in this case? Otherwise, why did DOJ feel compelled to step in at this early stage and get the court to simply reiterate that only market value is relevant?