Jacobs v. United States

Background

Two landowners with farms along Jones Creek in Jackson County, Alabama, sued after the United States built Widow’s Bar Dam on the Tennessee River. Government surveys showed the dam increased occasional overflows that impaired farm use. Negotiations and offers for flowage easements were considered inadequate, so the owners sued under a federal statute to recover compensation for the property taken. The District Court awarded damages dated to the dam’s completion plus six percent interest; the Court of Appeals later held that interest could not be recovered.

Reasoning

The main question was whether interest is part of the “just compensation” the Constitution requires when the Government partially takes land by causing flooding. The Court explained the suits rested on the Fifth Amendment right to compensation, not on an implied contract. Because the Government contemplated the flowage and the partial taking impaired use, the owners were entitled to full equivalent payment. The Court said interest (or an equivalent) is an appropriate measure to make the payment equal to the value paid at the time of the taking, and distinguished earlier cases where liability was tort-based rather than a constitutional taking.

Real world impact

The decision sends the case back to the lower court for further proceedings consistent with allowing interest as part of compensation. Practically, landowners whose property was partially taken by federal works causing flooding can claim interest to receive a contemporaneous-equivalent payment. The ruling governs constitutional takings claims and does not change outcomes for claims based on torts.