United States v. Rands

Background

Respondents owned land along the Columbia River in Oregon that was leased to the State with an option to buy for an industrial park that would include a port. The United States condemned the land for the John Day Lock and Dam Project and later conveyed the land to the State at a price below the respondents’ hoped-for option price. The trial judge limited compensation to ordinary uses like sand, gravel, and agriculture and excluded special port-site value; the Court of Appeals disagreed and held port-site value compensable.

Reasoning

The Court addressed whether the Constitution requires the Government to pay for special value that comes from a property’s riparian location as a port. Relying on the Commerce Clause and prior decisions, the Court explained that federal control over navigable waters creates a dominant navigational servitude. That federal power allows the United States to regulate, impair, or deny riparian access without owing compensation for the special value that access creates. The Court applied United States v. Twin City Power Co. and rejected the Court of Appeals’ rule, holding that port-site value need not be paid when the United States takes fast land.

Real world impact

The decision means owners of waterfront or riparian land cannot claim extra compensation for port-site value when the federal government condemns land to carry out navigation, flood control, or related projects. The judgment of the Court of Appeals was reversed and the District Court award reinstated, so lower courts will apply this rule in similar takings cases.