United States v. Fuller

Background

Respondents ran a large "cow-calf" ranch in western Arizona. They owned 1,280 acres in fee, leased 12,027 acres from the State, and used 31,461 acres of federal land under Taylor Grazing Act permits. The United States condemned 920 acres of the fee land for a reservoir project. At trial the parties disputed whether a jury could consider any increased market value of the fee land that came from its use together with the adjoining federal permit lands.

Reasoning

The Court addressed whether the Fifth Amendment requires the Government to pay for a rise in fee-land value caused by combining it with neighboring lands owned by the Government and used under revocable permits. Citing prior decisions, the majority explained that the Government need not pay for elements of value that it itself created or could destroy. The Court drew a line between value created by completed public works (which must be paid) and value dependent on revocable permits for government land. It concluded that allowing compensation for fee-land value based on combining with government-owned permit lands would create private claims in the public domain. The Court therefore held the Constitution does not require such compensation and reversed the lower court.

Real world impact

Ranchers and other private owners who rely on nearby federal permit lands cannot insist that the United States pay for the extra market value that stems from combining fee land with those permit lands. Congress, not the Constitution, could authorize such payment, but the Taylor Grazing Act expressly disclaims creating property rights in permit lands, and no compensating statute was found.

Dissents or concurrances

Justice Powell dissented, arguing the jury instruction properly allowed consideration of the location and accessibility of the grazing land (while excluding the permit itself) and would have affirmed the lower court’s award.