United States v. Chandler-Dunbar Water Power Co.

Background

The dispute involved the Chandler-Dunbar Company, which owned a strip of upland and the adjacent riverbed on the American side of the St. Marys River rapids. The company had placed dams, dykes, and other works in the rapids under permits from the Secretary of War and had been selling water power. Congress passed the act of March 3, 1909, declaring the whole channel and certain uplands necessary for navigation, revoked permits, and the United States condemned the land. Chandler-Dunbar sought compensation for both the upland taken and the alleged private value of the river’s water power; the lower court awarded a large sum for that “raw water” power in addition to upland damages.

Reasoning

The Court addressed whether the company had a private property right in the river’s flow that the Government had taken. It held that title to the bed of a navigable river is qualified and always subordinate to the public right of navigation. Congress has the power to control navigable waters and its judgment that the whole flow was needed for navigation is conclusive. Structures placed under revocable permits did not create an enduring private right to the water power. As a result, the Court ruled there was no compensable private property in the raw flow of the river, reversed awards based on that theory, and left intact compensation only for actual upland and legitimate land values.

Real world impact

The decision limits claims by private riverbank owners to payment for land actually taken, not for the commercial value of river flow or speculative power rights. It affirms wide federal authority to improve navigation, revoke permits, and, where appropriate, develop or lease any excess power produced by government works. The Supreme Court reversed the lower court and remanded for judgment consistent with these holdings.