Wednesday, March 9, 2011

Almota, Washington and the US Supreme Court

Almota, Washington and the Snake River

I stumbled across this little legal tidbit regarding the little community of Almota, Washington and the US Supreme Court. Up front I am not an attorney, so my understanding of the importance of this case is limited. But the small, off the beaten path, location on the lower Snake River apparently became an important eminent domain case.

In the 1960s the US government was proceeding with building dams on the lower Snake River in Washington State. The building of the dams would lead to flooding of the railroad along the river. Hence, the government had to purchase the land. If a property owner does not want to sell, the government can take the land through eminent domain, but the government still must compensate the property owner. Fairly straight forward and one of the fundamental rights spelled out in the United States Constitution.

At Almota the railroad had leased a chunk of land to Almota Farmers Elevator. The elevator company had built grain storage and loading facilities on the leased land next to the rail. There was a bit over seven years left on the lease with the railroad. The government contended that just compensation for the property should be the fair market value of the legal rights possessed as of the date of the taking, and no consideration should be given to any additional value based on the expectation that the lease might be renewed. Almota argued that just compensation should be measured by what a willing buyer would pay in an open market for the leasehold. Almota further argued that it was more than reasonable to expect that lease would be renewed and all the improvements would remain past the time of the current lease on the site and hence the value of the improvements over a longer time period than that remaining on the lease should be considered in compensation. It would be hard to expect any other shipper wanting to use the lease. And it stood to reason that the railroad would want to continue to lease the land as the railroad profited by hauling wheat. The railroad and grain elevator company had been working mutually together for many years.

The question before the court was not if Almota was to be compensated, but what should be considered in determining the compensation. Almota's argument prevailed at the US Supreme court by a 5-4 decision. This case is one of several cases that have over the years refined how just compensation is determined. Essentially the value of the land subject to eminent domain must be considered as though a purchaser was buying the land with no thought toward eminent domain.

The grain shipping port at Almota set a precedent that is referenced in discussions and court cases associated with three party eminent domain cases. The three parties being the government, the property owner and the lessee. It is a narrow ruling and was a close ruling that the judges attempted to layout in a manner that would not be interpreted too broadly. Indeed on the very same day the court ruled compensation was owed only on condemned land and did not have to account for the extra value associated with holding grazing rights on adjacent land would have had on the condemned land.

So tiny Almota has its place in eminent domain jurisprudence. And it is still a place that is one stop in getting Washington wheat to world markets. New grain elevators were built and currently most of the grain is shipped by barge down the slack water pools of the lower Snake River. The railroad line has been replaced with a new line that follows the shore line.

Previous posts on Almota and wheat shipping getting-wheat-to-river and almota-washington-1882-and-2010.

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