The opinion of the court was delivered by: QUACKENBUSH
RE: SCOPE OF PROJECT AND NAVIGATION SERVITUDE DOCTRINE
BEFORE THE COURT is the United States' Motion In Limine Concerning Valuation of Lands In Connection With Navigable Waters of the United States (Ct. Rec. 16), Motion to Establish Larger Parcels (Ct. Rec. 17), and a Supplemental Motion In Limine for Pretrial Rulings Concerning Scope of the Project Rule and Navigational Servitude Doctrine (Ct. Rec. 28), heard with oral argument on December 20, 1985. The United States was represented by Assistant United States Attorney Robert Sweeney; defendant landowners were represented by Kenneth Carpenter. The court having reviewed the records and files herein, having considered the oral and written argument of counsel, and being fully advised in these matters, rules that the scope of the project rule does not apply to the property in question and that the navigational servitude valuation statute, 33 U.S.C. § 595a, does apply to the landowners' remaining parcels. This ruling is set out more fully below.
The government's project involved in this case was authorized by Congress in 1935. Grand Coulee Dam was begun in 1935, and completed in 1941, with filling of the reservoir, Lake Roosevelt, being completed in 1942. Preliminary to the actual construction of the project, the Interior Department had been investigating lands which the government felt it needed for the project, and in 1934 the Department filed with the Washington Commissioner of Public Lands a list of state-owned lands that would be needed if the project obtained approval. This was done pursuant to R.C.W. 90.40.050, part of the state's 1905 Irrigation Code. The properties in question were part of that filing, being within the total of the 120 acres of part of the Northwest quarter of Section 16, T.28 N., R. 31 E.W.M., Lincoln County, listed by the Department. This was a section of the school endowment lands granted to the State of Washington under the State Enabling Act.
In 1943, the State of Washington conveyed the north half of Section 16 to Julius C. Johnson, with no reference being made to the Department of the Interior's 1934 filing. The Johnson family has retained some of these lands at issue and have conveyed some. Over the years, the land has been used almost exclusively for livestock grazing, except that some improvements have been made, such as land leveling on St. Jeor's land.
While the government did not institute condemnation until January of 1985, the court notes that in 1944, the Department of the Interior did file a notice of Definite Description with the State Land Commissioner, pursuant to R.C.W. 90.40.050. This notice identified 28.8 acres, including the 23.1 in question here. Also, in 1958, the Interior Department filed a notice with the State Land Commissioner indicating that the Department was of the opinion that because of R.C.W. 90.40.050's provisions, the government considered that it was owner of the property here in question. However, no condemnation action was taken. In 1968, Chief Judge Powell of this district, in a case not involving these specific lands, found R.C.W. 90.40.050 to be invalid, since it purported to allow the State of Washington to transfer lands to the government without compensation. United States v. 111.2 Acres in Ferry Cty., Wash., 293 F. Supp. 1042 (E.D. Wash. 1968), aff'd. 435 F.2d 561 (9th Cir. 1970). At that time it became clear the government had no interest in the lands in question under the provisions of R.C.W. 90.40.050. Despite this ruling, condemnation proceedings did not commence until 1985.
The "scope of the project" rule may be traced to United States v. Miller, 317 U.S. 369, 87 L. Ed. 336, 63 S. Ct. 276 (1943). The test of just compensation as stated in Miller is:
Id., at 377. Miller dominates the courts' analysis of just compensation questions involving government projects such as herein involved. See United States v. Reynolds, 397 U.S. 14, 25 L. Ed. 2d 12, 90 S. Ct. 803 (1970); United States v. 31.45 Acres of Land, 376 F. Supp. 1277 (E.D. Wash. 1974), rev. 547 F.2d 479 (9th Cir. 1976).
It is clear, however, that Miller is not the end of the court's inquiry into just compensation. Rather, it is just the beginning point, and in difficult cases Miller does little more than restate the problem. United States v. 320.0 Acres of Land, More or Less, in the County of Monroe, State of Florida, 605 F.2d 762 (5th Cir. 1979) (" Monroe "). The inquiry here must delve into the reasoning and policy considerations behind the Miller doctrine. The basic premise is the Constitutional mandate of just compensation in eminent domain proceedings. The government must pay a fair amount for lands taken, but it should not have to pay an additional amount as a result of its own project. Monroe, supra at 780. On the other hand, the landowner has a basic right to the highest and most profitable use of his land. While it is not just or fair for landowners to profit from the government's project, once that project is in place, the landowner should be able to develop any property the government has not taken to its fullest use, in light of the project. The landowner reasonably expects to be able to make the highest and best use of his land, an expectation that is based on the marketplace.
Where the project changes in form or scope, where errors require further or different land condemnation, or where completion of the project takes an inordinately long time, the "scope of the project" inquiry must be made with careful judicial discrimination. See Reynolds, supra at 21; United States v. Eastman, 528 F. Supp. 1177 (D. Oregon 1981), aff'd and opinion adopted, 714 F.2d 76 (9th Cir. 1983) (" Eastman "). But,
regardless of how the inquiry is framed, however -- whether in terms of the Miller test or in terms of reasonable expectations -- the object is the same: to distinguish value attributable to Government demand from true fair market value of Government-conferred benefits, and to ensure that the landowner is not awarded a premium for the ...