Opinion
No. 01 C 4696
May 29, 2002
MEMORANDUM OPINION AND ORDER
The parties have agreed on instructions to the commissioners, including instructions on the method for valuation. Plaintiff wishes to include an instruction that directs that federal law, both procedural and substantive, and not state law, controls. Certain defendants urge that federal law be deemed to have adopted state law.
But that is not a question that can be answered in a vacuum. The Natural Gas Act, § 717f(b), calls for conformity to state practice and procedure, but that is different from substantive standards, United States v. Miller, 317 U.S. 369 (1943), and was, in any event, effectively repealed by Federal Rule of Civil Procedure 71A, United States v. 93.970 Acres of Land, 360 U.S. 328, 333 (1959). Indeed, no one disputes that federal law controls. Even the cases most heavily relied upon by these defendants make that clear, Georgia Power Co. v. Sanders, 617 F.2d 1112, 1115 (5th Cir. 1980), and Columbia Gas Transmission Corp. v. Exclusive Natural Gas Easement, 962 F.2d 1192, 1195 (6th Cir. 1992), cert. denied, 506 U.S. 1022 (1992), although they rely in part on a dubious distinction between government and a private entity exercising the federal power.
We think the court got it right in United States v. Certain Property, Etc., 344 F.2d 142 (2d Cir. 1965). A developed body of substantive federal law should normally control. But if a mechanical application of some federal standard would lead to an unfair result, then the court should consider adopting a better state law standard or rethink the federal standard. It should not adopt a state law approach that provides a windfall for either condemnor or condemnee. The goal, after all, mandated by the Constitution, is to provide fair compensation.
We believe that the way is now clear for the commencement of valuation proceedings.