United States District Court, D. Nevada
ORDER ORDER (PL.'S MOTIONS TO EXCLUDE - ECF NOS.
128, 129, 130, 133, 134, 135; DEFS.' MOTION TO PRESERVE
ISSUE FOR JURY - ECF NO. 132).
MIRANDA M. DU UNITED STATES DISTRICT JUDGE.
eminent domain action, the Court has found that the United
States' taking of property for the purpose of operating
the Nevada Test and Training Range (“NTTR”), a
military test and training facility at Nellis Air Force Base,
is for a congressionally authorized public use. (ECF No. 111
at 1.) Accordingly, the only issue that remains is just
compensation. In response to the United States' request
over Defendants Sheahan Landowners'
(“Defendants” or “Landowners”)
objection, the Court stayed discovery pending resolution of
threshold evidentiary motions. (ECF No. 125 at 3.) The United
States filed six motions to exclude evidence. (ECF Nos. 128,
129, 130, 133, 134, 135.) Landowners filed a motion asking
the Court to “preserve the special purpose finding for
the jury and allow the jury to consider any valuation
methodology that is just and equitable”
(“Defendants' Motion”) (ECF No. 132 at
1.) The Court has reviewed the parties' responses (ECF
Nos. 142, 145, 146, 147, 148, 149) and replies (ECF Nos. 170,
171, 172, 173, 174, 175) in connection with these
motions. The Court heard argument on three of the
United States' motions on September 22, 2017. (ECF No.
237.) Because of the broad scope of Defendants' Motion,
the Court finds it logical to address Defendants' Motion
first before addressing two of the United States'
motions. The remaining motions will be addressed in a
United States filed a Complaint and Declaration of Taking on
September 10, 2015, to acquire 400 acres of property located
within the NTTR consisting of a group of patented and
unpatented mining claims known as the Groom Mine (“the
Property”). (ECF No. 129; see also ECF No. 1
(Complaint); ECF No. 2 (Declaration of Taking).) The United
States deposited the estimated compensation to the Court in
the amount of $1, 200, 000.00 (ECF No. 10 at 1), and the
funds were released to Landowners on March 9, 2016 (ECF No.
85 at 1-2). On September 16, 2015, the Court granted the
United States immediate possession of the Property. (ECF No.
14 at 1.) Landowners filed their Answer on November 6, 2015.
(ECF No. 53.) On October 5, 2016, the Court determined that
the “taking is for a congressionally authorized public
use identified in the United States' Complaint [ECF No.
1-3], and is legally valid.” (ECF No. 111 at 1.) As a
result, the amount of just compensation for the United
States' condemnation is the sole remaining issue.
Property is in the Groom Lake Valley about 7 miles from Area
51. (ECF No. 132 at 5.) The Property is the only privately
owned property that has an unobstructed view of Area 51.
(Id. at 16.) Landowners' family has owned the
Property since about 1885, long before the United States
began to use the nearby property. (Id. at 4-5.)
LAWS GOVERNING CONDEMNATION
Fifth Amendment of the Constitution provides that private
property shall not be taken for public use without just
compensation.” United States v. Miller, 317
U.S. 369, 373 (1943). In the event of a taking, “[t]he
owner is to be put in as good position pecuniarily as he
would have occupied if his property had not been
taken.” Id. As the Supreme Court reiterated in
Brown v. Legal Found. of Wash., 538 U.S. 216, 235-36
(2003), the Fifth Amendment's requirement of
“'just compensation' . . . is measured by the
property owner's loss rather than the government's
gain.” “[T]he landowner is entitled to a value
based on the use to which the condemned property is being put
or may be put in the reasonably near future.”
United States v. 100 Acres of Land, 468 F.2d 1261,
1266 (9th Cir. 1972). The issue of the condemned
property's highest and best use is for the trier of fact
to decide. Id.
Civ. P. 71.1 governs eminent domain proceedings. “In an
action involving eminent domain under federal law, the court
tries all issues, including compensation, except when
compensation must be determined . . . by a jury when a party
demands one.” Fed.R.Civ.P. 71.1(h)(1). Defendants have
timely demanded a jury to resolve the issue of just
compensation. (See, e.g., ECF No. 29 at 1-2.)
DEFENDANTS' MOTION (ECF NO. 132)
Motion asserts that because the Property is a “special
purpose” property, the Court should not apply a strict
valuation methodology but should “preserve the special
purpose finding for the jury and allow the jury to consider
any valuation methodology that is just and equitable.”
(ECF No. 132 at 27-28.) The United States asks the Court to
deny Defendants' Motion on several grounds, including
that the requested relief is vague and overbroad, that the
question of whether a proposed valuation methodology can be
considered under Rule 71.1(h) is an issue for the Court, and
that a ruling that the issue of whether the Property is a
special purpose property is meaningless without a
determination by the Court that normal market value evidence
is justified. (ECF No. 150 at 1-2.) In response,
Landowners dispute the United States' contention that
they are asking for a “blanket” ruling. (ECF No.
168 at 9 n.24.)
Court agrees with the United States that the requested relief
is overbroad and does not reflect the role of the Court in
serving its gatekeeping functions. Landowners explain that
they are asking the Court to permit the jury to decide
“a valuation approach that is ‘just and
equitable' and arrives at just compensation.”
(Id.) To the extent Landowners ask the Court to
allow the jury to decide which valuation formula is reliable,
this request ignores the Court's role in screening expert
opinions under Fed.R.Evid. 702. Any expert opinions as to the
proper valuation methodology must persuade the Court that the
methodology is reliable, regardless of whether the
methodology is an accepted fair value method or even a method
based on a finding that the Property is a “special
purpose” property. See Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 149 (1999) (“[T]he trial
judge must determine whether the testimony has a
‘reliable basis in the knowledge and experience of [the
relevant] discipline'”) (quoting Daubert v.
Merrell Dow Pharm., Inc., 509 U.S. 579, 592 (1993)).
Even accepting that, as Landowners argue, “the
valuation experts may have to bend these valuation
methodologies or use a different valuation methodology”
(ECF No. 168 at 10), any modified valuation methodologies
would nevertheless have to be evaluated by the Court for
reliability. For example, the Court would have to evaluate
whether the expert opinion is based on reliable methods and
whether evidence supporting such methodology is too
speculative and should be excluded. See, e.g.,
United States v. 99.66 Acres of Land, 970 F.2d 651,
655-58 (9th Cir. 1992) (affirming the district court's
decision to exclude evidence of individual lot sales and
evidence of fair market value premised on the lost sale
method where the district court found that the development of
the tract as a subdivision had not progressed “to the
stage where there was a realistic market for lot
may have valid reasons for presenting valuation methods that
are not based solely on fair market value, and the United
States may object. But the relief requested-that the Court
“preserve the special purpose finding for the jury and
allow the jury to consider any valuation methodology that is
just and equitable” (ECF No. 132 at 27-28)-is sweeping.
Landowners essentially ask the Court to abdicate its
responsibility of ensuring whether a proposed valuation
method is reliable and not speculative. For these reasons,
Defendants' Motion is denied.
MOTION TO EXCLUDE EVIDENCE RELATING TO THE CAUSE OF THE MILL
FIRE (ECF No. 128)
United States argues that the report and testimony of
Landowners' proffered expert Richard A. Ortiz as to the
cause of a fire that destroyed the Groom Mine mill building
in 1954 is irrelevant and should be excluded. (ECF No. 128 at
1-2.) Ortiz opined that the mill building “was struck
outside to inside by some large and heavy airborne
object.” (ECF No. 128-1 at 36.) The United States
contends that Ortiz's suggestion that the United States
caused the fire is not relevant to the only issue in this
case-just compensation-and would serve no purpose other than
to prejudice the United States. (ECF No. 128 at 2-3.)
Landowners counter that because the United States readily
admitted that it will seek to admit “evidence regarding
the lack of any commercial mining activity at the ...