## Facts

- The United States condemned land in Oconee County, South Carolina, for the Hartwell Dam and Reservoir Project on the Savannah River.
- J.P. Stevens & Co., Inc. owned a larger tract (about 905.64 acres); the government took about 509.64 acres in fee plus additional interests by easement, while the textile plant remained on land not taken.
- The mill discharged industrial effluent into Martin’s Creek and the Seneca River, non-navigable streams.
- Before the reservoir, the receiving waters were regulated under a lower state water-quality classification (Class C).
- Creation of a public recreational reservoir led to more stringent state water-quality requirements (Class A) for waters used for recreation.
- To continue discharging lawfully under the new standards, the mill installed a waste-treatment system costing about $50,000.
- A commission appointed under Fed. R. Civ. P. 71A(h) recommended compensation that included an amount reflecting the treatment-system expense.
- The district court rejected that component as noncompensable and limited compensation to interests actually taken and traditional remainder damages.

## Issues

1. Whether just compensation in a federal condemnation must include a landowner’s costs to install waste-treatment facilities made necessary by post-project water-quality regulations affecting the landowner’s discharges.
2. Whether the project’s effect on water classification and resulting regulatory compliance costs constituted a compensable taking of a property interest (such as a discharge or “flowage” right), rather than noncompensable consequential damages.

## Decision

- The Fourth Circuit affirmed the district court.
- The court held that the $50,000 waste-treatment system cost was not a compensable element of just compensation.
- Compensation was limited to the fair market value of the property interests taken and any legally cognizable diminution in value to the remainder directly attributable to the taking.
- The need to comply with stricter pollution controls was treated as a regulatory consequence of the project, not an interest taken by eminent domain.

## Legal Principles

- Just compensation under the Fifth Amendment is measured by the value of the property interests taken, not by all economic loss attributable to a public project.
- Costs that arise from generally applicable health, safety, or environmental regulation are ordinarily noncompensable in condemnation because they stem from police-power controls rather than from an acquisition of property.
- Project-related increases in operating or compliance costs are typically consequential damages and are not recoverable absent a specific, compensable property interest being taken.
- A landowner has no vested compensable right to continue discharging pollutants at prior levels when lawful regulation changes to protect public uses of affected waters.

## Conclusion

The court held that the government’s condemnation for the reservoir required payment for the land and direct interests taken, but not for the mill’s expenditures to meet stricter water-quality requirements; the treatment-system cost was noncompensable consequential damage arising from regulatory controls rather than a taking of property.


United States v. 531.13 Acres of Land, More or Less, 366 F.2d 915 (4th Cir. 1966)