## Facts

- The United States condemned 564.54 acres in Monroe and Pike Counties, Pennsylvania, owned by a private nonprofit affiliated with a church and used to operate three summer camps.
- The government offered $485,400 as the property’s fair market value; the nonprofit rejected the offer and sought roughly $5.8 million based on the cost to develop functionally equivalent substitute camp facilities elsewhere.
- The nonprofit argued that fair market value would not make it whole because the property was specially suited to its camp use and served public-welfare purposes.
- The district court ruled that substitute-facilities compensation was available only to governmental condemnees and limited compensation to fair market value.
- The court of appeals reversed, allowing a private nonprofit to seek substitute-facilities compensation if there was no ready market and the facilities were reasonably necessary to public welfare.
- On remand, a jury awarded only fair market value and found the nonprofit not entitled to substitute-facilities compensation.
- The court of appeals again reversed, ordering a new trial due to erroneous jury instructions on “reasonable necessity.”
- The Supreme Court granted review.

## Issues

1. Whether the Fifth Amendment requires substitute-facilities (replacement-cost) compensation for a private nonprofit whose property is condemned for public use.
2. Whether charitable or public-welfare use, or the owner’s special need for the property, justifies departing from fair market value when market value is readily ascertainable.
3. When, if ever, the Just Compensation Clause permits valuation methods other than fair market value.

## Decision

- The Supreme Court reversed the court of appeals.
- The Court held that paying the property’s fair market value satisfied the Just Compensation Clause.
- The Court declined to extend the substitute-facilities doctrine to a private nonprofit where the condemned property had a readily ascertainable market value.
- The jury’s fair-market-value award was reinstated.

## Legal Principles

- Just compensation is ordinarily measured by fair market value: what a willing buyer would pay a willing seller in cash at the time of the taking.
- The constitutional aim is to place the owner in as good a pecuniary position as if the property had not been taken, but the Clause does not require perfect indemnity for subjective or enterprise-specific losses.
- Departures from fair market value are limited to situations where market value is too difficult to ascertain or where using market value would depart too far from the indemnity principle.
- An owner’s particular need for the property, or the property’s charitable or public-benefit use, does not itself justify replacement-cost compensation when market value is workable.

## Conclusion

The Court held that a private nonprofit whose land is taken by eminent domain is generally entitled to fair market value, not the cost of substitute facilities, when market value can be determined; the Just Compensation Clause compensates for the property taken rather than the owner’s mission or continued operation.


United States v. 564.54 Acres of Land, 441 U.S. 506 (1979)