B-246660, Mar 20, 1992

B-246660: Mar 20, 1992

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Are normally used for intentional land acquisitions. Z 2886813(1) (B-246660) Attached is your Z file in the captioned matter. I am unable to conclude that this settlement is payable from the Judgment Fund. The claimant's action would be mooted by the government's acquisition of title to the land for which the patent was sought in order to protect the integrity of the refuge and park. Are the proper source of funds for acquiring land. 66 Comp.Gen. 157 (1986). The departments have indicated that. /1/ USDA is affirmatively prohibited from using eminent domain to acquire the land at issue. Unless the acquisition is specifically authorized by Congress. USDA is not precluded from buying the land as part of a consensual transaction.

B-246660, Mar 20, 1992

DIGEST: Claims Group should not certify payment from the Judgment Fund, 31 U.S.C. Sec. 1304 (1988), of the settlement of Santa Fe Pacific R.R. v. Secretary of the Interior in which the plaintiff sought to compel the government to grant a patent to some land located in a wildlife refuge in the Prescott National Forest where the claimant planned to do commercial development. The settlement allows the government to purchase the plaintiff's rights to the land in question in order to protect the integrity of the wildlife refuge, but agency appropriations, rather than the Judgment Fund, are normally used for intentional land acquisitions.

TO: Judgment Fund Manager - Ken Schutt

FROM:Senior Attorney - Neill Martin-Rolsky

SUBJECT: Santa Fe Pacific R.R. v. Secretary of the Interior, Z 2886813(1) (B-246660)

Attached is your Z file in the captioned matter. Despite extensive discussions with Bill Cohen and Glen Goodsell of the Justice Department (DOJ) and Jim Snow of the Department of Agriculture (USDA), I am unable to conclude that this settlement is payable from the Judgment Fund, 31 U.S.C. Sec. 1304 (1988).

The underlying litigation in this case involves an action to obtain a court order requiring the Department of the Interior to grant a patent to the claimant for some land located inside the bounds of a federally- established wildlife refuge in the Prescott National Forest. The party seeking the patent has stated that it wants to commercially develop the land. Under the settlement, the claimant's action would be mooted by the government's acquisition of title to the land for which the patent was sought in order to protect the integrity of the refuge and park. Normally, agency appropriations, rather than the Judgment Fund, are the proper source of funds for acquiring land. 66 Comp.Gen. 157 (1986).

The departments have indicated that, by law, /1/ USDA is affirmatively prohibited from using eminent domain to acquire the land at issue, unless the acquisition is specifically authorized by Congress. USDA is not precluded from buying the land as part of a consensual transaction, but maintains that its present appropriations are insufficient to the task, and that it is not practical for it to obtain additional appropriations in order to consummate this settlement in a timely fashion. Moreover, the departments are concerned about a statutory restriction to the effect that not more than 15% of the acreage added to the National Forest System by USDA under the applicable land acquisition authority may be located west of the 100th meridian. /2/ They are also concerned that DOJ land acquisition rules may prohibit this purchase since the government would acquire inchoate rights to the land, i.e., the land would lack a marketable title. In other words, the departments think USDA may be legally prohibited from buying the land in question.

The departments have also indicated that this matter resembles, but does not presently qualify as an action under the Quiet Title Act. /3/ They point out that, were the matter to become an action under this act, the price that the government would have to pay would increase substantially. It might also be argued that conversion of this action to one under the Quiet Title Act would not really solve the departments' problem. While this Office has yet to rule on whether such actions qualify for payment from the Judgment Fund, it seems doubtful that they could inasmuch as the transactions described in this provision sound very much like the exercise of eminent domain. Cf. 66 Comp.Gen. 157, 160 (1986).

Also for consideration here are the provisions of 28 U.S.C. Sec. 2414 (1988) to the effect that settlements are paid from the Judgment Fund in the same manner as judgments on the underlying litigation. Since a judgment in the underlying litigation in this case would result in an order of specific relief, rather than a money judgment, a settlement of it would not normally be pay-able from the Judgment Fund. Cf., e.g., 69 Comp.Gen 114, 116 (1990).

The departments have pointed to GAO's certification for payment under 31 U.S.C. Sec. 1304 of several previous settlements which they believe indicate that the Judgment Fund may be used in the present case. However, for a variety of reasons, while GAO strives for consistency in its interpretations of the Judgment Fund, Claims Group settlements and its certifications for payment from the Judgment Fund in other previous matters have little, if any, precedential value. Cf., e.g., 52 Comp.Gen. 751, 754 (1973). More importantly, however, the cases cited by the departments are significantly different from the present case: they were all classic inverse condemnations involving inadvertent "takings" subject to the Constitution's requirement of "just compensation." The present case is not.

The "bottom line" of the departments' arguments in this matter is that, if the government is unable to pay this settlement from the Judgment Fund, it will be forced to acquire the property under the Quiet Title Act and pay "just compensation" for it-- which the departments maintain will ultimately cost the taxpayers far more money. Being a taxpayer myself, I strongly sympathize with their concern in this regard. However, regardless of the clear legitimacy of this policy concern, the facts remain that the Judgment Fund is not legally available to buy land, that USDA appears legally prohibited from doing so, and that resort to a DOJ "settlement" of this litigation cannot overcome the legal obstacles to the use of the Judgment Fund in this case or the prohibitions on USDA's acquisition of title to this land. Consequently, you are advised not to certify payment from the Judgment Fund of this settlement.

Finally, Justice has asked, as do I, that Claims Group expedite its response to Justice's request in this matter.

/1/ "Subject to the appropriation of funds by Congress, USDA is authorized to acquire privately owned lands within the perimeter of any area designated by this chapter as wilderness, if (1) the owner concurs in such acquisition or (2) the acquisition is specifically authorized by Congress." 16 U.S.C. 1134(c).

/2/ See 16 U.S.C. Sec. 460l-9(a)(1) (1988).

/3/ The United States may be sued to adjudicate a dispute over its title to real property, and if the court determines that government lacks title to the property, it may nevertheless "elect" to retain possession and control of it or any portion of it upon payment of "just compensation." 28 U.S.C. Sec. 2409a(b) (1988).