B-249130 February 23, 1993
B-249130: Feb 23, 1993
Are analogous to land condemnation awards and. As such are payable from agency appropriations. Justice and Interior have agreed to this disposition of the matter. Are akin to intentional condemnations. The matter is taken into the courts. If the government is found not to have good title to the real property at issue. The two kinds of awards are not necessarily paid in the same way. Agencies have always been required to pay for intentional land acquisitions from the funds appropriated to them by Congress. Since condemnations are intentional acquisitions of property. Allowing agencies to fund their `exercise of eminent domain from the Judgment Fund would unacceptably expand what is already one of the most far-reaching governmental powers and pi a beyond the control of Congress. 66 Comp.
B-249130 February 23, 1993
DATE: February 23, 1993 TO: Judgment Fund Manager - Ken Schutt THRU: Assistant General Counsel - Thomas H. Armstrong fROM: Senior Attorney - Neill Martin-Rolsky
SUBJECT: Beiderman v. United States, Z-2906373 (B-249130)
This case involves a $16,000 settlement negotiated by the Justice Department, partly to resolve some active litigation brought under the Quiet Title Act (QTA), 28 U.S.C. Sec. 2409a (1988), as amended, and partly to dispose of an administrative claim for trespass pending before the Department of the Interior pursuant the Federal Tort Claims Act (FTCA), 28 U.S.C. ch. 171 (1988), as amended. Ruth Alston of your staff asked for our opinion on whether to certify payment of this settlement from the Judgment Fund, 31 U.S.C. Sec. 1304 (1988)
In order to avoid unnecessary delays in the processing of this claim and to avert the failure of the underlying settlement agreement, we previously advised you to certify payment of $11,000 of this award, with Interior to pay the balance. because this office has never before considered the settlement of claims arising under the QTA, this memorandum provides a brief explanation of the reasons for our previous advice. That part of the settlement which arose under the QTA may not be certified for payment from the Judgment Fund because it represents compensation for the government's deliberate acquisition of real property. However, the balance may be certified for payment from the Judgment Fund as amounts owed under a Justice Department settlement of claims arising from inverse condemnation activities. Justice and Interior have agreed to this disposition of the matter.
The Quiet Title Act
The QTA does not provide any guidance concerning the proper source of funds to be used to pay awards made under it. QTA actions, however, are akin to intentional condemnations, and, for purposes of the Judgment Fund, should be treated as such.
The QTA creates a procedure to resolve disputes over the federal government's title to real property. Where such disputes cannot be resolved informally by the agency and private claimant, the matter is taken into the courts. If the government is found not to have good title to the real property at issue, it may nevertheless "retain such possession and control of the real property or any part thereof as it may elect, upon payment [to the owner] of an amount which upon such election the district court in the same action shall determine to be just compensation for such possession or control. 28 U.S.C. Sec. 2409a(b) Clearly, the QTA contemplates a type of land condemnation.
For Judgment Fund purposes, we distinguish between intentional condemnations and unintentional (or inverse) condemnations. Usually, intentional condemnations result in judgments and settlements purposefully obtained by the government for the acquisition of property, while inverse condemnations result in awards obtained against the government by private claimants. In both cases, the awards serve the same purpose: the payment of just compensation for property allegedly taken by the government. However, the two kinds of awards are not necessarily paid in the same way.
It has long been held that the general rule against using agency appropriations to pay judgments and settlements does not apply to awards arising from intentional condemnation actions. Consequently, intentional condemnation awards fail the Judgment Fund's requirement that payment of the ad be "not otherwise provided for." 31 U.S.C. Sec 1304(a)(l) E.g., 66 Comp.Gen. 157 . In general, condemnation awards arise from the exercise of eminent domain, i.e., the deliberate acquisition of property by the government, without regard to the owner's desire to part with his or her property. Historically, agencies have always been required to pay for intentional land acquisitions from the funds appropriated to them by Congress. Presumably, this requirement arose from the fact that, since condemnations are intentional acquisitions of property, agencies can anticipate and budget for the costs of condemnation actions within the normal structure of the appropriations process. More recently, this requirement has found renewed support from the realization that, allowing agencies to fund their `exercise of eminent domain from the Judgment Fund would unacceptably expand what is already one of the most far-reaching governmental powers and pi a beyond the control of Congress. 66 Comp. Gen at 160
Inverse condemnation awards are treated differently. On a case-by-case basis, some inverse condemnation awards are paid from the Judgment Fund, while others are not. In each case, it must be determined whether the agency's actions "forced" the lawsuit, and whether the agency's appropriations would be augmented if payments made from the Judgment Fund. 66 Comp.Gen. at 163Inverse condemnations usually derive from the efforts of private owners to compel the government to pay for property which the private party claims the government has already taken, but has not acknowledged as such. Usually, though not always, inverse condemnations arise from inadvertent government actions. In these cases, the government resists the argument that its actions amounted to the taking of any private property, as well as the suggestion that compensation is required. Under these circumstances, it is difficult, if not impossible for the agency to anticipate and budget for the costs associated with inverse condemnation awards. Consequently, the reasons which caused the accounting officers of the United States to conclude that agency appropriations are legally available to pay for land acquisition may not actually apply to given inverse condemnation awards. Each award must be individually examined to see if they do apply. 66 Comp.Gen. at 163.
QTA actions are more like intentional condemnations. Under the law, whether or not the agency intended to trespass on the claimant's property, the claimant's remedy is a court order settling the claimant's right to the property and ordering the government to leave. See 28 U.S.C. Sec. 2409 For our purposes, what happens next is the critical part. Even where the court finds that title rests with the private party, the government may elect to retain all or part of the land, subject to payment of just compensation, as ordered by the court. 28 U.S.C. Sec. 2409a(b)Since the government has the unfettered right to choose w ether to retain the land in return for just compensation, we construe that action as the practical and legal equivalent of an intentional condemnation which should payable in the same manner. Cf. 66 Comp.Gen. at 162Thus, that portion of the award ($5,000, according to Justice and Interior) which was intended to pay for acquisition of title to the land at issue in the present case is payable from Interior's appropriations. As such, it is "otherwise provided for" and may not be paid from the Judgment Fund. 31 U.S.C. Sec. 1304(a) (1).
The FTCA Portion of This Award
As you know, the FTCA specifies that, with certain exceptions not relevant here, administrative settlements in excess of $2,500 and litigative awards are to be paid in t same manner as judgments in like causes. 28 U.S.C. Sec. 2672 This means that most FTCA awards are paid from the Judgment Fund. Here, however, while $11,000 of the claim was pursued and handled under the FTCA, this portion was not truly an FTCA claim. Factually, this portion of the claim arose from the government's construction of a road across the claimant's land. At the time, as elaborated in the record, the government had good reason to think that the land belonged to a third party, from whom the necessary access rights had been obtained. Later, it was held by the courts that the third party was not the owner of the land at issue.
This is a classic unintentional inverse condemnation. Neither characterization of the claim as a tort, nor processing it under the FTCA can make it otherwise. Cf. e.g., Meyers v. United States, 323 F.2d 580, 583 (9th Cir. 1963) Nevertheless, this distinction serves no useful purpose in the present case. As a Justice Department settlement of an inverse condemnation action where the government does not appear to have "forced" the suit, this part of the claim is still payable from the Judgment Fund pursuant to 28 U.S.C. Sec. 2414 Cf. 66 Comp.Gen. 163
Please feel free to contact us if you have any further questions on this matter. Your Z-file is being returned as an attachment to this memorandum.