Rockies Express Pipeline, LLC v. Burtle
Opinion of the Court
ORDER
Through condemnation proceedings in federal district court, Rockies Express Pipeline (“REX”) acquired the rights-of-way for an underground natural gas pipeline across central Illinois. When the owners of four particular tracts of land impacted by the easements contested the amount of just compensation owed to them by REX, the district court directed the parties to submit evidence on the issue. REX and the landowners each presented their own expert witness, both of whom testified and prepared written reports about the values of the properties affected by the easements. The district court excluded the testimony and reports of the landowners’ expert on the ground that the evidence was unreliable under Federal Rule of Evidence 702. The district court then granted REX’s motion for summary judgment, determining the compensation owed to the landowners based on the values offered by REX’s expert. The landowners appealed. Because the district court did not abuse its discretion in excluding the testimony of the landowners’ expert, we AFFIRM.
I.
REX is a natural gas pipeline company and is constructing a pipeline through Missouri, Illinois, Indiana, and Ohio. Under the Natural Gas Act, 15 U.S.C. § 717 et seq., REX has been authorized by the Federal Energy Regulatory Commission to obtain land and rights-of-way either by contract or by eminent domain. See 15 U.S.C. § 717f(h).
In June 2008, REX filed a complaint in federal district court seeking to acquire by condemnation the rights-of-way across several dozen pieces of property in central Illinois. (The rights-of-way for the planned pipeline run underground, and the above-surface portions of the land can still be used by the landowners, albeit in a more limited manner.) In August 2008, the district court confirmed the condemnations and authorized REX to take control of the rights-of-way. Because this constituted a taking, each landowner was entitled to just compensation under the Fifth Amendment of the United States Constitution.
Most of the compensation claims of the affected landowners were resolved amicably. This appeal involves a dispute over the just compensation owed to the landowners of four particular tracts of land located in Sangamon County, near Springfield, Illinois. The defendants-appellants are the owners of the four pieces of property: Robert and Bettie Burtle own two tracts of 40.69 acres and 20.24 acres, and Richard Watts is the trustee of a trust owning two tracts of 38.04 acres and 80 acres. The four properties are zoned for agricultural use, are currently used for agricultural farmland, and have been so used for more than 100 years. The landowners do not challenge REX obtaining by eminent domain the underground easements across their properties; instead, they contest the amount of just compensation to which they are entitled for the easements taken and for damage to the remainder, if any.
After the discovery period, the landowners presented the testimony and reports of one expert witness, Doug Stallard, on the
II.
When a right to a distinct tract of land is acquired through eminent domain, the landowners are entitled to “just com
The district court excluded Stallard’s opinion on the ground that it was based on unreliable evidence and failed to pass the requirements of Federal Rule of Evidence 702. In particular, the district court ruled that Stallard’s opinion was not reliable because (1) seven out of Stallard’s ten com-parables were too dissimilar to the landowners’ properties, (2) Stallard misapplied the formula for calculating damages to the remainder, and (3) there was no reasonable probability that the highest and best use of the properties was for commercial or residential use instead of agricultural use.
We review a district court’s evidentiary ruling for an abuse of discretion. Ross v. Black & Decker, Inc., 977 F.2d 1178,1183 (7th Cir. 1992). Also, because the admission or exclusion of expert testimony is left to the discretion of the district judge, the district court’s decision “will generally not be disturbed unless it is manifestly erroneous.” Celia v. United States, 998 F.2d 418, 423 (7th Cir. 1993) (citing Salem v. United States Lines Co., 370 U.S. 31, 35, 82 S.Ct. 1119, 8 L.Ed.2d 313 (1962)).
In this case, we cannot say that the district court abused its discretion in excluding Stallard’s testimony. It was appropriate for the district court to find that a majority of Stallard’s comparables were significantly dissimilar to the landowners’ properties to be proper comparables. The comparable sales method considers sales of land that are similar “in locality, character, time, proximity, market conditions, improvements, and modes of payment.” Dep’t of Transp. v. Central Stone Co., 200 Ill.App.3d 841, 146 Ill.Dec. 779, 558 N.E.2d 742, 745 (1990) (internal quotation omitted). But several of Stallard’s compara-bles were subdivided lots, making them unsuitable for comparison with the landowners’ unsubdivided properties. See Cent. Ill. Pub. Serv. Co. v. Gibbel, 65 Ill. App.3d 890, 22 Ill.Dec. 456, 382 N.E.2d 846, 849 (1978) (“[I]t has been consistently
In addition, Stallard speculated that the highest and best use of the landowners’ properties was for commercial or residential use, even though the properties were only zoned and used for agricultural purposes. Determining just compensation requires a consideration of the fair market value of the property “at its highest and best use.” City of Chicago v. Anthony, 136 Ill.2d 169, 144 Ill.Dec. 93, 554 N.E.2d 1381,1383 (1990). Generally, the highest and best use of a property is presumed to be the property’s current use, but it can also be a future use if the property has a future use “which may be anticipated with reasonable certainty.” Id. (quoting Crystal Lake Park Dist. v. Consumers’ Co., 313 Ill. 395, 145 N.E. 215, 219 (1924)); see also Dep’t of Transp. v. Western Nat’l Bank, 63 Ill.2d 179, 347 N.E.2d 161, 165 (1976) (“It is proper to base value upon the highest and best use permitted, not only under existing but also under other zoning classifications where there is reasonable probability of the granting of such zoning in the near future.”). In this case, the district court examined the record and determined that there was no reasonable certainty that the landowners’ properties would be rezoned from their current agricultural use and later developed for commercial or residential purposes. There is nothing in the record to make us question the determination of the district court that the highest and best use of the four properties was agricultural.
Because of the above two considerations, we cannot say that the district court abused its discretion in excluding Stal-lard’s opinion. Under Federal Rule of Evidence 702, a witness qualified as an expert can give expert testimony if “the testimony is based on sufficient facts or data.” Fed. R.Evid. 702(b). Here, the district court found that the data underlying Stallard’s calculations were not sufficiently reliable because the majority of the comparables were dissimilar and because the highest and best use of the properties was not commercial or residential. It was not an abuse of discretion for the district court to find that the insufficiency of Stallard’s data undermined the reliability of his final conclusions about the properties’ values.
AFFIRMED.
. The district court issued its judgment on August 3, 2010, and the landowners filed a first notice of appeal on August 25, 2010. This appeal was premature, however, because not all of the claims in the district court had yet been disposed of: one other group of defendants (the Bruntjen defendants, who are not parties to the case before us) owned a fifth tract of land and had not yet resolved their compensation dispute with REX. At that time, we flagged the landowners’ appeal as premature and the landowners in our case moved for a voluntary dismissal of the appeal. The dismissal was granted on September 3, 2010.
The Bruntjen owners settled their dispute with REX in November 2010, and subsequently filed a stipulated motion for dismissal on December 30, 2010. On that same day, the magistrate judge — who had been designated by the district judge to handle negotiations and to conduct a possible mediation — entered a text order indicating that a settlement had been reached in the Bruntjen matter and dismissing the Bruntjen property owners as defendants.
Following this text order, the landowners of the four properties in our case filed a second notice of appeal on January 24, 2011. Because the notice of appeal followed the text order of a magistrate judge, we again flagged the appeal for possible improper jurisdiction because the magistrate judge’s text order was not a final appealable judgment within the meaning of 28 U.S.C. § 1291. The parties were thus directed to address this jurisdictional issue first in memoranda filed with the court and then in their appellate briefs.
The parties have done so, and we see no jurisdictional concern. The defendant landowners in our case are not appealing the magistrate judge’s text order but the judgment of the district court issued on August 3, 2010, which was the final adjudication of their rights. However, because that decision did not resolve all the claims of all the parties (as the Bruntjen claim remained open) and because the district court did not expressly determine that there was "no just reason for delay,” at that time the decision was not a final judgment under Federal Rule of Civil Procedure 54. When the magistrate judge entered his text order on December 30, 2010, dismissing the Bruntjen owners, the claims of the defendant landowners were all that remained in the case. Although there was no accompanying Rule 58 final judgment issued by the district court, the absence of a final judgment does not prevent us from exercising jurisdiction over this appeal. See Smith-Bey v. Hosp. Adm’r, 841 F.2d 751, 756 (7th Cir. 1988). “[Tjhere is no question about the finality of the district court’s decision....” Id. The case became final with the magistrate judge’s text order on December 30, 2010, the defendants timely appealed, and we can exercise appellate jurisdiction. Id.
. The district court noted that it is an open question in our circuit whether state or federal substantive law should be used to determine compensation in condemnation cases involving federal licensees. The parties and the district court believed that state substantive law applied. We do not need to resolve the question because the distinction makes no appreciable difference in this case.
. The district court also took issue with Stal-lard's methodology in calculating the damages to the landowners' properties and the compensation owed. Stallard’s method was to value the entire property before the easement and after the easement. REX argues that the proper method is to value the damage to the strip land containing the easement, and then to determine whether there is damage to the remainder — i.e., the remaining portion of the property excluding the easement strip. REX argues that Stallard should have specifi
Reference
- Full Case Name
- ROCKIES EXPRESS PIPELINE, LLC v. Robert J. BURTLE
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- 2 cases
- Status
- Published