                        United States Court of Appeals,

                                   Fifth Circuit.

                                    No. 97-50351

                               Summary Calendar.

              UNITED STATES of America, Plaintiff-Appellant,

                                         v.

 4,970 ACRES OF LAND, MORE OR LESS, SITUATED IN HUDSPETH COUNTY,
State of Texas; C L Ranch, a partnership, Defendants-Appellees.

                                   Dec. 19, 1997.

Appeal from the United States District Court for the Western
District of Texas.

Before REYNALDO G. GARZA, SMITH and BENAVIDES, Circuit Judges.

       REYNALDO G. GARZA, Circuit Judge:

       In the condemnation action below, a jury returned a verdict

calculating just compensation as $1,363,000.                    In accordance with

this verdict, the district court entered judgment calculating just

compensation as $1,363,000 and ordering the United States to pay

that amount to defendant C L Ranch.                   The United States filed a

motion to alter or amend the judgment, arguing that the district

court's order of payment would prevent the United States from

utilizing its option to abandon the condemnation action under Rule

71A(i)(3). The district court denied this motion, correctly noting

that    the    United     States    could       not   dismiss    the   condemnation

proceeding under Rule 71A absent a stipulation with the landowner

or a court order.

       The United States then filed a motion to dismiss the case

pursuant to Rule 71A(i)(3).              Before the district court could


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consider the motion, however, the United States filed a notice of

appeal from the district court's condemnation judgment and denial

of the United States' motion to alter or amend.      The next day,

counsel for the United States requested the district court not to

rule on the motion to dismiss because the United States' notice of

appeal had divested the district court of jurisdiction.        The

district court, "in an effort to administratively remove this

motion from the pending motion list," dismissed the motion as moot,

noting that "[t]he Court expressly does not reach the merits of

this Motion."   On March 14, 1997, this Court issued a one sentence

order denying the United States' request for an extension of time

to file its brief in the first appeal and dismissed the appeal for

failure to prosecute.

     On April 7, 1997, the United States filed a motion in the

district court entitled, "Plaintiff's Motion to Reinstate Its First

Motion for Dismissal Pursuant to Federal Rule of Civil Procedure

71A(i)(3) or, in the Alternative, Plaintiff's Second Motion for

Dismissal Pursuant to Federal Rule of Civil Procedure 71A(i)(3)."

The district court denied this motion on the grounds that it lacked

jurisdiction over the matter.   The United States filed a notice of

appeal from this order, and the defendants filed a motion to

dismiss the appeal as frivolous and without merit.      This Court

ordered the motion carried with the case.

                            Discussion

     According to Federal Rule of Civil Procedure 71A(i)(3), which

governs dismissal of actions for condemnation by order of court:


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       At any time before compensation for a piece of property has
       been determined and paid and after motion and hearing, the
       court may dismiss the action as to that property, except that
       it shall not dismiss the action as to any part of the property
       of which the plaintiff has taken possession or in which the
       plaintiff has taken title or a lesser interest, but shall
       award just compensation for the possession, title or lesser
       interest so taken.

FED.R.CIV.P. 71A(i)(3).     It is well established that "the practical

effect of final judgment on the issue of just compensation is to

give   the   Government    an   option     to   buy   the    property    at    the

adjudicated price."       Kirby Forest Indus., Inc. v. United States,

467 U.S. 1, 4, 104 S.Ct. 2187, 2191, 81 L.Ed.2d 1 (1984);               Danforth

v. United States, 308 U.S. 271, 284, 60 S.Ct. 231, 236, 84 L.Ed.

240 (1939).    Accordingly, the government may choose to exercise

this option by tendering payment to the private owner, "whereupon

title and right to possession vest in the United States."                   Kirby

Forest, 467 U.S. at 4, 104 S.Ct. at 2191.                   Alternatively, the

government may decide not to exercise this option, in which case

the government may move for dismissal of the condemnation action

pursuant to Rule 71A(i)(3).         Id.

        The United States' first motion to dismiss was proper under

Rule 71A(i)(3), but the district court never reached the merits of

that motion, instead dismissing it as moot in light of the United

States first notice of appeal.            Actually, the district court was

without jurisdiction to consider the motion at that time.                     See,

e.g., United States v. Green, 882 F.2d 999, 1001 (5th Cir.1989)

(noting that filing of timely and sufficient notice of appeal

transfers    jurisdiction    over    matters     involved     in   appeal     from

district court to court of appeals, thus divesting district court

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of jurisdiction).   If the government had not filed a notice of

appeal and the district court had reached the merits of the motion,

however, it would have been a valid exercise of the court's

discretion to dismiss the action pursuant to Rule 71A(i)(3) because

the United States had not yet paid the compensation, even though

the district court had determined its amount in a final order.   See

FED.R.CIV.P. 71A(i)(3) (stating that district court may dismiss a

condemnation "[a]t any time before compensation for a piece of

property has been determined and paid....") (emphasis added).

     As noted, the Supreme Court has long held that the United

States has the option of abandoning a condemnation action by moving

to dismiss once judgment has become final.   See Kirby Forest, 467

U.S. at 4, 104 S.Ct. at 2190-91;     Danforth, 308 U.S. at 284, 60

S.Ct. at 236.   It does not follow that the government necessarily

forfeits its well established option to move for a dismissal under

Rule 71A(i)(3) by appealing an allegedly erroneous compensation

order.   Relative to this option, the district court's order was

equally final before and after appeal.    Admittedly, this Court's

dismissal for failure to prosecute of the United States' first

appeal does preclude the United States from arguing error with

regard to the compensation judgment itself and the district court's

denial of the United States motion to alter or amend that judgment.

This Court's dismissal does not, however, prohibit the United

States from exercising its Rule 71A(i)(3) option in the first

place.

     Accordingly, this Court's dismissal of the United States'


                                 4
first appeal does not preclude the district court from considering

the government's Rule 71A(i)(3) motion to dismiss, the merits of

which the court did not consider the first time around.                   This

ruling    promotes   the   important       public   policy   underlying   Rule

71A(i)(3) by allowing the government to use public resources in the

most economically efficient manner possible.            As the Court stated

in Danforth:

      The determination of the award is an offer subject to
      acceptance by the condemnor and thus gives to the user of the
      sovereign power of eminent domain an opportunity to determine
      whether the valuation leaves the cost of completion within his
      resources. Condemnation is a means by which the sovereign may
      find out what any piece of property will cost.

Id.

                                Conclusion

      In accordance with the long standing rule that the government

has an option to move for dismissal after a final condemnation

judgment, the district court erroneously concluded that it lacked

jurisdiction to consider the United States' motion to dismiss under

Rule 71A(i)(3).      This does not mean that the government has an

unlimited ability to draw out or abandon a condemnation action

entirely.    On the contrary, a Rule 71A(i)(3) motion to dismiss is

subject to the district court's discretion and the requirement that

the government make payment for any actual taking that occurred,

even if partial or temporary.     FED.R.CIV.P. 71A(i)(3).         As such, we

hereby DENY the defendants' motion to dismiss this appeal as

frivolous and without merit. Additionally, we REVERSE the district

court's order and REMAND for consideration of the Rule 71A(i)(3)

motion.

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REVERSED and REMANDED.




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