                                                                        F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                         DEC 21 1999
                              FOR THE TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

    UNITED STATES OF AMERICA,

                Plaintiff-Appellee,

    v.                                                  No. 98-6444
                                                  (D.C. No. 96-CV-987-C)
    ERNEST A. LEDFORD, JR. and                          (W.D. Okla.)
    RUBY LEE LEDFORD,

                Defendants-Appellants,

          and

    80 ACRES OF LAND SITUATED IN
    COTTON COUNTY, STATE OF
    OKLAHOMA, more or less, situated
    in Cotton County, State of Oklahoma;
    STATE OF OKLAHOMA, ex rel.
    Oklahoma Tax Commission,

                Defendants.




                              ORDER AND JUDGMENT        *




Before BALDOCK , PORFILIO , and BRORBY , Circuit Judges.



*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

      This is an action brought by the United States pursuant to 40 U.S.C. § 258a

to condemn land located in Oklahoma that was owned by Ernest and Ruby Lee

Ledford. The only issue presented on appeal is what is the correct date of the

government’s taking of the property. The Ledfords challenge the district court’s

determination that the date of taking was the date specified in the government’s

declaration of taking, contending instead that the date should be several years

earlier when the government’s lake construction project caused stored water to

interfere with use of their property. The government argues that the correct date

of taking for purposes of this action is whatever date it specified in its

declaration, and that the Ledfords’ claim that the taking occurred earlier is

effectively a counterclaim over which the district court did not have jurisdiction.

      Determination of the manner of deciding the date of taking is a question of

law subject to de novo review.   See Dang v. UNUM Life Ins. Co. , 175 F.3d 1186,

1189 (10th Cir. 1999); United States v. Eltzroth , 124 F.3d 632, 635 (4th Cir.

1997). Concluding that the government’s claim of complete control over

                                          -2-
establishing the date of taking is untenable, we vacate the district court’s

judgment and remand the case for further proceedings.

                                             I

       In 1971, the U.S. Army Corps of Engineers began construction of Waurika

Lake on a tributary of the Red River northwest of Waurika, Oklahoma. Water

impoundment began in 1977, and the project was largely completed by the early

1980s. The Ledfords’ property lies about eighteen miles south of the Waurika

Dam, and they have claimed since at least 1976 that the project has caused

flooding to their property. The government countered that its project did not

cause the Ledfords’ problems. In 1976, the Ledfords filed a claim for damages

against the government pursuant to the Federal Tort Claims Act, but the district

court dismissed that claim on immunity grounds.        See Ledford v. United States ,

429 F. Supp. 204, 205 (W.D. Okla. 1977). They subsequently made a number of

complaints to public officials, including two Presidents and three senators, that

eventually were successful, as in 1994 the Corps was ordered to purchase the

property.

       In June 1996, the government filed its complaint pursuant to 40 U.S.C.

§ 258a for the taking of the Ledfords’ property.   1
                                                       At the same time, it deposited


1
      Section 258a, which codified Section 1 of the Declaration of Taking Act,
provides as follows:
                                                                    (continued...)

                                            -3-
$197,107.06 with the district court as the estimated compensation (including

interest) due the Ledfords. The declaration of taking stated that the date of taking

was July 1, 1983. A Corps official later admitted that the choice of that date was

arbitrary, but that they were trying to pick a date when property values were high,

since values had subsequently decreased. In their answer, the Ledfords denied the

date of taking stated by the government and contended that the taking occurred

sometime earlier. In August 1996, the court allowed the Ledfords to withdraw the

funds deposited with the court.

         In January 1997, the district court appointed a three-member commission

and referred the question of just compensation to the commission, granting it the

powers set forth in Fed. R. Civ. P. 71A(h) and 53(c), (d)(1), (2). The commission

held a hearing at which the Ledfords presented evidence regarding the date of



1
    (...continued)
                 Upon the filing said declaration of taking and of the deposit in
          the court, to the use of the persons entitled thereto, of the amount of
          the estimated compensation stated in said declaration, title to the said
          lands in fee simple absolute, or such less estate or interest therein as
          is specified in said declaration, shall vest in the United States of
          America, and said lands shall be deemed to be condemned and taken
          for the use of the United States, and the right to just compensation
          for the same shall vest in the persons entitled thereto; and said
          compensation shall be ascertained and awarded in said proceeding
          and established by judgment therein, and the said judgment shall
          include, as part of the just compensation awarded, interest . . . on the
          amount finally awarded as the value of the property as of the date of
          taking, from said date to the date of payment . . . .

                                             -4-
taking and both parties presented evidence of the property’s value. In June 1998,

the commission issued its report stating that the surface value of the property was

$85,440 on the date of taking of July 1, 1983. The report stated that the date of

taking was based on instructions from the court. The Ledfords filed objections to

the report which included an objection to the date of taking. They contended that

an engineer who testified at the hearing indicated that, based on flooding and

other damage, the actual date of taking was July 1978. Following the

government’s response, the district court adopted the commission’s report in full,

stating that the date of taking was July 1, 1983, though without identifying any

reasons why it chose this date. In its judgment of just compensation, the court

found that considering the valuation determined by the commission and the

stipulated value of mineral interests, the government owed the Ledfords an

additional $3,340 plus interest of $13,332.91 from the date of taking.

      The Ledfords appeal from this judgment. They challenge only the

determination of the date of taking, but that determination obviously affects the

ultimate valuation of the property. Relying on   United States v. Dow , 357 U.S. 17

(1958), they contend that the date of taking is not the date arbitrarily chosen by

the government in its declaration of taking, but rather the date the government

actually took their property by adversely interfering with it, which they contend




                                           -5-
occurred on December 4 and 5, 1978.     2
                                            In response, the government contends

essentially that it has discretion in choosing the date of taking in an action

pursuant to § 258a and that the Ledfords cannot challenge its exercise of that

discretion in this proceeding. It further contends that the Ledfords’ claim of an

earlier date of taking is effectively a counterclaim under the Tucker Act against

the government, and that since the amount of the counterclaim exceeds $10,000,      3



only the Court of Federal Claims and not the district court had jurisdiction to hear

it. See 28 U.S.C. §§ 1346(a)(2), 1491. In support of its position, the government

cites, inter alia, United States v. 101.88 Acres of Land   , 616 F.2d 762, 772

(5th Cir. 1980), and   United States v. 3,317.39 Acres of Land   , 443 F.2d 104,

105-06 (8th Cir. 1971).




2
      It is unclear why this date differs from that contained in the Ledfords’
objections to the commission’s report.
3
      It is not apparent from the record or the parties’ briefs what the amount of
the Ledfords’ additional claim is or how the government determined that it
exceeded $10,000.

                                            -6-
                                             II

       Before addressing the merits of the parties’ arguments, we need to address

the government’s contention that the Ledfords waived the date-of-taking issue in

either of two ways. It first argues that the Ledfords waived this claim by

withdrawing the estimated just compensation. It cites no authority supporting this

argument, and to the extent we consider it at all,   see Phillips v. Calhoun , 956 F.2d

949, 953 (10th Cir. 1992), we find it inconsistent with the plain language of

§ 258a. This section allows the original property owner to withdraw the money

deposited in the court, with the court’s permission, and provides that if the final

determination of the amount of compensation exceeds the estimate withdrawn,

“the court shall enter judgment against the United States for the amount of the

deficiency.” Section 258a;     see also Fed. R. Civ. P. 71A(j). Nothing indicates

that by withdrawing the estimated compensation, a party waives any right to

contest the determination of the final amount of compensation.

       The government also argues that the Ledfords waived the date-of-taking

issue by failing to object to the district court’s instructions to the commission.

The government fails to identify, however, what exactly the Ledfords were

supposed to object to. The instructions to which it refers are form instructions

that do not direct the commission to use any particular date of taking. The only

references to the date of taking in the instructions tell the commission to use that


                                             -7-
date to determine the property’s fair market value and to identify the date in its

report. Though we have no reason to doubt that the court did instruct the

commission to use the July 1, 1983 date,    4
                                                nothing in the record shows when or

how it gave this instruction. Thus, from what we can tell from the record, the

date of taking was an unresolved issue at the time of the hearing, and it seems

perfectly reasonable for the Ledfords to have presented evidence on this issue,

which they did. It also seems reasonable, and in fact, probably necessary, for

them to have included this issue in their objections to the commission’s report.      5



On the record before us, there is no basis for concluding that they waived this

issue.

                                           III

         Turning to the merits of the appeal, we agree with the Ledfords that the

Supreme Court’s decision in     Dow controls the determination of the date of taking.


4
       The commission’s report, in which the commission appears to be
responding to various predetermined requests for information regarding its effort,
stated: “Set forth separately the important material issues that were contested by
the parties which you had to resolve,” and the response was “1. Date of Taking.
2. Amount of compensation due to owners of [the property].” Appellants’ App.,
Ex. 5 at 5. In responding to a question regarding how it resolved these issues, the
report stated: “Date of taking, instructions from the Court that July 1, 1983 was
date of taking.” Id. at 7.
5
       As will be evident below, it obviously would have been much preferable for
the Ledfords to have referred the district court to the Dow case in their objections,
but their objection included the substance of their challenge to the date of taking
and preserved the issue for appeal.

                                            -8-
Dow was a condemnation proceeding brought by the government under § 258a in

the Southern District of Texas. The issue in that case was the determination of

the date of taking where the government entered into possession of the property

(a pipeline easement) in 1943,   6
                                     but did not file a declaration of taking until 1946.

The question arose because ownership of the property changed hands in between

the two dates, and Dow, the owner at the time the government filed its declaration

of taking, claimed he was entitled to the compensation for the taking.

       In rejecting Dow’s claim, the Court first noted that there were two ways

in which the government may take property pursuant to its power of eminent

domain: through physical possession or seizure of the property, in which case

“the property owner is provided a remedy under the Tucker Act, 28 U.S.C.

§§ 1346(a)(2) and 1491, to recover just compensation;” and condemnation

under various statutes.   See Dow , 357 U.S. at 21. The Court explained that

             [a]lthough in both classes of “taking” cases--condemnation and
       physical seizure--title to the property passes to the Government only
       when the owner receives compensation, or when the compensation is
       deposited into court pursuant to the Taking Act, the passage of title
       does not necessarily determine the date of “taking.” The usual rule is


6
       The government initially instituted a condemnation action in 1943 under
various statutes and obtained a court order allowing it immediate possession,
which was followed shortly by physical entry and possession. The fact that the
government entered into possession based on a court order does not appear to be
relevant to the Court’s decision, see Georgia-Pacific Corp. v. United States ,
568 F.2d 1316, 1320 (Ct. Cl. 1978), and the government in this appeal attempt to
distinguish Dow on this basis.

                                              -9-
       that if the United States has entered into possession of the property
       prior to the acquisition of title, it is the former event which
       constitutes the act of taking. It is that event which gives rise to the
       claim for compensation and fixes the date as of which the land is to
       be valued and the Government’s obligation to pay interest
       accrues. . . .

Id. at 21-22 (citations omitted). The Court then held that when the government

has filed a declaration of taking   after entering into possession of the property,

“a number of considerations have led us to the view that in such cases the date

of ‘taking’ is the date on which the Government entered and appropriated the

property to public use.”    Id. at 23. The primary consideration was concern over

how the property would be valued if the date were otherwise:

               As already noted, in cases where there has been an entry into
       possession before the filing of a declaration of taking, such entry has
       been considered the time of “taking” for purposes of valuing the
       property and fixing the date on which the Government’s obligation to
       pay interest begins to run. To rule that the date of “taking” is the
       time of filing would confront us with a Hobson’s choice. On the one
       hand, it would certainly be bizarre to hold that there were two
       different “takings” of the same property, with some incidents of the
       taking determined as of one date and some as of the other. On the
       other hand, to rule that for all purposes the time of taking is the time
       of filing would open the door to anomalous results. For example, if
       the value of the property changed between the time the Government
       took possession and the time of filing, payment as of the latter date
       would not be an accurate reflection of the value of what the property
       owner gave up and the Government acquired. . . .

              There is another reason why we cannot regard the time of
       filing as the time of the “taking” in cases where the Government has
       already entered into possession. Because of the uncertainty when, if
       ever, a declaration would be filed after the Government’s entry,
       manipulations might be encouraged which could operate to the

                                           -10-
       disadvantage of either the landowner or the United States. The
       Government tells us that the declaration of taking procedure may be
       invoked “solely in the discretion of the administrative officer.” It
       would thus lie within the power of such an officer to reduce the
       “just” compensation due the property owner by staying his hand until
       a market situation favorable to the Government had developed.
       Conversely, landowners might be in a position to increase unduly
       the Government’s liability. . . .

Id. at 24-25. Thus, under Dow , the date of taking is the earlier of the date the

government entered into possession of the property or the date of the declaration

of taking. See Eltzroth , 124 F.3d at 636, 638 (following        Dow in holding that date

of valuation of taking is date government entered and appropriated property for

its use, not date of declaration).

       The government tries to distinguish     Dow on the basis that it did not

expressly address the jurisdictional argument it raises here. That is a true but

insignificant distinction. The Court was well aware of the provisions of the

Tucker Act providing compensation to aggrieved property owners,            see 357 U.S.

at 21, yet it clearly contemplated that any questions regarding the date of taking

for compensation purposes be resolved in one proceeding,          see id. at 24, and gave

no indication that a district court would not be the proper tribunal for that

proceeding. Indeed, the Court described what the government wants here--two

different dates of taking for the same property--as “bizarre.”       See id. at 24;

cf. Gaylor v. United States , 74 F.3d 214, 217 (10th Cir. 1996) (“[T]his court

considers itself bound by Supreme Court dicta almost as firmly as by the Court’s

                                             -11-
outright holdings, particularly when the dicta is recent and not enfeebled by later

statements.”).

       Moreover, the Federal Circuit, which has appellate jurisdiction over the

court whom the government maintains has exclusive jurisdiction for the Ledfords’

“counterclaim,” specifically rejected the government’s theory that district courts

lack jurisdiction in such situations.    See Georgia-Pacific , 568 F.2d at 1321-22.   7



In that case, Georgia-Pacific filed a claim for inverse condemnation in the claims

court alleging a taking in 1974-75. The government subsequently filed a

condemnation action and declaration of taking in the Southern District of West

Virginia. The claims court first noted that “[t]he theory of     Dow , with its

insistence on the date of actual taking as the valuation date and the date from

which interest begins to run, seems to us to empower the condemnation court

[the Southern District of West Virginia], in a case like this, to find that the actual

taking . . . preceded the declaration of taking.”     Id. at 1320. The claims court

further noted that only the district court would have jurisdiction over all phases

of the litigation, i.e., the government’s condemnation claim and the landowner’s

inverse condemnation claim, because the claims court did not have jurisdiction

over the condemnation claim. It then rejected the idea that the landowner was


7
      The Federal Circuit is the successor to the appellate jurisdiction of the
Court of Claims and has appellate jurisdiction over the Court of Federal Claims.
See United States v. Kasler Elec. Co. , 123 F.3d 341, 342 n.2 (6th Cir. 1997).

                                             -12-
asserting a “forbidden counterclaim” and that the Tucker Act was somehow

implicated. See id. at 1321-22. “The condemnation action puts in issue the date

of taking if Georgia-Pacific so wills it; if Georgia-Pacific tells the condemnation

court, as we think it should, that in the company’s view the taking occurred

before [the declaration of taking], that court can (in our view) decide the question

and determine compensation accordingly--all in its capacity as the condemnation

court.” Id. at 1322. See also In re Stephenson , No. 441, 1995 WL 529610, at **4

(Fed. Cir. Aug. 30, 1995) (noting that   Georgia-Pacific is still binding precedent

on that court) (unpublished).   8



                                           IV

       We therefore conclude that the district court should have considered the

Ledfords’ argument that the date of taking preceded July 1, 1983, the date stated

in the government’s declaration of taking. We do not mean to imply that the date

of taking is necessarily in December 1978 as the Ledfords claim. According to

the government, Mr. Ledford admitted that he continued to farm at least a portion




8
       We note that except for one district court case, the cases the government
cites to support its position involve disputes not over when the property was
taken, but over what property was taken.        See 101.88 Acres of Land , 616 F.2d
at 768; 3,317.39 Acres of Land , 443 F.2d at 105-06; Oyster Shell Prods. Corp. v.
United States , 197 F.2d 1022, 1023 (5th Cir. 1952). Although         United States v.
255.21 Acres in Anne Arundel County , 722 F. Supp. 235, 239-40 (D. Md. 1989),
appears to be to the contrary, it did not discuss    Dow , and we find it unpersuasive.

                                          -13-
of the property after that date. Thus, the correct date of taking is disputed and

will have to be resolved on remand.

      The judgment of the district court is VACATED, and the case is remanded

for proceedings consistent with this order and judgment.



                                                     Entered for the Court



                                                     Wade Brorby
                                                     Circuit Judge




                                         -14-
