Just Compensation and Just Compensation and Damages: Is this a model Damages: Is this a model that should be adopted in that should be adopted in

Wisconsin?Wisconsin?

Robert W. Roth, Joseph Niebler Jr., Robert W. Roth, Joseph Niebler Jr., and Nicholas J. Boerkeand Nicholas J. Boerke

Primary Sources IPrimary Sources I

““Government has no other Government has no other end than the preservation of end than the preservation of Property.” John Locke, Property.” John Locke, Second Treatise on Civil Second Treatise on Civil Government, ch. 6 (written Government, ch. 6 (written 1681, publ. 1690). 1681, publ. 1690).

Primary Sources IIPrimary Sources II As James Madison posited: “If there be As James Madison posited: “If there be

a government then which prides itself a government then which prides itself in maintaining the inviolability of in maintaining the inviolability of property; which provides that none property; which provides that none shall be taken directly even for public shall be taken directly even for public use without indemnification to the use without indemnification to the owner, and yet directly violates the owner, and yet directly violates the property which individuals have in property which individuals have in their opinions, their religion, their their opinions, their religion, their persons, and their faculties; nay more”persons, and their faculties; nay more”

Primary Sources II part 2Primary Sources II part 2 which indirectly violates their property, which indirectly violates their property,

in their actual possessions, in the labor in their actual possessions, in the labor that acquires their daily subsistence, that acquires their daily subsistence, and in the hallowed remnant of time and in the hallowed remnant of time which ought to relieve their fatigues which ought to relieve their fatigues and soothe their cares, the influence and soothe their cares, the influence [inference?] will have been anticipated, [inference?] will have been anticipated, that such a government is not a pattern that such a government is not a pattern for the United States.”for the United States.”

James Madison, ‘On Property’ 27 Mar James Madison, ‘On Property’ 27 Mar 1792.1792.

Primary Sources IIIPrimary Sources III Property is a fundamental right, and if you Property is a fundamental right, and if you

are a student of Locke, it may well be THE are a student of Locke, it may well be THE fundamental right. fundamental right.

One of our first Supreme Court Justices, William One of our first Supreme Court Justices, William Patterson, articulated the notion very well: “[It] is Patterson, articulated the notion very well: “[It] is evident; that the right of acquiring and evident; that the right of acquiring and possessing property, and having it protected, is possessing property, and having it protected, is one of the natural, inherent, and unalienable one of the natural, inherent, and unalienable rights of man. Men have a sense of property: rights of man. Men have a sense of property: Property is necessary to their subsistence, and Property is necessary to their subsistence, and correspondent to their natural wants and desires; correspondent to their natural wants and desires; its security was of of the objects that induced its security was of of the objects that induced them to unite in society. them to unite in society.

Primary Sources III part 2Primary Sources III part 2 ““No man would become a member of a No man would become a member of a

community, in which he could not enjoy community, in which he could not enjoy the fruits of his honest labour and the fruits of his honest labour and industry. The preservation of property industry. The preservation of property then is the primary object of social then is the primary object of social compact, and by the late Constitution of compact, and by the late Constitution of Pennsylvania, was made a fundamental Pennsylvania, was made a fundamental law.” law.”

Justice William Patterson, in one of his early state court cases: Justice William Patterson, in one of his early state court cases: VanHorne’s Lesse v. DorranceVanHorne’s Lesse v. Dorrance, 2 U.S. 304, 310, 1 L.Ed 391 2 Dall. , 2 U.S. 304, 310, 1 L.Ed 391 2 Dall. 304, 28 Fed Cas. 1012 (1795).304, 28 Fed Cas. 1012 (1795).

Basic Training 101Basic Training 101 What you get when you review some of the primary What you get when you review some of the primary

sources yield baseline observations:sources yield baseline observations: The Citizen, a member of “the People” has the right to hold The Citizen, a member of “the People” has the right to hold

all of his property, real, personal or intellectual and use it all of his property, real, personal or intellectual and use it exclusively for his or her enjoyment, to the exclusion of all exclusively for his or her enjoyment, to the exclusion of all others, especially any established government.others, especially any established government.

But that same citizen takes his same property subject to the But that same citizen takes his same property subject to the Plenary power of Eminent Domain, uniquely sited in Plenary power of Eminent Domain, uniquely sited in government or in today’s world, private enterprise agents of government or in today’s world, private enterprise agents of Government like utilities as well, vested with the powers of Government like utilities as well, vested with the powers of eminent domain prior in time to the citizen’s becoming the eminent domain prior in time to the citizen’s becoming the owner of his or her property.owner of his or her property.

Tort law applies to analyze when the citizen’s use and Tort law applies to analyze when the citizen’s use and enjoyment of his or her property rights are infringed, and enjoyment of his or her property rights are infringed, and that is all aspects of tort law, of which loss of property value that is all aspects of tort law, of which loss of property value is but one.is but one.

See: See: Tidewater Ry. C.o. v. ShartzerTidewater Ry. C.o. v. Shartzer, 107 Va. 572 , 107 Va. 572 (1907).(1907).

Basic Training 101.2Basic Training 101.2 In the cases, notice the strength of In the cases, notice the strength of

focus on being “made whole”, and focus on being “made whole”, and fully compensated:fully compensated: ““The Landowner is entitled to The Landowner is entitled to

compensation that is the ‘full and compensation that is the ‘full and perfect equivalent’ for the property”perfect equivalent’ for the property” Appalachian Power Co. v. Anderson, Appalachian Power Co. v. Anderson,

212 Va. 705, 708, 187 S.E.2d 148, 152 212 Va. 705, 708, 187 S.E.2d 148, 152 (1972)(1972)

Basic Training 101.3Basic Training 101.3 Even the “fair market value loss” Even the “fair market value loss”

process we somewhat ardently adhere process we somewhat ardently adhere to in Wisconsin has been criticized by to in Wisconsin has been criticized by SCOTUS: SCOTUS: ““It must be remembered that market It must be remembered that market

price, as such, is not controlling. The Fifth price, as such, is not controlling. The Fifth Amendment’s ‘exact limitation on the Amendment’s ‘exact limitation on the power of Government’ is not market power of Government’ is not market price, it is just compensation.”price, it is just compensation.” United States v. Felin & Co.United States v. Felin & Co., 334 U.S. , 334 U.S.

624, 652 (1948).624, 652 (1948).

Basic Training 101.4Basic Training 101.4 And most notably:And most notably:

““The Fifth Amendment to the The Fifth Amendment to the Constitution…provides that private Constitution…provides that private property shat not be taken for public use property shat not be taken for public use without Just Compensation. Such without Just Compensation. Such compensation means the full and perfect compensation means the full and perfect equivalent in money of the property taken. equivalent in money of the property taken. The owner is to be put in as good position The owner is to be put in as good position percuniarily as he would have occupied if percuniarily as he would have occupied if his property had not been taken.”his property had not been taken.”

United States v. MillerUnited States v. Miller, 317 U.S. 369, 373 , 317 U.S. 369, 373 (1943).(1943).

Wis.; Leading from the Rear?Wis.; Leading from the Rear? Wisconsin Civil Jury Instruction 8101:Wisconsin Civil Jury Instruction 8101:

““The sole question in the Special Verdict The sole question in the Special Verdict asks ‘What was the fair market value of asks ‘What was the fair market value of the property on [the date of taking]’.” the property on [the date of taking]’.” See also WCJI 8101 on partial takings.See also WCJI 8101 on partial takings.

That’s it, no other measure of damage That’s it, no other measure of damage or value loss in a condemnation trial or value loss in a condemnation trial other than loss of fair market value in other than loss of fair market value in the after condition is noted in the the after condition is noted in the instruction, almost…instruction, almost…

What is Just Compensation in WI?:What is Just Compensation in WI?:   Since 2006, almost certainly, the recovery of Since 2006, almost certainly, the recovery of

litigation expenses, that is, all litigation litigation expenses, that is, all litigation expenses, are part of Just Compensation as expenses, are part of Just Compensation as the term is used in the US and WI the term is used in the US and WI Constitutions.Constitutions.  ”… ”…In permitting recovery of litigation In permitting recovery of litigation

expenses, the legislature sought to provide expenses, the legislature sought to provide the condemnee with the condemnee with just compensationjust compensation by by ensuring that he or she would not be forced ensuring that he or she would not be forced to use part of the award to pay for litigation to use part of the award to pay for litigation expenses after a successful appeal.”expenses after a successful appeal.”

Warehouse II, LLC v. State Department of Warehouse II, LLC v. State Department of TransportationTransportation, 291 Wis.2d 80, 103, 715 N.W.2d , 291 Wis.2d 80, 103, 715 N.W.2d 213, 224 (2006) (citation omitted) (emphasis 213, 224 (2006) (citation omitted) (emphasis added).added).

And what about LINT?And what about LINT? It isn’t that Wisconsin hasn’t It isn’t that Wisconsin hasn’t

considered damages outside of loss considered damages outside of loss of fair market value, sort of:of fair market value, sort of: s. 32.09(6)(e) allows landowner s. 32.09(6)(e) allows landowner

experiential damages for Limitation of experiential damages for Limitation of Use, Inconvenience, Noise and Dirt to be Use, Inconvenience, Noise and Dirt to be considered as part of fair market value considered as part of fair market value loss in our courts.loss in our courts.

Adjacent Landowners have no eminent Adjacent Landowners have no eminent domain rights in Wisconsindomain rights in Wisconsin

The making of a public improvement in The making of a public improvement in the vicinity of private property, which the vicinity of private property, which is incidentally injured thereby, or is incidentally injured thereby, or diminished in volume, but no part of diminished in volume, but no part of which is taken or used for such which is taken or used for such improvement, is not a taking of private improvement, is not a taking of private property for public use, within the property for public use, within the meaning of the constitution. meaning of the constitution. Alexander v. City of MilwaukeeAlexander v. City of Milwaukee, 16 Wis. , 16 Wis.

247 (1862).247 (1862).

Adjacent Landowners have no eminent Adjacent Landowners have no eminent domain rights in Wisconsin 2domain rights in Wisconsin 2

““I concede that the infliction of such damages, I concede that the infliction of such damages, where no portion of the property of the plaintiff is where no portion of the property of the plaintiff is actually taken or occupied for public uses, does not actually taken or occupied for public uses, does not come within the letter of the constitutional come within the letter of the constitutional provision prohibiting the taking of private property provision prohibiting the taking of private property for public use without compensation. Yet, as a for public use without compensation. Yet, as a matter of justice, the right of the owner to such matter of justice, the right of the owner to such damage is as clear as his right to compensation damage is as clear as his right to compensation where his property is actually taken. And to deny it, where his property is actually taken. And to deny it, though not a violation of the letter, yet is entirely though not a violation of the letter, yet is entirely out of harmony with the spirit of that constitutional out of harmony with the spirit of that constitutional provision.”provision.” Alexander v. City of MilwaukeeAlexander v. City of Milwaukee, 16 Wis. 247 (1862)., 16 Wis. 247 (1862).

Adjacent Landowners have no eminent Adjacent Landowners have no eminent domain rights in Wisconsin 2domain rights in Wisconsin 2

““It may well be asked, in view of the It may well be asked, in view of the principles sustained by the authorities and principles sustained by the authorities and reasoning before cited, what is the difference reasoning before cited, what is the difference in principle, in equity, or in the rules of in principle, in equity, or in the rules of construction, between the case where the construction, between the case where the property of an individual is taken for public property of an individual is taken for public use, and the case where the property of an use, and the case where the property of an individual is sacrificed or rendered worthless, individual is sacrificed or rendered worthless, as the direct consequence of contiguous as the direct consequence of contiguous operations, designed and carried on for the operations, designed and carried on for the benefit of the public?”benefit of the public?” Goodall v. City of Goodall v. City of MilwaukeeMilwaukee, 5 Wis. 32, 45 (1856)., 5 Wis. 32, 45 (1856).

Wisconsin is leading from Wisconsin is leading from behind:behind:

Wisconsin is but one of 15 states that Wisconsin is but one of 15 states that restrict Eminent Domain damage recovery restrict Eminent Domain damage recovery to fair market value loss “only.” The to fair market value loss “only.” The District of Columbia makes the total 16.District of Columbia makes the total 16.

35 States have adopted constitutional 35 States have adopted constitutional changes, statutory or case made law changes, statutory or case made law which also protect private property from which also protect private property from damages, in addition to fair market value damages, in addition to fair market value loss (generally called “just compensation”)loss (generally called “just compensation”)

Blue is “Just Compensation” OnlyBlue is “Just Compensation” Only

Damage Example:Damage Example:Business LossesBusiness Losses

In In Dept. of Transp.v GillingDept. of Transp.v Gilling, 289 Mich. App. , 289 Mich. App. 219 (2009), the Michigan appellate court 219 (2009), the Michigan appellate court found that damages for business interruption found that damages for business interruption existed under their eminent domain scheme existed under their eminent domain scheme even though their constitution lacks the even though their constitution lacks the “damages” language.  Specifically, the court “damages” language.  Specifically, the court recognized that there were damages recognized that there were damages available beyond diminishment in value for available beyond diminishment in value for “lost profits resulting from the interruption of “lost profits resulting from the interruption of business” and “expenses caused by business business” and “expenses caused by business interruption.”  interruption.”    

Damage Example:Damage Example:Business Losses 2Business Losses 2

Illinois clearly allowed for business damages Illinois clearly allowed for business damages and interruption losses in and interruption losses in Metro. West Side Metro. West Side Elevated R. Co. v. SiegelElevated R. Co. v. Siegel, 161 Ill. 638 (1896).  , 161 Ill. 638 (1896).  This case also explicitly says that there should This case also explicitly says that there should be no separate damages for moving expenses, be no separate damages for moving expenses, as one selling their business would ask the new as one selling their business would ask the new owner to pay to move their equipment, but owner to pay to move their equipment, but that this value can be added to the that this value can be added to the consideration of market value of the consideration of market value of the property. Wisconsin provides limited statutory property. Wisconsin provides limited statutory recovery for relocation, see Wis. Stats. 31.19 & recovery for relocation, see Wis. Stats. 31.19 & 32.20 which is considered separate and apart 32.20 which is considered separate and apart of condemnation damages.of condemnation damages.

Damage Example:Damage Example:Business Losses 3Business Losses 3

Missouri explicitly allowed for Missouri explicitly allowed for business interruption loss damages business interruption loss damages in in Chicago, S.F. & C. Ry. Co. v. Chicago, S.F. & C. Ry. Co. v. McGrewMcGrew, 104 Mo. 282 (1891). , 104 Mo. 282 (1891). 

Minnesota also allows for business Minnesota also allows for business loss damages in certain situations as loss damages in certain situations as the result of takings, the result of takings, State by State by Mattson v. SaugenMattson v. Saugen, 283 Minn. 402 , 283 Minn. 402 (1969).(1969).

Citations for Reference 1Citations for Reference 1 Warehouse II, LLC v. State Dep’t of Warehouse II, LLC v. State Dep’t of

TransportationTransportation, 291 Wis.2d 80, 103, , 291 Wis.2d 80, 103, 715 N.W.2d 213 (citation omitted) 715 N.W.2d 213 (citation omitted) (2006).(2006).

Klemm v. American Transmission Klemm v. American Transmission Co., LLCCo., LLC, 333 Wis. 2d 580, 798 , 333 Wis. 2d 580, 798 N.W.2d 223 (2011).N.W.2d 223 (2011).

Dept. of Transportation of State of Dept. of Transportation of State of Illinois v. RasmussenIllinois v. Rasmussen, 108 Ill. App. , 108 Ill. App. 3d 615, 439 N.E.2d 48 (1982).3d 615, 439 N.E.2d 48 (1982).

Citations for Reference 2Citations for Reference 2 Alexander v. City of MilwaukeeAlexander v. City of Milwaukee, 16 , 16

Wis. 247 (1862).Wis. 247 (1862). Goodall v. City of MilwaukeeGoodall v. City of Milwaukee, 5 Wis. , 5 Wis.

32 (1856).32 (1856). TidewaterTidewater Dept. of Transportation v. GillingDept. of Transportation v. Gilling, 289 , 289

Mich. App. 219, 796 N.W.2d 476 Mich. App. 219, 796 N.W.2d 476 (2010).(2010).

Metro. West Side Elevated R. Co. v. Metro. West Side Elevated R. Co. v. SiegelSiegel, 161 Ill. 638, 44 N.E. 276 , 161 Ill. 638, 44 N.E. 276 (1896).(1896).

Citations for Reference 3Citations for Reference 3 Chicago, S.F. & C. Ry. Co. v. McGrewChicago, S.F. & C. Ry. Co. v. McGrew, ,

104 Mo. 282, 15 S.W. 931 (1891).104 Mo. 282, 15 S.W. 931 (1891). State by Mattson v. SaugenState by Mattson v. Saugen, 283 Minn. , 283 Minn.

402, 169 N.W.2d 37 (1969).402, 169 N.W.2d 37 (1969). Tidewater Ry. Co. v. ShartzerTidewater Ry. Co. v. Shartzer, 107 Va. , 107 Va.

572, 59 S.E. 407 (1907).572, 59 S.E. 407 (1907). Appalachian Power Co. v. AndersonAppalachian Power Co. v. Anderson, 212 , 212

Va. 705, 708, 187 S.E.2d 148, 152 (1972)Va. 705, 708, 187 S.E.2d 148, 152 (1972)

Citations for Reference 4Citations for Reference 4 UUnited States v. Millernited States v. Miller, 317 U.S. , 317 U.S.

369, 373 (1943).369, 373 (1943). United States v. Felin & Co.United States v. Felin & Co., 334 , 334

U.S. 624, 652 (1948).U.S. 624, 652 (1948). VanHorne’s Lesse v. DorranceVanHorne’s Lesse v. Dorrance, 2 , 2

U.S. 304, 310 (1795).U.S. 304, 310 (1795).

Contact InformationContact Information Bob Roth: Bob Roth: rroth@nprclaw.com

Joe Niebler Jr: jnj@nprclaw.comJoe Niebler Jr: jnj@nprclaw.com

Website: www.nprclaw.comWebsite: www.nprclaw.com

Office: 262-523-8000Office: 262-523-8000

Contact InformationContact Information Nicholas J. Boerke,von Briesen & Nicholas J. Boerke,von Briesen &

Roper, s.c.Roper, s.c. 411 East Wisconsin Avenue, Suite 411 East Wisconsin Avenue, Suite

1000Milwaukee, WI 532021000Milwaukee, WI 53202 Direct: 414-287-1460Fax: 414-Direct: 414-287-1460Fax: 414-

238-6432238-6432nboerke@vonbriesen.comnboerke@vonbriesen.comvonbriesen.comvonbriesen.com