Showing papers in "Notre Dame Law Review in 2021"

Valuation Blunders in the Law of Eminent Domain

Abstract: Virtually all legal disputes can be divided into two separate phases. The first deals with entitlements, and the second with remedies. The distinction helps sort out the conceptual and practical difficulties in takings cases. Entitlement questions are in most instances capable of being answered with some degree of clarity, because they involve typically only the identification of property taken and justifications for the taking. But remedial questions, in the eminent domain context as elsewhere, do not lend themselves to that kind of precision for there is always a real valuation question of whether the compensation supplied is in fact just. On liability, the inquiry is disjunctive: the answer is either yes or no. On remedies, the inquiry lies on a spectrum: once the taking is found, the set of possibilities for compensation (like the level of damages in contracts or tort cases) takes the form of a smooth, monotonic, and continuous function. The more that is taken, the greater the compensation owed. These functions should be well behaved, without kinks or gaps. Subject to that key constraint, the selection of the proper single point on that continuum can be troublesome. These difficulties are unavoidable no matter how perfect and impartial the decisionmaker. All valuation issues depend on some distribution of possible future values of the asset taken or destroyed that may, or may not, exhibit some kind of normal distribution. In market exchanges, public bodies do not have to resolve these difficult matters of valuation because they need only observe the price (typically in money) that the parties set for a particular asset.