409 U.S. 488 (1973)
Respondents operated a large-scale cow-calf ranch near the confluence of the Big Sandy and Bill Williams Rivers in western Arizona.1 Their activities were conducted on lands consisting of 1,280 acres that they owned in fee simple.2 They also held 12,027 acres leased from the State of Arizona.3 In addition, they held 31,461 acres of federal domain under Taylor Grazing Act permits.4
The permits were revocable by the Government.5 Respondents’ permits had not been revoked at the time of the taking.6 Only a small fraction of the public grazing land will be flooded in the dam and reservoir project.7
At the time of the taking respondents used this fee land as a base for a cattle operation known as a “cow-calf” ranch.8 A dependable source of water allowed intense cultivation of the fee land to provide the basic source of feed for the cattle.9 The public land was used for grazing during favorable seasons.10 Roads running across the public land connected respondents’ three parcels of fee land.11
The United States condemned 920 acres of respondents’ fee lands for a dam and reservoir project.12 In the District Court the parties disagreed as to whether the jury might consider value accruing to the fee lands as a result of their actual or potential use in combination with the Taylor Grazing Act permit lands.13 The Government contended that such element of incremental value to the fee lands could neither be taken into consideration by the appraisers who testified for the parties nor considered by the jury.14 Respondents contended that if on the open market the value of their fee lands was enhanced because of their actual or potential use in conjunction with permit lands, that element of value of the fee lands could be testified to by appraisers and considered by the jury.15 The District Court substantially adopted respondents’ position.16 It did so first in a pretrial order and then in its charge to the jury over appropriate objection by the Government.17
On the Government’s appeal, the Court of Appeals for the Ninth Circuit affirmed the judgment and approved the charge of the District Court.18 The Supreme Court granted certiorari.19
Whether the Fifth Amendment requires the Government to compensate for the element of value to fee lands based on their actual or potential use in combination with Taylor Grazing Act permit lands owned by the Government?20
The owner is entitled to fair market value of property taken in eminent domain.21 The Government as condemnor may not be required to compensate a condemnee for elements of value that the Government has created.22 It may also avoid compensation for value that it might have destroyed under the exercise of governmental authority other than the power of eminent domain.23 This principle is established in cases such as United States v. Rands and United States v. Miller.24
No. Respondents operated their cow-calf ranch on fee lands, state-leased lands, and federal permit lands under the Taylor Grazing Act.25 The permits remained unrevoked at the time of the taking of 920 acres of fee lands for the dam and reservoir project.26 The District Court permitted the jury to consider the incremental value to the fee lands from their conjunction with the revocable permit lands in determining just compensation.27
This element of value derives directly from the Government's ownership of the permit lands.28 The Government issued revocable permits that it could withdraw at any time without constitutional obligation.29 This places the case within the principle that the Government need not pay for value it created or could eliminate through non-eminent-domain authority.30 The navigational servitude cases excluded portsite or powersite value on similar grounds.31
The Fifth Amendment does not require the Government to pay for that element of value based on the use of respondents’ fee lands in combination with the Government’s permit lands.32
Related opinions on this issue
Justice Powell dissented on the ground that the District Court's jury instruction properly allowed consideration of the fee land's location value.33 The value arose from adjacency and accessibility to the substantially intact grazing lands.34 The instruction expressly stated that such permits are mere licenses which may be revoked and are not compensable as such.35
He argued that the majority's new principle improperly extends the water-rights cases.36 Those cases involved the Government exercising a dominant servitude over navigable waters as part of the same project that prompted the condemnation.37 Here the Government acted solely as condemnor of private land adjoining public land that remained available for Taylor Grazing Act use.38
Powell emphasized that market value routinely includes location advantages from proximity to Government property in other contexts such as taxation and private sales.39 Fairness under the Fifth Amendment requires paying what the land would fetch on the open market rather than an artificially denuded value.40
Whether the Taylor Grazing Act or other congressional enactments authorize payment of compensation for the value added to fee lands by their potential use in connection with permit lands?41
Congress may provide in connection with condemnation proceedings that particular elements of value or particular rights be paid for even though the Constitution would not require payment.42 The Taylor Grazing Act expressly provides that its provisions shall not create any right, title, interest, or estate in or to the lands.43 No such authorization appears in the Taylor Grazing Act or related congressional enactments.44
No. The Court of Appeals had concluded that the history of the Taylor Grazing Act indicated congressional intent to authorize compensation for the value added to fee lands by their potential use in connection with permit lands.45 The Act's explicit disclaimer that permits create no compensable property right in the underlying lands is clear.46
The absence of any directive comparable to the Reclamation Act of 1902 demonstrates that Congress did not intend to mandate payment for this incremental value in condemnation proceedings.47 That statute required payment for rights recognized under state law, as in United States v. Gerlach Live Stock Co.
We find no such authorization in the Taylor Grazing Act or related congressional enactments.48