# Petition — Georgia Power Co. v. 138.30 Acres of Land > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0276%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 - **Citation:** 449 U.S. 917 ## Text 80-255 Spm bat Te FILED AUG2 0 1980 ferent, LLERK In the Supreme Court of the United States October Term, 1980 GEORGIA POWER COMPANY, Petitioner, VS. 138.30 ACRES OF LAND and MILDRED B. SANDERS, ET AL.., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT WALLACE MILLER, JR. Counsel of Record W. WARREN PLOWDEN, JR. 500 First National Bank Building Macon, Georgia 31298 (912) 745-2821 Attorneys for Petitioner E. L. MENDENHALL, Inv., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-8080 QUESTION PRESENTED Whether the just compensation clause of the fifth amendment, rather than the law of the forum state, governs the measure of compensation in condemnation proceedings brought in a federal district court under the right of eminent domain delegated to federal licensees by Section 21 of the Federal Power Act. PARTIES The parties to this proceeding in the court of appeals were as follows: Georgia Power Company; 138.30 Acres of Land in Land Lot 327 of the Third Land District, 389th GM District, Putnam County, Georgia; Mildred B. Sanders, a/k/a Mrs. Carl D. Sanders, Jr.; Brannen McCarthy Sanders; Carl Walton Sanders; 377.61 Acres of Land in Land Lots 367, 368, 369, 377, 378, 379, 380, 381, 382 and 383 of the Third Land District, 389th GM District, Putnam County, Georgia; Nellie W. Larman; 532.82 Acres of Land in the 145th GM District, Green County, Georgia; Clifford H. Dyer, Jr.; J.P. Dyer III; and George M. Dyer. III TABLE OF CONTENTS I ec ccespemisipaieneinasinian I i. , cceneapiianigneenbianantiuunnapennehegs I an SESE ya RRO ca 1 EE Se RE RYOTE ORL Se 2 Constitutional Provision and Statute Involved .............. 2 I I sscdsncntesidbondenssationsntiodesncesave 3 Reasons for Granting the Wit ......0..2.0......ccccseecceeeseeeeeees 5 i ecient bepicobalabeloalbonasiiens 12 i gschesdesunidiccgebcansniphiannivinaensntcteanientsaiben Al TABLE OF AUTHORITIES CASES Arnett v. Kennedy, 416 U.S. 134 (1974) 00 eee eee 8 Bauman v. Ross, 167 U.S. 548 (1897) 2.0... eeeeeceeeeeeeeeee 6 Boswell v. Georgia Power Company, 440 U.S. 907 (1979) ....... diese ticstaiilialoc\atdRctit dn onntaiinintescslblianuns 3,9 Clearfield Trust Co. v. United States, 318 U.S. 363 (1943) SC MRSA its hlitsiiapesicinipeaghtigei 4 Dohany v. Rogers, 281 U.S. 362 (1930) 220.022... eeeeeees 11 Georgia Power Company v. 54.20 Acres of Land, et al., UE BO AD Gat. LOTT) cncesccscccccensccccsccsnsnassontonsotetiose 3 Georgia Power Company v. 138.30 Acres of Land, et al., SE ME. 0D GLE, BITD) ccccccccececccnsercecnsnseeesoscosssecsiocs 3-4 Georgia Power Company v. Sanders, 617 F.2d 1112 (5 ISR ee 4 Kohl v. United States, 91 U.S. 367 (1876) .....00.020020000..-.. 5 Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803) ...... 7 _ PREVIOUS PAGE WAS BLANK y% IV Monongahela Navigation Company v. United States, A ee I ita kincaid rapapdiintdacncavecssenecdiccunenas 7,10 Olsen v. United States, 292 U.S. 246 (1934) ~....40000002..... 6 Richmond Elks Hall Association v. Richmond Rede- velopment Agency, 561 F.2d 1327 (9 Cir. 1977) ........ 11 United States v. 9.17 Acres of Land, etc., C.A. No. 79- I MN MD Cassis cat Sidee ae ssccdesopaceeetienaumpeee 10 United States v. 146.60 Acres of Land, etc., C.A. No. 78- SOU We NG icc ce tls ac cncinbn catsnshcenntetidedacelaveiadeabees 10 United States v. Fuller, 409 U.S. 488 (1973) -....0002000... 6 United States v. Gerlach Live Stock Co., 339 U.S. 725 fhe EE RE RNa Mpc ORS RIE NII RE PIED, ROU IE 7 United States v. Kimbell Foods, Inc., 440 U.S. 715 Py ERE EC EN HE Eas ACS EN RA aes eT Oa aL oR NO 4 United States v. Miller, 317 U.S. 369 (1943) 0000... 6, 11 CONSTITUTION, STATUTES AND RULES Rs A IIS I dickies sdecnchinnmpertiethtlntndcannssninunnonns 2,5, 10, 11 Federal Power Act, Ch. 285, Section 1, 41 Stat. 1063, 16 U.S.C. §792, et seq.— I BG Tite BOT) cocscsiccsceciccecscscciecccdscosseaee 10 Bactides 31,26 WEG, GONG occ sccesckccnseseaccnrssveccenves 2,4, 5,6 Uniform Relocation Assistance and Real Property A¢- quisition Policies Act of 1970, 42 U.S.C. §4601, DE I seesnssteccncssapicsevesearssenescsnmetcbssstinstebeiesssbiossnnssoteosinasoseoses 7 FE I Meet eit Mi cicisthevssitcpieaiossiceguninilopistebage ecnisnes 4) EE thins vectra tacicnabbiiistanctsinciasabcntsaiteusinserbeetncs. 5) Be EY MEINE TES scureceussvaucrasiapinbbiertoehscuighudseebensbisadeonmoscatesie 2 Se NE NE i hecistcaracesa astienco nascent susisiiadoeneamibesaicsnnstndianeveasicieens 5 Se IN erick eayisiteiiederdsshabincaicatenmiaslcutieaathsninieaiobtieghtaisaee 5 V MISCELLANEOUS Brief for United States as Amicus Curiae, Boswell v. United States, 440 U.S. 907 (1979) .......-.--ceccececceceeeeeees 3,9 Monaghan, Forward: Constitutional Common Law, Se Ss tec, UI BRIM cesicsiinccdesdnincicanitensrotnnrindttrnsinesiion 7 Hearings on S. 1419 Before the Water Power Com- mittee of the House, 65th Cong., 2d Sess. 366 (1918) 6 H. R. Rep. No. 715, 65 Cong., 2d Sess. 20 (1918) ............ 6 a Ie CE ctastintihntienicenainnbe igen celioniohinptesicesniasiiions 2 In the Supreme Court of the United States October Term, 1980 GEORGIA POWER COMPANY, Petitioner, Vs. 138.30 ACRES OF LAND and MILDRED B. SANDERS, ET AL.., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Georgia Power Company respectfully petitions for a Writ of Certiorari to review the judgment of the Court of Appeals for the Fifth Circuit in the above-entitled case. OPINIONS BELOW The en banc opinion of the Court of Appeals (App. Al) is reported at 617 F.2d 1112 (5 Cir. 1980). The panel opinion of the Court of Appeals (App. A36), is reported at 596 F.2d 644 (5 Cir. 1979). The prior opinion of the Court of Appeals (App. A53) which was overruled by the en banc decision is reported at 563 F.2d 1178 (5 Cir. 1977). Copies of the judgments sought to be reviewed are repro- duced in the Appendix at A99, A101 and A103. The judg- ments sought to be reviewed involve identical questions, and Georgia Power Company is, therefore, filing a single petition pursuant to Rule 19.4. JURISDICTION The judgments of the court of appeals were entered on May 27, 1980. The jurisdiction of this Court is invoked under 28 U.S.C. §1254(1). CONSTITUTIONAL PROVISION AND STATUTE INVOLVED U.S. Const. amend. V: No person shall . . . be deprived of life; liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensa- tion. Section 21 of the Federal Power Act, ch. 285, 41 Stat. 1074, 16 U.S.C. §814, provides: That when any licensee cannot acquire by contract or pledges an unimproved dam site or the right to use or damage the lands or property of others necessary to the construction, maintenance, or operation of any dam, reser- voir, diversion structure, or the works appurtenant or accessory thereto, in conjunction with an improvement which, in the judgment of the Commission, is desirable and justified in the public interest for the purpose of im- proving or developing a waterway or waterways for the use or benefit of interestate or foreign commerce, it may acquire the same by the exercise of the right of eminent domain in the District Court of the United States for the district in which such land or other property may be located, or in the state courts. The practice and pro- cedure in any action or proceedings for that purpose in the District Court of the United States shall conform as nearly as may be with the practice and procedure in similar 3 action or proceeding in the courts of the state where the property is situated: Provided, that the United States District Courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.00. STATEMENT OF THE CASE These are land condemnation cases brought by Georgia Power Company in connection with its Lake Wallace Project, 42 F.P.C. 356 (1969). The jurisdiction of the Dis- trict Court was invoked under 16 U.S.C. §814. In a prior decision also involving petitioner’s Lake Wallace project, Georgia Power Company v. 54.20 Acres cf Land, et al., 563 F.2d 1178 (5 Cir. 1977), the court of appeais held that just compensation in a condemnation case instituted by a Federal Power Commission licensee under §21 of the Federal Power Act is to be determined in accordance with rules developed in federal condemna- tion decisions. It rejected contentions of the landowners that state law controlled or supplied the rules of decision to determine just compensation. The landowners filed a petition for writ of certiorari to this Court. The Court invited the Solicitor General to file a brief setting forth the views of the United States, 439 U.S. 814 (1978), and thereafter denied certiorari, Boswell v. Georgia Power Company, 440 U.S. 907 (1979). In the meantime, the instant cases were proceeding through the district court and were thereafter appealed to the court of appeals. A panel of the Fifth Circuit held that it was bound by the earlier decision approving the use of federal rules to determine just compensation. Georgia Power Company v. 138.30 Acres of Land, et al., 596 F.2d 644 (5 Cir. 1979). A motion for rehearing en banc was granted, and the panel opinion was reversed. Georgia Power Company v. Sanders, 617 F.2d 1112 (5 Cir. 1980). The Court of Appeals held that the source of the eminent domain power in question is federal, but that “Tslince the statute does not specify the appropriate rule of decision, the task of interstitial federal lawmaking falls upon the federal judiciary in this case ‘to declare the governing law in an area comprising issues substantially related to an established program of government opera- tion.’” Id. at 1115. It reviewed a series of decisions from this Court beginning with Clearfield Trust Co. v. United States, 318 U.S. 363 (1964) through United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979) and determined that “state law should be adopted unless it is shown that the legislative intent or other sufficient reasons exist to displace state law with federal common law... .” Id. It concluded that the “interests of the United States in the determination of the amount of compensation a private licensee must pay a landowner in a condemnation proceeding under §21 are not sufficient to warrant displace- ment of state law on that issue.” Id. at 1118, and that “the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for determining the measure of compensation when a li- censee exercises the power of eminent domain pursuant to §21 of the Federal Power Act.” Id. at 1124. Four judges dissented on the ground that federal rules should apply of their own force to such condemnation proceedings for the reasons set forth in the first opinion of the Fifth Circuit. REASONS FOR GRANTING THE WRIT I, The Court of Appeals Incorrectly Decided an Im- portant Question Concerning the Interpretation of the Fifth Amendment Which Should Be Settled by This Court. The court of apppeals committed fundamental error when it treated the issue before it as one of interstitial lawmaking. Rather, the issue involves the interpretation of the just compensation clause of the fifth amendment which is solely and exclusively a question of federal con- stitutional law. There is no occasion to undertake any balancing of interests between the federal government and the states or to search for the intention of Congress as to how to calculate the amount of money which must be paid to a landowner to comply with the constitutional mandate. Section 21 of the Federal Power Act delegates to li- censees the use of the federal power of eminent domain. This is the exact same power which is available to the federal government, its agencies and officials, and is the only power which Congress can delegate. Kohl v. United States, 91 U.S. 367 (1876). When Congress delegated this “right of eminent domain” to FPC licensees it did not leave any gap in the statute which needs filling any more than it did when it delegated the use of the power to, for example, the Secretary of the Army,’ the Sec- retary of the Interior,’ the Tennessee Valley Authority,’ or a natural gas pipeline company.‘ It was not setting 33 U.S.C. §591. 43 U.S.C. §421. 16 U.S.C. §831x. 15 U.S.C. §717. - of = 6 up a new scheme or program with new rights and duties and the almost invariable gaps or interstices which ac- company such legislation. Rather, it was delegating a pre-existing power whose constitutional limitations were well-known to Congress by 1920.° Prior decisions of this Court have undertaken to formulate “working rules” to control the admissibility of evidence in the determination of just compensation. See, e.g., Bauman v. Ross, 167 U.S. 548 (1897) (off-setting ben- efits); Olsen v. United States, 292 U.S. 246 (1934) (highest and best use in combination with other lands); United States v, Miller, 317 U.S. 369 (1943) (elimination of en- hancement); United States v. Fuller, 409 U.S. 488 (1973) (elimination of value based on use in combination with government permit lands). However, rather than viewing its task as one of interstitial lawmaking in the sense of choosing between “federal common law” and state law on the basis of the supposed congressional intent, the Court has viewed its function as one of interpreting and enforc- ing the provisions of the federal constitution. At the risk of stating the obvious, we would point out that this is, after all, “the province and duty of the judicial department 5. The public use limitation was briefly considered by the Committee on Water Power of the House. During hearings on S. 1419 Augustus S. Houghton representing the Conservation Commission of the State of New York testified that Section 21 would conflict with the New York Constitution because it would allow taking private property for private use which would be an abuse of the right of eminent domain. Hearings on S. 1419 Before the Water Power Committee of the House, 65th Cong., 2d Sess. 366 (1918) (statement of Augustus S. Houghton). There- after the Committee reported the bill to the House on June 28, 1918. The only comment on Section 21 was that “[s]ome mem- bers of the committee express a doubt as to the constitutionality of section 21 but a majority of your committee believe the same is constitutional and a proper provision to be included in the law.” H. R. Rep. No. 715, 65th Cong., 2d Sess. 20 (1918). 7 .... Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).° The court of appeals, on the other hand, seems to have assumed that Congress has the power to define just com- pensation, either by setting its own rules or by reference to state law. Although Congress can and has on occasion con- ditioned the exercise of the power upon the payment cf amounts over and above just compensation,’ it has no right, authority or prerogative to determine what shall be the measure of compensation under the fifth amendment when private property is taken for public purposes. In Monongahela Navigation Company v. United States, 148 U.S. 312 (1893), this Court held unconstitutional an act of Congress which authorized the condemnation of a lock and dam owned by the navigation company, but which forbade any consideration of the value of its franchise to collect tolls in placing a value on the property being taken. The Court held: By this legislation congress seems to have assumed the right to determine what shall be the measure of compensation. But this is a judicial, and not a legis- lative, question. The legislature may determine what private property is needed for public purposes; that is a question of 2 political and legislative character. But when the taking has been ordered, then the question of compensation is judicial. It does not rest with the 6. “The Court undoubtedly has both the power and the duty to fashion ‘interpretative’ implementing rules to fill out the meaning of generally framed constitutional provisions. This is simply an ancient aspect of the judicial function in constru- ing the meaning of any text—constitutional, statutory, con- tractual, etc.” Monaghan, Forward: Constitutional Common Law, 89 Harv. L. REv. 1, 22 (1975). 7. See Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §4601, et seq.; United States v. Gerlach Live Stock Co., 339 U.S. 725 (1950). y% public, taking the property, through congress or the legislature, its representative, to say what compensa- tion shall be paid, or even what shall be the rule of compensation. The constitution has declared that just compensation shall be paid, and the ascertainment of that is a judicial inquiry. Id. at 327. In a slightly different context, the Court has taken the same approach with regard to the deprivation of property under the due process clause of the fifth amendment in Arnett v. Kennedy, 416 U.S. 134 (1974): While the state may define what is and what is not property, once having defined those rights the Con- stitution defines due process, and as I understand it six members of the Court are in agreement on this fundamental proposition. Id. at 185. (White, J. concurring in part and dissenting in part.) As our cases have consistently recognized, the ade- quacy of statutory procedures for deprivation of a statutorily created property interest [public employ- ment] must be analyzed in constitutional terms. Id. at 167. (Powell, J. concurring in part and concurring in the result in part.) Quite apart from the interests of the instant parties, the decision of the Court of Appeals will have an adverse impact on the development of federally licensed water power projects and the costs to consumers of power pro- duced by those projects. This issue was ably discussed by the Solicitor General in his amicus brief: A project’s total costs, including its land acquisition costs, bear directly on its economic feasibility and hence 9 on whether the project will be undertaken. And once a project is undertaken and completed, costs that were incurred for land acquisition are passed on to con- sumers in the price of the electric power generated. Investment in land acquisition is included in the rate- base determinations by the Commission when it reg- ulates interstate wholesale rates for electric power, and by state utility commissions when they set rates for the intrastate sale of power. For these reasons, in light of the significant differences in land acquisition costs that may result from the choice between federal and state rules for measuring compensation, the choice of the legal standard is a matter of concern to the com- mission in carrying out its licensing functions. Brief for United States as Amicus Curiae at 11-12, Boswell v. Georgia Power Company, 440 U.S. 907 (1979). Finally, we would respectfully suggest that this issue is likely to recur. There are something in excess of 30 federal statutes (A105) which delegate the authority to exercise the federal eminent domain power to various gov- ernment departments, agencies, cabinet secretaries, govern- ment corporations, public utilities and others. Under the opinion of the court of appeals it will be necessary to decide whether Congress intended federal law to control the determination of just compensation under each of these statutes or whether application of state law »vould frustrate or hinder an ongoing federal program.*® 8. The Court of Appeals attempted to distinguish cases which apply fede~al rules of valuation in condemnation actions on the theory that when the United States condemns and pays for the land “the federal interests involved differ markedly” 617 F.2d at 1119 from the situation in this case. The federal interests which it identified were 1) maximization of hydro- electric development, 2) reduced energy costs, and 3) minimi- zation of cost to the government. Id. at 1120. However, these are the same federal interests which are at stake in government (Continued on following page) 10 II. The Decision of the Court of Appeals Conflicts With Prior Decisions of the Supreme Court and the Ninth Circuit. The issue in this case has always been framed in terms of whether federal or state law supplies the rules to determine just compensation. In its most basic sense, however, what we are really dealing with in this case are the rules of evidence which guide the fact finder in arriving at a sum of money representing just compensation. This Court held in Monongahela Navigation Company that just compensation within the meaning of the fifth amendment is the full monetary equivalent of the prop- erty taken. In order to determine this full monetary equivalent, the trier of fact of necessity has to take into account evidence of the value of the property on the date of taking. Facts regarding this value such as whether or not the announcement of the project has favorably in- fluenced prices of comparable property in the neighbor- hood or whether the remainder will increase in value be- Footnote continued— hydro projects, and the interests of the states in preserving their property laws are also the same. There are several govern- ment condemnation cases pending in the same district court from which these cases arose, and which are assigned to the same commissioners for trial. These cases, United States v. 9.17 Acres of Land, etc., C.A. No. 79-55-ATH (M.D. Ga.); United States v. 146.60 Acres of Land, etc., C.A. No. 78-57-ATH (M.D. Ga.), were brought to acquire projerty for the Richard B. Russell Dam and Lake Project which is being constructed by the Corps of Engineers. The federal government has just as much interest in developing hydroelectric power, reducing energy costs and min- imizing construction expense at Lake Wallace as it does with the Russell Dam Project. The irony in all this is that under the theory of the court of appeals, Georgia Power Company will have to incur excessive and unrealistic land costs, but the gov- ernment has reserved the right in Section 14 of the Act, 16 U.S.C. §807(a) to condemn the project at any time upon payment of just compensation which presumably would be calculated under federal rules. 11 cause of the project are the types of evidentiary questions which must be considered to determine the full monetary equivalent. In United States v. Miller, 317 U.S. 369 (1943), this Court held that state law rules concerning what evidence may be considered by the fact finder “could not affect questions of substantive right,—such as the measure of compensation,—grounded upon the Constitution of the United States.” Id. at 380. The opinion of the court of appeals in this case not only holds that state evidentiary rules regarding determination of just compensation can be relied upon, but that a district court in this circuit has no choice and must follow state law. Richmond Elks Hall Association v. Richmond Re- development Agency, 561 F.2d 1327 (9 Cir. 1977), was an inverse condemnation action brought under the fifth amendment by a landowner against a federally assisted city redevlopment agency. The landowner contended that just compensation means not only the full monetary value of the property taken, but that it also includes litigation expenses and attorneys’ fees. Relying on this Court’s opinion in Dohany v. Rogers, 281 U.S. 362 (1930) the Ninth Circuit held that expenses of litigation and attorneys’ fees are not includable in just compensation under the fifth amendment. It then rejected a contention by the land- owner that state law (which provided for an award of costs and expenses to owners in inverse condemnation cases against public entities) should be adopted to de- termine the proper measure of compensation. The Fifth Circuit, on the other hand, has required the adoption of state law as the appropriate federal rule, and if the law of the state in question required the payment of attorneys’ fees and expenses, these amounts would be includable in a federal condemnation case. 12 Federally guaranteed rights set forth in the Bill of Rights should not have materially different dimensions in each of the states. Both the source of the right and its ultimate interpretation are unitary, and the conflicts identified above therefore justify the grant of the writ to review the judgment below. CONCLUSION We respectfully urge the Court, for all the reasons set forth above, to grant the writ and reverse the decision below. Respectfully submitted, WALLACE MILLER, JR. Counsel of Record W. WARREN PLOWDEN, JR. Attorneys for Petitioner Al APPENDIX GEORGIA POWER COMPANY, Plaintiff-Appellee, v. 138.30 Acres of Land, situate, lying and being in Land Lot 327 of the 3rd Land District 389th G. M. District, Putnam County, Georgia, Defendant, Mildred B. SANDERS, a/k/a Mrs. Karl D. Sanders, Jr., et al., Defendants-Appellants, GEORGIA POWER COMPANY, Plaintii f-Appellee, v. 377.61 Acres of Land, situate, lying and being in Land Lots 367, 368, 369, 377, 378, 379, 380, 381, 382 and 383 of the Third Land District, 389th G. M. District, Putnam County, Georgia, Defendant, Mrs. Nellie W. LARMAN, et al., Defendants-Appellants. GEORGIA POWER COMPANY, Plaintiff-Appellee, Vv. 532.82 Acres of Land, situate, lying and being in the 145th G. M. District, Greene County, Georgia, Defendant, Clifford H. DYAR, Jr., et al., Defendants-Appellants, Nos. 77-1775, 77-1776 and 77-1777. United States Court of Appeals, Fifth Circuit. May 27, 1980. A2 Appeals from the United States District Court for the Middle District of Georgia. Before COLEMAN, Chief Judge, BROWN, AINS- WORTH, RONEY, GEE, TJOFLAT, HILL, FAY RUBIN, VANCE, KRAVITCH, FRANK M, JOHNSON, Jr., GARZA, HENDERSON, REAVLEY, POLITZ, HATCHETT, RAND- ALL, TATE, SAM D. JOHNSON, and THOMAS A. CLARK, Circuit Judges.* RANDALL, Circuit Judge: These condemnation cases present the issue whether compensation should be determined under federal law or under the law of the state where the condemned property is located when a licensee of the Federal Energy Regulatory Commission (the Commission)! exercises the power of eminent domain in federal court as authorized by Section 21 of the Federal Power Act, 16 U.S.C. § 814 (1976). If federal law is chosen, then the next issue for determination is whether the court should apply uniform national law or should apply, as federal law, the law of the state where the property is located. The panel held that federal law governed and the measure of compensation was to be determined under uniform national law. Georgia Power *Judge Goldberg was a member of the en banc court under 28 U.S.C.A. § 46(c) and participated in the oral argument of the case en banc. Since that time he has taken senior status and therefore does not participate in this decision. Judges Godbold and Anderson were recused and took no part in the consideration or decision of these cases. Judge Charles Clark took no part in the consideration or decision of these cases. 1. On October 1, 1977, the Federal Power Commission ceased to exist and its functions and regulatory responsibilities were trans- ferred to the Secretary of Energy and the Federal Energy Reg- ulatory Commission pursuant to the Department of Energy Or- ganization Act, Pub.L. No. 95-91, 91 Stat. 565 (August 4, 1977). See 42 U.S.C.A. §§ 7101, et seq. (1978) at §§ 7151(b) (transfer of functions to Secretary of Energy) and 7172(a) (transfer of func- tions to Federal Energy Regulatory Commission). A3 Co. v. 138.30 Acres of Land, 596 F.2d 644, 649 (5th Cir. 1979) (hereinafter referred to as Larman, the name of one of the landowners in the proceeding). In so doing, the panel was bound by our prior decision in Georgia Power Co. v. 54.20 Acres of Land, 563 F.2d 1178 (5th Cir. 1977), cert. denied, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979) (hereinafter referred to as Dodson, the name of one of the landowners in that proceeding). Because of the importance of the question at issue, we decided to have Larman reheard en banc (thereby vacating the panel opinion, 5th Cir. R. 17), to reconsider our holding in Dodson. Georgia Power Co. v. 138.30 Acres of Land, 602 F.2d 1243 (5th Cir. 1979). It is the opinion of a majority of the en banc court that Dodson was, in part, wrongly decided and, in that respect, should be overruled. We agree with Dodson that the source of law is federal but we now hold, contrary to Dodson, that the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for determining the measure of compensation when a licensee of the Com- mission exercises the power of eminent domain pursuant to Section 21 of the Federal Power Act. Parts I and II of the panel opinion in Larman, denom- inated “Right to a Jury Trial” and “Discretion to Appoint a Commission,” (up to Part III, “Applicability of Federal Law,” 596 F.2d at 648), are unaffected by our present decision on the choice of law issue and are, accordingly, approved and adopted by the court en banc. In Part IV of Larman, under the heading “Alleged Errors in the Com- mission’s Final Report,” the panel first set forth general principles relevant to commissions’ reports, then discussed the commission’s findings with respect to each of the properties involved and, finally, remanded for further fact findings and reevaluation of the compensation awarded each of the landowners. The portion of that section out- A4 lining general principles relevant to commissions’ reports, (up to the subheading “Sanders Taking,” 596 F.2d at 649), is unaffected by our present decision and is, therefore, approved and adopted by the court en banc. The balance of the discussion in that section, however, insofar as it is dependent upon the commission’s application of federal common law to the determination of the amount of com- pensation, is rendered inapplicable by our holding that Georgia law supplies the appropriate federal standard and is superceded to that extent. Part III of the panel opinion, denominated “Applicability of Federal Law,” is superceded in its entirety by this opinion. In both Dodson and Larman, Georgia Power Company, a privately owned Georgia utility, instituted condemnation proceedings against Georgia landowners in federal court to acquire land for the Lake Wallace hydroelectric power generating project in Georgia. These proceedings were instituted pursuant to Section 21 of the Federal Power Act, authorizing persons or entities licensed by the Commission under Section 4(e) of the Federal Power Act, 16 U.S.C. § 797(e),? to exercise the right of eminent domain under specified circumstances. Section 21 provides as follows: 2. Under 16 U.S.C. § 797(e) (1976), the Commission is au- thorized and empowered as follows: To issue licenses to citizens of the United States, or to any association of such citizens or to any corporation organized under the laws of the United States or any State thereof, or to any State or municipality for the purpose of construc- ting, operating, and maintaining dams, water conduits, reser- voirs, power houses, transmission lines, or other project works necessary or convenient for the development and improve- ment of navigation and for the development, transmission, and utilization of power across, along, from, or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, or upon any part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the (Continued on following page) A5 When any licensee cannot acquire by contract or pledges an unimproved dam site or the right to use or damage the lands or property of others necessary to the construction, maintenance, or operation of any dam, reservoir, diversion structure, or the works appur- tenant or accessory thereto, in conjunction with an improvement which in the judgment of the commission is desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such land or other property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the prop- erty is situated: Provided, That United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000. The district judge appointed a three-member commis- sion to determine the amount of compensation due the landowners. See Fed.R.Civ.P. 71A(h). The judge’s in- structions to the commission embodied federal rules for Footnote continued— surplus water or water power from any Government dam, except as herein provided: ... Provided further, That in case the Commission shall find that any Government dam may be advantageously used by the United States for public purposes in addition to navigation, no license therefor shall be issued until two years after it shall have reported to Con- gress the facts and conditions relating thereto... . Georgia Power was issued a license by the FPC for the Lake Wallace Project (then called the Laurens Shoals Project), on August 6, 1969. 42 F.P.C. 356 (1969). A6 determining just compensation. The landowners’ requests to substitute for those instructions ones in accord with Georgia rules were denied. If Georgia law were applied, the amount awarded the landowners would be greater than it would be under federal law.* Under Georgia law, the value of any benefits accruing by virtue of the project to any part of the landowner’s land which is not taken may be offset only against the recovery for damages to that remainder, if any, and not against the recovery for the value of the land actually taken. See Ga.CodeAnn. § 36-504 (1970). Under federal law, the value of any benefits accruing by virtue of the project to the portion of the tract not taken may be offset against the recovery for the value of the land actually taken. Bauman v. Ross, 167 U.S. 548, 17 S.Ct. 966, 42 L.Ed. 270 (1897); United States v. Trout, 386 F.2d 216 (5th Cir. 1967). Furthermore, under Georgia law, just compensation might include any increase in the value of the property caused by general knowledge of the project. See Hard v. Housing Authority of Atlanta, 219 Ga. 74, 132 S.E.2d 25 (1963). Under federal law, just compensation does not include any such increase in the value of the property. United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943).‘ 3. In fact, in case No. 75-4448, the commission awarded no monetary compensation, a result which could not be reached under Georgia law. Dodson, 563 F.2d at 1180. 4. At the time Dodson was decided, under Georgia law, rea- sonable attorneys’ fees would have been included.in the award. See White v. Georgia Power Co., 237 Ga. 341, 227 S.E.2d 385 (1976), overruled, DeKalb County v. Trustees, Decatur Lodge No. 1602, 242 Ga. 707, 251 S.E.2d 243 (1978). Since then, however, the Georgia Supreme Court has held that attorneys’ fees need not be included in the measure of just compensation under the Georgia Constitution. DeKalb County, 251 S.E.2d 243 (overruling White v. Georgia Power Co. and its progeny). It appears that the two differences in the method of determin- ing just compensation under Georgia and federal law discussed in the text above are the key differences. In any event, they are the only ones mentioned specifically on appeal. Any questions concerning the exact parameters of Georgia law on this issue will have to be resolved on remand. AT [1] We think it clear that the source of the eminent domain power at issue here is federal. Since Section 21 licensees derive their authority to exercise the power of eminent domain from the Federal Power Act, which was passed in the exercise of a “ ‘constitutional function or power,’” see United States v. Kimbell Foods, Inc., 440 U.S. 715, 726, 99 S.Ct. 1448, 1457, 59 L.Ed.2d 711 (1979) (quoting Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S.Ct. 573, 574, 87 L.Ed. 838 (1943)), their rights, as well, should derive from a federal source. 440 U.S. at 726, 99 S.Ct. at 1457. We think that, in this context, federal interests are “sufficiently implicated to warrant the protection of federal law.” Kimbell Foods, 440 U.S. at 727, 99 S.Ct. at 1457-1458. Since the statute does not specify the appropriate rule of decision, the task of inter- stitial federal lawmaking falls upon the federal judiciary in this case “‘to declare the governing law in an area comprising issues substantially related to an established program of government operation.’” United States v. Little Lake Misere Land Co., 412 U.S. 580, 593, 93 S.Ct. 2389, 2397, 37 L.Ed.2d 187 (1973) (quoting Mishkin, The Variousness of “Federal Law”: Competence and Discre- tion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797, 800 (1957)). Thus, the question which remains is whether the court should choose federal common law or state law as the appliceble federal rule. See, e. g., Kimbell Foods, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711; Clearfield Trust, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838. The answer to this question is largely dependent upon whether one begins with the position that state law should be adopted unless it is shown that legislative intent or other sufficient reasons exist to displace state law with federal common law or with the position that federal com- mon law should be utilized unless it is shown that legis- A8 lative intent or other sufficient reasons exist to warrant adoption of state law. Basic considerations of federalism, as embodied in the Rules of Decision Act,’ prompt us to begin with the premise that state law should supply the federal rule unless there is an expression of legislative intent to the contrary, or, failing that, a showing that state law conflicts significantly with any federal interests or policies present in this case. Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1301, 1304, 16 L.Ed.2d 369 (1966). Our reading of Supreme Court decisions convinces us of the correctness of our approach.* In Clearfield Trust, 5. The laws of the several states, except where the Con- stitution or treaties of the United States or Acts of Congress other- wise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply. 28 U.S.C. § 1652 (1976). 6. Ample support for this presumption favoring adoption of state law as the federal rule is found in the law review com- mentaries. As Professor Wechsler has said regarding the role of federalism, “National action has always been regarded as ex- ceptional in our policy, an intrusion to be justified by some necessity, the special rather than the ordinary case. .. The political logic of federalism thus supports placing the burden of persuasion on those urging national action.” Wechsler, The Po- litical Safeguards of Federalism: The Role of the States in the Composition and Selection of the National Government, 54 Colum. L.Rev. 543, 544-45 (1954). See also Mishkin, The Variousness of “Federal Law”: Competence and Discretion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797, 814 n.64 (1957) (“Our federalism, which the [Rules of Decision] act expresses, seems to posit generally that in case of doubt, the courts should use state law, leaving new extensions of federal power to the legislative body.”); Comment, Federal Courts— Choice of Controlling Law in Cases Involving Federally Insured Mortgages, 49 N.C.L.Rev. 358, 365 (1971) (“If the philosophy of the Rules of Decision Act is applied in answering the second question of whether to adopt the local law as the federal rule, a presumption will arise that the state law is adopted. This pre- sumption could be rebutted by a showing of sufficient federal int_rest for rejection of the local law as the federal rule.”); Com- ment, Rules of Decision in Nondiversity Suits, 69 Yale L.J. 1428, (Continued on following page) A9 federal law was chosen as the applicable federal rule to govern an action against the United States on a federal check. 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838. The Court stated: In our choice of the applicable federal rule we have occasionally selected state law.... But reasons which may make state law at times the appropriate federal rule are singularly inappropriate here. The issuance of commercial paper by the United States is on a vast scale and transactions in that paper from issuance to payment will commonly occur in several states. The application of state law, even without the conflict of laws rules of the forum, would subject the rights and duties of the United States to exceptional uncertainty. It would lead to great diversity in results by making identical transactions subject to the vagaries of the laws of the several states. The desirability of a uniform rule is plain. Id. at 367, 63 S.Ct. at 575 (citation omitted). Footnote continued— 1446 (1960) (“In the absence of evidence of congressional intent to the contrary, state law would seem applicable under the Rules of Decision Act in all three cases [where a federal statute is in- volved and 1) a term of the act requires further definition; 2) no provision is made for certain matters; or 3) the statute regu- lates certain areas without indicating whether existing state law in that area is preempted or continues in force where the federal law does not specifically govern], for the statute does not ‘other- wise require or provide.’ Of course, courts examining the major purposes of the act may find that the application of state law will cause results contrary to the objectives sought by Congress. In some cases, the lack of uniformity itself may obstruct the opera- tion of a statute even though none of the various results are by themselves objectionable. But this is, in effect, simply a finding of congressional intent not to be bound by state law. Without that finding, state law should be followed.”). Cf. Comment Adopting State Law as the Federal Rule of Decision: A Pro Test, 43 U.Chi.L.Rev. 823, 826 (1976) (“when the source of law is federal, Congress or the Constitution ‘“require[s]"”’ otherwise than that state law [should] govern of its own force”) (quoting United States v. Little Lake Misere Land Co., 412 U.S. 580, 592-93, 93 S.Ct. 2389, 2396-97, 37 L.Ed.2d 187 (1973) ). Al0 The choice of state law as the federal rule was thought to be similarly inappropriate in determining whether the United States could recover for damages suffered when a serviceman is injured by a third party tortfeasor. United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947). Uniform national treatment, rather than diversified local disposition, was called for because of the distinctively federal nature of the government- soldier relation and because the question was primarily one of federal fiscal policy, of no particular concern to the states or their citizens. Id. at 310-11, 67 S.Ct. at 1609-10." In Bank of America National Trust & Savings Ass’n v. Parnell, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93 (1956), the Supreme Court held state law applicable, refusing to ex- tend the Clearfield Trust rationale to litigation between private parties even though the suit involved federal com- mercial paper. The Court reasoned as follows: The present litigation is purely between private parties and does not touch the rights and duties of the United States. The only possible interest of the United States in a situation like the one here, exclusively involving the transfer of Government paper between private persons, is that the floating of securities of the United States might somehow or other be adversely affected by the local rule of a particular State regarding the liability of a converter. This is far too speculative far too remote a possibility to justify the application of federal law to transactions essentially of local concern. 352 U.S. at 33-34, 77 S.Ct. at 121. In Wallis v. Pan American Petroleum Corp., the Court held that state law governed the dealings of private par- 7. Judge Wisdom viewed these early cases, Clearfield Trust and Standard Oil, as representative of a presumption favori a law, from which later cases departed. Dodson, 563 F. at 1188. All ties in an oil and gas lease issued under the Mineral Leas- ing Act of 1920. 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369. The Court there enunciated the following test: In deciding whether rules of federal common law should be fashioned, normally the guiding principle is that a significant conflict between some federal policy or interest and the use of state law in the premises must first be specifically shown. Id., at 68, 86 S.Ct. at 1304.* In Miree v. DeKalb County, Georgia, 433 U.S. 25, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977), the Court held state law applicable in an action against the county by survivors of deceased airline passengers who attempted to recover as third party beneficiaries of a contract between the county and the Federal Aviation Administration. The Clearfield Trust approach was inapplicable because the rights of pri- vate litigants alone were at issue. 433 U.S. at 30, 97 S.Ct. at 2494. Although the United States has a substantial interest in regulation of air travel and promotion of air travel safety, id. at 31, 97 S.Ct. at 2494, as was the case in Parnell and Wallis, any federal interest in the outcome of the specific question before the Court was “ ‘far too specu- lative, far too remote a possibility to justify the applica- tion of federal law to transactions essentially of local con- cern.’” Id. at 32-33, 97 S.Ct. at 2495-2496 (quoting Parnell, 352 US. at 33-34, 77 S.Ct. at 121-122). Finally, in Kimbell Foods, decided after Dodson, the Court held that state law should be adopted as the ap- propriate federal rule for establishing priorities of com- peting federal (SBA and FHA) and private liens since a 8. Judge Simpson viewed this language as “nearly, if not quite,” establishing a ‘presumption favoring state law in choice of law cases.”” Dodson, 563 F.2d at 1194 (dissent). Al2 national rule was unnecessary to protect the federal in- terests involved. 440 U.S. 718, 99 S.Ct. at 1453. The Court rejected what it considered “generalized pleas for uni- formity as substitutes for concrete evidence that adopting state law would adversely affect administration of the fed- eral programs.” Id. at 730, 99 S.Ct. at 1459. The govern- ment’s argument that the special priority accorded federal tax liens was requ‘red here as well, since application of state law would undermine its ability to recover funds dis- bursed under the lending programs and thus would conflict with program objectives, was also rejected. Id. at 733-38, 99 S.Ct. at 1461-1464. The special priority the government commands in its tax collecting capacity was not warranted in this context where it was in substantially the same posi- tion as private lenders. Id. The foregoing review of Supreme Court decisions leads us to the conclusion that they do indeed evidence “a grow- ing desire to minimize displacement of state law,” Dodson, 563 F.2d at 1189, and that conclusion strongly supports our position that state law should be adopted as the federal rule of compensation unless it is shown that legislative in- tent or other sufficient reasons exist to displace state law with federal common law. [2] Our review of the relevant legislative history re- veals no express congressional intent that federal common law and not state law should supply the federal rule in determining the measure of compensation in condemnation cases brought under Section 21. Therefore, we turn to an examination of the considerations relevant to the “nature of the specific governmental interests and to the effects upon them of applying state law.” Standard Oil, 332 U.S. at 310, 67 S.Ct. at 1609. If the effect of applying state law is virtually to nullify the federal objectives, then there is a conflict that precludes application of state law. See, e. g., Al3 Little Lake, 412 U.S. 580, 93 S.Ct. 2389, 37 L.Ed.2d 187. If application of state law would arguably interfere with an identifiable federal policy or interest, but not amount to a conflict which would preclude application of state law, we must proceed to an examination of the relative strength of the state’s interests in having its rules applied. See United States v. Yazell, 382 U.S. 341, 351-53, 86 S.Ct. 500, 506-07, 15 L.Ed.2d 404 (1966); cf. Little Lake, 412 U.S. at 599, 93 S.Ct. at 2400 (although adoption of state law was precluded because it conflicted with the federal program regarding federal land acquisitions under the Migratory Bird Act, the Court stated that its conclusion might con- ceivably be influenced if the retroactive state statute sought to be applied served “legitimate and important state interests the fulfillment of which Congress might have contemplated through application of state law’); Wallis, 384 U.S. at 68, 86 S.Ct. at 1304 (not reaching the issue since no significant threat was found). See generally Comment, Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 799 (1976). [3] While we do not deny the existence of important federal interests in issues arising under the Federal Power Act (indeed, that is the basis for our decision that federal law governs in the first place), we are of the opinion that the interests of the United States in the determination of the amount of compensation a private licensee must pay a landowner in a condemnation proceeding under Section 21 are not sufficient to warrant displacement of state law on that issue. Before a license may be issued under the Federal Power Act, there must be a determination by the Commission that the project does not affect the “develop- ment of any water resources for public purposes [that] should be undertaken by the United States itself.” 16 U.S.C. § 800(b). Thus, by definition, a licensed project does not implicate the interests of the United States to the Al4 degree that it is thought desirable that the project be under- taken by the United States itself. We find persuasive and relevant to determining the nature of federal and state in- terests in this case the distinction observed by the Ninth Circuit in Public Utility District No. 1 v. City of Seattle, 382 F.2d 666, 669-70 (9th Cir.), cert. dismissed, 396 U.S. 803, 90 S.Ct. 22, 24 L.Ed.2d 59 (1969) (even though it was made in support of its finding, which we deem erroneous, that Section 21 does not delegate full eminent domain power): We first observe that the position of a licensee is disuinguishable from that of the United States with respect to furthering of the national interest. By is- suance of a license the United States is not acting in the national interest through the licensee to the same extent as it would if it undertook the project itself. The United States acts in the public interest on a na- tional scale; the licensee often on a local scale, on projects thought to be of insufficient dimensions to warrant the assertion of national power. In many cases the requirements of federal permission and regu- lation are all that the national interest requires. Fre- quently the licensee is a privately owned utility or even manufacturer, seeking the license for purposes of profit. Although federal rules have been applied to the de- termination of just compensation in federal condemnation cases where the United States is the party condemning and paying for the land,® we do not deem those decisions 9. See, e. United States v. Miller, 317 U.S. 369, 380, 63 S.Ct. 276, 283, 7 L.Ed. 336 (1943); United States v. Certain Property "Located in Borough of Manhattan, 344 F.2d 142, 146 (2d Cir. 1965); United States v. City of New York, 165 F.2d 526, 528 (2d Cir. 1948) (L. Hand, J.); United States v. Certain Parcels of Land, 144 F.2d 626, 628 (3d Cir. 1944); United States v. 3,595.98 Acres of Land, 212 F.Supp. 617 ( N.D.Cal.1962). Ald controlling’’ since our case arises in the context of a Sec- tion 21 proceeding by a licensee where the nature of the 10. The majority in Dodson denied being bound by those cases but was of the opinion that those decisions were helpful starting points even though they did not involve federal con- demnations by Section 21 licensees. Judge Wisdom wrote: Other courts in federal compensation cases have balanced the state and federal interests and have concluded that federal, rather than state, law should sipply the rules of compensa- tion. Unless we find the weights on our scale to be sub- stantively different, we see no reason to diverge from the yn of the Supreme Court and some of our Courts of ppeals. Dodson, 563 F.2d at 1186, n. 21. While a decision to apply federal rules of compensation might implicitly involve a determination that federal interests outweigh state interests, we do not find the cases cited persuasive since they contain no express interest analysis, which may be indicative of the importance attached to the presence of the United States as the condemnor in those cases. In support of its contention that there is no need to balance any interests in this case, Georgia Power Company places great reliance on Richmond Elks Hall Ass’n v. Richmond Redevelopment Agency, 561 F.2d 1327 (9th Cir. 1977), where the court refused to apply the law of the state (which, unlike federal law, awards costs and expenses, including attorneys’ fees, to landowners who obtain judgment in inverse condemnation actions against public entities) in a successful inverse condemnation action brought under the Fifth Amendment against a federally assisted city redevelopment agency. The Ninth Circuit viewed the Supreme Court’s reasoning in a Miller Act case, F. D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974), controlling. The Miller Act provides a remedy for suppliers and subcontractors who perform services or provide material for a contractor in connection with construction on federal property who must bring suit to recover money owed them by the con- tractor. 40 U.S.C. § 270a et seg. (1976). In F. D. Rich Co., the Supreme Court stressed the importance of a uniform national rule and reversed the Ninth Circuit’s holding that the Miller Act re- quires an award of attorneys’ fees where the “public policy” of the state in which suit is brought allows an award of fees in similar contexts. One reason for reversal was expressed as fol- lows: Although the court below premised its decision on the theory that a Miller Act remedy is afforded “ ‘in lieu of the lien upon land and buildings customary where property is owned by private persons,’ ” it gave respondent more protection than California law affords litigants involved in disputes arising from private construction projects who are not entitled to an (Continued on following page) Al6 federal interests involved differs markedly from the na- ture of the federal interests involved where the United States is the condemnor. Furthermore, while also not controlling, there is authority for the application of state law to questions concerning compensation, such as ad- missibility of evidence of consequential damages and the propriety of interest on a compensation award in con- demnation actions brought in federal court under Section 21. See, e. g. Feltz v. Central Nebraska Public Power & Irrigation Dist., 124 F.2d 578 (8th Cir. 1942) .™ Footnote continued— award of attorneys’ fees. We think it better to extricate the federal courts from the morass of trying to divine a “state policy” as to the award of attorneys’ fees in suits on construc- tion bonds. 417 U.S. at 128, 94 S.Ct. at 2164. The Court also pointed out that “[m]Jany federal contracts involve construction in more than one State, and often, as here, the parties to Miller Act litigation have little or no contact, other than the contract itself, with the State in which the federal project is located.” Id. at 127, 94 S.Ct. at 2164. In view of the foregoing analysis, discussing federal and state interests, we do not think Richmond Elks Hall lends much support to Georgia Power’s theory that there is no need to balance interests and we do not deem controlling on the issue before us the following language from F. D. Rich Co. quoted by the court in Richmond Elks Hall: The Miller Act provides a federal cause of action, and the scope of the remedy as well as the substance of the rights created thereby is a matter of federal not state law. Neither respondent nor the court below offers any evidence of con- gressional intent to incorporate state law to govern such an important element of Miller Act litigation as liability for attorneys’ fees. [F. D. Rich Co., 417 U.S.] at 127, 94 S.Ct. at 2164. 561 F.2d at 1334. Furthermore, we note that unlike Section 21 licensees, the redevelopment agency in Richmond Elks Hall was federally funded. 11. See also Central Nebraska Pub. Power & Irrigation Dist. v. Harrison, 127 F.2d 588 (8th Cir. 1942); Central Nebraska Pub. Power & Irrigation Dist. v. Fairchild, 126 F.2d 302 (8th Cir. 1942); Samuelson v. Central Nebraska Pub. Power & Irrigation Dist., 125 F.2d 838 (8th Cir. 1942); Burnett v. Central Nebraska Pub. Power & Irrigation Dist., 125 F.2d 836 (8th Cir. 1942); McGinley v. Cen- tral Nebraska Pub. Power & Irrigation Dist., 124 F.2d 692 (8th Cir. 1942); Central Nebraska Pub. Power & Irrigation Dist. v. Berry, 124 F.2d 586 (8th Cir. 1942). Al7 The overriding federal interest at stake in a case such as this one is in implementing or effectuating the fed- eral program. Thus, if state law is so hostile that its application would actually frustrate this objective, a con- flict exists which precludes adoption of state law as the federal rule. See Little Lake, 412 U.S. 580, 93 S.Ct. 2389, 37 L.Ed.2d 187. The specific federal interests or policies which may be identified under the Federal Power Act are 1) maximization of hydroelectric development, 2) re- duced energy costs and 3) minimization of cost to the government should it decide to exercise its option to ac- quire a project at the expiration of the license term, upon payment of ‘‘net investment,” not exceeding the “fair value” of the property taken, under Section 14(a) of the Federal Power Act, 16 U.S.C. § 807(a) (1976).'* See First 12. Section 14(a) of the Federal Power Act provides as follows: Upon not less than two years’ notice in writing from the Commission the United States shall have the right upon or after the expiration of any license to take over and there- after to maintain and operate any project or projects as defined in section 796 of this title, and covered in whole or in part by the license, or the right to take over upon mutual agreement with the licensee all property owned and held by the licensee then valuable and serviceable in the development, transmission, or distribution of power and which is then de- pendent for its usefulness upon the continuance of the license, together with any lock or locks or other aids to navi- gation constructed at the expense of the licensee, upon the condition that before taking possession it shall pay the net investment of the licensee in the project for projects taken, not to exceed the fair value of the property taken, plus such reasonable damages, if any, to property of the licensee val- uable, serviceable, and dependent as above set forth but not taken, as may be caused by the severance therefrom of property taken, and shall assume all contracts entered into by the licensee with the approval of the Commission. The net investment of the licensee in the project or projects so taken and the amount of such severance damages, if any, shall be determined by the Commission after notice and op- portunity for hearing. Such net investment shall not include or be affected by the value of any lands, rights-of-way, or other property of the United States licensed by the Commission (Continued on following page) Al8 Iowa Hydro-Electric Cooperative v. FPC, 328 U.S. 152, 171-74, 180, 66 S.Ct. 906, 915-16, 919, 90 L.Ed. 1143 (1946). See generally J. Kerwin, Federal Water-Power Legislation (1926). It is clear to us that application of state law to the narrow question of the determination of the amount of compensation a licensee must pay a landowner does not nullify federal objectives and does not result in a conflict which would preclude application of state law. In Little Lake, application of a state statute retroactively making mineral rights imprescriptible would have deprived the federal government of its previously bargained for con- tractual interests in mineral rights and would have cre- Footnote continued— under this chapter, by the license or by good will, going value, or prospective revenues; nor shall the values allowed for water rights, rights-of-way, lands, or interest in lands be in excess of the actual reasonable cost thereof at the time of acquisition by the licensee: Provided, That the right of the United States or any State or municipality to take over, maintain, and operate any project licensed under this chapter at any time by condemnation proceedings upon payment of just compensation is expressly reserved. 16 U.S.C. § 807(a) (1976). The option provision has been cited as illustrative of the “closensss of the relationship of the Federal Government to these projects and its obvious concern in main- taining control over their engineering, economic and financial soundness.” First Iowa Hydro-Electric Coop. v. FPC, 328 U.S. 152, 172-73, 66 S.Ct. at 906, 90 L.Ed. 1143 (1946). See also id. at 181 n. 25, 66 S.Ct. at 920, n. 25. The government, however, in its amicus brief to the Supreme Court on petition for certiorari in Dodson, brief for United States at 12, Boswell v. Georgia Power Company, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), described the governmental interest arising from this option as a “less important federal interest” since it cannot be predicted with confidence that many lensed projects will be recommended for federal take-over as their ‘erms expire. Since under Section 7(b) of the Act, 16 U.S.C. § 809(b), approval may not be given for any application for a project when the Commission finds that “the development of any water resources for public purposes should be undertaken by the United States itself,” the landowners argue that exercise of the option is unlikely because it will have already been determined that it was unnecessary for the United States to undertake the project initially. Alg ated uncertain’y in the land acquisition program embodied in the Migratory Bird Conservation Act, 16 U.S.C. § 715 et seq. The Court held that “borrowing” state law in this case would be inappropriate since ‘‘specific aberrant or hos- tile state rules do not provide appropriate standards for federal law.” Little Lake, 412 U.S. at 595-96, 93 S.Ct. at 2398. Georgia Power Company argues that it would like- wise be inappropriate to apply Georgia law to the com- putation of just compensation in condemnation actions in federal court under Section 21 since, especially in its al- lowance of enhanced value resulting from knowledge of the project, as to which it is admittedly in the minority,” the Georgia law is sufficiently aberrant and hostile to the energy program embodied in the Federal Power Act. We do not agree that application of a state law which results in higher awards to the landowners, even when aspects of that law represent the minority position, amounts to the kind of conflict which precluded adoption of state law in Little Lake. Compare Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404, where the Court held that state law governed in a suit by the United States to collect a debt owed the SBA even though application of that particular state law precluded the government’s recovery. The Court recognized that the state’s law of coverture, successfully 13. The Supreme Court of Georgia answered contentions that only Georgia has a rule allowing enhancement in value re- sulting from the improvement as follows: To such contentions we would reply further by paraphrasing a statement of a great president who once said, “Everybody is against me—everybody except the people,’ by saying that all the decisions are against what we hold—all except the controlling decisions of the courts of Georgia. On this point in Green v. Coast Line Railroad Co., 97 Ga. 15, at pages 36 and 37, 24 S.E. 814, at page 822, 33 L.R.A. 806, this court said: “Every direct authority known to us is against us. Nevertheless, we are right, and these authorities are all es as time and further judicial study of the subject will manifest.” Hard v. Housing Authority of Atlanta, 219 Ga. 74, 132 S.E.2d 25, 30 (1963). A20 invoked by the debtor, was “peculiar and obsolete” and had even been repealed in Texas subsequent to the events in the case. 382 U.S. at 351, 86 S.Ct. at 506. Nevertheless, the Court declined to override the state law because state interests, particularly in the field of family and family-property arrangements . . . should be over- ridden by the federal courts only where clear and substantial interests of the National Government, which cannot be served consistently with respect for such state interests, will suffer major damage if the state law is applied. Id. at 352, 86 S.Ct. at 507. Although application of state law resulting in higher condemnation costs to the licensee is not precluded, never- theless, since application of the state law arguably burdens or interferes with the three federal interests or policies enumerated above, we must weigh the federal interest in avoiding this interference against the state interest in hav- ing its law applied. In any case involving the issue of choice of federal or state law, the desirability of uniformity achieved by application of federal common law may be advanced. Where, however, as here, uniformity bears little relation to the federal program at issue,'* it does not weigh heavily 14. We take the opportunity to note at this juncture that the Federal Power Act does not represent an attempt by Congress to provide for application of uniform national law to all aspects of hydroelectric development under the Act. Examining the legis- lative history which primarily indicates congressional desire to insure the passage and constitutionality of the Act in order to promote the long needed development of water power, the Su- preme Court cited as illustrative of the integration of state and federal jurisdiction, which carefully preserves the separate in- terests of the states, the following provisions: [Section] 4(a) and (c), cooperation of the Commission with the executive departments and other agencies of the State and National Governments is required in the investigation of (Continued on following page) A21 in favor of application of uniform federal law. Further- more, since a licensee often has the option of utilizing Footnote continued— such subjects as the utilization of water resources, water-power industry, location, capacity, development costs and the re- lation to markets of power sites, and the fair value of power. § 4(f), notice of application for a preliminary permit is to go to any State or municipality likely to be interested. § 7(a), in issuing permits and licenses preference is to be given to States and municipalities. § 10(e) licenses to States and municipalities under certain circumstances shall be issued and enjoyed without charge. § 14, a right is reserved not only to the United States but to any State or municipality to take over any licensed project at any time by condemna- tion and payment of just compensation. §§ 19 and 20, regulation of service and rates is preserved to the states. First Iowa Hydro-Electric Coop., 328 U.S. at 174-75 n. 19, 66 S.Ct. at 916, 917 n. 19. This integration refutes any argument that failure to promote ease in federal administration through adoption of uniform national standards of compensation signifi- cantly undermines operation of the energy program. We think that Sections 19 and 20, 16 U.S.C. §§ 812 and 813, expressly limit- ing the Coinmission’s authority to regulate rates and other charges, which are directly related to energy costs, to situations where a state does not have its own regulations, is telling of the absence of intent to apply uniform federal law to the compensation ques- tion. Although cost of land acquisition is included in rate-base de- termination by the Commission in regulating interstate wholesale rates for electric power and by state utility commissions setting rates for the intrastate sale of power, the government conceded in its amicus brief to the Supreme Court on petition for certiorari in Dodson, brief for United States at 12 n. 11, Boswell v. Georgia Power Company, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), that “the Commission has not either in its rules and decisions determining what costs for hydroelectric projects are allowable under 16 U.S.C. 797(b) [determination of “actual legiti- mate original cost of and the net investment in a licensed project’ ] or in its rules and decisions governing rate-making by interstate wholesalers of electricity and natural gas, developed a standard favoring the use of either federal or state criteria in the valua- tion for land acquisition purposes.” See also Grand River Dam Auth. v. Grand Hydro, 335 U.S. 359, 374-75, 69 S.Ct. 114, 121-122, 93 L.Ed. 64 (1948) (discussing materiality of fact that valuations are used in determination of rates and net investment; holding that Federal Power Act does not displace state rules of com- pensation where a licensee relies only on the powers of eminent domain granted by the state; leaving open the questions of the proper measure of value in a condemnation proceeding instituted by the United States [since settled in favor of application of (Continued on following page) A22 either state or federal eminent domain power (as Georgia Power Company has with respect to most, if not all, of the land taken for the Lake Wallace project), application of uniform federal law when a licensee proceeds under the federal power authorized by Section 21 could result in a corresponding loss of uniformity even in a single proj- ect." Of course, distinguishing cases where the United States is the condemning party from cases where a li- censee is the condemnor, applying federal law to deter- mine the measure of compensation in the former but not in the latter, might be thought to be equally lacking in uniformity and undesirable.’* Since national uniformity is not specifically related to the operation of the Federal Power Act and since application of either federal or state law may result in a corresponding loss of uniformity, Footnote continued— federal law, United States v. Twin City Power Co., 350 U.S. 222, 76 S.Ct. 259, 100 L.Ed. 240 (1956)] or by one of its licensees under Section 21). 15. We express no opinion as to whether Congress had the power to compel “application of a uniform, federal standard in any exercise of eminent domain power, state or federal, to ac- quire land on which to build these federally regulated facilities” as contended by Judge Simpson, Dodson, 563 F.2d at 1200 (dissent) and disputed by the majority, id. at 1183 n. 16. We agree with the majority in Dodson that the landowners’ arguments that impermissible forum shopping and denial of equal protection may result from application of different standards of compensation when a licensee has the option of proceeding under state or federal powers of eminent domain are without merit. Id. at 1191-93. 16. Indeed, the same lack of uniformity in a single project could result if state law is applied to determine compensation when a licensee condemns the property and if federal law is applied to determine the “fair value” to which “net investment” is limited when the United States exercises its take-over option under Sec- tion 14. We note that, as pointed out by Judge Simpson, problems of interpretation of “net investment” emphasize that “whether the price paid by a state party in a Section 21 condemnation will affect the price later paid by the federal government in exer- cising its option under Section 14 is by no means certain.” Dodson, 563 F.2d at 1198 n. 11. See also Grand River Dam. Auth. v. Grand Hydro, 335 U.S. at 374-75, 69 S.Ct. at 121-22. A23 arguably cancelling out the advantage otherwise gained, we do not count this argument in either side’s favor." In analyzing the state’s interests in having its laws of compensation apply when a licensee exercises the power of eminent domain under Section 21 of the Federal Power Act, we begin with the state’s interest in avoiding displace- ment of its laws in the area of property rights, traditionally an area of local concern. Since property has been viewed as a bundle of valuable rights and since the question of what constitutes property is usually determined with refer- ence to state law,!® we think it consistent that the value of those rights also be determined with reference to state law. Since states, as well as the federal government, have an in- terest in providing economical energy to their citizens, their laws of compensation, accommodating that interest with that of insuring that their condemnee-landowner citizens are compensated in accord with their (states’) views of what is just, are entitled to weight. As pointed out by the landowners, a Section 21 licensee-condemnor is typically either the state itself, a state-owned entity, a municipality or a private utility, organized and operating under the laws of the state and heavily regulated by a state utility com- mission. A licensee usually condemns property for a proj- ect and sells electricity produced therefrom only in the state where it operates. This case, for example, involves a 17. Another argument traditionally advanced in cases in- volving the issue of choice of state or federal law is that greater certainty may be achieved by application of well established state law on an issue as to which there is no established body of federal common law. As pointed out by the majority in Dodson, that argument carries no weight in this case since there is an established body of federal law on the issue of just compensation. Dodson, 563 F.2d at 1189-90. While that fact does not further the argument that state law should be adopted in this case, we do not view it as significantly detracting from it. 18. See, e. g., United States v. Certain Property Located in Borough of Manhanttan, 344 F.2d 142, 144-45 (2d Cir. 1965) (Friendly, J.); United States v. 145.30 Acres of Land, 385 F.Supp. 699 (W.D.La.1974), aff'd, 524 F.2d 1231 (5th Cir. 1975). A24 private corporation using private funds to take private prop- erty from a private landowner. Georgia Power Company asserts that the application of Georgia law as the federal rule of compensation in these cases will result in higher land acquisition costs than those which would have obtained if the law applicable to cases in which the federal government is the condemnor were ap- plied.” Georgia Power goes on to assert that because those costs will ultimately be recovered from consumers of hydro- electric power in the form of higher charges for power, the selection of Georgia law will impermissibly burden the achievement of one of the principal objectives of the Fed- eral Power Act, inexpensive hydroelectric power. As- suming that the effect of the application of Georgia law will be higher cost to the consumer, nevertheless, we dis- agree with the conclusion that the result is an impermissible burden on the achievement of the objectives of the Federal Power Act. To apply federal law because of the de- creased cost to the consumer as compared to the cost to the 19. We do not view as highly probative the conflicting as- sertions of the parties in their supplemental briefs on rehearing en banc concerning the inferences which should be made regard- ing the effects of the energy program of increased costs of con- demnation based largely on certain statistics gleaned from the report of the United States Department of Energy, Energy In- formation Administration, Hydroelectric Plant Construction Cost and Annual Production Expenses 1976, Twentieth Annual Sup- plement (May 1978). The landowners argue basically that since a substantial number of projects were developed through the use of state laws of condemnation, we may conclude that use of state law does not retard hydroelectric development. While this appears to us to be largely conjectural, the argument that use of state law does retard hydroelectric development does not appear significantly less so. The landowners also assert in their en banc briefs that the Wallace Dam project was budgeted in anticipation that state law would control the setting of just compensation. The Power Com- pany vigorously denies that this was the case. We decline to give weight to this disputed assertion. Cf. Kimbell Foods, 440 U.S. at 729-32, 99 S.Ct. at 1459-61; Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404. A25 consumer which would result if Georgia law were applied is to require certain Georgia landowners partially to sub- sidize a private Georgia utility and consumers of electric power in a way which would not be required of them if Georgia law were applied. In the absence of an indi- cation of specific legislative intent to impose such a burden on Georgia landowners, we will not presume that Congress would have balanced the interests of private licensees and consumers of hydroelectric power, on one hand, and the property owners, on the other hand, in a fashion different from the way in which the laws of the State of Georgia balance such interests. As is demonstrated by the persuasiveness of the well- reasoned positions advanced by both the majority and the dissent in Dodson, the choice of law question in this case is a close one. A majority of this court, however, is of the opinion that absent a showing of legislative intent to the contrary considerations of federalism warrant a preference for adoption of state law as the federal rule. We do not find the showing of federal interest and the effect thereon of applying state law sufficient to overcome that preference in this case. Thus, we are led to the conclusion that the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for deter- mining the measure of compensation when a licensee ex- ercises the power of eminent domain pursuant to Section 21 of the Federal Power Act. The judgments of the district court are VACATED and the cases are REMANDED for further proceedings con- sistent with this opinion. VACATED and REMANDED. A26 FAY, Circuit Judge, concurring: In this era of ever-groping federal tentacles, perhaps it is quixotic to brandish one small sword in a crusade against further invasion of the powers of states. With the hope that this battle cry will not be a last gasp, I will charge forward with the apparently anachronistic views that states are sovereigns, that states do control property and property rights. A significant conflict between federal and state interests must exist tc preempt state control. Trimmed to the bone, the facts of this case are that a private, Georgia utility company desires privately-owned Georgia land from Georgia citizens for a private hydro- electric power and recreation project in Georgia to sup- ply power to Georgia citizens and to provide profit to private investors. In looking to define “just compensa- tion” when such a private, state-controlled utility company exerts the eminent domain power to acquire private land, federal law should not control the inquiry. I therefore concur in the majority result, although I would have reached that holding by a different route. Despite the danger of appearing to have surrendered this battle, I will also suggest an additional basis for prefer- ring state laws as federal rules of decision. A. States Control Property A helpful, if overly simplified, starting point may be to sketch out several types of state-federal relationships. In some instances, the Constitution forbids states to act, or grants the federal government exclusive power to act. In these subject areas, state action is precluded. At the op- posite end of the spectrum are the powers the Constitution reserves to the states.’ In those areas, congressional au- 1. It is probably the height of naivety to recall that some of us were taught that the federal government received its powers through delegation and that powers and authority not specifically prohibited to the states nor delegated to the United States were retained by those same sovereign states, U.S.Const. amend. X. “ A27 thority to regulate states is limited. See, e. g., National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976). Between these poles are areas that Congress has the power to regulate, and Congress either does or does not act. If Congress has not acted, state law is usually effective. If Congress has acted, and state law conflicts, the supremacy clause requires preemption of the state law, although Congress can designate state law to be applicable. At times Congress partially exercises its powers, leaving open some questions of applicable law. In those instances, the courts decide whether federal or state law applies, under the rubric of determining the choice of law or the rule of decision. Essentially four situations exist, therefore, in which state law may apply: when Congress expressly adopts state law, when Congress has not exercised its powers, when Congress has acted leaving some areas open, and when the tenth amendment? requires state law to apply of its own force. In cases involving the latter three situations, the courts must determine whether state law applies, of its own force or otherwise, and, except in some tenth amendment situations, whether it conflicts with fed- eral programs or policies. The determination requires an inquiry into the traditional, constitutional allocation of power over subject matters between state and federal governments. My objection to the current framework for determin- ing choice of law is that it stands on its head the proper order of questions, losing sight of the inquiry into con- stitutional allocations of power. The path to choice be- tween a federal or state rule has acquired many steps. First, the court decides whether the source of the right is 2. Reference to the tenth amendment is not meant to be exclusive but rather primary. See also U.S.Const. amend. XXI. A28 state or federal. If the source is federal, the court inquires whether Congress has provided that either federal or state law should govern. In the absence of congressional statement, the court considers whether the federal rule should be to adopt state law, or to apply or fashion a uni- form federal rule. In answering this question, the court initially determines whether use of state law will truly con- flict with effectuation of federal policies or programs. If the answer is “no,” the court balances federal interests in uniformity against the state’s interests in spheres tradition- ally left to local control. In my view the initial inquiry should be into what the competing subject areas are. The first step should be a determination of whether the subject area is one tradition- ally left to state control, not whether the source of right is state or federal. Especially when dealing with those powers left to the states, the courts should tread gingerly to the conclusion that Congress has preempted the field. See Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1 (1979); Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 477-80, 97 S.Ct. 1292, 1302-05, 51 L.Ed.2d 480 (1977); United States v. Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404 (1966). Indeed, a premise to the interstitial choice of law rulemaking is that Congress has not spoken, and therefore it should be rare to uncover an intent to preempt state law. Perhaps this explains why state law is adopted as the federal rule in so many choice of law cases. Instead of focusing on the allocation of state-federal control over the subject areas, the current choice of law analysis requires looking to the source of the right in question. Very little space is spent discussing this threshold inquiry. If the source of right is determined to be federal, the requirements of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) and the Rules of De- A29 cision Act® do not apply to cause state law to operate of its own force. The source of right is held to be federal whenever the case involves the Constitution, Clearfield Trust Co. v. United States, 318 U.S. 363, 366-67, 63 S.Ct. 573, 574, 75, 87 L.Ed. 838 (1943); see Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979); a federal statute, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); a federal rela- tionship, United States v. Standard Oil Co., 332 U.S. 301, 305-06, 67 S.Ct. 1604, 1606-07, 91 L.Ed. 2067 (1947); a fed- eral program, United States v. Kimbell Foods, Inc., 440 U.S. 715, 726-27, 99 S.Ct. 1448, 1457-58, 59 L.Ed.2d 711 (1979); United States v. Little Lake Misere Land Co., 412 U.S. 580, 592, 93 S.Ct. 2389, 2396, 37 L.Ed.2d 187 (1973); an implied federal cause of action, Burks v. Lasker, 441 U.S. 471, 476- 77, 99 S.Ct. 1831, 1836, 60 L.Ed.2d 404 (1979); a federal agency, United States v. Security Trust & Savings Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53 (1950); or a federal contract, United States v. Allegheny, 332 U.S. 174, 64 S.Ct. 908, 88 L.Ed. 1209 (1944). In a world in which the ever-burgeoning federal gov- ernment colors most aspects of life, this federal nexus is rarely lacking, and, accordingly, state law rarely applies of its own force.* Indeed, these choice of law cases normally arise in federal court, and, absent diversity, presumably need some federal connection to enter the federal halls of justice. Therefore the question posed in the first step of 3. See note 7 infra. 4. In a review of the choice of law cases, one is impressed with how infrequently the source of right is not federal. In United States v. Yazell, 382 U.S. at 357, 86 S.Ct. at 509, the Court left unanswered whether state law applied of its own force or as a federal rule. Perhaps if the source of right is state law, the courts immediately move into standard preemption analysis. See reel % Ackerman, ........ WP Gecsines , 100 S.Ct. 402, 62 L.Ed.2d 355 (1979). A30 the prevailing choice of law analysis is often answered the instant the action is commenced. Perhaps it is splitting hairs to argue over the means for selecting state law as the rule of decision so long as that result is reached in the majority of cases. I, for one, how- ever, find an inherent harm in this usurpation of state power contrary to the precepts of federalism even if the displacement is in name only. But the characterization of the source of the question as federal goes beyond the ap- pellation. First, the courts still may reject state law that conflicts with or is hostile to federal policies, or is aberrant. Although prevailing preemption analysis might also weed out conflicting state rules, to call the source federal casts uncertainty over whether, in any particular case, that state’s law will apply, or will be found lacking in federal court. Second, characterizing the source as federal binds state courts to follow the federal rule. Third, by entitling the source federal, state conflicts of law rules will not apply, even if the state law is adopted as the federal rule. Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Fourth, the characterization and subsequent steps of the analysis relegate state interests to a simple balancing against federal policies rather than requiring a focus on constitutional allocations and uncon- stitutional infringements of power. In this case, the open question is one of property law, one of the few areas traditionally left to the states. See United States v. Little Laxe Misere Land Co., 412 U.S. 580, 605-08, 93 S.Ct. 2389, 2403-05, 37 L.Ed.2d 187 (1973) (Stewart & Rehnquist, J.J., concurring); United States v. Yazell, 382 U.S. 341, 352-58, 86 S.Ct. 500, 506-10, 15 L.Ed.2d 404 (1966); United States v. Burnison, 339 U.S. 87, 89, 70 S.Ct. 503, 504, 94 L.Ed. 675 (1950); Davies Warehouse Co. v. Bowles, 321 U.S. 144, 155-56, 64 S.Ct. 474, 480-81, 88 L.Ed. 635 (1944); see also Sunderland v. United States, 266 A31 U.S. 226, 232-34, 45 S.Ct. 64, 65, 69 L.Ed. 259 (1923). The Supreme Court sometimes mentions this tradition of state property control when choosing the federal rule. E. g. Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979); United States v. Brosnan, 363 U.S. 237, 241-42, 80 S.Ct. 1108, 1111-12, 4 L.Ed.2d 1192 (1960); RFC v. Beaver County, 328 U.S. 204, 210, 66 S.Ct. 992, 995, 90 L.Ed. 1172 (1946). The property question arises be- tween a Georgia landowner and a privately-owned, Georgia utility company over land in Georgia condemned for a Georgia power project. Grant of a federal license is con- ditioned on the project’s being one that the United States should not undertake. 16 U.S.C. § 800(b) (1976). The major purpose of the Federal Power Act was to remove im- pediments to development of local power plants by grant- ing licensees permission to infringe upon the federal navi- gational servitude.’ Under these circumstances state law should govern the definition of just compensation! It is true that section 21 appears to grant licensees some eminent domain power, though it may be limited. See Public Utility District No. 1 v. Seattle, 382 F.2d 666, 669-73 (9th Cir. 1967). But see Dodson, 563 F.2d 1178, 1187- 88 (5th Cir. 1977). To call the source federal and to apply the choice of law analysis, however, skips the questions of whether Congress can constitutionally act in the property area, and whether Congress can constitutionally delegate the federal eminent domain power to private individuals or other legal entities and immunize such recipients from the 5. See Public Utility District No. 1 v. Seattle, 382 F.2d 666, 671 (9th Cir. 1967). Before the Federal Water Power Act of 1920 was enacted, the Rivers and Harbors Act of 1890 restricted con- struction of bridges, piers, and abutments on navigable streams. Additional legislation in 1899, 1906, and 1910 allowed construc- tion of dams upon passing of a special bill in Congress but pro- vided no protection for investors and permitted forfeiture or gov- ernment take-over at any time. See H.R.Rep.No.61, 66th Cong., 1st Sess. ........ (1919). A32 requirements of state law.® I would not be so quick to displace state supremacy over property within its borders, especially when the federal interests are so slight. B. State Law Preference While I depart from the majority on the route it took, I agree that state law governs. Although “considerations of federalism’’ provide one ground for preferring state law, another fundamental constitutional principle supports elect- ing state law as the tie breaker. As vital to our system as the notion of federal and state sovereignty is the concept of the separation of powers of the three federal govern- mental branches. If state law is not utilized, the federal 6. In Dodson, the majority concluded that the delegation was constitutional by analogy to the Natural Gas Act, upheld in Thatcher v. Tennessee Gas Transmission Co., 180 F.2d 644 (5th Cir.), cert. denied, 340 U.S. 829, 71 S.Ct. 66, 95 L.Ed. 609 (1960). 563 F.2d 1178, 1181. Cf. Public Utility District No. 1 v. Seattle, 382 F.2d 666 (9th Cir. 1967) (Congress has not bestowed the full measure of its eminent domain power on licensees, especially since licensees are often private companies operating for profit, not for a national interest). 7. The majority finds the roots of federalism in the Rules of Decision Act. As suggested by note 6 of the majority opinion, however, commentators debate whether the Rules of Decision Act applies when the source of law is federal. If the source is federal, “the Constitution or Treaties of the United States or Acts of Con- gress” may “otherwise require” than that state laws be rules of decision. United States v. Little Lake Misere Land Co., 412 U.S. 580, 592-93, 93 S.Ct. 2389, 2396, 37 L.Ed.2d 187 (1973). See Note. Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 823, 826 n.23 (1976). Other commentators believe that the Rules of Decision Act incorporates international conflicts of law principles to restrict the “cases where they [state rules] apply” to ones involving intra-territorial situations. R. Bridwell & R. Whitten, The Constitution and the Common Law 78-87, 99, 129-30 (1977). Although a question of federal source might involve a totally intrastate transaction, such as this one involving Georgia parties and Georgia property, it also might cover a setting in which choice of state law might force its ap- plication to cases with extraterritorial circumstances. Neverthe- less, federalism principles do support a preference for choosing state law, regardless of whether those principles are embodied in the Rules of Decision Act or extracted from the Constitution’s structing of the federal system. A33 courts must decide whether to fashion a federal rule, a process that may encroach on the legislative powers re- served to Congress.’ See Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1304, 16 L.Ed.2d 369 (1966); United Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 701, 86 S.Ct. 1107, 1110, 16 L.Ed.2d 192 (1966); United States v. Standard Oil Co., 332 U.S. 301, 313-16, 67 S.Ct. 1604, 1610-12, 91 L.Ed. 2067 (1947).° This is not to suggest that federal courts have no power to shape federal common-law rules; the Supreme Court has reaffirmed for almost forty years the judiciary’s author- 8. As the majority suggests, a third ground for preferring state law in this case is that the suit is between private parties. The Supreme Court has indicated that, especially when the United States is not a party, a strong conflict is needed to displace state law. Miree v. DeKalb County, Georgia, 433 U.S. 25, 31, 97 S.Ct. 2490, 2494, 53 L.Ed.2d 557 (1977); Bank of America v. Parnell, 352 U.S. 29, 34, 77 S.Ct. 119, 121, 1 L.Ed.2d 93 (1956). For cases in which federal law was applied when the United States was not a party, however, see Illinois v. Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972) (federal rule applied in dispute be- tween states over interstate pollution); Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946) (federal rule of equity applied in federal action between private parties). See also Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979); J. I. Case v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); Tunstall v. Brotherhood of Locomotive Firemen & En- ginemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187 (1944); Sola Electric v. Jefferson Electric, 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165 (1942). The United States’ status as a party, however, cer- tainly does not trigger the automatic generation of a federal rule. E. g., United States v. Kimbell, 440 U.S. 715, 99 S.Ct. 1448, 59 L. Ed.2d 711 (1978); United States v. Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404 (1966); United States v. Brosnan, 363 U.S. 237, 80 S.Ct. 1108, 4 L.Ed.2d 1192 (1960). 9. In Standard Oil, the Court turned down the opportunity to create a federal rule, but it also rejected use of a state rule. That case is therefore not solid support for a general state law pref- erence, but it does reflect the Court’s concern that its rulemaking not infringe on powers best exercised by Congress. See also R. Bridwell & R. Whitten, supra note 7, at 133-34. These authors also express the concern that judicial rulemaking rarely takes into account the parties’ expectations, which causes unfairly retroactive rulemaking, and uncertainty in the law and in private relations. Id. at 133. See majority opinion, note 17. A34 ity to fill many of the gaps left by Congress.’ Nor is it suggested that separation of powers principles would re- quire adoption of state law in the face of a significant .con- flict between that law and federal directives; under the cur- rent framework, the balancing of state and federal ir.’ »rests does not occur until after a determination that state law is not inconsistent with federal goals. Furthermore, I recog- nize that separation of powers considerations may not carry as much weight for questions such as this one, in which the federal common-law rules have been long evolving without indication of congressional displeasure. It does seem to me, however, that separation of powers pririciples fortify a general preference for applying a state law rather than creating a federal rule when the weight of federal and state interests is close on balance." If the current frame- 10. Cf. Cannon v. University of Chicago, 441 U.S. 677, 730, 745-47, 99 S.Ct. 1946, 1974, 1982-84, 60 L.Ed.2d 560 (Powell, J., dissenting) (1979) (distinguishing separation of powers problems from choice of law questions). For the view that Congress would be unable to bear the burden of interstitial lawmaking, see Hart, The Relations Between State and Federal Law, 54 Colum.L.Rev. 489, 534 (1954). See also United States v. Little Lake Misere Land Co., 412 U.S. at 593, 93 S.Ct. at 2397. 11. The majority states that “the choice of law question in this case is a close one,” although federal interests are not “suf- ficient to overcome [a state law] preference.” The question does not appear so close to me. No significant conflict exists that will defeat the purposes of the Federal Power Act. The three articulated federal interests or policies are not unduly hampered by application of state law. Congress itself built into the Act a significant amount of disuniformity. As in Kimbell, the federal operations already specifically adapt to state law and involve in- dividual negotiation with landowners, which minimizes the force of Georgia Power’s “generalized pleas for uniformity.” 440 U.S. at 729-30, 99 S.Ct. at 1459. The Court’s statements in Butner con- cerning use of state rules in bankruptcy proceedings have even greater relevance to the Federal Power Act, under which the fed- eral interests are less compelling: Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bank- ruptcy proceeding. Uniform treatment of property interests (Continued on following page) A35 work for analyzing choice of law must remain, principles of federalism and separation of powers support favoring state law as the rule of decision. ALVIN B. RUBIN, Circuit Judge, with whom AINS- WORTH, TJOFLAT and FRANK M. JOHNSON, Jr., Cir- cuit Judges, join, dissenting. Because I fail to perceive any sound reason to dis- tinguish between condemnation proceedings brought by the United States and those in which it authorizes its power to be used by its statutory licensee for a federal public pur- pose, I respectfully dissent. Federal rules ex proprio vigore should apply to such condemnation proceedings for the reasons set forth in the majority opinion in Georgia Power v. 54.20 Acres of Land, 563 F.2d 1178 (5th Cir. 1977), cert. denied, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), and followed in the panel opinion, 596 F.2d 644. Footnote continued— by both State and federal courts within a State serves to reduce uncertainty, to discourage forum shopping, and to pre- vent a party from receiving “a windfall merely by reason of the happenstance of bankruptcy.” Lewis v. Manufacturers — Bank, 364 U.S. 603, 609, 81 S.Ct. 347, 350, 5 L.Ed.2d 440 U.S. at 55, 99 S.Ct. at 918. Under these circumstances, the state interests outweigh the federal, regardless of whether a gen- eral presumption favoring state law is utilized. A36 GEORGIA POWER COMPANY, Plaintiff-Appellee, Ve 138.30 ACRES OF LAND, situate, lying and being in Land Lot 327 of the 3rd Land District 389th G. M. District, Putnam County, Georgia, Defendants, Mildred B. SANDERS, a/k/a Mrs. Karl D. Sanders, Jr., et al., Defendants-Appellants. GEORGIA POWER COMPANY, Plaintiff-Appellee, V. 377.61 ACRES OF LAND, situate, lying and being in Land Lots 367, 368, 369, 377, 378, 379, 380, 381, 382 and 383 of the Third Land District, 389th G. M. District, Putnam County, Georgia, Defendants, Mrs, Nellie W. Larman et al., Defendants-Appellants. GEORGIA POWER COMPANY, Plaintiff-Appellee, Vv. 532.82 ACRES OF LAND, situate, lying and being in the 145th G. M. District, Greene County, Georgia, Defendants, Clifford H. Dyar, Jr., et al., Defendants-Appellants. Nos. 77-1775 to 77-1777. United States Court of Appeals, Fifth Circuit. June 6, 1979. A37 Appeals from the United States District Court for the Middle District of Georgia. Before MORGAN, FAY and RUBIN, Circuit Judges. ALVIN B. RUBIN, Circuit Judge: The owners of three properties were required to ren- der unto the sovereign portions of their land for the Lake Wallace hydroelectric project in Georgia; they protest that they did not receive in return their constitutional due, and appeal from commission determinations of just com- pensation for the property taken. The owners, we con- clude, were not constitutionally guaranteed a jury trial; the district court acted within the range of its discretion in appointing a commission; and the commission properly applied federal rather than state law in determining the amount of compensation. However, the commission made clear errors in, or failed adequately to explain the basis for, its conclusions determining the amount of compensa- tion due each of the owners. Therefore, the judgments of the district court approving the reports are vacated, and the cases remanded for further proceedings consistent with this opinion. I. Right toa Jury Trial [1] The !andowners assert that their right to just compensation includes the right to have the amount of compensation fixed by a jury, and urge that the Supreme Court has never squarely denied the right to a jury trial on the issue of just compensation in an eminent domain action brought by the United States. The premises of the appellants’ argument are mistaken. In ruling on a challenge to a jury determination of the scope of a condemnation project, the Supreme Court re- cently said, “it has long been settled that there is no con- A38 stitutional right to a jury in eminent domain proceedings.” United States v. Reynolds, 1970, 397 U.S. 14, 18, 90 S.Ct. 803, 806, 25 L.Ed.2d 12, 17 (denial of jury trial on issue of project’s scope). That case did not directly present the issue of the right to have the amount of compensation determined by a jury, but the Court’s determination that no constitutional issue was presented is consistent with prior decisions in which it has implicitly held or stated in dicta that there is no right to a jury trial in condemna- tion proceedings. See, e. g., Bawman v. Ross, 1897, 167 U.S. 548, 591, 17 S.Ct. 966, 983, 42 L.Ed. 270, 289; Long Island Water-Supply Co. v. Brooklyn, 1897, 166 U.S. 685, 694, 17 S.Ct. 718, 722, 41 L.Ed. 1165, 1168; United States v. Jones, 1883, 109 U.S. 513, 519, 3 S.Ct. 346, 350, 27 L.Ed. 1015, 1017; Curtiss v. Georgetown and Alexandria Turn- pike Co., 1810, 10 U.S. (6 Cranch) 233, 3 L.Ed. 209. See also 12 C. Wright & A. Miller, Federal Practice and Pro- cedure: Civil § 3051 at 120 (1973); 5 Moore’s Federal Practice {]38.32[1] at 240-49 (2d ed. 1978). In promulgat- ing subdivision (h) of Rule 71A of the Federal Rules of Civil Procedure, the Supreme Court also expressly ap- proved use of a commission to determine just compensation in certain cases. [2] The Fourth Circuit has, apparently, reconsidered Beatty v. United States, 4 Cir. 1913, 203 F. 620, dismissed for want of jurisdiction and cert. denied, 1914, 232 U.S. 463, 34 S.Ct. 392, 58 L.Ed. 686, which recognized the right to a jury trial. See United States v. 21.54 Acres of Land, 4 Cir. 1973, 491 F.2d 301, 304; Atlantic Seaboard Corpora- tion v. Van Sterkenburg, 4 Cir. 1963, 318 F.2d 455, 459; United States v. Cunningham, 4 Cir., 246 F.2d 330, 332. For example, in 21.54 Acres of Land, supra, 491 F.2d at 304, the court noted that a landowner is not entitled to a jury trial if the trial judge determines that valuation should be by a commission or if Congress establishes a tri- A39 bunal to determine the amount of compensation due. See 40 U.S.C. § 258a; Fed.R.Civ.P. 71A(h). If there were a constitutional right to a jury trial on just compensation, the judiciary and Congress would have no power to deny landowners a jury trial. II. Discretion to Appoint a Commission. [3] The landowners contend that it was an abuse of discretion for the court to appoint a commission in their cases because only a small amount of property possessing unique characteristics was involved, a jury trial would not have occasioned thera hardship, and a jury would have been more sympathetic than a commission to small land- owners. Yet it was precisely because the Supreme Court considered use of a commissivii to be more equitable to small property owners that it authorized commission ap- pointment. Subdivision (h) of Rule 71A of the Federal Rules of Civil Procedure gives the court discretion, ‘because of the character, location, or quantity of property to be con- demned, or for other reasons in the interest of justice,” to order the use of a commission to determine the com- pensation due. The advisory committee that formulated the present rule had previously proposed a rule requiring a jury trial on the issue of just compensation in all cases except when existing statutes provided to the contrary.’ The Supreme Court directed the committee to reconsider in view of assertions that: (1) a provision for jury trial would be unfair in the case of many small landowners who lived at distances remote from the place where court would be held; (2) such a trial would be expensive and 1. There were statutory exceptions for TVA cases and cases arising in the District of Columbia, See 12 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 3051 at 119-20; 5 Moore’s Federal Practice 1 38.22[2] at 250.1-52. A40 burdensome to them; and (3) commissions are less likely than juries to make disproportionate awards when the government is condemning great acreages. See generally 12 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 3051; 5 Moore’s Federal Practice {| 38.32[2]. In presenting its revised proposal, now subdivision (h), the Advisory Committee noted that the reason justifying use of a commission for TVA cases “applied not only to the TVA but to other large governmental projects, such as . .. hydroelectric power . . . national forests, and others.” Supplementary Report to the Court of the Advisory Com- mittee, March 1951, reprinted in 7 Moore’s Federal Prac- tice | 71A.06[2] at 71A-172. The Committee further noted that the rule as drafted met the Court’s concerns: “[i]n large projects like the TVA the court may decide to use a commission.” Id. at 71A-173. The Lake Wallace project embraces 21,215 acres, com- posed of 225 tracts held by 197 different owners. The property taken is located in five counties, all of which are some distances from where the district court sits. At the time these cases were commenced, it was estimated by Georgia Power Company’s land department manager that it would be necessary to file about 40 condemnation cases to acquire the property; coincidentally, 40 cases had been brought by the time this appeal was briefed. The dis- trict court noted each of these factors in denying a jury trial. Our prior cases applying Rule 71A support the district court’s decision. Although we have previously stressed that a commission is to be used only for exceptional rea- sons, see United States v. Leavell & Ponder, Inc., 5 Cir. 1961, 286 F.2d 398, 407-08, cert. denied, 366 U.S. 944, 81 S.Ct. 1674, 6 L.Ed.2d 855 and United States v. Buhler, 5 Cir. 1958, 254 F.2d 876, 880, we have recognized that Rule 71A(h) A4l permits denial of a jury trial and appointment of a com- mission in cases involving “large areas held by many small landowners, or property too distant for a jury to view the premises ....” Id. We have also upheld the use of a commission in a project involving only sixteen parcels of land. United States v. 2,477.79 Acres of Land, 5 Cir. 1958, 259 F.2d 23. [4, 5] The fact that the property of the particular landowners involved in these cases was small and possessed unique characteristics, or that the landowners desired a jury trial, is not controlling; the rule focuses on the character, location or quantity of the entire property being condemned, hence on the overall scope of the project. See Buhler, supra, 254 F.2d at 880. A tremendous undertaking may embrace particular tracts of small size whose appraisal is relatively easy. The commission is appointed for the entire project, not simply for specific parcels whose value is difficult to determine. If, indeed, these properties are so singular as to require complex analysis, that factor would weigh in favor of, rather than against, the appointment of a commission. See Leavell & Ponder, supra, 286 F.2d at 408-09; United States v. Cunningham, 4 Cir. 1957, 246 F.2d 330, 333. III. Applicability of Federal Law. [6-8] Although the constitution requires the payment of just compensation when private property is taken for a public purpose, whether the taking is by federal or state authority, different standards for determining just com- pensation may be established by state and federal laws. See Grand River Dam Authority v. Grand-Hydro, 1948, 335 U.S. 359, 69 S.Ct. 114, 93 L.Ed. 64. Under federal com- mon law, which was applied by the commission, just com- pensation is calculated by subtracting the project’s benefit A42 to the land retained from the value of the land taken. Un- der Georgia law, consequential benefits to the land retained by the condemnee are not offset against the value of the land taken in determining just compensation. Because each of the owners retained land that was benefitted by the project, if compensation had been determined under state law rather than federal law, each would have been entitled to more compensation. [9] However we have now resolved the issue by holding that federal law should be applied when a licensee of the Federal Power Commission exercises the power of eminent domain in federal court as authorized by Section 21 of the Federal Power Act, 16 U.S.C. § 814 (1970). Georgia Powe: Company v. 54.20 Acres of Land, 5 Cir. 1977, 563 F.2d 1178, cert. denied, 1979, ........ © Rates , 99 S.Ct. 1213, 59 L.Ed.2d 454. IV. Alleged Errors in the Commission’s Final Report. We turn, then, to the commission’s report with respect to each of the properties. This necessarily involves a dis- cussion of the characteristics of each property in some detail. However, we set forth, at the outset, the principles that apply to the reports of such commissions. [10-12] Commissions are not juries, whose general verdicts are favored by a presumption of regularity if sub- stantial evidence supports their result. See Mortensen v. United States, 1944, 322 U.S. 369, 374, 64 S.Ct. 1037, 1040, 88 L.Ed. 1331; Sulmeyer v. Coca Cola Company, 5 Cir. 1975, 515 F.2d 835, 845, cert. denied, 424 US. 934, 96 S.Ct. 1148, 47 L.Ed.2d 341; Boeing Company v. Shipman, 5 Cir. en banc 1969, 411 F.2d 365, 374, 9 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 2524. When a commission is used in place of a jury to determine the compensation for a taking “[c]onclusory findings are alone not sufficient,” A43 because findings by a commission are to “be accepted by the court ‘unless clearly erroneous’; and conclusory find- ings as made in these cases are normally not reviewable by that standard.” United States v. Merz, 1964, 376 U.S. 192, 198, 84 S.Ct. 639, 643, 11 L.Ed.2d 629, 634. “[A] hear- ing before a commission must result in findings much more detailed than a general verdict.” United States v. 2,872.88 Acres of Land, 5 Cir. 1962, 310 F.2d 775, 777, modified in Merz, supra. See Cunningham, supra, 246 F.2d at 333. The path followed by the commission in reaching the amount of the award shall be distinctly marked, United States v. Merz, supra, 376 U.S. at 199, 84 S.Ct. at 643, 11 L.Ed.2d at 634, if not blazed with an array of findings of subsidiary facts that demonstrate that the ultimate finding is soundly and legally based. 2,872.88 Acres of Land, supra, 310 F.2d at 779. We recently reversed the decision of a district court accepting a commission’s report that failed to explain why the commission had rejected certain sales as comparables; the case was remanded for findings that would give us “a basis for enlightened appellate review.” United States v. Trout, 5 Cir. 1967, 386 F.2d 216, 224. While the com- mission’s path in these cases may have been better marked than the trail in Trout, certain of its findings were, never- theless, either clearly erroneous or insufficient to provide a basis for “enlightened” review. Therefore we remand the cases for further proceedings related to some of the points discussed below. Sanders Taking [13] After the taking of 138.30 acres by Georgia Power Co., the landowners are left with three separate parcels consisting of 4.79, 21.20 and 41.03 acres. The smallest parcel has direct highway access, but the other two do not. The 21.20 acre parcel has been cut off from the state highway A44 by the reservoir; after the taking, the only remaining access to this parcel is over a small, unpaved road that grazes the eastern corner of the property. In order partially to remedy this problem, Georgia Power Co., prior to the commission’s hearing, gratuitously granted to the landown- ers an unimproved 80-foot easement that allows direct access to a county road. By its terms, however, the ease- ment expires “upon nonuse for 24 consecutive months, or no maintenance for 12 months... .” The 41.03 acre parcel was deprived of access to a state highway by the taking of 10 acres in the western corner of the original tract. The district court’s final order reserves to the landowners, “a 50-foot, non-exclusive road right-of- way” along the southwestern boundary of the 10 acres taken, which will give this parcel access to the highway. However the topography of the area makes it difficult to construct a road, and drainage from an adjoining tract may create maintenance problems. International Paper Com- pany owns the fee simple interest over which the ease- ment runs;? if a road is constructed, the users must main- tain it or they must bear the expense of constructing a paved surface. Even in that event, the county may refuse to accept dedication because the road is on property owned in fee by International Paper Company. In its amended report, the commission found that the provision made for road purposes with respect to the 21.20 acre tract was “so nearly adequate” as not to affect ad- versely the fair market value of the tract. It found that giving the 41.03 acre tract a value of $1100 per acre “in- cludes the cost of any road.” The commission allowed no additional compensation for the construction of a road to this tract because “[n]Jone of the comparables cited by the 2. Georgia Power Co. obtained from International Paper Co. the easement that was granted to Sanders. A45 witnesses for the landowner or the Power Company in- cluded an item for road construction.” In reaching these conclusions, the commission did not adequately compensate the owners for the access problems created for these two parcels, and, therefore its findings as to their values are clearly erroneous. [14, 15] A simple easement over unimproved fields that will expire “upon no use for 24 consecutive months, or no maintenance for 12 months,” is clearly less valuable to the property owned than either a public road or a perma- nent easement. If the owner is unable for any reason to build a road over the easement within 24 months, or if, thereafter, the owner is unable to maintain it, it will be lost.* Moreover, even if the easement is utilized, the land- owner must bear both the cost of construction and the con- tinuing expense of maintenance. Each of the expert wit- nesses who testified concerning the value of the remaining 21.20 acre tract believed that the limited easement added to the value of the property and based his estimate of value on what the property would be worth if a road were con- structed. Two of them calculated the current value of the parcel by estimating the value of the tract with road access, then deducting the cost of constructing a road and an additional amount to account for the risk of losing the ease- ment. One estimated that the value of the tract should be reduced by 25 percent simply to account for the limited nature of the easement; another, a witness for Georgia Power, made a 20 percent reduction for the same reason. A third expert, who did not specifically make a deduction to account for the limited nature of the easement, never- theless admitted that such an easement is less valuable 3. International Paper Co. has explained, in a letter to Georgia Power Co., that the intent of the parties to the easement was that the 24 month and 12 month limitation periods shall com- mence when filling of the Wallace Dam Reservoir begins, or, at the latest, on the scheduled filling date of January 1, 1979. A46 than a permanent one. The commission relied on these experts’ other opinions in connection with this parcel, but ignored their testimony concerning the effect of the limited easement. Because all of the experts agreed that the re- stricted nature of the easement had a detrimental effect on value, and two of the three expressly stated that some allowance should be made for it, the failure of the commis- sion to do so was clearly erroneous. The commission assumed that the cost of building a road over the right-of-way affected the value of the 41.03 acre parcel, but in allowing only $1100 an acre for the property with some vague allowance for this expense, it included far less than the estimated $10,000 cost of a paved road. If the commission assumed that a less expensive road would be built that could not be dedicated to the county, it made no specific allowance for maintenance ex- pense, and the language of its report suggests that none was tacitly included. Its failure to take adequately into account the effect of these costs on the parcel’s value was clearly erroneous. Larman Taking The Larman taking was on October 29, 1974. Sales of other properties prior to that date were [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0276%3A1. Public record. Not legal advice.