# Petition for Writ of Certiorari — Mill v. Colorado Department of Health

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1995
- **Citation:** 515 U.S. 1159

## Text

7
FILED
B41706 apr 171995

No. OFFICE OF THE CLERK

In The

Supreme Court of the United States
October Term, 1994

4

THE MILL, a limited partnership,

Petitioner,
vs.

STATE OF COLORADO, DEPARTMENT OF HEALTH,
and THE TREASURER FOR GUNNISON
COUNTY, COLORADO,

Respondents.

- ¢

Petition For Writ Of Certiorari To The
Supreme Court Of The State Of Colorado

+

PETITION FOR WRIT OF CERTIORARI

+

GeorGE ALAN HOLLEy
Counsel of Record
Eric E. TORGERSEN

Ho.tey, ALBERTSON & PoLk, P.C.

1667 Cole Boulevard
Suite 100, Building 19
Golden, Colorado 80401
(303) 233-7838

Attorneys for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831

220

QUESTIONS PRESENTED FOR REVIEW

This case presents the issue of how property must be
valued when a state is directed by the United States to
acquire real property to allow the United States to per-
form, at no cost to the property owner, remedial action to
correct existing radioactive contamination required by
federal statute. Does the state, acting through the instru-
mentality of its courts, take property without paying just
compensation if - in an eminent domain proceeding
brought pursuant to the statute - the state denies the
owner the right to recover the value of the property
determined without regard to the cost of the contem-
plated remedial action?

This case squarely presents a question left open by
Lucas, i.e., how a landowner’s expectations are shaped by
land-use regulations in existence before he acquires title.
Where tne owner purchases land in reliance on the state’s
prior termination of regulations which restricted use of
part of the land, does the state - by subsequently regulat-
ing that part of the land to prohibit all economically
viable use - interfere with the owner’s reasonable invest-
ment-backed expectations so substantially that the state
effects a compensable taking?

ii
PARTIES TO THE PROCEEDING

The caption contains the names of all parties to this

proceeding.

ili

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED FOR REVIEW .......... i
PARTIES TO THE PROCEEDING ........-----+++-. ii
TABLE OF AUTHORITIES ..........---ee-eeeeeeee iv
DECISIONS BELOW ...........-ee eee reece renee 1
JURISDICTION ......... ee eee e ee eee erences 2
CONSTITUTIONAL AND STATUTORY PROVI-
GIONS Al TSBUE 2... cece cece rene reseccncvenes 2
STATEMENT OF THE CASE ........-0-+-eeeeeeees 3
REASONS FOR GRANTING THE PETITION ...... 10

I. THIS CASE PRESENTS AN IMPORTANT BUT
UNSETTLED QUESTION - WHEN DOES THE
FIFTH AMENDMENT REQUIRE THAT JUST
COMPENSATION NOT BE MEASURED
STRICTLY BY THE FAIR MARKET VALUE OF
THE LAND TAKEN?..........---- eee ee eee reees 11

Il. THIS CASE PRESENTS AN IMPORTANT QUES-
TION - WHEN DOES A STATE’S REGULATION
OF LAND SO INTERFERE WITH THE OWNER’S
REASONABLE INVESTMENT-BACKED EXPEC-
TATIONS THAT IT EFFECTS A COMPENSABLE
EE ccc agi asdcavsericvcreccecesccereses 20

EIN Sic sc ncccesrcnseacscessecesecccseces 30

iv

TABLE OF AUTHORITIES

Page
CASES

Agins v. City of Tiburon, 447 U.S. 255, 100 5.Ct.
Sa TS Lees WD CEs aoc ccc ie kv beneereivsss 24

Alamota Farmers Elevator and Warehouse Co. v.

United States, 409 U.S. 470, 93 S.Ct. 791, 35
See ER dk Vedio ook d Vann GA saed eae dee eA 14

Allison v. Smith, 695 P.2d 791 (Colo. Ct. App. 1984)
Lxeucd web aed yebe EAs bake aed cake esac e 28, 29

Armstrong v. United States, 364 U.S. 40, 80 S.Ct.
ie SRR Ee, | rr er re rere 23

City and County of Denver v. Stackhouse, 135 Colo.
Be, ee Tie Bee LESSED wens duke wisn vaneadesasics 26

Creppel v. United States, 41 F.3d 627 (Fed. Cir. 1994) .... 26
Department of Health v. Hecla Mining Co., 781 P.2d

122 (Colo. Ct. App. 1989) (cert. denied)...... 7, im
Echave v. City of Grand Junction, 118 Colo. 165, 193
Fae Ee GR ic dan ds ace eunbavn binds cobenereneawn 28

First English Evangelical Lutheran Church of Glendale
v. County of Los Angeles, 482 U.S. 304, 107 S.Ct.

2378, 96 L.GG2G 250 (ISG7) . wn. cece ccasees 13, 20, 23
Florida Rock Indusiries, Inc. v. United States, 18 F.3d
pg SE a re errr rere 23, 25, 26

Fountain v. Metropolitan Atlanta Rapid Transit
Auth., 678 F.2d 1038 (11th Cir. 1962) ............... 8

Golden Pacific Bancorp v. United States, 15 F.3d 1066
(Fed. Cir), cert. denied, .... US. _. 115 S£A4.

8 RARE Pa een mee to par en rey 25
Loveladies Harbor, Inc. v. United States, 28 F.3d 1171
ee | ere rr by Ts De at, ae

Vv

TABLE OF AUTHORITIES - Continued
Page

Lucas v. South Carolina Coastal Council, .. US.
__, 112 §.Ct. 2886, 120 L.Ed.2d 798 (1992)
Y oe a oe Ce ee Nae oa edad 71, 23, 24, 25, 27, 29

CO ois 0 5 0 6
Uranium Mill Tailings Radiation Control Act of
1978, 42 U.S.C. §§ 7901-7942 (1988) .............-.. 3
Uranium Mill Tailings Radiation Control Act of
1978, Pub. L. No. 95-604, 92 Stat. 3021 (Nov. 8,
ER Pon ey en ee Per oe ee Pee eT eee 5

OTHER AUTHORITY

H.R. Rep. No. 1480, 95th Cong, 2d Sess. (1978),
reprinted in 1978 U.S.C.C.A.N. 7433 ....--.--+++- 15, 17

rrr anit

No.

*
In The

Supreme Court of the United States
October Term, 1994

e
THE MILL, a limited partnership,
Petitioner,
vs.

STATE OF COLORADO, DEPARTMENT OF HEALTH,
and THE TREASURER FOR GUNNISON
COUNTY, COLORADO,

Respondents.

+

Petition For Writ Of Certiorari To The
Supreme Court Of The State Of Colorado
+

PETITION FOR WRIT OF CERTIORARI
¢

DECISIONS BELOW

The decision of the Colorado Supreme Court, en
banc, is reported at 887 P.2d 993 (1994), and is reproduced
as Appendix (App.) A. The decision of the Colorado
Court of Appeals on rehearing is reported at 868 P.2d
1099 (1993), and is reproduced as Appendix B. The deci-
sion of the Colorado Court of Appeals before rehearing 1s
reproduced as Appendix C. The initial decision of the
Colorado Supreme Court is reported at 809 P.2d 434
(1991) and is reproduced as Appendix D. The initial
decision of the Colorado Court of Appeals is reported at
787 P.2d 176 (1989) and is reproduced as Appendix E. The

N

order of the District Court, Gunnison County, Colorado,
is reproduced as Appendix F. The order of the District
Court, City and County of Denver, Colorado, is repro-
duced as Appendix G. Page references are to the versions
in the appendix.

JURISDICTION

The decision of the Colorado Supreme Court was
entered on December 19, 1994, and a timely petition for
rehearing was denied on January 17, 1995. The jurisdic-
tion of this Court is invoked under 28 U.S.C. § 1257(a).
The provisions of 28 U.S.C. § 2403(b) may be applicable to
this proceeding.

CONSTITUTIONAL AND STATUTORY
PROVISIONS AT ISSUE

The federal constitutional provisions at issue in this
matter are the Supremacy Clause, Article VI, Clause 2 of
the United States Constitution and the Fifth and Four-
teenth Amendments to the United States Constitution.
The Supremacy Clause provides in part: “This Constitu-
tion, and the Laws of the United States which shall be
made in Pursuance thereof... shall be the supreme Law
of the Land; and the Judges in every State shall be bound
thereby, any Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.” The Fifth
Amendment provides in part: “[NJor shall private prop-

erty be taken for public use without just compensation.”
The Fourteenth Amendment provides in part: “[NJor

shall any state deprive any person of life, liberty, or
property, without due process of law.”

The statutes at issue are the Uranium Mill Tailings Radi-
ation Control Act of 1978, 42 U.S.C. §§ 7901-7942 (1988),
Colorado Revised Statutes, C.R.S. § 25-11-303(d)(IIT) (Repl.
vol. 11A 1989), Radiation Control, and C.R.S.
§ 24-56-117(1)(c) (Repl. vol. 10B 1988), Relocation Assistance
and Land Acquisition Policies. The relevant portions of the
statutes are set out at Appendix L, J and K, respectively.
Citations are to the version in the Appendix.

¢

STATEMENT OF THE CASE

In 1973, the Petitioner, The Mill (“The Mill”), pur-
chased 61 acres of industrially-zoned land in Gunnison,
Colorado, for $260,000. In 1991, Respondent, State of
Colorado, Department of Health (“CDOH”), obtained
title to all 61 acres of The Mill’s land in an eminent
domain proceeding in which The Mill was awarded noth-
ing. This case is the consolidated appeal of The Mill’s
regulatory taking action and CDOH’s subsequent con-
demnation proceeding.

The Mill’s property is divided into an approximately
35 acre “tailings pile” parcel, and an approximately 25
acre “mill yard” parcel which is improved with four
wells, a 40,000 square foot “mill” building and a 3,000
square foot office building. In the late 1950’s and early
1960's, the property was used as a uranium mill and
disposal site for uranium mill tailings. At that time, the
property was subject to licensure by the Atomic Energy

Commission (“AEC”) authorizing possession of uranium

ore. When milling Operations ceased in 1962, AEC issued

a separate license forthe mill yard which permitted pos-
session of source material produced in past milling activ-
ities. In 1964, the property was sold to Colorado Ventures,
Inc. (“Colorado Ventures”), which had been issued a
license by AEC authorizing possession and storage of the
buildings and equipment on the mill yard parcel. In 1968,
that license, no. SUA-809, was anended to allow the
transfer of equipment if decontaminated properly in
accordance with AEC standards. In 1968, Colorado was
delegated authority by AEC to regulate radioactive mate-
rials previously under AEC’s jurisdiction. CDOH was
given the regulatory jurisdiction to license and control
the possession and use of radioactive materials. Thus,
CDOH was given jurisdiction over license no. SUA-809
without modification. App. 55, 124-125.

In 1971, Colorado Ventures obtained an exemption
from general licensure of the mill yard parcel as a result
of its stabilization. At that time, cleanup efforts were
limited to buildings and equipment, with an emphasis on
alpha contamination.! App. 125. Although other types of
radiation, including radon and other forms of low-level
radiation, could be detected as early as 1971, there was
insufficient concern for the hazard from these other forms
of radiation. After Colorado Ventures completed the
required decontamination process, CDOH terminated
license no. SUA-809.2 When that license was terminated,

1 Since 1971, other types of radiation, including radon,
radon progeny called radon daughters and gamma radiation
have become more important. App. 125.

2 The tailings pile remained licensed before and during The
Mill’s ownership of the property.

ee

1

WN

the 25 acre mill yard parcel was authorized by CDOH for
unrestricted use. App. 125.

In February 1973, one of The Mill’s general partners,
Marcus Bishop, conferred with CDOH representatives
and reviewed CDOH’s files to obtain information about
the property, because The Mill’s partners were concerned
that it had previously been used as a uranium mill site.
App. 126. The Mill determined that the 25 acre mill yard
parcel was safe for unrestricted use, relying on the infor-
mation regarding the decontamination and license termi-
nation found in CDOH’s files when it made the decision
to purchase the property. Based on its review of the
information in those files, which indicated that the mill
yard parcel was decontaminated and safe for unrestricted
use, The Mill purchased the property from Colorado Ven-
tures in July 1973. App. 138-139.

In 1978, Congress enacted the Uranium Mill Tailings
Radiation Control Act of 1978, Pub. L. No. 95-604, 92 Stat.
3021 (Nov. 8, 1978) (codified at 42 U.S.C. §§ 7901-7942 ~
(1988)) (“UMTRCA”). The Mill’s property was included
in a list of proposed cleanup sites specified for action
under UMTRCA, and The Mill’s property became a “can-
didate for remedial action.” App. 128. In 1979, Colorado
adopted legislation to carry out UMTRCA. See Radiation
Control Act, ch. 269, § 1, 1979 Colo. Sess. Laws 1069
(codified at C.R.S. §§ 25-11-301 to 305 (Repl. vol. 11A
1989)). In 1980, the United States Department of Energy
(“DOE”) and CDOH entered into a Cooperative Agree-
ment to carry out UMTRCA on the processing sites
located in Colorado. App. 174. In 1981, DOE and The Mill
entered into a limited use agreement for radiation testing
only on the 35 acre tailings pile. In 1982, CDOH and DOE

performed a radiation survey on the tailings pile and

also, without The Mill’s permission, on the mill yard.
App. 56, 129-131.

In February 1983, The Mill leased the mill yard to
O.C. Coal Company (“O.C. Coal”) for $7,000 per month.
The Mill then notified CDOH of this lease. App. 129. In
response to that notice, CDOH issued a series of restric-

tive letters and communications* which, taken together,
prohibited The Mill from using the mill yard for any
economically viable purpose. App. 129, 142. Although the
mill yard had been released from licensure and its use
declared unrestricted, CDOH had been and was continu-
ing to issue use restrictions. CDOH’s letter of March 4,
1983, begins these further restrictions by referring to
“existing mill yard radioactive contamination”. These let-
ters and communications continued, some falsely stating
that the mill yard was still under licensure by CDOH.
App. 129-130.

CDOH restricted the use of the mill building to only
those limited portions of the building floor covered by
concrete pads. CDOH restricted the use of the mill build-
ing and the entire mill yard until The Mill had con-
structed certain improvements to align with CDOH’s
regulations. CDOH prohibited O.C. Coal from any stor-
age other than as expressly authorized by CDOH without
decontamination and survey. CDOH also restricted the
use of any portion of the mill yard outside the

3 CDOH did not undertake any formal administrative or
legal actions to enjoin The Mill’s use of the mill yard or relicense
the mill yard. App. 4-5; cf. C.R.S. § 25-11-107 (Repl. vol. 11A
1989).

a

building to a 50-foot strip along the eastern edge of the
property, and prohibited The Mill from constructing any
new buildings on the mill yard parcel. App. 95-96.

The restrictions on the mill yard had a direct impact
on the O.C. Coal lease. App. 130. Because of the
numerous and ambiguous restrictions CDOH placed on
the use of the property, O.C. Coal terminated its lease
with The Mill in May 1984. In 1985, after O.C. Coal had
terminated its lease, The Mill flatly asked CDOH what
The Mill could do with its property. CDOH’s answer was
“not perfectly clear and easily understood” by The Mill.
App. 130. Since then, The Mill has been able to put the
property to no viable economic use as a result of the
restrictions imposed by CDOH.4 App. 142.

In January 1986, The Mill filed suit against CDOH
alleging inverse condemnation, regulatory taking and
estoppel claims resulting from CDOH’s regulation of the
mill yard. After a trial on The Mill’s regulatory taking
claim® in March 1987, Judge H. Jeffrey Bayless found that
CDOH had effected a temporary regulatory taking of The
Mill’s property and awarded The Mill lost use damages

4 In the trial on The Mill’s regulatory taking claims, the
Denver District Court found that the property was contami-
nated to such an extent that it was unfit for general public
access. Prior to that trial, The Mill was able to earn only between
$500 and $700 per month in rent from storage, less than the
property taxes during that time which were over $5,000 per
year. App. 142.

° The Denver court dismissed The Mill’s inverse condem-
nation claim before trial, holding that CDOH could not have
inversely condemned The Mill’s property because it did not
have statutory condemnation authority until May 1986.

for a period until, as Judge Bayless reasoned, DOE would
remediate and return The Mill’s property under
UMTRCA.

On appeal, the Colorado Court of Appeals reversed
the Denver court’s decision to dismiss The Mill’s inverse
condemnation claim before trial. App. 109. The Colorado
Supreme Court granted certiorari and reversed. App. 93.
Justice Mullarkey, disagreeing with the Eleventh Circuit
in Fountain v. Metropolitan Atlanta Rapid Transit Authority,
678 F.2d 1038 (11th Cir. 1982), held that a state agency
which does not have the power of eminent domain can-
not inversely condemn property, App. 99, but neverthe-
less concluded that The Mill could seek damages for a
regulatory taking, and remanded the case to the Court of
Appeals for further review, App. 105-109.

In 1989, while The Mill’s case was on appeal, CDOH
commenced an eminent domain proceeding in the Gun-
nison County District Court to occupy The Mill’s prop-
erty for periods of three, and then ten, weeks to allow
DOE to conduct radiation and other tests on the property.
In 1990, DOE concluded that remedial action was needed
for the entire 61 acres, not just the 35 acre tailings pile.
DOE then directed CDOH to acquire The Mill's entire 61
acres in fee simple.

CDOH then sought and obtained leave to amend its
condemnation petition to acquire The Mill’s entire 61
acres in fee. In November 1990, CDOH and The Mill
stipulated, in lieu of an immediate possession hearing

—————

before the Gunnison court, that in its contaminated con-
dition The Mill’s property had a zero fair market value.é
In April 1991, on a summary judgment motion by CDOH
and over The Mill’s objection, the Gunnison court entered
a Rule and Order vesting title to The Mill's property in
CDOH with a zero condemnation award. App 120.

The Mill appealed the eminent domain proceeding
and that appeal was consolidated with the remand appeal
of The Mill’s regulatory taking case. App. 77. Subse-
quently, the Court of Appeals reversed the Gunnison
court's Rule and Order in the eminent domain proceed-
ing, holding that the provisions and intent of UMTRCA,
as well as equal protection concerns, required that prop-
erty taken under UMTRCA be valued in its decontami-
nated condition. App. 77. On rehearing, the Court of
Appeals entered a modified opinion which, in addition to
deciding the proper value of The Mill’s land in the emi-
nent domain proceeding, affirmed the Denver court's
finding in The Mill’s regulatory taking case that CDOH
had effected a regulatory taking of The Mill’s property in
May 1984, to establish the valuation date of The Mill’s
land in the eminent domain proceeding, and awarded
The Mill prejudgment interest from that date. App. 52.

® Before CDOH commenced the condemnation of The
Mill’s property, the Colorado Court of Appeals held, in Depart-
ment of Health v. Hecla Mining Company, 781 P.2d 122 (Colo. Ct.
App. 1989) (cert. denied), that in a condemnation proceeding
brought pursuant to UMTRCA, Colorado’s common law rule
against enhancement precluded the property owner from intro-
ducing evidence of the decontaminated fair market value of the
property. In Hecla, as here, the remediation cost far exceeded the
property’s decontaminated fair market value.

10

On certiorari, the Colorado Supreme Court reversed
both aspects of the Court of Appeals’s decision. App. 1.
Writing for the majority, Justice Mullarkey held that The
Mill did not have reasonable investment-backed expecta-
tions for its property, and therefore CDOH’s actions
could not have effected a taking. App. 7-17. Justice Mul-
larkey also concluded that Colorado’s statutory rule
against enhancement prohibited The Mill from recovering
the decontaminated fair market value of its land, on the
premise that UMTRCA did not intend this “windfall
profit.” App. 17-30. Justice Scott dissented from the
majority, arguing that Judge Bayless had found as a mat-
ter of fact that The Mill did purchase its property with
reasonable investment-backed expectations. App. 38-51.

+

REASONS FOR GRANTING THE PETITION

Supreme Court Rule 10.1(b) lists among the consider-
ations governing review on certiorari, the circumstance
when a state court of last resort has decided a federal
question in a way that conflicts with the decision of a
United States court of appeals. Supreme Court Rule
10.1(c) lists among the considerations governing review
on certiorari, the circumstance when a state court has
decided an important question of federal law which has
not been, but should be, settled by this Court, or has
decided a federal question in a way that conflicts with
applicable decisions of this Court. All of these grounds
for review are present in this case.

EO

11

I.

THIS CASE PRESENTS AN IMPORTANT BUT UNSET-
TLED QUESTION - WHEN DOES THE FIFTH
AMENDMENT REQUIRE THAT JUST COMPENSA-
TION NOT BE MEASURED STRICTLY BY THE FAIR
MARKET VALUE OF THE LAND TAKEN?

The Mill received a zero condemnation award in an
eminent domain proceeding brought by CDOH pursuant
to UMTRCA, even though the United States was obli-
gated to perform remedial action on The Mill’s property
at no cost to The Mill, whether or not the United States
allowed The Mill to keep its land. By affirming that
award, the decision below illustrates the extreme inequity
of Colorado’s rule that a property owner cannot receive
any enhancement in the value of his property due to the
public improvement for which the property is taken. In
this case, “just compensation” requires that Colorado
depart from its general rule against enhancement.

CDOH condemned The Mill’s property pursuant to
authority granted in Colorado’s Radiation Control Act.
See C.R.S. § 25-11-303(d)(III) (Repl. vol. 11A 1989). In
relevant part, the Act provides:

[CDOH] is authorized to obtain [a designated
UMTRCA processing] site by condemnation
proceedings pursuant to the provisions of article
1 of title 38, C.R.S. A decision made pursuant to
the provisions of article 1 of title 38, C.R.S., shall
be made in accordance with the criteria estab-
lished in section 24-56-117(1)(c), C.R.S., and the
provisions of [UMTRCA].

12

C.R.S. § 25-11-303(d)(IIT) (Repl. vol. 11A 1989) (emphasis
added).

Because a § 303(d)(III) condemnation is brought at
DOE’s behest for UMTRCA purposes, and involves fed-
eral funds, the Act requires that the court decide the
property's value “in accordance with the criteria estab-
lished in [C.R.S. § 24-56-117(1)(c) (Repl. vol. 10A 1988)
(codifying Colorado’s common law rule against enhance-
ment)] and the provisions of [UMTRCA].” Applying
Hecla, see 781 P.2d at 122, the Gunnison court concluded
that § 24-56-117(1)(c) prohibited any evidence of the
decontaminated value of The Mill’s land. App. 57-66.
Since The Mill and CDOH had stipulated, in lieu of an
immediate possession hearing, see C.R.S. § 38-1-105(6)(a)
(Repl. vol. 16A 1982), that the contaminated value of The
Mill’s land was zero, the Gunnison trial court summarily
vested title in CDOH.” App. 120.

The Colorado Supreme Court affirmed the zero award
in CDOH’s UMTRCA condemnation proceeding against The
Mill. This case was the second UMTRCA condemnation in
Colorado which amounted to a zero award. App. 19, n.11; see
Hecla, 781 P.2d at 122. Writing for the majority, Justice Mul-
larkey considered whether the Supremacy Clause required
Colorado to follow the provisions of UMTRCA, rather than
state law, “begin[ning] by assuming that the historic police
powers of the state are not to be superseded by any federal

7 After CDOH obtained possession of The Mill’s land in
December 1990, the only issue remaining for trial in the con-
demnation case was the value of the land taken, see C.R.S.
§ 38-1-114 (Repl. vol. 16A Supp. 1994), which was determined
by Hecla. App. 57-59.

Lined
WW

laws or regulations unless that congressional purpose is
clearly shown.” App. 21. The court below concluded that the
State's rule against enhancement in value by reason of the
public improvement, C.R.S. § 24-56-117(1)(c), was not incon-
sistent with UMTRCA, and that UMTRCA did not require
Colorado to deviate from its general rule. App. 26-27, 30.
Following that preemption analysis, the court determined
that The Mill was not entitled to recover the decontarninated
fair market value of its property, ie., that The Mill was
entitled to receive nothing for the loss of 61 acres of
improved land.

The question of what compensation is “just” begins
with the Fifth Amendment. See First English Evangelical
Lutheran Church of Glendale v. County of Los Angeles, 482
U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987). “The Fifth
Amendment . . . provides that private property shall not
be taken for public use without just compensation. Such
compensation means the full and perfect equivalent in
money of the property taken. The owner is to be put in as
good [a] position pecuniarily as he would have occupied
if his property had not been taken.” United States v.
Miller, 317 U.S. 369, 373, 63 S.Ct. 276, 279-280, 87 L.Ed.
336 (1943). “However, this principle of indemnity has not
been given its full and literal force. Because of serious
practical difficulties in assessing the worth an individual
places on particular property at a given time, [this Court
has] recognized the need for a relatively objective work-
ing rule.” United States v. 564.54 Acres of Land, 441 USS.
506, 510-11, 99 S.Ct. 1854, 1857, 60 L.Ed.2d 435 (1979)
(citations omitted). “The Court therefore has employed
the concept of fair market value to determine the con-

demnee’s loss. Under this standard, the owner is entitled

14

to receive ‘what a willing buyer would pay in cash to a
willing seller’ at the time of the taking.” 564.54 Acres, 441
U.S. at 511 (citations omitted).

“Although the market-value standard is a useful and
generally sufficient tool for ascertaining the compensa-
tion required to make the owner whole, [this] Court has
acknowledged that such an award does not necessarily
compensate for all values an owner may derive from his
property.” 564.54 Acres, 441 U.S. at 511. Wnile recognizing
the “need for a practical general rule, this Court has
refused to designate market value as the sole measure of
just compensation.” 564.54 Acres, 441 U.S. at 512; see
United States v. Commodities Trading Corp., 339 U.S. 121, 70
S.Ct. 547, 94 L.Ed. 707 (1950). “This Court has never
attempted to prescribe a rigid rule for determining what
is ‘just compensation’ under all circumstances and in all
cases. Fair market value has normally been accepted as a
just standard. But when market value has been too diffi-
cult to find, or when its application would result in
manifest injustice to owner or public, courts have fash-
ioned and applied other standards.” Commodities Trading,
339 U.S. at 123; see United States v. General Motors Corp.,
323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311 (1945); see also
United States v. 50 Acres of Land, 469 U.S. 24, 29, 105 S.Ct.
451, 454-55, 83 L.Ed.2d 376 (1984); Alamota Farmers Eleva-
tor and Warehouse Co. v. United States, 409 U.S. 470, 478, 93
S.Ct. 791, 797, 35 L.Ed.2d 1 (1973) (“The constitutional
requirement of just compensation derives as much con-
tent from the basic principles of fairness as it does from
technical concepts of property law.”) (citations omitted).
On those occasions when equity and fairness dictate, this

Court has not confined itself to strictly applying the

15

market value standard to determine just compensation.
E.g., United States v. General Motors, 323 U.S. at 373. This
case merits precisely such a deviation to fully compensate
The Mill for the loss of its land.

Congress enacted UMTRCA to “protect the public
health and safety and the environment from hazards
associated with wastes from the uranium or milling pro-
cess,” H.R. Rep. No. 1480, 95th Cong., 2d Sess., pt. 1, at 6,
13 (1978), reprinted in 1978 U.S.C.C.A.N. 7433, 7435, at the
cost of the nine involved states and the federal govern-
ment, id. at 14, reprinted in 1978 U.S.C.C.A.N. 7433, 7436.
In UMTRCA, “Congress finds that uranium mill tailings
located at active and inactive mill operations may pose a
potential and significant radiation health hazard to the
public, and .. . that every reasonable effort [should] be
made to provide for the stabilization, disposal, and con-
trol in a safe and environmentally sound manner of such
tailings.” 42 U.S.C. § 7901(a) (1988). UMTRCA’s primary
purpose is “to provide . . . in cooperation with the inter-
ested States . . . and the persons who own or control
inactive mill tailings sites, a program of assessment and
remedial action at such sites . . . in order to stabilize and
control such tailings in a safe and environmentally sound
manner and to minimize or eliminate radiation health
hazards to the public.” 42 U.S.C. § 7901(b) (1988).

UMTRCA requires DOE to “complete remedial
action” at twenty-two separate “processing sites” located

in nine states, including The Mill’s property in Gunnison,
Colorado. 42 U.S.C. § 7912(a)(1) (1988). The United States
pays ninety percent of the cost of performing remedial
actions under UMTRCA, including acquisition costs, and
the state pays ten percent. 42 U.S.C. § 7917(a) (1988). To

16

accomplish the required remedial action, DOE is “autho-
rized to enter into cooperative agreements with [the host
states] to perform remedial actions at each designated
processing site.” 42 U.S.C. § 7913(a) (1988). The coopera-
tive agreement between DOE and the state must “require
the State where determined appropriate by [DOE], to
acquire any designated processing site.” 42 U.S.C.
§ 7914(a) (1988). “In determining whether to require the
State to acquire a designated processing site,” UMTRCA
admonishes that “consideration shall be given to the pre-
vention to windfall profits.” 42 U.S.C. § 7914(a). Despite
Congress’s direction to consider “windfall profits,”
UMTRCA does not define the term, either within the
statute or the legislative history which accompanied it.
See 42 U.S.C. § 7911 (1988); H.R. Rep. No. 1480, pt. 2, at
37, reprinted in 1978 U.S.C.C.A.N. at 7433, 7464. UMTRCA
also omits any means to determine the appropriate acqui-
sition cost for a processing site. See 42 U.S.C. § 7914
(1988).

UMTRCA does not require ownership of a site to
perform remedial action. Under the cooperative agree-
ment, DOE may elect to require the state to obtain written
consent from the owner to perform the remedial action,
42 U.S.C. § 7913(c)(1) (1988), or may direct the state to
acquire the property in fee or some lesser interest®, 42
U.S.C. § 7914(a) (1988). Congress did not require DOE to

8 Despite Justice Mullarkey’s suggestion that prevention of
“windfall profits” is the sole factor used by DOE to determine
whether to acquire a processing site, App. 22, § 7914 allows
DOE virtually unbridled discretion in making its decision, see 42
U.S.C. § 7914.

The record may support the trial court’s finding that The
Mill was unaware of contamination on the mill yard itself. How-
ever, the question before the court is whether The Mill’s expec-
tation that there would be no further regulation of the mill yard
is reasonable. This determination does not depend on the sub-
jective belief of The Mill. It is an objective determination.

App. 12

reprinted in 1978 U.S.C.C.A.N. 7433, 7434. Moreover, the
facts stipulated to by the parties in the regulatory taking
action indicated that The Mill knew that the entire prop-
erty, including the mill yard, had been subject to federal
licensing and regulation since 1962 due to the presence of
radioactive contamination.

Although the parties also stipulated that, at the time
The Mill purchased the property in 1973, the mill yard
was authorized for unrestricted use, it is important to
view that stipulation in context. Testimony in the record
indicates that no specific restrictions were imposed on the
mill yard insofar as CDH did not require The Mill to
obtain a specific license for any portion of the property
because CDH preferred to obtain compliance through
voluntary means. The record also shows that there was
some confusion in the department concerning whether
the mill yard was subject to a general license. However,
the authority to regulate this site was in place at the time
of the purchase, whether or not it was exercised at that
time.

To the extent that radioactive contamination in fact
still existed on the property, it remained subject to broad
regulatory authority. The Colorado radiation control stat-
ute gave CDH authority to “develop and conduct pro-
grams for evaluation and control of hazards associated
with the use of any and all radioactive materials and
other sources of ionizing radiation.” 1963 C.R.S. § 66-26-3
(1967 Supp.) Comprehensive state regulations governing
radioactive materials, specifically, maintenance of ura-
nium mill tailings piles and the possession of radioactive
material, were already in effect at the time the Mill pur-
chased the property. See 6 C.C.R. 1007-1 (1970). At the

:
|
i

App. 13

time The Mill purchased the site, CDH sent copies of
these regulations to the new owner and, after that, con-
tinued to monitor both the mill yard and the tailings pile.

Under these radiation control regulations, “[nJo per-
son shall receive, use, possess, transfer or dispose of
radioactive material except as authorized in a specific or
general license issued pursuant to these regulations.” RH
3.1, 6 C.C.R. 1007-1 (1970). The regulations imposed a
“general license” that was “effective without the filing of
applications with [CDH] or the issuance of licensing doc-
uments to particular persons” upon receipt of title to
source material, e.g., “uranium or thorium, or any combi-
nation thereof, in any physical or chemical form.” RH 1.6;
RH 3.2; RH 3.3.3. Uranium mill tailings were exempt from
these licensing requirements “provided they are in com-
pliance with the provisions set forth in [the CDH regula-
tions governing mill tailings].” RH 3.19.2.4. Under the
regulations, CDH was authorized to “impose upon any
licensee . . . such requirements in addition to those estab-
lished in these regulations as it deems appropriate or
necessary to minimize danger to public health and safety
or property.” RH 1.14. Likewise, licensees were required
to allow CDH to inspect their facilities and sources of
radiation on their property. RH 1.10. Given this regula-
tory environment, it is unreasonable for The Mill to claim
it had no notice of the significant risk of further regula-
tion of the site.®

6 Furthermore, evidence in the record indicates that The
Mill may have had actual knowledge of this ongoing regulatory
authority. In 1983, the mill owners received an inspection report
from CDH stating that the inspection was performed under a

App. 14

Just as a property owner “on notice” of government
regulatory authority cannot reasonably expect to avoid
regulation, neither can a property owner reasonably
expect to put property to a use that constitutes a nui-
sance, even if that is the only economically viable use for
the property. “In accord with ordinary intuition, govern-
ment need not pay even for complete takeover or destruction
if the latter is justified by the owner’s insistence on using
his property to injure other people or their property.”
Laurence H. Tribe, American Constitutional Law 593 (New
York 1988) (citations omitted) (emphasis added). In par-
ticular, the Supreme Court holds that where a regulatory
action

does not proscribe a productive use that was
previously permissible under relevant property
and nuisance principles . . . [t]he use of these
properties for what are now expressly prohib-
ited purposes was always unlawful, and (subject
to other constitutional limitations) it was open
to the State at any point to make the implication
of those background principles of nuisance and
property law explicit.

Lucas, __ U.S. at __, 112 S.Ct. at 2901. Accordingly, the
state may always restrict uses by regulation or statute

general license pursuant to RH 3.2.1. Marcus Bishop was the
general partner in The Mill responsible for inspecting CDH
records prior to purchasing the property. When asked whether
this report was the first indication that there was a general
license in effect, he stated, “This is the first indication that I have
in writing I have any recollection of. There may have been some
conversations with some of the people about a general license,
but it’s an issue that is still vague to me. I still don’t understand
the general license.”

App. 15

when such uses previously were forbidden under com-
mon law principles. These uses were never part of the
landowner’s “bundle of rights that are commonly charac-
terized as property.” Kaiser Aetna, 444 U.S. at 176, 100
S.Ct. at 391. Thus, it is unreasonable for a landowner to
expect that such uses would never be formally prohib-
ited.

The relevant Colorado common law principles would
not permit a landowner to engage in activities that spread
radioactive contamination.? Under Colorado common
law, landowners have a duty to prevent activities and
conditions on their land from creating an unreasonable
risk of harm to others. Moore v. Standard Paint & Glass, 145
Colo. 151, 155, 358 P.2d 33, 36 (1960) (emphasis added). A
public nuisance is the doing or failure to do something
that injuriously affects the safety, health, or morals of the
public or works some substantial annoyance, inconve-
nience, or injury to the public. Specifically, under Colo-
rado common law, land uses that cause pollution
constitute a nuisance. Wilmore v. Chain 0’ Mines, 96 Colo.
319, 325-26, 44 P.2d 1024, 1027 (1934) (“Whatever rights
might be claimed by the defendant owners, they cannot
justify the claim of a right to pollute the stream.”). Under

” Although the trial court did not address the question of
whether CDH restrictions were consistent with the principles of
nuisance and property law in existence at the time of The Mill's
purchase of the processing site, this determination is a question
of law that an appellate court may resolve independently. See
Evans v. Romer, 854 P.2d 1270, 1274 (Colo. 1993) (where an issue
involves only legal and not factual questions, the lower court’s
judgment is subject to independent review by the appellate
court).

App. 16

Colorado’s nuisance statute enacted a year before The
Mill purchased the processing site, “[a]ny unlawful pollu-
tion or contamination of any surface or subsurface waters

. . or of the air” constitutes a nuisance. 1963 C.R.S.
§ 39-13-305. Improperly handled, radioactive materials in
particular were treated as a public nuisance under Colo-
rado solid waste laws enacted before The Mill purchased
the site. See 1963 C.R.S. § 36-23-10(d), -14 (1967 Supp.).

Under these principles of Colorado nuisance law, the
right to make any use of the property that would create a
hazard to public health by spreading radioactive contam-
ination was excluded from The Mill's title at the onset.
The radioactive contamination at the site was present as a
result of prior uranium milling activities. It was a condi-
tion of the property that did not either arise or disappear
as a result of any classification or correspondence issued
by CDH. Accordingly, any use limitations suggested by
CDH to avoid the spreading of radioactive contamination
could not have constituted a taking because those uses
were never lawfully available to The Mill even in the
absence of CDH action.®

Based on this analysis, we conclude that the right to
use the processing site in a way that would spread radio-
active contamination did not constitute a reasonable

8 Because we find that the uses restricted by CDH action
were not within The Mill’s reasonable expectations for use of
the property, we will not address the questions of whether the
CDH correspondence with The Mill rose to the level of regula-
tion or whether CDH “regulation” destroyed all economic value
in the property.

App. 17

investment-backed expectation. Because we find The
Mill’s expectations to have been highly unreasonable, this
factor is “so overwhelming” as to dispose of the taking
issue for purposes of determining just compensation.
Monsanto, 467 U.S. at 1005, 104 S.Ct. at 2874.

ITT.

Sections 25-11-301 to 305, 11A C.R.S. (1989), govern
the state’s participation in federa! implementation of
UMTRCA. Under section 303(d)(III), CDH is authorized
to acquire a processing site by condemnation proceedings
if necessary. § 25-1 1-303(d)(III). Fair market value in these
proceedings is to be determined “in accordance with the
criteria established in section 24-56-117(1)(c), C.R.S., and
the provisions of the federal ‘Uranium Mill Tailings Radi-
ation Control Act of 1978.’ ” Jd Section 24-56-117(1)(c),
10B C.R.S. (1988), codifies the Colorado rule against
enhanced value. The rule requires the state to disregard
any change in the fair market value of the property
caused by the public improvement for which the property
is being acquired in determining just compensation for
the property. § 24-56-117(1)(c).10

* We agree that the Mill’s actual use of the property did not
constitute a nuisance, but that was precisely because The Mill
complied with the CDH limitations.

'0 The statute provides that

Before the initiation of negotiations for acquisition of
real property, an amount shall be established which it
is reasonably believed is just compensation therefor,
and such amount shall be offered for the property. In
no event shall such amount be less than the approved
appraisal of the fair market value of such property.

App. 18

In the eminent domain action, the court of appeals
found that the stipulation entered into by The Mill and
CDH setting the fair market value of The Mill’s property
in its contaminated state at zero was dictated by the rule
against enhanced value and set aside the stipulation.
Because application of the rule would limit The Mill’s
compensation to the value of the property in its contami-
nated state, the court concluded that the rule against
enhanced value was contrary to the intent of UMTRCA
and resulted in unfair and disparate treatment of the
owners of designated sites. The Mill III, 868 P.2d at 1103.
Specifically, the court found that the financing scheme of
UMTRCA indicated an intent that property owners pay
nothing for cleanup, and thus, for the state to collect the
difference between the contaminated and decontami-
nated property values would be contrary to the intent of
the statute. Id.!! It found further that the Colorado

Any decrease or increase in the fair market value of
real property prior to the date of valuation caused by
the public improvement for which such property is
acquired, or by the likelihood that the property would
be acquired for such improvement, other than that
due to physical deterioration within the reasonable
control of the owner, shall be disregarded in deter-
mining the compensation for the property. The owner
of the real property to be acquired shall be provided
with a written statement of and summary of the basis
for the amount established as just compensation.
Where appropriate, the just compensation for the real
property acquired and for damages to remaining real
property shall be separately stated.
§ 24-56-117(1)(c), 10B C.R.S. (1988).

11 The court of appeals also found it contrary to the intent
of UMTRCA that site owners invariably would lose their initial

App. 19

implementation scheme under UMTRCA resulted in dis-
parate treatment of similarly-situated property owners,

investment under the rule against enhanced value. The court
erroneously assumed that application of the rule against
enhanced value would dictate a finding of nominal or zero
market value in condemnation actions pursuant to UMTRCA so
that owners always would lose their initial investment in the
property, as well as be forced to repurchase their property at fair
market value after decontamination was completed.

The rule against enhanced value requires only that the
property be valued in its present condition without regard to
any increase or decrease in value projected upon completion of
the government project for which the property was condemned.
See § 24-56-117(1)(c). It does not mean that a property owner
will necessarily lose the initial investment in the property. As
discussed infra, site acquisition is envisioned under UMTRCA
in those instances where the initial purchase price of the prop-
erty reflected on-site contamination. Presumably, the rational
and informed site owner would not have purchased the site
unless some use or value remained despite the contamination.
The fair market value determined under the rule would reflect
the more-than-nominal value of those uses. Moreover, if the site
owner purchased the site at a price that reflected on-site con-
tamination, the value determined under the rule would allow
the owner to recover that initial investment.

In this case, the value of the property was set at zero by
stipulation of the parties; it was not dictated by state law. The
Mill took what it thought was the best Strategic position on
property value, and forfeited its initial investment as a result of
that strategy. Neither the court of appeals’ prior decision in
Department of Health v. Hecla Mining Co., 781 P.2d 122 (Colo.
App. 1989), nor the rule against enhanced value allows the state
to condemn a site and then pay less than fair market value of the
Property at that time. Accordingly, we will address only
whether it is consistent with UMTRCA to apply the rule against
enhanced valuation to condemnation actions to the extent that it
excludes compensation for any increased value resulting from
remedial action by the government.

App. 20

since those whose property is cleaned up by consensual
agreement pay nothing, while property owners whose
property is acquired by the state must repurchase their
property at its market value in a decontaminated state. Id.
The court of appeals declined to follow its prior decision
in Department of Health v. Hecla Mining Co., 781 P.2d 122
(Colo. App. 1989), to the extent it was inconsistent with
its ruling in this case. We do not agree.

In addressing and rejecting the court of appeals’
analysis, we will examine first the alleged conflict
between Colorado’s enhanced value statute and the fed-
eral law. Then we will consider the equal protection
implications caused by application of the rule against
enhanced value.

A. Inconsistency with the Federal Statute

Under the Supremacy Clause of the United States
Constitution, state statutes that conflict with federal stat-
utes are invalid. Brubaker v. Board of County Comm'rs, 652
P.2d 1050, 1054 (Colo. 1982); Housing Auth. v. United
States, 980 F.2d 624, 631 (10th Cir. 1992). Federal law
preempts state law when Congress expresses clear intent
to preempt state law; when there is outright or actual
conflict between federal and state law; when compliance
with both federal and state law is physically impossible;
when there is an implicit barrier within federal law to
state regulation in a particular area; when federal legisla-

tion is so comprehensive as to occupy the entire field of
regulation; or when state law stands as an obstacle to the
accomplishment and execution of the full objectives of
Congress. Frontier Airlines, Inc. v. United Air Lines, Inc., 758

App. 21

F. Supp. 1399, 1407 (D. Colo. 1989). However, exercise of
federal supremacy is not to be presumed lightly. Brubaker,
652 P.2d at 1055. We must begin by assuming that the
historic police powers of the state are not to be super-
seded by any federal laws or regulations unless that
congressional purpose is clearly shown. Dantus v. First
Federal Savings & Loan Ass‘n, 502 F. Supp. 658, 660 (D.
Colo. 1980).

In construing statutes to make this determination of
Congressional objectives in enacting UMTRCA, we must
ive effect to the intent reflected in the language of the
enactment and the legislative process. Colorado v. Idarado
Mining Co., 916 F.2d 1486, 1494 (10th Cir. 1990). Congres-
sional intent is determined primarily from the plain lan-
guage of the statute, and secondarily from the statute’s
legislative history. Mass v. Martin Marietta Corp., 805 F.
Supp. 1530, 1534 (D. Colo. 1992).

The court of appeals found that the Colorado rule
against enhanced value is an obstacle to the accomplish-
ment and execution of the objectives of UMTRCA. We do
not agree. We find that both the plain language of
UMTRCA and its legislative history indicate a legislative
intent not inconsistent!2 with the Colorado rule against
enhanced value which requires that property subject to
condemnation proceedings be valued in its unimproved

'2 Because Supremacy Clause analysis begins with the
assumption that state regulation is not superseded by federal
regulation, Brubaker, 652 P.2d at 1054, Dantus, 502 F. Supp. at
660, the court need not find that the federal and state statutes
are consistent, only that they are not inconsistent.

App. 22

state. Williams, 147 Colo. at 198-202, 363 P.2d at 173-75;
§ 24-56-117(1)(c).

1. The Language of the Federal Statute

Turning first to the plain language of the statute, the
stated purpose of UMTRCA is to clean up and stabilize
uranium processing sites to alleviate the danger to the
public posed by radiation emitted from mill tailings and
other radioactive waste at such sites, 42 U.S.C. § 7901. To
this end, the federal government “shall pay 90 per cen-
tum of the actual cost of such remedial action, including
the actual costs of acquiring such site (and any interest
therein) .. . and the state shall pay the remainder of such
costs from non-Federal funds.” § 7917(a).

The act addresses two possible cleanup scenarios:
cleanup with the consent of the property owner, section
7913(c), and cleanup accomplished after the acquisition of
the site by the state in which the property is located,
section 7914(a). In deciding whether to proceed by one
method or the other, the sole factor enumerated in the
statute to which the federal Secretary of Energy and the
Nuclear Regulatory Commission must give consideration
is the “prevention of windfall profits” to the property
owner. Id. If the cleanup will result in a windfall to the
property owner, the state will be directed to acquire the
site, id., with the option to sell the decontaminated prop-
erty back to the original owner at fair market value.
§ 7914(e)(2). If the state is not directed to acquire the site,
the state may enter into a consent agreement with the
property owner which will “releas[e] the United States of
any liability or claim thereof” and “hold[] the United

App. 23

States harmless against any claim... . arising out of the
performance of any such remedial action.” § 7913(c)(2).
UMTRCA thus distinguishes between Property owners to
whom a windfall benefit would accrue and Property
Owners to whom a windfall would not accrue in deter-
mining which cleanup scenario to follow.

The Mill argues that

[t]he perceived ‘windfall’ is the cost associated
with the remedial action undertaken by DOE
which otherwise could have been borne by the
property owner. However, [(UMTRCA’s] specific
purpose is to obligate DOE to absorb these
costs, since ‘but for’ the Federal contracts which
8ave rise to the tailings which contaminate these
sites, the properties would likely be free from
uranium contamination.

According to The Mill, the admonition against windfall
profits in section 7914(a) is merely an attempt to limit
costs. It does not mandate differential treatment of prop-
erty owners whose Property is remediated by consent
and those whose Property is acquired by the state before
remediation.

UMTRCA does not define “windfall profits.” Neither
the Department of Energy nor the Nuclear Regulatory
Commission has issued regulations enunciating the fac-
tors on which it bases its determination to require a state
to acquire a processing site, or elaborating how “windfall
profits” may be identified. Thus, we must interpret the
term without Statutory or regulatory guidance.

In reading a statute we are required to adopt an
interpretation that gives “consistent, harmonious and
sensible effect” to all of the Statute’s provisions. Colorado

App. 24

State Bd. of Medical Examiners v. Saddoris, 825 P.2d 39, 42
(Colo. 1992) (citation omitted). Furthermore, the court
must give words their commonly accepted and under-
stood meaning. East Lakewood Sanitation Dist. v. District
Court, 842 P.2d 233, 235 (Colo. 1992).

The Mill’s interpretation fails to “sensibly” and “har-
moniously” construe the statute. First, if the windfall
profit addressed by UMTRCA is merely the cost of reme-
dial action, including acquisition costs, then it would be
impossible to consider “prevention” of windfall profits as
required by section 7914, since all cleanup effort would
result in some windfall to the property owner. The Secre-
tary of Energy and the Nuclear Regulatory Commission
could only consider “limitation” of windfall profits. Sec-
ond, to treat “windfall profits” as the cost of cleanup, as
The Mill recommends, would read consensual cleanup
under section 7913(c) out of the statute. Since all remedial
action would result in some windfall profit, prevention of
which is the sole enumerated factor for consideration
under section 7914(a), presumably the Secretary of
Energy and the Nuclear Regulatory Commission would
require acquisition of most, if not all, sites. Finally, The
Mill’s interpretation also fails to acknowledge that prop-
erty owners may benefit not only from avoiding the cost
of cleanup (including future liability arising from on-site
pollution), but also from the increased value of the prop-
erty after the government-funded cleanup is complete.
While the statute clearly is designed to require federal
and state government to bear the cost of cleanup, there is
no evidence that it was intended to provide these second-
ary benefits to landowners as well. Accordingly, we must
identify a satisfactory alternative construction.

Ma 8 ah Sie lle le Cn iis cs

App. 25

A “windfall” is commonly understood to mean “an
unexpected or sudden gain or advantage.” Webster's Third
New International Dictionary 2619-20 (1986). “Profit,” in
the context of financial matters such as these, generally
means the [sic] “the excess of returns over expenditure in
a transaction or series of transactions.” Id. at 1811. Thus,
“windfall profit” must occur Where a transaction pro-
duces some unexpected excess of returns over expendi-
tures. In the context of this Statute, the transaction in
question must be the acquisition of property by the state
since, under section 7914(a), it is “lijn determining
whether to require the State to acquire a designated process-
ing site or interest therein, [that] consideration shall be
given to the prevention of windfall profits.” § 7914(a)
(emphasis added).

Under this definition, windfall profits would accrue
to a property owner as a result of cleanup only where the
property owner purchased the Property in its contami-
nated state at a price which reflected the presence of
contamination and then, without making any expendi-
tures for cleanup, could resell the property, or interest
therein, at a price reflecting an increase in value due to
the cleanup. Such an increase in market value due to
cleanup would necessarily be unexpected, and thus a
“windfall,” because if government-funded cleanup plans
had been publicly known, the market Price of the prop-
erty in a contaminated state would have been comparable
to that of similar, uncontaminated property.

Not all cleanups would result in such a windfall to
the property owner. For example, where the property
Owner purchased the tract in an uncontaminated state

App. 26

before the milling operations took place pursuant to fed-
eral contracts, cleanup of the property merely returns the
property to its state at the time of initial purchase.'> The
same would be true where the property owner purchased
the tract after the decision to take remedial action had
been made or after remedial action had begun, so that the
purchase price reflected the decontaminated value of the
property. Presumably, in these circumstances the Secre-
tary of Energy and the Nuclear Regulatory Commission
would not require the state to acquire the processing site
prior to performing remedial action.

The rule against enhanced value is not inconsistent
with UMTRCA’s policy of preventing windfall profits to
the property owner. In fact, the rule furthers UMIRCA
policy. If the property owner were allowed to collect the

13 The uranium mill tailings addressed under UMTRCA
were produced by uranium milling operations under federal
contracts. Because at the time milling operations were under-
way the tailings were not believed to be a health hazard, federal
cost-plus contracts allowed for only a very small expenditure
for tailings disposal. Profit margins under the contracts did not
accommodate the cleanup expenses now recognized as neces-
sary to assure public safety. H.R. Rep. No. 1480(II) at 58,
reprinted in 1978 U.S.C.A.A.N. 7477-78.

Increased property value that accrues to these property
owners as a result of remedial action does not constitute a
windfall profit because (1) on-site hazardous contamination
resulted in a decrease in property value after purchase of the
site which offsets the increase in value created by cleanup; and
(2) cost compensation calculated under federal cost-plus con-
tracts during milling operations did not account for decon-
tamination expenses. Governmental cleanup thus does not
result in an unexpected double-benefit to these property
owners.

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App. 27

value of the property in its decontaminated state, the
Property owner would not only be spared the expense of
the cleanup, but would also receive the increase in mar-
ket value resulting from the cleanup. While the statute
does not require property owners to pay for the cleanup
itself, as indicated by placing the full cost on the federal
and state governments in section 7917(a), the rule against
enhanced value assures that the property owner cannot
collect through condemnation Proceedings the “windfall

profits” that state acquisition of the property was
intended to prevent.

2. The Legislative History of the Federal Statute

The legislative history of UMTRCA does not define
“windfall profits,” or address the criteria for acquisition
of processing sites. However, nothing in the legislative
history indicates that the Colorado rule against enhanced
value is inconsistent with UMTRCA. In its “Section-by-
Section Analysis and Committee Comments,” House
Report No. 1480 states that the “affected State [shall]
acquire the processing site before remedial action is initi-
ated if such acquisition is determined appropriate by the
Secretary and the NRC.” H.R. Rep. No. 1480(II) at 37,
reprinted in 1978 U.S.C.A.A.N. 7464. The Report speci-
fically indicates that “[s]uch acquisition is to be accom-
plished pursuant to State law.” Id. This reference to state
law indicates that Congress intended for the state to
utilize the same policies and procedures in this context as
it uses in other types of land acquisition. In Colorado, the
rule against enhanced value is generally applicable to the
acquisition of land by the state in other contexts. See

App. 28

§ 24-56-117 (“Any state agency or political subdivision of
the state which acquires real property for a program or
project for which federal financial assistance will be
available to pay all or any part of the cost of such pro-
gram or project shall comply with the following poli-
cies:”); Williams, 147 Colo. at 198-202, 363 P.2d at 173-75.

The committee also noted that where cleanup is
accomplished by consent,

the property owner will benefit from the volun-
tary remedial action provided by this act.
Clearly, the committee does not want to find
that at some later date the United States is faced
with a claim from such owner, his heirs, suc-
cessors or assigns concerning such remedial
action or arising from such action.

H.R. Rep. No. 1480(II) at 37, reprinted in 1978
U.S.C.A.A.N. 7464. Thus, the committee viewed the
waiver of liability that is part of a consent agreement to
be at least partial consideration for the benefit that
accrues to the property owner. Under the interpretation
urged by The Mill, the property owner would receive not
only the benefit of the cleanup and the attendant increase
in property value, but would also avoid providing a
waiver releasing the United States from liability which
otherwise would have been required if the site had been
decontaminated under a consent agreement. Such an
interpretation would create every incentive for a property
owner to resist consensual cleanup, force the state to
condemn the processing site in order to perform remedial
action, and thus drive up program costs. Since the com-
mittee was “concerned about the cost of acquisition
under this section and expect[ed] that it be utilized only

App. 29

when necessary,” H.R. Rep. No. 1480(II) at 38, reprinted in
1978 U.S.C.A.A.N. 7465, such a construction is clearly
contrary to the legislative intent of UMTRCA as
expressed in the Act’s legislative history. Application of
the rule against enhanced value would eliminate this
adverse incentive and thus be more consistent with Con-
gressional intent.

B. Equal Protection

The court of appeals found that applying traditional
condemnation rules, such as the rule against enhanced
value, to property acquisitions under UMTRCA resulted
in disparate treatment of similarly-situated property
owners. This result, the court found, is “further evidence
that the traditional enhancement rule was not intended to
apply under UMTRCA.” The Mill III, 868 P.2d at 1105.
Because we find that property owners whose property is
subject to condemnation proceedings and property
owners whose property is subject to consensual remedial
cleanup are not similarly situated, we disagree.

The equal protection guarantees under the Colorado
and United States constitutions assure like treatment of
all who are similarly situated. Colo. Const. art. II, § 25;
U.S. Const. amend. 14.; Mayo v. National Farmers Union
Property and Casualiy Co., 833 P.2d 54, 57 (Colo. 1992). If
persons alleging disparate treatment are not similarly
situated, the equal protection challenge to a statute must
fail. Western Medical Lath, Inc. v. Acoustical & Constr. Sup-
ply, Inc., 851 P.2d 875, 880 (Colo. 1993).

App. 30

As discussed above, the decision to acquire property,
as opposed to entering into a consensual arrangement for
cleanup, is based on the prevention of windfall profits to
the property owner. By agreement with the federal gov-
ernment, the state is required to acquire only those pro-
cessing sites where the Secretary of Energy and the
Nuclear Regulatory Commission already have made a
threshold determination that the owners would stand to
make a windfall profit if remedial action were to proceed
under a consensual agreement. This finding alone indi-
cates that the two groups of property owners are not
similarly situated. Accordingly, any equal protection
challenge to the application of the rule against enhanced
value must fail.

After this examination of the language and legislative
intent of UMTRCA, we conclude that the rule against
enhanced value codified in section 24-56-117(1)(c) is fully
consistent with Congressional intent in enacting
UMTRCA.

IV.

For the foregoing reasons, we find that 1983 corre-
spondence between CDH and The Mill did not constitute
a regulatory taking in violation of the I'nited States and
Colorado constitutions. We also find tl.at application of
the Colorado rule against enhanced value in condemna-
tion proceedings is not contrary to the intent of
UMTRCA, and thus, that the stipulation of zero value
entered into by The Mill and CDH may stand. Accord-
ingly, we (1) reverse the court of appeals’ holdings on
both issues, (2) return the case to the court of appeals for

App. 31

remand to the district court with instructions to dismiss
The Mill’s regulatory taking and estoppel claims, and (3)
return the case to the court of appeals for reinstatement
of the judgment of the Gunnison County District Court
granting title to the property to CDH.

ERICKSON, J., specially concurs.

SCOTT, J., dissents.

State v. The Mill, No. 93SC418
JUSTICE ERICKSON specially concurring:

We granted certiorari to review both the regulatory
taking and eminent domain rulings in The Mill v. State of
Colorado, Department of Health, 868 P.2d 1099 (Colo. App.
1993).14 I agree with the majority that the court of appeals
erred in finding a regulatory taking of The Mill’s prop-
erty. I also agree that the enhanced value statute, section
24-56-117(1)(c), 10B C.R.S. (1988), is dispositive in this
case in determining whether the decontaminated value of
a property should be considered for purposes of eminent
domain pursuant to the Uranium Mill Tailings Radiation
Control Act (UMTRCA), 42 U.S.C. §§ 7901-7942 (1993

4 We previously reviewed inverse condemnation and reg-
ulatory taking issues in State of Colorado, Department of Health v.
The Mill, 809 P.2d 434 (Colo. 1991) and remanded to the district
court for further consideration of promissory estoppel and reg-
ulatory taking claims asserted by The Mill.

App. 32

Supp.). I concur in the majority opinion and write sep-
arately on the applicability of the enhanced value rule in
this case.

|

The 61-acre parcel of land (property) at issue in this
case consists of a 25-acre mill yard and a 36-acre tailings
pile. Pursuant to an Atomic Energy Commission (AEC)
license, the property was operated as a uranium process-
ing mill and for storage of uranium mill tailings from the
late 1950s until 1962. In 1968, the AEC delegated regula-
tory authority of the radioactive materials and the AEC
license to the State of Colorado, which terminated the
license for the property in issue that adjoins the Gunnison
Airport.

The Mill purchased the property in 1973. At that
time, the Colorado Department of Health (CDH) had
imposed no restrictions on the use of the property. Radio-
active contamination of the mill yard was found in 1976.
In 1978, Congress enacted UMTRCA to decontaminate
twenty-two inactive uranium mills to protect the public
from the health hazards associated with the radioactivity
of uranium mills. After radioactive contamination of the

property was confirmed in 1980 and 1982, The Mill leased
the property to O.C. Coal Company in 1983. The Mill
notified CDH of the lease agreement, and CDH
responded with a letter advising The Mill and O.C. Coal
of safety precautions that were recommended because of
the radioactive contamination of the property.

App. 33

O.C. Coal terminated the lease in 1984. The Mill
contends that the CDH letters setting forth safety require-
ments caused O.C. Coal to terminate the lease and
brought an action against CDH in 1986, claiming a regu-
latory taking. While the regulatory takings case was on
appeal, CDH initiated a condemnation proceeding in
accordance with UMTRCA and the applicable Colorado
statute. § 25-11-303(1)(d), 11A C.R.S. (1989 & 1994 Supp.).
In the condemnation action under UMTRCA, the parties
stipulated that the market value of the property in its
contaminated state was zero, and the trial court vested
title to the property in CDH. The Mill appealed both the
regulatory taking and the condemnation decisions to the
court of appeals.

The court of appeals consolidated the regulatory tak-
ings case with the eminent domain case. In the consoli-
dated appeal, the court of appeals held that a regulatory
taking had occurred and set aside the stipulation of the
parties that the fair market value of the property in its
contaminated state was zero. On remand, the court of
appeals directed that fair market value be determined
based on the decontaminated value of the property, and
ordered a new determination of just compensation.

II

In Department of Health v. Hecla Mining Co., 781 P.2d
122, 125 (Colo. App. 1989), the court of appeals stated:
“We do not find support in the federal law for [the]
assertion that the purpose of [UMTRCA] is to meet an

App. 34

obligation to remedy government-initiated contamina-
tion.”15 The legislative history of UMTRCA reflects a
congressional intent not to overburden either the federal
or state governments with the costs of clean-ups.!© Rather
than protecting the investment of the property owner,
Congress’ concern was to minimize the costs of the pro-
gram in cleaning up radioactive uranium sites.!”

15 The court of appeals in Hecla subsequently stated:

The [UMTRCA] ... expressly set forth, as the purpose

for the legislation, the protection of the public health,

safety, and welfare from the potential and significant

radiation health hazards of uranium mill tailings... .

This is an undisputable public purpose. . .
Id. (citations omitted); see 42 U.S.C. § 7901(b)(1) (stating that the
purpose of the UMTRCA is “to stabilize and control . . . tailings
in a safe and environmentally sound manner and to minimize or
eliminate radiation health hazards to the public... . ”).

16 The UMTRCA divides the costs of decontamination
between the federal government (90%) and state government
(10%). 42 U.S.C. § 7917(a). In contrast, the Comprehensive Envi-
ronmental Response, Compensation, and Liability Act
(CERCLA), 42 U.S.C. §§ 9601-9675 (1993 Supp.), imposes lia-
bility upon “the owner and operator of a... facility,” or “any
person who at the time of disposal of any hazardous substance
owned or operated any facility at which such hazardous subs-
tances were disposed of... . ” §§ 9607(a)(1)-(2).

The Mill is also subject to federal legislation that imposes
liability on mill owners for non-compliance with radon emis-
sion standards. 40 C.F.R. § 61.222(b) (1993). The cost of decon-
tamination of The Mill property has been estimated at $40
million.

17 Such a concern eliminates the disparate appearance of
the two decontamination options provided in UMTRCA. A con-
taminated site may be cleaned up either (1) through an agree-
ment with the owner, 42 U.S.C. § 7913(a), or (2) by purchase or
condemnation when the Secretary of Energy, with the

CTS 2 Cae MT UN, AMEE ION ME, © Ig or fo

App. 35

Hecla set out the key elements of the legislative his-
tory and stated:

The legislative history shows that the Radi-
ation Control Act was enacted due to concern
over the health threat posed by unstable and
uncontrolled inactive uranium mill tailings and
not to meet any legal obligation on the part of
the federal government to remedy the hazard-
ous situations at such sites. Concern over costs
of the program prompted Congress to provide
for state acquisition of mill sites, particularly if
decontamination would result in windfall
profits to an owner who retained the site after
decontamination.

Hecla, 781 P.2d at 124. The court of appeals in Hecla held
that in a condemnation proceeding, property must be
valued in its present condition, without regard to the
governmental purpose supporting the necessity for con-
demnation or the radioactive contamination of the prop-
erty. Accord, Williams v. City and County of Denver, 147
Colo. 195, 363 P.2d 171 (1961); § 24-56-117(1)(c).

In a condemnation proceeding, the property taken is
valued at its fair actual cash market value at the time of

concurrence of the Nuclear Regulatory Commission, determines
that decontamination would lead to “windfall profits” for the
owner. 42 U.S.C. §§ 7914(a) and (e)(2).

The two options are intended to reduce the costs of the
program to the public by preventing the receipt of “windfall
profits” to landowners. Allowing owners such as The Mill to
recover the uncontaminated value of their land, after purchas-
ing the property in a contaminated condition, would provide
the owners a windfall and would increase the cost of the pro-
gram, contrary to congressional intent.

App. 36

trial or when the property is taken. § 38-1-114, 16A C.R.S.
(1982 & 1994 Supp.); see Mulford v. Farmers’ Reservoir &
Irrigation Co., 62 Colo. 167, 161 P. 301 (1916). Market value
is the price a property will bring when it is offered for
sale by one who desires but is not obligated to sell, and is
bought by one who desires, but is under no necessity to
buy the property. Dep’t of Highways v. Schuloff, 167 Colo.
72, 445 P.2d 402 (1968). The value of the land taken is
based on present conditions and not on the future devel-
opment of the property. Id.

When Congress enacted UMTRCA, it directed that
acquisitions be accomplished pursuant to state law. H.R.
Rep. No. 95-1480 (II), 95th Cong., 2d Sess. at 37 (1978),
reprinted in 1978 U.S.C.C.A.N. 7464. When the Colorado
General Assembly agreed to the financial commitments of
UMTRCA and authorized the CDH to participate in_its
implementation, it specifically directed that such acquisi-
tions be conducted pursuant to the eminent domain laws
of Colorado. § 25-11-303(1)(d). In particular, the General
Assembly directed that the enhanced value criteria in
section 24-56-117(1)(c), be followed when condemning
property under UMTRCA. Section 24-56-117(1)(c) pro-
vides in relevant part: “Any decrease or increase in the
fair market value of real property prior to the date of
valuation caused by the public improvement for which
such property is acquired . . . shall be disregarded in
determining the compensation for the property.” Section
24-56-117(1)(c) is the statutory codification of the rule
against enhanced value. See Williams, 147 Colo. at
199-200, 363 P.2d at 173-74. The court of appeals dis-
missed section 24-56-117 as “general policy” that must
yield to what the court stated was the “ends” of

App. 37

UMTRCA (protecting the owner’s investment). The Mill,
868 P.2d at 1106.

The UMTRCA is not an exception to the enhanced
value rule, but rather incorporates the rule into its frame-
work. In Hecla, the court of appeals held that evidence of
the decontaminated value of the land, “because it fails to
reflect the actual condition of the property at the time of
the taking, is necessarily speculative or prospective and
thus inadmissible.” Hecla, 781 P.2d at 126. The court of
appeals in the present case declared that Hecla was dis-
positive of value determination of fair market value and
of the issues raised at the immediate possession hearing,
but held that the enhanced value rule in Williams was
inapplicable and that Hecla would not be followed as
inconsistent with the scheme established by UMTRCA.
The court of appeals misinterpreted UMTRCA, and erred
in not following Hecla.'§

The enhanced value statute is dispositive of the con-
demnation issue. The contaminated value of the land was
zero. The Mill, in acquiring the property, knew of the
property’s prior use as a uranium processing mill, which
contaminated both the building and the soil. The Mill was
effectively limited in the use it could make of its land
because of radioactive contamination. Such a limitation
on use is not compensable, however, because the only
value of The Mill’s property would be as the result of

18 Judge Smith authored the opinion of the court in Hecla
and the court of appeals opinion in this case, but the other
members of the panel were not the same. The court of appeals
panel in this case erred in applying a different interpretation of
the UMTRCA than a different panel employed in Hecla.

App. 38

improvements effected by a clean-up that would restore
the land to its former condition. The property was con-
taminated when it was acquired by The Mill. Because the
cost of decontaminating the property exceeds the value of
the property after the clean-up, the value of the property
is zero, and the rule against enhanced value is applicable.

Il

The cost of decontaminating The Mill’s property is
borne by the state and federal governments. A consider-
ation of the property’s decontaminated state for purposes
of calculating fair market value would grant The Mill
more than it acquired when it purchased the property in
1973, and would grant the landowner “windfall profits,”
profits which Congress intended to avoid in enacting
UMTRCA.

Because an application of the rule against enhanced
value is in accordance with congressional intent and the
intent of the General Assembly, the court of appeals erred
in ordering a determination of the property’s decontami-
nated value and in not following Hecla. The court of
appeals also erred in setting aside the parties’ stipulation
that the property had no value in its present condition.

State of Colorado v. The Mill, No. 935C418
JUSTICE SCOTT dissenting:

The majority holds that The Mill, the owner of real
property, did not have “reasonable investment-backed

App. 39

expectations” as to the contemplated use of the “mill
yard” because “an extensive regulatory scheme [was] in
place at the time of investment,” maj. op. at 999-1000,
and, as a consequence, any taking by the State does not
require compensation. Because I believe such a rule
impermissibly blurs the distinction between takings of
real and personal property and improperly permits tak-
ings without compensation in violation of constitutional
mandates, and because I believe the record does not
support a conclusion that The Mill’s expectations were
“highly unreasonable,” I respectfully dissent.

Moreover, because the lower court’s determination
that The Mill was deprived of its entire economic interest
in the property is supported by the record, I would hold
the actions of the State compensable, assuming The Mill
can establish a regulatory taking premised upon its com-
pliance with directives set forth in agency letters and
similar communications. Accordingly, because the anal-
ysis I would employ requires that we examine the issues
the majority fails to address, I respectfully dissent.!9

I.

In 1973, respondent, The Mill, purchased a lot in
Gunnison, Colorado, which had previously been used as
a uranium mill and disposal site for uranium mill tail-
ings. The lot was divided into two separate parcels: the
“tailings pile” and the “mill yard.” Prior to purchasing

19 I do not address the issues raised in the eminent domain
action because it would be premature in light of my analysis of
the takings issue.

App. 40

the lot, The Mill searched the records of the Colorado
Department of Health (CDH) and discovered that in 1971,
the State of Colorado had removed the mill yard from
licensure, authorized its unrestricted use, and considered
the mill yard not contaminated and free for lawful uses
such as those contemplated by The Mil11.2° Based on its
review of the information in CDH’s files, which indicated
that the mill yard parcel was decontaminated and safe for
unrestricted use, The Mill purchased the subject property
in July of 1973.

From 1973 to 1978, CDH conducted various tests of
the tailings pile located on property adjacent to The Mill.
At some point, CDH also conducted tests of the mill yard.
In 1976, CDH found radioactive contamination through-
out the mill yard. At that time, CDH informed The Mill of
its finding and advised it to take precautionary measures
with regard to the mill yard. Both the mill yard and the
tailings pile were designated for radiation clean-up under
the Uranium Mill Tailings Radiation Control Act of 1978,
Pub. L. No. 95-604, 42 U.S.C. § 7901 (1991) (“UMTRCA”").
The Mill was informed that it was a “candidate for reme-
dial action” in 1978.

20 The mill yard had been licensed in 1964 by the Atomic
Energy Commission (AEC). Pursuant to the license, the prop-
erty was authorized: “[flor storage only of the contaminated
equipment and buildings constituting the Gunnison uranium
mill. This license does not authorize removal, use, transfer or
decontamination of the equipment and/or buildings in any
manner.” In 1968 the license was amended to allow for transfer
of contaminated equipment to persons not possessing an AEC
license provided that decontamination was accomplished in
accordance with the AEC standards. Decontamination of equip-
ment and buildings was also authorized.

App. 41

In 1983, The Mill notified CDH that it had leased the
mill yard to O.C. Coal. CDH then sent several letters to
both The Mill and O.C. Coal informing them of the “exis-
ting mill yard radioactive contamination” and the limited
uses to which the mill yard could be put. The trial court
found that there had been a taking because of the letters
and other actions of CDH, and awarded compensation in
the amount of $200,909. based on a total loss of use,
rather than a loss of property valuation.

The court of appeals affirmed the trial court’s ruling
that the CDH correspondence amounted to a total regula-
tory taking. A majority of this court now reverses, and, in
effect, ignores the distinction so clearly drawn between
real and personal property in federal takings jurispru-
dence and, in its place, holds that the adoption of “an
extensive regulatory scheme” trumps the fundamental
constitutional right to just compensation as a conse-
quence of a government taking. It is to that conclusion of
the majority that I take exception.

II

In Lucas v. South Carolina Coastal Council, ___ U.S. __,
112 S. Ct. 2886, 120 L.Ed.2d 798 (1992), the United States
Supreme Court reaffirmed its holding in Pennsylvania
Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322
(1922), where Justice Holmes, writing for the Court,
opined that “while property may be regulated to a certain
extent, if regulation goes too far it will be recognized as a
taking.” Lucas, __ U.S. at __, 112 S.Ct. at 2893 (citing
Mahon, 260 U.S at 415, 43 S.Ct. at 160). Writing for the
majority in Lucas, Justice Scalia acknowledged that the

App. 42

seventy years of Supreme Court takings jurisprudence
has been essentially by ad hoc, factual inquiries. The
Court has, however, found regulatory takings “compens-
able without case-specific inquiry into the public interest
advanced in support of the restraint” in instances in
which it has “found . . . regulation [by the state] denied
all economically beneficial or productive use of land.” Id.
(citing Agins v. Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138,
2141, 65 L.Ed.2d 106 (1980); Nollan v. California Coastal
Comm’n, 483 U.S. 825, 834, 107 S.Ct. 3141, 3147, 97 L.Ed.2d
677 (1987); Keystone Bituminous Coal Ass’n v. DeBenedictis,
480 U.S. 470, 495, 107 S.Ct. 1232, 1247, 94 L.Ed.2d 472
(1987); Hodel v. Virginia Surface Mining & Reclamation
Ass'n, Inc., 452 U.S. 264, 295-96, 101 S.Ct. 2352, 2370, 69
L.Ed.2d 1 (1981) (footnote omitted)).

In fact, the Court has categorically held that takings
which deny all economically beneficial use require com-
pensation. Noting this categorical rule, Justice Scalia sug-
gested the justification for the rule was “simply, as Justice
Brennan suggested, that total deprivation of beneficial
use is, from the landowner’s point of view, the equivalent
of a physical appropriation.” Lucas, __ U.S. at __, 112
S.Ct. at 2894 (citing San Diego Gas & Elec. Co. v. San Diego,
450 U.S. 621, 652, 101 S.Ct. 1287, 1304, 67 L.Ed.2d 551
(1981) (Brennan, J., dissenting)). Essentially, then, Justice
Scalia opined, “when the owner of real property has been
called upon to sacrifice all economically beneficial uses in
the name of the common good, that is, to leave his
property economically idle, he has suffered a taking.”
Lucas, ___ U.S. at __, 112 S.Ct. at 2895.

On appeal to this court, CDH argued, and the major-
ity agreed, that the court of appeals erred by failing to

Krastaaieateiti

App. 43

apply the exception stated in Lucas that no compensation
is due if the restrictions merely duplicate the result that
could have been achieved in the courts through nuisance
or property law. Lucas, __ U.S. at __, 112 S.Ct. at 2901.
That exception only applies, however, where the “owner
is barred from putting land to a use that is proscribed by
those existing rules or understandings.” Id. The Lucas
Court established that “[w]here the State seeks to sustain
regulation that deprives land of all economically benefi-
cial use, we think it may resist compensation only if the
logically antecedent inquiry into the nature of the
owner’s estate shows that the proscribed use interests
were not part of his title to begin with.” Id. at__, 112 S.Ct.
at 2899 (emphasis added). At the time The Mill purchased
the land in 1973, the contemplated use of the land (stor-
age) was not proscribed by any rules or understanding
that existed at that time. The anticipated investment-
backed use of The Mill property was not unlawful, since
the State itself had declared the property authorized for
unrestricted use. By its actions in 1983, however, the State
was in effect changing the uses and hence, in effect,
understandings that reflect a more developed under-
Standing of the hazards of radiation - all of which
occurred years after the purchase. Thus, the Lucas excep-
tion that “the proscribed use interests were not part of
[The Mill’s] title to begin with,” i.e., in 1973, has no
application to the case at hand.

Importantly, despite its early infatuation with “harm-
ful or noxious uses,” or reliance upon nuisance law, the
Lucas Court reversed the South Carolina Supreme Court
because its judgment was premised upon a determination
that the property owner’s proposed use was a nuisance,

App. 44

harmful to the public, and, as a consequence, would
render a taking not subject to compensation. Lucas, __
U.S. at __-__, 112 S.Ct. at 2897-98. Instead, the Court
reasoned, “noxious-use logic cannot serve as a touchstone
to distinguish regulatory ‘takings’ - which require com-
pensation — from regulatory deprivations that do not
require compensation.” Id. at __, 112 S.Ct. at 2899. Con-
tinuing, the Court held: “A fortiori the [state’s] recitation
of a noxious-use justification cannot be a basis for depart-
ing from our categorical rule that total regulatory takings
must be compensated.” Id. (emphasis added). The majority
fails to take this holding into account.?!

21 The majority in this case emphasizes principles of nui-
sance law in its holding, stating “under Colorado common law,
land owners have a duty to prevent activities and conditions on
their land from creating an unreasonable risk of harm to
others.” Maj. op. at 1002. The majority sets forth further, “[i]n
accord with ordinary intuition, government need not pay even in
complete takeover or destruction if the latter is justified by the
owners insistence on using his property to injure other people
or their property.” Maj. op. at 1001 (citing Laurence H. Tribe,
American Constitutional Law 593 (New York 1988)).

In the nuisance cases relied on by the majority it was the
conduct of the owner of the property that caused the nuisance,
not the character of the property itself, over which the owner
had no control. In the case at bar, however, The Mill is not
putting its property to any noxious use at all — it is merely using
it as a storage facility. The Mill is not engaging in any act that
makes the property itself dangerous; the property is already
dangerous because it is contaminated with radiation.

App. 45

Il

The United States Supreme Court has identified sev-
eral factors that should be taken into account when deter-
mining whether a governmental action amounts to a
taking. Among those factors are “the character of the
governmental action, its economic impact, and its inter-
ference with reasonable investment-backed expecta-
tions.” Pruneyard Shopping Ctr. v. Robins, 447 U.S. 74, 83,
100 S.Ct. 2035, 2042, 64 L.Ed.2d 741 (1980). I would agree
with the majority that the reasonable investment-backed
expectations of the regulated party is a dispositive factor
in this case. I would disagree, however, with the major-
ity’s conclusion that The Mill’s expectations in 1971 were
unreasonable, in light of the CDH determination that the
property was not contaminated and was available for
unrestricted use. With respect to owner expectations, the
Lucas Court stated:

Where the State seeks to sustain regulation that
deprives land of all economically beneficial use,
we think it may resist compensation only if the
logically antecedent inquiry into the nature of
the owner’s estate shows that the proscribed use
interests were not part of his title to begin with.
This accords, we think, with our “takings” juris-
prudence, which has traditionally been guided by the
understandings of our citizens regarding the content
of and the State’s power over the “bundle of rights”
that they acquire when they obtain title to property.

Lucas, ___ U.S. at ___, 112 S.Ct. at 2899 (emphasis added).
Continuing the concept of owner expectations, the Court
noted a distinction between personalty and realty:

App. 46

And in the case of personal property, by reason
of the State’s traditionally high degree of control
over commercial dealings, he ought to be aware
of the possibility that new regulation might
even render his property economically worth-
less. .. . In the case of land, however, we think
the notion . . . that title is somehow held subject
to the “implied limitation” that the State may
subsequently eliminate all economically valu-
able use is inconsistent with the historic com-
pact recorded in the Takings Clause that has
become part of our constitutional culture.

Where “permanent physical occupation” of land
is concerned, we have refused to allow the govern-
ment to decree it anew (without compensation) no
matter how weighty the asserted “public interest”
involved. . . . We believe similar treatment must be
accorded confiscatory regulations, i.e., regulations
that prohibit all economically beneficial use of
land. Any limitation so severe cannot be newly
legislated or decreed (without compensation),
but must inhere in the title itself . . . already
place[d] upon land ownership.

Id. at __-__, 112 S.Ct. at 2899-900 (citations and foot-
notes omitted) (emphasis added). The Court’s analysis is
consistent with the sharp distinction historically drawn
between the treatment of real property and personal
property. See Property Tax Administrator v. Production Geo-
physical, 860 P.2d 514, 519 (Colo.1993). For example, we
apply the statute of frauds to interests in real property
but not to interests in personal property (§ 38-10-108, 16A
C.R.S. (1963)) and specific performance is generally
directed in contracts concerning the sale of land but not
in contracts concerning personal property. See, e.g.,
Atchison v. City of Englewood, 193 Colo. 367, 568 P.2d 13

En cicac tb Sle lt: DS) OPS. ha Rifas 2A 2 Re a With ott

Pp ee ee ee Lee

App. 47

(1977); Radetsky v. Palmer, 70 Colo. 146, 199 P. 490 (1921).
The basis for drawing such a distinction is that every
parcel of real property is unique. See Mt. Sneffels Co. v.
Estate of Scott, 789 P.2d 464, 466 (Colo.App.1989). Hence,
when the property interest is that associated with the
ownership of land, as opposed to personalty, our takings
analysis must be guided by the landowner’s understand-
ings regarding the bundle of rights he or she acquires
with the title to the property. Id. ___ U.S. at __, 112 S.Ct.

_at 2899. To the contrary, here, the majority assumes that

the existence of a comprehensive regulatory scheme
requires that we impute to land owners at the time of
purchase, today’s knowledge of the harm caused by radi-
ation. Such owner expectations are unreasonable years
before the effects of radiation are fully understood; the
majority’s position does not comport with our previous
treatment of owner expectations. The inconsistency of the
majority’s position is reflected by its statement in foot-
note 4. Maj. op. at 1000 n.4.?2

22 The majority asserts that “expectations of unregulated
use are unreasonable when an extensive regulatory scheme is in
place at the time of the investment.” Maj. op. at 1000. The
picture drawn by the majority is no different, however, from a
Situation in which property is acquired for permissible use
under existing zoning ordinances and is subsequently “taken”
by a change of zoning ordinances within the existing regulatory
scheme. Yet it is undisputed that in that situation compensation
is required. See, e.g., Cottonwood Farms v. Board of County
Comm'rs of Jefferson County, 725 P.2d 57, 60 (Colo.App.1986); see
also Gold Run, Ltd. v. Board of County Comm'rs, 38 Colo.App.44,
46, 554 P.2d 317, 319 (1976) (when zoning is confiscatory it rises
to a “taking” of private property requiring compensation).

App. 48

There have been three important cases decided in
this jurisdiction which deal with the concept of owner
expectations. See Ford Leasing v. Board of County Comm'rs,
186 Colo. 418, 528 P.2d 237 (1974); Nopro Co. v. Cherry Hills
Village, 180 Colo. 217, 504 P.2d 344 (1972); Gold Run, Ltd. v.
Board of County Comm'rs, 38 Colo.App.44, 554 P.2d 317
(1976). In each of these three cases, the harm was self-
inflicted. For example, in Nopro, a zoning case, the court
held “Nopro’s land investment was made in full knowl-
edge of the zoning limitations. [t took the calculated risk
that it could break the zoning use barrier and thereby
double the profit from its investment.” Nopro, 180 Colo. at
227, 504 P.2d at 349. The court concluded “if hardship
exists . . . it was incurred voluntarily by the choice of
Nopro and was self-inflicted.” Id. Likewise, in Ford Leas-
ing and Gold Run, the court emphasized the fact that the
owner bought the property having full knowledge of
existing restrictive zoning, thus rendering a hardship of
self-inflicting.

In this case, the majority asserts that The Mill was on
notice that the radioactive materials present on the prop-
erty were highly regulated at both the state and federal
level, stating “the facts stipulated to by the parties in the
regulatory taking action indicated that the entire prop-
erty, including the mill yard, had been subject to federal
licensing and regulation since 1962 due to the presence of
radioactive contamination.” Maj. op. at 1000. The major-
ity maintains that even in 1973, when The Mill purchased
the lot, there “existed an awareness that the hazards
posed by radiation were potentially severe.” Id. The
majority’s observation fails to fairly take into account two
important realities: (1) in 1973, the extent of the potential

App. 49

hazards posed by radiation was not fully understood;
and (2) The Mill had no knowledge of the site’s contam-
ination at the time of its purchase due to its reliance upon
CDH findings that the mill yard was uncontaminated and
available for uses contemplated by The Mill.23 These and
other facts found by the trial court cannot be ignored.
Where the findings of the trial court are supported by the
record, those findings must be accepted on review unless
they are clearly erroneous. M.D.C./Wood, Inc. v. Mortimer,
866 P.2d 1380, 1384 (Colo.1994). Because we have consis-
tently disapproved of the substitution of new factual
findings by reviewing courts for those made by the trial
court, Pace v. Clark, 197 Colo. 306, 313, 592 P.2d 792, 796
(1979), and because the record clearly supports the find-
ings of the trial court, it would be inappropriate on
review to fail to take such facts into consideration.

The facts of this case deal with what was described
during the trial as “a regulatory framework which has
evolved over time to deal with our increase in knowledge
of radiation and its dangers.” As found by the trial court,
the need to clean up areas such as the Gunnison uranium
mill site was not “an overriding concern” in the early
1970’s. Testimony shows that in 1971, cleanup efforts
were done related to buildings and equipment, with an
emphasis at that time on alpha contaminations. That
same testimony indicates that since 1971, concerns have

2” The trial court held that The Mill “knew there had been a
uraniuin mill on that site; and knew what was still there; that is
to say, the tailings pile. The [Mill] did not know, at the time that
it purchased, that there was radioactive contamination on the
mill site itself.” This finding is supported by the record.

App. 50

grown for other types of radiation contamination, includ-
ing radon contamination, radon progeny called radon
daughters and gamma radiation. Although there were
proper tools and equipment for testing for these types of
other radiation problems in 1971, there was not a suffi-
cient concern at that time for the dangers from these
other radiation hazards. Thus, they were not part of the
examination that was done prior to the delicensure in
1971. In fact, testimony indicated that in 1971, when the
property in question was removed from licensure, CDH
did not even consider it important enough to regulate the
tailings pile, let alone the mill yard. Today, on the other
hand, according to testimony which was introduced at
trial, radiation is considered potentially harmful in any
degree.

Before purchasing the property in 1973, The Mill
fully researched the possibility of contamination on that
site by reviewing CDH files in February of 1973. The Mill
found that the site had been regulated at one time, but
that the State had delicensed the parcel, representing that
it was not contaminated, and authorizing its unrestricted
use. After regulatory examination, the State demon-
strated its approval of the storage use contemplated by
The Mill, as well as any other reasonable uses. The record
reflects that The Mill purchased the property based on an
expectation created by the government. Given the fact
that “scientific knowledge concerning the hazards of
radiation was not as sophisticated as it is now,” maj. op.
at 1000, the State’s representations were conceivable. It
follows that The Miill’s reliance on those representations
was reasonable. Thus, in 1973, despite the fact that the
mill yard remained subject to federal regulation, The

Casals aa iis soi Nal 4 errs tates

App. 51

Mill’s contemplated use of the property for storage, a use
also contemplated by government officials after regula-
tory examination, was reasonable.

It is not disputed that the mill yard is contaminated
and should be regulated by the state. The issue comes
down to who should bear the cost of the government’s
intervention — the state or the private party. When a
citizen relies on government records and the government
later changes its position, the only logical solution is for
the government to bear any costs involved.

IV

I would therefore find that the investment-backed
expectations of The Mill based upon information from
CDH were not highly unreasonable. Since the trial court’s
findings with respect to the remaining material facts are
supported by the record, I would find a potentially com-

~pensable taking requiring that we determine issues not

reached by the majority. For the foregoing reasons, I
respectfully dissent.

App. 52

APPENDIX B
THE MILL, Plaintiff-Appellant,
v.

STATE of Colorado, DEPARTMENT OF
HEALTH, Defendant-Appellee.

THE MILL, Plaintiff-Appellee
and Cross-Appellant,

v.
STATE of Colorado, DEPARTMENT OF
HEALTH, Defendant-Appellant and Cross-Appellee.

DEPARTMENT OF HEALTH, State of Colorado,
Petitioner-Appellee,

v.
THE MILL, Respondent-Appellant.
Nos. 87CA0502, 87CA0838 and 91CA0770.
Colorado Court of Appeals, Division II.
April 22, 1993.*

Rehearing Denied June 10, 1993.
Certiorari Granted March 7, 1994.

Owner of uranium-contaminated mill site brought
action against Department of Health alleging inverse con-
demnation and regulatory taking. The District Court of
the City and County of Denver, H. Jeffrey Bayless, J.,
awarded owner damages for temporary regulatory taking
but dismissed claim for inverse condemnation. The Court

* Prior opinion announced December 31, 1992 was With-
drawn. Petition for Rehearing of The Mill Granted. Petition for
Rehearing of The State of Colorado Denied.

App. 53

of Appeals, 787 P.2d 176, reversed and remanded. Cer-
tiorari was granted. The Supreme Court, 809 P.2d 434,
reversed and remanded. On remand, case was consoli-
dated with owner’s appeal of order by the District Court,
Gunnison County, Thomas J. Goldsmith, J., condemning
property under Uranium Mill Tailings Radiation Control
Act (UMTRCA). The Court of Appeals, Smith, J., sitting
by assignment, held that: (1) in valuing properties desig-
- nated under UMTRCA for purpose of determining just
compensation in condemnation proceeding for remedial
decontamination operations, rule against enhanced value
does not apply; (2) stipulation which applied enhanced
value rule was void as being contrary to law; and (3) trial
court properly analyzed regulatory taking issue.

Affirmed in part and reversed and remanded in part.

Holley, Albertson & Polk, P.C., George Alan Holley,
Eric E. Torgersen, Golden, for plaintiff-appellant, plain-
tiff-appellee and cross-appellant, and respondent-appel-
lant.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter,
Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol.
Gen., Jerry W. Goad, First Asst. Atty. Gen., Denver, for
defendant-appellee, defendant-appellant and cross-appel-
lee, and petitioner-appellee.

Opinion by Judge SMITH**.

** Sitting by assignment of the Chief Justice under provi-
sions of the Colo. Const. art. VI, Sec. 5(3), and § 24-51-1105,
C.R.S. (1988 Repl.Vol. 10B).

App. 54

In an initial consolidated appeal (87CA0502,
87CA0838), The Mill, a partnership, appealed the trial
court’s dismissal of its claim in inverse condemnation
against the Department of Health (State), and both par-
ties appealed the trial court’s award to The Mill of
$200,000 in damages for what the court determined to be
a temporary regulatory taking. In that appeal, we reins-
tated The Mill’s inverse condemnation claim against the
State. The Mill v. State, 787 P.2d 176 (Colo. App.1989).
However, on certiorari review, the Supreme Court
reversed that ruling, and the matter is now before us on
remand. State of Colorado v. The Mill, 809 P.2d 434
(Colo.1991).

In addition to the matters on remand, we have con-
solidated The Mill’s appeal of the State’s condemnation
of The Mill property (91CA0770) under its newly
acquired authority to take, by eminent domain, proper-
ties which have been designated under the Uranium Mill
Tailings Radiation Control Act, 42 U.S.C. §§ 7901 to 7942
(1988) (UMTRCA) as eligible for remedial action See
§ 25-11-303(1)(d)(III), C.R.S. (1989 Repl.Vol. 11A).

As to this latter appeal (91CA0770), we reverse the
trial court’s judgment and remand the cause for further
proceedings.

In light of our disposition of the appeal in the emi-
nent domain proceeding, the damage claim issues based
upon “promissory estoppel” and “regulatory taking” the-
ories are largely subsumed in that decision. We arrive at
that conclusion because, even if there were a regulatory
taking or if a promissory estoppel had arisen, the specific
monetary damages arising therefrom could not exceed

App. 55

the fair market value of the property. Thus, since the State
will be required to pay the total fair market value of the
property in the eminent domain proceeding, the issues in
the other two cases are rendered moot, except as to the
question concerning whether a regulatory taking
occurred and, if so, when it occurred and the effect of
such a taking upon the condemnation award. We affirm
the trial court’s findings and conclusion that a total regu-
latory taking occurred upon cancellation of the coal com-
pany lease in May of 1984.

The property at issue here consists of a 61-acre parcel
that was, essentially, divided into two parts: The mill
yard (roughly 25 acres) and the tailings pile (approx-
imately 36 acres). The property was operated as a ura-
nium and uranium mill tailings disposal site in the late
1950s and until 1962. This activity left the property and
the buildings and equipment located on the property
contaminated with radioactive material.

Milling operations were originally conducted pur-
suant to a license issued by the Atomic Energy Commis-
sion (AEC) which, after milling operations ceased, was
reissued to permit only the storage on the property of
past mill tailing products and contaminated equipment
and buildings. The permit was again amended in 1968 to
allow the transfer of decontaminated equipment. Also in
1968, the State was delegated authority by the AEC to
regulate radioactive materials formerly under the juris-
diction of the AEC. In 1971, the State delicensed the mill
yard and the property was authorized for unrestricted
use.

App. 56

In 1973, after reviewing all available governmental
records regarding the property and discovering the fore-
going information relative to the status of the property,
The Mill purchased the entire 61 acres.

In 1978, as a result of the growing awareness of the
potential public health hazards presented by uranium
mill tailings, Congress passed UMTRCA for the purpose
of cleaning up “designated” uranium processing sites.
Under UMTRCA, processing sites would be either
acquired by the State or decontaminated at the govern-
ment’s expense and returned to the property owner.

All 61 acres of The Mill’s property were subsequently
designated as a “processing site” under UMTRCA, and,
in 1981, The Mill and the Department of Energy (DOE)
entered into a limited agreement permitting DOE to test
the 35-acre tailings pile. Nonetheless, testing was ulti-
mately performed on all 61 acres and contamination of
the ‘delicensed’ or unregulated mill yard was confirmed
by the DOE in 1982.

In 1983, The Mill leased its property to O.C. Coal
Company, primarily for the storage of coal, at a rental of
$7,000 per month. Subsequent to being notified of this
lease, the State began issuing The Mill a series of letters
and communications which restricted the property’s use
for coal storage, and, in May of 1984, the coal company
prematurely terminated its lease. Since then, The Mill has
earned only approximately $500 to $700 a month from the
mill yard based upon 20% building use.

Alleging that, because of the State’s restrictions, the
property could not be put to any reasonable economic
use, The Mill filed a complaint in January 1986, alleging

App. 57

three claims for relief: Inverse condemnation; a regula-
tory taking; and that the State was estopped to deny it the
use of its property. The trial court subsequently dismissed
The Mill’s claim in inverse condemnation.

Upon trial of the remaining claims, the court ruled
that the State had so diminished The Mill’s right to use its
property that it had effected a regulatory taking. Measur-
ing damages in terns of “loss of use” over the period of
time which the trial court anticipated decontamination of
the property under UMTRCA would require, the court
awarded The Mill $200,000.

While these issues were on appeal, the State initiated
an action to condemn The Mill property in fee simple
under § 25-11-303(1)(d), C.R.S. (1989 Rep!.Vol. 11A). In
response, The Mill moved for and was denied a dismissal
or stay of the action pending the outcome of the consoli-
dated appeal. Pursuant to a stipulation of the parties, the
court determined that the fair market value of the prop-
erty was zero, and it accordingly entered a “rule and
order,” or judgment, vesting title to The Mill property in
the State.

I. 91CA0770

The eminent domain appeal

In its appeal of the eminent domain proceedings, The
Mill contends that the trial court’s judgment vesting the
state with fee simple title to The Mill property must be
vacated. We agree.

The record reveals that the “zero” award in the con-
demnation action here was the result of a stipulation

App. 58

entered into by the parties in lieu of an evidentiary hear-
ing under § 38-1-106, C.R.S. (1982 Repl.Vol. 16A). That
stipulation entered into by The Mill and the State pro-
vided in relevant part:

Decontaminating The Mill’s property, which is
presently contaminated with radioactive mate-
rial, is a public purpose as set forth by statute in
the Uranium Mill Tailings Radiation Control
Act, 42 U.S.C. § 7901 et seq. and the Colorado
Radiation Control Act, § 25-11-301 et seq. C.R.S.
In its present condition, the cost of remedial
action and cleanup of The Mill’s property to
properly decontaminate it exceeds tne fair mar-
ket value which the property would otherwise
have if completely uncontaminated. Therefore,
in its present condition, the value of The Mill’s
property is zero.

The Colorado Department of Health has the
necessity for immediate possession of The Mill’s
property in order to commence the remedial
action and decontamination operations which
are the purpose of the present condemnation
proceeding. (emphasis added)

A stipulation, like any other agreement between pri-
vate parties, may be set aside if “there is a sound reason
in law or equity” to do so. See generally Lake Meredith
Reservoir Co. v. Amity Mutual Irrigation Co., 698 P.2d 1340
(Colo.1985).

The stipulation is, by implication, a direct result of
our decision in Department of Health v. Hecla Mining Co.,
781 P.2d 122 (Colo.App.1989), in which, as here, the State
sought to condemn property, like that at issue in this

App. 59

appeal, heavily contaminated with radioactive uranium
tailings and designated under UMTRCA as one of the
specific sites eligible for remedial action. We held that the
Hecla condemnation, likewise triggered by UMTRCA,
was indisputably for a “public purpose.”

Of critical importance, in Hecla, we also held that, as
in other eminent domain proceedings, valuation of the
condemned property was governed by the principle that
an owner of land which is condemned is not entitled to
recover the increase or enhancement in the value of his
land which is caused by the very improvement for which
the land is being acquired. Williams v. City & County of
Denver, 147 Colo. 195, 363 P.2d 171 (1961). Determining
that evidence of the value of Hecla’s property in its
uncontaminated condition would represent such an
increase or enhancement in value, we ruled that, in ascer-
taining the fair market value of Hecla’s property for the
purpose of awarding just compensation, no evidence of
the uncontaminated value of the condemned land was
admissible even though, as here, in its contaminated con-
dition, the value of the property was zero.

In short, Hecla was entirely dispositive of all the
issues to be resolved by the court in The Mill’s immediate
possession hearing under § 38-1-106, C.R.S. (1982
Repl.Vol. 16A). Likewise, it was dispositive of the only
other issue pending, that of determining the fair market
value of the property being condemned.

Evaluating the parties’ stipulation here, thus, neces-
sarily compels us to re-evaluate our conclusion in Hecla
that, in valuing UMTRCA properties for the purpose of

App. 60

awarding just compensation, evidence of the uncontami-
nated value of the property was improper. Our analysis
begins with an examination of the origin of both federal
and State action, UMTRCA, and with an assessment of
whether our holding in Hecla is consistent with this statu-
tory scheme. We conclude that it is not and that, accord-
ingly, the stipulation must be set aside.

The purpose of UMTRCA is clearly stated in the Act,
that is, to stabilize and control residual uranium radioac-
tive materials at certain specially identified, privately
held, inactive mill sites that were previously producers of
uranium for the federal government. 42 U.S.C. §§ 7901,
7911 (1988).

Provisions of UMTRCA reflect, if not a federal
responsibility for the contamination of these mill sites, a
federal obligation to stabilize and control the undisputed
hazards of radioactivity. 42 U.S.C. § 7901 (1988). Accord-
ingly, the statutory scheme vests considerable authority
in the Secretary of the Department of Energy (Secretary)
to complete remedial action at the designated sites
promptly.

Implementation is to proceed under federal/state
cooperative agreements which delegate to the states the
“means” to access these privately held lands and to fund
the remedial action required to achieve decontamination.
42 U.S.C. § 7913 (1988).

Specifically, UMTRCA provides that access will be
obtained either through written consent of the property
owner or, at the Secretary’s determination, through
“acquisition” of the site by the state. Funding will be 90%
federal dollars and 10% state dollars. 42 U.S.C. § 7917

App. 61

(1988). Significantly, private owners of sites that are not
acquired through purchase or condemnation, are required
to pay nothing for the consensual remedial cleanup of
their property. Hecla Mining Co. v. United States, 909 F.2d
1371 (10th Cir.1990).

In short, the foregoing statutory scheme obligates the
federal government, and to a lesser extent the state gov-
ernment, to undertake and to pay the costs of the reme-
dial action compelled by the presence of unstable and
uncontrolled uranium mill tailings.

However, application of the Hecia rule effectively
predetermines the fair market value of any properties in
which access for clean-up is obtained by a condemnation
proceeding initiated under UMTRCA at zero or minimal
value. This is true irrespective of the fact that the prop-
erty owner may have a substantial investment in the
property. Accordingly, the owner’s investment becomes a
casualty of, and hence, part of the “cost” of, remedial
action.

Thus, we conclude that the Hecla rule, which pre-
cludes the admission of evidence of the value of
UMTRCA properties in their uncontaminated state for
the purpose of determining just compensation, is incon-
sistent with this statutory scheme because it results in
imposing at least a portion of the cost of clean-up on the
property owner rather than the federal and state govern-
ments.

In support of the result we reach here, it should be
noted that UMTRCA provides that, before offering for
public sale any processing sites which the state has
acquired, the state shall offer to sell such lands at their

App. 62

fair market value as decontaminated back to the person
from whom they were acquired. 42 U.S.C. § 7914 (1988).
Thus, if, as in the case of Hecla, supra, decontamination
increases the value of the property from zero to $3.5
million, the original property owner, who received noth-
ing or almost nothing for his property in the condemna-
tion proceeding and who elects to reacquire the property
under the statute, in effect, subsidizes the ‘cost’ of the
remedial action.

The unfair and disparate treatment of the owners of
designated sites is the inevitable result of applying tradi-
tional condemnation rules to UMTRCA condemnations.
A similar result does not occur when access for remedial
action is accomplished through UMTRCA’s alternative
means, that is, by obtaining the property owner’s written
consent. Indeed, the disparate treatment created between
similarly situated property owners by application of the
Hecla rule is further evidence that the traditional enhan-
cement rule was not intended to apply under UMTRCA.

Thus, UMTRCA - the basis and authority for all
federal and state action for remedial clean-up action on
designated inactive uranium contaminated mill sites -
does not support the rule announced in Hecla, supra, for
valuation of UMTRCA properties subject to acquisition
through condemnation. Condemnation in such instances
is but one “means” to the “end” — remedial action under-
taken solely at the federal government's initiative and
predominately at its expense. Hence, condemnation, for
the purpose of clean-up pursuant to UMTRCA, albeit
proceeding under state law, must be consistent with his
“end.” Application of the Hecla rule would negate this
consistency.

App. 63

UMTRCA’s legislative history further bolsters our
conclusion. Nowhere in the extensive Congressional
Committee reports discussing the federal law is the con-
cept expressed, or even implied, that the property owner
should be burdened by the cost, or any portion thereof, of
the remedial action contemplated by the Act. Quite to the
contrary, the focus of the Act is on the potential and
significant radiation health hazard to the public that the
tailings present and the federal government’s lack of
authority, absent this legislation, to stabilize and control
this hazard.

The Act provides for an appropriation of funds and
their expenditure under a shared cost formula which
neither precludes state participation nor excessively bur-
dens the federal budget. Indeed, in at least one committee
report, it is specifically acknowledged that benefits to the
property owner will accrue from the government's volun-
tary remedial action as provided by the Act. H.R.Rep. No.
95-1480, 95th Cong., 2d Session Pt. 2, at 7464 (1978)
reprinted in U.S.Code Cong. & Admin.News 7450.

Therefore. in summary, based on UMTRCA’s express
statutory scheme for remedial action, interpreted in light
of the Act’s legislative history, we conclude that in valu-
ing properties designated under 42 U.S.C. § 7912, for the
purpose of determining just compensation in a condem-
nation proceeding for remedial decontamination opera-
tions under UMTRCA, the Congress intended that the
rule against enhanced valuation set forth in Williams,
supra, should not apply. To the extent that Hecla, supra,
holds to the contrary, we feel compelled not to follow it.

App. 64

The State advances several objections to our holding
above. We conclude that none are persuasive.

First, the State argues that our analysis ignores speci-
fic reference to the applicability of the rule against
enhanced value (§ 24-56-117(1)(c), C.R.S. (1988 Repl. Vol.
10B)) in the Radiation Control Act, § 25-11-301, et seq.,
C.R.S. (1989 Repl.Vol. 11A).

Inasmuch as 24-56-117(1)(c) is a codification of the
rule against enhanced value, our preceding discussion
mandates our conclusion that it is inapplicable here
because it directly conflicts with, and defeats the purpose
of, UMTRCA. To apply it in order to exclude evidence of
the value these properties would have if the decon-
tamination had been accomplished would reject the basic
scheme of both UMTRCA and the State Radiation Control
Act. We view this as the only conclusion consistent with
§ 25-11-303, C.R.S. (1988 Repl.Vol. 10B) which, in addition
to authorizing state participation in UMTRCA, speci-
fically provides that:

[D]ecision[s] made pursuant to the provisions of
article 1 of title 38, C.R.S., shall be made in
accordance with the criteria established in
§ 24-56-117(1)(c), C.R.S. and the provisions of the
federal Uranium Mill Tailings Radiation Control
Act of 1978. (emphasis added)

Moreover, this conclusion is consistent with the dis-
tinction between acquisition for a public improvement and
acquisition, as here, for a public purpose in the interest of
the public health safety and welfare.

The former involves an anticipation that the property
acquired will be put to a continuing public use, one

App. 65

which is reasonably likely to enhance the value of the
acquired or adjacent property. This related benefit result-
ing from public acquisition and use is absent when the
acquisition of property is to eliminate a public health or
safety hazai ., like that underlying UMTRCA, because the
property, at least at the time of condemnation, has no
anticipated continuing public use. Indeed, UMTRCA
specifically seeks in several ways to maintain private
ownership of the properties designated for remedial
action or to restore it to private use after decontamina-
tion. See 42 U.S.C. §§ 7913, 7914 (1988).

Accordingly, we conclude that § 24-56-117(1)(c), as it
appears in the Radiation Control Act, must be interpreted
as a general policy of state land acquisition which is
modified, in this instance, by the specific policies for state
land acquisition under UMTRCA.

Next, the state argues that allowing evidence of
UMTRCA properties’ uncontaminated value creates a
special rule for one hazardous material but not for others.
While this may be true, a review of the Act’s legislative
history indicates that this was precisely the Congress’
intent.

Particularly revealing in this regard is the report of
the House Congressional Committee on Interstate and
Foreign Commerce which states in pertinent part:

[T]he committee . . . stresses that it does not
consider [UMTRCA] a precedent to be followed
in the case of other waste management prob-
lems .. . [T]he situation at these inactive sites is
quite unique in that there was once Federal
licensing of the operations, but, due to a loop-
hole in the law, the s

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1596%3A1. Public record. Not legal advice.
