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Wisconsin Supreme Court Rules on Contamination Valuation in Eminent Domain Claims

The Wisconsin Supreme Court recently reviewed 260 North 12th Street, LLC v. Wisconsin DOT, 2010 WI App 138, 329 Wis. 2d 748, 792 N.W.2d 572 and took the majority state opinion that in condemnation proceedings, the government is allowed to introduce evidence of environmental contamination and future remediation costs to reduce the amount of just compensation it must pay to a property owner.

As the law firm representing the plaintiff, we believe that the affects of contamination and related remediation costs should not be considered when determining just compensation in an eminent domain claim.  Introducing evidence of contamination and remediation costs allows the government to acquire the property at a discounted rate and then allows them to sue the same property owner for the costs of clean-up.   The landowner is therefore subject to a form of double-taking.

Neighboring state Minnesota held in Moorhead Economic Development Authority v. Anda, 789 N.W.2d 860 (Minn. 2010) that evidence of environmental contamination and clean-up costs are generally inadmissible in condemnation cases, based on fairness and due process considerations.  The Wisconsin Courts failed to adopt Minnesota’s rule because the cases presented in arguments were based upon the assumption that a subsequent environmental action against the property owner is a certainty, when in fact it isn’t.

It came as no surprise when Wisconsin took the majority state opinion by ruling in favor of the condemnor in these cases. However, their holdings are not equitable in a double taking contamination eminent domain case and the state will be forced to modify their holdings when this issue arises in the future.

Read the Supreme Court Opinion.  Learn more about our position on contamination valuation in eminent domain claims.