Free Memorandum - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

LAND GRANTORS IN HENDERSON, UNION and WEBSTER COUNTIES, KENTUCKY and THEIR HEIRS,

) ) ) ) Claimants, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) ____________________________________)

No. 93-648X Judge Charles F. Lettow (Presiding Officer), Senior Judges Lawrence S. Margolis, Loren A. Smith, Review Panel

UNITED STATES' OPENING BRIEF IN SUPPORT OF ITS NOTICE OF EXCEPTION

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TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi ATTACHMENT LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii MEMORANDUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. II. Summary of Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Factual Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. The United States' Acquisition of the Breckinridge Properties . . . . . . . . . . . 4 Documents Generated at or Near the Time of Acquisition . . . . . . . . . . . . . . . 7 1. The Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 I. ii. 2. 3. C. The Documents Related to the Purchased Properties . . . . . . . 7 The Documents Related to the Condemned Properties . . . . . . 9

Contemporaneous Correspondence . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Historical Newspaper Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

The United States' Sale of the Breckinridge Properties . . . . . . . . . . . . . . . . . 13 1. 2. 1944 and 1949 Property Surplus Acts . . . . . . . . . . . . . . . . . . . . . . . . . 13 Sale of the Breckinridge Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

D. III.

Higginson Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Procedural Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 A. B. C. Pre-Trial Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 The First Interim Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 The Final Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

IV.

Applicable Legal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

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A. B. C. V.

Standard of Review of a Hearing Officer's Report . . . . . . . . . . . . . . . . . . . . 21 The Purpose and Effect of a Congressional Reference . . . . . . . . . . . . . . . . . 22 General Rules Applicable in a Congressional Reference . . . . . . . . . . . . . . . . 22

The Reports are Fundamentally Flawed Because they Lack Claimant-Specific Findings and are Based on Flawed Inductive Reasoning . . . . . . 25 The Hearing Officer's Conclusion that "The Doctrine of Laches is Inapplicable" is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 A. The Review Panel Should Recommend No Recovery Based on the Doctrine of Laches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 The Hearing Officer's Factual Findings Cited to Support a Conclusion that the Doctrine of Laches is Inapplicable Are Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1. "Sometime in 1968, following the United States Supreme Court's denial of certiorari in the Higginson case, a group of landowners and/or their heirs formed the Breckinridge Land Committee (`the Committee') and turned to Congress to seek redress." Land Grantors I, 64 Fed. Cl. at 685. . . . . . . . . . . . 31 "The record evidences that numerous requests/petitions were made by the former landowners to repurchase their land after World War II ended." Land Grantors I, 64 Fed. Cl. at 713. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 "The record also evidences that there was considerable confusion about what federal office was responsible for decisions about disposal of Camp Breckinridge that was caused by the Government." Land Grantors I, 64 Fed. Cl. at 713. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 "The record evidences no public notice or local news article[s] about the 1957 lease to Felmont Oil or [the] 1959 lease to Kingwood Oil at the time they were entered." Land Grantors I, 64 Fed. Cl. at 714. . . . . . . . . . . . . . . . . . . . . . . . . . . 35

VI.

B.

2.

3.

4.

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5.

"Landowners living in the Henderson, Union, and Webster County areas may have assumed, albeit erroneously, that sufficient efforts were made to preserve their legal rights to benefit from the doctrine of equitable tolling by the filing of the Higginson complaint." Land Grantors I, 64 Fed. Cl. at 715. . . . . . . . . . . . . . . . . . . . . . . . . . . 35 "Plaintiffs did not have the ability to compel the Government to obtain and release information about the 1957 and 1959 leases and 1965 sales" because the "Freedom of Information Act, 5 U.S.C. § 552, et seq., ("FOIA") was not enacted until 1966." Land Grantors I, 64 Fed. Cl. at 715. . . . . . 36

6.

VII.

The Hearing Officer's Admission of, and Reliance on, Hearsay Evidence is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 A. Admission of the Affidavits After Trial Without Foundation is Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 The Hearing Officer's Reasons for Admission Should Not Be Upheld . . . . 41

B.

VIII. The Hearing Officer's Conclusion that "Many" Landowners Were Promised a "Priority to Repurchase Land Sold by Them if Sold by the United States Government" is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . 43 A. The Hearing Officer's Finding Cannot be Based on the Deposition Transcripts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 The Hearing Officer's Finding Cannot be Based on the Discovery Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 The Hearing Officer's Finding Cannot be Based on the Affidavits . . . . . . . 45 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

B.

C. D. IX.

The Hearing Officer's Conclusion that the Landowners Were "Paid Less than Reasonable Value Due in Part to the Refusal of the United States Government to Compensate the Owners for Mineral, Oil and Gas Rights" is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 A. The Hearing Officer Disregarded the Extensive Expert Testimony that Proved Claimants Were Not Paid Less than Reasonable Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

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B.

The Hearing Officer's Finding that the Former Landowners Did Not Receive Reasonable Value for the Breckinridge Properties is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

X.

The Hearing Officer's Application of the Doctrine of Mutual Mistake is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 A. Claimants' Right to Avoid the Contracts Are Barred for Failure to Act Within a Reasonable Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Subsequent Discovery of Commercially Valuable Mineral Deposits Cannot Retroactively Create a Mistake of Fact . . . . . . . . . . . . . . . 55 The Hearing Officer's Finding that the Parties Entered the Sales Contracts With a Mutual Mistake About the Existence of Minerals is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . 56 1. The Hearing Officer's Finding that the Parties Were Mutually Mistaken is Not Supported by the Record . . . . . . . . . . . . . 57 i. ii. iii. iv. v. vi. 2. The United States' Historians' Expert Reports . . . . . . . . . . . 58 The Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Thirty-Nine Affidavits Signed by Heirs in 1979 . . . . . . . . . . . 60 Five Deposition Transcripts of Former Landowners . . . . . . . 61 Four Interrogatory Responses . . . . . . . . . . . . . . . . . . . . . . . . . 62 Mineral Lease Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

B.

C.

The Hearing Officer's Finding About a Subsequent Discovery of Minerals is Not Supported by the Record . . . . . . . . . . . 63

D.

The Hearing Officer's Finding that the Parties' Mistaken Belief Constituted a "Basic Assumption" Underlying the Contracts is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 The Hearing Officer's Unsupported Statement that the Parties' Mistaken Belief Had a "Material Effect" on the Agreed Exchange of Performance is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . 66

E.

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F.

Even Assuming the Parties Were Mistaken About the Existence of Minerals, the Hearing Officer's Conclusion that the Claimants Should Not Bear the Risk of Any Mutual Mistake is Clearly Erroneous . . . . . . . . . . . . . . . . . . . . . . . . . 68 The Doctrine of Mutual Mistake is Not Responsive to the Terms of S. 794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

G.

XI.

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

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TABLE OF AUTHORITIES FEDERAL CASES A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 28 Acuna v. United States, 1 Cl. Ct. 270 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Awtry v. United States, 684 F.2d 896 (Ct. Cl. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Baker v. Penn Mutual Life Ins. Co., 788 F.2d 650 (10th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Banfi Products Corp. v. United States, 40 Fed. Cl. 107 (1997), aff'd as modified, 41 Fed. Cl. 581 (1998) (Cong. Ref.) . . . 24, 25 Bellamy v. United States, 7 Cl. Ct. 720 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 14 Benson v. United States, 141 Ct. Cl. 273 (1958) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Blacklock v. United States, 208 U.S. 75 (1908) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 United States v. 53 1/4 Acres of Land, More or Less, in Borough of Brooklyn, 176 F.2d 255 (2d Cir. 1949) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 C.V. v. United States, 61 Fed. Cl. 55 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29 Cayuga Indian Nation of N.Y. v. Pataki, 83 F.Supp.2d 318 (N.D.N.Y. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Cent. Freight Lines, Inc. v. N.L.R.B., 653 F.2d 1023 (5th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Colorado Coal & Iron Co. v. United States, 123 U.S. 307 (1887) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

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Dairyland Power Coop. v. United States, 16 F.3d 1197 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53, 55, 65-66 Emerald Maint., Inc. v. United States, 925 F.2d 1425 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Eurell v. United States, 566 F.2d 1146 (Ct. Cl. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Flippin Materials Co. v. United States, 160 Ct. Cl. 357 (1963) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Ford v. United States, 116 U.S. 213 (1886) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Grymes v. Sanders, 93 U.S. 55 (1876) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Harrison v. Phillips, 185 F.Supp. 204 (S.D. Tex. 1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Hart v. United States, 58 Ct. Cl. 518 (1923) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Higginson v. United States, 384 F.2d 504 (6th Cir. 1967), cert. denied, 390 U.S. 947 (1968) . . . . . . . . . . . . 15, 16, 66 Highsmith v. SW Med. Found., 116 F.Supp. 958 (D. C. Tex. 1953) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Idaho v. Wright, 497 U.S. 805 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 INSLAW, Inc. v. United States, 39 Fed. Cl. 307 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22-24 JANA, Inc. v. United States, 936 F.2d 1265 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Kanehl v. United States, 38 Fed. Cl. 89 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 28-29, 32 Kanehl v. United States, 40 Fed. Cl. 762 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 24 vii

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Kerr-McGee Corp. v. United States, 36 Fed. Cl. 776 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23-24 Kirby Forest Indus., Inc. v. United States, 467 U.S. 1 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 LaCoste v. United States, 9 Cl. Ct. 313 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Land Grantors v. United States, 64 Fed. Cl. 661 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Land Grantors v. United States, 69 Fed. Cl. 435 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 59 Land Grantors v. United States, 74 Fed. Cl. 518 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Land Grantors v. United States, 77 Fed. Cl. 686 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Land Grantors v. United States, 81 Fed. Cl. 580 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Martin v. United States, 37 Fed. Cl. 86 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Mason v. United States, 169 F.Supp. 507 (1959) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Murphy v. United States, 222 Ct. Cl. 559 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Nat'l Austl. Bank v. United States, 452 F.3d 1321 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53, 63 Northrop Grumman Corp. v. United States, 47 Fed. Cl. 20 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Office of Personnel Mgmt. v. Richmond, 496 U.S. 414 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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Palumbo v. Ewing, 540 F. Supp. 388 (D. Del. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Paul v. United States, 20 Cl. Ct. 236, aff'd, 21 Cl. Ct. 758 (1990) (Con. Ref.) . . . . . . . . . . . . . . . . . . . . . . . . . 22 Peters v. United States, 408 F.2d 719 (Ct. Cl. 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Philippine Sugar Estates Dev. Co. v. Government of Philippine Islands, 247 U.S. 358 (1918) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Rex Trailer Co. v. United States, 50 U.S. 148 (1956) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Ridgely's Estate v. United States, 180 Ct. Cl. 1220 (1967) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Sac & Fox Indians of Iowa v. Sac & Fox Indians of Okla., 45 Ct. Cl. 287 (1910) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Sea-Gate, Inc. v. United States, 4 Cl. Ct. 25 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Seiden v. Larson, 188 F.2d 661 (D.C. Cir. 1951), cert. denied, 341 U.S. 950 (1951) . . . . . . . . . . . . . . . . . 15 Shu-Hui Chen v. Bouchard, 347 F.3d 1299 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 J.L. Simmons Co. v. United States, 60 Fed. Cl. 388 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Spalding & Son, Inc. v. United States, 28 Fed. Cl. 242 (1993) (Cong. Ref.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Spezzaferro v. F.A.A., 807 F.2d 169 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 United States v. Miller, 317 U.S. 369 (1943) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 United States v. Sowards, 370 F.2d 87 (10th Cir. 1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 ix

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West Virginia v. United States, 37 Ct. Cl. 201 (1902) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Widmayer v. United States, 42 Ct. Cl. 519 (1907) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 STATE CASES Allied Chem. Corp. v. Union County Bd. of Supervisors, 511 S.W.2d 196 (Ct. App. Ky. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Bennett v. Shinoda Floral, Inc., 739 P.2d 648 (Wash. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Columbia Basin Fitness Club v. TC Investments, 98 Wash. App. 1018, 1999 WL 1080343 (Wash. App. 1999) . . . . . . . . . . . . . . . . . . . . . 71 Finch v. Carlton, 524 P.2d 898 (Wash. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Haag v. State Bd. of Univ. & School Lands, 219 N.W.2d 121 (N.D. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Pendelton v. Witcoski, 836 So.2d 1025 (Fla. Dist. Ct. App. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Wood v. Boynton, 64 Wis. 265 (1885) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 FEDERAL STATUTES 5 U.S.C. § 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 28 U.S.C. § 1346(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 28 U.S.C. § 1491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-20 28 U.S.C. § 2503(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 28 U.S.C. § 2509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 21-23, 28 40 U.S.C. § 258a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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40 U.S.C. § 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 40 U.S.C. § 3114(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 40 Stat. 241 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 46 Stat. 1191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 58 Stat. 765 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 14 62 Stat. 1196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Pub. L. No. 692 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 FEDERAL RULES Fed. R. Evid. 807 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38-42 OTHER MATERIALS 125 Cong. Rec. 166 (Nov. 27, 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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ATTACHMENT LIST1/ Attachment A B Description Summary of Dates on Petitions in Condemnation and Declarations of Taking Documents cited to support finding that "numerous requests/petitions were made by the former landowners to repurchase their land after World War II ended" (Land Grantors I, n.52) Documents cited to support finding "there was considerable confusion about what federal office was responsible for decisions about disposal of Camp Breckinridge that was caused by the Government" (Land Grantors I, n.53) Affidavits cited to support finding "many of the landowners entered into Contracts with . . . the apparent understanding that they could repurchase their properties after World War II was concluded" (Land Grantors I, n.36) Deposition transcripts cited to support finding "many of the landowners entered into Contracts with . . . the apparent understanding that they could repurchase their properties after World War II was concluded" (Land Grantors I, n.35) Discovery responses cited to support finding "many of the landowners entered into Contracts with . . . the apparent understanding that they could repurchase their properties after World War II was concluded" (Land Grantors I, n.37) Different tracts relevant to finding about repurchase promises Affidavits cited to support finding that parties mistakenly believed there were no minerals underlying the Breckinridge Properties (Land Grantors I, n.44) Deposition transcripts cited to support finding the parties mistakenly believed there were no minerals underlying the Breckinridge Properties (Land Grantors I, n.44) Discovery responses cited to support finding that parties mistakenly believed there were no minerals underlying the Breckinridge Properties (Land Grantors I, n.44) Different tracts relevant to finding about mutual mistake

C

D

E

F

G H I

J

K

In support of key findings, the Hearing Officer's Reports cite numerous trial exhibits, often in string cites in footnotes. Attachments A through K summarize the relevant information contained in those documents. Claimants' Trial Exhibits are referred to as "CX-#", United States' Trial Exhibits are referred to as "DX-#" and Joint Trial Exhibits are referred to as "JX-#." xii

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MEMORANDUM I. Summary of Argument Senate Bill 794, 103d Cong. (1993) ("S. 794"), directs this Court to investigate the legal and equitable claims of certain individuals (or if deceased, their heirs), who sold property in Henderson, Union, and Webster Counties, Kentucky, to the United States for the establishment of Camp Breckinridge, a military training installation. S. 794 limits relief to those former landowners who were: (1) (2) promised they would be given priority to repurchase land sold by them if sold by the United States Government; and paid less than reasonable value due in part to the refusal of the United States Government to compensate the owners for mineral, oil and gas rights.

S. 794, Sec. 2.2/ The Senate directed the Chief Judge to "proceed . . . in accordance with the provisions of sections 1492 and 2509 of title 28, United States Code, and report back to the Senate, at the earliest practicable date, giving such findings of fact and conclusions that are sufficient to inform Congress of the amount, if any, legally or equitably due from the United States to the claimants individually." S. Res. 98. The Hearing Officer's ("Officer's") conclusion that Claimants are "entitled to monetary relief from Congress arising out of an equitable claim," Land Grantors v. United States, 81 Fed. Cl. 580, 601 (2008) ("Land Grantors VI" or "Final Report"), is based on clearly erroneous

2/

By its clear terms, S. 794 requires Claimants to show both requirements. In addition to the discussion below, Claimants presented no evidence that the United States refused to compensate any landowner for minerals. Consequently, Claimants did not carry their burden of proof. See Trial Tr. at 198:12-13 (CLAIMANTS' COUNSEL: "We've now found from discovery that the minerals were paid for."). 1

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factual findings and legal analyses.3/ As discussed below, the Review Panel should reject the Officer's Reports,4/ and issue a Panel Report concluding that any award would be a gratuity and recommending no relief to the Claimants. Although the Final Report contains numerous errors, this brief focuses on the following issues.5/ First, the Reports are not based on Claimant-specific evidence and lack any Claimantspecific analysis of liability or damages. The conclusions are instead based on the allegations of a small number of individuals, and the Officer's unsupported assumption of generalized harm. The Final Report compounds these problems by allowing as yet unnamed individuals to join as Claimants, and by certifying a new class action. As a result of these decisions, no one knows who the Claimants are, which Claimants the Officer believes may be entitled to equitable relief, or how much any individual Claimant is due. See discussion infra § V. The Review Panel should reject the Final Report, therefore, because it lacks information "sufficient to inform

The Officer did not decide whether Claimants were entitled to relief under a legal claim. See id. ("That issue [whether the statute of limitations should be lifted] does not need resolution in this reference. . . ."). See 28 U.S.C. § 2509(c) (directing the Officer to determine the facts "bearing upon the question whether the bar of any statute of limitation should be removed, or facts claimed to excuse the claimant for not having resorted to any established legal remedy").
4/

3/

The Officer issued a Final Report and several interim reports. See id. at 582 n.1 (incorporating the interim reports into the Final Report). Where appropriate, all of the Officer's reports are termed "Reports." Among other issues, the United States also disagrees with the Officer's calculation of damages, which is based, in part, on Claimants' submissions, submitted over the United States' objection after trial. The Officer's conclusion that the United States' sales of the Breckinridge Properties resulted in unjust enrichment is unsupported. In addition, the Officer's accusation that the "Government destroyed and/or misplaced many of the documents that would verify the proper amount of restitution owed to Claimants, even during the period that this reference was pending," Land Grantors VI, 81 Fed. Cl. at 583, is offered without citation or support, and is clearly erroneous. 2
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Congress of the amount . . . due from the United States to the claimants individually." S. Res. 98. Second, the Officer's conclusion that "the doctrine of laches is not relevant," Land Grantors v. United States, 64 Fed. Cl. 661, 716 (2005) ("Land Grantors I" or "First Interim Report"), is clearly erroneous. See discussion infra § VI. As discussed below, the Officer's findings relevant to this issue are either not supported by the documents cited or are inapplicable to the laches defense. On this basis alone, the Review Panel should recommend that any monetary award would be a gratuity. Third, regarding Section 2(1) of S. 794, the Officer concluded that the "landowners entered into Contracts with the Government in 1942-1944 with the apparent understanding that they could repurchase their properties after World War II was concluded. . . ." Land Grantors I, 64 Fed. Cl. at 702. The Officer's finding is based on inadmissible hearsay statements, which were generated decades after the relevant events. These self-serving allegations are contradicted by thousands of pages of historical documents. The Review Panel should overrule the Officer's admission of these hearsay documents, see discussion infra § VII, and reject the Officer's conclusion about repurchase promises. See discussion infra § VIII. Fourth, regarding Section 2(2) of S. 794, the Officer concluded that all landowners and all government agents mistakenly believed, at the time of the United States' acquisition, that there were no minerals underlying these properties. On this basis, the Officer concluded that the doctrine of mutual mistake applied, and recommended that Congress appropriate a multi-million dollar award for Claimants' behalf. See discussion infra §§ IX-X. The Review Panel should reject the Officer's conclusion because it is unsupported by the law and is based on clearly

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erroneous factual findings. A memorandum in support of these exceptions follows. II. Factual Background A. The United States' Acquisition of the Breckinridge Properties

Even prior to Pearl Harbor, the United States began preparations for possible war by constructing military camps for the training and housing of federal troops. Due to its inland location, level land suitable for training maneuvers, and access to rail, road and river transportation, western Kentucky was identified by the War Department in early 1941 as a suitable location for an Army training camp. See DX-182 at DOJ1817 (expert report of Dr. Johnson); DX-183 at DOJ2761 to -62 (expert report of Dr. Brigham). Planning and surveying for such a camp in Henderson, Union and Webster Counties, Kentucky (the "Tri-County Area") began in August 1941. See DX-182 at DOJ1817; DX-183 at DOJ2773. To build Camp Breckinridge, the United States acquired a total of 491 tracts of land ­ 365 by direct condemnation ("Condemned Tracts") and 126 by sale ("Purchased Tracts") ­ between 1942 and 1944 (collectively, these properties are hereinafter called the "Breckinridge Properties"). Most of the landowners used their properties for farming. Prior to the United States' acquisition, owners of 271 of the 491 Breckinridge Properties (55 percent) had entered into oil and gas leases with third parties; the United States also acquired these mineral leases. See DX-537 (summary document, showing 30 percent of the Purchased Tracts had a mineral lease at the time of acquisition); DX-204 (summary document, showing 61 percent of the Condemned Tracts had a mineral lease at the time of acquisition). For several tracts, the surface estate was owned by one individual and the minerals were owned by a different individual; in those cases, the United

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States acquired both interests from the respective owners. See, e.g., JX-322 at CHI-020-E0820017 to -18 (Final Judgment for Tract E-82, showing coal rights were separately owned and separately acquired). The per acre value paid by the United States for the Breckinridge Properties varied widely (from $10 per acre, to as high as $22,795 per acre), depending on the size, shape and characteristics of the individual tract. See DX-204; DX-537. The Act of July 2, 1917, 40 Stat. 241 (codified as amended at 50 U.S.C. § 171) (repealed 1956) ("War Powers Act"), provided authority for the United States' acquisition of the Breckinridge Properties. See, e.g., JX-263A at CON1705 to -06. Proceedings under the War Powers Act began when the Secretary of War filed with the Federal District Court for the Western District of Kentucky ("District Court") a Petition in Condemnation, which identified the location of the properties the United States intended to acquire. See id. (sample Petition in Condemnation). The United States filed five Petitions in Condemnation between February 1942 and May 1944. See Attach. A. The Petitions in Condemnation were jurisdictional prerequisites to permit the District Court to hear any necessary further proceedings. See 6 Julius L. Sackman, Nichols on Eminent Domain § 26A.02[1] (rev. 3d ed. 2005). The War Department's filings of the Petitions in Condemnation did not transfer ownership of the Breckinridge Properties to the United States. Either before ­ or sometimes after ­ the United States filed a Petition in Condemnation, government agents negotiated with landowners to secure an option agreement. See DX-183 at DOJ2777 to -78. With an option agreement, the United States paid for the right to purchase a property at a predetermined price within a specified period of time. The United States signed purchase options for 126 tracts of land. See id. These Purchased Tracts were, in the language of S. 794, "sold . . . under threat of

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condemnation." Owners of 365 Condemned Tracts declined to sign an option agreement, and the United States condemned these properties. See DX-204 (detailed information about the Condemned Tracts).6/ The War Powers Act did not prescribe the manner in which the United States might exercise its authority to condemn the properties identified in the Petitions in Condemnation if condemnation was necessary. In the case of Camp Breckinridge, the United States used the legal authority provided by the Declaration of Takings Act, 40 U.S.C. § 258a (current version at 40 U.S.C. § 3114 (2006)). See JX-206A (example). The United States invoked this authority by filing Declarations of Taking, which identified the specific tracts being condemned, and set forth the United States' estimate of compensation for each tract. See Attach. A (identifying the Declarations of Taking); JX-206A (example). At the same time it filed a Declaration of Taking, the United States deposited the just compensation for each Condemned Tract, based on the United States' appraisal, into the District Court's registry "for the use and benefit of the persons entitled thereto." JX-206A at CON0015. Title to these properties vested in the United States the moment the government filed a Declaration of Taking and deposited the just compensation. See 40 U.S.C. § 258a; 40 U.S.C. § 3114(b) (current version). The owner of a Condemned Tract could withdraw the full amount of the deposit immediately. See, e.g., United States v. Miller, 317 U.S. 369, 381 (1943); United States v. 53 1/4 Acres of Land, More or Less in Borough of Brooklyn, 176 F.2d 255, 258 (2d Cir. 1949). Once the United States filed a Declaration of Taking, the District Court, in subsequent judicial proceedings, ascertained the exact value of the

6/

Nine properties, whose owners signed option agreements but apparently refused to sell at the agreed-upon price, were acquired by condemnation. See DX-204. 6

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land, and awarded the difference, if any, between the adjudicated value and the estimated amount the United States had deposited with the District Court, plus interest on the difference. See Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 5 (1984). At the time of the acquisition, interest on the difference was calculated at 6 percent simple interest. B. Documents Generated at or Near the Time of Acquisition

The trial record includes thousands of pages of sales and condemnation documents (the "Acquisition Documents"), correspondence to and from landowners, and newspaper articles, all generated at or near the time of the United States' acquisition of the Breckinridge Properties. In the entire historical record, there is no mention of repurchase promises and no mention of the United States' refusal to compensate landowners for subsurface minerals. A summary of this record is provided below. 1. The Acquisition Documents i. The Documents Related to the Purchased Properties

The trial record contains thousands of pages of Acquisition Documents related to those Purchased Tracts that correlate to the claims raised by those individuals who had been identified as Claimants at the time of trial. See JX-538 to JX-614. These documents clearly and unambiguously show that the landowners intentionally conveyed, and the United States intentionally acquired, the full fee simple absolute in the Breckinridge Properties. Nearly all of the Purchased Tract owners entered into option agreements with the United States. See, e.g., JX-541 at CHI-002-A015-0016 to -19 (representative example). The option agreement indicated the landowner's intent to convey to the United States "the land, with the buildings, improvements and equipment thereon and all rights and appurtenances thereto

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[followed by a legal description]." Id. at CHI-002-A015-0016. The option agreements stated that the landowner agreed to convey the property "in fee simple, free from all encumbrances." Id. at CHI-002-A015-0017.7/ For each of the Purchase Tracts, a representative of the United States signed a Certificate of Inspection and Possession ("Certificate") at the time of acquisition. The Certificate included several statements related to the United States' inspection of the property, and often included the following language: That to the best of my information and belief after actual and diligent inquiry and physical inspection of said premises there is no evidence whatever of any vested or accrued water rights for mining, agricultural, manufacturing or other purposes . . . nor any exploration or operations whatever for the development of coal, oil, gas or other minerals on said lands. . . . Id. at CHI-002-A015-0015. Each landowner signed an Affidavit of Vendor ("Affidavit") at the time of acquisition. Similar to the Certificate, the Affidavit generally included language related to ongoing mining operations. For Tract No. A-15, for example, the landowners stated, "[t]hat there are no explorations or rentals being paid whatever for the development of coal, oil, gas or other minerals on said lands [and] no exploration for oil, gas or minerals are being conducted on said premises at this time, and that there are no oil wells on said premises." Id. at CHI-002-A0150036. Some landowners redacted the above-quoted language when they signed the Affidavit, in order to fit the particular circumstances relevant to their properties. See JX-605 at CHI-046E667-0024 (showing redacted language in Affidavit for Tract No. E-667, which had a mineral
7/

In addition, the landowner granted the "right of immediate occupancy and use of the land hereinabove described, for any purpose whatsoever, from and after acceptance by the United States of this offer, until such time as said land is conveyed to the United States by the [former owner] hereinabove provided." JX-541 at CHI-002-A015-0018. 8

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lease at the time of the United States' acquisition). On the date of closing, the landowners conveyed a Warranty Deed to the United States, and signed a receipt. The Warranty Deed showed that the landowner sold "to [the United States], its successors and assigns forever, the following described real estate. . . ." JX-541 at CHI-002-A015-0009 to -10 (describing the conveyance as a "quit-claim" of "all of their right, title and interest, if any, in and to any and all of the property adjoining and abutting the above described property . . . TO HAVE AND TO HOLD . . . to the [United States], its successors and assigns forever, with a covenant of `General Warranty'"). The receipt stated that the payment was "in full satisfaction and discharge of the interest of the undersigned in the premises conveyed." Id. at CHI-002-A015-0013. ii. The Documents Related to the Condemned Properties

The trial record also includes thousands of pages of Acquisition Documents related to the Condemned Tracts. See JX-205 to JX-536-H. Once the United States filed a Declaration of Taking with respect to a particular Condemned Tract, the District Court appointed three independent appraisers (identified as "Commissioners") to reappraise the fee simple interest in the property. See, e.g., DX-615 at DOJ4794 (Order Appointing Commissioners for Civil No. 77); id. at DOJ4912 to -15 (Commissioners' report for value of "the land and any and all improvements thereon or interest therein" for Tract No. E-27). The United States always agreed to pay the higher of its own estimate and the independently appraised value. See Def.'s PostTrial Mem. at Tab 4. Many landowners were represented by legal counsel during the condemnation proceedings, and several landowners filed exceptions to the Commissioners' report, and took their case to a jury trial. E.g., JX-514 at CON4118 (exceptions for Tract No. E-

9

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626); id. at CON4128 to -31 (jury award for same tract). Like the Acquisition Documents for the Purchased Tracts, the Acquisition Documents for the Condemned Tracts do not support a finding that any landowner received a repurchase promise or that the United States refused to compensate any landowner for his mineral rights. Rather, these documents show that the landowners knowingly conveyed their full fee simple interest, with no repurchase right or reservation retained. See id. at CON4137 to -38 (Final and Deficiency Judgment, stating that the land is "heretofore condemned for the use and benefit of the United States of America, and the fee simple absolute title thereto . . . was vested in the United States of America by Order and Preliminary Judgment of Condemnation heretofore entered," and ordering "the vesting of title as aforesaid in the United States of America be confirmed and all the right, title and interest of all other persons in or to said land is hereby divested."). 2. Contemporaneous Correspondence

The record is devoid of any evidence generated at or near the time of the United States' acquisition ­ no letter, no diary entry or calendar notation, no handwritten note, no confirmation letter from any of the several attorneys who represented landowners8/ ­ supporting Claimants' allegations. Out of the thousands of people effected by the Breckinridge acquisitions, there is not a single piece of paper generated at or near the time of acquisition that suggests any landowner received a promise that he could repurchase his property after the war, or that the United States refused to pay for mineral rights. Furthermore, there is no evidence that any

The pleadings demonstrate that a majority of the condemnees hired the law firm of King and Flournoy for legal assistance in the condemnation efforts. King and Flournoy was a local firm, which had an expertise in oil and gas matters as well as real estate transactions. See DX-49. 10

8/

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landowner complained, at the end of the war, that he had sold his property pursuant to a verbal repurchase promise. See Trial Tr. at 172:8-15 (HEARING OFFICER: "Do we have any evidence in the record of letters from people to the government saying remember me, you told me the following, and now I'm back and I want to buy my land?" CLAIMANTS' COUNSEL: "Well, in the record right now, no, we don't have any letters. We do have people who obviously took that position in the sixties, but it has been taken down through the years.").9/ Although there are no contemporaneous documents to support Claimants' allegations, there are several documents that contradict those allegations (and several other documents that explain how the rumors of repurchase promises likely came into being). For example, the record includes an April 1942 petition addressed to President Roosevelt, in which a group of landowners complained about the acquisition of their properties. See DX-69. The petition does not mention that any landowner received a repurchase promise or that the United States refused to pay for mineral rights. See id. The United States immediately investigated the protest, and concluded that the prices offered to the landowners were "liberal and in line with present economic conditions in the community." DX-71. President Roosevelt personally informed the landowners that if they did not want to accept the United States' offer, they were free to proceed through condemnation. See id. If Claimants' allegations were true, it is only logical that some mention would be made in that petition. The few 1940-era letters in the record do not support the requirements set forth in S. 794. For example, one set of correspondence shows that the United States Attorney and an attorney
9/

Among the landowners were a Union County judge, the mayor of Morganfield, and several practicing attorneys. DX-182 at DOJ1870. Surely at least one of these individuals would have demanded legal documentation for an oral promise made by a government negotiator had such a promise been made. 11

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representing two landowners discussed the handling of mineral leases on the landowners' properties, and demonstrates that the landowners had no expectation of repurchase. See DX-618 (landowners' attorney stating that at the time the landowners signed the option agreement, it was understood the owners would "convey to the Government a fee simple interest"); DX-634 (discussing handling of mineral lease on the property). After the war, a few individuals inquired about the Breckinridge Properties; however, none of the inquiries mention anything about a repurchase promise. One former owner's letter, which was written in 1944, states that he "offered to let the Government use it for the duration [of the war], but they could not see it my way so I am now asking the Government for the same right of having the first option on this land." DX-91 (emphasis added). In June 1951, an attorney representing former owners, inquired as to his clients' rights to the property, but did not mention a repurchase promise. DX-149 at DOJ1507.10/ Similarly, a 1957 administrative protest to a proposed oil and gas lease does not mention any verbal repurchase promise, and instead states the former landowners merely hoped that "Congress will or should pass an act . . . that [they] be given a chance to repurchase [their land] from the Government." DX-158 at DOJ1527. 3. Historical Newspaper Articles

The record includes hundreds of contemporaneous newspaper articles about the land acquisitions. See DX-182, DX-183. These articles contain a great deal of information, detailing specific events, as well as community sentiment and local rumors. The newspaper articles do not contain even a single suggestion of any repurchase promise or a refusal by the United States to
10/

The attorney's inquiry seems based solely on the temporary priority scheme in place from 1944 to 1949. See DX-150 at DOJ1508 (response letter). As discussed below, in recent years, several heirs may have confused the temporary priority scheme with a perceived right to repurchase their properties. See discussion infra § II(C)(1). 12

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pay for mineral rights. See Trial Tr. at 248:23-25 (Dr. Johnson stating no evidence of repurchase promises); id. at 249:1-4 (Dr. Johnson stating no suggestion of a refusal to pay for minerals); id. at 457:13-18 (Dr. Brigham stating no evidence of repurchase promises); id. at 457:19-23 (Dr. Brigham stating no evidence of refusal to pay for minerals).11/ It is important to note that several articles did discuss the landowners' ability to repurchase their movable property (including residences) from the United States at a salvage price (10 percent of its appraised value).12/ In recent years, former landowners and their heirs may have confused that right to repurchase movable property at a discount, with a perceived right to repurchase their property for 10 percent of its sales price. C. The United States' Sale of the Breckinridge Properties 1. 1944 and 1949 Property Surplus Acts

Congress passed the Surplus Property Act of 1944, ch. 479, 58 Stat. 765 (originally codified at 50 U.S.C. App. §§ 1611-46 (Supp. IV 1941-1945)) (repealed 1949) ("1944 Act") to facilitate the disposal of unneeded surplus property that had been acquired by the War Department. See Bellamy v. United States, 7 Cl. Ct. 720, 721-23 (1985); Rex Trailer Co. v. United States, 350 U.S. 148, 149-50 (1956). Previously, the War Department could not dispose of property without Congressional authorization. See Act of Feb. 20, 1931, Pub. L. No. 692, 46 Stat. 1191 (formerly codified at 10 U.S.C. § 1354). The 1944 Act conferred on former property

Several historical newspaper articles openly discussed mineral leases on the Breckinridge Properties, recounting that "[t]he government did not want to have any property encumbered by leases and paid operators an amount equivalent to the sum the oil firms had invested in the property, according to reports." DX-183 at DOJ2082 (February 26, 1942 article).
12/

11/

See, e.g., DX-183 at DOJ2144 (August 6, 1942 article stating that "[p]reference will be given the former owners of the property" to repurchase buildings on 45 farms). 13

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owners a temporary priority preference (after federal agencies and states) to repurchase their land when, and if, the United States declared the land surplus. See 1944 Act, § 23(d)(1)(A). The priority system was not enacted until after the United States had acquired all of the Purchased Tracts and filed all of the Declarations of Taking. Hence, the 1944 Act was not in place during acquisitions of any Breckinridge Properties. In addition, Congress always intended that the 1944 Act's priority system would be a temporary gratuity ­ by its own terms, the priority system expired three years after the cessation of hostilities in World War II. See 1944 Act, § 38, 58 Stat. 765 ("Unless extended by law, this Act shall expire at the end of three years following the date of the cessation of hostilities in the present war."); Harrison v. Phillips, 185 F.Supp. 204, 207 (S.D. Tex. 1960), aff'd, 289 F.2d 927 (5th Cir. 1961) ("Congress intended to give no more than a temporary privilege of repurchase in the 1944 Act."). Congress expressly repealed virtually all of the 1944 Act, including the temporary priority scheme, when it enacted the Federal Property and Administrative Services Act of 1949, ch. 288, § 502(a)(1), 63 Stat. 377, 399 ("1949 Act"), and eliminated all priorities the 1944 Act had created after the set date of December 31, 1949. See Bellamy, 7 Cl. Ct. at 724; see also Supplemental Independent Offices Appropriation Act of 1949, 62 Stat. 1196, 1203 (1948) (reaffirming the limited nature of the priority gratuity by declaring that the 1944 Act would not apply "to property of the Government which has not been declared surplus under the terms of such Act as of the date of enactment hereof [February 28, 1949]"). There is a high likelihood that many heirs were confused by the 1944 Act, believing either that it gave former landowners compensable rights of repurchase or that landowners had relied on the priority scheme in selling their properties. There is no support for either of these

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beliefs. Several courts, including the Court of Claims, have rejected claims based on the 1944 Act on the ground that the priority scheme was "in the nature of a gratuity." Mason v. United States, 169 F.Supp. 507, 510 (1959); Seiden v. Larson, 188 F.2d 661 (D.C. Cir. 1951), cert. denied, 341 U.S. 950 (1951) (1944 Act did not create "a statutory privilege protected by judicial remedies"); Highsmith v. SW Med. Found., 116 F.Supp. 958, 959 (D. C. Tex. 1953) (plaintiff's right to repurchase expired after the 1944 Act's priority system was repealed in 1949); Higginson v. United States, 384 F.2d 504, 506 (6th Cir. 1967) ("Obviously no right could accrue to plaintiff thereunder" because 1944 Act was repealed 13 years before Camp Breckinridge was declared surplus."), cert. denied, 390 U.S. 947 (1968). In addition, former landowners could not have relied on the 1944 Act's priority scheme because the 1944 Act was not in place during the United States' acquisition of the Breckinridge Properties, despite some individuals' apparent belief to the contrary.13/ 2. Sale of the Breckinridge Properties

The General Services Administration ("GSA") declared the Breckinridge Properties to be surplus on February 7, 1963. See id. After transferring or selling some of the land to federal, state or local government agencies, GSA auctioned off the remaining acreage to the public between 1965 and 1969. See DX-182 at DOJ1862 to -65; DX-183 at DOJ2789. Because the 1944 Act was no longer in effect, former landowners were not accorded any priority right during

Even the drafters of S. 794 apparently believed that a "major reason" former landowners did not fight the condemnation appraisal in court "involved the Surplus Property Acts of 1939 and 1944." CX-269 at Ex. 3 (document page) 2 (emphasis added); see also 125 Cong. Rec. 166 (Nov. 27, 1979) at (unnumbered) 3 ("The Surplus Property Act of 1939 [gave] original land owners the first option to repurchase their property at a price no greater than the price paid by the government, less damages"). There was no 1939 Act, however. These faulty impressions appear to be based on nothing more than false memories about the 1944 Act. 15

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the auction. D. Higginson Litigation

On April 15, 1965, Cyrus Higginson, a former owner, filed a class action lawsuit against the United States on behalf of himself and all other former landowners. See Higginson, 384 F.2d at 504. The Higginson lawsuit sought to recover the Breckinridge Properties pursuant to the 1944 Act and, in the alternative, sought just compensation under the "Little Tucker Act," 28 U.S.C. § 1346(a)(2). See id. at 506. This lawsuit ­ filed approximately twenty years after World War II ended ­ was the first time any former landowner attempted to reacquire a Breckinridge Property through the legal process, and it appears to be the first time any former landowner alleged that he had received a verbal repurchase promise. The Sixth Circuit affirmed the rejection of the Higginson plaintiffs' claims, stating the United States acquired the "fee simple title" to the Condemned Tracts, and the "government's title to the land acquired by negotiated purchases vested some 20-30 years ago. This title cannot now be disputed under any accepted property theory." Id. III. Procedural Background A. Pre-Trial Proceedings

The Senate transmitted S. 794 to this Court on October 19, 1993. On January 12, 1994, Claimants filed their initial complaint (Docket No. 2). The original Officer (Judge Merow) notified potential claimants of the filing and gave them an opportunity to join. See Order, dated Jan. 24, 1995 (Docket No. 22). Claimants filed a First Amended Complaint on September 22, 1995, listing 1,011 individuals who wished to participate in these proceedings (Docket No. 25). On the same date, Claimants filed a Motion to Certify a Class (Docket No. 26), which the

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Officer denied in December 1997. See Order, dated Dec. 23, 1997 (Docket No. 42). Claimants' First Amended Complaint, like Claimants' original complaint, alleged eight counts.14/ In November 1998, the Officer (1) dismissed Claims 2 and 5 in their entirety as well as the pertinent allegations of Claim 7; and (2) dismissed any individual whose claims related to a Condemned Tract. See Order, dated Nov. 24, 1998, at 9 (Docket No. 65) ("November 1998 Order"). Claimants requested a stay of proceedings on February 26, 1999, in order to determine which individuals remained in this litigation after the Officer's November 1998 Order, and to develop a settlement position (Docket No. 69). Claimants' counsel eventually determined that the remaining Claimants correlated to 85 different Purchased Tracts. See CX-66A. Claimants eventually developed their settlement position, but the parties were unable to resolve their differences of opinion. Judge Braden, who was appointed as Hearing Officer on August 15, 2003, conducted a trial with respect to those 85 Purchased Tracts on September 8-10 and November 22-23, 2004. B. The First Interim Report

After trial, the Officer asked the parties to submit documents related to the disposal of the Breckinridge Properties in the mid-1960s. The United States provided responsive documents to the Officer on March 7, 2005. (Docket No. 162). On March 23, 2005, the Officer requested additional information from the United States related to the amount the "Government was paid in The eight counts were: (1) Condemnation of Real Property Interests ­ Just Compensation Claim; (2) Condemnation of Real Property Interests ­ Alternative Claims; (3) Condemnation of Sub-surface Mineral Interests ­ Just Compensation Claim; (4) Condemnation of Sub-surface Mineral Interests ­ Due Process Claim; (5) Vested Right of Re-purchase ­ Due Process Claim; (6) Loss of Agricultural Products ­ Just Compensation Claim; (7) Loss of Agricultural Products ­ Due Process Claim; and (8) General Equity Claim. Claimants did not allege a claim of mutual mistake until 2005, more than a year after trial ended, following completion of post-trial briefing and the issuance of the First Interim Report. 17
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1967 for coal rights on Tracts 1, 7A, and 7B." Land Grantors I, 64 Fed. Cl. at 695. The United States filed a motion to limit review to the trial record (Docket No. 164), which the Officer denied (Docket No. 165). The United States provided the requested information on March 31, 2005. (Docket No. 169). The Officer issued the First Interim Report on April 1, 2005. See Land Grantors I, 64 Fed. Cl. at 664. Among other conclusions, Land Grantors I dismissed Counts 6 and 7 of the First Amended Complaint for failure to prosecute, and held that "Plaintiffs' constitutional claims are not ripe for adjudication." See id. at 717. The Officer also articulated a new basis for liability ­ mutual mistake ­ which was not mentioned in Claimants' First Amended Complaint, not briefed by the parties, and not litigated at trial. See Land Grantors v. United States, 69 Fed. Cl. 435, 437 n.1 (2005) ("Land Grantors II") ("As the Government correctly observed, `the doctrine of mutual mistake was identified sua sponte by the Officer for the first time after post-trial briefing has been completed.'") (citation omitted). According to the Officer, the 1942-1944 sales Contracts15/ were void because they were based on a mutual mistake that "no coal, gas, oil, or other mineral deposits existed under the condemned properties that would support exploration or operations at the time of sale." Land Grantors I, 64 Fed. Cl. at 703. The Officer also directed the parties to "show cause why the court should not enter a final judgment, pursuant to 28 U.S.C. § 1491(a)(1), and stay issuance of a Final Report, pursuant to S. 794." Id. at 718. The parties responded to the show cause order in October 2005. See Def.'s Resp. to the Ct.'s Show Cause Order (Docket No. 181); Pls.' Mem. on Order to Show Cause

The Officer defined "Contracts" to be "an option for purchase of land; a certificate of inspection and possession; an affidavit of the vendor; a warranty deed; and a receipt for the United States Treasurer's check." Land Grantors I, 64 Fed. Cl. at 702 n.38. 18

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Regarding Entry of Final Judgment (Docket No. 182). Among other arguments, the United States opposed the Officer's proposed conversion from a Congressional Reference matter to a Tucker Act claim because Claimants had never before alleged jurisdiction under 28 U.S.C. § 1491(a)(1), had never argued that any legal claim was timely, and had explicitly waived all legal claims. See, e.g., Pls.' Objections to the Def.'s Pre-Trial Filings (Docket No. 135) at 3 ("The Claimants will not seek to establish a `legal claim' at trial."); Trial Tr. at 164:17 (Claimants' Counsel: "We do not have a legal claim in this case.").16/ C. The Final Report

On October 3, 2005, approximately thirteen months after trial, Claimants ­ for the first time ever in this litigation ­ asserted jurisdiction under 28 U.S.C. § 1491, and alleged a new claim of mutual mistake. See Second Am. Compl. ¶¶ 32-40 (Docket No. 183). The United States opposed the filing. See Def.'s Opp'n to Filing of Claimants' Proposed Second Am. Compl., filed Oct. 18, 2005 (Docket No. 185). In December 2005, the Officer requested additional briefing on whether it should sua sponte reconsider the 1997 decision on class certification. (Docket No. 192). The United States opposed reconsideration. See Def.'s Resp. to Ct.'s Dec. 29, 2005 Order (Docket No. 194); see also Def.'s Mot. to Strike Mot. for Recons. (Docket No. 197); Def.'s Reply in Supp. of Def.'s Mot. to Strike (Docket No. 199); Def.'s Opp'n to Claimants' Mot. to Reconsider Class Cert. (Docket No. 207). In June 2006, the Officer reconsidered the 1997 decision, certified an opt-in class, and requested additional briefing on the form of class notice. (Docket No. 211). The parties submitted proposed notices in August 2006.

The Officer erroneously stated that Claimants had pled a Tucker Act claim in their First Amended Complaint. See Land Grantors I, 64 Fed. Cl. at 717-18. Claimants did not allege a Tucker Act claim until 2005, after the Officer directed Claimants to do so. 19

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See Def.'s Mot. to Approve Proposed Class Notice and Proposed Request to Join, dated Aug. 25, 2006 (Docket No. 214); Pls.' Status Report, dated Aug. 25, 2006 (Docket No. 213). On December 14, 2006, the Officer issued a Second Interim Report, Memorandum Opinion, and Order, in which the Officer stated an intention to defer "final disposition in this case until the en banc decision in Kirkendall [v. Dep't of the Army] is issued and final." Land Grantor