UNITED STATES OF AMERICA v. 275.81 ACRES OF LAND, MORE OR LESS, SITUATED IN STONYCREEK TOWNSHIP, SOMERSET COUNTY COMMONWEALTH OF PENNSYLVANIA

Filing 133

ORDER denying 103 Motion in Limine; denying 104 Motion in Limine; denying 105 Motion in Limine; denying 106 Motion in Limine. A Status Conference is scheduled for April 9, 2013, at 12:30 p.m., in Courtroom 3B. Two days prior to this conference, each party is directed to submit a position paper not to exceed five (5) pages in length setting forth its position on a trial by commission versus a trial by jury. Signed by Judge Donetta W. Ambrose on 3/13/2013. (sps)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
United States of America,
Plaintiff,
vs.
275.81 Acres of Land, More or Less,
Situated in Stonycreek Township,
Somerset County, Commonwealth of
Pennsylvania, and Svonavec, Inc.

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Civil Action No. 09-233

Defendant.
AMBROSE, Senior District Judge
OPINION
AND
ORDER OF COURT
The factual and procedural details of this condemnation action are well known to the
parties and I need not repeat them in detail here. In short, the United States of America filed a
Complaint for Condemnation on September 1, 2009, for the taking of property under the power
of eminent domain and for the ascertainment and award of just compensation to the owners and
parties in interest. (Docket No. 1). The subject property consists of 275.81 acres of land owned
at the time of taking by Defendant, Svonavec, Inc., and located in Stonycreek Township,
Somerset County, Pennsylvania. This site includes approximately six acres of land on which
United Airlines Flight 93 crashed on September 11, 2001. The United States acquired a fee
simple estate in the 275.81 acres subject to existing easements and certain rights of third
parties. See Docket No. 1. The public use for which the property was taken was for the
administration, preservation, and development of a Flight 93 National Memorial. Id. Svonavec,
Inc. has requested a jury trial on the issue of just compensation. (Docket No. 21).
Pending are four Motions in Limine. The United States offers the expert testimony of
appraiser Gregory Jones (“Jones”) on the issue of valuation of the subject property. Pending is
1

Defendant’s Motion in Limine seeking to exclude Jones’ proposed testimony on the grounds that
his methodology is unreliable. (Docket No. 104). Defendant offers the expert testimony of
appraiser Randall Bell in support of its valuation of the subject property. The United States has
filed three motions in limine seeking to preclude portions of Bell’s testimony and/or materials on
which Bell relied to support his opinions. (Docket Nos. 103, 105, 106).

The parties have

represented that a hearing is not necessary on these issues. Thus, I base my decision on the
parties’ submissions and attachments thereto. See Oddi v. Ford Motor Co., 234 F.3d 136, 15455 (3d Cir. 2000). For the reasons set forth below, the Motions in Limine are denied.
I. Applicable Standards
A. Daubert Standard and Rule 702
In Daubert, the Supreme Court held that:
[f]aced with a proffer of expert scientific testimony, ... the trial court judge must
determine at the outset ... whether the expert is proposing to testify to (1)
scientific knowledge that (2) will assist the trier of fact to understand or determine
a fact in issue. This entails a preliminary assessment of whether the reasoning
or methodology underlying the testimony is scientifically valid and of whether that
reasoning or methodology properly can be applied to the facts in issue.
Daubert v. Merrell Dow Pharm., Inc. 509 U.S. 579, 592-93 (1993). More recently, in Kumho Tire
Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999), the Supreme Court clarified any confusion
regarding the intended reach of the Daubert decision, by declaring that the trial judge must
perform this “basic gatekeeping obligation” to all expert matters, not just “scientific” matters. In
the Third Circuit, the trial court’s role as a “gatekeeper” announced in Daubert requires proof
that: (1) the proffered witness is qualified as an expert; (2) the expert must testify about matters
requiring scientific, technical, or specialized knowledge; and (3) the expert’s testimony must fit
the facts of the case. In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 741-42 (3d Cir. 1994).
Thus, pursuant to Daubert, the gatekeeping function requires the court to ensure that the expert
testimony is both reliable and relevant. Daubert, 509 U.S. at 589; Kumho Tire Co., 526 U.S. at
147.

2

As to the first requirement - qualification - the Court of Appeals for the Third Circuit has
“eschewed imposing overly rigorous requirements of expertise and [has] been satisfied with
more general qualifications.” Paoli, 35 F.3d at 741. “Rule 702's liberal policy of admissibility
extends to the substantive as well as the formal qualification of experts.” Id. Thus, an expert
can qualify based on a broad range knowledge, skills, of training and experience.
The second inquiry focuses on methodology. The inquiry into methodology is designed
to ensure that an expert’s opinions are based upon “’methods and procedures of science’ rather
than on subjective belief or unsupported speculation.” Id. at 742. Factors used to assess
reliability include whether: (1) the theory or technique can be tested; (2) the theory or technique
has been peer reviewed; (3) there is a high rate of known or potential error; (4) there are
standards of control; (5) the theory is “generally accepted”; (6) there is a sufficient relationship
between the technique and methods which have been established to be reliable; (7) the expert’s
qualifications are sufficient; and (8) the method has been put to non-judicial uses.

See

Magistrini v. One Hour Martinizing Dry Cleaning, 180 F. Supp. 2d 584, 594 (D.N.J. 2002), aff’d,
68 F. App’x 356 (3d Cir. 2003).

“Some courts also consider additional factors relevant in

determining reliability, including: (i) whether the expert’s proposed testimony grows naturally
and directly out of research the expert has conducted independent of the litigation . . . ; (ii)
whether the expert has unjustifiably extrapolated from an accepted premise to an unfounded
conclusion. . . ; (iii) whether the expert has adequately accounted for alternative explanations . .
. ; (iv) whether the expert is being as careful as he would be in his professional work outside of
the litigation context . . . ; and (v) whether the field of expertise asserted by the expert is known
to reach reliable results for the type of opinion proffered by the expert . . . .” Id. at 594-95
(citations omitted); see also Cuffari v. S-B Power Tool Co., 80 F. App=x 749, 751 (3d Cir. 2003)
(AIn short, trial courts should determine whether the expert=s conclusion is based on valid
reasoning and reliable methodology.@).

3

Although this list of factors is lengthy, not each factor will be relevant to every reliability
analysis.

The “test of reliability is ‘flexible.’”

Kumho, 526 U.S. at 141.

According to the

Supreme Court, “Daubert’s list of specific factors neither necessarily nor exclusively applies to
all experts.” Id. The relevance of the Daubert factors depends “on the nature of the issue, the
expert’s particular expertise, and the subject of his testimony.” Id. at 150 (internal quotation
marks and citations omitted).
Finally, Daubert and Rule 702 require that the expert’s testimony “fit” the facts of the
case. “’Fit’ requires that the proffered testimony must in fact assist the jury, by providing it with
relevant information, necessary to a reasoned decision of the case.” Magistrini, 180 F. Supp. 2d
at 595 (citing Paoli, 35 F.3d at 743).
B. Eminent Domain – Just Compensation
Rule 71.1 of the Federal Rules of Civil Procedure governs federal eminent domain
proceedings in district courts. Fed. R. Civ. P. 71.1. As set forth in Rule 71.1(h), the court in a
federal eminent domain action tries all issues including compensation, except that
compensation may be determined by a jury when a party demands one.1 Thus, legal and
factual issues other than just compensation, including disputes over title to the land at issue, are
for the court to decide. See United States v. Reynolds, 397 U.S. 14, 19-20 (1970).
The United States has the authority to take private property for use by eminent domain,
provided that it satisfies its Fifth Amendment obligation to provide “just compensation” to the
owner thereof. United States v. 6.45 Acres of Land, 409 F.3d 139, 145 (3d Cir. 2005) (quoting
Kirby v. Forest Indus., Inc., 467 U.S. 1, 9 (1984)). “In general, ‘just compensation’ means ‘the
fair market value of the property on the date it is appropriated.’” Id. “The guiding principle of
just compensation . . . is that the owner of the condemned property must be made whole but is
not entitled to more.” Id. at 145 n.11 (quoting United States v. 564.54 Acres of Land, 441 U.S.
1

Under Rule 71.1(h)(1), compensation must be determined “by a jury when a party demands one . . .
unless the court appoints a commission.” Fed. R. Civ. P. 71.1(h)(1)(B). The procedure for appointing a
commission in lieu of a jury is set forth in Rule 71.1(h)(2).
4

506, 516 (1979) (emphasis in original)).

It is the landowner’s burden to establish just

compensation. Id.
Fair market value is determined by considering the subject property’s “highest and best
use.” Specifically, the just compensation clause requires that “condemnees receive the value of
the highest and best use for which the property is adaptable in the reasonably near future from
the vantage point of the date of the taking.” United States v. 68.94 Acres of Land, 918 F.2d
389, 393 (3d Cir. 1990) (citing Olson v. United States, 292 U.S. 246, 255 (1934)). Although the
factfinder should not entertain mere speculative uses of the property, “evidence of a potential
use should not be excluded merely because it depends upon the existence of extrinsic
conditions.” Id.
“Expert opinion testimony acquires special significance in an eminent domain
proceeding where the sole issue is the value of condemned property.” Id. As the Court of
Appeals for the Third Circuit has cautioned:
Since there are no infallible means for determining with absolute conviction what
a willing buyer would have paid a willing seller for the condemnees’ property at
the time of taking, eminent domain proceedings commonly pit the Government’s
valuation experts against those of the landowner. Thus, the exclusion of one or
all of either party’s proposed experts can influence substantially the amount of
compensation set by the factfinder. Not only does the landowner have a strong
interest in receiving just compensation for property, the public as well has vested
interests in insuring that the Government does not pay more than what the owner
justly requires. Recognizing the critical role of expert witnesses in these cases
and the strong interest on both sides that the compensation be just, trial courts
should proceed cautiously before removing from the jury’s consideration expert
assessments of value which may prove helpful.
Id.
II.
A.

Analysis

Defendant’s Motion in Limine – Docket No. 104

The United States offers the expert testimony of appraiser Gregory Jones. In a report
dated November 23, 2010, Jones opines that there were “not one, but several possible highest
and best uses of the property, possibly in combination.” See Docket No. 104, Ex. B; see also

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Docket No. 110-3 (Jones Report at 29).2 He states that among the most probable and feasible
uses for about 94% of the site were the ones seen throughout rural Somerset County, including
open space used for cropland, grazing, hunting and recreation, farmettes, and large-tract home
sites. Id. He also acknowledges that several acres in the immediate vicinity of the Flight 93
impact site “are likely to be left undisturbed in perpetuity, in memoriam as sacred ground.” Id.
Although Jones states in his report that a private Flight 93 museum might be among the
property’s possible higher and better uses, he concludes that there was inadequate support to
determine that use to be financially feasible. Id. Jones’ report ultimately concludes that the
property had an estimated unit value of $2,200 per acre for a total final estimate of value of
$600,000 as of the date of the taking, September 9, 2009. See Docket No. 110-4 at 7 (Jones
Report at 50); Docket No. 104-2.
Defendant moves in limine to exclude Jones’ expert testimony.

(Docket No. 104).

Defendant does not challenge Jones’ qualifications as an expert. Rather, he argues that Jones’
appraisal methodologies are flawed and inherently unreliable. See Docket No. 104. All of
Defendant’s arguments challenge Jones’ “highest and best use” analysis.

Specifically,

Defendant contends that (1) Jones ignores the subject property’s use as a private memorial at
the date of the taking; (2) Jones’ attempts to discount the feasibility of operating a private
memorial on the property are futile and ill-founded; and (3) Jones fails to cite any reliable
support for his own highest and best use conclusion. Docket No. 104 at 3.
The parties agree that the appropriate “highest and best use” analysis is that set forth by
the Appraisal Institute, a global association of professional real estate appraisers. See Docket
No. 104 at 7; Docket No. 105, Ex. 19 (Stephen F. Fanning, Market Analysis for Real Estate:
Concepts and Applications in Valuation and Highest and Best Use). Using these standards, the

2

A copy of Jones’ Report is attached as Exhibit 2 to the United States’ Response in Opposition to
Defendant’s Motion. See Docket No. 110-2 and 110-3. Portions also are attached as Exhibit B to
Defendant’s Motion. See Docket No. 104-2.
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highest and best use analysis consists of a four step process. That is, an appraiser must
determine what uses are: (1) physically possible; (2) legally permissible; (3) of the alternative
uses that are both physically possible and legally permissible, which uses are financially
feasible; and (4) of the financially feasible uses, which use is maximally productive. See id. As
the foundation for a thorough investigation of the competitive position of the property in the
minds of market participants,” it is “critical that a careful highest and best use analysis precede
the application of the approaches to value.” The Appraisal of Real Estate 13th ed. (Docket No.
105, Ex. 1).
Defendant’s argument that Jones engaged in a flawed highest and best use analysis
requiring exclusion of Jones’ expert testimony is without merit. First, contrary to Defendant’s
argument, Jones did not ignore the property’s use or potential use as a private memorial. In this
regard, I note that the parties dispute whether and/or to what extent the property was being
used as a private Flight 93 memorial as of the date of the taking. Nevertheless, Jones’ analysis
included a thorough investigation into the potential use of a private memorial on the property.
After a detailed evaluation of this issue, Jones concluded that although a private memorial was
a potential highest and best use, he could not deem that use to be financially feasible due to the
many unknown variables, risks, and uncertainties he found to be inherent in such a use. See
Jones Report (Docket No. 110-2, 110-3) at 21-29. To the extent Defendant disagrees with
Jones’ conclusions regarding the financial feasibility of operating a private memorial on the
property, such matters go to the weight, not the admissibility, of Jones’ testimony. Defendant is
free to attack Jones’ conclusions on cross-examination or to introduce appropriate competing
evidence at trial. 3

3

Jones’ alleged failure to mention the federal statute establishing the Flight 93 crash site as a public
memorial (see Docket No. 104, at 4) is not fatal to his analysis. As the United States Supreme Court has
held, a highest and best use analysis focuses on the uses a private owner might reasonably develop or
enjoy, not the demand or use for which the government acquired the property. See United States v.
th
Cors, 337 U.S. 325, 333 (1949); United States v. 320 Acres of Land, 605 F.2d 762, 801 n.107 (5 Cir.
1979). Thus, the appropriate focus is the feasibility of using the land as a private, not public, memorial.
7

Defendant’s argument that Jones fails to cite any reliable support for his own highest
and best use conclusion is likewise unfounded.

As set forth above, Jones methodically

evaluated each of the elements of the highest and best use analysis in his report. He also
analyzed the subject property’s market, including uses of surrounding properties; and reviewed
the property’s history and condition, including recognizing the Flight 93 crash site as “hallowed
ground to be treated with reverence.”

Jones Report (Docket No. 110-2, 110-3) at 16-29.

Although Defendant points out supposed deficiencies in Jones’ analysis such as Jones’
deposition testimony that he talked to a county official who indicated it was difficult to raise
crops on reclaimed mine lands, those attacks are appropriate topics for cross-examination, not
exclusion.
In short, I disagree that the highest and best uses that Jones proposes are speculative
uses that should be excluded from consideration by the trier of fact. As the United States aptly
notes, the fact that Jones arrived at a different highest and best use conclusion than Defendant
would like is not a basis for excluding Jones’ opinion.

Defendant’s disagreement with and/or

perceived weaknesses inherent in Jones’ highest and best use analysis are matters of weight,
not admissibility. For all of these reasons, Defendant’s Motion in Limine (Docket No. 104) is
denied.
B.

Plaintiff’s Motion to Exclude Defendant’s Highest and Best Use of the
Subject Property as a Memorial and Related Visitor Center – Docket No. 105

Defendant offers the expert testimony of Randall Bell in support of its valuation of the
subject property. Among other things, Bell opines in his appraisal report that the highest and
best use of the property is as a private memorial and related visitor center. Docket No. 114-1,
at 6 (12/15/2011 Bell Report at 27). Using the land residual valuation approach, Bell ultimately
estimates the market value of the subject property to be $23,300,000. Id. at 3; Docket No. 1056, at 21 (12/15/2011 Bell Report at 40). This value far exceeds the government’s expert’s value

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estimate of $600,000. The United States moves to exclude all or part of Bell’s testimony on
several grounds. In the instant motion, the government attacks Bell’s highest and best use
conclusion and urges me to exclude Bell’s highest and best use testimony on the grounds that
he improperly based the conclusion on speculative and unfounded assumptions. Docket No.
105, at 1; see also id. at 2 (arguing the “fundamental flaw in Mr. Bell’s analysis is his reliance
upon a preconceived highest and best use conclusion that lacks adequate support”).

The

government alleges that Bell failed to apply the required highest and best use analysis and,
thus, failed to meet its burden to show that it was reasonably probable that a financially feasible
privately operated memorial and visitor’s center could be developed on the property. Id. at 2-3.
After careful consideration I disagree that Bell engaged in such a flawed highest and
best use analysis that I must exclude this aspect of his expert testimony. As set forth above, the
parties agree that the appropriate highest and best use analysis is the four step process set
forth by the Appraisal Institute; i.e., the appraiser must determine what uses are: (1) physically
possible; (2) legally permissible; (3) of the alternative uses that are both physically possible and
legally permissible, which uses are financially feasible; and (4) of the financially feasible uses,
which use is maximally productive. See supra Section II.A.
Contrary to Plaintiff’s assertions, Bell discusses all four of these factors in his report.
Docket No. 105-6, at 8 (Bell Report at 27). Although the report does not describe in detail the
bases for Bell’s conclusions under the analysis, Defendant explains that the report is a
“Summary Appraisal Report,” and, as such, does not require the level of detail the government
urges. Def.’s Br. Opp. (Docket No. 112) at 10-11; see also Def.’s Suppl. Ex. A (Docket No. 1141, at 2-3).4 Defendant states that, in accordance with relevant appraisal standards, the data
necessary to support Bell’s highest and best use conclusion is contained in Bell’s workfile
4

Specifically, Defendant cites the Uniform Standards of Professional Appraisal Practice, under which a
Summary Appraisal Report is an acceptable option. Def.’s Br. Opp. (Docket No. 112) at 11-12 & Def.’s
Suppl. Ex. F (Docket No. 114). Defendant also attaches excerpts from the Uniform Appraisal Standards
for Federal Land Acquisitions indicating that a Summary Appraisal Report is one of two acceptable written
reporting options. Id. Ex. G.
9

related to the appraisal. Def.’s Br. Opp. (Docket No. 112) at 12; see also Docket Nos. 115-117
(selections from Bell’s workfile).
Although Plaintiff contends that Bell relies solely on a preconceived notion of highest and
best use as a memorial and visitor’s center without any consideration of market elements or
other uses, the record does not support this conclusion. As an initial matter, I agree with
Plaintiff that Congress’s establishment of a public Flight 93 national memorial alone is an
improper basis for a highest and best use determination. Although the historical significance of
the crash site cannot be ignored, the highest and best use analysis must, as set forth above,
focus on the uses a private owner might reasonably develop or enjoy and not the demand or
use for which the government acquired the property. See Cors, 337 U.S. at 333; 320 Acres of
Land, 605 F.2d at 801 n.107; see also id. at 783 n.26 (“[I]n determining the fair market value of
condemned property, the use which the Government proposes to devote the property to should
not be considered unless private owners could also reasonably devote the property to that
use.”). Thus, the appropriate focus is the feasibility of using the land as a private, not public,
memorial.
Nevertheless, the record makes clear that the creation of the public Flight 93 national
memorial was not the only basis for Bell’s conclusions. To the contrary, Bell testified under oath
that he conducted voluminous research and considered numerous factors related to financial
feasibility, including case studies of other memorials, alternative uses such as agriculture and
wind farms, and information from the National Park Service. Bell Dep. (Docket No. 105-8) at 35,
122-27.

Among other things, Bell’s workfile includes portions of a March 12, 2008 Appraisal

Report of the property prepared by LECG for the National Park Service in which the appraiser
concludes that the highest and best use of the property is a privately owned and operated
memorial dedicated to the passengers of Flight 93. Docket No. 116-1, at 21-30.5 There is also

To the extent Plaintiff’s expert Jones has disagreed with the LECG highest and best use analysis, that
disagreement goes to the weight, not the admissibility, of Defendant’s evidence.
5

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evidence, although disputed by Plaintiff, that Defendant was operating a temporary private
memorial on the site at the time of the taking.
In short, I disagree that Defendant’s proposed highest and best use of the property as a
private memorial and visitor’s center is a merely speculative use subject to exclusion at trial. In
so concluding, I do not find that Plaintiff’s criticisms of Bell’s highest and best use analysis are
without merit. Rather, those criticisms go to the weight, not the admissibility, of Bell’s highest
and best use testimony.6 Plaintiff remains free to expose any weaknesses in Bell’s analysis
through proper cross-examination or contrary evidence at trial.
For all of these reasons, Plaintiff’s motion to exclude Bell’s highest and best use
testimony is denied.
C.

Plaintiff’s Motion to Exclude Defendant’s Use of Certain Studies Employed
by Defendant’s Appraiser Randall Bell as Irrelevant Under Federal Rule of
Civil Procedure 71.1 and Federal Rules of Evidence 402 and 403 –
Docket No. 103

The United States moves to exclude Defendant’s use of (1) memorial case studies
prepared by appraiser Bell; and (2) a visitation study prepared for the National Park Service and
adopted by Bell. (Docket No. 103). Bell cites the memorial case studies as support for income
and expense variables in valuing a private memorial and visitor’s center on the subject property,
and cites the visitation study as a basis for visitation numbers at such memorial. The United
States argues that both studies are “wholly incomparable” to the subject property and, therefore,
are irrelevant. The United States further contends that the studies are excludable under Rule
403 on the grounds of prejudice, confusion, and waste of time, because Bell allegedly misuses
the underlying data, especially the expense ratios from the memorial case studies. Docket No.
103 at 1-2.
Relevant evidence is defined as evidence "having any tendency to make the existence

6

Plaintiff’s allegations regarding Bell’s financial interest in the subject property also go to the weight, not
admissibility, of Bell’s testimony. See Pl.’s Br. (Docket No. 105) at 6-9.
11

of any fact that is of consequence to the determination of the action more probable or less
probable than it would be without the evidence." Fed. R. Evid. 401. In turn, relevant evidence
may be excluded if its “probative value is substantially outweighed by the danger of unfair
prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay,
waste of time, or needless presentation of cumulative evidence.” Fed. R. Evid. 403. “Rule 403
authorizes a district court in its broad discretion to exclude collateral matters that are likely to
confuse the issues.” United States v. Casoni, 950 F.2d 893, 919 (3d Cir. 1991). The inquiries
under Rules 401 and 403 are fact-intensive, and context-specific. Sprint v. Mendelsohn, 552
U.S. 379 (2008). A court should be wary of excluding evidence in limine under Rule 403
because “[a] court cannot fairly ascertain the potential relevance of evidence for Rule 403
purposes until it has a full record relevant to the putatively objectionable evidence.” In re Paoli
R.R. Yard PCB Litig., 916 F.2d 829, 859 (3d Cir. 1999). “[W]hen the trial judge is in doubt, Rule
403 requires admission.” Coleman v. Home Depot, Inc., 306 F.3d 1333, 1344 (3d Cir. 2002)
(quoting United States v. Krenzelok, 874 F.2d 480, 482 (7th Cir. 1989)).

The burden of

establishing the admissibility and relevance of evidence rests on the proponent. See, e.g.,
Phillips v. Potter, Civ. A. No. 7-815, 2009 WL 2588830, at *1 (W.D. Pa., Aug. 19, 2009).
With respect to the case studies of other memorials and visitor’s centers that Bell uses in
his valuation analysis, the Motion in Limine is denied. As part of his valuation analysis and
appraisal of the subject property, Bell prepared twenty case studies of various memorials across
the United States. See Pl.’s Mot. Ex. 1 (Docket No. 103-1) at 7-18 . Bell used the case studies
to, inter alia, derive inputs for different variables in his income valuation approach, including
average admission rate, bookstore/concession income, and rate of visitors paying admission.
See id.

The United States attacks the relevancy of the case studies, claiming that they

represent an improper “apples to oranges” comparison of the subject property to dissimilar
memorials. Docket No. 103 at 6-17. Defendant disagrees, pointing out the thoroughness of
Bell’s case study analysis and arguing that Bell did engage in an “apples to apples” comparison
12

using the best available comparators. Docket No. 111 at 8-11. After careful review, I find that,
in the context of this case, whether Bell’s case studies are “apples” or “oranges” is a disputed
issue of fact, and that Plaintiff’s relevancy arguments properly go to the weight, not the
admissibility, of the evidence.7
With respect to the visitation study prepared for the National Park Service to which the
United States objects, the Motion in Limine is likewise denied. The United States complains
that the visitation study is irrelevant because it relates to the public Flight 93 memorial, and not
a private memorial.

Although the visitation study undoubtedly was prepared for the public

memorial site, the government has not satisfactorily explained why the projected visitation
numbers contained therein are unique to a public memorial. I agree with the United States that
the use to which the Government proposes to devote the property should not be considered in
determining highest and best use or fair market value. This principle, however, does not mean
that evidence concerning projected visitation numbers for a memorial is irrelevant simply
because the numbers were prepared for a public memorial. To the extent the United States can
show that the public/private distinction makes a difference in this regard, it can demonstrate this
point to the fact finder through appropriate evidence and cross examination at trial.
To the extent the United States separately contends that admitting the case and/or
visitation studies would unfairly prejudice the government, I disagree.

The United States

suggests that admission of the studies would be unfairly prejudicial because the studies would
confuse the jury and it would waste the Court’s time to force the United States to address (and
thus give false credence to) them. See Docket No. 103. This argument is without merit. As set
forth above, the United States understates the potential relevance of the studies. Even if the
probative value is minimal, however, I disagree that the studies will cause undue confusion or
delay.

7

To the extent that this motion also attacks the reliability of Bell’s application of the case studies to the
valuation of the subject property, the motion is denied for the reasons set forth in Section II.D, infra.
13

For all of these reasons, Plaintiff’s motion to exclude Defendant’s use of the case
studies and visitation study is denied.
D.

Plaintiff’s Rule 71.1(h) Motion to Exclude the Valuation Testimony of
Defendant’s Appraiser Randall Bell – Docket No. 106

The United States seeks to exclude Randall Bell’s valuation testimony as unreliable
under the principles set forth in Daubert and its progeny. Specifically, the United States argues
that Bell: (1) improperly used an income approach – the land residual technique – to determine
the land’s market value; (2) misapplied the land residual approach, leading him to value a
hypothetical operating business that did not exist on the property as of the date of the taking;
and (3) used unsupported and speculative data in his valuation. Pl.’s Br. (Docket No. 106) at 12.8 Although I do not disagree with the government that Bell’s valuation analysis has its share of
weaknesses, I find that those weaknesses are not fatal to Bell’s testimony at this juncture.
First, to the extent the United States suggests that Bell’s testimony fails simply because
he employs an income approach instead of a sales comparison approach, such argument is
without merit.

Although the sales comparison approach9 “has been described as the best

evidence of market value,” see, e.g., United States v. 60.14 Acres of Land, 362 F.2d 660, 665
(3d Cir. 1966), there are several accepted ways to value real property, including income
capitalization. See, e.g., Nat’l Food & Beverage Co. v. United States, 105 F. Cl. 679, 701 (Fed.
Cl. Ct. 2012) (noting that the three primary valuation methods include the cost approach, the
income approach, and the sales comparison approach); see also The Appraisal of Real Estate
13th ed., at 130, 140 (Docket No. 106-8). The valuation approach employed depends on the
8

The United States does not seek to exclude testimony regarding Bell’s alternative comparable sales
analysis. See Pl.’s Br. (Docket No. 106) at 1, n.1; see also Docket No. 103-1 at 23-27 (Bell’s comparable
sales analysis).
9

The sales comparison approach involves collecting data from the sales of similar parcels of land and
then analyzing, comparing, and adjusting the data to provide a value for the land being appraised. In
contrast, the income capitalization approach involves analyzing the property’s capacity to generate future
th
benefits and capitalizing the income to indicate present value. See The Appraisal of Real Estate 13 ed.,
at 140-142 (Docket No. 106-8).
14

type of property, the intended use of the appraisal, the identified scope of work, and the quality
and quantity of data available for analysis. Alternatives to the sales comparison approach are
particularly appropriate in the absence of adequate comparable sales. See, e.g., United States
v. 1,629.6 Acres of Land, 360 F. Supp. 147, 151 (D. Del. 1973), aff’d in part, rev’d in part on
other grounds, 503 F.2d 764 (3d Cir. 1974); United States v. 819.98 Acres of Land, 78 F.3d
1468, 1471 (10th Cir. 1996).10
Here, Defendant argues that the events of September 11, 2001, rendered the subject
property unique and, therefore, comparable sales are not available. In other words, the crash of
Flight 93 imbued the subject property with a national significance and intrinsic value that is
neither transferable nor comparable to otherwise similar parcels. See Def.’s Br. Opp. at 9-10
and Ex. I (Bell Dep. testimony). The United States does not address this argument directly,
stating only that, but for the Flight 93 crash, the subject property is similar to other area
properties. See, e.g., Jones Dep. at 195-196 (Docket No. 114-11, Def.’s Ex. L). Statements
such as this, however, imply that the crash may differentiate the property from surrounding
tracts. Whether and/or how the pre-taking crash of Flight 93 impacted the value of the subject
property as compared to other neighboring properties is a topic more properly explored via
evidence and testimony at trial.
The United States also argues that Bell further erred by utilizing a “direct capitalization”
income approach, rather than a “yield approach,” because “the subject property was not
operating on a stabilized – consistent and income producing – basis on the date of value.” Pl.’s

10

As set forth above, Bell’s appraisal report also contains a sales comparison analysis. See Docket No.
103-1 at 23-27. The United States cites this comparable sales analysis (which interestingly results in a
higher valuation of the property than his income approach) as support for its argument that the Bell’s
income analysis is improper. That argument is unpersuasive at this juncture. As an initial matter, the
record is woefully underdeveloped concerning Bell’s sales comparison analysis as opposed to his income
capitalization analysis. Moreover, Defendant strongly argues that truly comparable sales are not
available. The Appraisal of Real Estate text also notes that appraisers may use one or more approaches
th
to determine value. The Appraisal of Real Estate 13 ed. (Docket No. 106-8) at 130. For all of these
reasons, I cannot conclude that Bell’s inclusion of a comparable sales analysis in his report is tantamount
to an admission that comparable sales exist and, therefore, that an income approach is improper.
15

Br. Supp. (Docket No. 106) at 11-14.11 Because there was no income-producing visitors’ center
and memorial operating on the property at the time of the taking, the United States contends
that the land residual approach was inapplicable. See id. This argument does not necessitate
exclusion of Bell’s testimony. As set forth above, there is conflicting record evidence as to the
nature and extent of the “temporary” memorial operating on the site prior to the taking.
Moreover, and in any event, the case law to which Plaintiff cites does not hold that a direct
capitalization approach is per se inapplicable in the absence of an ongoing income-producing
venture. Rather, courts have held that “[m]ere physical adaptability to a given use is not enough
to invoke the capitalization method; the landowner must show that an income producing market
existed at the date of the taking or will exist in the reasonably near future.” United States v.
75.13 Acres of Land, 693 F.2d 813, 816 (8th Cir. 1982) (emphasis added); see also, e.g., United
States v. 25.202 Acres of Land & Building Affixed to Land Located in Town of Champlain,
Clinton County, N.Y., 860 F. Supp. 2d 165, 176-77 (N.D.N.Y. 2010) (same), aff’d, 2012 WL
5458026 (2d Cir. Nov. 9, 2012). Based on the record in this case, the applicability of a direct or
yield capitalization approach, including whether an income-producing private memorial and
visitor’s center would exist in the reasonably near future or was purely a speculative and remote
potential use, are issues more appropriately addressed at trial. Cf. United States v. 68.94 Acres
of Land, 918 F.2d at 395 (trial court abused its discretion by excluding condemnee’s expert
valuation testimony where there was no finding that the analysis relied on events that were not
reasonably probable as of the date of the taking).
The United States further argues that Bell compounded his already flawed analysis by

11

The Appraisal of Real Estate lists three types of income capitalization: two “direct” capitalization
techniques called the “land residual technique” and “ground rent capitalization”; and one “yield”
th
capitalization technique referred to as “discounted cash flow analysis.” The Appraisal of Real Estate 13
ed. (Docket No. 106-8) at 142-43, 363. Unlike direct capitalization techniques, which look at the
relationship between one year’s income and value, the yield approach examines the relationship between
several years’ stabilized income and a reversionary value at the end of a designated period. See id. In
this case, Bell utilized direct income capitalization, applying the land residual technique.
16

choosing to apply the “land residual” technique of direct capitalization. Pl.’s Br. Supp. (Docket
No. 106) at 14-16. The land residual technique is “a method of estimating land value in which
the net operating income attributable to the land is isolated and capitalized to produce an
indication of the land’s contribution to the total property.” The Appraisal of Real Estate, 13 th ed.
(Docket No. 106-9) at 368-69. The United States contends that the land residual technique
depends significantly on variables subject to an appraiser’s judgment and, therefore, allows for
the manipulation of those variables, leading to an improper and unreliable valuation of the
subject property. Pl.’s Br. Supp. (Docket No. 106) at 15-16. I acknowledge that the land
residual technique is not the most common valuation approach and that small variations in any
of the required variables can result in a dramatic change to the land value estimate. See The
Appraisal of Real Estate, 13th ed. (Docket No. 106-9) at 369.12 As even the government notes
in its brief, however, the land residual technique historically has been used and is more
applicable to estimate land value when sales data on similar parcels of vacant land is not
available. Pl.’s Br. Supp. (Docket No. 106) at 15 (citing The Appraisal of Real Estate, 13th ed. at
363, 368). The absence of such sales data is exactly what Defendant argues in this case.
Again, without commenting on the ultimate validity of Plaintiff’s arguments, I find that these are
issues more appropriately examined at trial.13
Lastly, the United States argues that, even if applicable, Bell’s land residual valuation
method is fatally flawed because it relies on unsupported and speculative data. Among other
things, the government attacks Bell’s proposed: average admission rate; bookstore and

12

According to the literature, the land residual approach most commonly is used to test the feasibility of
th
alternative uses of a particular site in the highest and best use analysis. The Appraisal of Real Estate 13
ed., at 363, 368.
13

This conclusion applies equally to the government’s argument that Bell incorrectly applied the land
residual valuation method by failing to deduct income generated from structures on the property. Pl.’s Br.
Supp. (Docket No. 106) at 22-25 (arguing that Bell thus improperly valued a business and not the land);
see also Def.’s Br. (Docket No.113) at 9 (countering that any income generated by the memorial and
visitor’s center would be attributable to the unique status of the land as the Flight 93 crash site, i.e., that
“the land is the value of the total property”). The United States may readdress these points through
appropriate evidence, testimony, or cross examination at trial.
17

concession income; visitors per year; percentage of visitors paying admission; expense ratio;
and capitalization rate. Pl.’s Br. (Docket No. 106) at 16-22. The United States complains that
Bell’s figures lack market and evidentiary support. See id. In response, Defendant submits
significant documentation, including case studies and market and research data, on which Bell
contends he relied.

See Docket Nos. 115-117 (Def.’s Suppl. Ex. D).

I disagree with the

government that this data is so inapposite, speculative, and/or unreliable as to warrant pre-trial
exclusion of Bell’s testimony. The perceived weaknesses in Bell’s supporting data are more
appropriate fodder for cross-examination or counter-evidence at trial.
In short, after careful review, I disagree that Bell’s valuation testimony and methodology
fail the Daubert test of reliability and fit.

The propriety of using the income capitalization

approach, the availability of comparable sales, and other relevant issues involve questions of
fact that are inappropriate for resolution at this stage of the proceedings based on the record
before me. Under the facts of this case, the United States’ criticisms of Bell’s supporting data
and the application of his methodology go to the weight, not the admissibility, of Bell’s
testimony. The government is free to attack Bell’s testimony through testimony, evidence, and
effective cross-examination at trial.
For all of these reasons, I decline to exclude Bell’s valuation testimony based on his use
of the land residual income approach.14
III.

Conclusion

For all of these reasons, the Motions in Limine are denied. I caution, however, that
nothing in this ruling intimates that the appraisal methods, evidence, and/or opinions that the
parties have challenged ultimately will be accepted. All that I rule here is that the parties are

14

In so ruling, I am mindful of the Court of Appeals’ caution against denying the landowner the
opportunity to present expert valuation testimony especially where, as here, the expert’s estimated fair
market value differs greatly from that of the government’s appraiser. See United States v. 68.94 Acres of
Land, 918 F.2d at 395-96 (exclusion of condemnee’s valuation expert affected a substantial right of the
landowner because, had the expert testified, the jury also would have had evidence before it of property
values more than twice the government’s estimate).
18

entitled to present their evidence at trial and that I cannot rule definitively that the valuation
evidence is inadmissible based on the record now before me. See United States v. 100.01
Acres in Buchanan County, No. 1:00CV00185, 2002 WL 923925, at *4 (W.D. Va. May 7, 2002).
An appropriate Order follows.

19

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
United States of America,
Plaintiff,
vs.
275.81 Acres of Land, More or Less,
Situated in Stonycreek Township,
Somerset County, Commonwealth of
Pennsylvania, and Svonavec, Inc.

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)
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)
)
)
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Civil Action No. 09-233

Defendant.
AMBROSE, Senior District Judge

ORDER
AND NOW, this 13th day of March, 2013, it is hereby ORDERED that Defendant’s Motion
in Limine filed at Docket No. 104, and Plaintiff’s Motions in Limine filed at Docket Nos. 103, 105,
and 106 are denied.
A Status Conference is scheduled before the undersigned for April 9, 2013, at 12:30
p.m. in Courtroom 3B. Two days prior to this conference, each party is directed to submit a
position paper not to exceed five (5) pages in length setting forth its position on a trial by
commission versus a trial by jury.

BY THE COURT:
/s/Donetta W. Ambrose
Donetta W. Ambrose
Senior Judge, U.S. District Court