UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1716
EAST TENNESSEE NATURAL GAS COMPANY,
Plaintiff - Appellant,
versus
7.74 ACRES IN WYTHE COUNTY, VIRGINIA; HAROLD
HART; LARRY S. BALL,
Defendants - Appellees,
and
MARY CASEL, Commissioner of Revenue; JOHN
DOE; UNKNOWN OWNERS,
Defendants.
Appeal from the United States District Court for the Western
District of Virginia, at Danville. Jackson L. Kiser, Senior
District Judge. (4:02-cv-00104-jlk)
Argued: March 15, 2007 Decided: May 22, 2007
Before TRAXLER, KING, and GREGORY, Circuit Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the opinion,
in which Judge Traxler and Judge King joined.
Lela Merrell Hollabaugh, WALLER, LANSDEN, DORTCH & DAVIS,
Nashville, Tennessee, for Appellant. Henry Evans Howell, III,
WALDO & LYLE, Norfolk, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
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GREGORY, Circuit Judge:
A jury in Roanoke, Virginia, awarded approximately $1.8
million to Appellees Harold Hart and Larry S. Ball (“Appellees”) as
just compensation for the easements taken by Appellant East
Tennessee Natural Gas Company (“East Tennessee”). The district
court denied East Tennessee’s motion for a new trial or, in the
alternative, remittitur, a decision East Tennessee now appeals.
Finding no abuse of discretion by the district court, we affirm.
I.
In 2003, the court below granted East Tennessee a fifty-foot
wide permanent easement across 7.74 acres of Appellees’ land and a
temporary easement across 10.31 acres of Appellees’ land so that
East Tennessee could install a natural gas pipeline. That
decision, which this Court affirmed, is not before us. See East
Tenn. Natural Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004); see
also id. at 818 (explaining that the Natural Gas Act, 15 U.S.C. §
717f(h) (2000), grants gas companies the power to acquire property
by eminent domain). The taking has affected approximately 378
acres of Appellees’ 700-acre real estate. Those 378 acres
(“Appellees’ property”) are comprised of a 364-acre parcel and a
14-acre parcel beside State Route 629 and at the intersection of
Interstate Routes 77 and 81 in Wythe County, Virginia.
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In March 2006, the district court impaneled a six-person jury
to determine the amount of just compensation owed to Appellees as
a result of the taking. Before trial began, East Tennessee filed
motions in limine to exclude the appraisal testimony of Appellees’
two expert witnesses, Frank Porter and Dennis Gruelle. The motions
argued that Porter and Gruelle’s testimony about the value of
Appellees’ property before and after the taking was not based upon
sufficient facts and was not the product of reliable methods as
required by Federal Rule of Evidence 702. After a hearing on the
motions, the court denied them.
On the first day of trial, the jury visited Appellees’
property. When the jury returned, Appellees called Robert Cellell
Dalton, Wythe County Administrator and a civil engineer by trade.
Dalton indicated that commercial development was the highest and
best use for Appellees’ property before the taking. In 2002, he
recalled, a large sporting goods retailer approached Appellees
about commercial use of their property because of its high
visibility from two interstates. The county’s marketing efforts
resulted in the retailer’s narrowing its choice for a location on
which to build to Appellees’ property and a site in West Virginia
that the retailer ultimately chose for tax reasons. Dalton
admitted that the negotiations did not progress beyond a general
stage, that there would be costs (albeit costs the county was
willing to undertake) associated with developing Appellees’
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property for commercial use, and that no one was looking at the
property when the pipeline was announced. Dalton further testified
that if the pipeline had not been built, the county would have
continued to show the property to commercial and industrial buyers
interested in interstate visibility. Now the county does not.
Appellees next called John Fowler, an engineering consultant
who testified that before the taking, it would have been
practically and economically feasible to build interstate on/off
ramps on Appellees’ property, thereby increasing its suitability
for commercial and industrial development. Now, he testified,
Appellees’ property is unsuitable for such development because an
access road cannot be built over the pipeline. Fowler relied on
his visit to the site, maps supplied by East Tennessee and the U.S.
Geological Survey, and a video shown at trial to reach his
conclusions.
Appellees called appraisers Porter and Gruelle to establish a
fair market value for the property before and after the taking.
Porter testified that the highest and best use of Appellees’
property before the taking was “to hold it for an industrial/
commercial type of use.” J.A. 560. Porter relied on three
industrial sales in the Virginia counties of Rockingham, Warren,
and Wythe to determine the before-take value of Appellees’
property. He reduced the values of those three properties by 52%,
66%, and 75%, respectively, to make them comparable to Appellees’
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property, a “unique property” for appraisal purposes. J.A. 560-61.
In assessing the value of Appellees’ property, Porter assumed that
interstate ramps which currently do not exist would be constructed.
Porter concluded that the placement of the pipeline in the middle
of Appellees’ property now limited the property to agricultural or
residential use. Accordingly, he relied on agricultural and
residential sales from Wythe County to calculate the value of
Appellees’ property after the taking.
Like Porter, Gruelle testified that the highest and best use
of Appellees’ property before the taking was commercial development
and that the property’s location made it unique for appraisal
purposes. Gruelle used five sales of property for commercial or
industrial use to establish the before-take value of Appellees’
property. The first sale was the same Rockingham County sale used
by Porter. The second, third, and fourth sales involved property
between 16.69 and 20 acres in size, a contrast to Appellees’ 378
acres. The fifth sale was the same Wythe County sale used by
Porter. In addition, two of the five sales Gruelle used were sales
of property for the construction of convenience stores or truck
stops; Gruelle admitted that Appellees’ property is not suited to
such use. Gruelle reduced the values of the five properties by
55%, 85%, 55%, 35%, and 60%, respectively, in order to establish a
value for Appellees’ property before the taking. Gruelle concluded
that the property’s diminished utility after the installation of
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the pipeline made its highest and best use residential and
agricultural use. Like Porter, Gruelle used three sales of
agricultural and residential property in Wythe County to calculate
the value of Appellees’ property after the taking.
East Tennessee called appraiser Warren Klutz, who gave
extensive testimony about the improper application of professional
appraising standards by Porter and Gruelle. Klutz testified that
Porter and Gruelle did not provide sufficient data or evidence to
support their conclusions that the highest and best use of
Appellees’ property before the taking was commercial or industrial
development. Klutz opined that the highest and best use before
the taking was agricultural or residential use. Klutz did not
appraise Appellees’ property, visit the property, review the files
prepared by Porter and Gruelle (as opposed to reading only their
reports), or talk to any of the parties involved in the
transactions on which Porter and Gruelle relied.
East Tennessee also presented the videotaped deposition of
John Harris to establish that Appellees’ property outside of the
easement could still be developed. Lastly, East Tennessee called
appraiser James Johnston. Johnston testified that because of poor
access to the property and because of its topography, the
property’s highest and best use was agricultural or residential
use. Johnston admitted that the property’s proximity to the
interstate was an advantage and that he had not consulted an
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engineer in forming his conclusion that it would be too expensive
to develop access to Appellees’ property. Johnston further
testified that based on market practices, he accounted only for the
loss in value to the 200 feet on each side of the pipeline, not the
loss in value to Appellees’ entire property.
The jury returned a verdict in favor of Appellees in the
amount of $1,875,986. East Tennessee then filed a motion for a new
trial or, in the alternative, remittitur, pursuant to Rule 59 of
the Federal Rules of Civil Procedure. After a hearing, the
district court denied the motion. In this appeal, East Tennessee
charges that the district court abused its discretion in denying
its motion for a new trial or, in the alternative, remittitur, and
in admitting the expert testimony of Porter and Gruelle. We
consider the latter charge first.
II.
We review a trial court’s decision whether to admit expert
testimony for abuse of discretion. O’Neill v. Windshire-Copeland
Assocs., 372 F.3d 281, 284 (4th Cir. 2004). In making its
decision, the trial court “exercises a gate keeping function to
assess whether the proffered evidence is sufficiently reliable and
relevant.” Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th
Cir. 1999). East Tennessee argues that the court below abdicated
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its gate-keeping function when it admitted expert testimony that,
for two reasons, was flawed from the start.1
First, according to East Tennessee, Porter and Gruelle failed
to establish that the highest and best use of Appellees’ property
before the taking was industrial or commercial use. This Court
presumes the highest and best use of a property to be its current
use——here, agricultural and residential——unless the landowner shows
that a different highest and best use is “reasonably probable”
within the “reasonably foreseeable future,” not merely “within the
realm of possibility.” United States v. 69.1 Acres of Land, 942
F.2d 290, 292 (4th Cir. 1991). East Tennessee contends that Porter
and Gruelle have not met this standard: the last offer for the
property was made in 2002, at a price-per-acre nearly half of that
appraised by Porter and Gruelle, and the property would have
required extensive improvements in access and topography to
accommodate industry and commerce.
1
We reject Appellees’ suggestion that East Tennessee’s failure
to object to the admission of the expert testimony at trial has
ruined the issue for appeal. “Motions in limine preserve issues
that they raise without any need for renewed objections at trial,
just so long as the movant has clearly identified the ruling sought
and the trial court has ruled upon it.” Rice v. Cmty. Health
Ass’n, 203 F.3d 283, 286 (4th Cir. 2000); see also Fed. R. Evid.
103(a) (“Once the court makes a definitive ruling on the record
admitting or excluding evidence, either at or before trial, a party
need not renew an objection or offer of proof to preserve a claim
of error for appeal.”). East Tennessee has met this standard.
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Second, according to East Tennessee, Porter and Gruelle did
not use truly “comparable” sales to determine the value of
Appellees’ property before the taking, making their opinions
untrustworthy and misleading. East Tennessee alleges that one of
Porter’s three comparable sales is unreliable because it was not an
arms-length transaction and that his other two sales took place in
counties that he has not established are similar to Wythe County.
East Tennessee finds similar fault with two of Gruelle’s comparable
sales and complains that the remainder of his comparable sales are
of properties too small to be compared to Appellees’ 378 acres.
Both experts’ “drastic” downward adjustments demonstrate, in East
Tennessee’s view, precisely how dissimilar their chosen comparable
sales are to Appellees’ property.
Where, as here, an expert’s factual basis, data, principles,
methods, or application are called into question, Federal Rule of
Evidence 7022 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509
2
Federal Rule of Evidence 702 states in its entirety:
If scientific, technical or other specialized knowledge
will assist the trier of fact to understand the evidence
or to determine a fact in issue, a witness qualified as
an expert by knowledge, skill, experience, training, or
education, may testify thereto in the form of an opinion
or otherwise, if (1) the testimony is based upon
sufficient facts or data, (2) the testimony is the
product of reliable principles and methods, and (3) the
witness has applied the principles and methods reliably
to the facts of the case.
Fed. R. Evid. 702.
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U.S. 579 (1993), require a trial court to determine whether the
expert’s testimony “has a reliable basis in the knowledge and
experience of [his or her] discipline.” Kumho Tire Co., Ltd. v.
Carmichael, 526 U.S. 137, 149 (1999) (quotation marks omitted). In
making this determination, the court must focus on the “principles
and methodology employed by the expert, not on the conclusions
reached.” Westberry, 178 F.3d at 261 (quotation marks omitted).
The court “should be mindful that Rule 702 was intended to
liberalize the introduction of relevant expert evidence.” Id.
Accordingly, we have held that:
the court need not determine that the expert testimony a
litigant seeks to offer into evidence is irrefutable or
certainly correct. As with all other admissible
evidence, expert testimony is subject to being tested by
[v]igorous cross-examination, presentation of contrary
evidence, and careful instruction on the burden of proof.
Id. (quotation marks and citations omitted). At the same time,
the court should be mindful that, “given the potential
persuasiveness of expert testimony, proffered evidence that has a
greater potential to mislead than to enlighten should be excluded.”
Id. We give “great deference” to the trial court’s ultimate
decision. United States v. Barnette, 211 F.3d 803, 816 (4th Cir.
2000). It will not be disturbed unless the court acted arbitrarily
or irrationally. United States v. Jones, 913 F.2d 174, 177 (4th
Cir. 1990).
In denying East Tennessee’s motions in limine, the district
judge remarked that he would need to hear the full expert testimony
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before deciding whether the experts used incorrect methodology to
determine the highest and best use of Appellees’ property. The
judge also observed that, because he was not the trier of fact, he
“would be on a very slippery slope to start saying what is a proper
comparable and what is not a proper comparable.” J.A. 298. He
concluded: “I am not prepared to say that because the comparables
are open to very severe cross-examination, that they’re not proper
comparables. At this point in time, I think that is an issue for
the jury to determine, not the Court.” Id.
This ruling was not an abuse of discretion. The district
judge was not obligated to determine whether Porter and Gruelle’s
conclusions about highest and best use were “irrefutable” or
whether the comparable sales Porter and Gruelle chose were
“certainly correct” measurements. Westberry, 178 F.3d at 261.
Porter and Gruelle’s choices and conclusions were thoroughly tested
on cross-examination, East Tennessee presented its own witnesses to
contradict Porter and Gruelle’s testimony, and the judge instructed
the jury on the burden of proof and the weight to be given expert
testimony. Cf. id. In these circumstances, we do not find present
the competing consideration in admitting expert testimony: the
potential for the testimony to mislead rather than to enlighten.
We further note that, in their written motions and at the
hearing on the motions, East Tennessee produced no evidence that
would have weighed in favor of excluding Porter and Gruelle’s
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testimony as unreliable. East Tennessee presented no evidence that
Porter and Gruelle’s starting point for a before value or their
rationale in determining highest and best use has not been tested,
has not been subject to peer review, has not been accepted by the
appraisal community, or has a known rate of error. See generally
id. at 261 n.1 (listing “tools” that are valuable in assessing the
reliability of an expert’s opinion); accord TFWS, Inc. v. Schaefer,
325 F.3d 234, 240 (4th Cir. 2003) (upholding the decision to admit
testimony where the plaintiff “[did] not argue that [the expert’s]
methods have not been tested, have not withstood peer review and
publication, have excessive rates of error, have no standards for
their application, or have not been accepted in their field”).
East Tennessee admits that it has never questioned Porter’s
and Gruelle’s qualifications or their method of determining just
compensation by calculating the difference between before and after
values. Rather, East Tennessee maintains, it is merely questioning
the basis for Porter’s and Gruelle’s just compensation
calculations. Upon closer examination, however, it is apparent
that East Tennessee is really challenging the proper weight to be
given the evidence presented at trial. Excerpts from East
Tennessee’s briefs are telling:
Contrary to the speculative opinions of Mr. Porter and
Mr. Gruelle, the clear weight of the evidence at trial
established that the highest and best use of the property
was for agricultural or residential use.
Appellant’s Br. 29; and
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As stated in East Tennessee’s opening brief, the evidence
presented at trial arguably suggests that
commercial/industrial use may occur at some point in the
future. However, the evidence failed to establish that
it was reasonably probable in the reasonably near future.
Appellant’s Reply Br. 1. In other words, East Tennessee “does not
mount a true Daubert challenge.” TFWS, 325 F.3d at 240; see id.
(upholding decision to admit testimony where the plaintiff mounted
“a challenge to the proper weight to be given to [the expert’s]
evidence, not to its admissibility”). Accordingly, the district
court did not abuse its discretion in admitting Porter and
Gruelle’s testimony.
III.
We review the decision to deny a motion for a new trial for
abuse of discretion and “will not reverse absent exceptional
circumstances.” Dennis v. Columbia Colleton Med. Ctr., Inc., 290
F.3d 639, 650 (4th Cir. 2002).3 A court should grant a new trial
only if the verdict (1) “is against the clear weight of the
evidence, or (2) is based on evidence which is false, or (3) will
3
We reject Appellees’ contention that our standard of review
is actually even more forgiving because East Tennessee failed to
move for a directed verdict at trial pursuant to Federal Rule of
Civil Procedure 50(a). East Tennessee was not required to make a
Rule 50(a) motion because East Tennessee does not challenge whether
there is an issue for the jury——that is, whether Appellees have the
right to just compensation. East Tennessee concedes the right to
just compensation; instead, it challenges the sufficiency of the
evidence supporting the amount of compensation determined by the
jury. Thus, this Court’s standard of review is unchanged.
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result in a miscarriage of justice, even though there may be
substantial evidence which would prevent the direction of a
verdict.” Knussman v. Maryland, 272 F.3d 625, 639 (4th Cir.
2001).East Tennessee draws our attention to the first and third
prongs of this standard.
East Tennessee first argues that the jury verdict is against
the weight of the evidence because every appraiser who testified at
trial stated that there were agricultural or residential properties
in Wythe County that sold for approximately $1,800 per acre. Yet,
East Tennessee argues, Porter and Gruelle suggested a before-take
value for Appellees’ property of $10,000 and $11,500 per acre,
respectively, based on incomparable sales of industrial and
commercial property in other counties. Second, East Tennessee
argues that the verdict will result in a miscarriage of justice
because in the six trials and multiple land commission proceedings
convened to date to determine the compensation owed to landowners
affected by East Tennessee’s pipeline, no landowner——regardless of
the size of his or her property——has been awarded more than
$135,800. Given this, East Tennessee argues, fairness requires
setting aside or reducing Appellees’ award.
These arguments fail. As the district court noted in its
order denying the motion, there was evidence at trial, contrary to
East Tennessee’s assertions, demonstrating that the highest and
best use of Appellees’ property before the taking was industrial
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and commercial use. In addition to Porter and Gruelle, Dalton and
Fowler testified as much. Although East Tennessee called witnesses
to contradict the conclusions drawn by these four individuals, it
was, as the district court noted, the jury’s decision to weigh the
credibility of the witnesses presented by both sides. Cf. United
States v. Smoot Sand & Gravel Corp., 248 F.2d 822, 829 (4th Cir.
1957) (upholding a verdict “not consistent with either party’s
theory of valuation” where, among other things, the “jury heard the
experts presented by the parties and could accept or reject any
part of their testimony”). As for East Tennessee’s fairness
argument, we find nothing irrational or arbitrary about the
district court’s conclusion that fairness must be put into context
when each just compensation case involves different parcels of
land, different owners, different witnesses, and so on. The mere
fact that the jury’s verdict in this case exceeds any previous
verdict does not mean that there has been a miscarriage of justice.
Furthermore, even if the previous awards represent a fraction of
the award here, East Tennessee has provided no evidence about the
characteristics of the other properties affected by the pipeline or
the testimony, expert and otherwise, that the other juries and land
commissioners heard. East Tennessee’s motion was properly denied.
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IV.
Whether the jury’s award is excessive is a question of law
that we review de novo. Conner v. Schrader-Bridgeport Intern.,
Inc., 227 F.3d 179, 202 (4th Cir. 2000). Appellees’ appraiser-
witnesses, Porter and Gruelle, estimated that just compensation for
Appellees’ 364-, 14-, and 40-acre parcels4 would exceed $3 million.
Of East Tennessee’s appraiser-witnesses, Klutz could not offer a
figure because he did not appraise the property; Johnston testified
that Appellees were owed a total of $82,652 for the three parcels.
Given this testimony, which the jury was free to accept or reject
as it pleased, an award of $1.8 million is entirely reasonable and
is not excessive compensation for the diminution in Appellees’
property which the jury could reasonably determine, based on the
evidence presented at trial, the pipeline caused. Cf. Conner, 227
F.3d at 202; see also Klein v. Sears Roebuck & Co., 773 F.2d 1421,
1428 (4th Cir. 1985) (noting that a district court “in its
discretion may set aside a verdict and grant a new trial if the
verdict is so excessive that it cannot be justified by anything in
the record or of which the [c]ourt can take judicial notice”
(quotation marks omitted)); Smoot Sand, 248 F.2d at 829 (refusing
to grant a new trial where the jury’s verdict was within the range
of the credited testimony, “which should not be reweighed on
4
Just compensation for the 40-acre parcel is not at issue in
this appeal.
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appeal”). The district court properly denied East Tennessee’s
request for remittitur.
V.
For the foregoing reasons, we conclude that the district court
did not abuse its discretion in denying East Tennessee’s motions in
limine and motion for a new trial. We therefore affirm the
decision below.
AFFIRMED
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