Manatt Triumps in Eminent Domain Lawsuit Against the United States

Manatt, Phelps & Phillips, LLP, litigators, led by partner and OCA Member Edward G. Burg at trial, secured a victory for Hahm International Inc. and Levand Steel & Supply Corp. on Feb. 15 in the U.S. District Court, Central District of California against the United States. The jury awarded $30.3 million in compensation to the owners of 1,000 acres of land in the Mojave Desert, which was taken by eminent domain for expansion of the U.S. Marine Corps training base at Twentynine Palms.The property, owned by principals of Hahm International Inc. of Apple Valley and Levand Steel & Supply Corp. of Los Angeles, contained a permitted iron ore mine that was slated to supply iron ore to the cement industry for the next 45 years. The United States told the jury that the property was worth $5.6 million, while the owners claimed the property was worth $38.6 million.Burg, representing the property owners, hailed the verdict. “We always believed that the federal government vastly undervalued the property by not recognizing its uniqueness and its importance to future infrastructure and construction in California,” he said.

The property owners currently own one of two active iron ore mines in California supplying iron to the cement industry. The property in the lawsuit, a permitted mine known as Morris Mine, was to become the next source of iron ore for the industry. Located in Johnson Valley, in the desert east of Apple Valley, it is the only iron ore mine permitted in the state in the past 15 years.

The presently operating mine is scheduled to close in 2022 because it is in the path of the expansion of the Fort Irwin Army Base. The owners reached an agreement with the U.S. Army in 2006 that allows them to mine iron ore intermittently, leaving the property when the Army troops need to train. However, the Marine Corps was not willing to enter into a similar shared-use agreement for Morris Mine.

The United States filed its eminent domain case in 2016 to acquire the mine for expansion of the training base. The case was tried in federal court in downtown Los Angeles before Chief Judge Virginia A. Phillips.

After a six-day trial, the jury reached its verdict Thursday, finding that the owners are entitled to $30,273,850 from the United States for the taking of their property.

“We are gratified that the jury took the time to understand how valuable this property is,” said Burg. “We respect the Marine Corps’ decision to expand its base, but the United States never properly recognized the true value of the property.”

About Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP, is one of the nation’s leading law and consulting firms, with offices strategically located in California (Los Angeles, Orange County, Palo Alto, San Francisco and Sacramento), New York (New York City and Albany), Chicago and Washington, D.C. The firm represents a sophisticated client base—including Fortune 500, middle-market and emerging companies—across a range of practice areas and industry sectors. For more information, visit www.manatt.com.