Kimball Laundry Co. v. United States facts for kids
Quick facts for kids Kimball Laundry Co. v. United States |
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| Argued December 7, 1948 Decided June 27, 1949 |
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| Full case name | Kimball Laundry Co. v. United States |
| Citations | 338 U.S. 1 (more)
69 S. Ct. 1434; 93 L. Ed. 1765; 7 A.L.R.2d 1280
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| Prior history | On Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit. |
| Holding | |
| Loss in going concern value, though related in part to intangibles, is property capable of being destroyed by the government so as to give rise to an obligation of just compensation under the fifth amendment. | |
| Court membership | |
| Case opinions | |
| Majority | Frankfurter, joined by Jackson, Burton, Rutledge, Murphy |
| Concurrence | Rutledge |
| Dissent | Douglas, joined by Vinson, Black, Reed |
| Laws applied | |
| U.S. Const. amend. V | |
Kimball Laundry Co. v. United States was an important Supreme Court case in 1949. It helped clarify how the government must pay people when it takes their property for public use. This power is called eminent domain. The case focused on whether the government has to pay for things you can't touch, like a business's customers or its good reputation. The Court decided that sometimes, these "intangible property" rights must also be paid for fairly. This fair payment is known as just compensation.
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What Was This Case About?
The story began when the United States Army needed a place to do laundry. They decided to take over the Kimball Laundry Company's building in Omaha, Nebraska. The Army used the laundry's facilities for a certain time.
Because the Army took over, the Kimball Laundry Company couldn't serve its regular customers. The company was paid rent for the building itself. However, the owner felt this wasn't enough. He argued that the Army's actions had destroyed his customer base. This meant his business lost value, even after the Army left. He believed he should be paid for this loss too.
The case went to a lower court, the United States District Court for the District of Nebraska. The owner claimed he wasn't given enough "just compensation." He felt the payment should include money for the loss of his business's value due to losing its customers.
The Supreme Court's Decision
The Supreme Court looked at this situation. The laundry business had to stop operating because the Army was using its facilities. The company was paid for the rent of its building. But it didn't get money for losing its customers. This loss of customers made the business less valuable. Appraisers (people who estimate value) agreed this loss was likely.
The Court, led by Justice Frankfurter, decided that the government had to pay for this loss. This included the reduction in the "going concern value" of the business.
What is "Going Concern Value"?
Justice Frankfurter explained that "going concern value" is the value of a business that is actively running. It includes things like its customer base, its reputation, and its ability to make money. Even though these are "intangible" (you can't touch them), they are still part of the business's property.
He said that if the government's actions destroy this value, it's like taking property. And under the Fifth Amendment of the U.S. Constitution, the government must provide "just compensation" for property it takes.
Justice Frankfurter noted that usually, when the government takes land, the business owner can just move and rebuild their customer base. But in this case, the Army took over the entire laundry. This made it impossible for the laundry to keep its customers. Because of this, the business's "going concern value" was destroyed. The Court decided this destruction was a "taking" of property. Therefore, the government had to pay for it.
Different Ideas: Concurring Opinion
Justice Rutledge agreed with the main decision. He understood that taking property for a short time might need different rules for payment than taking it forever. He joined the Court's opinion. However, he also warned against making very strict rules about how to measure this kind of payment. He thought it would be better to test these ideas in real cases first.
Different Ideas: Dissenting Opinion
Not all the Justices agreed. Justice Douglas, along with Justices Black, Vinson, and Reed, disagreed with the majority. They argued that the government should only pay for what it actually takes. They felt the government shouldn't have to pay for what the owner loses if the government doesn't gain from it.
The dissenting Justices pointed out that the Army didn't use the laundry's customer lists or trade routes. So, they argued, the government shouldn't have to pay for them. They believed that if the business was harmed, it was an accidental result of taking the land, not something the government intended to take. Therefore, they felt it shouldn't be compensated.
