Fuller was a rancher who owned
some land, leased some from the Arizona, and had a permit to graze on
The Taylor Grazing Act of
1934 (43 U.S.C. §315) (TGA) established the permitting system for grazing on Federal lands.
The Federal government took
most of the lands Fuller owned via eminent domain. The 5th
Amendment required them to pay Fuller
the fair market value for the lands. There was a disagreement over how to
calculate the value of the lands.
The US argued that Fuller
didn't have much land, so he couldn't graze a lot of cattle, therefore
the land wasn't worth much.
Fuller argued that even
though he didn't own a lot of land himself, he had permits for the use of
a lot of adjacent Federal grazing land. So Fuller could use the small
amount of land he owned to support a very large cattle ranch. Therefore
the land was worth a lot.
Basically, Fuller was
arguing that he had a property interest in the grazing permits.
The US argued that the TGA explicitly said that the permits do not
create any property interests.
The Trial Court found for
Fuller. The US appealed.
The Trial Court found that
when calculating the value of Fuller's land, the fact he owned grazing
permits needed to be factored in.
The Appellate Court affirmed.
The US appealed.
The US Supreme Court reversed
and found that Fuller had no property interest in the gazing permits.
The US Supreme Court
acknowledged that the grazing permits did increase the amount someone
would be willing to pay for Fuller's land.
However, the Court found that
eminent domain doesn't always require that the government pay fair market
value. It only has to pay "just compensation."
The Court looked to the TGA and found that it explicitly did not create
any property interests. In addition, the permits were revocable.
Therefore the 5th Amendment did not require that the government factor in
the value of the grazing permits when deciding how much to pay Fuller for
If Fuller had sold his land on
the open market, the fact that he had grazing permits to go with the land
would have substantially increased the selling price. This decision
probably wasn't fair to him.