4.5.1. The Scope of the Project Test.To fairly apply the principle excluding project influence, the Supreme Court created the scope of the project test in United States v. Miller: “[I]f the ‘lands were probably within the scope of the project from the time the Government was committed to it,’ no [change] in value attributable to the project is to be considered in awarding compensation.”670 Accordingly, if the scope of the project rule applies, project influence on market value must be disregarded.671 Conversely, if properties not originally within the scope of the project are later acquired by the government, the United States “must pay their market value as enhanced [or diminished] by this factor of proximity” to the project—so any project influence on value, positive or negative, must in fairness be considered.672

The Miller test concerns “whether the . . . lands were probably within the scope of the project from the time the Government was committed to it.”673 This determination can be particularly complex in connection with acquisitions in later stages of large government projects that span several years or require boundary adjustments, such as flood control and reservoir projects.674 In making this determination, courts typically consider the government’s representations to the landowner or the public regarding the property and/or the project boundaries;675 how foreseeable it was at the outset of the project that the property would be needed for it;676 and the length of time between the original and subsequent acquisitions, if applicable.677 The rule does not require that the land ultimately acquired was actually specified in the original project plans. It need only be shown that during the course of the planning or original construction it became evident that land so situated would probably be needed for the public project.678 

Some courts have framed this inquiry in terms of reasonable expectations, i.e., whether, after announcement of the government project, a reasonable buyer could reasonably anticipate being able to devote the subject property to its highest and best use without serious apprehension that it would soon be condemned for the government project.679 For example, the Tenth Circuit held that landowners could not have reasonably believed that their property had been removed from the scope of a reservoir project despite mistakenly being left off some project maps: the property not only was clearly covered by the government’s statements of intent, but also had been partly “covered with water nearly all of the time since the lake filled . . . ; obviously the government intended this property to be part of the project.”680 But both frameworks reflect a common aim: 

Regardless of how the inquiry is framed, however—whether in terms of the Miller test or in terms of reasonable expectations—the object is the same: to distinguish value attributable to Government demand from true fair market value of Government-conferred benefits, and to ensure that the landowner is not awarded a premium for the former but, at the same time, is justly compensated for the latter.681 

The date on which the government’s project commences also requires legal determination. In making this determination, courts typically consider three legal requirements of a “project”: a public purpose for which property is to be acquired, identification of the particular properties to be acquired for that public purpose, and imminent acquisition that is evident to the public.682 As the former Fifth Circuit reasoned: 

It is the date as of which the landowners or prospective purchasers no longer could reasonably anticipate being able to devote these properties to their highest and best use in the context of the surrounding governmental project, without serious apprehension that the properties would soon be condemned. In other words, it is the date as of which the prospect of imminent condemnation becomes sufficiently definite that it would be a major factor in the decision of any reasonable person to buy or develop the property.683 

Once that date has been legally determined, the appraiser “must disregard any . . . alterations in value [due to the project] which it finds to have occurred thereafter.”684 

The nature of the government project and its alleged influence on value may also require legal analysis. For example, in United States v. 480.00 Acres of Land (Fornatora), the Eleventh Circuit determined that the scope of the project rule did not allow appraisers to disregard preexisting zoning restrictions that affected the market value of property being acquired for the East Everglades expansion of Everglades National Park.685 There, county regulations had restricted development of the properties being acquired since 1981, well before the properties were acquired by condemnation starting in 2000.686 The landowners argued the county regulations should be disregarded under the scope of the project rule, claiming they reflected the influence of the federal government in an attempt to depress market value in anticipation of future federal acquisitions. To determine this legal question, the lower court correctly conducted an extensive review of evidence surrounding the county’s passage of the 1981 zoning ordinance, ultimately finding that the evidence failed to show that “the primary purpose of the regulation was to depress the property value of land or that the ordinance was enacted with the specific intent of depressing property value for the purpose of later condemnation.”687 As a result, the 1981 county ordinance “was not within ‘the scope’ of [the federal government’s] decision seven years later to expand Everglades National Park or its decision nineteen years later to begin condemning properties.”688 The Eleventh Circuit affirmed, holding that the district court “acted correctly in ruling on [the landowners] objection regarding the zoning restrictions as a matter of law and in then excluding evidence regarding this objection from the fact-finding Commission.”689