United States v. Polar Star

A federal government action for a taking, concurrent with a notice to renew a lease upon that same property, may be dismissed if the government's lease is renewed and there is a possessory right in the property. Other terms to that lease renewal, such as the price of the lease are within the sole jurisdiction of the Court of Federal Claims.

In 1984 the Air Force entered into a program where they allowed a contractor to build family housing on Eilson Air Base in Alaska. As apart of this deal, the Air Force retained possession of the underlying property, whereas the contractor possessed the buildings and leased them back to the Air Force with an option to buy at the end of 23 years. Approaching the end of this lease period, the Air Force and the current leaseholder, Polar Star, could not agree on a final sale price. To protect their interest in the property, the Air Force filed an eminent domain action concurrently with an action to renew the lease for one year till a final price could be reached. The district court renewed the lease for one year and dismissed the eminent domain action as no taking had therefore occurred. The district court further held that it did not have jurisdiction to set terms of rent for the renewed lease. Polar Star appealed. The Ninth Circuit affirmed holding that actions against the government for money damages on a breach of contract must be made in the Court of Federal Claims and that the "district court correctly determined that the condemnation action should be dismissed because the Government already owned the possessory right it sought to condemn."