In the case of Kirby Forest Industries, Inc. v. United States (1983), the Supreme Court ruled in favor of the U.S government regarding a dispute over land valuation for eminent domain purposes. The U.S government had taken 21,298 acres of land from Kirby Forest Industries under its power of eminent domain to create a national park and wildlife refuge in Texas. The disagreement arose when determining compensation; Kirby argued that it should be compensated based on potential future profits from oil and gas reserves believed to exist beneath the property's surface while the government contended that only current market value should be considered. The court held that "just compensation" as required by Fifth Amendment takings clause meant fair market value at time of taking without considering speculative uses or values which depend upon events or combinations likely to occur in immediate future but not yet begun. It further clarified that any increase or decrease in property's value due to imminent threat of condemnation must also be disregarded when calculating just compensation.

In the dissenting opinion for Kirby Forest Industries, Inc. v. United States, Justice O'Connor disagreed with the majority's interpretation of "just compensation" under the Fifth Amendment's Takings Clause. She argued that fair market value should not be the sole measure of just compensation when it fails to fully indemnify a property owner for their loss. In this case, she believed that Kirby Forest Industries was entitled to more than just its land’s market value because they had specific plans to use and develop it in ways which would have generated significant profit beyond its mere sale price on an open market at any given time. The government’s taking thus deprived them not only of their property but also these potential profits from planned development projects - something which she felt should be factored into determining what constitutes “just” compensation.