Justice Manual § 5-15.530

Federal Rule of Civil Procedure 71.1(c) provides that there shall be named defendants in condemnation cases all persons having or claiming an interest in the property condemned whose names can be ascertained by a reasonably diligent search of the local land records, considering the character and value of the property involved and the interest or estate to be acquired. Persons having an interest in property include those owning an estate in the land (e.g., fee owner, lessee, tenant) and those having a lien or encumbrance on the land (e.g., mortgagee, taxing authority, material person, mechanic). Evidence of title must, therefore, be obtained and examined for a determination of the necessary and proper parties defendant. Persons having (or claiming) an interest in the property at the time of the commencement of record notice, see JM 5-15.524 are necessary parties and must be joined in the action as defendants. By joining as defendants all persons disclosed by the title evidence as having a possible interest in the property as of the commencement of record notice, and, in the course of proceedings, by giving those parties notice and opportunity to be heard at the trial or hearing on just compensation, due process will have been afforded and the final judgment will be res judicata as to those parties. If the United States secures a judgment of condemnation fixing compensation and ordering distribution to the wrong person or to fewer than all persons entitled thereto, the party having a compensable interest who was omitted from the proceedings has been denied due process and is entitled to bring an action against the United States for just compensation. The United States may thus be compelled to pay twice for the same acquisition. Where the interest of the omitted party was a matter of record but was not disclosed by the title evidence, the United States may recover its loss from the title company or abstracter up to the limit of liability. See JM 5-15.534.