United States of America v. 1.41 Acres of Land et al

Filing 45

ORDER RE MOTION TO STRIKE AFFIRMATIVE DEFENSES [re 35 MOTION to Strike 34 Answer to Complaint, 33 Answer to Complaint filed by United States of America, 38 Opposition/Response to Motion filed by East Bay Regional Parks District]. Signed by Judge William Alsup on 11/10/2014. (whasec, COURT STAFF) (Filed on 11/10/2014)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 UNITED STATES OF AMERICA, 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 Plaintiff, No. C 14-01781 WHA v. 1.41 ACRES OF LAND, more or less, situated in the City of Alameda, Alameda County, State of California, and THE STATE OF CALIFORNIA, acting by and through its Department of Parks and Recreation, and the EAST BAY REGIONAL PARK DISTRICT, ORDER RE MOTION TO STRIKE AFFIRMATIVE DEFENSES Defendants. / 18 19 20 STATEMENT In this condemnation action, the United States, acting on behalf of the General Services 21 Administration, seeks to condemn a portion of McKay Avenue in Alameda County. The map 22 below shows McKay Avenue, which extends from Central Avenue to Crown Memorial State 23 Beach. East of McKay Avenue is the Alameda Federal Center and a vacant parcel of federal 24 land. West of McKay Avenue are condominiums and Crown Beach. 25 26 27 28 1 2 3 4 5 6 7 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 MAP OF CONDEMNED AND SURROUNDING AREA 19 As a practical matter, this dispute is one of preserving public open-space values versus 20 maximizing the proceeds of the sale of the vacant federal parcel through private development. 21 The United States had sought to sell the vacant federal parcel for private development, and 22 defendants seek to preserve the open-space near Crown Beach. At issue are certain access rights 23 that the United States seeks to possess. 24 In 1961, the United States granted McKay Avenue to the State of California, reserving 25 access and utility easements across McKay Avenue for “as long as may be required to serve 26 Government-owned property.” 27 28 In 2011, the United States began publicly auctioning the vacant parcel. A private developer submitted the winning bid with a sale price of $3.075 million. Defendant East Bay 2 1 Regional Park District (“East Bay”) offered $1.5 million. The City of Alameda then re-zoned 2 the property for open-use only. 3 In April 2014, the United States commenced this condemnation action, filed a declaration 4 of taking, and deposited ten dollars with the Clerk of the Court (Dkt. Nos. 1, 5, 11, 13). 5 Defendants California Department of Parks and Recreation (“State Parks”) and East Bay filed 6 answers. 7 The United States then filed the instant motion to strike affirmative defenses. Fact 8 discovery will close in May 2015 and trial will begin October 2015. This order follows full 9 briefing and oral argument. 11 For the Northern District of California United States District Court 10 ANALYSIS The United States seeks to strike defendants’ affirmative defenses, leaving only the issue 12 of just compensation. This is a pleading motion without the benefit of discovery. The United 13 States seeks an order holding as a matter of law that the taking is for a congressionally- 14 authorized public purpose, namely, whether the taking is authorized by statute and whether it 15 qualifies as a “public use” under the Fifth Amendment. United States v. 14.02 Acres of Land, 16 547 F.3d 943, 949–50 (9th Cir. 2008). For the reasons stated herein, the United States’ motion 17 to strike defendants’ affirmative defenses is DENIED. 18 1. 19 It is undisputed that the United States’ complaint and declaration of taking failed to cite 20 a disposal-of-property statute such as 40 U.S.C. 543, 545. The declaration and complaint only 21 cite 40 U.S.C. 581(c), which prescribes the GSA’s general authority (including condemnation), 22 40 U.S.C. 3114, which sets the requirements for a declaration of taking, and an appropriations 23 act. On the record presented, it would appear that at least some of the condemned land is to be 24 taken solely for the benefit of the vacant lot, given that the United States already has an easement 25 to service the vacant lot for so long as it is owned by the United States. Therefore, the 26 affirmative defense will not be stricken, though it will need to be proven up at summary 27 judgment and/or trial. STATUTORY AUTHORITY. 28 3 1 The United States responds that it did not need to cite a disposal statute because it 2 sought to condemn the land for the “continuing operations” of the Alameda Federal Center. 3 This argument is belied by the easement it already retains and the circumstances around the now 4 defunct sale to the private developer. The only real reason the United States seeks to obtain title 5 to McKay Avenue in fee simple is to secure easements for a prospective private development 6 of the vacant federal parcel. This falls into the category of disposal of surplus lands and the 7 government should have cited such authority in its declaration and complaint. 8 The United States’ reliance on United States v. 1.33 Acres, 9 F.3d 70, 71 (9th Cir. 1993) 9 is misplaced. There, unlike here, the United States relied upon a disposal statute and the GSA’s general condemnation power. The disposal statute cited was found to be broad enough to 11 For the Northern District of California United States District Court 10 authorize the condemnation. Here, no disposal statute was cited in the declaration of taking. 12 2. PUBLIC USE. 13 On the other hand, this order sides with the United States on the next issue of “public 14 use.” Defendants contend that there is no “public use” for the proposed taking and that the 15 proffered “public purposes” are pre-textual. Kelo v. City of New London, Connecticut, 545 U.S. 16 469, 477–78 (2005). Specifically, defendants allege that the United States condemned the land 17 in order to secure rights to the McKay Avenue utility and access easements so as to effect a more 18 profitable sale of the vacant parcel. 19 In 1.33 Acres, our court of appeals upheld a condemnation action undertaken to secure 20 an easement necessary to dispose of federal property. 9 F.3d at 72–74. As discussed supra, that 21 decision relied primarily on a disposal statute. Furthermore, in Southern Pacific Land Co. v. 22 United States, 367 F.2d 161, 163 (9th Cir. 1966), the United States condemned mineral rights 23 underlying a parcel taken for the construction of a military facility in order to increase the value 24 of the condemned land in the event of its future sale. The court stated that “[a]dvantageous 25 liquidation of a Government’s investment is a legitimate consideration in determining the estate 26 to be taken.” Ibid. Taken together, these decisions support the proposition that the United States 27 may condemn property pursuant to a disposal statute in order to secure access by the buyer to the 28 4 1 disposed property and in doing so may also consider the condemnation’s effect on the value 2 of the disposal property. 3 The problem is that the United States neglected to cite the disposal statute and thus 4 this dictum so far does it no good. As the record actually stands, the United States relies solely 5 on condemnation to support “continuing operations of the federal building.” In light of the 6 easement already owned by the United States for exactly that purpose, the supposed rationale for 7 condemnation would appear to be a sham – or so it is alleged – and at this stage, that defensive 8 allegation will not be stricken. 9 COASTAL ZONE MANAGEMENT ACT. State Parks’ ninth affirmative defense invoked the Coastal Zone Management Act, 11 For the Northern District of California United States District Court 10 3. 16 U.S.C. 1452. The United States moved to strike this defense and State Parks stated that it 12 “does not contest the motion to strike its defense based on the Coastal Zone Management Act” 13 (Opp. 13). Accordingly, the motion to strike State Parks’ ninth affirmative defense is GRANTED. 14 CONCLUSION 15 For the reasons stated herein, State Parks’ ninth affirmative defense is hereby STRICKEN. 16 The United States’ motion to strike defendants’ other affirmative defenses is hereby DENIED. 17 The requests for judicial notice, to the extent not relied upon herein, are DENIED AS MOOT. 18 19 20 Whether or not an amendment to the declaration can be made is a procedural issue not decided by this order. As stated at oral argument, these issues should be set forth in a motion for summary 21 judgment. Accordingly, the United States shall file a motion for summary judgment by 22 FEBRUARY 16, 2015, to be noticed on a 35-day track. This, of course, does not preclude 23 defendants from moving for summary judgment at some earlier point. 24 25 IT IS SO ORDERED. 26 27 Dated: November 10, 2014. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 28 5

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