SHM Jamestown, LLC v. City of Jamestown, Kentucky et al

Filing 15

MEMORANDUM OPINION AND ORDER by Judge Greg N. Stivers on 8/25/2016 granting 10 Motion to Dismiss filed by the United States of America and U.S. Army Corps of Engineers. Defendants' Motion to Dismiss (DN 10 ) is GRANTED, and all claims asserted against United States of America and United States Army Corps of Engineers are DISMISSED WITH PREJUDICE. cc: Counsel (CDR)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:16-CV-00064-GNS
SHM JAMESTOWN, LLC

PLAINTIFF

V.
CITY OF JAMESTOWN, KENTUCKY;
UNITED STATES OF AMERICA; and
UNITED STATES ARMY CORPS OF ENGINEERS

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendants’ Motion to Dismiss (DN 10) filed by the
United States of America (“United States”) and U.S. Army Corps of Engineers (“Corps”) (jointly
“Moving Defendants”). The motion has been fully briefed and is ripe for decision. For the
reason stated below, the motion is GRANTED.
I.

STATEMENTOF THE CASE

This is action was filed by Plaintiff SHM Jamestown, LLC seeking a declaration of rights
invalidating an ordinance passed by Defendant City of Jamestown, Kentucky (“City”), allowing
the City to annex real property (the “Property”) Plaintiff leased from the United States, and
seeking damages against City for violations of Plaintiff’s constitutional rights under the
Constitution of the United States and the Commonwealth of Kentucky. On April 8, 2016, the
City enacted an ordinance manifesting its intent to annex the Property.

Although KRS

81A.425(3) required the City to notify the property owner no later than fourteen days prior to the
enactment of the ordinance, the City failed to notify both Plaintiff and the United States of its
intentions.

Moving Defendants claim they have not waived their sovereign immunity, which is
required for jurisdiction under federal law. See United States v. Mitchell, 463 U.S. 206, 212
(1983). Plaintiff is not seeking relief against Moving Defendants. Thus, Moving Defendants
request that the claim against them be dismissed pursuant to Fed. R. Civ. P. 12(b)(1) and
12(b)(6).
However, Plaintiff claims Moving Defendants are indispensable parties, as the matter
requires the adjudication of property rights of the United States. Moving Defendants argue that
if Plaintiff is correct and the United States has a property interest at stake in this matter, the claim
should be dismissed in its entirety.
II.

JURISDICTION

This Court has “original jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens
of different States . . . .” 28 U.S.C. § 1332(a)(1).
III.

STANDARD OF REVIEW

When a motion to dismiss is filed by the United States based on sovereign immunity the
motion should be treated as a motion under Fed. R. Civ. P 12(b)(1), dismissal for lack of subject
matter jurisdiction. See In re Ohio River Disaster Litig., 862 F.2d 1237, 1244 (6th Cir. 1988). In
order to survive dismissal for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1),
the plaintiff bears the burden of proving subject matter jurisdiction. See Adams v. Bain, 697 F.2d
1213, 1219 (4th Cir. 1982). The court must “construe the Complaint liberally and treat all wellpleaded facts as true, according the plaintiff the benefit of all reasonable inferences.” Murphy v.
United States, 45 F.3d 520, 522 (1st Cir. 1995) (citation omitted). “A plaintiff, however, may
not rest merely on unsupported conclusions or interpretations of law.” Id. (internal quotation

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marks omitted) (citation omitted). “[S]ubjective characterizations or conclusory descriptions of a
general scenario which could be dominated by unpleaded facts will not defeat a motion to
dismiss.” Id. (internal quotation marks omitted) (citation omitted).
For a plaintiff to survive a dismissal for failure to state a claim under Fed. R. Civ. P.
12(b)(6), the complaint “must contain sufficient factual matter, accepted as true, to state a claim
that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation
marks omitted) (citation omitted).

A claim must allow the court “to draw a reasonable

inference” as to the defendant’s liability to be facially plausible. Id. “[A] district court must (1)
view the complaint in the light most favorable to the plaintiff and (2) take all well-pleaded
factual allegations as true.” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir.
2009) (citation omitted).

“But the district court need not accept a bare assertion of legal

conclusions.” Id. (internal quotation marks omitted) (citation omitted). A pleading that offers
labels and conclusions or systematic or a formulaic recitation of the elements of a cause of action
will not do. Nor does a complaint suffice if it tenders naked assertions[s] devoid of further
factual enhancement.”

Iqbal, 556 U.S. at 678 (internal quotation marks omitted) (citation

omitted).
IV.

DISCUSSION

Moving Defendants argue the claim against them should be dismissed for two reasons.
First, Moving Defendants argue that sovereign immunity does not allow the courts to establish
subject matter jurisdiction over the United States and that this case should be dismissed in
accordance with Fed. R. Civ. P. 12(b)(1). (Defs.’ Mem. in Supp. of Mot. to Dismiss 1-2, DN 101). Second, Moving Defendants argue Plaintiff has failed to state a claim for which relief could

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be granted and the case should be dismissed in accordance with Fed. R. Civ. P. 12(b)(6). (Defs.’
Mem. in Supp. of Mot. to Dismiss 2-3).
A.

Rule 12(b)(1)

Sovereign immunity protects the United States and its agencies from law suits by
removing the court’s subject matter jurisdiction over the claim. The United States must waive
sovereign immunity for the court to have jurisdiction, without waiver jurisdiction cannot be
found. See Mitchell, 463 U.S. at 212. The United States claims it has not waived sovereign
immunity, and Plaintiff has not offered any proof of such a waiver. Because of this, there is no
subject matter jurisdiction over Moving Defendants. The United States and Corps must be
dismissed as parties to the claim due to lack of subject matter jurisdiction.
B.

Rule 12(b)(6)

A claim will only survive a motion to dismiss for failure to state a claim if the facts
pleaded allow the relief to be facially plausible. See Bell Atl. Corp. v. Twombly, 550 U.S. 554,
570 (2007). A complaint must also include “direct or inferential allegations respecting all the
material elements to sustain a recovery under some viable legal theory.” Scheid v. Fanny
Farmer Candy Shops, Inc., 859 F.2d 434, 436-37 (6th Cir. 1988) (citation omitted).
Plaintiff does not assert claims against either of Moving Defendants in the Complaint. In
fact, the Complaint does not contain any language that leads the Court to infer an allegation is
being made against either the United States or Corps. Plaintiff frankly admits in its response that
no claim or award against the United States or Corps is being sought.
According to Plaintiff, the United States and Corps have a property interest at stake in
this matter and are indispensable parties because the matter requires the adjudication of property
rights of the United States. (Pl.’s Resp. to Defs.’ Mot. to Dismiss 1-2, DN 13). The United

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States does not have a property interest at stake in this matter. City’s annexation of this land will
not affect the United States’ ownership of the land or usurp its authority over the land. “A state
may conform its municipal structures to its own plan, so long as the state does not interfere with
the exercise of jurisdiction within the federal area by the United States.” Howard v. Comm’rs of
Sinking Fund of City of Louisville, 344 U.S. 624, 626-27 (1953). In Howard, the City of
Louisville annexed federal land which was the location of a Naval Ordnance Plant. In rejecting
the argument that the city lacked the authority to annex the federal area, the Court stated that “[a]
change of municipal boundaries did not interfere in the least with the jurisdiction of the United
States within the area or with its use or disposition of the property.” Id. See also First Hardin
Nat’l Bank v. Fort Knox Nat’l Bank, 361 F.2d 276, 279 (6th Cir. 1966) (“The principle has been
well established that a military reservation within a state remains a geographical part of the city,
county and state of which it was part at the time of acquisition by the United States.”). Based
upon the holding in Howard, the Court finds the United States and Corps are not indispensable
parties and they must be dismissed for Plaintiff’s failure to state a claim against Moving
Defendants upon which relief can be granted.
V.

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’ Motion to
Dismiss (DN 10) is GRANTED, and all claims asserted against United States of America and
United States Army Corps of Engineers are DISMISSED WITH PREJUDICE.

Greg N. Stivers, Judge
United States District Court
cc:

counsel of record

August 25, 2016

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