United States of America v. Western Radio Services Co.
Filing
64
Opinion and Order - Plaintiff's motion to dismiss (ECF 24 ) is GRANTED IN PART and DENIED IN PART, Plaintiff's motion for summary judgment (ECF 26 ) is GRANTED, and Defendant's motion for summary judgment (ECF 32 ) is DENIED. Under the Declaratory Judgment Act, the Court declares as follows: the Communications Use Lease between the Forest Service and Western Radio, designated CRE09 and issued December 17, 2000, was properly revoked by the Forest Service and is cancelled. Signed on 4/28/2014 by Judge Michael H. Simon. (mja)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
UNITED STATES OF AMERICA,
Case No. 3:13-cv-01186-SI
Plaintiff,
OPINION AND ORDER
v.
WESTERN RADIO SERVICES CO., INC.,
Defendant.
S. Amanda Marshall, United States Attorney, Neil J. Evans, Assistant United States Attorney,
United States Attorney’s Office, District of Oregon, 1000 S.W. Third Avenue, Suite 600,
Portland, OR 97204. Of Attorneys for Plaintiff.
Marianne Dugan, 259 E. 5th Avenue, Suite 200-D, Eugene, OR 97401. Of Attorneys for
Defendant.
Michael H. Simon, District Judge.
Western Radio Services Co., Inc. (“Western Radio” or “Defendant”) and the U.S. Forest
Service (“Forest Service”) are parties to a Communications Use Lease, designated CRE09,
issued December 17, 2000 (“Lease”). The United States brings this declaratory judgment action
against Western Radio seeking a declaration that the Lease is cancelled and that the United
States is the owner of the structures and improvements and Western Radio has no legal
ownership. Currently before the Court are Plaintiff’s motion to dismiss Defendant’s
PAGE 1 – OPINION AND ORDER
counterclaims (ECF 24), Plaintiff’s motion for summary judgment (ECF 26), and Defendant’s
motion for summary judgment (ECF 32). For the reasons stated below, Plaintiff’s motion to
dismiss is granted in part, Plaintiff’s motion for summary judgment is granted, and Defendant’s
motion for summary judgment is denied.
STANDARDS
A. Motion to Dismiss
A motion to dismiss for failure to state a claim may be granted only when there is no
cognizable legal theory to support the claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual
allegations, the court must accept as true all well-pleaded material facts alleged in the complaint
and construe them in the light most favorable to the non-moving party. Wilson v. HewlettPackard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d
992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint
“may not simply recite the elements of a cause of action, but must contain sufficient allegations
of underlying facts to give fair notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from
the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office
Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the
plaintiff’s legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S.
662, 678-79 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an
entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the
expense of discovery and continued litigation.” Baca, 652 F.3d at 1216. “A claim has facial
PAGE 2 – OPINION AND ORDER
plausibility when the pleaded factual content allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
B. Motion for Summary Judgment
A party is entitled to summary judgment if the “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine
dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view
the evidence in the light most favorable to the non-movant and draw all reasonable inferences in
the non-movant’s favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th
Cir. 2001). Although “[c]redibility determinations, the weighing of the evidence, and the
drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling
on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of
the plaintiff’s position [is] insufficient. . . . ” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252,
255 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for
the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).
C. Administrative Procedure Act
Western Radio brings a counterclaim under the Administrative Procedure Act, 5 U.S.C.
§ 701 et seq. (“APA”). The APA provides for judicial review of final agency action. 5 U.S.C.
§§ 701-706. Under the APA, a court may set aside agency actions only if such actions are
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A). Under the APA, an “agency must examine the relevant data and articulate a
satisfactory explanation for its action.” Motor Vehicle Mfrs. Ass’n of United States, Inc. v. State
PAGE 3 – OPINION AND ORDER
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Under this standard, an agency’s action is
arbitrary and capricious if: (1) the agency fails to consider an important aspect of a problem;
(2) the agency offers an explanation for the decision that is contrary to the evidence; (3) the
agency’s decision is so implausible that it could not be ascribed to a difference in view or be the
product of agency expertise; or (4) the agency’s decision is contrary to the governing law. Org.
Village of Kake v. U.S. Dept. of Agric., --- F.3d ----, 2014 WL 1229762, at *1 (9th Cir. Mar. 26,
2014). Although a court’s “inquiry must be thorough, the standard of review is highly
deferential; the agency’s decision is ‘entitled to a presumption of regularity,’ and [a court] may
not substitute [its] judgment for that of the agency.” San Luis & Delta-Mendota Water Auth. v.
Jewell, --- F.3d ----, 2014 WL 975130, at *9 (9th Cir. Mar. 13, 2014) (quoting Citizens to
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16 (1971)).
BACKGROUND
Western Radio leases land on Walker Mountain from the Forest Service on which
Western Radio maintains a communications tower, a support building, and a generator pad
(collectively, “Original Tower”). Beginning in August 2010, Western Radio constructed a new
communications tower at the same site (“New Tower”). In a previous action, the Court held that
Western Radio breached the Lease when it constructed the New Tower without receiving final
approval from the Forest Service and that the New Tower was a continuing trespass on the Forest
Service’s land. United States v. Western Radio Servs. Co., 2012 WL 3776474 (D. Or. Aug. 29,
2012) (Western Radio I). The Court ordered Western Radio to remove all trespassing structures
and to restore the site by August 30, 2013. United States v. Western Radio Servs. Co., 2013
WL 1867477 (D. Or. May 3, 2013) (Western Radio II). Western Radio appealed the Court’s
judgment and on July 5, 2013, the Court stayed its judgment during the pending appeal, except
for the portion of the judgment prohibiting Western Radio from removing any of United States
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Cellular Operating Company of Medford’s equipment from the Original Tower. United States v.
Western Radio Servs. Co., Case No. 3:11-cv-00638-SI, Amended Judgment dated July 5, 2013,
Docket No. 249.
In the previous action, the United States had requested that the Court cancel the Lease as
a remedy to the breaches of the Lease that the Court had found on summary judgment. The Court
declined to cancel the Lease because the parties had specifically agreed in the Lease to an
administrative revocation procedure in the event Western Radio breached the Lease. Western
Radio II, 2013 WL 1867477, at *1. The United States then commenced the revocation procedure
that is now at issue.
On January 3, 2013, the United States sent a Notice of Noncompliance (“Notice”) to
Western Radio and also to counsel for Western Radio. AR 218-231. Due to his schedule, Richard
Oberdorfer, the President of Western Radio, did not receive the Notice until January 17, 2013.1
The Notice enumerated seven purported violations of the Lease by Western Radio. AR 219-20.
Three of the alleged instances of noncompliance (Nos. 1, 2, and 4) were violations that the Court
had previously found were breaches of the Lease and for which the Court had found Western
Radio liable. See Western Radio I, 2012 WL 3776474, at *3-5. The Notice set out two options by
which Western Radio could cure its noncompliance if it wished, and required Western Radio to
elect a cure option on or before January 17, 2013. AR 220. The Notice stated that “[f]ailure to
return a signed copy of either Option 1 or Option 2 to this office by January 17, 2013, will be
1
The date when Mr. Oberdorfer received the Notice is disputed. Mr. Oberdorfer states in
his declaration that he did not receive it until January 17, 2013. In other documents in the record,
however, Mr. Oberdorfer acknowledges that the Notice was the primary subject of discussion at
the January 10, 2013 mediation. AR 253. Because the facts are viewed in the light most
favorable to the non-moving party, for purposes of Plaintiff’s summary judgment motion, the
Court accepts that Mr. Oberdorfer received the Notice on January 17, 2013. This dispute,
however, is not material.
PAGE 5 – OPINION AND ORDER
treated as evidence of your rejection of the opportunity to cure and will result in the revocation
of [the Lease].” AR 220.
Option One required Western Radio within 30 days to provide a detailed schedule for
completing the removal of the New Tower and other trespassing structures by July 1, 2013,
identify contractors who would perform the removal, post a $65,000 bond, provide a detailed
accounting of all equipment on Walker Mountain, and initiate a 30-day technical review period
with all site users for new equipment on the Original Tower or equipment that will be moved
from the New Tower to the Original Tower. AR 222. It also required Western Radio within 90
days to report any unresolved concerns raised by other site users and paint a satellite dish that
was an unapproved color. AR 223.
Option Two required Western Radio within 30 days to identify contractors it would retain
subject to the potential court order of removal, post a $65,000 bond, provide a detailed
accounting of all equipment on Walker Mountain, and initiate a 30-day technical review period
with all site users for new equipment on the Original Tower and all equipment on the New
Tower. AR 224. It also required Western Radio within 90 days to report any unresolved concerns
raised by site users, paint a satellite dish that was an unapproved color, provide a structural and
electrical inspection report for the New Tower, provide construction plans by a licensed engineer
for the New Tower, and obtain any required county permits for the New Tower. AR 225. The
Notice informed Western Radio that the failure to perform any of the required tasks on the
selected cure option would constitute grounds for the Forest Service to revoke the Lease, without
further notice or opportunity to cure. AR 223, 225.
On January 10, 2013, the parties engaged in mediation. Much of the mediation was spent
discussing the two options set forth in the Notice. See AR 243, 253. The parties were unable to
PAGE 6 – OPINION AND ORDER
reach an agreement. On February 1, 2013, Western Radio responded to the Notice with an email
in which Western Radio disputed the assertion that it had violated the Lease. AR 234-35.
Western Radio did not select either of the two options to cure, did not complete the actions
required under either of the options to cure, and did not request an extension of time to respond
to the Notice.
On February 4, 2013, because Western Radio failed to confirm in writing on or before
January 17, 2013, its intent to cure the noncompliance issues and, more significantly, because
Western Radio did not timely perform any of the curative actions that were required to be
performed within 30 days of the date of the Notice, District Ranger Holly Jewkes of the Forest
Service revoked the Lease, effective immediately. AR 236-37. The revocation required that all
Western Radio equipment be removed from Walker Mountain on or before July 1, 2013. The
revocation stated that if Western Radio’s equipment was not removed, pursuant to Lease V.B.
and 36 C.F.R. § 251.60(i), any remaining equipment would become the property of the United
States. Western Radio was given 45 days to appeal the revocation.
On March 20, 2013, Western Radio appealed the Forest Service’s revocation of the Lease
and requested an oral presentation. AR 240-41. On May 17, 2013, John Allen, Forest Supervisor,
met with Mr. Oberdorfer to discuss the revocation. See AR 256-58. On June 11, 2013, Forest
Supervisor Allen affirmed the decision of Ranger Jewkes to revoke the Lease and denied
Western Radio’s appeal. AR 268-75.
On June 24, 2013 and June 25, 2013, Western Radio submitted second-level appeals.
AR 278, 280. On July 1, 2013, Regional Forester Kent P. Connaughton affirmed Forest
Supervisor Allen’s affirmance of Ranger Jewkes’s revocation of the Lease and denied Western
Radio’s second-level appeal. AR 264-67, 285-86. This decision was not further reviewable
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within the agency and, thus, constituted the final agency administrative determination. Id. On
July 15, 2013, the United States filed this action seeking a declaratory judgment regarding the
rights and responsibilities of the parties for Western Radio’s structures and equipment on Walker
Mountain.
DISCUSSION
A. Plaintiff’s Motion to Dismiss
The United States moves to dismiss Western Radio’s two counterclaims—a claim under
the APA and a claim seeking attorney’s fees under the Equal Access for Justice Act, 28 U.S.C.
§ 2412 (“EAJA”).
1. APA Counterclaim
Western Radio’s counterclaim brought under the APA alleges that in 2005 and 2007 the
United States approved the construction of the New Tower, that those approvals were final
agency actions, that by filing the previous lawsuit and this declaratory judgment action arguing
that construction of the New Tower was a breach of the Lease and constitutes a trespass the
United States “de facto revoked” its 2005 and 2007 final agency decisions, and that the
“revocation” of the 2005 and 2007 agency actions was arbitrary and capricious. Def.’s 2nd Am.
CC, ECF 17, ¶¶ 20-25. The United States correctly points out that this Court has already
determined that: (1) the United States did not approve the construction of the New Tower;
(2) Western Radio breached the Lease by constructing the New Tower; and (3) the New Tower is
a trespass. Because the Court previously found that the Forest Service did not approve
construction of the New Tower and that the construction of the New Tower was a breach of the
Lease by Western Radio and constitutes an ongoing trespass, the motion to dismiss the APA
counterclaim allegations that the United States engaged in a “de facto” revocation of the 2005
and 2007 “approvals” of the New Tower is granted.
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In its response to the motion to dismiss, however, Western Radio appears to abandon its
claim that the “revocation” of the 2005 and 2007 “approvals” were in violation of the APA and
instead argues that the 2013 revocation of the Lease is a final agency action that was arbitrary,
capricious, not in accordance with the law, and without observance of procedures required by
law. The United States, although not conceding its argument that Western Radio failed properly
to plead that the 2013 revocation of the Lease violated the APA, “suggests” that an APA review
of the revocation of the Lease is “prudent” to avoid future litigation of the issue. Plf.’s Reply Br.,
ECF 52 at 9-10. That is also what Western Radio seeks. In the interest of judicial economy, the
Court deems Western Radio’s APA counterclaim amended to allege that the revocation of the
Lease violated the APA and shall consider that claim on the merits. The motion to dismiss the
APA counterclaim allegations that the 2013 revocation of the Lease violated the APA is denied.
2. EAJA Counterclaim
The United States also moves to dismiss Western Radio’s counterclaim for attorney’s
fees under the EAJA. The EAJA provides:
A party seeking an award of fees and other expenses shall, within
thirty days of final judgment in the action, submit to the court an
application for fees and other expenses which shows that the party
is a prevailing party and is eligible to receive an award under this
subsection. . . .
28 U.S.C. § 2412(d)(1)(B).
EAJA fees are neither ripe nor justiciable until after there has been a final judgment in the
action. Id.; see also Sohappy v. Hodel, 911 F.2d 1312, 1321 (9th Cir. 1990) (“Because there has
been no final judgment in this action, this [EAJA fee] request is premature.”); Tippett v. United
States, 98 Fed. Cl. 171, 183 (2011) (dismissing without prejudice a claim for fees under the
EAJA in a pending case as not ripe). The EAJA is a fee-shifting statute and “is not a highway to
federal court.” Advanced Mgmt. Tech., Inc. v. FAA, 211 F.3d 633, 637 (D.C. Cir. 2000). “[T]o
PAGE 9 – OPINION AND ORDER
warrant an award of attorney’s fees [under the EAJA], a party must first prevail in its litigation.”
Roberts v. Napolitano, 792 F. Supp. 2d 67, 76 (D.D.C. 2011). Accordingly, Western Radio fails
to state claim for relief under the EAJA because it cannot plausibly allege that there is a final
judgment in the action or that Western Radio is the prevailing party. Western Radio’s
counterclaim pursuant to the is dismissed without prejudice.
Additionally, as discussed below, the Court grants summary judgment to the United
States on its declaratory judgment action and denies Western Radio’s motion for summary
judgment. Thus, even if Western Radio had properly asserted a counterclaim for attorney’s fees
under the EAJA, that counterclaim would be dismissed on the merits because Western Radio is
not the prevailing party.
B. The Motions for Summary Judgment
The United States moves for summary judgment on its declaratory judgment claim,
arguing that there is no genuine dispute of material fact that Western Radio breached the Lease
and that the United States properly revoked the Lease.2 Western Radio argues that the Court does
not have jurisdiction to consider the declaratory judgment claim because the Declaratory
Judgment Act does not provide a cause of action in this case. Western Radio also argues that it
did not breach the Lease and that is has been curing the alleged deficiencies. Western Radio also
moves for summary judgment on its claim that the United States violated the APA, which the
Court has narrowed to a claim that the 2013 revocation of the Lease violated the APA.
2
In its Complaint, the United States had also sought a declaration that Western Radio’s
structures and improvements on Walker Mountain now belong to the United States. This request
was withdrawn by the United States at oral argument.
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1. The Motion for Summary Judgment Brought by the United States is Granted
Because the Lease was Properly Revoked
a. The Court has jurisdiction to consider the declaratory judgment claim
The United States seeks a declaration regarding the rights and obligations of the parties
under the Lease and pursuant to federal regulations. Western Radio argues that the Court does
not have jurisdiction to consider this claim because the Declaratory Judgment Act does not
provide a cause of action in this case. Western Radio’s argument is without merit.
“Under the Declaratory Judgment Act, a district court may ‘declare the rights and other
legal relations of any interested party seeking such declaration.’” Allstate Ins. Co. v. Herron, 634
F.3d 1101, 1107 (9th Cir. 2011) (quoting 28 U.S.C. § 2201(a)). This includes declaring rights
under a contract and whether a party has breached the contract. Id. at 1108. The Declaratory
Judgment Act creates a remedy by which parties may seek a declaration of their rights and
obligations, but the Declaratory Judgment Act does not confer jurisdiction on a case that
otherwise could not be brought in federal court. See Countrywide Home Loans, Inc., v. Mortgage
Guar. Ins. Corp., 642 F.3d 849, 853 (9th Cir. 2011). Additionally, a declaratory judgment action
must meet the case-or-controversy requirement of Article III of the United States Constitution.
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007). Whether a declaratory judgment
action meets Article III’s case-or-controversy requirement depends on “whether the facts alleged,
under all the circumstances, show that there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment.” Id. at 127.
The Court has jurisdiction in this case both under 28 U.S.C. § 1345 because the case was
brought by the United States and under 28 U.S.C. § 1331 because the case involves a question of
federal law. The Court exercises its discretionary jurisdiction to consider the declaratory
PAGE 11 – OPINION AND ORDER
judgment claim because the facts alleged show that there is a substantial controversy between the
parties as to whether Western Radio breached the Lease, whether the United States properly
revoked the Lease, and whether the remedy originally sought (and withdrawn at oral argument)
by the United States of taking ownership of the structures and improvements is appropriate.
These issues have immediacy and warrant the issue of a declaratory judgment.
b. Western Radio breached the Lease
Much of Western Radio’s arguments and evidence submitted in support of its summary
judgment motion and in opposition to Plaintiff’s summary judgment motion relate to Western
Radio’s contention that it did not breach the Lease. The Court has already found, however, that
Western Radio breached the Lease. Western Radio is estopped from arguing that it did not
breach the Lease based on the doctrine of issue preclusion.3 As explained by the United States
Court of Appeals for the Ninth Circuit:
Issue preclusion bars relitigation of issues adjudicated in an earlier
proceeding if three requirements are met: “(1) the issue necessarily
decided at the previous proceeding is identical to the one which is
sought to be relitigated; (2) the first proceeding ended with a final
judgment on the merits; and (3) the party against whom collateral
estoppel is asserted was a party or in privity with a party at the first
proceeding.”
Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th Cir. 2006) (quoting Kourtis v.
Cameron, 419 F.3d 989, 994 (9th Cir. 2005)).
All three requirements are satisfied in this case. Whether Western Radio breached the
Lease in constructing the New Tower and whether the New Tower constitutes a trespass was
necessarily decided in the previous case, that case ended with a final judgment on the merits, and
3
“Issue preclusion” is the preferred term for this doctrine, replacing “collateral estoppel.”
Taylor v. Sturgell, 553 U.S. 880, 892 n.5 (2008) (“[I]ssue preclusion encompasses the doctrines
once known as ‘collateral estoppel’ and ‘direct estoppel.’”).
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Western Radio both litigated those issues in the previous case and is litigating the same issues in
this case. The Court previously found that Western Radio breached two clauses of the Lease.4
Although the United States enumerated in the Notice a total of seven alleged instances of
noncompliance and only three of the seven (Nos. 1, 2, and 4) had been determined by the Court
to be breaches of the Lease, that fact is irrelevant for purposes of the pending motions. Western
Radio cannot reasonably dispute that it breached the Lease in at least the three instances found
by the Court; therefore the United States was entitled to move forward with the administrative
revocation procedure.5 The issue now before the Court is whether the United States properly
revoked the Lease. In litigating this issue, Western Radio is estopped from arguing that it did not
breach the Lease and that the New Tower does not constitute a trespass.
c. Revocation procedures under the Lease
“Federal law governs the interpretation of contracts entered pursuant to federal law where
the federal government is a party.” Chickaloon-Moose Creek Native Ass’n, Inc. v. Norton, 360
F.3d 972, 980 (9th Cir. 2004); see also Tehama-Colusa Canal Auth. v. U.S. Dep’t. of the
Interior, 721 F.3d 1086, 1093 (9th Cir. 2013). The proper construction of federal contracts
follows well-known principles of contract law, including that a contract “must be read as a whole
and every part interpreted with reference to the whole, with preference given to reasonable
interpretations,” that “terms are to be given their ordinary meaning,” and that “when the terms of
4
The Court found that Western Radio breached Clauses III.B and III.C of the Lease. See
Western Radio I, 2012 WL 3776474, at *3-5. (The Court notes that there was a scrivener’s error
in the Western Radio I opinion in that the Opinion erroneously refers to Clause III.B as Clause
III.A and to Clause III.C as Clause III.B).
5
In fact, in declining to cancel the Lease as a remedy in the previous action, the Court
expressly found that the United States was “entitled” to “immediately” begin the administrative
revocation procedures set forth in the Lease. United States v. Western Radio, Case No. 3:11-cv0638-SI, Transcript of October 24, 2012 hearing, ECF 196.
PAGE 13 – OPINION AND ORDER
a contract are clear, the intent of the parties must be ascertained from the contract itself.” Wapato
Heritage, L.L.C. v. U.S., 637 F.3d 1033, 1039 (9th Cir. 2011) (citations and quotation marks
omitted). “The fact that parties to a contract dispute its meaning does not, ipso facto, mean that
the contract is ambiguous; a contract is only ambiguous if reasonable people could find its terms
susceptible to more than one interpretation.” Id.
Here, the Lease is not ambiguous. Section V.B. of the Lease governs revocation,
termination, and suspension. AR 36-37. It establishes that the Lease may be “revoked upon
breach of any of the conditions herein. . . .” Lease V.B.2. Under the Lease, revocation “refers to
an action by the Authorized Officer to end the lease because of noncompliance with any of the
prescribed terms, abandonment, or for reasons in the public interest.” Lease V.B.1. In the Lease,
the “Authorized Officer” is defined as “the Forest Service official having the delegated authority
to execute and administer this lease. Generally, unless otherwise indicated, such authority may
be exercised by the Forest Supervisor or District Ranger of the National Forest wherein the
[leased] lands are located.” AR 34. Revocation is subject to an appeal. Lease V.B.1. and V.B.5.
To properly revoke the Lease, the Authorized Officer must “give the Lessee written
notice of the grounds for revocation or suspension and a reasonable time, not to exceed 90 days,
to complete the corrective action.” Lease V.B.3. If the Lease is revoked for noncompliance, “the
Lessee shall remove all structures and improvements within
[sic] days . . . and shall restore
the site as nearly as reasonably possible to its original condition” unless that requirement is
waived by the United States. Lease V.B.7. The Court finds that the Lease unambiguously
provides that, if appropriate procedures are followed, the United States may revoke the Lease if
Western Radio breached any of its terms. As noted above, Western Radio breached the Lease.
Revocation was, therefore, authorized and an appropriate remedy under the Lease.
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d. The reasonableness of the revocation of the Lease
The Lease and governing federal regulations establishes certain requirements that the
United States must follow in revoking the Lease. These requirements are: (a) Western Radio
must have breached the Lease; (b) an authorized officer ends the Lease and provides written
notice of the grounds for revocation; (c) Western Radio must be given a reasonable time, not to
exceed 90 days, to complete the required corrective action; and (d) revocation is subject to
appeal pursuant to 36 C.F.R. part 214. Lease V.B; 36 C.F.R. § 251.60(2). The revocation of the
Lease must also comport with the APA, such that the revocation was not arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law. These requirements all have been
met in this case.
i. Western Radio breached the Lease
The Lease allows revocation for a breach of any of its terms. Lease V.B.2. As discussed
above, the Court has already found that Western Radio breached the Lease. Accordingly, that
foundational requirement for revocation is satisfied.
ii. An Authorized Officer revoked the Lease
The Lease requires that revocation be instituted by an “Authorized Officer.” Lease V.B.1.
Western Radio argues that District Ranger Jewkes did not have the authority to revoke the Lease
because it was the Acting Forest Supervisor who authorized the Lease and under 36 C.F.R.
§ 251.60(b) revocation can only be authorized by the person who issues the authorization or that
person’s successor. Thus, argues Western Radio, the revocation was improper and did not
comply with the governing regulation. Western Radio’s argument is not persuasive.
Under the terms of the Lease, the District Ranger is an Authorized Officer and, therefore,
the revocation by District Ranger Jewkes complied with the terms of the Lease. It also complied
with the governing regulations. The Court notes three provisions in the governing regulations
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relevant to who had authority to revoke the Lease: (1) 36 C.FR. § 251.60(b), which defines an
“authorized officer” as the person who issues the authorization or that person’s successor; (2) 36
C.F.R. § 251.51, which provides that an “authorized officer” is “any employee of the Forest
Service to whom has been delegated the authority to perform the duties described in this part;”
and (3) 36 C.F.R. § 251.52, which provides that “Special use authorizations shall be issued,
granted, amended, renewed, suspended, terminated, or revoked by the Chief, or through
delegation, by the Regional Forester, Forest Supervisor, District Ranger or other forest
officer . . . .” (emphasis added). Western Radio fails to identify any legal authority holding that
the “successor” under 36 C.F.R. §251.60(b) cannot be a successor via delegation of authority
and, to the contrary, 36 C.F.R. § 251.52 expressly provides for such a delegation for revocation
of special use permits and 36 C.F.R. § 251.51 contemplates delegation of authority generally for
authorized officers.
On April 22, 2010, the Forest Supervisor delegated signing authority for Special Use
Permits such as the Lease to the District Ranger. AR 115-18. Accordingly, before the revocation
at issue in this case, District Ranger Jewkes received the delegated authority by the Forest
Supervisor. The Court finds that she was, therefore, an “authorized person” under 36 C.F.R.
§ 251.60(b) as the successor via delegation to the Acting Forest Supervisor who had originally
authorized the Lease.
Even if a successor via delegation is not an “authorized person” under 36 C.F.R.
§ 251.60(b), it is undisputed that Forest Supervisor Allen affirmed the revocation of the Lease.
His affirmance of the revocation of the Lease was a decision revoking the Lease and he was the
successor to the Acting Forest Supervisor who had originally authorized the Lease. His
revocation, therefore, complied with 36 C.F.R. § 251.60(b). Additionally, his affirmance was
PAGE 16 – OPINION AND ORDER
given an appellate review by the Regional Forester, which provided Western Radio with the onelevel appellate review required under 36 C.F.R. § 214.7(a). Thus, the United States complied
both with the Lease and the governing regulations in having an authorized officer revoke the
Lease.
iii. Western Radio was provided written notice and a reasonable time
to cure
The Lease also requires that Western Radio be provided written notice of the grounds for
revocation and a reasonable time to complete the corrective action. Lease V.B.3. Federal
regulations also require that lessee be given written notice and “reasonable time to cure any
noncompliance.” 36 C.F.R. § 251.60(e). The United States sent the Notice, which detailed the
grounds for revocation and the requirements to cure the deficiencies, to Western Radio and its
counsel on January 3, 2013. The Notice required that if Western Radio wished to cure the
deficiencies and avoid revocation, it must choose on or before January 17, 2013 one of two plans
by which it could cure the deficiencies. More significantly, the options to cure required actions to
occur within time periods ranging from 30 days to six months.
Option One involved removing the trespassing structures and required the following
within 30 days: providing a schedule for removal of the trespassing structures, identifying
contractors, posting a bond, providing a detailed accounting of certain equipment, and initiating
a 30-day technical review period with all site users. Option One also required the following
within 90 days: reporting any unresolved concerns raised by other site users and painting a
satellite dish that was an unapproved color. Option One required the trespassing structures be
removed on or before July 1, 2013.
Option Two involved remedying the noncompliance while waiting for a final court order
regarding the trespassing structures (because Western Radio appealed this Court’s determination
PAGE 17 – OPINION AND ORDER
that the structures were trespassing to the Ninth Circuit and this Court stayed its order requiring
removal of the structures pending appeal), and required within 30 days many of the same actions
as Option One. Option Two also required within 90 days both of the actions required in Option
One plus providing structural and electrical inspection reports, providing construction plans by a
licensed engineer, and obtaining any required permits.
Western Radio argues that the Notice did not provide reasonable time to cure because
Western Radio did not receive the Notice until January 17, 2013, which was the deadline for
choosing one of the two options. Western Radio also argues that requiring it to choose one of
two options was unreasonable and that instead of choosing an option, Western Radio began
curing the alleged deficiencies. Finally, Western Radio argues that requiring it to perform work
on equipment during the winter months was unreasonable. These arguments are unavailing.
When Western Radio actually received the Notice is not relevant for purposes of
determining whether the Notice was reasonable. The Notice was sent via certified mail to
Western Radio. It was also delivered to Western Radio’s counsel. Additionally, the contents of
the Notice were discussed at length during the mediation on January 10, 2013, which was one
week before the deadline established for Western Radio to choose an option to cure. The Court
finds that under these circumstances, the United States provided reasonable notice.
The Court also finds that the two-week deadline to respond to the Notice was reasonable
under the circumstances. The United States did not require Western Radio to perform any acts on
Walker Mountain within the two-week deadline, but merely to notify the United States if
Western Radio intended to cure its breaches, and, if so, which method of curing the breaches
Western Radio intended to pursue. Two weeks was a reasonable time period in which to require
Western Radio to select a plan for curing the breaches, particularly in light of the litigation that
PAGE 18 – OPINION AND ORDER
had occurred for more than 20 months before the Notice relating to the alleged breaches and how
those breaches could be cured.
The Court further finds that the 30-day, 90-day, and six-month time periods allowed to
cure the deficiencies were reasonable. The actions required within 30 days did not involve work
on Walker Mountain that might be hampered by weather conditions, but were informational in
nature. Similarly, the actions required within 90 days did not involve work on Walker Mountain,
with the exception of painting the satellite dish. The Court finds that allowing 90 days to paint
the dish was reasonable. Additionally, the United States allowed nearly six-months for Western
Radio to remove the trespassing structures, if Western Radio elected that option to cure. That
was a reasonable time period to remove the structures, particularly in light of the fact that the
Court allowed Western Radio less than four months to remove the trespassing structures in its
Order. See Western Radio II, 2013 WL 1867477, at *2.
Western Radio’s arguments that the opportunity to cure was not reasonable primarily
stem from Western Radio’s position that it did not breach the Lease. As discussed above, that
argument is foreclosed by the Court’s earlier ruling. The Court finds that the United States
complied with the requirements of the Lease and 36 C.F.R. § 251.60(e) in providing written
notice and a reasonable time to cure.
The Lease was revoked on February 4, 2013. It was revoked because Western Radio had
not identified which cure option it would pursue, had not completed any of the curative tasks that
had been required to be completed within 30 days, and had responded to the Notice by disputing
and attempting to re-argue that Western Radio had breached the Lease.
Western Radio argues that, although it did not elect either Option One or Option Two, it
has been curing its breaches of the Lease. Western Radio offers no support for this argument,
PAGE 19 – OPINION AND ORDER
other than the fact that the satellite dish has been repainted. Western Radio offers no factual data
or evidence that it provided a schedule for removal of the trespassing structures, identified
contractors, posted a bond, provided the requested equipment accounting, provided structural and
electrical inspection reports, provided construction plans by a licensed engineer, obtained any
required permits, or initiated a 30-day technical review period with all site users. “Conclusory
allegations unsupported by factual data will not create a triable issue of fact.” Marks v. United
States, 578 F.2d 261, 263 (9th Cir. 1978).
Moreover, Western Radio argued to the Forest Service and currently to the Court that it
did not need to perform many of the required curative tasks because it did not breach the Lease
or had previously complied with the necessary requirements. For example, Western Radio argues
that it already supplied sufficient plans, but it relies on plans that the Court expressly found were
insufficient. As discussed above, Western Radio’s arguments based on its contention that it did
not breach the Lease fail because the Court found that Western Radio did breach the Lease.
Thus, Western Radio fails to demonstrate a genuine issue of material fact that it cured the
deficiencies noted by the United States.
iv. Western Radio was provided the appropriate level of
administrative review
The Lease provides that discretionary decisions such as revocation are subject to the
appeal regulations of 36 C.F.R. § 251. Lease V.B.5. Pursuant to 36 C.F.R. § 251.60, the
revocation of special use permits such as the Lease is subject to the administrative review
procedures of 36 C.F.R. part 214. A one-level review is available, pursuant to 36 C.F.R.
part 214, for appealable decision made by, among others, District Rangers and Forest
Supervisors. 36 C.F.R. § 214.7(a).
PAGE 20 – OPINION AND ORDER
Here, Western Radio was allowed two levels of administrative review of District Ranger
Jewkes’s revocation—one by Forest Supervisor Allen and a second-level review by Regional
Forester Connaughton. This was more than what was required to comply with the appeal
requirements of the Lease and the governing regulation. Moreover, even assuming Forest
Supervisor Allen’s affirmance of the revocation was the revocation by an “authorized officer,”
Western Radio was still granted the one-level review required under 36 C.F.R. part 214 when
Regional Forester Connaughton reviewed Forest Supervisor Allen’s affirmance of the
revocation.
In revoking the Lease, the United States complied with the terms of the Lease and
with 36 C.F.R. § 251.60. The Court finds that there is no genuine dispute of material fact as to
whether the revocation was reasonable.
2. The Motion for Summary Judgment Brought by Western Radio is Denied
Because the Revocation of the Lease Did Not Violate the APA
Western Radio moves for summary judgment on its counterclaim under the APA, arguing
that the 2013 revocation of the Lease was arbitrary and capricious or otherwise not in
conformance with the law. Western Radio argues that the revocation was arbitrary and capricious
because it did not comply with the governing regulations in that District Ranger Jewkes was not
an “authorized official” and because the Forest Service treated Western Radio differently than
other lessees on Walker Mountain.
As discussed above, the Court finds that the Forest Service complied with the governing
regulations and that an “authorized official” properly revoked the Lease. Moreover, in
considering this issue in the context of Western Radio’s APA counterclaim, the final agency
action at issue in this case is the Regional Forester’s decision affirming the revocation. AR 26467, 285-86. In his decision, the Regional Forester considered the issue of whether District
PAGE 21 – OPINION AND ORDER
Ranger Jewkes had authority to revoke the Lease and, relying on the delegation of authority, 36
C.F.R. § 251.51, Forest Service Manual at 2704.34, and the terms of the Lease, the Regional
Forester determined that Western Radio’s argument that the District Ranger did not have
authority to revoke the lease was without merit. AR 265. In making this determination, the
agency complied with the APA because the Regional Forester “examine[d] the relevant data and
articulate[d] a satisfactory explanation for [his] action.” Motor Vehicle Mfrs. Ass’n of United
States, 463 U.S. at 43. The agency’s decision is “entitled to a presumption of regularity” and
“even ‘[i]f the evidence is susceptible of more than one rational interpretation, [the court] must
uphold [the agency’s] findings.’” San Luis & Delta-Mendota Water Auth., 2014 WL 975130 at
*9 (alterations in original) (quoting Bear Lake Watch, Inc. v. FERC, 324 F.3d 1071, 1076 (9th
Cir. 2003)). The Court finds that the agency’s determination that District Ranger Jewkes had
authority to revoke the Lease was not arbitrary or capricious.
In support of its second argument, that the Forest Service acted arbitrarily and
capriciously because it treated Western Radio differently than other lessees who breached their
leases, Western Radio relies on information outside of the administrative record. In considering
challenges under the APA, “[i]t is an established rule that ‘the focal point for judicial review
should be the administrative record already in existence, not some new record made initially in
the reviewing court.’” Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v.
U.S. Dept. of Agric., 499 F.3d 1108, 1117 (9th Cir. 2007) (quoting Camp v. Pitts, 411 U.S. 138,
142 (1973)). Extra-record evidence may be admitted under “limited circumstances” if it fits
under one of four “narrow” exceptions. Id. These exceptions are:
(1) if admission is necessary to determine whether the agency has
considered all relevant factors and has explained its decision, (2) if
the agency has relied on documents not in the record, (3) when
supplementing the record is necessary to explain technical terms or
PAGE 22 – OPINION AND ORDER
complex subject matter, or (4) when plaintiffs make a showing of
agency bad faith.
Id. (citing Southwest Ctr. for Biological Diversity v. U.S. Forest Serv., 100 F.3d 1443, 1450 (9th
Cir. 1996)).
The Court finds that none of these exceptions apply in this case, and the circumstances of
the Forest Service’s revocation of the Lease do not warrant departing from the general rule that
judicial review under the APA is limited to the administrative record. See Rendleman v. Shalala,
21 F.3d 957, 961 n.5 (9th Cir. 1994) (finding that the plaintiff’s “attempts to rely on materials
outside the administrative record to demonstrate that the agency’s decision in this instance
departs from its practice on other occasions” did not warrant departing from the general rule that
judicial review under the APA is limited to the administrative record).
Moreover, even if consideration of Western Radio’s extra-record materials were
warranted in this case, the evidence relied on by Western Radio does not “establish a ‘settled’
precedent contrary to the result in this case.” Id. (citing Atchison, T. & S.F. Ry. Co. v. Wichita
Bd. of Trade, 412 U.S. 800, 805–08, (1973)). The evidence relied on by Western Radio involve
instances that are either consistent with the result in this case or do not involve lessees who are
similarly-situated to Western Radio.
In one instance, an unauthorized tower was built by an unknown entity, not the lessee,
and the Forest Service demanded from the lessee that the unauthorized tower be removed but did
not revoke the underlying lease. Declaration of Marianne Dugan, Ex. S, ECF 37-4. That situation
is distinguishable from this case because, unlike Western Radio’s unauthorized tower, the lessee
did not build the unauthorized tower and cooperated with the Forest Service in attempting to
ascertain who built the tower in order to get it removed.
PAGE 23 – OPINION AND ORDER
Another instance relied on by Western Radio involves a tenant (the FBI) of a sub-lessee
(The Oregon State Police Department (“OSP”) and the Oregon Department of Transportation
(“ODOT”)) of a lessee (Bonneville Power Administration (“BPA”)). The FBI apparently moved
equipment from a Forest Service building on Walker Mountain into the OSP/ODOT portion of
BPA’s building without BPA’s knowledge and BPA did not engage in the required 30-day
technical review process. Id. Exs. O, P, & Q, ECF 36-7, 37-1, 37-2. The evidence shows that the
Forest Service demanded that BPA: (1) ascertain whether the FBI’s equipment had, in fact, been
moved into the OSP/ODOT portion of BPA’s building; (2) ascertain whether the FBI’s
equipment was operational; and (3) engage in the 30-day technical review if the FBI’s equipment
had been moved and was operational. This demand by the Forest Service was made on January
17, 2014, and Western Radio did not provide any evidence of BPA’s compliance or lack thereof
with the Forest Service’s demands and the Forest Service’s response, if any. The evidence does
show, however, that the BPA, as lessee, did not deny or otherwise argue with the Forest Service,
but instead cooperated with the Forest Service in ascertaining the status of the FBI’s equipment.
This situation does not show that similarly-situated lessees are being treated differently
than Western Radio. First, the Forest Service is demanding that BPA engage in the 30-day
technical review process, just as the Forest Service demanded of Western Radio, before the
Forest Service revoked the Lease. Second, the facts are distinguishable because the BPA did not
know that equipment had been moved into its building, unlike in this case where Western Radio
itself built new unauthorized equipment and moved equipment onto an unauthorized tower
without engaging in the 30-day technical review process and because BPA is cooperating with
the Forest Service in remedying the situation.
PAGE 24 – OPINION AND ORDER
The final instance relied on by Western Radio is a situation where there was confusion as
to whether a user was a tenant of a lessee or a direct lessee itself. Id. Ex. R, ECF 37-3. At one
point in time, the tenant was given a special use permit and that special use permit expired. The
permit was not renewed because a permit is only required for the direct lessee, not tenants of the
direct lessee. The tenant requested that the permit be re-issued retroactive to its expiration date
and that the tenant be allowed to replace the lessee’s tower and building. The Forest Service
responded that the user was a tenant and, as such, does not need a permit because only the lessee
is required to have a permit and that the lessee, and not the tenant, would have to take the
appropriate steps to replace the lessee’s tower or building. There is no evidence that any party
was in breach of a lease, and this instance provides no support for Western Radio’s argument
that similarly-situated lessees who breach their leases are treated differently than Western
Radio.6
The Court finds no genuine dispute of material fact concerning whether the Forest
Service examined all relevant data and articulated a satisfactory explanation for its decision to
revoke the Lease. The Court concludes as a matter of law that the Forest Service’s decision to
revoke the Lease did not violate the APA because it was not contrary to governing law, was not
contrary to the evidence before the agency, was the result of a considered decision, and was not
so implausible that it could not be the product of agency expertise. Org. Village of Kake, 2014
WL 1229762, at *1.
6
Western Radio also argues that the Forest Service treated AT&T differently than
Western Radio by not requiring AT&T to engage in the 30-day technical review process to
ascertain whether its proposed tower interfered with other site users. The Court, however, has
already found that the Forest Service’s conduct with regard to whether AT&T’s proposed tower
interfered with other site users did not violate the APA and that Western Radio failed to submit
comments regarding AT&T’s proposed tower within the 30-day technical review period. U.S. v.
Western Radio Services Co., 869 F. Supp. 2d 1282, 1288-89 (D. Or. 2012).
PAGE 25 – OPINION AND ORDER
CONCLUSION
Plaintiff’s motion to dismiss (ECF 24) is GRANTED IN PART and DENIED IN PART,
Plaintiff’s motion for summary judgment (ECF 26) is GRANTED, and Defendant’s motion for
summary judgment (ECF 32) is DENIED. Under the Declaratory Judgment Act, the Court
declares as follows: the Communications Use Lease between the Forest Service and Western
Radio, designated CRE09 and issued December 17, 2000, was properly revoked by the Forest
Service and is cancelled.
IT IS SO ORDERED.
DATED this 28th day of April 2014.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge
PAGE 26 – OPINION AND ORDER
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