Bridgeport Hydraulic v. COUNCIL ON WATER, ETC.

• Decision Date: 19 June 1978
• Docket Number: Civ. No. B-75-212.
• Citation: 453 F. Supp. 942
• Parties: BRIDGEPORT HYDRAULIC COMPANY et al., Plaintiffs, v. The COUNCIL ON WATER COMPANY LANDS OF the STATE OF CONNECTICUT et al., Defendants.
• Court: U.S. District Court — District of Connecticut

453 F. Supp. 942

BRIDGEPORT HYDRAULIC COMPANY et al., Plaintiffs, v. The COUNCIL ON WATER COMPANY LANDS OF the STATE OF CONNECTICUT et al., Defendants.

Civ. No. B-75-212.

United States District Court, D. Connecticut.

December 29, 1977.

On Motion to Vacate Judgment June 19, 1978.

COPYRIGHT MATERIAL OMITTED

Clifford R. Oviatt, Gary A. MacMillan, Warren W. Eginton, Cummings & Lockwood, Stamford, Conn., for plaintiffs.

Donald F. Keefe, Joseph C. Lee, J. Michael Sulzbach, Tyler, Cooper, Grant, Bowerman & Keefe, New Haven, Conn., for intervening plaintiff New Haven Water Co.

Noel R. Newman, Bridgeport, Conn., for Town of Fairfield and John J. Sullivan, as First Selectman of Town of Fairfield.

Paul E. Pollock, Keith D. Dunnigan, Bai, Pollock & Dunnigan, Bridgeport, Conn., for Town of Newtown, and F. R. DeLucia, Town of Westport and Jacqueline P. Heneage.

Frederick F. Ehrsam, Bridgeport, Conn., for Town of Oxford, and J. R. Untied as First Selectman.

William J. Curran, Bridgeport, Conn., for City of Shelton and F. X. Kelley, Mayor of Shelton.

J. Peter LaChance, Town Atty., Westport, Conn., for Town of Weston and Barbara Wagner, First Selectman.

Raymond E. Baldwin, Jr., Dion W. Moore, Pullman, Comley, Bradley & Reeves, Bridgeport, Conn., for Town of Redding and Jesse P. Sanford, First Selectman.

Ralph L. Palmesi, Bridgeport, Conn., for Town of Trumbull and James A. Butler, First Selectman.

Carl A. Ajello, Atty. Gen., Frederick D. Neusner, William B. Gundling, Robert S. Golden, Jr., Asst. Attys. Gen., Hartford, Conn., for Council on Water Company Lands, Public Utilities Commission, Howard E. Hausman, as Chairman of PUC and as Member of Council and Dept. of Finance & Control, Horace Brown, as Director, Dept. of Health, Douglas Lloyd, as Commissioner, Dept. of Environmental Protection, Joseph N. Gill, as Commissioner, R. Loew, S. Richards, M. Lightfoot, as Members of Council etc.

David B. Losee, Donald R. Holtman, Connolly, Holtman & Losee, West Hartford, Conn., for Town of Litchfield and Robert D. Cooley, as First Selectman.

Richard S. Bruchal, Town Counsel, Ansonia, Conn., for Town of Seymour and Anna L. LoPresti, as First Selectman.

Richard L. Nahley, Danbury, Conn., for City of Danbury and Charles A. Ducibella.

Stephen C. Gallagher, Danbury, Conn., for Town of Bethel and Francis Clarke.

Edward W. Manasse, Smith, Cornell, Smith & Mettling, Torrington, Conn., for Town of Canaan.

Haynes N. Johnson, Stamford, Conn., for all intervening defendants.

James T. B. Tripp, East Setauket, N. Y., Peter B. Cooper, New Haven, Conn., for Environmental Defense Fund, Natural Resources Defense Council, Connecticut Conservation Ass'n and Conservation Law Foundation, amici.

Eric N. Wellman, Danbury, Conn., for City of Danbury and Donald W. Boughton, Mayor.

Before SMITH, Circuit Judge, and ZAMPANO and NEWMAN, District Judges.

On Plaintiff's Motion to Vacate Judgment June 19, 1978.

MEMORANDUM OF DECISION

ZAMPANO, District Judge:

This action challenges the constitutionality of certain statutes and regulations affecting public utility companies which were enacted by the State of Connecticut during the last five years. The claim is made that these enactments have substantially impaired, if not destroyed, the effective management of these companies and have usurped their property for the general public benefit without just compensation, in violation of the Fifth and Fourteenth Amendments of the United States Constitution.

The plaintiffs are five private, investor-owned Connecticut water companies (Litchfield, Norfolk, North Canaan, Lakeville and Cornwall Water Companies), their parent company (Bridgeport Hydraulic Company), and its holding company (The Hydraulic Company). The New Haven Water Company was permitted to intervene as a plaintiff solely with respect to Count IV. The defendants include the Council on Water Company Lands ("Council"), the Public Utilities Control Authority ("PUCA"), the Departments of Finance and Control, Health, and Environmental Protection, and numerous towns of the State in which the plaintiffs own real estate.

The six-count complaint, as amended, seeks declaratory and injunctive relief pursuant to the provisions of 42 U.S.C. § 1983, with jurisdiction premised on 28 U.S.C. §§ 1331 and 1343. Because an injunction restraining the enforcement of state statutes and regulations on grounds of unconstitutionality is sought, a three-judge district court was convened under 28 U.S.C. §§ 2281 and 2284.¹

I

The plaintiffs first assert that the enforcement of Public Act 75-405, the so-called Moratorium Act, in effect since June 25, 1975, and extended for another two-year period by the 1977 legislature, Public Act 77-606, deprives them of their property without due process of law.

The Act empowers the Council to undertake certain activities, including inter alia:

1) The promulgation of criteria for determining whether any water company lands should be considered surplus property with due regard given to the purity and adequacy of present and future water supply and whether any such surplus lands may be suitable for recreation or open space use;

2) The establishment of policies and procedures to assist municipalities in acquiring the surplus lands for community use;

3) The issuance of recommendations concerning executive and legislative action governing the disposition of water company property; and

4) The development of provisions for the long term acquisition of the surplus lands by the State or municipalities, and for a restriction of the percentage of land within a given municipality which a water company may sell in a specified period without approval.

In addition, Section 2(a) of the Act placed a two-year moratorium, with certain limited exceptions,² on the development or sale of all parcels of unimproved real property in excess of three acres owned by water companies. As stated, the moratorium was extended for another two years by the legislature on June 26, 1977.

The plaintiffs contend that this statutory scheme is confiscatory in its operation and constitutes a taking without just compensation. They point out, among other things, that they own thousands of acres of land which in their opinion are presently or after the installation of filtration facilities will no longer be useful to the water supply business. They argue that their plans to dispose of this property at substantial gains over the original cost and book value are effectively blocked by the legislation and, therefore, they have become uncompensated custodians of de facto public land in contravention of the protections of the Fifth and Fourteenth Amendments. Cf. Pumpelly v. Green Bay Company, 80 U.S. (13 Wall.) 166, 177-178, 20 L.Ed. 557 (1871); Trager v. Peabody Redevelopment Authority, 367 F.Supp. 1000, 1002 (D.Mass.1973) (three-judge court).

Certain controlling principles guide our determination of the issue presented. Subject to specific constitutional limitations, the enactments in question come to us clothed with a presumption of validity. United States v. Vuitch, 402 U.S. 62, 70, 91 S.Ct. 1294, 28 L.Ed.2d 601 (1971); Bibb v. Navajo Freight Lines, 359 U.S. 520, 529, 79 S.Ct. 962, 3 L.Ed.2d 1003 (1959). To be sustained, legislative regulatory pronouncements in the public interest need only be found to be within the perimeters of what traditionally is known as the state's police power. Berman v. Parker, 348 U.S. 26, 32, 75 S.Ct. 98, 99 L.Ed. 27 (1954). In the exercise of that power, the legislature has broad and flexible authority, particularly in the areas of public health and safety. Goldblatt v. Hempstead, 369 U.S. 590, 595, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962); Village of Euclid v. Amber Realty Co., 272 U.S. 365, 391, 47 S.Ct. 114, 71 L.Ed. 303 (1926). So long as the legislation bears a real and substantial relation to a legitimate state purpose and the means of enforcement are reasonable, judicial intervention is not warranted. Village of Belle Terre v. Boraas, 416 U.S. 1, 8, 94 S.Ct. 1536, 39 L.Ed. 797 (1974); Sproles v. Binford, 286 U.S. 374, 388, 52 S.Ct. 581, 76 L.Ed. 1167 (1932); Maher v. City of New Orleans, 516 F.2d 1051, 1058-1059 (5 Cir. 1975).

Applying these standards, it is evident that the statutes before us reflect a permissible exercise of the police power and not an arbitrary interference with private rights. While it is true that the moratorium on the sale of water company lands may affect the plaintiffs' opportunities to reap immediate net profits, that fact alone fails to give rise to any constitutional infirmity. As stated in Day-Brite Lighting, Inc. v. Missouri, 342 U.S. 421, 424, 72 S.Ct. 405, 408, 96 L.Ed. 469 (1952): "Most regulations of business necessarily impose financial burdens on the enterprise for which no compensation is paid. Those are part of the costs of our civilization." The overriding consideration is the State's power to regulate the disposition of plaintiffs' lands — to the limited extent set forth in the legislation at issue — while acting in furtherance of its desire to preserve and insure the quality of one of its most crucial resources.

At the outset we note that the enactments under review do not prohibit the sale of plaintiffs' lands absolutely. Water companies are free to seek an exception to the moratorium on sales by requesting the written approval of the Council and the chief executive officer of the municipality in which the property is located. Neither may withhold permission arbitrarily or unreasonably; both must accord the plaintiffs due process of law with respect to any application to sell a particular parcel of land. See Uniform Administrative Procedure Act, Conn.Gen.Stat. § 4-166 et seq.; Gohld Realty Co. v. Hartford, 141 Conn. 135, 146, 104 A.2d 365 (1954).

In any event, the expansive record before us demonstrates that the obvious purpose of the legislation is the protection of the health and welfare of the State's inhabitants. By providing that there...