Commodities Export Co. v. Detroit Int'l Bridge Co.

• Decision Date: 27 December 2012
• Docket Number: No. 11–1758.,11–1758.
• Parties: COMMODITIES EXPORT COMPANY, Plaintiff–Appellee, v. DETROIT INTERNATIONAL BRIDGE CO., Defendant/Cross–Defendant–Appellant, City of Detroit, Defendant–Appellee, United States of America, Defendant/Cross–Plaintiff–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

695 F.3d 518

COMMODITIES EXPORT COMPANY, Plaintiff–Appellee,

v.DETROIT INTERNATIONAL BRIDGE CO., Defendant/Cross–Defendant–Appellant,City of Detroit, Defendant–Appellee,United States of America, Defendant/Cross–Plaintiff–Appellee.

No. 11–1758.

United States Court of Appeals,

Sixth Circuit.

Argued: July 26, 2012.

Decided and Filed: Sept. 24, 2012.

Rehearing and Rehearing En Banc Denied Dec. 27, 2012.

ARGUED:Robert A. Sedler, Detroit, Michigan, for Appellant. Eric B. Gaabo, City of Detroit Law Department, Detroit, Michigan, Kurt Kastorf, United States Department of Justice, Washington, D.C., for Appellees. ON BRIEF:Michael A. Nedelman, Nedelman Legal Group, PLLC, Farmington Hills, Michigan, Craig L. John, Craig L. John PLLC, Plymouth, Michigan, for Appellant. Jennifer Scheller Neumann, United States Department of Justice, Washington, D.C., Eric B. Gaabo, City of Detroit Law Department, Detroit, Michigan, for Appellees. William H. Golden, Goodman & Hurwitz PC, Detroit, Michigan, for Amici Curiae.

Before: BOGGS and McKEAGUE, Circuit Judges; and WATSON, District Judge.^*

OPINION

BOGGS, Circuit Judge.

The Michigan Supreme Court, in a unanimous 2008 decision, held that the Detroit International Bridge Company was immune from the City of Detroit's zoning ordinances because it was a federal instrumentality for the limited purpose of facilitating commerce over the Ambassador Bridge, which connects Detroit, Michigan to Ontario, Canada. The United States was not a party to this Michigan litigation. Less than one year later, Commodities Export Company, which owned property near the Ambassador Bridge, filed suit against the City of Detroit and the United States. It alleged that the Bridge Company had unilaterally condemned roads around its property, cutting off the land and effecting a regulatory taking. It claimed that the City was liable for failing to enforce its own ordinances and demanded that the United States take a position on the Bridge Company's federal-instrumentality status and control the Bridge Company's actions. Although not originally a party, the Bridge Company eventually intervened. The United States cross-claimed against the Bridge Company, allegingthat it had misappropriated the title of “federal instrumentality.” The district court granted summary judgment for the United States. After the district court dismissed Commodities Export's claims, the Bridge Company appealed. For the reasons that follow, we affirm.

I

In 1921, Congress gave the Detroit International Bridge Company's predecessor, the American Transit Company, permission to build and operate what would become the Ambassador Bridge. Pub. L. No. 66–395, 41 Stat. 1439 (1921). The bridge spans the Detroit River between Detroit, Michigan and Ontario, Canada. The Bridge Company is a private, for-profit corporation, incorporated under Michigan law.

According to DIBC, the Ambassador Bridge is “the busiest commercial border crossing in North America,” accounting for 26% to 30% of “all land trade between the United States and Canada.” Vehicles arriving from Canada enter an enclosed compound, where federal authorities conduct border inspections. Bridge Company employees collect tolls inside of the inspection compound but must account for their presence at all times and check out with customs officials before leaving. Aside from operating the inspection compound, the federal government has no day-to-day involvement in the Bridge Company's operations. Congress did not create the Bridge Company in the first instance, and the federal government has no right to appoint members to the Bridge Company's board or otherwise control the Bridge Company's day-to-day actions.

In the mid–1990s, the Bridge Company began working with the Michigan Department of Transportation on the “Ambassador Bridge/Gateway Project.” The project had two goals: (1) to facilitate easier access to the interstate-highway system from the Ambassador Bridge; and (2) to improve the Ambassador Bridge border crossing and the transportation border infrastructure network in the area of the Ambassador Bridge. The Michigan Department of Transportation took primary responsibility for the project's first objective, conducting extensive highway renovations near the bridge.

In pursuit of the second objective, the Bridge Company sought, and eventually received, federal approval to build new toll plazas, a duty-free gas station, and a weighing station for trucks. Around the year 2000, the Bridge Company asked the City of Detroit for zoning variances that would allow it to complete these projects. The City denied the requests. The Bridge Company, flouting the City's decision, went forward. The City sued. After extensive state-court litigation, the Michigan Supreme Court held that the Bridge Company was “a federal instrumentality for the limited purpose of facilitating traffic over the Ambassador Bridge.” City of Detroit v. Ambassador Bridge Co., 481 Mich. 29, 748 N.W.2d 221, 223 (2008). The Bridge Company was, therefore, “immune from the zoning regulation of the city of Detroit that would preclude construction projects furthering this limited federal purpose.” Ibid. A Michigan trial court entered an injunction consistent with this holding, enjoining the City from “enforcing or implementing any ordinance, regulation, policy, practice, rule or procedure the purpose or effect of which would directly inhibit the Detroit International Bridge Company ... [from] conducting its activity as a federal instrumentality.” Appellant's Br. at 10. The state trial court retained jurisdiction so that it could enforce its injunction.

Less than one year after the Michigan Supreme Court's decision, Commodities Export Company filed suit against the City of Detroit and the United States. The complaint,¹ in essence, alleged that the Bridge Company had effected a regulatory taking by unilaterally condemning, then closing, the only road that provided access to Commodities Export's property. According to the complaint, the City was liable because it failed to protect Commodities Export from the Bridge Company's actions. Commodities Export also argued that the United States was liable because it failed to control its instrumentality, the Bridge Company. The complaint asserted that Commodities Export was “entitled to the quiet and peaceful enjoyment of [its] property and is not required to surrender it to the Detroit International Bridge Company which Plaintiff here alleges is not a federal instrumentality,” and noted that the “United States of America has yet to declare that the Detroit International Bridge Company is or is not its instrumentality.” Finally, Commodities Export expressed concern that the Bridge Company's “use of its alleged status as a federal instrumentality ... [would likely] caus[e] damage to Plaintiff until or unless the Defendant United States of America takes a position on this issue and the Court issues its declaratory judgment.” The complaint, therefore, sought “a mandatory injunction requiring the Defendant City of Detroit to enforce its aforesaid ordinances,” and “ask[ed] [the district court] to require the Defendant United States of America to declare that the Detroit International Bridge Company is, or is not [sic] its instrumentality....”

Approximately five months after the case began, the district court set a briefing schedule and the Bridge Company then sought permission to participate as amicus curiae. The district court denied the request. More than two months later—and after Commodities Export moved for a permanent injunction and declaratory judgment—the Bridge Company sought, and ultimately received, permission to intervene as a defendant. The Bridge Company immediately filed an answer and asserted a number of affirmative defenses. It claimed that the United States was not a proper party, that the complaint did not vest the court with jurisdiction because there was no federal question, that comity, a number of abstention doctrines, and collateral estoppel counseled against the district court's entertaining the case, that the suit was the product of collusion between the City and Commodities Export, and that the court lacked personal jurisdiction over the United States.

Commodities Export filed a second amended complaint, adding the Bridge Company as a defendant and adding a number of new claims. The Bridge Company answered, re-asserting all of the affirmative defenses that it asserted in its initial answer.

The United States then filed the pleading that is relevant to this appeal—a cross-claim against the Bridge Company. It alleged that, despite the Bridge Company's contrary representations and the Michigan Supreme Court's contrary decision, the Bridge Company had “misappropriated the status of ‘federal instrumentality’ or so-called ‘limited federal instrumentality.’ ” The Bridge Company, the United States claimed, “is not a federal instrumentality, of any kind, or any other type of arm, appendage, servant, or agent whatsoever of the United States,” and thus its “representations that it is any kind of federal instrumentality are contrary to federal law.” The United States, therefore, urged that the Bridge Company's “misfeasance or alleged misfeasance towards Commodities ... is not properly attributable to the federal government,” and sought declaratory and injunctive relief, barring the Bridge Company from claiming “that it is any kind of federal instrumentality or other arm or agent of the federal government.”

On the same day, the United States also filed a motion for summary judgment on its claim as to the Bridge Company's federal-instrumentality status. It argued that the Bridge Company was not a federal instrumentality within the meaning of applicable Supreme Court and Sixth Circuit precedent and that the Michigan Supreme Court, in reaching its contrary conclusion, had misapplied federal law. The Bridge Company responded and then filed its own motion for summary judgment on the...