Lichoulas v. City of Lowell

• Decision Date: 17 November 2010
• Docket Number: No. 09-P-1448.,09-P-1448.
• Citation: 78 Mass.App.Ct. 271,937 N.E.2d 65
• Court: Appeals Court of Massachusetts
• Parties: James T. LICHOULAS, Jr., individually & as trustee, v. CITY OF LOWELL.

937 N.E.2d 65

78 Mass.App.Ct. 271

James T. LICHOULAS, Jr., individually & as trustee,¹

v.CITY OF LOWELL.

No. 09-P-1448.

Appeals Court of Massachusetts,

Suffolk.

Argued March 8, 2010.

Decided Nov. 17, 2010.

Brian A. Davis, Boston, for the plaintiff.

R. Eric Slagle, for the defendant.

Present: TRAINOR, RUBIN, & FECTEAU, JJ.

RUBIN, J.

The plaintiff, James T. Lichoulas, Jr. (plaintiff), commenced this action in the Land Court challenging the validity of the city of Lowell's eminent domain taking of the plaintiff's dormant hydroelectric power plant. The Land Court dismissed the complaint for want of subject matter jurisdiction. The plaintiff has appealed.

1. Background. In 1986, the plaintiff was licensed by the Federal Energy Regulatory Commission (FERC) to operate theAppleton Trust Project (the project), a hydroelectric power plant, on land comprising 169, 171, 291, 307, and 351 Jackson Street in Lowell (Appleton Mill Property). At some point thereafter, the project ceased operation. By September, 2004, FERC notified the plaintiff that it considered the dormant project to be abandoned, and considered that abandonment to evidence his intent to surrender his license. FERC, however, did not initiate a proceeding to terminate the plaintiff's license at that time.

On April 25, 2006, the defendant, the city of Lowell (city), as part of an urban renewal and revitalization plan, took the Appleton Mill Property by eminent domain. The order of taking cited "the applicable provisions of Massachusetts General Laws, Chapter 79 and Chapter 121B and also Chapter 610 of the Acts of 1967, and of any and every other power granted or implied" as authority for the city's exercise of power. The city notified FERC of the taking and requested that it inspect the project. On March 21, 2007, FERC issued a "Notice of Termination by Implied Surrender and Soliciting Comments, Protests, and Motions to Intervene," initiating proceedings to terminate the plaintiff's Federal license.

2. Prior litigation. The plaintiff initially brought suit in the United States District Court for the District of Massachusetts, where he sought a return of the property and a declaration that the city's taking of the project violated the Federal Power Act (FPA), 16 U.S.C. §§ 791a et seq., which, he claims, prohibits the taking by eminent domain of a Federally licensed power plant by a municipality that is not competent to, nor actually undertakes to, maintain and operate the plant thereafter (Federal court FPA claims). The plaintiff alternatively sought, under that court's supplemental jurisdiction, compensation for the taking pursuant to G.L. c. 79, § 14 (Federal court compensation claim).

The Federal District Court dismissed the complaint, without prejudice to refiling, on March 31, 2008. Lichoulasv. Lowell, U.S. Dist. Ct., No. 07-10725-RWZ (D.Mass. March 31, 2008). That court concluded that "the validity of the plaintiff's license lies at the heart of this case," and that resolution of the plaintiff's claims should therefore await conclusion of the FERC proceedings at which the status of the plaintiff's license would bedetermined. Id., slip op. at 4. The court also held that, to the extent any of the parcels that made up the Appleton Mill Property were not part of the project, a claim for just compensation properly belonged in State court. Id., slip op. at 5. See Williamson County Regional Planning Commn. v. Hamilton Bank of Johnson City, 473 U.S. 172, 194, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985).

While the plaintiff's appeal to the United States Court of Appeals for the First Circuit was pending, on September 18, 2008, FERC concluded its proceedings by finding that the plaintiff had impliedly surrendered his Federal license by failing to operate the project, and ordered the license terminated. See Lichoulas v. Lowell, 555 F.3d 10, 12 (1st Cir.2009), citing Lichoulas, 124 F.E.R.C. ¶ 61,255 (Sept. 18, 2008). The plaintiff appealed the orderterminating his license to the United States Court of Appeals for the District of Columbia Circuit. Ibid.

On January 30, 2009, the United States Court of Appeals for the First Circuit affirmed the Federal District Court's judgment of dismissal without prejudice. Id. at 14. The court stated that, under the circumstances, "the district court was entitled, as a matter of judicial judgment, to await the outcome of a FERC proceeding that likely would eliminate any warrant for intervention by a federal court." Ibid. Noting FERC's termination order, and the plaintiff's appeal therefrom, the court explained that "the evident prospect that FERC would revoke the license made clear that the federal interest, such as it was, would likely be mooted; and any objection to the taking, or deficiency in adequate compensation, could be and preferably is to be done in state proceedings." Id. at 13.

3. This lawsuit. On March 23, 2009, the plaintiff brought this action in the Land Court.² The complaint did not, however, seek compensation for the taking or any portion thereof. As the plaintiff explains, "the only relief ... requested in this case is an order directing the City to return title to, and control of, the AppletonTrust Project to" the plaintiff. In this action, the plaintiff asserts that the city failed to comply with the procedural rules set forth in G.L. c. 164, §§ 35 and 37, and that the taking therefore violated State law. He also asserts that this failure made the city incompetent under Massachusetts law to operate and maintain a hydroelectric power plant, and argues, again, that, as a result of that incompetence, the city's taking violates certain provisions of the FPA. ³

Sections 35 and 37 are contained within a subchapter of c. 164 entitled "Municipal Lighting Plants." Section 35, entitled "Vote of a city to acquire plant," states, "A city shall not acquire such a plant until authorized by a two thirds vote of its city council ... passed in each of two consecutive municipal years and thereafter ratified by a majority of the voters at an annual or special city election" (emphasis added). G.L. c. 164, § 35. Section 37 then sets forth the process by which the town clerk must certify and transmit the records of a vote taken in compliance with § 35 to the Department of Telecommunications and Energy.⁴ See G.L. c. 164, § 37. It is one of the plaintiff's contentions that the city did not comply with these procedures.

The FPA states in relevant part: "[T]he right of the United States or any State or municipality to take over, maintain, and operate any project licensed under this chapter at any time by condemnation proceedings upon payment of just compensation is expressly reserved." 16 U.S.C. § 807(a). Under the FPA, a "municipality" is defined as "a city, county, irrigation district, drainage district, or other political subdivision or agency of a State competent under the laws thereof to carry on the business of developing, transmitting, utilizing, or distributing power." 16 U.S.C. § 796(7). It is the plaintiff's second contention that theFPA forbids the taking, since the failure to comply with G.L. c. 164, §§ 35 and 37, rendered the city incompetent to "carry on the business of developing, transmitting, utilizing, or distributing power" by use of the power plant taken here.

The Land Court dismissed the action for lack of subject matter jurisdiction pursuant to Mass.R.Civ.P. 12(b)(1), 365 Mass. 755 (1974). It determined, first, that a provision in the FPA, 16 U.S.C. § 825p, conferred on the Federal courts exclusive jurisdiction "to hear disputes arising from the FPA"; and, second, that the plaintiff's allegations that the city failed to follow the prescribed statutory procedures in effectuating the taking could provide the plaintiff no State remedy other than money damages. In the absence of jurisdiction over the claims, the judge also denied the defendant's motion for a memorandum of lis pendens. See G.L. c. 185, § 1( k ); G.L. c. 184, § 15. It is from the Land Court's dismissal and its denial of the motion for lis pendens that the plaintiff now appeals.

On May 28, 2010, while this appeal was pending, the United States Court of Appeals for the District of Columbia Circuit affirmed the termination by FERC of the plaintiff's license on the ground of implied surrender. Lichoulas v. Federal Energy Regulatory Commn., 606 F.3d 769 (D.C.Cir.2010).

4. Discussion. Under its statutory grant, the Land Court has jurisdiction over "[a]ll cases and matters cognizable under the general principles of equity jurisprudence where any right, title or interest in land is involved." G.L. c. 185, § 1( k ). In determining whether the plaintiff has presented such a case, and therefore whether dismissal was appropriate under rule 12(b)(1), we accept as true all factual allegations of the plaintiff's complaint, as well as any favorable inferences reasonably drawn therefrom, see Ginther v. Commissioner of Ins., 427 Mass. 319, 322, 693 N.E.2d 153 (1998). We review questions of law de novo. See Warner-Lambert Co. v. Execuquest Corp., 427 Mass. 46, 47, 691 N.E.2d 545 (1998). "A complaint is sufficient against a motion to dismiss if it appears that the plaintiff may be entitled to any form of relief, even though the particular relief he has demanded and the theory on which he seems to rely may not be appropriate." Sullivan v. Chief Justice for Admn. and Mgmt. of the Trial Court, 448 Mass. 15, 21, 858 N.E.2d 699 (2006), quoting from Nader v. Citron, 372 Mass. 96, 104, 360 N.E.2d 870 (1977). a. Massachusetts law. "The taking of land from a private owner against his will for a public use under eminent domain is an exercise of one of the highest powers of government." Devine v. Nantucket, 449 Mass. 499, 506, 870 N.E.2d 591 (2007), quoting from Lajoie v. Lowell, 214 Mass. 8, 9, 100 N.E. 1070 (1913). It is a power that resides in the Legislature and passes to municipalities only by explicit delegation. See Burnham v. Mayor & Aldermen of Beverly, 309 Mass. 388, 389, 35 N.E.2d...