Mopac v. 55 Acres of Land in Crittenden Cty. Ark.

• Decision Date: 04 November 1996
• Docket Number: No. J-C-96-254.,J-C-96-254.
• Citation: 947 F.Supp. 1301
• Parties: MISSOURI PACIFIC RAILROAD COMPANY, Plaintiff, v. 55 ACRES OF LAND LOCATED IN CRITTENDEN COUNTY, ARKANSAS; Frances R. Wallace; and Unknown Owners, Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

Page 1301

947 F.Supp. 1301

MISSOURI PACIFIC RAILROAD COMPANY, Plaintiff, v. 55 ACRES OF LAND LOCATED IN CRITTENDEN COUNTY, ARKANSAS; Frances R. Wallace; and Unknown Owners, Defendants.

No. J-C-96-254.

United States District Court, E.D. Arkansas, Jonesboro Division.

November 4, 1996.

COPYRIGHT MATERIAL OMITTED

John Dewey Waton, Friday, Eldredge & Clark, Little Rock, AK, for plaintiff.

Elton Rieves, III, Elton Rieves, III, Rieves & Mayton, West Memphis, AK, for defendants.

ORDER

STEPHEN M. REASONER, Chief Judge.

Pending before the Court is the defendant's Motion for Relief from Order of Possession. The Court held a hearing regarding this matter on September 23, 1996. Based upon the pleadings filed herein, as well as the testimony and arguments of counsel presented at the hearing, the Motion is denied.

I. FACTUAL BACKGROUND

Plaintiff, Missouri Pacific Railroad [hereinafter "MoPac"], is a corporation incorporated under the laws of the State of Delaware. Its principal place of business is located in the State of Nebraska. On August 1, 1996, it filed the present action in federal district court for the condemnation of certain lands located in Crittenden County, Arkansas. The basis of subject matter jurisdiction asserted by MoPac is that of diversity of citizenship pursuant to 28 U.S.C. § 1332. The defendant landowner, Frances R. Wallace, is a citizen of Crittenden County, Arkansas.

Ms. Wallace filed a Motion to Dismiss and Answer. In her motion, the defendant raised various defenses to the proposed taking. Among these were: (1) that the Court lacked subject matter jurisdiction; (2) that MoPac failed to file suit in the circuit court of the county in which the land is located, as required by Arkansas statute; (3) that the proposed taking of property for an intermodal facility does not fall within the meaning of "right-of-way" for which a railroad may exercise its power of eminent domain; (4) that MoPac does not intend to construct an intermodal facility on the land it is attempting to condemn; (5) that the subject land is zoned "residential" by the City of Marion and cannot be used by MoPac for the purpose of constructing an intermodal facility; (6) that MoPac acquired land in 1993 located approximately five miles from defendant's property which it could utilize for the construction of the intermodal facility; and (7) that irreparable harm would result if the Court were to sign an order of condemnation because there is an existing crop growing on the land.

Because other condemnation cases filed by MoPac in this Court involve identical issues to those presented here, the Court allowed the parties involved in the other cases to present arguments and testimony at the September 23, 1996 hearing. Additional objections to the taking have been raised by these parties in their pleadings. For simplification, these issues will be added to those designated above. These additional defenses are: (8) that MoPac has failed to join indispensable parties, namely, a tenant farmer and the City of Marion; and (9) that the taking is private and not "necessary" to MoPac's operations. After discussing the factual history of this case, the Court will address these nine defenses in the order by which they are numbered.

On August 23, 1996, after reviewing the complaint and motion to dismiss filed in this case, the Court entered an Order of Possession granting MoPac the "right of immediate entry onto and possession of the Property." Further, the Order stated that "the Defendants ... be and are hereby required and directed to immediately surrender possession of said Property to MoPac." MoPac was allowed to "have entry upon the lands for all purposes, including surveying the Property to determine its exact description and preparing the site for construction and constructing the proposed intermodal facility." This Order prompted the filing of the subject Motion for Relief and a lengthy hearing on this matter.

MoPac seeks to condemn the subject lands for the construction and operation of an "intermodal facility". Testimony presented at the September 23rd hearing revealed that an intermodal facility allows for trailers and containers loaded with freight to be transferred from train to train, truck to train, or train to truck. According to MoPac, the intermodal facility "will allow for more efficient transportation of goods and freight by customers of MoPac and other railroad companies in order to better facilitate the shipment of goods and freight in interstate commerce. See Complaint, ¶ 6. MoPac argues that its proposed intermodal facility must be able to accommodate at least a 7,000 foot long train. Therefore, subsequent to the filing of the present action, it instituted five additional condemnation actions in this Court. The asserted basis of jurisdiction in all is that of diversity of citizenship. In total, MoPac seeks to condemn over 544 acres from landowners in Crittenden County.

As a preliminary matter, MoPac argues that Federal Rule of Civil Procedure 71A prevents the Court from even considering the defenses raised in the Motion to Dismiss and Answer. Rule 71A sets forth a detailed procedure for condemnation actions brought in federal district court and provides, in part:

If a defendant has any objection or defense to the taking of the property, the defendant shall serve an answer within 20 days after the service of notice upon the defendant. The answer shall identify the property in which the defendant claims to have an interest, state the nature and extent of the interest claimed, and state all the defendant's objections and defenses to the taking of the property. A defendant waives all defenses and objections not so presented, but at the trial of the issue of just compensation, whether or not the defendant has previously appeared or answered, the defendant may present evidence as to the amount of compensation to be paid for the property, and the defendant may share in the distribution of the award. No other pleading or motion asserting any additional defense or objection shall be allowed.

FED.R.CIV.P. 71A(e).

MoPac argues that because the defendant's pleading was entitled "Motion to Dismiss and Answer", it should not be considered by the Court. The Court rejects such a restrictive reading of Rule 71A. First, one of the issues raised in the pleading addresses subject matter jurisdiction. This is an issue which the Court could raise sua sponte at any time during the proceedings. Clark v. Paul Gray, Inc., 306 U.S. 583, 588, 59 S.Ct. 744, 748, 83 L.Ed. 1001 (1939). Thus, the Court is not prevented from considering this issue. Additionally, the pleading filed by the defendant was entitled "Motion to Dismiss and Answer". In that pleading, the defendant raised objections to the proposed taking. While the pleading may have been more properly styled as an "Answer and Objections to Taking", the defendants have substantially complied with the spirit of Rule 71A. The purpose of the Rule is to simplify condemnation proceedings in federal court and to clarify the issue of what state procedures apply. Northern Border Pipeline Co. v. 127.79 Acres of Land, More or Less in Williams County, North Dakota, 520 F.Supp. 170, 171 (D.N.D.1981). Its purpose is not to prevent the Court from considering meritorious defenses to the exercise of eminent domain power. The Court will now turn to addressing each of the nine defenses raised by the defendants.

II. DEFENSES TO THE PROPOSED TAKING

1. Lack of Subject Matter Jurisdiction

Defendants argue that this Court lacks subject matter jurisdiction under the diversity statute, 28 U.S.C. § 1332. They concede that MoPac is a corporation incorporated under the laws of the State of Delaware and has its principal place of business in the State of Nebraska. All defendants are Arkansas citizens. However, the landowners argue that because MoPac filed its Articles of Incorporation with the Arkansas Secretary of State pursuant to Arkansas Code Annotated Section 23-3-108, it is also deemed to be a citizen of Arkansas for diversity purposes.

Arkansas Code Annotated Section 23-3-108 provides:

(a)(1) Before any railroad ... of any other state or territory organized for the purpose of generating, transmitting, and distributing electric power and energy for public use shall be permitted to avail itself of the benefits of §§ 23-3-108, 23-11-302, 23-11-401, 23-11-402, and 23-11-404 or any part thereof, the corporation shall file with the Secretary of State of this state a certified copy of its articles of incorporation if incorporated under a general law of the state or territory....

(2) Upon the filing of its articles of incorporation ... with a map and profile of the proposed line and payment of the fees prescribed by law for railroad ... charters, ... the railroad, ... for all intents and purposes, shall become a railroad ... of this state, subject to all the laws of this state, the same as if it was formally incorporated in this state, anything in its articles of incorporation or charter to the contrary notwithstanding.

(3) Such acts on the part of the corporation shall be conclusive evidence of the intent of the corporation to create and become a domestic corporation.

Ark.Code Ann. § 23-3-108 (Michie 1987). There is no dispute that MoPac did, in fact, file copies of its articles of incorporation with the Arkansas Secretary of State on August 21, 1978. See Certificate of Good Standing of a Foreign Corporation attached as Exhibit "A" to MoPac's Brief in Support of Response to Motion to Dismiss.

As set forth in Section 23-3-108, by virtue of filing its articles in this state, MoPac was allowed to sell or lease roads or property to connecting foreign railroads and was given the power to acquire other railroads. Ark. Code Ann. § 23-22-302. Secondly, it was authorized to extend and construct its railroad into or through this state. Ark.Code Ann. § 23-22-401. Thirdly, MoPac was permitted to buy, lease, or...