Partners v. The United States

• Decision Date: 11 February 2011
• Docket Number: No. 08-536 L,08-536 L
• Parties: LOVE TERMINAL PARTNERS, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

LOVE TERMINAL PARTNERS, et al., Plaintiffs,
v.
THE UNITED STATES, Defendant.

No. 08-536 L

United States Court of Federal Claims

Filed: February 11, 2011

Failure to State a Claim Upon Which Relief Can Be Granted; RCFC 12(b)(6); Partial Summary Judgment; RCFC 56; Fifth Amendment Taking; Physical and Regulatory Takings; Loretto; Wright Amendment Reform Act of 2006; Ripeness; Williamson County Reg'l Planning Comm'n; Fallini; Omnia Commercial Co.; Objections to Proposed Findings of Fact; Discovery; RCFC 56(f); No Genuine Issue of Material Fact; Judicial Estoppel; Statutory Construction; Canon of Constitutional Avoidance; Unfunded Mandates Reform Act

Roger J. Marzulla, Washington, DC, for plaintiffs. Lucy J. Wiggins, of counsel.

James D. Gette, United States Department of Justice, Washington, DC, for defendant. Paul Samuel Smith, of counsel.

OPINION AND ORDER

SWEENEY, Judge

Before the court are Defendant's Motion to Dismiss Plaintiffs' Complaint for Failure to State a Claim ("motion") and Plaintiffs' Cross-Motion for Summary Judgment on Partial Liability ("cross-motion"). In this action, plaintiffs Love Terminal Partners, L.P. and Virginia Aerospace, LLC ("Love Terminal Partners" and "Virginia Aerospace," respectively; "plaintiffs," collectively) allege that the Wright Amendment Reform Act of 2006 ("WARA") prohibited the use of 26.8 acres of Dallas Love Field Airport ("Love Field") to which they hold long-term lease rights and effected a taking without just compensation in contravention of the Fifth Amendment to the United States Constitution. Defendant moves, pursuant to Rule 12(b)(6) of the Rules of the United States Court of Federal Claims ("RCFC"), to dismiss the complaint, asserting that plaintiffs have failed to plead any facts that, if true, prove that the government placed regulatory limitations upon plaintiffs' use of the leased property. Furthermore, defendant contends that any impact the WARA had upon plaintiffs constitutes a consequential loss for which compensation is unavailable. Plaintiffs seek partial summary judgment on liability, contending that the WARA constituted a per se, physical taking of six air passenger gates that Love Terminal Partners constructed on the leased property. For the reasons discussed below, defendant's motion is denied and plaintiffs' cross-motion is granted.

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Due to the length of this opinion, the court provides the following table of contents:

I. FACTUAL BACKGROUND...................................................4

A. Love Field and Dallas-Fort Worth International Airport ("DFW")................4
B. Congressional Involvement, 1979-1996.....................................6

1. The Wright Amendment...........................................6
2. The Shelby Amendment...........................................7

C. Love Terminal Partners' Construction of a New Terminal at Love Field...........8
E. Efforts to Amend or Repeal the Wright Amendment..........................10

1. Congress Recommends a Local Solution.............................10
2. Enactment of the WARA.........................................12

F. Plaintiffs' Legal Challenges.............................................13
G. Plaintiffs Default on the Master Lease.....................................15

H. Plaintiffs' Property Interests............................................. 17

II. PROCEDURAL HISTORY...................................................18

III. LEGAL STANDARDS...................................................... 18

A. Nature of a Fifth Amendment Takings Claim...............................18

1. Physical Takings................................................21
2. Regulatory Takings.............................................. 22
3. The Lucas "Antecedent Inquiry"....................................24

B. Ripeness............................................................ 25
C. RCFC 12(b)(6) Motion to Dismiss....................................... 26
D. Motion for Summary Judgment..........................................27

IV. DISCUSSION.............................................................28

A. Plaintiffs' Takings Claim Is Ripe......................................... 29
B. Defendant's Motion...................................................35

1. The Parties' Exhibits Are Not "Matters Outside the Pleadings" That Require
Conversion of Defendant's Motion to a Motion for Summary
Judgment..................................................................................................... 35
2. Plaintiffs Have Identified a Property Interest That Was Allegedly Taken.... 37
3. Plaintiffs Have Alleged Government Appropriation of Their Ownership in the
Leaseholds...................................................39
4. Plaintiffs' Complaint States a Takings Claim.......................... 40

a. Plaintiffs' Complaint States a Claim for a Physical Taking......... 40
b. Plaintiffs Are Entitled to Offer Evidence in Support of Their
Regulatory Takings Theory.............................. 43

C. Plaintiffs' RCFC 56 Cross-Motion....................................... 54

1. Defendant's Discovery-Related Objections Are Insufficient Under
RCFC 56.................................................. 54
2. Principles of Statutory Construction.................................57

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3. The Doctrine of Judicial Estoppel Does Not Apply to Plaintiffs' Contrary
Positions Advanced Before the Northern District of Texas and the Court of
Federal Claims..............................................58
4. Numerous Provisions of the WARA Contain Language Utilized in the
Contract................................................... 61

a. The WARA Contains Identical Provisions to Those Set Forth in the
Contract............................................. 61
b. The WARA Explicitly References the Contract.................. 64
c. Section 5 of the WARA Codifies Under Federal Law Specific
Obligations Set Forth in the Contract...................... 65

i. The WARA Requires That Dallas Reduce the Number of Gates
at Love Field................................... 65
ii. The WARA Requires That Dallas Allocate the Number of
Gates in Accordance With the Contract............... 66
iii. The WARA Requires That Dallas Manage Love Field in
Accordance With the Contract...................... 72
iv. The WARA Requires That Dallas Demolish the Lemmon
Avenue Terminal................................ 74
v. The WARA Specifies how Dallas May Fund the Reduction of
Gates at Love Field.............................. 75
vi. The WARA's Limitations Upon the DOT and the FAA Do Not
Affect the Determination That the WARA Incorporates the
Contract Into Federal Law......................... 75

5. Incorporation of the Contract Into the WARA Does Not Create Constitutional,
Contractual, or Statutory Conflicts.............................. 77

a. The Canon of Constitutional Avoidance Is Not Implicated in
This Case............................................ 78
b. Incorporation of the Contract Into the WARA Creates No Conflict for
Dallas............................................... 79
c. Incorporation of the Contract Does Not Result in an "Unfunded
Mandate"............................................80

6. The WARA's Legislative History Confirms That Congress Intended to
Incorporate the Contract Into Federal Law........................ 85
7. Plaintiffs Are Entitled to Partial Summary Judgment....................89

V. CONCLUSION............................................................ 90

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I. FACTUAL BACKGROUND¹
A. Love Field and Dallas-Fort Worth International Airport ("DFW")

The history of Love Field is defined, in large measure, by the rivalry between the City of Dallas ("Dallas") and the City of Fort Worth ("Fort Worth"). In 1917, the Dallas Chamber of Commerce purchased the land that now constitutes Love Field and leased it to the United States Army. Royce Hanson, Civic Culture and Urban Change Governing Dallas 37 (2003). Following World War I, the Dallas Chamber of Commerce developed Love Field into an aviation-oriented industrial park and, in 1927, sold Love Field to Dallas. Id. at 38. Love Field then began servicing Dallas as its municipal airport.

During the 1950s and early 1960s, Dallas and Fort Worth, which are separated by approximately thirty miles, City of Dallas, Tex. v. Sw. Airlines Co., 494 F.2d 773, 774 (5th Cir. 1974), aff'g 371 F. Supp. 1015 (N.D. Tex. 1973), operated competing airports, Am. Airlines, Inc. v. U.S. Dep't of Transp., 202 F.3d 788, 793 (5th Cir. 2001), and were "bitter rival[s] for the business of commercial aviation and commercial air carriers," Sw. Airlines Co., 371 F. Supp. at 1019; see also H.R. Rep. No. 109-600, pt. 2, at 4 (2006) (noting that Dallas and Fort Worth "engaged in a protracted airport rivalry"). In 1962, the Civil Aeronautics Board ("CAB"), the predecessor to the United States Department of Transportation ("DOT"), explored the benefits of designating a specific airport as the single point through which all interstate air carrier service to Dallas and Fort Worth would be provided. Sw. Airlines Co., 371 F. Supp. at 1020. Two years later, the CAB determined that the competition between the two cities' airports was harmful and ordered Dallas and Fort Worth to reach a voluntary agreement designating one airport through which CAB-regulated carriers would serve both communities. See id.

The cities were unable to designate one of the existing airports...