United States v. Town of Windsor, Conn., Civ. No. H-76-248.

Decision Date30 July 1980
Docket NumberCiv. No. H-76-248.
Citation496 F. Supp. 581
PartiesUNITED STATES of America and Combustion Engineering, Inc. v. TOWN OF WINDSOR, CONNECTICUT and William J. Kelly, the Building Inspector and Zoning Enforcement Officer of the Town of Windsor, and his successors in office.
CourtU.S. District Court — District of Connecticut

COPYRIGHT MATERIAL OMITTED

Mikal H. Frey, Trial Atty., Tax Div., U. S. Dept. of Justice, Washington, D. C., for the United States.

Brandon Hickey, Hartford, Conn., for Combustion Engineering, Inc.

Vincent W. Oswecki, Jr., Windsor, Conn., for defendants.

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

CLARIE, Chief Judge.

The parties have filed cross-motions for summary judgment pursuant to Rule 56, Fed.R.Civ.P. The United States urges that the Supremacy Clause of the United States Constitution prohibits the defendants, the Town of Windsor and its Building Inspector and Zoning Enforcement Officer, from imposing the state building code requirements and collecting a building permit fee with respect to the construction of a jointly sponsored experimental coal gasification research project. The Government funds two-thirds (2/3) of the project, has title to the facilities built in connection with the project, and leases the land upon which it is conducted. Combustion Engineering, Inc. is the co-plaintiff with the United States in this declaratory judgment action. It funds one-third (1/3) of this joint project, is responsible for the design, construction and operation of the facility, and owns the land upon which the unit rests. The Town of Windsor asserts that it is entitled to judgment as a matter of law on the grounds: (1) that the building requirements, including the permit fee, are lawfully enforced, because they are directed against only the fee owner of the land, Combustion Engineering, Inc.; (2) that the Government has never accepted exclusive jurisdiction over the leased land upon which the research facility has been built, and (3) that there is no federal law with which the building code requirements conflict. The Court finds that to the extent that the regulations and the fee are not imposed by law on the Federal Government or its property, there is no conflict between the state and local requirements and federal law which would bar the defendants from enforcing the local building code. The Court finds that the Town may enforce said code requirements against the plaintiff Combustion Engineering, Inc., as the owner of the land and the builder of the project, but to the extent that said requirements are directed by law against the United States or its property, they are not enforceable. Summary judgment shall enter consistent with these findings.

Jurisdiction

Jurisdiction over this action is conferred on this Court by 28 U.S.C. §§ 1345 and 1331. The action was commenced by the United States as a plaintiff; and it arises under the Constitution of the United States, with the matter in controversy exceeding Ten Thousand Dollars ($10,000), exclusive of interest and costs.

Facts

The United States of America and the Combustion Engineering, Inc. ("CE") brought this suit against the Town of Windsor and William J. Kelly, the Building Inspector and Zoning Enforcement Officer of the Town of Windsor, seeking a declaration that by reason of the Supremacy Clause of the United States Constitution, the various provisions of the Connecticut General Statutes, the Connecticut Basic Building Code, the Town of Windsor Zoning Regulations, and the Town of Windsor ordinance, which require a building permit and payment of a building permit fee, are neither applicable to nor enforceable against the United States or its contractor, CE, or their officers or agents, in connection with the construction of a coal gasification Process Development Unit ("PDU") in the Town of Windsor, Connecticut.

The United States and CE entered into a contract on October 1, 1974, according to which CE is responsible for the design, construction and operation of a PDU test facility funded two-thirds (2/3) by the United States and one-third (1/3) by CE. The land on which the PDU is built is owned by CE and leased to the Government at an annual rate of One Dollar ($1.00), renewable from year to year until 1989 (Court X-B).

According to the contract between the Government and CE, the latter is independently responsible for the PDU project. CE is not the Government's agent; it cannot bind the Government directly for its contract purchases. However, with respect to all of the property purchased by CE for the construction of the PDU for which it is entitled to be reimbursed, title vests in the Government upon delivery of such property to CE by the vendor. Title to the completed PDU would vest in the Government. Consistent with these contract terms granting title to the PDU in the Government, the lease provides that within one year from the end of the lease, the Government shall remove such property and restore the demised premises. However, CE and the Government may agree to allow the latter to abandon the facilities, which include four buildings and one large gasifier tower, in which event title to such property would vest in CE. (Section IX B, Court X-B).

Construction of the PDU by the independent contractor, CE, began in March, 1976. Shortly thereafter, the defendant William J. Kelly, in his capacity as Building Inspector and Zoning Enforcement Officer of the Town of Windsor, advised CE, owner of the land and builder of the project, that it was in violation of the Connecticut General Statutes, the Connecticut Basic Building Code, and the Windsor Zoning Regulations, because it had neither obtained a building permit nor requested an inspection prior to commencing construction. The defendant Inspector ordered that CE cease construction of the PDU, apply for a building permit and pay a building permit fee of approximately Sixty-Six Thousand Dollars ($66,0001). CE failed to pay the fee and the defendant Town of Windsor commenced a state court action to stay construction.

Then, in order to complete construction and continue the project, the United States and CE entered into a stipulation with the defendants, signed on June 22, 1976. The stipulation provides, in relevant part, that whereas the Town of Windsor contends that CE must obtain a building permit and pay a building permit fee with respect to the construction of the PDU; the United States, through its Energy Research and Development Administration (ERDA), contends that no permit or fee can be required (because the PDU is being constructed at ERDA's direction pursuant to Congressional action relating to the development of more efficient methods of utilizing coal, and because the United States will be the owner of the PDU); and the Town of Windsor has withdrawn without prejudice its state court action; it is agreed that CE will obtain a building permit under protest and pay into escrow the permit fee of approximately $66,000. (Court X-A). The permit fee is now being held in a separate trust account pending the outcome of this litigation.

Paragraphs 8, 12, 16, and 17 of the complaint frame the issues raised by the cross-motions for summary judgment. The plaintiffs allege in paragraph 12 that the defendant William J. Kelly, in his capacity as Building Inspector and Zoning Enforcement Officer, told CE representatives that no building permit would be required, because the United States was to be the owner of the PDU. Such allegation is included in the complaint as arguable grounds for estopping the Town of Windsor from enforcing the permit and fee requirements. The other cited paragraphs represent that the requirements imposed by the state and local laws and regulations sought to be enforced by the defendants are obligations of the United States, the owner of the structures to be erected. The plaintiffs contend that such provisions cannot be enforced against the United States, or CE acting at the direction of the United States, because by virtue of the Supremacy Clause of the United States Constitution, the Federal Government's activities are free from regulation, interference and taxation by the states and their political subdivisions. The Court's task on these cross-motions for summary judgment is to determine whether there is any genuine issue as to the material facts alleged, and whether or to what extent either moving party is entitled to a judgment as a matter of law pursuant to Rule 56, Fed.R.Civ.P.

Discussion

The coal gasification PDU project was undertaken by the Government and CE pursuant to an act of Congress enacted in July of 1960, which granted authority to the Secretary of the Interior and the Office of Coal Research to contract for the development through research of "new and more efficient methods of mining, preparing, and utilizing coal." 30 U.S.C. § 662(1).2

Notably lacking in the Energy Research and Development Acts,3 as conceded by the Government in its brief, are any specific provisions which relieve the ERDA, or private persons engaged by ERDA, from state and local taxation and regulation. The law provides, however, that the Secretary of the Interior (now the ERDA administrator, per 42 U.S.C. § 5814(e)(1)) shall "cooperate to the fullest extent possible with . . . State governments, and all other interested agencies, governmental and nongovernmental." 30 U.S.C. § 662(4), (emphasis added).

The provisions of the state and local laws and regulations, which are sought be the plaintiffs to be declared inapplicable and unenforceable in connection with the construction of the PDU, are those which require a building permit and the payment of a building permit fee. For example, Connecticut General Statute § 19-398 provides:

"After October 1, 1970, no building or structure shall be constructed or altered until an application has been filed with the building official and a permit issued. Such permit shall be issued or refused, in whole or in part, within 30 days after
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