US Postal Service v. Town of Greenwich, Conn., Civ. No. 3:94 CV 1279 (JBA).

• Decision Date: 05 September 1995
• Docket Number: Civ. No. 3:94 CV 1279 (JBA).
• Citation: 901 F. Supp. 500
• Parties: UNITED STATES POSTAL SERVICE v. TOWN OF GREENWICH, CONNECTICUT v. CENTRAL LAND COMPANY OF GREENWICH and Felix Equities, Inc.
• Court: U.S. District Court — District of Connecticut

901 F. Supp. 500

UNITED STATES POSTAL SERVICE v. TOWN OF GREENWICH, CONNECTICUT v. CENTRAL LAND COMPANY OF GREENWICH and Felix Equities, Inc.

Civ. No. 3:94 CV 1279 (JBA).

United States District Court, D. Connecticut.

September 5, 1995.

Alan M. Soloway, Assistant U.S. Attorney, Bridgeport, CT, Ruth A. Gottlieb, U.S. Postal Service, Ofc. of Field Legal Services, Windsor, CT, Margot E. de Ferranti, U.S. Dept. of Justice, Civil Division, Federal Programs Branch, Washington, DC, for Plaintiff.

John Meerbergen, Bleakley Platt & Schmidt, Greenwich, CT, Joyce H. Young, Town of Greenwich, Law Dept., Town Hall, Greenwich, CT, for Defendant.

Margaret A. Triolo, Whitman Bread Abbott & Morgan, Greenwich, CT, for Third-Party Defendant, Central Land Company of Greenwich.

Mark P. Santagata, Ronald E. Kowalski, II, Cacace Tusch & Santagata, Stamford, CT, for Third-Party Defendant, Felix Equities.

RULING ON PLAINTIFF'S and DEFENDANT'S CROSS-MOTIONS FOR SUMMARY JUDGMENT AND THIRD-PARTY DEFENDANTS' MOTIONS TO DISMISS

ARTERTON, District Judge.

I. Factual and Procedural History

This case poses the question of whether the Town of Greenwich, Connecticut ("Town") may enforce state building code requirements and require payment of building permit fees relating to the construction of a new post office (the "West Putnam Station") in Greenwich against the United States Postal Service, the lessor of the property (Central Land Company of Greenwich) and/or the independent building contractor constructing the post office (Felix Equities, Inc.).

The essential facts of this controversy are not in dispute. On May 26, 1993, the United States Postal Service ("Postal Service") entered into a forty-year lease with five five-year renewal options with Third-Party Defendant Central Land Company of Greenwich ("Central Land") for the property at 500 Old Post Road in Greenwich. The lease gives the Postal Service the right to erect a new building. The lease explicitly states that the Postal Service is liable for any applicable license or permit fees and shall, at its expense, comply with all applicable federal, state, county, and municipal laws, orders, ordinances, and regulations. (Central Land Lease, §§ 3.01, 5.01, Town Exhibit 1). At the end of the term (or renewal term) of the lease, any improvements to the land become the property of Central Land. (Central Land Lease, § 6.01, Town Exhibit 1).

Apparently because it does not have title to the land upon which the West Putnam Station sits, Congress has not acted to assert exclusive jurisdiction over the site, See U.S. Const. Art. I, § 8, cl. 17 (Congress shall have Power ... "to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be ..."), nor has the State of Connecticut ceded exclusive jurisdiction over the land to the federal government. See C.G.S. § 48-1 (1993) ("Exclusive jurisdiction in and over land so acquired by the United States is ceded to the United States ..."). Under Connecticut law, the consent of the state is statutorily granted for the acquisition of land by the United States for post offices or any other government purposes and the property is "exempt from all state, county, and municipal taxation, assessment, or other charges." Id.

On September 28, 1993, the Postal Service awarded Felix Equities, Inc. the contract to construct the post office for a total amount of $4,347,000. The building plans call for a total floor area of 66,700 square feet including a lobby that can accommodate sixty-eight people. Included in the Postal Service's original contract with Felix Equities for the West Putnam Station, and referenced in the Postal Service's Architect-Engineer Project Requirements ("Project Requirements"), were the following clauses:

G.11.a. State and local building codes and regulations do not apply as a matter of law to work inside the property lines of Postal Service-owned properties but generally do apply to Postal Service-leased properties. In compliance with Postal Service policy, the contractor must comply with all State and local building code requirements unless otherwise specifically provided.

G.11.b. The contractor must pay all fees and charges for connections to outside services for use of property outside the site.

(West Putnam Station Solicitation, Town Exhibit 3).

When Felix Equities applied to the Town for a permit to access electrical facilities offsite, the Town Engineer refused to issue the permit unless the Postal Service or Felix Equities secured a general building permit pursuant to Conn.Gen.Stat. § 29-263 or obtained a waiver from the Town. Under Connecticut law, "no building or structure may be constructed or altered until an application is filed with the local building official and a permit issued." Conn.Gen.Stat. § 29-263 (1993). Prior to the issuance of the permit, the local building official is required to review the building plans to determine compliance with the state building code. Id. With the exception of the State of Connecticut, the Town imposes a building permit fee of one percent of the estimated total cost of construction against any person or entity engaged in new construction or material alteration.¹ Conn.Agencies Regs. § 114.3.1 (1993) ("Each municipality shall establish a schedule of fees for each ... building permit."); Conn. Gen.Stat. § 29-252a(h) (1993) ("State agencies shall be exempt from the permit requirements of section 29-263 ...").

The Town and the Postal Service disagreed on whether a general building permit could be required. The Town maintained that Section G.11.a. of the Postal Service's contract with Felix Equities and the Project Requirements required the issuance of a building permit. The Postal Service, on the other hand, contended that it did not consider the project as "Postal Service-leased property," but rather a "Postal Service-owned improvement on leased land,"² which is not subject to building code regulations.³

The Town building official has reviewed and objected to certain aspects of the building plans, most notably, emergency lighting and sprinklers in "lookout galleries," where postal inspectors secretly monitor Postal employees, and the number of women's toilets. The Town has demanded that the design features be corrected, and that the building permit fee of $43,470 be paid before construction continued.

During the course of negotiations, the Postal Service deposited the disputed building permit fee with the Town in escrow pending the judicial resolution of the dispute and work continued on the project. The Postal Service also modified its contract with Felix Equities by eliminating Section G.11.a. and amended its lease with Central Land to state that the improvements on the land would be the property of the Postal Service during the term of the lease.

Pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, the Postal Service filed this action against the Town seeking a declaration that the Postal Service is not subject to the state building code under the Postal Service Reorganization Act and the Supremacy Clause of the United States Constitution. In turn, the Town brought a third-party action against Central Land and Felix Equities seeking a declaration that the Town may enforce the state building code against Central Land and Felix Equities by requiring them to secure a building permit and certificate of occupancy, and to pay the necessary fees, as would normally be required of such building contractors and lessors of land to projects not involving the federal government. Conn.Gen.Stat. § 29-263 (1993).

Before the Court are the following motions: Central Land's Motion to Dismiss, Felix Equities' Motion to Dismiss, Postal Service's Motion for Summary Judgment, and the Town of Greenwich's Motion for Summary Judgment. The Court heard oral arguments on these motions on July 28, 1995. Pursuant to the Court's request, the parties filed post-hearing briefs on August 29, 1995.

For the reasons that follow, the Court concludes that the state building code does not apply to the Postal Service, its contractor, and/or its lessor for the construction of the West Putnam Station.

II. DISCUSSION

A. Introduction

Postal Service and the Town of Greenwich have filed cross-motions for summary judgment pursuant to Fed.R.Civ.P. 56 while Central Land and Felix Equities moves this Court to dismiss the complaint against them pursuant to Rule 12(b)(6). The parties have agreed on the essential facts underlying this case, and that this case can be decided as a matter of law. The Court concurs with the parties' assessment. Further, as required, the Court accepts the factual allegations in the Town's Third-Party Complaint as true in its consideration of the Third-Party Defendants' Motions to Dismiss. Walsche v. First Investors Corp., 793 F.Supp. 395, 396 (D.Conn.1992) (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974)).

B. Postal Service's Motion for Summary Judgment

The Court begins its analysis by turning to the applicability vel non of this state building code enforcement statutory scheme to post offices. The United States Constitution authorizes Congress to establish post offices. U.S. Const. art. I, § 8, cl. 7 (The Congress shall have Power ... "To establish Post Offices and post Roads."). Accordingly, Congress enacted the Postal Reorganization Act, which established the United States Postal Service as "an independent establishment of the executive branch of the Government of the United States," 39 U.S.C. § 201 (1993), to provide postal services. 39 U.S.C. § 403 (general duties of Postal Service). The Postal Service has the right to establish and maintain postal facilities so that patrons throughout the country will "have ready access to postal services." 39 U.S.C. § 403(b)(3) (1993). The Postal Service has the right to determine the need for post office and facilities, 39 U.S.C. § 404(a)(3), and may...