CHRISTOPHER R. COOPER, United States District Judge.
The National Railroad Passenger Corporation, known by all as "Amtrak," can take "interests in property" by eminent domain where those interests are "necessary for intercity rail passenger transportation." 49 U.S.C. § 24311(a)(1)(A). Relying on this authority, Amtrak filed suit in July 2015 to condemn two parcels of land owned by Defendant Fluorine LLC that sit adjacent to Washington Union Station.
Fluorine has filed a motion for partial summary judgment challenging Amtrak's statutory authority to take one of the parcels, which contains an office building and an underground parking garage. It reads the statute governing Amtrak's acquisitions narrowly as requiring absolute, last-resort necessity, and it contends that the parcel is not indispensable to Amtrak's operations. Amtrak responds in a cross-motion that the condemnation is amply
Washington's iconic Union Station is Amtrak's headquarters and one of its busiest rail stations. Since 2012, defendant Fluorine LLC has owned two adjacent parcels of land just north of Union Station. The parcels hug the west side of 2nd Street Northeast and abut the east side of the railroad tracks that head north out of Union Station. The first parcel, Lot 814, contains a surface parking lot with an electrical substation beneath it. The other, Lot 812, contains an office building called the Railway Express Agency Building ("REA Building") and an underground parking garage. Together, the lots comprise nearly 110,000 square feet.
Historically, Amtrak leased office space in the REA Building and had additional access to it through various easements. At the time Amtrak condemned the lots, it was the building's largest tenant — it leased almost 35,000 square feet, or 30% of its leasable space. Amtrak also controlled an underpass below Union Station that extends under the H Street Bridge and connects with the parking garage beneath the REA building. It previously granted Fluorine's predecessor an easement to use that underpass for vehicle access and parking.
As part of its efforts to develop the Northeast Corridor railway line from Boston to Washington, D.C., Amtrak in 2012 began devising a plan to rehabilitate and expand Union Station. Pl.'s Mot. Summ. J. Ex. 22, at 11:6-12:1. The result was an omnibus "Union Station Master Plan," which contemplated Amtrak's "reconstruction of all tracks [and] platforms, creating a series of new concourses below the tracks," and overall sought to "provide safer, more efficient, more accessible services for passengers and for employees."
Over the next three years, Amtrak studied how best to expand the station's capacity and, as part of this process, commissioned a report assessing the possible acquisition of the two parcels at issue.
In January 2015, after further study, Amtrak personnel created a presentation for its Board of Directors proposing Amtrak's acquisition of the REA Building, as well as the adjacent parking lot and air rights above it.
In May 2015, Amtrak's Board of Directors approved a resolution authorizing Amtrak to purchase Lots 812 and 814 or, if unable to strike a deal, to condemn them by eminent domain.
Three weeks after the resolution passed, Amtrak sent a letter to Fluorine offering to purchase the two lots for $35 million. Pl.'s Mot. Summ. J. Ex. 34. Fluorine rejected the offer three days later in a one-line letter: "Thank you for your interest. Fluorine, LLC has no intent [o]n selling the property."
Amtrak then brought this condemnation action in July 2015. As required by 49 U.S.C. § 24311(b)(1), Amtrak filed a declaration (a) stating "the public use for which the interest is taken"; (b) describing the property; (c) stating the interest in the property; (d) "showing the interest taken"; and (e) estimating just compensation for the interest taken.
Two months after Amtrak commenced this action, the parties stipulated to Amtrak's acquisition of the property but reserved "Fluorine's right to contest the validity of Amtrak's taking." Joint Stipulation and Order 3 (ECF No. 23). Following discovery, both Amtrak and Fluorine moved for partial summary judgment on the sole question of whether Amtrak was permitted to take Lot 812, the parcel containing the REA Building and the underground parking garage. The Court held a hearing on the cross-motions on August 29, 2017.
A party is entitled to summary judgment if the pleadings and other materials in the record show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. The moving party bears the burden of demonstrating the absence of a genuine issue of material fact.
Congress gave Amtrak the power to acquire by eminent domain "interests in property" that are "necessary for intercity passenger rail transportation," 49 U.S.C. § 24311(a)(1), and that it cannot "acquire by contract" or "agree with the owner on the purchase price,"
The central issue before the Court is just how "necessary" a property interest must be to be eligible for condemnation and, relatedly, how much weight a court should give Amtrak's own determination of necessity. Fluorine contends that Amtrak's power is narrow and that courts owe Amtrak no deference on its determinations of necessity. In Fluorine's view, Amtrak may condemn a property interest only "as a last resort" — "where it cannot practicably do otherwise" — and it urges the Court to engage in a searching, fact-specific
The Court finds that Amtrak's power — and the scope of the Court's review — lies somewhere between these two extremes.
First, courts simply do not owe Amtrak's determinations of necessity the same sort of substantive deference that federal agencies and other government entities receive when condemning property. The Supreme Court has distinguished between two types of statutes delegating the power of eminent domain. On one hand, there are "general authorization[s]" that "authorize officials to exercise the sovereign's power of eminent domain on behalf of the sovereign itself."
So what are the terms of that grant? Again, § 24311 allows for the condemnation
This conclusion, combined with Amtrak's status as a for-profit corporation, has one further consequence. Where Amtrak's condemnation is challenged, the Court may uphold the taking if it finds that the property taken is necessary for intercity passenger rail transportation. Just as Amtrak's interpretation of § 24311 and its determinations of necessity do not warrant substantial judicial deference, neither do flaws in its internal decisionmaking process warrant halting a condemnation.
That leaves the question of what it means for property to be "necessary for intercity passenger rail transportation." Fluorine urges a more restrictive definition of necessity — one of absolute, last-resort need. Its interpretation finds some support in dictionaries.
But for centuries the law has also recognized a broader understanding of necessity that does not imply indispensability. Chief Justice Marshall famously concluded that, for constitutional purposes, "necessary" laws are those "`convenient, or useful' or `conducive'" to implementing one of Article I's enumerated powers.
Recognizing the indeterminacy of the term "necessary," the parties rightly concede that the standard in § 24311 is ambiguous, and therefore that the Court must look beyond its plain text "to resolve that ambiguity."
The Court finds that § 24311's standard is best read as more stringent than mere "usefulness," but more lenient than absolute, last-resort need. For Amtrak to acquire a property interest by eminent domain, the property interest must have a "significant relationship" with Amtrak's provision of intercity rail passenger transportation.
All courts that have construed Amtrak's eminent domain power have adopted this broader sort of interpretation. The Second Circuit, while acknowledging that "Amtrak's exercise of its delegated power of eminent domain is entitled to less deferential review than that of a government agency," declined to impose a strict standard of necessity.
And while the Supreme Court has not interpreted the specific language of § 24311, in
As Fluorine observes,
Fluorine's second argument on this front is more substantial. Section 24311, like its predecessor statute at issue in
Fluorine contends that, by codifying a presumption of need only for railroad property, Congress implied that Amtrak must prove genuine need when condemning non-railroad property. That argument is only half correct. The absence of an evidentiary presumption does mean that Amtrak must affirmatively show necessity when it condemns non-railroad property. But the absence of a presumption does not imply that Amtrak's standard of necessity is strict. If anything, the link between the provisions governing railroad and non-railroad takings cuts in the other direction: The "back-to-back" juxtaposition of the provisions — both requiring that the property taken be "necessary for intercity passenger rail transportation" — demands that the substance the necessity standard is the same for both types of property. 4,945 Square Feet of Land, 1 F.Supp.2d at 82. And, again, in the railroad context, the Supreme Court has suggested that a broader reading of necessity is "preferable."
Uses of the word "necessary" elsewhere in Amtrak's governing statute provide further support for a broader interpretation of the term in the eminent domain provision.
Read in context of the entire report, the statement that Amtrak should use its power carefully is better understood as an admonition than a judicially enforceable limit. The committee goes on to describe two safeguards against Amtrak's abuse of its eminent domain power, neither of which suggests a legal standard of indispensability. First, "[t]he judicial review which is exercised through the condemnation proceedings assures that the property being taken is in fact needed for the purpose mandated under the statute" — an emphasis on reviewing the propriety of Amtrak's purpose, not the direness of its need for the property.
The report also explains that the committee saw Amtrak's new power of eminent domain as "similar to that accorded railroads and public utilities under State law."
The historical takings power of railroads and utilities, however, was not boundless. Interpreting a statute granting rail carriers the power to "appropriate such land `as may be deemed necessary for its railroad,'" one state supreme court provided a helpful summary of the relevant limitations:
All in all, this standard of necessity — one that implies a significant link between the property and the "legitimate objects" set forth in Amtrak's statutory charter — is the one contemplated by § 24311 and best effectuates its purpose. A strict standard of last-resort need would be impossible to implement without vitiating Amtrak's power to take property: it is hard to imagine a property truly indispensable to Amtrak's ability to provide rail service. But general "usefulness" is similarly problematic. Almost any condemnation could be plausibly justified as useful for a transportation provider: Taking a commercial building with no physical connection to Amtrak's rail system and selling it for a profit might enable Amtrak to lower its ticket prices. Rather, just as Congress unlikely wanted to confer a functionally inert takings power, neither would it sensibly include restrictive language along the axes of purpose ("intercity passenger rail transportation") and importance ("necessary") if it expected those restrictions to be completely toothless. The upshot is that Amtrak may condemn property only if it has a significant connection to its goal of providing intercity passenger rail transportation. The sufficiency of this connection is a question of fact, but one readily resolvable on summary judgment.
Having decided the standard to apply, the Court now turns to whether the record evidence supports summary judgment for either party. Fluorine contends that, even under a broader understanding of necessity, Amtrak has not shown that taking Lot 812 was necessary for intercity passenger rail transportation. At a minimum, it argues, there remain material disputes of fact regarding necessity.
Again, the relevant question is whether the parcel containing the REA Building and its underground garage has a significant relationship with Amtrak's goal of providing intercity passenger rail transportation. The Court finds that, as a matter of law, Amtrak has satisfied that standard.
It is undisputed that, before the taking, Amtrak used the REA Building for its intercity passenger rail transportation operations: Amtrak leased about 30% of the offices in the REA Building to house staff from several departments and had easements for use of space in the building below its tracks at Union Station. Def.'s Mem. Supporting Mot. Summ. J. 4.
It is also undisputed that Amtrak sought to condemn the property in order (1) to allow for expanded use of the property in the future and (2) to secure its existing uses of the building and underpass through fee simple ownership. And, on both of these fronts, Amtrak's past and planned uses for the property bear an indisputable link with its transportation goals. When it comes to its operations, Amtrak believes that the simplest way to expand the eastern side of the railyard would be to demolish approximately 1,000 square feet of the eastern side of the REA
Moreover, Amtrak has an interest — and one within the scope of § 24311 — in solidifying its current interests in the REA Building through fee simple ownership. In particular, it is undisputed that Amtrak viewed its easement providing access to the H Street Underpass as conflicting with Fluorine's easement, Pl.'s Mot. Summ. J. Ex. 22, at 34:6-38:16, and that Amtrak used the underpass for vehicle access to Union Station and for parking, Def.'s Mot. Summ. J. Ex. AA, at ¶ 4.
If this conflict of easements were truly a concern, Fluorine asks, then why could Amtrak not seek to clarify the inferiority of Fluorine's easement? For that matter, why did Amtrak not negotiate with Fluorine for a lease or easement for the additional parts of the building to which it sought access, rather than seeking fee simple ownership of the parcel? These arguments might carry the day if the Court imposed Fluorine's desired definition of necessity: one that demanded scrutinizing Amtrak's decisionmaking process to ensure that eminent domain was used as a last resort. But, again, § 24311 requires that the property have a significant connection with Amtrak's transportation mission. Assuming the requisite connection, the Court is not in a position to assess whether a lease, an easement, or fee simple ownership is the optimal way to further that mission. Indeed, the legislative history of Amtrak's eminent domain provision expressly contemplates, as a legitimate justification for using eminent domain, the inferiority of leaseholds to outright ownership: "Amtrak is currently leasing terminal and other facilities from various railroads. These facilities are not always best adapted to Amtrak needs, nor is the lease always the most economical means by which Amtrak could fulfill its requirements for a facility." H.R. Rep. No. 93-415, at 8 (emphasis added). That was precisely Amtrak's conclusion here — it expressed concern that its current property interests in the building, consisting of leaseholds and easements, were insufficiently secure and would not afford Amtrak the necessary flexibility as it continued to expand Union Station. And Fluorine's admitted willingness to provide a property interest less than fee simple ownership does not undermine the soundness of Amtrak's conclusion or its compliance with § 24311.
Fluorine's other attacks on the necessity of Amtrak's condemnation must similarly be rejected. Citing the Amtrak Board's identification of a high estimated rate of return for the REA Building, Fluorine contends that Amtrak had ulterior motives for the acquisition. This fact would be troubling if profit were the only evident purpose for Amtrak's acquisition. But, as explained, the REA Building has a clear nexus with Amtrak's transportation-related goals, and the mere consideration of economic factors cannot defeat an otherwise valid taking. Amtrak's takings power is restricted by the terms § 24311, but so long as it does not exceed its statutory power, Amtrak is not forbidden from considering additional factors before seeking to acquire a multi-million-dollar property.
Finally, Fluorine contends that Amtrak "failed to consider an important aspect of the problem before it" by not separately analyzing the need to acquire the REA Building, apart from its need to acquire the adjacent surface parking lot. Def.'s
Because the Court finds that, as a matter of undisputed fact, the condemned parcels were necessary for intercity passenger rail transportation, the Court will grant Amtrak's motion for partial summary judgment and deny Fluorine's cross-motion. The amount of just compensation due to Fluorine will be determined as necessary in a subsequent proceeding. A separate Order accompanies this Memorandum Opinion.