Clear Sky Car Wash LLC v. City of Chesapeake, Virginia ( 2014 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1492
CLEAR SKY CAR WASH LLC; CLEAR SKY CAR WASH OPERATING LLC;
SAMUEL JACKNIN, founder, owner and managing agent of Clear
Sky; CHARLES EINSMANN, co−founder, co−owner and agent of
Clear Sky,
Plaintiffs - Appellants,
v.
CITY OF CHESAPEAKE, VIRGINIA; CAROLE GILLESPIE, natural
person, individually and in her capacity as City Right of
Way Manager; GREENHORNE & O’MARA, INCORPORATED, d/b/a
Greenhorne & O’Mara Consulting Engineers, and in its
capacity as and for the City; THOMAS COPELAND, natural
person, individually and as agent of the City; EVELYN JONES,
natural person, individually and as agent of the City;
DANIEL JONES, natural person, individually and as agent of
the City; VIRGINIA DEPARTMENT OF TRANSPORTATION, by and
through the current Commissioner of Highways, now Gregory
Whirley, Sr., in his capacity as such; UNITED STATES
DEPARTMENT OF TRANSPORTATION, by and through its current
Secretary, now Ray LaHood in his capacity as such,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Mark S. Davis, District
Judge. (2:12-cv-00194-MSD-LRL; 2:12-cv-00195-MSD-TEM)
Argued: October 29, 2013 Decided: February 21, 2014
Before NIEMEYER, MOTZ, and DIAZ, Circuit Judges.
Affirmed by published opinion. Judge Niemeyer wrote the
opinion, in which Judge Motz and Judge Diaz joined.
ARGUED: Edward Joseph Grass, Burke, Virginia, for Appellants.
Thomas Jeffrey Salb, BREEDEN, SALB, BEASLEY & DUVALL, PLC,
Norfolk, Virginia; Kent Pendleton Porter, OFFICE OF THE UNITED
STATES ATTORNEY, Norfolk, Virginia, for Appellees. ON BRIEF:
Rebecca L. Dannenberg, FRANKLIN & PROKOPIK, PC, Herndon,
Virginia, for Appellees Greenhorne & O’Mara, Incorporated,
Thomas Copeland, Evelyn Jones, and Daniel Jones. Christopher D.
Eib, OFFICE OF THE ATTORNEY GENERAL, Richmond, Virginia, for
Appellee Virginia Department of Transportation. Neil H.
MacBride, United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Alexandria, Virginia, for Appellee United States
Department of Transportation.
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NIEMEYER, Circuit Judge:
In connection with a project to widen Dominion Boulevard
(U.S. Route 17) in the City of Chesapeake, Virginia, the City
took the property of Clear Sky Car Wash LLC, consisting of a
32,056-square-foot parcel of land on which Clear Sky operated a
car wash. Following unsuccessful negotiations with Clear Sky to
purchase the property, the City initiated a “quick take”
proceeding to take the property, pursuant to Virginia Code §§
33.1-119 and 33.1-120, filing a “certificate of take” in state
court and depositing $2.15 million with the court as its
proffered just compensation. Under this procedure, the City was
able to take title to the property immediately, leaving the
resolution of any dispute over the property’s valuation to be
resolved in condemnation proceedings.
Although the state proceedings were pending, Clear Sky and
its principals commenced this action to challenge the City’s
conduct (1) in arriving at its $2.15 million valuation (which
Clear Sky contends was too low); (2) in negotiating with Clear
Sky (which Clear Sky alleges was conducted in bad faith); and
(3) in initiating the quick take proceeding “prematurely.” It
claims that the City’s conduct violated the mandatory real
property acquisition policies set forth in 42 U.S.C. § 4651,
which are made applicable to state agencies when, as here,
federal funds are involved, see id. § 4655.
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On the defendants’ motions to dismiss, the district court
concluded that § 4651 did not create enforceable rights and
dismissed the complaint.
For the reasons that follow, we affirm.
I
In November 2008, the Chesapeake City Council passed a
resolution approving a project of the Virginia Department of
Transportation (“VDOT”) to widen a portion of Dominion Boulevard
(U.S. Route 17) and to replace the bridge that passes over the
southern branch of the Elizabeth River. The project was to be
funded by the City, the VDOT, and the U.S. Department of
Transportation (“USDOT”) and was to be managed by the City.
The project required that various parcels of land be
acquired, including the parcel owned by Clear Sky. The City
hired two separate appraisers to determine the value of Clear
Sky’s parcel, and each appraisal relied on a square-foot basis
of valuation, without considering comparative values of other
pad sites. 1 In August 2011, the City transmitted copies of both
appraisals to Clear Sky and stated that it was accepting the
1
“Pad site” is understood to refer to any freestanding
parcel of commercial real property located in front of or near a
shopping center such that it benefits from traffic to the
shopping center.
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appraisal that valued Clear Sky’s property at $2.15 million, the
lower of the two.
Between August 2011 and January 2012, Clear Sky and the
City discussed at length Clear Sky’s objections to the City’s
appraisal. According to Clear Sky, some of the City’s agents
eventually acknowledged problems with the appraisal, agreeing,
for example, that its depreciation calculation was incorrect.
Nonetheless, on January 27, 2012, the City formally offered
Clear Sky the $2.15 million amount as just compensation for
Clear Sky’s property, and Clear Sky rejected the offer.
The City thereafter initiated a quick take proceeding, as
authorized by the Virginia Code, filing a certificate of take in
the Circuit Court for the City of Chesapeake on March 22, 2012,
and depositing $2.15 million with the court. Clear Sky
unsuccessfully attempted to remove that proceeding to federal
court, see City of Chesapeake v. Clear Sky Car Wash LLC, No.
2:12cv195, 2012 WL 3866508 (E.D. Va. Sept. 5, 2012), and
simultaneously commenced this action, naming as defendants the
City, several of its employees and agents, the VDOT, and the
USDOT. The complaint alleged that the defendants violated Clear
Sky’s rights under the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (“URA”), 42 U.S.C.
§§ 4601-4655, in pursuing the acquisition of its property.
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More particularly, the complaint alleged that in preparing
for its taking of Clear Sky’s property, the City obtained two
appraisals, both of which “undervalue[d]” the land by “at least
$1 million” by failing to take into account the value of
comparable pad sites. It alleged that the City then used those
appraisals to conduct negotiations with Clear Sky in bad faith,
failing to timely provide information in response to Clear Sky’s
questions and providing information that was “largely
incomplete” and “not all truthful.” It also alleged that even
though the City recognized that the appraisal on which it had
chosen to rely included errors in its depreciation calculation
and failed to use “comparable properties outside the area,” the
City never addressed these problems and instead stuck with its
original appraisal of $2.15 million. Finally, the complaint
alleged that the City inappropriately “declin[ed] to discuss
settlement,” opting instead to file a certificate of take, which
prematurely effected a quick take of Clear Sky’s property under
Virginia law. Based on the City’s appraisals, negotiations, and
quick take procedures, Clear Sky alleged that the City, its
agents, and its partners violated Clear Sky’s rights under 42
U.S.C. §§ 4651 and 4655.
Relying on these allegations, the complaint set forth six
causes of action. Count I alleged that the defendants failed
“to act in compliance with and subject to the mandates of the
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[URA]” in a number of ways, including by obtaining and using
inappropriate appraisals; conducting negotiations in bad faith;
failing to deposit “a sufficiently large sum” for the taking in
court; filing their quick take proceeding “prematurely”; and
“improperly attempting to obtain entry on and possession of the
property.” Count II alleged that the defendants’ conduct
violated Clear Sky’s rights under the Due Process Clauses of the
Fifth and Fourteenth Amendments. Count III alleged that the
conduct violated Clear Sky’s rights under the Equal Protection
Clause of the Fourteenth Amendment. Count IV alleged that the
defendants violated 42 U.S.C. §§ 1983 and 1985 in denying Clear
Sky its interests in “the proper application of the [URA].”
Count V alleged a Virginia common law claim for breach of
contract. And Count VI alleged a Virginia common law claim for
equitable estoppel. The complaint sought declaratory and
injunctive relief and demanded damages “in a sum not less than
$9 million.”
The defendants filed motions to dismiss under Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6), and the district court
granted the motions, dismissing the complaint with a Memorandum
Opinion dated December 18, 2012. See Clear Sky Car Wash, LLC v.
City of Chesapeake, 910 F. Supp. 2d 861 (E.D. Va. 2012). The
court held first that it lacked subject matter jurisdiction over
Count I because it rested on alleged violations of the URA’s
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land acquisition policies, as set forth in Subchapter III of the
Act, 42 U.S.C. §§ 4651-4655. Citing Gonzaga University v. Doe,
536 U.S. 273 (2002), it found that Subchapter III did not create
a federal right of action for landowners. To the extent that
Clear Sky might have also been claiming a right to relocation
assistance under Subchapter II of the URA, the court likewise
concluded that that Subchapter created no right of action. In
addition, the court noted as to Subchapter II that Clear Sky had
“failed to allege that [it] made even one application for
relocation assistance payments” and had similarly “allege[d] no
facts concerning . . . advisory relocation assistance.” Clear
Sky Car Wash, 910 F. Supp. 2d at 880-81, 83. It thus concluded
that although it would generally have jurisdiction to review
relocation assistance determinations under the Administrative
Procedure Act (“APA”), Clear Sky had “failed to allege a final
agency action sufficient to trigger such jurisdiction.” Id. at
883. 2 Based on its conclusion that the URA did not confer
privately enforceable rights, the court dismissed Counts II,
III, and IV for failure to state a claim. Finally, with respect
to Counts V and VI, the court declined to exercise supplemental
2
We agree with the district court that Clear Sky’s
complaint did not allege that the defendants violated Subchapter
II by failing to provide relocation assistance. Accordingly, we
do not address whether Clear Sky could have stated a claim under
Subchapter II.
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jurisdiction over the state law claims pursuant to 28 U.S.C.
§ 1367(a) inasmuch as it had dismissed all the federal claims.
From the district court’s judgment, Clear Sky filed this
appeal, challenging the court’s ruling that the URA did not
create a private right of action and that neither 42 U.S.C.
§ 1983 nor the APA provided it with avenues for relief under the
URA.
II
Clear Sky notes on appeal that the URA requires federal
agencies that are acquiring real property to take certain steps
“to assure consistent treatment for owners . . . and to promote
public confidence in Federal land acquisition practices,”
listing ten specific policies that must be followed. 42 U.S.C.
§ 4651. Because its property was taken in connection with a
project funded in part by the United States, Clear Sky states
correctly that § 4655 made § 4651 applicable to the City and the
VDOT as a condition of federal funding. Therefore, because
these policies were mandated by federal law and imposed on state
agencies, Clear Sky claims that it was entitled to enforce
compliance with those policies (1) by a direct cause of action
against the offending parties; (2) by an action under 42 U.S.C.
§ 1983 to secure its rights in those policies; or (3) under the
APA, which provides for review of agency actions -- in this
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case, the actions of the USDOT. We address these arguments in
order.
A
To determine whether the URA creates an implied right of
action for enforcement of the policies mandated by § 4651, we
must determine “whether Congress intended to create a federal
right.” Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). And,
to that end, we look to the relevant statute.
Section 4651 provides that “heads of Federal agencies
shall, to the greatest extent practicable, be guided by” ten
policies enumerated in that section when acquiring real property
from landowners. 42 U.S.C. § 4651. The policies specify, for
example, that the head of a federal agency shall “make every
reasonable effort to acquire expeditiously real property by
negotiation,” obtain an appraisal of the real property at issue,
and promptly “offer to acquire the property for” “an amount
which he believes to be just compensation therefor,” but which
shall in no event “be less than the agency’s approved appraisal
of the fair market value of such property.” Id. Section 4655
then extends the reach of § 4651 by requiring federal agencies
distributing federal funds to condition their grants to state
agencies on their agreement to comply with § 4651’s land
acquisition policies:
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[T]he head of a Federal agency shall not approve any
. . . grant to . . . an acquiring agency under which
Federal financial assistance will be available to pay
all or part of the cost of any program or project
which will result in the acquisition of real property
. . . unless he receives satisfactory assurances from
such acquiring agency that (1) in acquiring real
property it will be guided, to the greatest extent
practicable under State law, by the land acquisition
policies in section 4651 of this title . . . .
Id. § 4655(a). As a result, state agencies that have received
federal funds for a project generally “must comply with § 4651
to the greatest extent legally possible under state law.” City
of Columbia v. Costle, 710 F.2d 1009, 1013 (4th Cir. 1983).
In short, the URA directs that “the head of a Federal
agency” be guided by the policies of § 4651 when acquiring land
or that he assure himself that the state agencies are guided by
them when using federal funds to acquire land. The statutory
directive is aimed at the agency head, and it omits any language
conferring rights or benefits on landowners. Indeed, to the
contrary, § 4602(a) specifically provides: “The provisions of
section 4651 of this title create no rights or liabilities and
shall not affect the validity of any property acquisitions by
purchase or condemnation.” 42 U.S.C. § 4602(a) (emphasis
added).
It is axiomatic that we will not recognize an implied right
of action under a statute “where the text and structure of [the]
statute provide no indication that Congress intend[ed] to create
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new individual rights.” Gonzaga, 536 U.S. at 286. To create a
private right of action, Congress must “speak[] with a clear
voice,” id. at 280, and the statute must “unambiguously,” id. at
283, express the intent “to create not just a private right but
also a private remedy,” id. at 284 (quoting Alexander v.
Sandoval, 532 U.S. 275, 286 (2001)). In this case, not only did
Congress not speak with a clear voice and unambiguously provide
Clear Sky both a private right and remedy, it spoke with a clear
voice and unambiguously to the contrary, stating that the
policies in § 4651 “create no rights or liabilities.” 42 U.S.C.
§ 4602(a).
Clear Sky would have us imply a private right because
§ 4602(a) only refers to § 4651, which lists the policies, and
does not include a reference to § 4655, which requires that the
federal policies be applied to state agencies. This argument,
however, overlooks the respective roles of §§ 4651 and 4655 and
their relationship to each other. Section 4655 does not
independently create any policies. Rather, it serves only to
extend the § 4651 policies to state agencies when those agencies
use federal funds to acquire real property. It is § 4651 that
provides the source for the mandated substantive policies, and
those policies are expressly qualified by § 4602(a), which
rejects their use as a basis for a right of action.
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At bottom, we hold that the URA, in imposing policies on
the heads of federal and state agencies in §§ 4651 and 4655,
creates no individually enforceable rights. Therefore, Clear
Sky lacks any basis for a private action to remedy violations of
those sections. See Gonzaga, 536 U.S. at 286.
B
Clear Sky contends that even if it lacks a right of action
under the URA itself, 42 U.S.C. § 1983 provides it with a
vehicle to enforce §§ 4651 and 4655.
Section 1983, however, does not confer any substantive
rights; rather, it supplies a remedy for rights conferred by
other federal statutes or by the Constitution. See Gonzaga, 536
U.S. at 284 (“Once a plaintiff demonstrates that a statute
confers an individual right, the right is presumptively
enforceable by § 1983”). And determining whether another
statute -- here, 42 U.S.C. §§ 4651 and 4655 -- confers rights
for enforcement under § 1983 “is no different from the initial
inquiry in an implied right of action case.” Id. at 285.
Because we conclude that 42 U.S.C. §§ 4651 and 4655 do not
confer individual rights enforceable by Clear Sky, we also
conclude that Clear Sky cannot enforce those sections under 42
U.S.C. § 1983. Accordingly, we affirm the district court’s
dismissal of Clear Sky’s § 1983 claim.
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C
Finally, Clear Sky asserts that it “has a right to
immediate judicial review based on the APA.” It argues that the
USDOT’s failure to require the City to comply with the URA was
“per se arbitrary, capricious, and not in accordance with the
law,” and it contends that it is entitled, under the APA, to an
injunction ordering the USDOT to compel the other defendants to
comply with § 4651.
Because the URA expressly provides that § 4651 “create[s]
no rights or liabilities,” 42 U.S.C. § 4602(a), some courts have
concluded that there can be no judicial review under the APA of
an agency’s compliance with § 4651’s policies. See, e.g.,
Paramount Farms, Inc. v. Morton, 527 F.2d 1301, 1304 (7th Cir.
1975); see also 5 U.S.C. § 701(a)(1) (withdrawing APA review
where relevant statute “preclude[s] judicial review”). But
regardless of whether § 4602(a) can be interpreted as precluding
judicial review under the APA, Clear Sky cannot seek relief
under the APA because it never asserted an APA claim in its
complaint. The only mention of the APA is made in the
complaint’s opening statement of jurisdiction:
Jurisdiction in this Court is proper for all of the
claims and causes of action in this Complaint pursuant
to 28 U.S.C. § 1331 (original federal question
jurisdiction), 1343, 1346(a)(2) (claims against the
United States not exceeding $10,000), 1358 (in the
alternative, original jurisdiction for condemnation by
agencies of the United States), et seq., 5 U.S.C.
14
§§ 701 and 702 et seq., (federal judicial review of
certain administrative matters), 28 U.S.C. §§ 2201-
2202 (declaratory relief regarding rights and legal
relations); 28 U.S.C. § 1367(a) (supplemental
jurisdiction in the alternative), as well as in
relation to 42 U.S.C. §§ 1983, 1985, and 1988 et seq.,
42 U.S.C. § 4601 et seq., and 49 C.F.R. Part 24.
(Emphasis added). This passing reference is insufficient to
plead a cause of action under the APA for judicial review of
“final agency action for which there is no other adequate remedy
in a court.” 5 U.S.C. § 704.
Moreover, even reading the alleged facts of the complaint
liberally does not remotely suggest the existence of a “final
agency action,” as necessary to justify judicial review under
the APA. “Agency action,” as used in 5 U.S.C. § 704, refers to
“an agency’s determination of rights and obligations, whether by
rule, order, license, sanction, relief, or similar action.”
Village of Bald Head Island v. U.S. Army Corps of Eng’rs, 714
F.3d 186, 193 (4th Cir. 2013) (emphasis added) (citation
omitted). And for agency action to be final, it must “mark the
consummation of the agency’s decisionmaking process.” Id. at
194 (quoting Bennett v. Spear, 520 U.S. 154, 178 (1997)); see
also Dow AgroSciences LLC v. Nat’l Marine Fisheries Serv., 637
F.3d 259, 265 (4th Cir. 2011). Moreover, final agency action
does not encompass an agency’s “day-to-day manage[ment].”
Village of Bald Head Island, 714 F.3d at 194. At most, the
complaint here suggests only arguably that the USDOT should have
15
monitored the City’s conduct more closely and required it to
comply with § 4651. But such ongoing oversight does not amount
to final agency action under § 704.
Accordingly, we reject Clear Sky’s argument that it has an
APA claim against the USDOT to require it to enforce the
policies of § 4651.
For the foregoing reasons, the judgment of the district
court dismissing Clear Sky’s complaint is
AFFIRMED.
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