NE 32nd Street, LLC v. United States , 896 F.3d 1240 ( 2018 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-11908
________________________
D.C. Docket No. 9:16-cv-80802-RLR
NE 32ND STREET, LLC,
c/o Mr. William Swain as agent for the Frank Sawyer
Revocable Trust
5455 Via Delray
Delray Beach, FL 33484
as agent for the Frank Sawyer Revocable Trust,
Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 23, 2018)
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Before WILLIAM PRYOR and MARTIN, Circuit Judges, and HALL, * District
Judge.
WILLIAM PRYOR, Circuit Judge:
This appeal requires us to decide whether a conservation restriction imposed
in 2013 on a property owned by the Frank Sawyer Revocable Trust restarted the
12-year statute of limitations of the Quiet Title Act, 28 U.S.C. § 2409a, so that NE
32nd Street, LLC, as agent for the trust, can sue to extinguish a spoilage easement
granted to the federal government in 1938. The trust owns a piece of land on the
Intracoastal Waterway in Florida. In 1938, its predecessor in interest granted a
spoilage easement that allows the government to deposit dredged material on the
property. And in 2013, the government granted the trust a building permit that
imposes strict conservation requirements on the land. Three years later, NE 32nd
filed an action against the government to extinguish the 1938 spoilage easement. It
argued that the 2013 permit restarted the statute of limitations, but the district court
disagreed and dismissed the complaint. Because the statute of limitations bars a
challenge to the eighty-year-old easement and the 2013 permit did not change the
terms of that easement to the detriment of the trust, we affirm.
*
Honorable James Randal Hall, United States District Judge for the Southern District of
Georgia, sitting by designation.
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I. BACKGROUND
The Frank Sawyer Revocable Trust owns a piece of property on the
Intracoastal Waterway in Florida. In 1938, its predecessor in interest granted the
United States “the perpetual right and easement to deposit upon the [property]
material that may at any time be dredged in the construction and maintenance of
the . . . Waterway.” Three quarters of a century later, the government issued the
trust a permit to fill and build on part of the property. The 2013 permit also
imposed strict conservation restrictions on much of the property. For example, the
permit requires the trust to “maintain the [relevant] areas . . . in their natural state
in perpetuity,” forbids the “[d]umping or placing [of] soil or other substance or
material as landfill or [the] dumping or placing of trash, waste[,] or unsightly or
offensive material,” prohibits many kinds of “[s]urface use,” and demands that
“only clean fill material” be used on the property.
Three years later, NE 32nd Street, LLC, as agent for the trust, sued the
government under the Quiet Title Act, 28 U.S.C. § 2409a, and “request[ed] entry
of a judgment . . . cancelling the [1938 easement] and releasing [the property] from
all burdens and obligations created thereunder.” NE 32nd underscored that when
the government issued the 2013 permit with its strict conservation requirements,
the government “committed an act wholly inconsistent with its future use and
enjoyment of the [1938 spoilage easement].” NE 32nd argued that this tension
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between the 1938 easement and 2013 permit required the district court to
extinguish the easement.
The government moved to dismiss for lack of jurisdiction based on a
provision of the Act that states that an action against the government “shall be
barred unless it is commenced within twelve years of the date upon which it
accrued.” Id. § 2409a(g). It argued that this limitations period is jurisdictional. The
government maintained that the challenged easement was granted in 1938 and that
the “predecessor in interest [of the trust] knew or should have known of the claim
of the United States [to the easement] since [this date].”
The district court initially denied the motion, but it later granted a motion for
reconsideration and dismissed the complaint. It explained that the “adverse
interests were present in this case in 1938” and that the issuance of the 2013 permit
“did not abolish [the] preexisting notice [that the trust had] of the United States’[s]
asserted interest.”
II. STANDARD OF REVIEW
We review de novo both “a district court’s application of a statute of
limitations,” F.E.B. Corp. v. United States, 818 F.3d 681, 685 (11th Cir. 2016)
(citation and internal quotation marks omitted), and its “grant of [a] motion[] to
dismiss for lack of subject matter jurisdiction,” Broward Gardens Tenants Ass’n v.
U.S. Envtl. Prot. Agency, 311 F.3d 1066, 1072 (11th Cir. 2002).
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III. DISCUSSION
The Act provides that an action to quiet title brought by a private party
against the United States “shall be barred unless it is commenced within twelve
years of the date upon which it accrued.” 28 U.S.C. § 2409a(g). This limited
“waiver of sovereign immunity . . . is jurisdictional,” F.E.B., 818 F.3d at 685, and
we “must be careful not to interpret it in a manner that would extend the waiver
beyond that which Congress intended,” id. at 686 (quoting Block v. North Dakota
ex rel. Bd. of Univ. & Sch. Lands, 461 U.S. 273, 287 (1983)) (internal quotation
marks omitted). Indeed, the Supreme Court has underscored that the Act represents
a “careful and thorough remedial scheme” that litigants cannot “circumvent[] by
artful pleading.” Block, 461 U.S. at 285 (quoting Brown v. Gen. Servs. Admin., 425
U.S. 820, 833 (1976)).
The running of the statute of limitations starts “on the date the plaintiff or his
predecessor in interest knew or should have known of the claim of the United
States.” 28 U.S.C. § 2409a(g). We define this “claim” in terms of a property
interest of the United States that is actually “adverse[]” to the interest asserted by
the plaintiff. Werner v. United States, 9 F.3d 1514, 1519 (11th Cir. 1993). It is not
enough that the government asserts “some interest—any interest—in the property.”
Id. Indeed, if the interests asserted by the parties are capable of peaceful
coexistence—such as if the plaintiff asserts that he owns a fee simple subject to an
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easement while the government claims the complementary easement—then the
clock will not run. In contrast, adversity arises if the government asserts a new
interest that is fundamentally incompatible with the interest asserted by the
plaintiff or “seeks to expand [a preexisting] claim.” Id.
For example, in Werner we explained that the Act did not bar former users
of a road over government property from “seeking a declaration that they had
acquired an easement of necessity” after the government installed a gate blocking
the road within 12 years of the suit. Id. at 1515; see also id. at 1516. Although the
government had held “some interest” in the underlying property for a much longer
period of time because it had owned the land since 1821, id. at 1519; see also id. at
1515, we explained that the “government’s claim” for the purpose of the litigation
was its decision to “expand [its preexisting] claim” when it built the gate and
excluded the plaintiffs, id. at 1519 (emphasis added); see also Kane Cty. v. United
States, 772 F.3d 1205, 1216 (10th Cir. 2014) (“As a public right-of-way can
generally peaceably coexist with an underlying ownership interest, the United
States must provide a county or state with sufficient notice of the United States’[s]
claim of a right to exclude the public.” (citations and internal quotation marks
omitted)); Michel v. United States, 65 F.3d 130, 132 (9th Cir. 1995) (explaining
that the plaintiffs’ “claim of access to roads and trails across [government
property] did not accrue until [they] knew or should have known the government
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claimed the exclusive right to deny their historic access to the trails and roads”). In
short, a claim arises when the government puts its interest in conflict with that of
the plaintiff.
NE 32nd contends that the statute of limitations does not foreclose its suit to
extinguish the 1938 spoilage easement. Although NE 32nd does not dispute that
the trust and its predecessor in interest have “known of” the easement since 1938,
28 U.S.C. § 2409a(g), it argues that the “spoil[age] easement did not become
adverse . . . until the conflicting . . . [p]ermit was issued in 2013 and the
conservation easement was recorded by the [government] in direct conflict
therewith.” It asserts that the fee simple interest held by the trust peacefully
coexisted with the spoilage easement until 2013, and it concludes that the issuance
of the conservation permit restarted the statute of limitations.
We disagree. The property right of the government that NE 32nd wants to
challenge—the 1938 spoilage easement—is the same property right that the
predecessor in interest of the trust granted the government. And 1938 was a lot
more than 12 years ago. The 2013 permit did nothing to “expand” the 1938
easement in a manner adverse to the trust. Werner, 9 F.3d at 1519.
NE 32nd responds that adversity arose only in 2013 when the government
issued a conservation permit that is in tension with the 1938 easement, but this
argument overlooks that any limitations that the permit imposes on the future use
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of the spoilage easement by the government have no negative impact on the
interest held by the trust. To be sure, the government conceded for the purpose of
the motion to dismiss that the extensive 2013 conservation restrictions are
inconsistent with the 1938 easement. But any tension between two interests that
both benefit the government hardly creates new adversity between the interests of
the government and the trust. See F.E.B., 818 F.3d at 692 (“[T]he statute of
limitations is . . . triggered by . . . only a claimed interest that is inconsistent with
. . . the plaintiff’s asserted interest.” (emphasis added)); Werner, 9 F.3d at 1519
(explaining that the “inquiry” was whether the government “expand[ed] [its]
claim” to the detriment of the plaintiff). If anything, the events of 2013 benefitted
the trust by suggesting that the government is now more reluctant to dump spoilage
on the property. And NE 32nd acknowledges as much when it asserts that “the
government itself, by [the 2013 permit], . . . restricted its own access and created
the conflict with its own spoil[age] easement.” In short, the fee simple held by the
trust is no more encumbered by the spoilage easement than it was in 1938.
NE 32nd invokes the legal principle that “easement interests and fee simple
ownership interests can peacefully coexist with one another without adversity,”
and it contends that its fee simple interest was somehow not inherently adverse to
the spoilage easement in 1938 but instead became adverse to the easement in 2013.
But whether certain kinds of easements can coexist with certain kinds of fee
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simples is irrelevant to this appeal. More specifically, although a fee simple and an
easement can coexist when the landowner defines his interest as a fee simple
encumbered by an easement, see Kane Cty., 772 F.3d at 1216; Michel, 65 F.3d at
132, NE 32nd has asserted a fee simple unencumbered by the 1938 easement. This
kind of unencumbered fee simple necessarily has been adverse to the spoilage
easement since the moment that the easement was created in 1938, and the 2013
permit did nothing to exacerbate this conflict.
To be sure, the recent decision by NE 32nd to redefine the property interest
as an unencumbered fee simple has created a dispute about the 2013 easement, but
this conflict provoked by NE 32nd cannot restart the clock because only an
“expan[sion]” by the government can create the necessary adversity. Werner, 9
F.3d at 1519. The plain text of the Act dictates this conclusion when it provides
that the statute of limitations begins to run when the landowner has notice of “the
claim of the United States.” 28 U.S.C. § 2409a(g) (emphasis added). When the
private party decides to challenge the claim of the United States has nothing to do
with when adversity arises. A plaintiff cannot restart the clock whenever he
decides to reinvent his interest. Indeed, the ability to manufacture adversity
through “artful pleading” would nullify the statute of limitations. Block, 461 U.S.
at 285 (quoting Brown, 425 U.S. at 833).
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Finally, NE 32nd suggests that the district court lacked sufficient reason to
revisit its initial ruling and grant the motion for reconsideration, but this argument
is meritless. The statute of limitations is jurisdictional, see F.E.B., 818 F.3d at 685,
and a jurisdictional question demands review at any point in litigation, see Fed. R.
Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter
jurisdiction, the court must dismiss the action.”). Indeed, we have underscored that
“because a federal court is powerless to act beyond its statutory grant of subject
matter jurisdiction,” it should “raise the question of subject matter jurisdiction at
any point in the litigation where a doubt about jurisdiction arises.” Smith v. GTE
Corp., 236 F.3d 1292, 1299 (11th Cir. 2001). The district court wisely
reconsidered its ruling.
IV. CONCLUSION
We AFFIRM the dismissal of the complaint.
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