Illinois Central Railroad Company v. United States

In the United States Court of Federal Claims
No. 17-826L
(Filed: October 4, 2018)
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ILLINOIS CENTRAL RAILROAD CO., *
*
Plaintiff, * Motion to Dismiss for Lack of Subject
* Matter Jurisdiction; Statute of Limitations;
v. * Accrual of Cause of Action; Stabilization
* Doctrine; Fifth Amendment Taking; Breach
THE UNITED STATES, * of Contract.
*
Defendant. *
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Bradley R. Belsome, with whom was Michael C. Mims, Bradley Murchison Kelly & Shea,
LLC, New Orleans, Louisiana, for Plaintiff.
Edward C. Thomas, Senior Attorney, with whom was Jeffrey H. Wood, Acting Assistant
Attorney General, Environmental & Natural Resources Division, U.S. Department of
Justice, Washington, D.C., for Defendant.
OPINION AND ORDER
WHEELER, Judge.
Plaintiff Illinois Central Railroad Company (“IC”) brings this action after the United
States Army Corps of Engineers allegedly damaged two of IC’s railroad bridges near New
Orleans by permitting the Bonnet Carré Spillway to operate with a flowage rate above
250,000 cubic feet per second in violation of the Corps’ easement. In its complaint, IC
claims that the Corps’ actions constituted a taking without just compensation (Counts I and
II) and a breach of contract (Count III).
Currently before the Court is Defendant’s motion to dismiss IC’s complaint for lack
of subject matter jurisdiction. Dkt. No. 14. In its motion, the Government argued that the
Court lacks subject matter jurisdiction to hear Plaintiff’s claims because IC failed to timely
file its complaint within the six-year statute of limitations period. See Def.’s Mot. at 1.
For the reasons explained below, the Court DENIES Defendant’s motion to dismiss on
Counts I and II, and GRANTS Defendant’s motion to dismiss on Count III.
Background1
Congress enacted the Flood Control Act of 1928, 33 U.S.C. § 702a et seq., in order
to prevent flooding across the United States. Compl. ¶¶ 13-14. Pursuant to that legislation,
Congress authorized construction of individual flood control projects nationwide. Id. ¶ 14.
The Bonnet Carré Spillway was one such project. Id. ¶ 15. This spillway was intended to
divert water from the Mississippi River to reduce flowage rates as the river approached
New Orleans, Louisiana, thereby reducing the risk of flooding in the city. Id. ¶¶ 29-36.
When water levels on the Mississippi are high enough to raise flooding concerns, the Corps
of Engineers floods the land within the spillway. Id.
Before construction of the spillway could begin, the Corps had to secure rights to
the land that would be flooded. Id. ¶¶ 19-21. At the time, IC and the Yazoo & Mississippi
Valley Railroad (“Yazoo”) held rights of way for their railway lines operating in this area.
Id. ¶ 19. Accordingly, on January 9, 1934, the Government initiated two condemnation
actions in the Eastern District of Louisiana seeking flowage easements over IC’s and
Yazoo’s rights of way. Id. ¶ 21. The Government, IC, and Yazoo then entered into
negotiations of the terms. Id. The parties ultimately filed a stipulation with the district
court granting the easements with the condition that the discharge rate in the spillway did
not exceed 250,000 cubic feet per second. Id. ¶¶ 24-25. In return, the stipulation outlined
that the Government would provide compensation for IC and Yazoo to construct timber
trestle bridges designed to withstand water discharge up to 250,000 cubic feet per second.
Id. ¶¶ 25, 27. The Government also agreed to provide compensation to maintain these
railways in as good of a condition as they were in before these alterations. Id. ¶ 25.
On November 9, 1934, the district court entered judgment pursuant to the
stipulation’s terms. Id. ¶ 26. IC and Yazoo subsequently built two bridges, the McComb
Bridge and Yazoo Bridge, over the land within the spillway. Id. ¶ 28. IC has since acquired
Yazoo and now operates Yazoo’s former railways including those lines that fall within the
spillway. Id. ¶ 20.
In early May 2011, the Ohio and Mississippi River Valleys experienced unusually
heavy rainfall, which raised the water levels in the Mississippi River. Id. ¶ 39. To manage
the river’s volume, the Corps opened the spillway from May 9, 2011 into June 2011. Id.
¶¶ 40- 41. At certain times during this period, the Corps permitted the spillway to operate
with a flowage rate in excess of 250,000 cubic feet per second. Id. ¶ 42. After the Corps
closed the spillway, IC inspected its bridges and discovered that they had been seriously
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The Court draws the facts as stated in the Background section of this Opinion from IC’s complaint, cited
herein as “Compl.”
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damaged. Id. ¶ 43. IC maintains that it was unaware of and could not determine the extent
of the damage to the bridges until sometime after the damage was done. Id.
Procedural History
Plaintiff filed its complaint in this Court on June 19, 2017. Dkt. No. 1.
Approximately three months later, on September 18, 2017, Defendant filed its answer.
Dkt. No. 8. The Court issued its first discovery scheduling order on November 14, 2017.
Dkt. No. 11. On April 5, 2018, the Court amended that order as to the discovery and
briefing schedule on the statute of limitations issue only. Dkt. No. 13. On June 18, 2018,
Defendant filed a motion to dismiss pursuant to Rule 12(b)(1). Dkt. No. 14. Plaintiff filed
its response on July 18, 2018, and Defendant filed its reply on August 24, 2018. Dkt. Nos.
15, 18. The Court heard oral argument on Defendant’s motion on September 24, 2018.
Discussion
I. Standard of Review
a. Motion to Dismiss
Jurisdiction is a threshold matter to be addressed in any case. When deciding a Rule
12(b)(1) motion to dismiss, a court must assume all the undisputed facts in the complaint
are true and draw reasonable inferences in the non-movant’s favor. Erikson v. Pardus, 551
U.S. 89, 94 (2007). However, a plaintiff must establish that jurisdiction exists (that is, that
the action was timely filed) “by a preponderance of the evidence.” M. Maropakis
Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010). In determining
whether a plaintiff has met this burden, the Court may look “beyond the pleadings and
‘inquire into jurisdictional facts’ in order to determine whether jurisdiction exists.”
Lechliter v. United States, 70 Fed. Cl. 536, 543 (2006) (quoting Rocovich v. United States,
933 F.2d 991, 993 (Fed. Cir. 1991)). If the Court finds that it lacks subject matter
jurisdiction, it must dismiss the claim. Gluck v. United States, 84 Fed. Cl. 609, 614 (2008).
b. Statute of Limitations
IC brought this action under the Tucker Act, 28 U.S.C. § 1491(a)(1), and therefore
must file within six years of the date on which its claims accrued. 28 U.S.C. § 2501; see
also Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1576-77 (Fed. Cir.
1988). The six-year limitations period is a jurisdictional requirement which must be strictly
construed. Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 404 (1994). IC filed its
complaint on June 19, 2017. See Dkt. No. 1. To survive a motion to dismiss, IC must
show that each of its claims accrued on or after June 19, 2011.
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c. Claim Accrual
A claim typically accrues “when all the events which fix the government’s alleged
liability have occurred and the plaintiff was or should have been aware of their existence.”
Hopland Band, 855 F.2d at 1577. “[W]hether the pertinent events have occurred is
determined under an objective standard.” Fallini v. United States, 56 F.3d 1378, 1380
(Fed. Cir. 1995). A plaintiff therefore need not have actual knowledge of the relevant facts
triggering accrual. Id.
d. Accrual for Takings by a Gradual Physical Process
In unique circumstances, the Government may take property “by a gradual physical
process rather than a discrete action . . . such as a condemnation or regulation.”
Mildenberger v. United States, 643 F.3d 938, 945 (Fed. Cir. 2011). Takings by a “discrete
action” establish a more precise date for the taking and for claim accrual. Takings by a
physical process introduces uncertainty into fixing the date of the taking, thus placing on
the property owner the “onus of determining the decisive moment in the process of
acquisition by the United States when the fact of a taking could no longer be in
controversy.” United States v. Dickinson, 331 U.S. 745, 748 (1947). The Supreme Court
in Dickinson recognized the potential for uncertainty inherent in takings by a physical
process and, in those situations, “discouraged the strict application of accrual principles.”
Boling v. United States, 220 F.3d 1365, 1370 (Fed. Cir. 2000) (citing Dickinson, 331 U.S.
at 748). Accordingly, the Supreme Court laid out a new standard: a claim for a taking by
a gradual physical process does not accrue “until the situation becomes stabilized.”
Dickinson, 331 U.S. at 749.
Under this “stabilization doctrine” established in Dickinson and its progeny, such a
claim accrues and the statute of limitations begins to run “once it is clear that the process
has resulted in a permanent taking and the extent of the damage is reasonably foreseeable.”
Boling, 220 F.3d at 1371. The test is for reasonable foreseeability; it is “not necessary that
damages from the alleged taking be complete and fully calculable before the cause of action
accrues.” Fallini, 56 F.3d at 1382.
II. Analysis
a. IC Has Met its Burden of Pleading Subject Matter Jurisdiction Over its
Takings Claims.
The Government advocates that this case should not be analyzed pursuant to the
stabilization doctrine, but rather under the general accrual standard detailed in Hopland
Band. The Government maintains that the flowage rate in the spillway exceeded 250,000
cubic feet per second from May 14, 2011 to June 3, 2011, and IC knew about the excessive
flow on these same dates. Using the Hopland Band standard, the Government asserts that
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IC’s claim accrued within that approximately three-week period. IC contends that the facts
before the Court support the stabilization doctrine analysis. Using that standard, though
the bridges were damaged between May 14, 2011 and June 3, 2011, the extent of the
damage was not reasonably foreseeable until IC could inspect them, which was impossible
until on or after June 19, 2011. Its takings claims, IC asserts, accrued on or after that date.
The Court agrees.
IC alleges a taking by flooding. The damages from the flood could not be
ascertained due to the nature of the taking until after the taking occurred. IC’s takings
claims are thereby entitled to the less exacting stabilization doctrine accrual standard.
IC could not foresee the extent of the damage to its bridges before it could perform
an inspection. The Government flooded the spillway at a flowage rate above 250,000 cubic
feet per second between May 14, 2011 and June 3, 2011. On May 27, 2011, IC examined
the McComb Bridge’s exposed portions by “snooper truck” and did not discover any
damage. However, this method did not include an investigation of the underwater
conditions. That examination required sending divers into the spillway which was not
possible while the spillway remained open because the Corps directed IC not to interfere
with the flow through the spillway and the high flowage rate presented too great a safety
concern to the divers. Nevertheless, IC began contacting vendors to arrange for underwater
inspections. On June 14, 2011, IC told the Corps that it intended to perform that inspection.
In response, the Corps alerted IC that it needed to first acquire a Special Use Permit.
Without the ability to examine both the exposed and underwater portions of its
bridges, IC could not have reasonably foreseen the extent of the damage to the bridges.
While the spillway was open, IC was constrained in what types of inspections it could
perform given the then-existing dangerous conditions within the spillway, the Corps’
directive not to interfere with the spillway, and IC’s lack of a necessary permit to perform
further inspections. During this period, IC did those inspections that were possible.
Inspections did not reveal any further damage. Moreover, there is no indication that IC
could have done more to understand whether additional damage was sustained.
On June 20, 2011, the Corps closed the spillway but had not yet issued IC’s permit.
On June 22, 2011, in order to investigate (albeit incompletely) whether there was
underwater damage without entering the water, IC roughly measured the water depth
around the bridges. It used that measurement to approximate damage. This testing
revealed possible extensive “scouring” to the bridges.2 The Corps granted IC’s permit on
June 28, 2011, and dive inspections began the next day. Divers confirmed IC’s initial
estimation that both bridges had sustained extensive scouring damage.
2
Scouring is the process by which the earth holding a bridge’s trestle pilings in place erodes away.
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The Corps closed the spillway on June 20, 2011 and issued IC’s permit on June 28,
2011. IC was then able to inspect the bridges. A takings cause of action could not have
accrued until IC was able to evaluate the extent of the damage to the bridges. Such an
evaluation was impossible until sometime after June 19, 2011 when IC could examine both
the exposed and underwater portions of the bridges. Setting the date of accrual after June
19, 2011 merely provides IC with the opportunity to inspect its property and ascertain the
damage. It does not unduly extend the accrual period until IC’s damages are “complete
and fully calculable.”
The Court also is unconvinced by Defendant’s argument that IC’s knowledge of the
damage to the McComb Bridge caused by a May 22, 2011 debris strike triggered accrual.
Notice of some, limited damage does not by itself instill awareness of the extent of the
damages. See Forsgren v. United States, 64 Fed. Cl. 456, 459 (2005) (“[S]imply foreseeing
the damage is not the test for accrual. Instead, accrual occurs when Plaintiffs should have
reasonably foreseen the extent of the damage to their property.”) (emphasis in original).
Accordingly, “causes of action for different types of flood damage may accrue at different
times.” McDonald v. United States, 37 Fed. Cl. 110, 114 (1997), aff'd, 135 F.3d 778 (Fed.
Cir. 1998) (citing Chipps v. United States, 19 Cl. Ct. 201, 207, aff'd mem., 915 F.2d 1585
(Fed. Cir. 1990)).
The May 22, 2011 debris strike to the McComb Bridge gave IC notice of that limited
type of damage but not of the extent of the damage. The debris strike, subsequent repairs,
and snooper truck inspection did not lead to any indication that the McComb Bridge
sustained more extensive damage. While IC only inspected the exposed portions, it was
limited by constraining physical conditions and Corps-imposed restrictions. Given IC’s
inability to investigate underwater conditions and the lack of indication of further damage
after its initial external inspection, IC could not have reasonably foreseen the scouring
damage.
Accordingly, IC’s takings claims accrued after June 19, 2011. Finding otherwise
would improperly require IC to “resort either to piecemeal or to premature litigation.”
Dickinson, 331 F.2d at 749. The Court denies the Government’s motion to dismiss IC’s
claims in Counts I and II.
b. IC Has Not Met its Burden of Pleading Subject Matter Jurisdiction Over its
Contract Claim.
The Government argues that IC’s breach of contract claim accrued on the date of
the breach. In response, IC makes the same argument for later accrual on this claim as it
does on the takings claims: the cause of action did not accrue until it could reasonably
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foresee the extent of the damage done to the bridges (which was on or after June 19, 2011).
The Court agrees with the Government.
The parties agreed that the stipulation negotiated during the 1934 condemnation
proceedings capping the flowage rate at 250,000 cubic feet per second constituted a
contract between IC and the Government. IC alleges that the Corps operated the spillway
at a rate above 250,000 cubic feet per second between May 14, 2011 and June 3, 2011 in
violation of that contract. Press releases, news coverage, and websites detailing the
flowage rates on those days were circulated between May 14, 2011 and June 3, 2011.
Accordingly, IC knew or should have known that the flowage rates exceeded 250,000 cubic
feet per second on those very same dates. Put differently, IC was on notice of the breach
when the breach occurred. All events required to assert a breach of contract claim were
fixed at least by the time the breach ended on June 3, 2011. Therefore, June 3, 2011 is the
latest possible date upon which a claim for breach of contract could have accrued. See
Higgins v. United States, 589 F. App'x 977, 980 (Fed. Cir. 2014).
Adding six years to that date results in a June 3, 2017 filing deadline. IC’s complaint
filed on June 19, 2017 falls outside of that six-year window for the breach of contract claim.
The Court therefore does not have subject matter jurisdiction to hear IC’s claim. Count III
of the complaint is dismissed.
Conclusion
For the reasons stated above, the Court DENIES Defendant’s motion to dismiss on
Counts I and II, and GRANTS Defendant’s motion to dismiss on Count III. No costs.
IT IS SO ORDERED.
s/ Thomas C. Wheeler
THOMAS C. WHEELER
Judge
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