Petworth Holdings, LLC v. Bowser ( 2021 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
PETWORTH HOLDINGS, LLC, et al.,
Plaintiffs,
v. Civil Action No. 18-3 (JEB)
DISTRICT OF COLUMBIA,
Defendant.
MEMORANDUM OPINION
With great ambitions of turning a profit, Plaintiff Petworth Holdings, LLC acquired a lot
in Northwest Washington about fifteen years ago. Although a full-service gas station was
situated there, Plaintiff wanted to ultimately convert the lot to a residential property or sell it to
someone else to do the same. The D.C. Council had ambitions of its own: ensuring that, as the
city grows, it maintains a sufficient number of full-service stations to handle vehicle repairs.
Pursuing this goal, the Council in 2015 amended the longstanding Retail Service Station Act —
which had, since 1977, regulated the alteration and conversion of full-service stations — to
prohibit the discontinuation of the stations altogether. With its real-estate dreams stymied,
Petworth and one of its principals filed this suit against the District and some of its officials,
contending that the amended RSSA violates the Fifth Amendment to the U.S. Constitution by
taking their property without providing just compensation. Each side now moves for summary
judgment. Because each has some gas in the tank, the Court grants in part and denies in part the
Cross-Motions.
1
I. Background
The Court has previously set forth the underlying facts of the case and assumes the
reader’s familiarity with those Opinions. Petworth Holdings, LLC v. Bowser, 308 F. Supp. 3d
347, 350–51 (D.D.C. 2018) (granting in part motion to dismiss); see also Petworth Holdings,
LLC v. Bowser, 333 F.R.D. 297, 298 (D.D.C. 2019) (granting motion to amend Complaint). For
purposes of the current Cross-Motions, the relevant facts are largely undisputed. In brief,
Nantucket Holdings, Ltd. purchased a lot that contained a full-service gas station from DAG
Petroleum Suppliers, LLC for $2.5 million in 2005. See ECF No. 58-1 (Pl. Resp. to Def.
Statement of Facts), ¶ 9; see also ECF No. 60-18 (Def. Resp. to Pl. Statement of Facts), ¶ 9.
Nantucket Holdings subsequently assigned ownership of that lot, located at 4140 Georgia
Avenue, N.W., to Plaintiff Petworth Holdings, LLC in September 2005. See PRDSF, ¶¶ 9, 11;
DRPSF, ¶ 8. Although John Formant, one of Petworth’s two principals is also a plaintiff here,
see PRDSF, ¶ 11, DRPSF, ¶ 85, the Court, for ease of reference, will refer to them jointly as
Petworth. Since the purchase, Petworth has leased the property back to DAG, which owns the
gas pumps, storage tanks, and buildings on the land, and actually operates the service station.
See ECF No. 51-7 (Deposition of Christofilos Tsintolas) at 55:1–20; PRDSF, ¶ 13.
Petworth acquired the property with the intention of developing it. See DRPSF, ¶¶ 13–
19. Pursuant to those plans, it filed a Planned Unit Development application in 2006, which the
D.C. Zoning Commission approved in 2007. Id. The global financial crisis of 2007–08 and
subsequent recession halted Petworth’s development efforts, however. Id., ¶ 25; see also
Tsintolas Depo. at 141:2–11. By 2014, the PUD permit had expired and Petworth began seeking
bids from potential purchasers and developers. See DRPSF, ¶¶ 28, 30. Those sale discussions
ran smack into a roadblock: the District’s RSSA.
2
The RSSA regulates the alteration, conversion, and certain business operations of full-
service retail gas stations. As opposed to those entities that merely have gas pumps, a full-
service station is one that has a garage or similar space for repair, maintenance, and service
work. See D.C. Code § 36–304.01(a)–(b). The Act came into being in 1977 as a temporary
moratorium on conversions from full-service stations to non-full-service stations, see D.C. Law
1–123, § 5-301, 24 D.C. Reg. 2371 (Apr. 19, 1977), and the D.C. Council repeatedly
reauthorized the prohibition until making it permanent in 2005. See D.C. Law 15-297, § 2(d), 52
D.C. Reg. 1485 (Feb. 18, 2005); e.g., D.C. Law 3-44, § 2(c)(2), 26 D.C. Reg. 2093 (Nov. 9,
1979) (through Oct. 1, 1981); D.C. Law 7-148, § 2(a), 35 D.C. Reg. 5427 (July 15, 1988)
(through Oct. 1, 1991); D.C. Law 13-130, § 2, 47 D.C. Reg. 2688 (Apr. 21, 2000) (through Oct.
1, 2005); see also PRDSF, ¶ 7. Since 1977, consequently, the District has prohibited full-service
stations from being “structurally altered, modified, or otherwise converted . . . into a nonfull
service facility.” D.C. Code § 36–304.01(b) (2014); see also D.C. Law 1–123, § 5-301, 24 D.C.
Reg. 2371 (Apr. 19, 1977). It has also barred operators of such stations from “substantially
reduc[ing] the number, types, quantity, or quality of the repair, maintenance, and other services
. . . offered” and required them to provide “a qualified individual . . . capable of performing
repair, maintenance, and service work . . . during a reasonable number of hours per day and of
days per week.” D.C. Code § 36–304.01(c) (2015); see also D.C. Law 1–123, § 5-301, 24 D.C.
Reg. 2371 (Apr. 19, 1977).
When it purchased the lot in 2005, therefore, Petworth should have known that it could
not convert the business to a non-full-service station. That is not the dispute here, however.
Petworth’s problems began in earnest in 2015 when the D.C. Council amended the RSSA to
prohibit any full-service station from being “discontinued” or “converted . . . into any other use.”
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D.C. Law 20-271, § 211, 62 D.C. Reg. 1884 (Feb. 13, 2015). Following these amendments, the
RSSA provided: “No retail service station which is operated as a full service retail service station
. . . may be discontinued, nor may be structurally altered, modified, or otherwise converted,
irrespective of the type or magnitude of the [change] . . . into a nonfull service facility or into any
other use.” D.C. Code § 36–304.01(b) (2015) (emphasis added to amendments). As a result,
Petworth now was barred not only from reducing the station’s offerings, but also from
converting it into anything else — e.g., residential property or some other commercial or retail
use.
One safety valve remained: an aggrieved full-service-station owner could seek an
exemption by petitioning the Gas Station Advisory Board, a five-member body that reviewed
petitions and recommended whether the Mayor should grant the request. See D.C. Code § 36–
304.01(d)–(e) (2015). By at least 2015, however, this exemption process was illusory since the
Board had no members. See ECF No. 59 (Pl. Reply) at 31; see also ECF No. 1-3 (Attorney
General’s 2017 Letter on District’s Retail Station Conversion Ban) at 1, 4 n.14 (noting that
Board was dormant, with no members appointed since 2006).
Dissatisfied with this freeze of its property, Petworth brought this suit in January 2018
against Mayor Muriel Bowser, Attorney General Karl A. Racine, District of Columbia
Department of Energy & Environment Director Tommy Wells, and the Gas Station Advisory
Board. See ECF No. 1 (Complaint) at 1. Plaintiffs sought a declaration that the RSSA, as
amended in 2015, violates the Fifth and Thirteenth Amendments to the United States
Constitution, as well as an injunction barring its enforcement. Id. at 10. Defendants moved to
dismiss, see ECF No. 6 (Def. MTD), and the Court granted that Motion as to the Thirteenth
4
Amendment claim alone. Petworth Holdings, LLC, 308 F. Supp. 3d at 350, 358. The takings
cause of action thus remains.
With this litigation pending, the D.C. Council in 2019 again amended the RSSA and in
two ways: it removed the prohibition on the discontinuation of full-service stations (but kept the
bar on conversion to any other use), and it modified the exemption process by directing
petitioners to the Director of the Department of Energy & Environment, as opposed to the Gas
Station Advisory Board. See D.C. Law 22-289, § 2, 66 D.C. Reg. 1665 (Feb. 8, 2019). Under
the new regime, DOEE can grant petitions for exemptions when “[t]he operator of the full
service retail service station is experiencing extreme financial hardship” and “[a]nother full
service retail service station exists within one mile of the station which provides equivalent
service facilities.” D.C. Code § 36–304.01(d)(3)(A); see also id. § 36–304.01(d)(3)(B)
(requiring DOEE to give “due weight to the views of the community and the affected [Advisory
Neighborhood Commission]”).
Subsequent to this change, Plaintiffs moved to amend their Complaint to add the District
of Columbia as a defendant and a new claim for damages under 42 U.S.C. § 1983. See ECF No.
35 (Motion to Amend). The Court granted this motion, which made no reference to the District’s
2019 amendments. See Petworth Holdings, LLC, 333 F.R.D. at 298. Nor did the Amended
Complaint. See ECF No. 41 (Am. Compl.). This pleading thus still targets the 2015 RSSA.
See, e.g., id., ¶¶ 22–23 (quoting 2015 RSSA); id., ¶¶ 31–36 (discussing 2015 RSSA’s exemption
process); id., ¶¶ 37–41, 44–45 (focusing on effect of RSSA, as modified by 2015 amendments).
Procedural history in the rearview mirror, the Court now turns to the parties’ pending Cross-
Motions for Summary Judgment.
5
II. Legal Standard
“When faced with cross-motions for summary judgment, the Court must review each
motion separately on its own merits to determine whether either of the parties deserves judgment
as a matter of law.” Family Trust of Mass., Inc. v. United States, 892 F. Supp. 2d 149, 154
(D.D.C. 2012) (cleaned up) (quoting Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003)).
Summary judgment shall be granted if “the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see also Anderson v. Liberty Lobby, 477 U.S. 242, 247–48 (1986); Holcomb v. Powell,
433 F.3d 889, 895 (D.C. Cir. 2006). A fact is “material” if it is capable of affecting the
substantive outcome of the litigation. See Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at
895. A dispute is “genuine” if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party. See Scott v. Harris, 550 U.S. 372, 380 (2007); Holcomb, 433 F.3d at
895. “A party asserting that a fact cannot be or is genuinely disputed must support the assertion”
by “citing to particular parts of materials in the record” or “showing that the materials cited do
not establish the absence or presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1).
In considering a motion for summary judgment, “[t]he evidence of the non-movant is to
be believed, and all justifiable inferences are to be drawn in [its] favor.” Liberty Lobby, 477
U.S. at 255; see also Mastro v. PEPCO, 447 F.3d 843, 850 (D.C. Cir. 2006); Aka v. Wash. Hosp.
Ctr., 156 F.3d 1284, 1288 (D.C. Cir. 1998) (en banc). The Court must “eschew making
credibility determinations or weighing the evidence.” Czekalski v. Peters, 475 F.3d 360, 363
(D.C. Cir. 2007). To defeat summary judgment, however, the opposition must consist of more
than mere unsupported allegations or denials and must be supported by affidavits, declarations,
6
or other competent evidence, setting forth specific facts showing that there is a genuine issue for
trial. See Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The non-
movant, in other words, is required to provide evidence that would permit a reasonable jury to
find in its favor. Laningham v. Navy, 813 F.2d 1236, 1241–42 (D.C. Cir. 1987).
If the Court determines that one party is not entitled to summary judgment, it “changes
tack on the cross motion and gives the unsuccessful movant ‘all of the favorable factual
inferences that it has just given to the movant’s opponent.’” Nucap Indus., Inc. v. Robert Bosch
LLC, 273 F. Supp. 3d 986, 998 (N.D. Ill. 2017) (quoting Hotel 71 Mezz Lender LLC v. Nat’l
Ret. Fund, 778 F.3d 593, 603 (7th Cir. 2015)). It is nonetheless still possible for a court to grant
motions in part or deny summary judgment to both sides.
III. Analysis
The Takings Clause of the Fifth Amendment provides that private property shall not “be
taken for public use, without just compensation.” It “was designed to bar Government from
forcing some people alone to bear public burdens which, in all fairness and justice, should be
borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960). It does
not completely prohibit the taking of property, but instead proscribes takings without just
compensation. Brown v. Legal Found. of Wash., 538 U.S. 216, 235 (2003); see also First
English Evangelical Lutheran Church of Glendale v. Cnty. of L.A., 482 U.S. 304, 315 (1987)
(Takings Clause “is designed not to limit the governmental interference with property rights per
se, but rather to secure compensation in the event of otherwise proper interference amounting to
a taking”). When property is taken without just compensation, the owner can bring her claim in
federal court under 42 U.S.C. § 1983, as Petworth does here. Knick v. Twp. of Scott, 139 S. Ct.
2162, 2168, 2170 (2019).
7
Before embarking on the parties’ arguments, it is important to have a clear view of
Petworth’s actual claims. To challenge allegedly unconstitutional takings, litigants ordinarily
bring an as-applied cause of action, which considers the “the particular impact of government
action on a specific piece of property” and “requires the payment of just compensation.”
Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 494 (1987); see also Knick,
139 S. Ct. at 2168, 2170. Litigants may also, or alternatively, take on the “uphill battle” of
raising a facial challenge by alleging that the “mere enactment of a statute constitutes a taking.”
Keystone Bituminous Coal Ass’n, 480 U.S. at 494–95; see also Tahoe-Sierra Pres. Council, Inc.
v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 320 (2002) (considering facial claim); see generally
Goodwin v. Walton Cnty. Fla., 248 F. Supp. 3d 1257, 1265 (N.D. Fla. 2017) (considering
differences between facial and as-applied takings claims). Petworth brings both, alleging that the
RSSA is unconstitutional on its face and as applied to its property. See Am. Compl. at 11–12
(seeking, inter alia, injunction barring enforcement of RSSA generally and “specifically barring
Defendant . . . from enforcing the penalty provisions . . . against Plaintiff[]”); ECF No. 51-1 (Pl.
MSJ) at 28–29 (“The RSSA . . . is unconstitutional on its face . . . .”); id. at 16 (contending that
RSSA, as applied to Petworth, has caused it to “suffer[] a permanent physical invasion of its
property”) (emphasis removed).
Because the District amended relevant portions of the RSSA while this lawsuit was
pending, the Court will start with the 2015 version of the Act before considering the effect of the
2019 amendments. This is because even if the latest amendments cured the problem, a taking
could still have occurred in the interim, which could merit compensation.
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A. 2015 RSSA
As amended in 2015, the RSSA prohibited any full-service station from being
“discontinued” or “converted . . . into any other use.” D.C. Code § 36–304.01(b) (2015). The
Court will first take a slight detour to consider the District’s threshold position regarding
exhaustion before looking under the hood of the parties’ arguments about whether those
amendments imposed a taking.
Exhaustion
The city initially maintains that Petworth’s suit cannot even leave the garage because
Plaintiff did not exhaust the administrative process to seek an exemption before filing suit. See
ECF No. 60-1 (Def. MSJ) at 2, 29–31; see also ECF No. 61 (Def. Reply) at 24–25. Petworth
responds that following the Supreme Court’s decision in Knick v. Township of Scott, 139 S. Ct.
2162, exhaustion of state remedies is no longer required for suits brought under section 1983.
See Pl. Reply at 31. While the parties speak in the language of exhaustion, their arguments
actually sound in ripeness. E.g., Knick, 139 S. Ct. at 2169 (describing requirement that plaintiff
seek variance before filing federal suit as issue of ripeness); see also Rumber v. District of
Columbia, 487 F.3d 941, 944–45 (D.C. Cir. 2007) (discussing “ripeness requirements”). To the
extent that the District’s argument relates to exhaustion alone, Petworth is right: the Fifth
Amendment imposes no exhaustion requirement for takings claims brought via section 1983, nor
facial claims. Knick, 139 S. Ct. at 2167 (“[T]he settled rule is that exhaustion of state remedies
is not a prerequisite to an action under 42 U.S.C. § 1983.”) (cleaned up) (citations omitted);
Patsy v. Bd. of Regents, 457 U.S. 496, 504 (1982) (section 1983 provides “immediate access to
the federal courts”); see also Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 736 n.10
9
(1997) (facial challenge generally can be brought when law is passed). The Court will
nonetheless consider Defendants’ arguments as if they contested ripeness.
The ripeness doctrine’s road begins with the Supreme Court’s decision in Williamson
County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985),
where the Court articulated two preconditions for a ripe, as-applied takings claims. First, a
finality requirement: an as-applied takings challenge to a local land-use regulation is “not ripe
until the government entity charged with implementing the regulations has reached a final
decision regarding the application of the regulations to the property at issue.” Id. at 186.
Second, a state-litigation requirement: the as-applied claim is not ripe if the plaintiff “did not
seek compensation through the procedures the State has provided for doing so.” Id. at 194. The
Supreme Court eliminated the latter in Knick, declining to opine on the former. See 139 S. Ct. at2169–70.
What remains is the finality requirement. E.g., Pakdel v. City & Cnty. of San Francisco,
952 F.3d 1157, 1160 (9th Cir. 2020) (finding same). Unlike facial challenges, which “are
generally ripe the moment the challenged regulation of ordinance is passed,” Suitum, 520 U.S. at736 n.10, a federal court cannot hear an as-applied claim until the government has reached that
final decision on how the law applies to the land at issue — in other words, the claim is not ripe
until the government has decided whether to act in a manner that could constitute a taking.
Williamson Cnty., 473 U.S. at 191, 194. A plaintiff thus must seek available exemptions before
bringing an as-applied suit, as that process may save the land from being taken. Id. at 192–94.
Here is where the District’s exhaustion arguments become relevant.
As the Court has previously explained in considering Petworth’s standing to bring suit, it
is clear that the RSSA applies to the property. Petworth Holdings, LLC, 308 F. Supp. 3d. at 353.
10
The District does not now argue otherwise. Its sole contention is that Petworth failed to apply
for relief from the RSSA. See Def MSJ at 29–31; Def. Reply at 24–25. When Plaintiffs filed
suit, however, such relief was unavailable because the very Board that they needed to petition
existed in name only. See Attorney General’s Letter on District’s Retail Station Conversion Ban,
at 1, 4 & n.14 (noting that Board had no members and was nonoperational). Because there were
no actual hoops Petworth could jump through, it could not effectively seek an exemption.
Plaintiff’s as-applied claim is thus ripe.
The District protests that, instead of applying to the non-existent Board, Petworth should
have gone straight to the Mayor, who was charged with granting exemptions. See D.C. Code
§ 36–304.01(d)(1)(C) (2015) (“The Mayor, in agreement with the Board, grants the
exemption.”). But that is not what the statute said. The RSSA was clear: Petworth had to file its
petition with the Board. Id. § 36–304.01(d)(1)(A) (“An exemption may be granted to the
prohibitions . . . if . . . [a] petition for exemption has been filed with the Gas Station Advisory
Board . . . .”); id. § 36–304.01(d)(2)(A) (“To be considered for an exemption . . . petitioners must
file a petition with the Board . . . .”) (emphasis added). Only once the Board completed its
review and provided a recommendation to grant an exemption could the Mayor do so. See id.
§ 36–304.01(d)(1)(B) (requiring Board to “make[] a determination . . . that an exemption should
be granted and make[] a recommendation to the Mayor to grant the exemption”); see also D.C.
Code § 36–304.01(d)(1)(C). Contrary to the District’s contention, then, Petworth could not have
received an exception by direct application to the Mayor.
The District nonetheless attempts to jump start its argument by turning the Court’s
attention to the 2019 amendments to the RSSA. Plaintiff, says the city, could now apply to the
11
DOEE Director for an exemption. See D.C. Code § 36–304.01(d)(3) (2019). While this may be
true, it has no effect on Petworth’s pre-2019 takings claim.
Taking
The Supreme Court has recognized a few types of unconstitutional takings, including
(1) “physical takings,” which are government actions that cause a “permanent physical
occupation of real property,” Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419,
427 (1982); see also Tahoe-Sierra, 535 U.S. at 324 (collecting cases); and (2) “regulatory
takings,” which are restrictions on uses of private property that go “too far.” Pennsylvania Coal
Co. v. Mahon, 260 U.S. 393, 415, (1922); see also Penn Central Transp. Co. v. New York City,
438 U.S. 104, 124 (1978). Petworth maintains that the RSSA is a taking without just
compensation under both theories, each of which is subject to a distinct analysis. See Horne v.
Dep’t of Agric., 576 U.S. 350, 364 (2015) (cautioning against confusing physical and regulatory
takings analyses); see also Tahoe-Sierra, 535 U.S. at 323. It further contends that, even if the
2019 RSSA remedied the unconstitutional portion of the 2015 RSSA, the District still imposed a
temporary physical taking. See Pl. MSJ at 26–27; Pl. Reply at 23. Whereas Petworth moves for
summary judgment only as to the physical taking, see Pl. MSJ at 2, the District asks for judgment
on both forms of the claim. See Def. MSJ at 5, 7. Finding a physical taking, the Court need go
no further at this juncture.
Petworth does not argue that the District has appropriated its property by taking actual
title. See Pl. MSJ at 9–13. It contends instead that the city imposed a physical occupation of its
land because it “destroyed Plaintiff’s right to exclude the general public from its Property and
effectively [gave] the public an easement to access and traverse the Property at will.” Id. at 11.
Defendants rejoin that the RSSA cannot impose a physical taking because Petworth “retains full
12
title to the Property in fee simple and no third party has been authorized to build or otherwise
encroach on it.” Def. MSJ at 2, 5–7. The Court agrees with Petworth. In doing so, it notes that
when it previously reflected that the RSSA “falls short of a direct ‘physical appropriation of
[Plaintiff’s] property,’” it did so merely in passing and expressly declined to analyze whether the
RSSA imposed a physical occupation or invasion. See Petworth Holdings, LLC, 308 F. Supp. 3d
at 355–56 (quoting Keystone Bituminous Coal Ass’n, 480 U.S. at 489).
As used in the Fifth Amendment, the word “property” “includes the entire group of rights
inhering in the citizen’s ownership.” PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 82 n.6
(1980) (cleaned up) (quoting United States v. General Motors Corp., 323 U.S. 373 (1945)).
Because “[t]he power to exclude has traditionally been considered one of the most treasured
strands in an owner’s bundle of property rights,” Loretto, 458 U.S. at 435, a government-
mandated physical occupation of private land requires payment of just compensation. E.g., id.,Kaiser Aetna v. United States, 444 U.S. 164, 179–80 (1979) (noting that “the ‘right to exclude,’
so universally held to be a fundamental element of the property right, falls within this category of
interests that the Government cannot take without compensation”); cf. Byrd v. United States, 138
S. Ct. 1518, 1527 (2018) (“One of the main rights attaching to property is the right to exclude
others.”) (citation omitted). A property “owner suffers a special kind of injury” when a
government mandate enables “a stranger [to] directly invade[] and occup[y] the owner’s
property.” Loretto, 458 U.S. at 436.
The Court is aware that physical takings are “relatively rare.” Tahoe-Sierra, 535 U.S. at
324. They occur where “government physically takes possession of an interest in property for
some public purpose,” id. at 322, or otherwise “requires the landowner to submit to the physical
occupation of his land.” Yee v. City of Escondido, Cal., 503 U.S. 519, 527 (1992) (emphasis
13
removed). Mere regulation of an owner’s use of her property does not, without more, fall within
the “very narrow” category of physical takings. Bldg. Owners & Managers Ass’n Int’l v. FCC,
254 F.3d 89, 97 (D.C. Cir. 2001).
Just compensation is thus necessary when, for example, the government requires property
owners to permit third-party cable television companies to install cable facilities on a building,
Loretto, 458 U.S. at 422, or requires owners to submit to a public easement on their property.
Nollan v. California Coastal Com’n, 483 U.S. 825, 831 (1987) (finding taking where government
gives public “a permanent and continuous right to pass to and fro”); Chmielewski v. City of St.
Pete Beach, 890 F.3d 942, 947 (11th Cir. 2018) (finding permanent physical taking where
municipality encouraged public access to and hosted public events on private, beachfront
property, and declined to enforce trespassing laws upon owner’s request). Whereas a limited
restriction on an owner’s “right to exclude” does not necessarily constitute a taking, e.g.,
PruneYard Shopping Ctr., 447 U.S. at 82–86 (no taking where law required shopping mall,
otherwise open to public, to allow peaceful, political leafletting on property), a permanent
“eviscerat[ion]” of an owner’s “right to exclude” does. Dolan v. City of Tigard, 512 U.S. 374,
384, 394 (1994) (concluding hypothetical public easement would, “[w]ithout question,” be a
taking).
As explained above, the Act — as it existed between 2015 and 2019 — banned full-
service stations from being “discontinued.” D.C. Code § 36–304.01(b) (2015). The Supreme
Court’s analysis in Nollan is instructive as to why such a prohibition imposes a physical taking.
There, the Court had “no doubt there would have been a taking” had the government “required
[plaintiffs] to make an easement across their [property] available to the public on a permanent
basis.” 483 U.S. at 831. In doing so, the government would have taken the plaintiffs’ right to
14
exclude by granting the public “a permanent and continuous right to pass to and fro, so that the
real property may continuously be traversed, even though no particular individual [would be]
permitted to station himself permanently upon the premises.” Id. at 832; see also Dolan, 512
U.S. at 394; cf. Kaiser Aetna, 444 U.S. at 180 (noting, in considering regulatory taking, that
“even if the Government physically invades only an easement in property, it must nonetheless
pay just compensation”).
The District acknowledges that a “requirement that the public have access” to private
property “support[s] the finding of a taking,” Def. Reply at 4 (discussing Nollan, 483 U.S. 825),
but contends that the RSSA does not do so. According to the city, under the RSSA, Petworth
“would not have to admit a single member of the public onto the Property and, having admitted
one, could exclude any other member it chose for any legal reason.” Id. In other words, Plaintiff
retained the very “right to exclude” that it argues it lost. This position is running on empty.
While Petworth can exclude some members of the public from its property, it cannot exclude all
without violating the statute.
This becomes clear as one considers how the prohibition on discontinuation affects
Plaintiff. While a full-service station unaffected by a law like the RSSA could exclude the
public from its land and shut down entirely, Petworth could not. Not only was it required to
“continue” providing full automotive services, it could not even “substantially reduce” those
services, since they must be available “during a reasonable number of hours per day and of days
per week.” D.C. Code § 36–304.01(c) (2015). It is manifest that Petworth cannot “continue” its
business without providing at least some members of the public access to its land. This is no
different from a beachfront landowner’s being forced to provide an easement across her property
to even limited members of the public. The prohibition on discontinuation thus goes beyond
15
mere regulation; it limits Petworth’s use of its land to a single purpose that necessitates public
access and prohibits it from ever ceasing that service. The 2015 RSSA thus took Petworth’s
“right to exclude” by mandating a physical invasion of its private land without providing just
compensation.
Finding this physical taking, however, is only the first stop in Petworth’s journey to
obtaining just compensation. The Court must also determine whether the 2019 amendments,
which are addressed next, have rendered any taking only temporary.
B. 2019 RSSA.
The 2019 amendments are significant here because Petworth acknowledges that if they
have cured any taking that previously existed, they thus rendered it temporary, rather than
permanent. See Pl. MSJ at 26. The Court concludes they have. As the attentive reader will
recall, the D.C. Council in 2019 removed the prohibition on “discontinu[ing]” full-service
stations and provided an administrative process to request exemptions. See D.C. Law 22-289,
§ 2, 66 D.C. Reg. 1665 (Feb. 8, 2019). While Plaintiff, perhaps coincidentally, amended its
Complaint after this modification, the new pleading did not mention the 2019 change or update
its takings claim.
The removal of the ban on discontinuation provides reason for the Court to pump the
brakes on any as-applied or facial challenge. Petworth counters that this amendment has no
material effect on its position and thus asks the Court to find a permanent taking. See, e.g., Pl.
MSJ at 26 (“Plaintiff is forever barred from developing the Property or converting it in to any
other use . . . .”); Pl. Reply at 21 (maintaining that, following 2019 amendment, “it is apparent
that the law still prohibits discontinuance of full-service retail service stations”). It explains that
RSSA’s conversion ban, when read in combination with its subsection regulating business
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operations (e.g., requiring the provision of a mechanic and prohibiting substantial reductions in
services), still bars it from ceasing operations. See D.C. Code § 36–304.01(c). The Court finds
that such position has little horsepower.
This is not a case where the District amended some unrelated portion of the statute: the
updated law removes the very word that led the Court to conclude that the 2015 RSSA imposed a
physical taking of Petworth’s property. See supra at 14–16. Put simply, the Act’s express
language no longer prevents discontinuation. It is true that a subsection of the RSSA does ban
the substantial reduction in the repair and maintenance services full-service stations provide. See
D.C. Code § 36–304.01(c). But this language has been part of the law since 1977, see D.C. Law
1–123, § 5-301, 23 D.C. Reg. 5900 (Feb. 11, 1977), and was not contemporaneously interpreted
to prohibit full-service stations from going out of business entirely. See Opinions of the
Corporation Counsel (Jan. 6, 1981), 1981 D.C. AG LEXIS 1, *2 (“[N]othing in [the RSSA]
would prohibit one from razing a full service retail station and simply going out of business.”).
If the RSSA had prohibited full-service stations from closing since 1977, moreover, the District’s
2015 addition of the word “discontinued” would have been surplusage. The Court declines to
presume that the District expends such energy on nugatory amendments. See TRW Inc. v.
Andrews, 534 U.S. 19, 31 (2001) (“It is a cardinal principle of statutory construction that a
statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence,
or word shall be superfluous, void, or insignificant.”) (internal quotation and citation omitted).
For the same reasons, it cannot conclude that the RSSA’s continued prohibition against
conversions to other uses — while quite restrictive — imposes a ban on closing the business.
Petworth provides no argument for why the sum of prohibitions on substantial reduction and on
conversion to another use has some greater effect than the individual parts, and the Court sees
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none. Unlike the 2015 RSSA, the 2019 edition does not prohibit discontinuation of full-service
stations and thus does not unconstitutionally mandate public access to Petworth’s land. This is
because Petworth can, consistent with the law, discontinue its business. It thus retains its right to
exclude the public.
To be clear, the Court does not conclude that the 2019 RSSA is safe from all
constitutional challenges. It may well be that the prohibition on “conver[sion] . . . into any other
use” goes “too far” and constitutes a regulatory taking. Penn Coal Co., 260 U.S. at 415; see also
Penn Central, 438 U.S. at 124. The same would then hold true of that portion of the 2015 RSSA,
too. In this Opinion, the Court concludes only that the 2019 amendments to the RSSA
sufficiently changed the law to render the District’s physical taking temporary. Just
compensation on this theory is thus owed only for the 2015–19 period.
C. Arkansas Game Taking
Although this would seemingly cut the engine on the Court’s liability analysis, there is a
spare argument in the trunk that no party mentions. As if the law of takings were not sufficiently
murky, it is possible that analyses of temporary takings should be conducted in a different
manner.
In Arkansas Game & Fish Commission v. United States, 568 U.S. 23 (2012), the
Supreme Court considered whether intermittent flooding could constitute a taking and
emphasized that while “permanent” physical takings always require compensation, “temporary
actions of the same character” are subject to a multi-factor analysis. Id. at 26, 32–34, 38–39.
Whether courts should apply this framework to determine whether any temporary physical
invasion is a taking (rather than merely whether floods or more intermittent physical invasions
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are) remains unclear. Id. at 38 (“We rule today, simply and only, that government-induced
flooding temporary in duration gains no automatic exemption from Takings Clause inspection.”).
As a result, to be thorough, the Court will now briefly consider the 2015 RSSA under the
Arkansas Game framework. That analysis looks to the duration of the regulatory restriction, “the
degree to which the invasion is intended or is the foreseeable result of authorized government
action,” “the character of the land at issue and the owner’s ‘reasonable investment-backed
expectations,’ regarding the land’s use” and the “[s]everity of the interference.” Id. at 38–39
(citations omitted). Viewing the facts in the light most favorable to the government, the outcome
is the same as under the traditional physical-taking test described above: the 2015 RSSA imposes
a temporary physical taking and just compensation is owed. The Court will analyze the
Arkansas Game factors in turn, grouping some where the analysis is related.
The duration factor runs to Petworth’s benefit. The physical invasion at issue lasted from
May 2, 2015, until the 2019 amendments became effective on April 11, 2019. See D.C. Law 20-
271, § 211, 62 D.C. Reg. 1884 (Feb. 13, 2015); DRPSF, ¶ 41; D.C. Law 22-289, § 2, 66 D.C.
Reg. 1665 (Feb. 8, 2019); DRPSF, ¶ 53. This term of years is greater than shorter periods courts
have concluded impose temporary takings. See Tahoe-Sierra, 535 U.S. at 341–42
(acknowledging that development moratoria of longer than one year could impose taking);
United States v. Pewee Coal Co., 341 U.S. 114, 115 (1951) (taking where government possessed
and operated coal mine for approximately five months); Kimball Laundry Co. v. United States,
338 U.S. 1, 3–4 (1949) (condemnation of almost three and one-half years); Caquelin v. United
States, 959 F.3d 1360, 1362 (Fed. Cir. 2020) (180 days).
“[T]he degree to which the invasion is intended or is the foreseeable result of authorized
government action” — whether one factor or two — also indicates a taking. It is plain that the
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District intended for the public to have access to privately owned land that hosts a full-service
station. It specifically amended the RSSA to ensure that members of the public would have
access to such stations — like the one on Petworth’s land. See Def. MSJ at 15 (Council’s
extensions and amendments to RSSA “ha[ve] made clear that it considers the preservation of
full-service gas stations an important service to residents of the District of Columbia.”). In the
same vein, unlike a spontaneous flood or other unplanned event, the public use of Petworth’s
private land was foreseeable. See Arkansas Game, 568 U.S. at 39 (citing John Horstmann Co. v.
United States, 257 U.S. 138, 144–46 (1921), which found no taking where, even if there was
“causal connection” between government action and resulting rise of water in lakes, the harm
“could not have been “foreseen”). “There was no inadvertence here.” Banks v. United States,
138 Fed. Cl. 141, 150 (Fed. Cl. 2018) (finding taking from government imposition of railroad
right-of-way easement). “[T]he continuous public trespassing and occupation of their property
was the natural and intended effect of the City's actions.” Chmielewski, 890 F.3d at 950
(easement).
The restriction, moreover, was quite severe. Arkansas Game, 568 U.S. at 39–40. As the
Court previously explained, Petworth’s inability to close its property to the public led it to lose
its “right to exclude,” “a fundamental element of the property right.” Kaiser Aetna, 444 U.S. at179–80; see also supra at 14–16. While the government did not take title to Petworth’s property,
and Plaintiff did not lose access to its own land, the 2015 RSSA “eviscerate[d]” Petworth’s
“right to exclude.” Dolan, 512 U.S. at 394.
The Supreme Court provided little guidance on how courts should weigh “the character
of the land at issue” in the balance. Arkansas Game, 568 U.S. at 39. Some have considered the
land’s susceptibility to the particular invasion — e.g., flooding. See Caquelin, 140 Fed. Cl. at
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581; see also Ideker Farms, Inc. v. United States, 151 Fed. Cl. 560, 586–87 (Fed. Cl. 2020)
(asking how flood changed character of land); Wilkie v. City of Boiling Spring Lakes, 263 N.C.
App. 413, 2018 WL 6613993, at *6 (N.C. Ct. App. 2018) (same for loss of shoreline). Courts
have also noted that, when the government takes an easement, mere susceptibility is not
determinative. See In re Upstream Addicks & Barker (Texas) Flood-Control Reservoirs, 146
Fed. Cl. 219, 249 n.18 (Fed. Cl. 2019) (concluding that, despite land’s susceptibility to flooding,
“the character of the land at issue in this case is most simply described as private property not
subject to a flowage easement”); cf. Banks, 138 Fed. Cl. at 150 (finding factor “immaterial” to
liability, with “potential relevance” only to compensation owed, where government took
easements). Given that this is not a flooding case, most of these precedents offer little guidance;
indeed, it is unclear whether this factor is even relevant in a case such as this. In any event, it is
hard to argue that it clearly supports the city.
As to Petworth’s “reasonable investment-backed expectations.” Arkansas Game, 568
U.S. at 39, the parties dispute whether its development plans (which remain barred under the
2019 RSSA’s prohibition on conversion to another use) were reasonable. The Court need not
resolve that issue. Even if it assumes that this factor favors the District, the remainder weigh
heavily on Petworth’s side of the scale and support, in the balance, finding a temporary taking.
Cf. First English, 482 U.S. at 321 (“Where the government’s activities have already worked a
taking of all use of property, no subsequent action by the government” — whether “amendment
of the regulation, withdrawal of the invalidated regulation, or exercise of eminent domain” —
“can relieve it of the duty to provide compensation for the period during which the taking was
effective.”).
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IV. Conclusion
There remain the questions of exactly what compensation Petworth is owed for the
constitutional violation that lasted from 2015 to 2019 and how the parties wish to proceed in
regard to Plaintiff’s Penn Central claim. The Court will thus set a hearing to discuss the next
phase of the litigation. At this point, it will grant in part and deny in part each side’s Cross-
Motion as to the physical taking. It also dismisses — at Defendants’ request and without
opposition — all Defendants except the District of Columbia. A separate Order so stating will
issue this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: March 26, 2021
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