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Kerpen v. Metropolitan Washington Airports Authority

United States District Court, E.D. Virginia, Alexandria Division

May 30, 2017

PHIL KERPEN, Individually and on behalf of All Others Similarly Situated, et al., Plaintiffs,
v.
METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, et al., Defendants.

          MEMORANDUM OPINION

          JAMES C. CACHERIS UNITED STATES DISTRICT COURT JUDGE.

         This matter is before the Court on the Motions for Partial Summary Judgment [Dkt. 46] and for Leave to File Supplemental Authority [Dkt. 127] filed by Plaintiffs Phil Kerpen, Cathy Ruse, Austin Ruse, Charlotte Sellier, Joel Sellier, and Michael Gingras. Also before the Court are the Motions to Dismiss filed by Defendants Metropolitan Washington Airport Authority (WMAA) [Dkts. 90, 91], the District of Columbia [Dkt. 94], Secretary of Transportation Anthony Foxx, and the U.S. Department Of Transportation [Dkts. 85, 86]. Although not a party, the Commonwealth of Virginia has filed a Brief Amicus Curiae in Support of Dismissal [Dkt. 83-1] .

         Plaintiffs - individuals who “ha[ve] used, and continue[ ] to use” the facilities at Ronald Reagan Washington National Airport and Washington Dulles International Airport, and who pay tolls on the Dulles toll road, Am. Compl. [Dkt. 37] ¶¶ 17-22 - filed this putative class action on July 5, 2016. The putative class includes “all persons or entities in the United States who used the facilities located on or within the premises” at National and Dulles “leased to MWAA . . . and from whom MWAA has exacted a fee, charge, toll or other similar payment from November 2008 to present.” Id. ¶ 78.

         Plaintiffs challenge MWAA's authority on a variety of constitutional and statutory grounds. Broadly speaking, Plaintiffs contend that (1) MWAA results from an unlawful interstate compact between Virginia and the District of Columbia (Counts I - II); (2) the federal government has improperly delegated federal power to MWAA (Counts III - V); (3) the tolls charged by MWAA are illegal exactions (Count VI); (4) MWAA has contravened the lease, and the related federal law, under which it maintains properties owned by the federal government (Counts VII - VIII); (5) MWAA and the federal government have both violated the Administrative Procedures Act (APA) (Counts IX - X); and (6) MWAA has violated 42 U.S.C. § 1983 (Count XI). For the following reasons, the Court will grant Defendants' Motions to Dismiss for Failure to State a Claim, deny Plaintiffs' Motions for Partial Summary Judgment and for Leave to File Supplemental Authority, and dismiss Plaintiffs' Complaint with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6).

         I. Background

         Facts drawn from the allegations of and exhibits to Plaintiffs' Amended Complaint [Dkt. 38] are taken as true for purposes of Defendants' Motions, insofar as those Motions are brought pursuant to Federal Rule of Civil Procedure 12(b)(6). See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011). In addition to Plaintiffs' Amended Complaint, the Court considers matters of public record subject to judicial notice, see Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009), and cited by Defendants without objection by Plaintiffs.

         A. MWAA's Origins

         Ronald Reagan Washington National Airport and Washington Dulles International Airport are two of three major airports serving the Washington, D.C., metropolitan area. Am. Compl. [Dkt. 37] ¶ 26. Both are located in Virginia, id., and are “the only two major commercial airports owned by the Federal Government.” Metro. Washington Airports Auth. v. Citizens for Abatement of Aircraft Noise, Inc., 501 U.S. 252, 256 (1991) (CAAN).

         Originally, both National and Dulles were managed by the Federal Aviation Administration (FAA). Am. Compl. [Dkt. 37] ¶ 26. Eventually, however, “the Secretary of Transportation concluded that necessary capital improvements could not be financed for either National or Dulles unless control of the airports was transferred to a regional authority with power to raise money by selling tax-exempt bonds.” CAAN, 501 U.S. at 257. In 1984, a commission made up primarily of local, state, and federal representatives from Virginia, Maryland, and the District of Columbia - deemed “the parties principally interested in the operation” of the airports - was tasked with “developing a proposal for transferring” the airports “from federal ownership to a state, local or interstate public entity.” 131 Cong. Rec. S9608, S9609 (Apr. 26, 1986).[1] The commission ultimately determined that “Washington National and Washington Dulles International Airports should be transferred by . . . Congress to a single, independent public authority to be created jointly by the Commonwealth of Virginia and the District of Columbia[.]” 131 Cong. Rec. S9608.

         In accordance with this plan, Virginia and the District of Columbia enacted reciprocal legislation creating MWAA in 1985. See D.C. Code §§ 9-901, et seq.; Va. Code §§ 5.1-152, et seq; see also Am. Compl. [Dkt. 37] ¶ 28. MWAA was constituted as an independent public body governed by an 11-member board, later expanded to 17 members with “seven appointed by the Governor of the Commonwealth of Virginia, four appointed by the Mayor of the District of Columbia, three appointed by the Governor of the State of Maryland, and three appointed by the President of the United States.” D.C. Code § 9-904; Va. Code § 5.1-155. Virginia and the District individually and jointly conferred “powers and jurisdiction” upon the MWAA, D.C. Code § 9-902; Va. Code § 5.1-153, as were necessary to manage, fund, and develop National and Dulles. See D.C. Code § 9-905; Va. Code § 5.1-156.

         The following year, Congress passed the Metropolitan Washington Airports Act of 1986, codified as 49 U.S.C. §§ 49101, et seq. (Transfer Act). This gave the agreement between the District of Columbia and Virginia the status of federal law. See Tarrant Reg'l Water Dist. v. Herrmann, 133 S.Ct. 2120, 2130 n.8 (2013). The Transfer Act recognized the “continuing but limited [federal] interest in the operation of” the airports, as well as the “important and growing” role the airports played in “the commerce, transportation, and economic patterns of Virginia, the District of Columbia, and the surrounding region.” 49 U.S.C. § 49101(1), (3). In light of the “perceived limited need for a Federal role in the management of these airports and the growing local interest, ” the Act sought to achieve “a transfer of authority from the Federal to the local/State level that is consistent with the management of major airports elsewhere in the United States.” Id. § 49101(7).

         Congress found that the federal government's interest could be adequately safeguarded “through a lease mechanism which provides for local control and operation” of the two airports. Id. § 49101(10). Accordingly, the Act authorized the Secretary of Transportation to lease the two airports, “including access highways and other related facilities, ” id. § 49102, to MWAA as long as MWAA met certain criteria. See id. § 49106. The Transfer Act further prescribed minimum terms to be included in the lease. See Id. § 49104. Among other things, the Transfer Act provided that MWAA would “assume responsibility for the [FAA]'s Master Plans for the Metropolitan Washington Airports, ” id. § 49104(a)(6)(A), which contemplated an extension of the existing Washington Metrorail system to Dulles. See Federal Defs. Exh. 1 [Dkt. 88-1] at 2, 123-24, 131. “On March 2, 1987, the Secretary of Transportation and MWAA entered into a long-term lease complying with all of the conditions specified in the then recently enacted Transfer Act.” CAAN, 501 U.S. at 261.

         The Transfer Act also initially provided for a Board of Review composed of nine members of Congress, which was empowered to veto decisions made by MWAA's Board of Directors. See CAAN, 501 U.S. at 255. The Supreme Court held this to be an unconstitutional encroachment by Congress on the sphere of the executive. See id. at 277. Congress attempted to modify and reconstitute the Board of Review, but this second attempt was likewise held to be unconstitutional. See Hechinger v. MWAA, 36 F.3d 97 (D.C. Cir. 1994). Accordingly, MWAA is now governed solely by its 17-member Board.

         The federal government, however, maintains a limited degree of control over the airports through the Secretary of Transportation. The Transfer Act provides that “[i]f the Secretary decides that any part of the real property leased to [MWAA] . . . is used for other than airport purposes, ” the Secretary “shall (i) direct that [MWAA] take appropriate measures to have that part of the property used for airport purposes; and (ii) retake possession of the property if [MWAA] fails to have that part of the property be used for airport purposes within a reasonable period of time, as the Secretary decides.” 49 U.S.C. § 49104(a)(2)(C). “Airport purposes” is defined broadly, and includes “a business or activity not inconsistent with the needs of aviation that has been approved by the Secretary.” Id. § 49104(a)(2)(A)(iv).

         B. The Dulles Toll Road and Metrorail Project

         “To facilitate access to what would become Washington Dulles International Airport . . . the federal government acquired a broad corridor of land in Virginia, known as the Dulles Airport Access Highway and Right-of-way[, ] . . . between the Interstate 495 Beltway at Falls Church, Virginia and Dulles Airport.” Corr v. Metro. Washington Airports Auth., 800 F.Supp.2d 743, 745-46 (E.D. Va. 2011), aff'd 740 F.3d 295 (4th Cir. 2014). This stretch of land was used to construct the Dulles Airport Access Highway - “a 13.65-mile highway” used exclusively “to provide rapid access to and from the Dulles Airport.” Id. at 746; see also Am. Compl. [Dkt. 37] ¶ 39.

         In 1980, Virginia sought and received an easement over a portion of the federally owned Dulles corridor to construct a toll road for non-airport traffic. See Corr v. Metro. Washington Airports Auth., 740 F.3d 295, 297 (4th Cir. 2014) (Corr II); see also Am. Compl. [Dkt. 37] ¶ 40. The easement required that “[t]he roadway . . . be constructed . . . so as to preserve the median between the eastbound and westbound lanes of the Dulles Access Highway for future rail service to Dulles Airport.” MWAA Mot. Exh. 2 [Dkt. 93-2] ¶ 13. Virginia began operating the tollway in 1984. Am. Compl. [Dkt. 37] ¶ 40.

         In the years that followed, “the Virginia General Assembly repeatedly authorized [the Virginia Commonwealth Transportation Board] to use toll revenue to fund mass transit projects within the Dulles Corridor, ” including the extension of the Washington Metrorail system to Dulles. Corr II, 740 F.3d at 298. As MWAA “shared Virginia's goal of extending the Metrorail system to Dulles Airport” and had assumed the FAA's master plans, which contemplated such a project, “MWAA proposed to take control of the Metrorail expansion project, as well as the Dulles Toll Road which was providing much of the revenue for the expansion.” Id. at 298. Virginia and MWAA entered into a Master Transfer Agreement in December of 2006. See MWAA Mot. Exh. 5 [Dkt. 93-5]; MWAA Mot. Ex. 6 [Dkt. 95-1]. The agreement required, among other things, that MWAA use revenue from the tollway to fund the Metrorail project. MWAA Mot. Exh. 5 [Dkt. 93-5] § 6.01. Tollway revenues are presently projected to cover roughly half of the project's cost. Am. Compl. [Dkt. 37] ¶ 67. In October of 2008, the Secretary of Transportation certified that this arrangement between MWAA and Virginia serves a valid “airport purpose” within the meaning of the Transfer Act. See Pls. Mot. for Summ. J. Exh. 11 [Dkt. 52-1].

         C. Corr v. MWAA

         The toll road agreement between MWAA and Virginia was unsuccessfully challenged in two previous lawsuits brought by Plaintiffs' counsel. See Gray v. Virginia Sec'y of Trans., 276 Va. 93 (2008); Corr II, 740 F.3d 295. The second of these, Corr, was filed in this Court and raised many of the same issues presented here. Accordingly, this Court made a number of rulings bearing upon the present proceedings. It held, for example, that the tolls charged by MWAA for use of the tollway are not illegal exactions or taxes but rather are permissible “user fee[s].” 800 F.Supp.2d at 755. Similarly, the Court “reject[ed] Plaintiffs' contention that” Congress or the states “impermissibly delegated to an unelected body, MWAA, the authority to tax them.” Id. at 756. The Court further concluded that “MWAA's independence does not violate Plaintiffs' right to a republican form of government, ” and found “no merit to Plaintiffs' claim that MWAA's governance structure somehow interferes with the President's authority under Article II to ensure that the laws are faithfully executed or violates the Appointments Clause.” Id. at 757-58. Each claim rejected above has some analogue in the present action.[2]

         After this Court dismissed the Corr plaintiffs' complaint, they sought review in the Court of Appeals for the Federal Circuit. That Court held that it did not have jurisdiction to entertain the appeal, as MWAA is not a “federal instrumentality” subject to the Little Tucker Act, 28 U.S.C. § 1346(a)(2). Corr v. Metro. Washington Airports Auth., 702 F.3d 1334, 1337 (Fed. Cir. 2012) (Corr I). Having found that “MWAA possesses few, if any, of the hallmarks of a federal instrumentality identified” by the Supreme Court, the Federal Circuit transferred the case to the Fourth Circuit. Id. at 1337-38.

         The Corr plaintiffs fared no better there. The primary subject of that appeal was whether Virginia's General Assembly could legally delegate taxing power to MWAA. See Corr II, 740 F.3d at 300. The Fourth Circuit found that MWAA had levied no tax, and that the tollway constituted a “fee-for-service” arrangement that did not violate Virginia law. See id. at 302. Accordingly, the Fourth Circuit determined that the Corr plaintiffs failed to state a claim and affirmed this Court's Order dismissing the case. See id. at 302. The Supreme Court subsequently denied certiorari.

         D. The Present Proceedings

         Plaintiffs originally filed this putative class action in the U.S. District Court for the District of Columbia on July 5, 2016. On September 26, 2016, the U.S. District Court for the District of Columbia transferred the case to this Court. See Mem. Op. and Order [Dkt. 26].[3]

         The District of Columbia filed a Notice [Dkt. 44] on December 15, 2016, informing the Court that it would intervene pursuant to Federal Rule of Civil Procedure 5.1(c). Virginia then filed an amicus brief [Dkt. 83-1] on January 23, 2017, stating that it would not waive its sovereign immunity with respect to this suit and would decline to intervene. Accordingly, the Commonwealth argued that the Court should dismiss this case pursuant to Federal Rule of Civil Procedure 19 for failure to join Virginia as a necessary and indispensable party. As the Court finds that the case should be dismissed for other reasons, the Court declines to reach this argument.

         On December 19, 2016, Plaintiffs filed a Motion for Partial Summary Judgment [Dkt. 46], seeking to resolve issues related to Defendants' liability. Defendants each responded with Motions to Dismiss [Dkts. 85, 86, 90, 91, 94]. After the hearing on this matter, Plaintiffs filed a Motion for Leave to File Supplemental Authority [Dkt. 127], further addressing the absence of Virginia and its import under Federal Rule of Civil Procedure 19. Having reviewed the parties' filings and heard the arguments of counsel, this matter is now ripe for decision.

         II. Legal Standard

         In order to survive a motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6), a complaint must set forth “a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). When reviewing a motion brought under Rule 12(b)(6), the Court “must accept as true all of the factual allegations contained in the complaint, ” drawing “all reasonable inferences” in the plaintiff's favor. E.I. du Pont de Nemours & Co., 637 F.3d at 440 (citations omitted). “[T]he court ‘need not accept the [plaintiff's] legal conclusions drawn from the facts, ' nor need it ‘accept as true unwarranted inferences, unreasonable conclusions, or arguments.'” Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 616 n.26 (4th Cir. 2009) (quoting Kloth v. Microsoft Corp., 444 F.3d 312, 319 (4th Cir.2006)) (alterations in original).

         Generally, courts may not look beyond the four corners of the complaint in evaluating a Rule 12(b)(6) motion. See Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). The Court, however, “may properly take judicial notice of matters of public record.” Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

         III. Analysis

         A. MWAA does not violate ...


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