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Autozone Development Corp. v. Dist. of Columbia

March 29, 2007

AUTOZONE DEVELOPMENT CORP., AND AUTOZONE STORES, INC., PLAINTIFFS,
v.
THE DISTRICT OF COLUMBIA ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document No. 91

MEMORANDUM OPINION

GRANTING THE DEFENDANTS'MOTION TO DISMISS*fn1

I. INTRODUCTION

The plaintiffs, Autozone Development Corporation and Autozone Stores, Inc., bring suit against the District of Columbia, the National Capital Revitalization Corporation ("NCRC"), and Naylor Road, LLC ("Naylor Road") (collectively, "the defendants") for allegedly violating the Takings Clause of the Fifth Amendment. The defendants*fn2 move to dismiss, contending that the plaintiffs lack standing to bring this suit because they can show no injury in fact. In response, the plaintiffs argue that they suffered an injury because the National Capital Revitalization Corporation Eminent Domain Clarification and Skyland Eminent Domain Approval Act of 2004 ("the Skyland Act"), D.C. Code § 2-1219.19, placed a "cloud" over the plaintiffs' property and made the plaintiffs' rights unassignable. In addition, the plaintiffs claim that they suffered an injury because they were deprived of a portion of the net proceeds recovered in the sale of the property. Because the plaintiffs have not sufficiently alleged that they suffered an injury in fact, the court grants the defendants' motion.

II. BACKGROUND

A. Factual Background

Defendant Naylor Road formerly owned the parcel of land situated at 2626 Naylor Road, S.E. ("the property"). Third Am. Compl. ("Compl.") ¶ 5. On June 16, 1995, defendant Naylor Road leased the property to a non-party lessee who assigned the leasehold to the plaintiffs on October 21, 1998. Compl. ¶ 5; Defs.' Mot. for Sum. J. ("Defs.' Mot.") at 6. The plaintiffs have continuously occupied and conducted business on the property since 1998. Pls.' Opp'n to Defs.' Mot. for Summ. J. ("Pls.' Opp'n") at 3.

The terms of the plaintiffs' lease grant them the right to assign the lease. Pls.' Opp'n at 9. The plaintiffs' lease also contains a clause which provides that if after a condemnation, the plaintiffs determine that the property is not fit for its existing use, the plaintiffs may terminate the lease. Pls.' Opp'n at 20; Defs.' Mot. at 6. This clause also applies to purchases that are arranged in lieu of a traditional condemnation. Pls.' Opp'n at 20; Defs.' Mot. at 6.

In 1998, D.C. created NCRC as an independent instrumentality to encourage economic development and remove blight. D.C. Code § 2-1219.02; see also Compl. ¶ 4; Defs.' Mot. at 2-3. To achieve these purposes, the Skyland Act authorized NCRC to exercise eminent domain powers subject to approval by the D.C. City Council. D.C. Code § 2-1219.19. In 2001, according to the defendant, a neighborhood commission encouraged the government to take action in the Skyland area due to its "abandoned feel" combined with drug and alcohol-related crime.*fn3 Defs.' Mot. at 4. As a result, NCRC began to work with private developers on a plan to rejuvenate the Skyland area in September, 2002. Compl. ¶ 17; Defs.' Mot. at 4-5. NCRC was able to begin its work with the private developers without exercising its eminent domain powers because, on December 9, 2005, Naylor Road sold the property to NCRC. Pls.' Opp'n at 2-3; Defs.' Mot. at 6. The sale of the property by its terms did not affect the plaintiffs' lease. Pls.' Opp'n at 3 (stating that the subject property remains encumbered by the plaintiffs' lease); Defs.' Mot. at 10.

B. Procedural History

The plaintiffs brought this suit on March 8, 2005, seeking to enjoin defendant NCRC's exercise of eminent domain over the property. Autozone Dev. Corp. v. District of Columbia, 2006 U.S. Dist. LEXIS 11731, at *3 (D.D.C. Mar. 2, 2006). When NCRC purchased the property from Naylor Road in December 2005, the plaintiffs, with permission of the court, filed a Third Amended Complaint, arguing that the sale materially altered their complaint.*fn4 Id. The defendants now argue that none of their actions have harmed the plaintiffs and that the plaintiffs consequently lack the standing to bring this action.

III. ANALYSIS

A. Legal Standard for a Motion to Dismiss Pursuant ...


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