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ROBZEN'S, INC. v. UNITED STATES

March 31, 1981

ROBZEN'S, INC., Plaintiff,
v.
UNITED STATES of America, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al., Defendants



The opinion of the court was delivered by: NEALON

MEMORANDUM AND ORDER

I. FACTS

 This case is before the court on cross-motions for summary judgment. Robzen's, Inc., claims the right to compensation for "moving and related expenses" incurred during a forced relocation from Wilkes Barre to Scranton pursuant to a condemnation of the company's real property in 1977. The principal defendant, the United States Department of Housing and Urban Development ("HUD"), argues that the complainant has already received all appropriate payments authorized under state and federal law. Resolution of the controversy requires a careful review of the facts.

 Robzen's, a corporation engaged in the processing of meat products, has a history which dates back to 1938. For thirty-nine years, the plaintiff maintained its sole plant at 810-840 North Pennsylvania Avenue in Wilkes Barre. On August 16, 1973, the Wilkes Barre City Council adopted a proposal for redevelopment of designated areas in the municipality. *fn1" HUD subsequently approved this scheme. As a preliminary measure, the plan called for condemnation of private property located in the sections targeted for reconstruction. The Robzen's plant was within the zone set aside for rebuilding. Representatives of the plaintiff and the Wilkes Barre Redevelopment Authority attempted to negotiate a settlement of the condemnee's rights. Unfortunately, the parties could not reach an agreement.

 In January 1975, the Authority filed an action in the Luzerne County Court of Common Pleas to formalize the condemnation. On September 10th of that year, the Board of View determined that the plaintiff was entitled to.$ 661,728.00 in return for the property. The Authority appealed this finding to the Common Pleas Court. The parties eliminated the need for a final ruling on that particular issue in March of 1977, when Robzen's accepted $ 590,000.00 as satisfaction for all of its claims except those pertaining to moving expenses. The latter issue was deferred pending further negotiations with the Authority. *fn2"

 The complainant's request for moving expenses fell into two categories. Initially, Robzen's received $ 25,000.00 as compensation for the cost of moving inventory to Scranton. There is no dispute as to the propriety of this payment. Second, the plaintiff also submitted an expanded list of moving expenses which included claims based on the need for substitute equipment, professional services, modification of the new facility, and other expense items. In all, the complainant sought $ 1,644,709.12. On February 22, 1979, the Authority rendered its final decision denying Robzen's any recovery for the costs outlined in the expanded list. Pursuant to federal regulations, the plaintiff then obtained a review of this decision from HUD. The latter agency slightly modified the Authority's ruling. Specifically, the complainant was awarded $ 2,843.70 for advertising necessitated by the relocation and $ 180.24 for costs incidental to a move to another circuit operated by the Department of Agriculture. HUD, however, upheld all other aspects of the Authority's decision. Ultimately, Robzen's sought redress in this court.

 The plaintiff's overall argument is concise. According to 42 U.S.C. § 4622(a), a provision of the Uniform Relocation Assistance Act ("URAA"):

 
Whenever the acquisition of real property for a program or project undertaken by a Federal Agency in any State will result in the displacement of any person on or after January 2, 1971, the head of such agency shall make a payment to any displaced person, upon proper application as approved by such agency head, for
 
(1) actual reasonable expenses in moving himself, his family, business, farm operation, or other personal property;
 
(2) actual direct losses of tangible personal property as a result of moving or discontinuing a business or farm operation, but not to exceed an amount equal to the reasonable expenses that would have been required to relocate such property as determined by the head of the agency; and
 
(3) actual reasonable expenses in searching for a replacement business or farm.

 All parties to this litigation agree that Robzen's is a "displaced person" eligible for compensation under this statute. See Messer v. Virgin Islands Renewal Board, 623 F.2d 303, 304 (3d Cir. 1980). The complainant contends that the items contained in the expanded list are authorized under § 4622(a) and applicable regulations.

 HUD, conversely, insists that the plaintiff's rights resulting from the condemnation have been satisfied. As previously indicated, Robzen's received $ 590,000.00 for its property in Wilkes Barre. This sum was calculated according to the "Assembled Economic Unit Doctrine", a principle that requires the Commonwealth to include in eminent domain awards an allowance for machinery, equipment, and fixtures ("MEF") which cannot be economically moved to a new situs. At oral argument, the parties agreed that the complainant had received payment for all of the MEF located in the Wilkes Barre plant. On this basis, the defendants propose that Robzen's entire business interest has been "extinguished" and the corporation has no right to "moving expenses," because there literally was nothing left to move to Scranton other than the inventory, for which compensation has already been made.

 Both sides have moved for summary judgment. The defendants feel that their extinction argument can dispose of the entire case without further expansion of the record. Robzen's asks the court to recognize a right to recover with regard to broad categories of liability but admits that more evidence will be needed to set specific awards under each classification. Each motion will be granted in part. For reasons stated below, the court holds that the plaintiff may recover the following expenses: (1) licenses, permits, certifications, and professional services incidental to the move; (2) search expenses; and (3) modifications of the Scranton plant necessary to prepare the facility for operation. The issue of storage costs shall remain open. HUD's request for summary judgment is awarded in all other respects.

 II. JURISDICTION

 Before discussing the merits of the case, the court must resolve a threshold argument involving jurisdiction. HUD claims that the sovereign immunity of the United States Government renders any claims against the federal defendant invalid. This contention misapprehends the true nature of the suit. The Administrative Procedure Act ("APA") generally permits judicial review of decisions rendered by federal agencies. See 5 U.S.C. §§ 701, et seq. Our Court of Appeals has held that the APA grants jurisdiction over suits that challenge HUD's implementation of the URAA. Society Hill Civic Association v. Harris, 632 F.2d 1045, 1055-57 (3d Cir. 1980). In the current litigation the defendants have never questioned the fact that the plaintiff has exhausted the administrative procedures prerequisite to an action under §§ 701, et seq. Accordingly, HUD's challenge to the court's jurisdiction is rejected. *fn3"

 The complaint states an alternative ground for jurisdiction i. e., a direct cause of action based on the URAA. The soundness of this argument is uncertain. In Beaird-Poulan Division of Emerson Electric Company v. Department of Highways, State of Louisiana, 441 F. Supp. 866, 869-70 (W.D.La.1977), aff'd, 616 F.2d 255 (5th Cir. 1980), cert. denied, 449 U.S. 971, 101 S. Ct. 383, 66 L. Ed. 2d 234 (1980), the district court recognized such a claim. *fn4" The Court of Appeals for the Fifth Circuit summarily affirmed the ruling and the Supreme Court denied certiorari. Justice Rehnquist, however, dissented from the latter decision on the following rationale: "Nothing in the (URAA) gives displaced persons a direct cause of action ..., nor does respondent cite any evidence in the legislative history suggesting that such a cause of action was contemplated." 101 S. Ct. at 384-85. The Court of Appeals for the Third Circuit, moreover, has admonished district judges to be "chary" of implying statutory remedies broader than those expressly established by Congress. United States v. City of Philadelphia, 644 F.2d 187 at 192 (3d Cir. 1980). This court need not resolve the issue. At oral argument, counsel for the plaintiff stated that the scope of review permitted by the APA is adequate for presentation of the arguments that Robzen's shall offer in the instant suit. For this reason, there is no need to assess the validity of a complaint premised solely on the URAA. Bell v. Wolfish, 441 U.S. 520, 526-27 n.6, 99 S. Ct. 1861, 1867 n.6, 60 L. Ed. 2d 447 (1979); Swank Refractories Company v. State Workmen's Insurance Fund, Civil No. 79-1293, slip op. at 7 (M.D.Pa., March 20, 1980).

 III. ANALYTICAL FRAMEWORK

 A. The Uniform Relocation Assistance Act

 The overriding purpose of the URAA is standardization of the benefits available to individuals displaced by federal projects. Alexander v. United States Department of Housing and Urban Development, 441 U.S. 39, 49, 99 S. Ct. 1572, 1580, 60 L. Ed. 2d 28 (1979). The legislative history indicates that the drafters of the Act considered previous methods for compensating condemnees seriously inadequate. The official report issued by the House Public Works Committee stated:

 
... As the thrust of Federal and federally assisted programs ... shifted from rural to urban situations, it became increasingly apparent that the application of traditional concepts of valuation and eminent domain resulted in inequitable treatment for large numbers of people displaced by public action. When applied to densely populated urban areas, with already limited housing, the result can be catastrophic for those whose homes or businesses must give way to public needs. The result far too often has been that a few citizens have been called upon to bear the burden of meeting public needs.

 (1970) U.S.Code Cong. & Admin.News 5850, 5851. To remedy this situation, Congress passed the URAA which establishes uniform rights for all eligible displacees. *fn5" See also Annot., 33 ALR Fed. 9, 28-36 (1977).

 The instant case turns on § 4622(a) of the Act. As previously quoted, this provision states that a condemnee may qualify for three types of compensation: (1) "reasonable expenses in moving," (2) "direct losses of tangible personal property," and (3) "reasonable expenses in searching for a replacement farm or business." Congress, moreover, has authorized the heads of HUD and other federal agencies to promulgate regulations for the administration of the URAA. 42 U.S.C. § 4633. These regulations are binding on the defendants. Society Hill Civic Association v. Harris, 632 F.2d at 1056-57. *fn6" In assessing Robzen's claim for relief, this court must construe § 4622(a) and its companion regulations.

 At the outset, it is essential to understand the proper relationship between compensation established by the URAA and that obtainable under the Commonwealth's eminent domain laws. The Relocation Act supplements state procedures by setting a minimum standard of recovery available to all eligible displacees. If the eminent domain laws of a particular state do not provide sufficient payments to satisfy this standard, then the URAA authorizes federal funds to make up the difference. Auraria Businessmen Against Confiscation, Inc. v. Denver Urban Renewal Authority, 183 Colo. 441, 517 P.2d 845 (1974) offers a good illustration of this principle. There, the Colorado Supreme Court held that, as a matter of state law, a condemnee's goodwill and lost profits were not compensable under eminent domain. In a footnote, however, the opinion noted that the plaintiff might be able to achieve at least partial recovery for these expenses by invoking the URAA. 517 P.2d at 848 n.2.

 Congress, nevertheless, also decided that federal expenditures should not provide displacees with double recovery. Hence, the Relocation Act denies compensation for any item already covered by state law, even if the terms of the URAA would otherwise provide payment. According to 42 U.S.C. § 4631(b):

 
No payment or assistance under Section 4630 (which includes the items listed in § 4622(a)) or 4655 of this title shall be required or included as a program or project cost under this section, if the displaced person receives a payment required by the State law of eminent domain which is determined by such Federal agency head to have substantially the same purpose and effect as such payment under this section, and ...

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