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Commercial Warehouse Leasing, LLC v. Thomas

United States District Court, W.D. Kentucky, Owensboro Division

January 14, 2019

GREG THOMAS, in both his official capacity as Secretary of the Kentucky Transportation Cabinet and in his individual capacity DEFENDANT



         This matter is before the Court on Defendant's Motion to Dismiss. [DN 11]. Fully briefed, this matter is ripe for decision. For the following reasons, the Defendant's motion is DENIED.

         I. Background

         According to the Complaint, Plaintiff Commercial Warehouse Leasing, LLC (“CWL”) owns and operates an industrial storage facility located on the northwest side of the “T” intersection where U.S. 41A and Tucker Schoolhouse Road meet in Madisonville, Kentucky. [DN 1 ¶ 7]. CWL leases its warehouse space to local manufacturers who store goods at the facility until the goods are ready to be shipped via the Interstate System. [Id. ¶ 18-19]. The goods are delivered to CWL's facility by tractor-trailers which enter and exit the facility via an express, recorded easement benefitting CWL. [Id.].

         In 2012, the Kentucky Transportation Cabinet (“KYTC”) entered Official Order 107579 (the “Order”), which called for the expansion of U.S. 41A into a partially controlled access highway. [DN 1 ¶ 31-32; DN 11-2]. The final design plans for the project were not completed until later. [DN 12 at 4]. By law, the expansion means that entrances onto the highway must be located at least 600 feet apart from one another. [DN 1 ¶ 31]. In June 2016, Cory Underwood, a KYTC acquisition agent, contacted CWL for the first time about purchasing a portion of its property for the expansion. [DN 12-3]. During the first meeting with Mr. Underwood, he provided CWL with the final plans for the project and informed CWL that its access point via the express easement would be removed by the expansion. [Id. at 3]. CWL raised concerns with Mr. Underwood about access to its facility under these plans. [Id. at 5].

         Thereafter, KYTC filed a condemnation action against portions of CWL's property in Hopkins County Circuit Court, Kentucky. See Commonwealth, Transp. Cabinet, Dep't of Highways v. Commercial Warehouse Leasing, LLC, 17-CI-00609 (Hopkins Cty. Cir. Ct. 2017). The next year, in April 2018, CWL filed a lawsuit in this Court against KYTC to enforce CWL's alleged right to continued, reasonable access pursuant to the Surface Transportation Assistance Act (“STAA”). [DN 12 at 5]. The case was dismissed on jurisdictional grounds, holding that the suit was barred by the Eleventh Amendment. Commercial Warehouse Leasing, LLC v. Ky. Transp. Cabinet, 2018 U.S. Dist. LEXIS 132560 (W.D. Ky. Aug. 7, 2018) (slip opinion). This Court stated that “CWL must refile the action so that subject matter jurisdiction exists at the commencement of the suit . . . .” Id. CWL then filed the instant action against Greg Thomas, in both his official capacity as Secretary of the Kentucky Transportation Cabinet and in his individual capacity. [DN 1 ¶ 3]. CWL seeks numerous declarations of rights under the STAA (Counts I-IV) and injunctive relief prohibiting Thomas from implementing the order and discontinuing CWL's access to U.S. 41A (Count V). [Id. ¶¶ 54-106].

         Thomas filed this Motion to Dismiss arguing that CWL's Complaint should be dismissed for lack of subject matter jurisdiction, or in the alternative, for failure to state a claim. [DN 11 at 1]. Specifically, in terms of lack of subject matter jurisdiction, Thomas argues that CWL suffered no injury in fact, failed to exhaust available administrative remedies, and sued the incorrect defendant. [DN 11-1 at 9-10]. In the alternative, Thomas asks the Court to dismiss the Complaint for its failure to state a claim-based on the federal cause of action not authorizing private party lawsuits and the expiration of the limitations period. [Id. at 13-15]. CWL responded and addressed first Thomas' Motion regarding subject matter jurisdiction. CWL reasons that Thomas' basis for arguing it lacks injury is faulty, as CWL is not challenging the weight restrictions on Tucker Schoolhouse Road and is instead challenging the Order's illegal implementation. [DN 12 at 12-13]. CWL then argues that it was not required to exhaust administrative remedies due to irreparable injury and that Thomas is the correct state official to sue as he is the individual with authority over the Order. [Id. at 14-19]. Next, CWL addresses each of Thomas' arguments regarding lack of subject matter jurisdiction-first, responding that precedent suggests the STAA does allow private party lawsuits, and second, that the suit is not barred by the applicable limitations period. [Id. at 19-24]. Finally, Thomas filed his Reply in which he addresses several points raised in the Response and further expounds on the issue of CWL's alleged injury. In particular, Thomas claims that CWL changed its argument in response to the Motion to Dismiss but that the new claim still fails to constitute the requisite injury. [See generally DN 13].

         II. Standard of Review

         Two standards of review are pertinent here. The Motion is based on lack of subject matter jurisdiction and the failure of CWL to state a claim for which relief can be granted. See Fed.R.Civ.P. 12(b)(1), (6). “A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists.” Abbott v. Michigan, 474 F.3d 324, 328 (6th Cir. 2007) (citing DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004)).

         To survive a motion to dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[A] district court must (1) view the complaint in the light most favorable to the plaintiff and (2) take all well-pleaded factual allegations as true.” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (citing Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009) (citations omitted)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The complaint need not contain “detailed factual allegations, ” yet must provide “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (citing Twombly, 550 U.S. at 555).

         III. Discussion

         As correctly noted by CWL, a suit against Thomas would normally be barred pursuant to the Eleventh Amendment. However, pursuant to Ex parte Young, a state official who threatens and is about to commence proceedings “to enforce against parties affected an unconstitutional act, violating the Federal Constitution, may be enjoined by a Federal court of equity from such action.” 209 U.S. 123, 156 (1908). The Eleventh Amendment does not bar such a suit. The Supreme Court more recently expounded on this exception to sovereign immunity:

because an unconstitutional legislative enactment is “void, ” a state official who enforces that law “comes into conflict with the superior authority of [the] Constitution, ” and therefore is “stripped of his official or representative character and is subjected in his person to the consequences of his individual conduct. The State has no power to impart to him any immunity from responsibility to the supreme authority of the United States.”

Va. Office for Prot. & Advocacy v. Stewart, 563 U.S. 247, 254 (2011) (quoting Ex parte Young, 209 U.S. at 159-60). The doctrine of Ex parte Young “is accepted as necessary to ‘permit the federal courts to vindicate federal rights.'” Id. at 248 (quoting Pennhurst State ...

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