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United States v. Western Radio Services Co., Inc.

United States District Court, D. Oregon

April 28, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
WESTERN RADIO SERVICES CO., INC., Defendant.

S. Amanda Marshall, United States Attorney, Neil J. Evans, Assistant United States Attorney, United States Attorney's Office, District of Oregon, 1000 S.W. Third Avenue, Suite 600, Portland, OR 97204. Of Attorneys for Plaintiff.

Marianne Dugan, 259 E. 5th Avenue, Suite 200-D, Eugene, OR 97401. Of Attorneys for Defendant.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

Western Radio Services Co., Inc. ("Western Radio" or "Defendant") and the U.S. Forest Service ("Forest Service") are parties to a Communications Use Lease, designated CRE09, issued December 17, 2000 ("Lease"). The United States brings this declaratory judgment action against Western Radio seeking a declaration that the Lease is cancelled and that the United States is the owner of the structures and improvements and Western Radio has no legal ownership. Currently before the Court are Plaintiff's motion to dismiss Defendant's counterclaims (ECF 24), Plaintiff's motion for summary judgment (ECF 26), and Defendant's motion for summary judgment (ECF 32). For the reasons stated below, Plaintiff's motion to dismiss is granted in part, Plaintiff's motion for summary judgment is granted, and Defendant's motion for summary judgment is denied.

STANDARDS

A. Motion to Dismiss

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Baca, 652 F.3d at 1216. "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

B. Motion for Summary Judgment

A party is entitled to summary judgment 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). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge... ruling on a motion for summary judgment, " the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

C. Administrative Procedure Act

Western Radio brings a counterclaim under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. ("APA"). The APA provides for judicial review of final agency action. 5 U.S.C. §§ 701-706. Under the APA, a court may set aside agency actions only if such actions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Under the APA, an "agency must examine the relevant data and articulate a satisfactory explanation for its action." Motor Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Under this standard, an agency's action is arbitrary and capricious if: (1) the agency fails to consider an important aspect of a problem; (2) the agency offers an explanation for the decision that is contrary to the evidence; (3) the agency's decision is so implausible that it could not be ascribed to a difference in view or be the product of agency expertise; or (4) the agency's decision is contrary to the governing law. Org. Village of Kake v. U.S. Dept. of Agric., ___ F.3d ___, 2014 WL 1229762, at *1 (9th Cir. Mar. 26, 2014). Although a court's "inquiry must be thorough, the standard of review is highly deferential; the agency's decision is entitled to a presumption of regularity, ' and [a court] may not substitute [its] judgment for that of the agency." San Luis & Delta-Mendota Water Auth. v. Jewell, ___ F.3d ___, 2014 WL 975130, at *9 (9th Cir. Mar. 13, 2014) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16 (1971)).

BACKGROUND

Western Radio leases land on Walker Mountain from the Forest Service on which Western Radio maintains a communications tower, a support building, and a generator pad (collectively, "Original Tower"). Beginning in August 2010, Western Radio constructed a new communications tower at the same site ("New Tower"). In a previous action, the Court held that Western Radio breached the Lease when it constructed the New Tower without receiving final approval from the Forest Service and that the New Tower was a continuing trespass on the Forest Service's land. United States v. Western Radio Servs. Co., 2012 WL 3776474 (D. Or. Aug. 29, 2012) ( Western Radio I ). The Court ordered Western Radio to remove all trespassing structures and to restore the site by August 30, 2013. United States v. Western Radio Servs. Co., 2013 WL 1867477 (D. Or. May 3, 2013) ( Western Radio II ). Western Radio appealed the Court's judgment and on July 5, 2013, the Court stayed its judgment during the pending appeal, except for the portion of the judgment prohibiting Western Radio from removing any of United States Cellular Operating Company of Medford's equipment from the Original Tower. United States v. Western Radio Servs. Co., Case No. 3:11-cv-00638-SI, Amended Judgment dated July 5, 2013, Docket No. 249.

In the previous action, the United States had requested that the Court cancel the Lease as a remedy to the breaches of the Lease that the Court had found on summary judgment. The Court declined to cancel the Lease because the parties had specifically agreed in the Lease to an administrative revocation procedure in the event Western Radio breached the Lease. Western Radio II, 2013 WL 1867477, at *1. The United States then commenced the revocation procedure that is now at issue.

On January 3, 2013, the United States sent a Notice of Noncompliance ("Notice") to Western Radio and also to counsel for Western Radio. AR 218-231. Due to his schedule, Richard Oberdorfer, the President of Western Radio, did not receive the Notice until January 17, 2013.[1] The Notice enumerated seven purported violations of the Lease by Western Radio. AR 219-20. Three of the alleged instances of noncompliance (Nos. 1, 2, and 4) were violations that the Court had previously found were breaches of the Lease and for which the Court had found Western Radio liable. See Western Radio I, 2012 WL 3776474, at *3-5. The Notice set out two options by which Western Radio could cure its noncompliance if it wished, and required Western Radio to elect a cure option on or before January 17, 2013. AR 220. The Notice stated that "[f]ailure to return a signed copy of either Option 1 or Option 2 to this office by January 17, 2013, will be treated as evidence of your rejection of the opportunity to cure and will result in the revocation of [the Lease]." AR 220.

Option One required Western Radio within 30 days to provide a detailed schedule for completing the removal of the New Tower and other trespassing structures by July 1, 2013, identify contractors who would perform the removal, post a $65, 000 bond, provide a detailed accounting of all equipment on Walker Mountain, and initiate a 30-day technical review period with all site users for new equipment on the Original Tower or equipment that will be moved from the New Tower to the Original Tower. AR 222. It also required Western Radio within 90 days to report any unresolved concerns raised by other site users and paint a satellite dish that was an unapproved color. AR 223.

Option Two required Western Radio within 30 days to identify contractors it would retain subject to the potential court order of removal, post a $65, 000 bond, provide a detailed accounting of all equipment on Walker Mountain, and initiate a 30-day technical review period with all site users for new equipment on the Original Tower and all equipment on the New Tower. AR 224. It also required Western Radio within 90 days to report any unresolved concerns raised by site users, paint a satellite dish that was an unapproved color, provide a structural and electrical inspection report for the New Tower, provide construction plans by a licensed engineer for the New Tower, and obtain any required county permits for the New Tower. AR 225. The Notice informed Western Radio that the failure to perform any of the required tasks on the selected cure option would constitute grounds for the Forest Service to revoke the Lease, without further notice or opportunity to cure. AR 223, 225.

On January 10, 2013, the parties engaged in mediation. Much of the mediation was spent discussing the two options set forth in the Notice. See AR 243, 253. The parties were unable to reach an agreement. On February 1, 2013, Western Radio responded to the Notice with an email in which Western Radio disputed the assertion that it had violated the Lease. AR 234-35. Western Radio did not select either of the two options to cure, did not complete the actions required under either of the options to cure, and did not request an extension of time to respond to the Notice.

On February 4, 2013, because Western Radio failed to confirm in writing on or before January 17, 2013, its intent to cure the noncompliance issues and, more significantly, because Western Radio did not timely perform any of the curative actions that were required to be performed within 30 days of the date of the Notice, District Ranger Holly Jewkes of the Forest Service revoked the Lease, effective immediately. AR 236-37. The revocation required that all Western Radio equipment be removed from Walker Mountain on or before July 1, 2013. The revocation stated that if Western Radio's equipment was not removed, pursuant to Lease V.B. and 36 C.F.R. § 251.60(i), any remaining equipment would become the property of the United States. Western Radio was given 45 days to appeal the revocation.

On March 20, 2013, Western Radio appealed the Forest Service's revocation of the Lease and requested an oral presentation. AR 240-41. On May 17, 2013, John Allen, Forest Supervisor, met with Mr. Oberdorfer to discuss the revocation. See AR 256-58. On June 11, 2013, Forest Supervisor Allen affirmed the decision of Ranger Jewkes to revoke the Lease and denied Western Radio's appeal. AR 268-75.

On June 24, 2013 and June 25, 2013, Western Radio submitted second-level appeals. AR 278, 280. On July 1, 2013, Regional Forester Kent P. Connaughton affirmed Forest Supervisor Allen's affirmance of Ranger Jewkes's revocation of the Lease and denied Western Radio's second-level appeal. AR 264-67, 285-86. This decision was not further reviewable within the agency and, thus, constituted the final agency administrative determination. Id. On July 15, 2013, the United States filed this action seeking a declaratory judgment regarding the rights and responsibilities of the parties for Western Radio's structures and equipment on Walker Mountain.

DISCUSSION

A. Plaintiff's Motion to Dismiss

The United States moves to dismiss Western Radio's two counterclaims-a claim under the APA and a claim seeking attorney's fees under the Equal Access for Justice Act, 28 U.S.C. § 2412 ("EAJA").

1. APA Counterclaim

Western Radio's counterclaim brought under the APA alleges that in 2005 and 2007 the United States approved the construction of the New Tower, that those approvals were final agency actions, that by filing the previous lawsuit and this declaratory judgment action arguing that construction of the New Tower was a breach of the Lease and constitutes a trespass the United States " de facto revoked" its 2005 and 2007 final agency decisions, and that the "revocation" of the 2005 and 2007 agency actions was arbitrary and capricious. Def.'s 2nd Am. CC, ECF 17, ¶¶ 20-25. The United States correctly points out that this Court has already determined that: (1) the United States did not approve the construction of the New Tower; (2) Western Radio breached the Lease by constructing the New Tower; and (3) the New Tower is a trespass. Because the Court previously found that the Forest Service did not approve construction of the New Tower and that the construction of the New Tower was a ...


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