NORFOLK REDEV. & HOUSING AUTH. v. C. & P. TEL.
Legal provision: 42 U.S.C. 4601
ORAL ARGUMENT OF FRANCIS N. CRENSHAW, ESQ., ON BEHALF OF PETITIONER
Chief Justice Warren E. Burger: We'll hear arguments next in Norfolk Redevelopment against Chesapeake and Potomac Telephone Company.
Mr. Crenshaw, I think you may proceed whenever you are ready.
Francis N. Crenshaw: Mr. Chief Justice, and may it please the Court:
The question in this case is whether the Respondent telephone company is eligible under the terms of the Uniform Relocation Assistance and Real Properties Acquisition Policies Act of 1970 to be reimbursed for its costs when it disconnects transmission lines beneath certain streets in the City of Norfolk, Virginia and rebuilds replacement lines under new streets.
The claim was submitted to the Petitioner, Redevelopment Authority, and was denied because it felt that the common law requires a utility company to move its transmission lines at its expense, and the Uniform Act did not change the common law.
Furthermore, the telephone company did not meet the threshold requirements for eligibility under the Uniform Act because it did not move personal property, and it did not move any property as a result of the acquisition of land.
Now the telephone company had installed its facilities in the streets of Norfolk pursuant to a franchise with the City of Norfolk by virtue of which it had a mere license.
It was a franchisee and it is the established common law in Virginia and in the overwhelming majority of other states that a utility company having such a franchise has the obligation of moving its lines at its own expense when the public good requires those lines to be relocated.
This a long-standing and well understood and respected custom and the opinion of the Circuit Court of Appeals for the Fourth Circuit would change that rule.
Now in this case these transmission lines were rerouted because of the execution by the Petitioner, Redevelopment Authority, of conservation and redevelopment projects within the City of Norfolk.
Under those projects areas of blighted property were acquired.
The old buildings were demolished and the cleared land was made available for redevelopment.
In certain instances it was necessary and desirable to rearrange certain streets, and the Redevelopment Authority petitioned the City of Norfolk to close streets so that the new street pattern could be established.
The city did close those streets, and in a very cooperative manner the city, the Petitioner and the City of Norfolk worked together with the telephone company to work out an arrangement for the new streets to be built in a manner that the public and the private utilities could be laid within those streets with a minimum of inconvenience to all of the parties.
There was no coercion no eminent domain.
It was all done in a friendly and matter-of-fact way, and there was no request for any reimbursement.
Over a year after the redevelopment work had been done and the new streets had been laid the telephone company filed its claim which had been denied.
I think it is important that the Court recognize the nature of the facilities that are here involved.
By and large they are massive.
They are permanent.
They are embedded in the ground, and we have contended that they have become real estate.
They consist primarily of conduits which are about four inches in diameter which carry cooper cables which have as many as 3600 pairs in them.
Those conduits extend between underground vaults which are known as manholes.
These manholes are larger than a man is tall.
They are like a little subterranean womb.
The walls are a foot thick.
They have a collar that connects the top of the manholes to the street and when the--
Unidentified Justice: Mr. Crenshaw, I suppose the Fourth Circuit has determined that as a matter of state law these things were personal property.
Is that right?
Francis N. Crenshaw: --Justice O'Connor, I think that the Fourth Circuit must have been persuaded by the telephone company's interpretation of Transcontinental which is--
Unidentified Justice: Well, in any event that was the Fourth Circuit's determination, was it not?
Francis N. Crenshaw: --I think that is a reasonably fair statement.
I think there is a little equivocation there, yes.
Unidentified Justice: All right.
Do we not normally defer to a Circuit Court of Appeals determination on state law issues and leave that alone?
Francis N. Crenshaw: I would think so, but the difficulty here is I think you had a flat out decision by the Virginia Supreme Court which is contrary to the Fourth Circuit, and the Fourth Circuit in my judgment was a not too exhaustively reasoned opinion with respect to that so that I think that it is not facetious for me to assert in this Court that these facilities were in effect real property and not personal property.
Manifestly they are so massive and so connected that they have to be real property, and the case Transcontinental which was cited by both parties in this case holds that underground gas mains are real property, and the rationale that the Fourth Circuit relied upon is a rather small point which was not really applied to the underground mains but was applied to machinery that was in the Transcontinental case.
That is the reason that I mention that here.
Unidentified Justice: Is it essential to your argument that we disagree with the Court of Appeals for the Fourth Circuit about what kind of property?
Francis N. Crenshaw: There are three bases on which I would contend that the claim would be denied.
That is one of them.
I do not have to win on all three, but I think they are all three sound.
The first one is that the Act did not cover utilities at all.
This, I think, is the most compelling argument.
The Uniform Act was passed after a decade of extensive congressional committee inquiry.
It followed a prior decade when the highway statutes had been considered.
During the 1950's the Federal-Aid Highway statutes came along and in those hearings there was expressed and careful attention to the requirements of the utility companies.
The Highway Act contains Section 123 which dealt with utility companies.
Contrarywise during the 1960's when the hearings were being held on the Uniform Relocation Act there was no congressional inquiry into the plight of the utilities.
Unidentified Justice: Why do you suppose that is?
It seems so strange that no discussion of that emerged.
Francis N. Crenshaw: --The only reason that I can say is that the Congress was satisfied with the solution given by the Highway Act because that solution which was in Section 123 was retained.
It was not changed.
Unidentified Justice: But, of course, in the language of the Relocation Act in defining a person it did not admit of any exception, and I think it is just strange that there would not be some reference in the legislative history to the utility problem.
Francis N. Crenshaw: I think it is strange that in all of those hearings with the hundreds really of representatives that there was no movement by utilities to have had their particular problem addressed.
I think that the overwhelming reason was that the Uniform Relocation Act dealt with the acquisition of private property by and large from individuals and small businesses.
The C&P does not have private property.
It does not have a compensable property interest in its franchise.
The Fugate case by the Supreme Court of Virginia has held that their interest as a licensee does not amount to a compensable property interest so that I think that the purpose of the Uniform Act was to help those people whose property was being taken by eminent domain and to supplement the benefits.
The people who were getting fair market value under the principles of eminent domain were not being fairly treated.
A hardware store, for example, that was in a redevelopment project if their property was condemned they would get the fair market value of the building, but unless they got relocation costs they would not get the cost to move to a new location and they had to compete against another hardware store in the community who had the fair market value of their property.
It had not been taken, but they did not have to move.
That was the kind of disproportionate burden that I think the committees looked into.
The statistics are overwhelming that that is the sort of thing that they inquired about.
I think the statute had primarily humanitarian interests, the small person, the mom and pop business, those things who moved personal property in the common ordinary sense of personal property.
I just do not see anywhere in this statute or its legislative history any contemplation of the problem of utility lines, and as the District Court noted this matter was not under the table or hidden or secret at all.
There was a live controversy right across the Potomac in Virginia where PEPCO and the Virginia Highway Commission were going through all sorts of litigation about this very matter, but it was related to Section 123 of the Highway Act so that I think that the Act just simply did not contemplate it.
When you compare the Uniform Act to actions of the Congress before the Highway statute or actions of the Congress afterwards, in 1972 it adopted legislation which permitted relocation costs to utilities in the District of Columbia.
Specifically the committees dealt with that problem.
They recognized that if they did not pass this the utility companies would not be compensated, and that was two years after the Uniform Act.
Again, this past May in the Senate they have adopted amendments to this very statute that we are talking about.
I realize this is after this claim and after this decision, but still it is the same committee of Congress.
It is the same thrust that is being explained.
I think that the action by the Congress or the Senate this last May is very revealing about the congressional intent.
Unidentified Justice: Does the Uniform Act apply to all federal condemnations?
Francis N. Crenshaw: Yes, it does.
Unidentified Justice: Including highways?
Francis N. Crenshaw: Yes, it does.
With respect to the highways it is interesting that Chapter 5 of the Highway Act was amended and repealed, but Section 123 of the Highway Act which pertained to utilities was left exactly as it was so that the Uniform Act came up and sat on top of Section 123.
It refers to the comment by Justice Powell in the previous case.
There you have a specific statute, Section 123, which deals with utility relocation.
You have a general statute, the Uniform Relocation Act, which was passed in foreknowledge of the Highway statute which says nothing about it.
I think that simply shouts out that the Uniform Act does not contemplate utilities.
There are 21 federal agencies which administer some 50 programs that are affected by this Act.
None of them have regulations which pertain to utility relocation.
HUD which is the agency which was involved here has a specific regulation that the relocation costs for a utility transmission line is not an eligible cost unless the state law requires it.
That regulation was in effect before the Uniform Act.
It is in effect after the Uniform Act and there was no change by HUD.
So surely the agencies which interpret this Act as well as the utility companies in the localities have dealt with this Act as not including utilities.
Now there are two threshold requirements.
I have alluded briefly to one, that is, you must move personal property.
I contend that it is not personal property.
I think these facilities manifestly are real property, but secondly they were not moved.
When the street was discontinued the collar to this vault that I described was destroyed.
The vaults themselves were filled with sand and abandoned.
The conduits were abandoned and the cable which was in the conduits was withdrawn and sold for salvage where it was profitable to do so.
Unidentified Justice: What relocation expenses so-called are they claiming?
The cost of filling up the holes, for example?
Francis N. Crenshaw: Justice White, it is a little hard for me honestly to answer that because we have not got into damages.
The claims are very stark.
They have not been flexed out at all.
But my impression of those claims is the cost of constructing in the new streets--
Unidentified Justice: A new manhole.
Francis N. Crenshaw: --the new facility, right.
So there is not any movement from point A to point B, but it is a discontinuance in the old street and a new building job in the new street.
It is a construction job, not a move.
I think the last threshold requirement is that the real property must--
Unidentified Justice: You do not think that if the City just closed the street, for example, and there was not any so-called move at all there would not be any claim here?
Francis N. Crenshaw: --Well, I will say this.
If the City simply closed the street and there was no redevelopment project, no acquisition--
Unidentified Justice: Well, assume that Washington, D.C. builds a convention center that covers two or three blocks and you cannot go up and down Tenth Street any more.
They closed that street.
They built a building on it.
I suppose the utilities took their... Suppose they filled up their manholes in that street.
Under their claim in this case they would not have claimed anything.
Francis N. Crenshaw: --I think they would have claimed and the reason I say that--
Unidentified Justice: For just filling up the holes?
Francis N. Crenshaw: --No, the claim is far more than filling up the holes.
We would give them the money to fill up the holes.
But the point... When they terminate a block here they have to build a new block there because the service has got to be continued.
Ordinarily these lines are through.
They are not just serving little blocks, but these are transmission lines which go the extent of the city.
If you cut one here you have got to loop it around so it connects to another place.
You have got to keep the service going.
Unidentified Justice: Unless you have already got a utility line in some other street that would serve the purpose.
Francis N. Crenshaw: Right.
Now I do think if they discontinued a line and did not connect somewhere else I do no know of any claim.
But we do not have that in this case.
Unidentified Justice: All right.
Francis N. Crenshaw: I would like to reserve the rest of my time for rebuttal.
Chief Justice Warren E. Burger: Mr. Schwartz.
ORAL ARGUMENT OF JOSHUA I. SCHWARTZ, ESQ., ON BEHALF OF FEDERAL RESPONDENT IN SUPPORT OF PETITIONER
Joshua I. Schwartz: Mr. Chief Justice, and may it please the Court:
In the view of the United States the Court of Appeals has misinterpreted the pertinent provisions of the Federal Uniform Relocation Assistance Act.
It is our submission that that Act was never intended to address the question of who should bear the cost of reconstructing utility lines when those lines are recreated in a new location because of local public improvements in the very streets in which they have been located pursuant to local franchises.
Unidentified Justice: Mr. Schwartz, the Solicitor General has changed his mind in this case from the time of petition for certiorari.
Am I correct?
Joshua I. Schwartz: There has been some change, Mr. Justice Blackmun.
Our recommendation to the Court most forthrightly was that the petition should be denied.
I take it that is a moot question.
Unidentified Justice: I am not insisting that you do not have a right to change your mind.
I just want to be sure.
Joshua I. Schwartz: We have to that degree certainly... Well, the question is no longer presented whether the Court should have granted the petition.
The petition has been granted.
Unidentified Justice: I know but that is not the extent of your prior position.
Joshua I. Schwartz: That is right.
Unidentified Justice: Your prior position was that this was a reasonable construction of the statute.
Joshua I. Schwartz: If I may continue, Justice White, that is quite right.
Unidentified Justice: You have changed your mind on that?
Joshua I. Schwartz: We have concluded that it is an erroneous construction of the statute.
The position we urge is the same one we urged in the Court of Appeals, and if I might just say this, our reason for concluding that it is erroneous is based frankly on a closer study of the statute.
We believe that we have identified concrete statutory language that this claim simply does not fit.
So that contrary to what we said in the unfortunate brief we filed at the petition stage, this case simply does not in our view involve interpolating an exception into plain statutory language that covers the situation.
That is what the Court of Appeals thought it involved, and if that were true the Court of Appeals might be right.
But we believe that the statutory requirement which says that payment shall be made for moving of personal property or for moving one's self or one's business simply cannot comfortably be made to cover the situation of reconstructing utility lines.
I think the words are important, and the reality is important.
This really is a construction job.
The Respondent... I refer to C&P as the Respondent... says in their answering brief that we are in no position to deny that their claims represent certain matters.
One of the things they say they represent are the costs of reconstructing those lines.
I take that to be a concession that what we are talking about for the largest part is the cost of digging new trenches, pouring new concrete, installing new pipes, laying and installing new cables, and it seems to me that it would be a very odd choice of words indeed to use the words "moving personal property" if one wanted to describe those operations and paying for those costs.
If I might turn to something Justice O'Connor asked, the Court is not confronted necessarily with the question of whether the Fourth Circuit misunderstood Virginia law.
There is a question here whether this equipment, these lines are real or personal property.
The government is skeptical of the Fourth Circuit's conclusion that it is all personal property.
If the Court please, the Petitioner has lodged with the clerk an illustration of a sample utility manhole which is as far as we can see an underground building, and if you look closely at the Court of Appeals' opinion I would suggest that the Court of Appeals may have simply misunderstood what the physical equipment involved was and what the operation of replacing it was.
The Court of Appeals appears to have believed that this equipment was removed from its location and transferred to a new location.
Because of that misunderstanding I think the ordinary deference to the Court of Appeals reading of state law is not required here.
But even if it were, the question necessarily presented is a federal one, the question of what Congress meant by "moving".
That is the term in the federal statute as to which there is no reason to believe that state law was intended to be controlling.
Unidentified Justice: I have a little problem.
The difference between personal property and real property is determined by state law.
Joshua I. Schwartz: Ordinarily we would say that would be true but--
Unidentified Justice: It is ordinarily any way.
Do you know any other way to determine it?
Joshua I. Schwartz: --If the federal statute indicated an intent otherwise, but in this case we do not--
Unidentified Justice: Could the federal statute say that property in a manhole in Virginia is personal property?
Joshua I. Schwartz: --The federal statute does not--
Unidentified Justice: Can a statute say that, a federal statute?
Joshua I. Schwartz: --A federal statute could say that for the purposes of this statute the term "personal property" shall include the following, and the Congress could choose that manner of legislating.
We are not suggesting that that is what it has done here.
Unidentified Justice: Then next they can say a man is a woman in Virginia.
Joshua I. Schwartz: Congress probably could do that, Your Honor, but again that is not the mode of analysis by which we perceive Congress has used the term 'moving personal property
"or moving it itself. "
"We think that that choice of language does not comfortably apply to this process of abandoning capital facilities and recreating new ones in new locations. "
We would submit that at a minimum this language "moving personal property" is sufficiently ambiguous that it is not sufficient to stop with the statutory language, and it is sensible to go beyond it and look at the usual indicia of legislative intent.
In this case the first thing we are confronted by is the rather stark silence in the ten year long legislative record, and I might add that representatives of the American Right of Way Association which represents the interests of the utilities insofar as rights of way are concerned did speak at the hearings on this.
But they never suggested that this statute would or that it should alter the established common law rule.
Accordingly, while this would be an easier case if someone has said the obvious, it appears to us that everyone understood that this issue, the question of relocation assistance, was one that was governed by a well-established rule of state law and that absent any indication of an intent to change it Congress must have intended to leave it where it was especially because in 1956 in the Highway Act Congress had demonstrated that it was aware of the state law rule and that it chose for Highway Act purposes to defer to that state rule.
Now the Uniform Relocation Act does not say except insofar as provided by other law the following payments shall be made.
It says all federal acquisition shall be controlled and federally assisted acquisitions shall be controlled by this statutory scheme.
Given that, it is difficult for us to understand why Congress apparently quite deliberately left in effect provisions of the Highway Act which said thou may pay relocation assistance but only if state law provides for it.
If there were any question left in the wake of that Act in 1972 when Congress turned to the question again in the District of Columbia Public Utilities Reimbursement Act when Congress provided specifically for the purposes of interstate highways that these monies should be paid, that portion of the statute would have had precisely no effect and would have been entirely superfluous if the Uniform Relocation Act in 1970 had set aside the rule of Section 123 of the Highway Act.
As it happened, Congress did set aside other provisions of the Highway Act, Title 23, Sections 501 and the following sections which dealt with other provisions of relocation assistance.
So one cannot even say that Congress might have overlooked the Highway Act.
If you go through this statute and if you go through the House and Senate committee reports you will find an extraordinarily detailed listing set out in haec verba of each of the statutory texts that was repealed in many sections of the Highway Act that are to be found there.
It is just very difficult for me to believe that Congress just missed this.
It appears that Congress chose to leave Section 123 and its rule which defers to state law in effect.
There is another thing that one can garner from looking at the several occasions on which Congress has addressed the question of relocation assistance.
Congress has used different language to speak to this.
In the District of Columbia Act of 1972 Congress spoke of abandoning, relocating, reconstructing, reestablishing, and used a large number of terms which speak to the capital building process.
Unidentified Justice: Mr. Schwartz, did that bill go through the same committee that this bill, the Uniform Relocation Act, would have gone through?
Joshua I. Schwartz: Justice Rehnquist, I do not know the answer to that question, and I am skeptical that--
Unidentified Justice: I wonder how relevant it is if you do not really have any knowledge that the same individuals on a committee compared the two and chose to leave them the way they were.
Joshua I. Schwartz: --I think we have something special because there are three stages to this.
There is Section 123.
There is the Uniform Act, and there is the D.C. Act while perhaps the action of one committee in 1972 does not say that much about what the 1970 Congress though the entire statute that was enacted would have been of no effect at all.
I would question whether we ought to attribute that intent of Congress in 1972.
We would suggest that when Congress wishes to address this subject it knows how to do so and that it did not do so in the Uniform Relocation Act and that the judgment of the Court of Appeals accordingly should be reversed.
Chief Justice Warren E. Burger: Mr. Kelly.
ORAL ARGUMENT OF JOSEPH L. KELLY, ESQ., ON BEHALF OF RESPONDENT
Joseph L. Kelly: Mr. Chief Justice, and may it please the Court:
I believe we should first make quite clear that there is no uncertainty on the record in this case about the nature of the telephone company's claim, the nature of the expenses for which it claims.
There is no need to speculate from what is said in the briefs whether they correctly described them.
Those claims were filed in the beginning and have been in the possession of both Petitioner and the federal defendant since that time and still are.
Those claims are for the nonbetterment cost of reconstructing, the nonbetterment cost of moving utility lines, a completely familiar concept that is observed and applied every day.
It involves determining the true cost of moving by starting with the cost of rebuilding which is inevitably required whenever you move a utility line for the most part unless there happened to be overhead poles that can be moved or wires that can be moved and used again which would be exceptional.
But in all events in the multitude of cases in which a utility company moves its lines at the expense of someone else whether by contract or under voluntary arrangement at the time the parties well understood here from the beginning from the time these claims were filed as they understood when they stipulated that a similar expense if it happened to be a municipal system, stipulated in those words in this case, that the nonbetterment cost if it happened to be a municipal line is part of the cost of the project or is carried as the city's share, I guess the city's share of the total project cost.
So there should not be any uncertainty about the fact that this case from the beginning has involved claims for the relocation, for moving the lines in the only sense in which the vicinities of most displaced persons which happen to use heavy or large equipment and structures which are not part of the land taken because they are severed from it by agreement or by law.
As the Fourth Circuit has determined it, these were severed by law.
They were personal property.
Since they are not taken, then the expense of moving them, relocating them would be one of those inequitable expenses and burdens borne by a particular class of people instead of being borne--
Unidentified Justice: Mr. Kelly, you used the word "moving" a moment ago in your argument.
These facilities were never moved were they?
Joseph L. Kelly: --They were moved in the sense in which that term is most frequently moved in the same sense in which it is used... If the hardware store referred to in Mr. Crenshaw's brief had been the property of the hardware store owner severed from the land by agreement and he had a right to move it or if some structure that was part of it he had a right to move from the land, it did not belong to the owner of the land.
It was taken.
Unidentified Justice: Are there two manholes out there where there used to be one?
Joseph L. Kelly: Two manholes, Your Honor?
Unidentified Justice: Yes.
Joseph L. Kelly: There used to be one?
Unidentified Justice: Yes.
Joseph L. Kelly: No, Your Honor.
The facilities that were moved were simply duplicated by construction in a new place.
Unidentified Justice: Did they take up the manhole and move the manhole to another place?
Joseph L. Kelly: The manholes were not dug out of the ground and lifted and transferred to another place.
Unidentified Justice: So they were not moved, were they?
Joseph L. Kelly: There was no physical movement of them from one spot to another.
I submit that the language of the Act when it refers to moving personal property has to apply if the Act is to be intelligible at all, for instance, to this same hardware store operator's store cases, show cases, other trade fixtures which he has a right to move but which it is not sensible, not economically feasible for him to move bodily to the new place.
But no one would doubt that he has within the meaning of that Act moved those structures and facilities when he takes them down and scraps or abandons them when it is not practical to move them bodily and rebuilds and reconstructs them in a new place.
Unidentified Justice: Is there anything in the legislative history that will help you?
Joseph L. Kelly: I beg your pardon, Your Honor?
Unidentified Justice: Is there anything in the legislative history that will help you?
Joseph L. Kelly: I am so sorry, Your Honor.
I could not hear.
Unidentified Justice: Is there anything in the interpretive history that will help you in saying that this is what you mean by moving?
Joseph L. Kelly: By moving personal property?
Unidentified Justice: Yes, sir.
You cited a hardware case.
What else do you have?
Joseph L. Kelly: The fact that in common acceptation when one of the tower lines constructed on one man's land in sight of us all is taken down and rebuilt on another man's land, the whole world would say the company has moved its power line.
Unidentified Justice: But if you had a power line on one land and built a brand new power line on another man's land that would not be moving it, would it?
Joseph L. Kelly: Yes, I think, Your Honor, it would be.
Unidentified Justice: It would be moving?
Joseph L. Kelly: You would still... We would all still say the company has moved its power line.
Now we should not from that proceed to the assumption that a statute authorizing payment for the cost of moving that line would entitle anyone to be paid for building himself a new line the whole cost of that which might be a much bigger, better and newer line than the old one, and that is not the cost that was claimed here.
It is not the cost that all utility companies have always claimed when they were entitled, admittedly entitled to claim the nonbetterment cost of moving.
You start with the cost of the new construction.
You must deduct from it the unused value, any difference in value between the new line and the value of the old one that they gave up.
You do not get the benefit of new construction.
Our claims do not claim it.
Under our interpretation of the Act the displaced person does not get the benefit of new construction.
He gets the cost of replacing what cannot be moved.
It is not part of his cost of just moving if he builds a better one.
That is the cost of an improvement which he cannot claim and should not received.
But he has moved any shared structure of any kind which he had a right to take.
It was not taken with the land because it belonged to someone else.
That is why it was personal property.
He did not take it with him to the new land, but if--
Unidentified Justice: Mr. Kelly, will you look at Section 202(a) that is quoted in the Appendix to the government's brief.
I am sure you are familiar with the statute.
It talks about whenever the acquisition of real property, et cetera, and then it tells what you can recover for.
The first is actual, reasonable expenses.
The second is actual direct losses, and the third is actual reasonable expenses in searching for replacement.
Does your claim come under (a)(1)?
Joseph L. Kelly: --It comes under (a)(1), Your Honor.
Unidentified Justice: You are not claiming actual direct losses of--
Joseph L. Kelly: That is what, Your Honor?
Unidentified Justice: --You are not claiming under (2) then that it is actual direct losses of tangible personal property as a result of moving.
Joseph L. Kelly: No, the figure representing that loss appears in these claims in only one indirect way.
When you determine what was the cost of relocating this utility line from the old land it used to be on to the land it is on now, you start with the cost of building the new line.
You deduct from that the difference between the value of that new line and the old one that you gave up.
You must deduct also the salvage value of--
Unidentified Justice: I do not know where you get that measure of damages under (1) which simply talks about actual reasonable expenses in moving himself, his family, business, farm operation or other personal property.
It does not seem to allow the kind of computation you made.
Joseph L. Kelly: --Because, Your Honor, we would... The same statement... These same claims although we do argue and it is still our position that they are the cost of moving these utility lines the same thing is also--
Unidentified Justice: But the statute does not say cost.
It says expenses.
Joseph L. Kelly: --I beg your pardon, the expense of moving the lines.
It is not only the expense of moving the lines.
It is equally as true that those same expenses or the expense of moving a business--
Unidentified Justice: But if you do not move your line at all, if you do not move the physical personal property out of the ground how can you have any actual reasonable expenses incurred in moving it?
Joseph L. Kelly: --If that view of the expense of moving personal property were accepted which we still contest, if that were accepted the same figures still represent the expense of moving a business which is defined in the statute very carefully so as to mean any legitimate activity of business cannot be physically moved.
It is an activity.
It is not a thing physically.
Unidentified Justice: What section of the statute is it that defines carefully the expenses incurred in moving a business?
Joseph L. Kelly: 4601, subparagraph 7.
Unidentified Justice: Is that in your brief?
Joseph L. Kelly: Oh, yes, Your Honor.
It is in the Appendix to the government's brief.
It is in the opening pages of our brief on the merits.
It is 4601 (7), and it is in this instance every expense claimed was also we think it was an expense of moving a utility line.
Whether it was or not is was a sure expense of moving the lawful activity of using these lines from the land where they used to be used to serve the public.
That is what Senator Caplan defines as the meaning of the word "business" wherever used in the Act.
It was most assuredly the cost of moving that business activity--
Unidentified Justice: All I see... I am looking on the Statute Involved Section of your brief, the red brief, at page vii and viii, and all I see set off for (7) is the term "business" means any lawful activity, excepting a farm operation conducted primarily for the sale of services to the public.
Joseph L. Kelly: --That is correct, Your Honor.
That is not all of that section, but that is the act of business that we moved.
Then 4622(a) provides that payment shall be made for the cost not only of moving personal property... in this case it happened to be the same thing... it is the cost of moving a business which is that lawful activity that we were conducting on that property and also for the cost of just moving.
In the case of any business organization the business corporation, partnership or association cannot physically move.
It has no physical existence.
Unidentified Justice: Now you have got a proviso in (2), 4622(a)(2) where you say you can also include
"actual direct losses of tangible personal property as a result of moving or discontinuing a business. "
but then it goes on to say
"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. "
So that sets a ceiling on the kind of damage you are claiming of the amount of expenses you have incurred to relocate.
Joshua I. Schwartz: No, Your Honor.
I think it does not.
I think the clear sense of that section is altogether different from that.
It sets a ceiling on an expense we do not claim here.
No item of our claim is for the loss of property we left.
The sense of that section (2) is to cover the very common situation very likely to arise in which the owner of property that is not taken because it is not part of the land still like these manholes not feasible to move bodily.
The owner may just abandon and give up.
He may never find another place for part of his business, and yet he is a displaced person because he moved his business.
He just did not move that part, and he abandoned and lost it in place and never reconstructed it anywhere or in any other sense moved it.
In such case he just loses that property and that would be an expense borne by him, not borne by anyone else.
Yet one of the burdens, the expenses that that project required some persons to pay and the sense of the Act is that he should be reimbursed for that loss.
That would occur--
Unidentified Justice: Mr. Kelly, I guess the lower courts have not resolved these questions yet have they?
They just were dealing with whether the utilities were covered at all and then were going to send it back to resolve some of these things.
Joseph L. Kelly: They have not considered these questions except to the extent that they are necessarily included in the legal conclusion that a company in moving its facilities has moved or at least has moved its business or has moved its personal property from one place to another.
We think it moved all three.
It has not considered them directly because the contention that we have not moved our facilities was never made in the lower court or in any of the administrative proceedings and were stipulated by the parties alleged in the complaint that we did move all of our facilities, admitted in the answer that we did move all of our facilities, stipulated that we did move all of our facilities, stipulation agreed to by all the parties.
The significance of that fact... I do not contend that the parties, the Petitioner and the government, bound themselves by the legal conclusions involved in the use of those terms.
It is highly significant, though, to my contention that that is the usual and ordinary acceptation of the word "moved its facilities" when we are dealing with any displaced person whose facilities, whose personal property includes property of such physical nature that it needs to be rebuilt in a new place.
Unidentified Justice: Mr. Kelly, may I ask you a question?
Joseph L. Kelly: Yes, Your Honor.
Unidentified Justice: Am I correct in believing that the Court of Appeals did not rely on the provision that pertains to the moving of a business?
They relied on the moving of personal property as I remember the opinion.
Is that right?
Joseph L. Kelly: They did not mention--
Unidentified Justice: They did not mention 4637.
Joseph L. Kelly: --the removal of personal property although they plainly regarded that the reconstruction of these lines amounted to moving the lines.
Unidentified Justice: But moving the lines is a question--
Joseph L. Kelly: They bear fully understood--
Unidentified Justice: --But the question of moving a business they did not really face up to?
Joseph L. Kelly: --It was never discussed.
Unidentified Justice: Yes, because one might argue... I do not know if it is right or not... that that thinks in terms of moving an entire business or moving a facility or something like that.
Joseph L. Kelly: That point is indeed argued in the reply briefs.
The courts below did not consider any of these contentions now being made as to the meaning of the expression "moved" in the case of a corporation, moved from land, moved personal property from land when in fact it had to be rebuilt elsewhere.
It did not consider any of those because made for the first time in the government's brief on the merits never once advanced before and the Court will review the pleadings, the stipulations.
It is perfectly apparent that we were all agreed then that the utility company here, the telephone company, had moved its lines to the new places, moved all of its facilities to the new places stipulated in so many words that--
Unidentified Justice: Did they agree that the move of the personal property was a move made as a result of the acquisition of real estate?
Joseph L. Kelly: --That is the one thing they did not.
The answers denied although the government did not agree with this, that is, the Department of Housing and Urban Development in the administrative review disagreed.
They contended that we did not move as a result of the acquisition.
But they admitted that the removal of all of these facilities occurred.
That is expressly admitted in the answers, alleged in the complaint, admitted in the answers and stipulated in the stipulation of facts.
Unidentified Justice: Can I go back to when I raised the point?
Does the record still show that there were two manholes?
Joseph L. Kelly: I think the testimony makes clear that the manholes were abandoned and left in the ground.
Unidentified Justice: Well, how in the world can you say you moved them?
You moved one that did not move.
Joseph L. Kelly: In the same sense in which we say they rented the building.
The shed which one company has rented and used for years to store machinery on the land of another after which rebuilds on a new place we all say the company has moved its shed to the new place.
Unidentified Justice: I guess if we can put a grain elevator into Commerce we can do that.
Joseph L. Kelly: It is indeed possible and under this view of what is meant by "moved" the utility companies and all other displaced companies including the chainsaw company involved in the Beaird-Poulan case discussed where they moved plant.
They did not pick that plant up and move it, Your Honor.
They did not pick much up and move it.
They moved a whole plant, and the Court concluded that the Beaird-Poulan moved.
It is also the answer to the suggestion that maybe you have to move your entire business.
The chain saw plant was most assuredly not the only business of the Emerson Company.
That is why the statute was so careful to define what activity is, what a business means.
It means any activity conducted for a business purpose.
That activity was moved.
Whether we all could agree that the company moved that is what everyone would say in common parlance and that the power line was moved, the underground lines were moved, that is what everyone would say in common parlance.
We say that is what the Act meant.
Whether we could all agree on that or not, most assuredly the activity was moved to the new location.
I trust the Court understands that from the time when the claims were first filed right through... I cannot recall how many years of administrative consideration of those claims... two years in the trial court, a total of three years in litigation, the parties seem to be fully agreed that we had moved the lines and that we had moved.
There was never any contention to the contrary ever asserted.
That continued to be true down through the time when the government's first brief was filed.
Having declined to join in a petition for writ of error, the government's position was not quite fully stated just now by the Solicitor General.
The statement there twice was that the plain terms of the Act that the Court of Appeals had merely followed the plain terms of the Act.
Nothing has happened.
At that point the Department of Justice had been defending this litigation on behalf of the United States for more than three years.
It has in the trial court supported the administrative interpretation until the Fourth Circuit held that it was contrary to the plain terms of the Act after which the Solicitor General concluded and informed the Court in its brief in opposition that the Court of Appeals cannot be said to have erred in following the plain language of the Act and that the arguments to the contrary of the Petitioner and amicus supporting the Petitioner were made despite the Act's plain terms.
Nothing has been said to explain how in the next five months the Act's plain terms became any less plain.
I think attention should be called to the anomalous consequences that would arise out of any interpretation of the word "move personal property" in this or move property that would limit it to the case when it can be bodily transplanted.
The law was never intended to treat differently the power company, the gas company that takes up his lines and moves them and uses them again and the one where it is not feasible and not sensible to do that and puts new ones in the new place and recovers compensation only for the difference between the old and the new or the loss, the actual cost of putting itself back where it was by reconstructing and relocating its facilities in a new place.
Chief Justice Warren E. Burger: Do you have anything further, counsel, by way of rebuttal?
ORAL ARGUMENT OF FRANCIS N. CRENSHAW, ESQ., ON BEHALF OF THE PETITIONER -- REBUTTAL
Francis N. Crenshaw: I have just a couple of words if I might, sir.
I would like to call to the Court's attention that the complaint at paragraph 7 alleges that these lines were moved.
The Redevelopment Authority's answer at paragraph 7 denies those allegations.
The stipulation... That is at page 21 of the Joint Appendix... which refers to the term C&P has removed.
Then we stipulate that then any that have been removed were removed subject January the 2nd.
I do not think we have articulated well our argument on removal, but it certainly has been in the case.
The second thing I would like to say is that this statute was passed to supplement benefits of people whose private property was taken.
In this case we are dealing with the acquisition or the removal or reconstruction of lines in public property.
The public street was where the lines were.
When the streets were closed the Redevelopment Authority owned them.
It is a political subdivision of the state.
It is still public property.
Nowhere in this are we talking about taking a compensable property interest, and the telephone company has not cited and I do not believe they can cite any case in which benefits under the relocation statute are conferred unless there is the acquisition of a compensable interest in real property.
We think the claim should be denied.
Chief Justice Warren E. Burger: Thank you, gentlemen.
The case is submitted.
Unidentified Justice: The Honorable Court is now adjourned until tomorrow at 10:00.