Benenson v. United States

No. 368-75 (548 F.2d 939) (Ct. Cl. January 26, 1977)

ELR Digest

The Court of Claims holds that governmental action to preserve the historic Willard Hotel in Washington, D.C. has resulted in a taking without just compensation. Plaintiffs hold title to the Willard, having purchased it in 1961. A government advisory committee in 1964 called for demolition of the Willard. In 1965, pursuant to the National Historic Sites Act of 1935, 16 U.S.C. § 461 et seq., the Secretary of the Interior designated the area along Pennsylvania Avenue, including the Willard, as a National Historic Site This designation created a federal presence in the area.

Business having fallen off, the Willard ceased operations in 1968. Plaintiffs sold the hotel's fixtures, equipment, and furnishing to recover their investment and forestall vandalism losses. Plaintiffs negotiated with the government for purchase or exchange of the Willard, but these negotiations broke off in 1972 with the enactment of the Pennsylvania Avenue Development Corporation Act of 1972, 40 U.S.C. § 871 et seq., which contained a one-year construction moratorium. When the moratorium expired in 1973, plaintiffs applied to demolish the nonstructural parts of the hotel, but the permit was denied by the Commission of Fine Arts. The sentiments of the Commission were soon shared by the Pennsylvania Avenue Development Corporation (PADC) which in 1974 recommended preserving the Willard. Congress reenacted the moratorium. P.L. 93-427, 88 Stat. 1170 (Oct. 1, 1974).

By statute, when the Pennsylvania Avenue Development Plan became effective on May 19, 1975, the moratorium remained in effect. Thereafter, the District of Columbia Court of Appeals held that the Commission of Fine Arts lacked authority to consider permit applications such as the plaintiffs'. Commissioner of the District of Columbia v. Benenson, 329 A.2d 437 (D.C. App. 1974). Then plantiffs were enjoined from demolishing or altering the Willard without prior approval of PADC, don't Tear It Down, Inc. v. Washington, 399 F. Supp. 153 (D.D.C. 1975), an injunction which continues in effect. In 1976, Congress authorized acquisition of the Willard by PADC, P.L. 94-388, 90 Stat. 1188 (Aug. 14, 1976), but no funds have been appropriated.

Governmental interference with property use may become so burdensome as to constitute a taking.Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922); United States v. General Motors Corp., 323 U.S. 373 (1945). Beginning in 1972, defendant's acts have deprived plaintiffs of any reasonable use of their property, which has been under a cloud of condemnation. Plaintiffs have no market for the Willard. Cf. Drakes Bay Land Co. v. United States, 191 Ct.Cl. 389, 424 F.2d 574 (1970). Plaintiffs' entire fee interest has been taken.

None of defendant's arguments have merit. Although it is true that a mere drop in property value is not per se a taking, see Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962), there is no potentially profitable use of the Willard property without removal of the facade or demolition. Similarly, although historic preservation is a valid police power exercise, Berman v. Parker, 348 U.S. 26 (1954), Maher v. City of New Orleans, 516 F.2d 1051, 5 ELR 20524 (5th Cir. 1975), such purposes cannot prevail when a property owner has no beneficial use left.

Defendant's further argument, that plaintiffs lost their investment by allowing the hotel to deteriorate, is also without merit. Plaintiffs diligently pursued business and sale arrangements to keep the hotel operating. Moreover, defendant incorrectly contends that plaintiffs, by disposing of the hotel fixtures, are legally barred from claiming their property was taken by governmental action pursuant to a law passed several years after the auction.

Plaintiffs' motion for summary judgment is granted and the case remanded to the Trial Division to determine the amount of just compensation. The date of the taking shall fall between October 27, 1972 and August 14, 1976.

Judge Davis, concurring, emphasizes that the possibility of the taking occurring before August 14, 1976 depends on the resolution of Don't Tear it Down, Inc. v. Washington, supra, in that the plaintiffs may have obtained a vested right to demolish during 1973 to 1974 when no demolition moratorium was in effect. If so, then the taking date must be August 14, 1976.

The full text of this opinion is available from ELR (15 pp. $2.00, ELR Order No. C-1117).

Counsel for Plaintiffs
J. Hampton Baumgartner, Jr., Stanley J. Fineman, Michael B. McGovern
Wilkes & Artis
1666 K St., NW, Washington DC 20006
(202) 457-7800

Counsel for Defendant
Peter R. Taft, Ass't Attorney General; Dorothy R. Burakreis, Hubert M. Crean
Department of Justice, Washington DC 20530
(202) 739-4113

Cowan, C.J., joined by Bennett, J.; Davis, J., concurs.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]