JAMES T. LICHOULAS, JR., Individually and as Trustee of the Appleton Trust, the Appleton Mill No. 5 Parking Trust, the Appleton Mill No. 5 Realty Trust, and the Parcel 291 Realty Trust v. CITY OF LOWELL

Plaintiff initiated this action on March 23, 2009, seeking a determination that Defendant’s April 25, 2006 eminent domain taking of property owned by Plaintiff was unlawful and invalid. That same date, Plaintiff filed a Motion for Endorsement of Memorandum of Lis Pendens. Defendant filed its opposition to Plaintiff’s motion on April 23, 2009, together with Defendant’s Motion to Dismiss Pursuant to Mass. R. Civ. P. 12(b)(1) and 12(b)(6). Plaintiff opposed this motion through a written opposition filed on April 30, 2009. A hearing on the motions was held on May 7, 2009, at which both parties were heard. The court gave both parties additional time to submit further briefing on certain jurisdictional issues and they submitted supplemental briefs.

The pleadings establish that in 1986, Plaintiff obtained a license from the Federal Energy Regulatory Commission (FERC) to operate a hydroelectric power project on certain property located at 169, 171, 291, 307, and 351 Jackson Street in Lowell (Appleton Mill Property). Thereafter, a portion of the Appleton Mill Property was operated by Plaintiff as a hydroelectric power facility for an indeterminate period of time (Appleton Trust Project). However, sometime between 1994 and 2004, Plaintiff ceased operation of the Appleton Trust Project. In September of 2004, FERC contacted Plaintiff and informed him that it considered the Appleton Trust Project to have been abandoned and that his license may be terminated. Plaintiff informed FERC in November of 2004 that he intended to file a repair plan for the Appleton Trust Project by March of 2005. Plaintiff failed to file the repair plan but FERC did not take any further steps to terminate Plaintiff’s license at that time.

On April 25, 2006, Defendant took the Appleton Mill Property by eminent domain pursuant to G. L. c. 79 and c. 121B. Defendant did not intend to continue operating the Appleton Trust Project as a hydroelectric power facility, but planned to use the Appleton Mill Property as part of a revitalization project planned for downtown Lowell. After Defendant gained control of the Appleton Mill Property, it requested an inspection of the Appleton Trust Project by FERC. The inspection, conducted by FERC on June 15, 2006, indicated that the Appleton Trust Project was in a state of significant disrepair.

On April 13, 2007, Plaintiff filed a complaint against Defendant in the United States District Court for the District of Massachusetts alleging that the Federal Power Act (FPA) prohibited Defendant from taking the Appleton Mill Property because Defendant was not competent to maintain and operate the hydroelectric power facility at the Appleton Trust Project (USDC Action). Defendant moved to dismiss Plaintiff’s complaint, which the court allowed, noting that “both parties recognize that the validity of plaintiff’s license lies at the heart of this case.” Lichoulas v. City of Lowell, United States District Court for the District of Massachusetts, Civil Action No. 07-10725-RWZ (March 31, 2008). The Court noted that the status of Plaintiff’s license was then properly pending before FERC and those proceedings should conclude before any federal action could be ripe. Id.

Plaintiff appealed the USDC Action to the First Circuit Court of Appeals, which affirmed the dismissal of Plaintiff’s complaint. See Lichoulas v. City of Lowell, 555 F.3d 10 (1st Cir. 2009). Plaintiff subsequently sought endorsement of a memorandum of lis pendens in both the USDC and the First Circuit. Both courts denied the requested memorandum. On September 18, 2008, without a formal hearing, FERC issued an Order Terminating License by Implied Surrender for the Appleton Trust Project. Plaintiff appealed this decision to the DC Circuit Court of Appeals, where it is pending.

Plaintiff argues that his claim is properly before this court because it challenges Defendant’s taking of the Appleton Mill Property under both federal and state law. Plaintiff also relies on language in the USDC decision, which he argues mandates that this action be brought in state court. Plaintiff further argues that since his complaint seeks the return of title to the Appleton Mill Property, his claim is properly in the Land Court and a memorandum of lis pendens is appropriate. For the reasons set forth herein, this court disagrees.

Because Defendant has challenged this court’s jurisdiction under Mass. R. Civ. P. 12(b)(1), this court must address the factual issues pertaining to jurisdiction. [Note 1] Once jurisdiction has been properly challenged, “a rule 12(b)(1) motion supported by affidavits places the burden on the plaintiff to prove jurisdictional facts.” Callahan v. First Congregational Church of Haverhill, 441 Mass. 699 , 709-10 (2004) (quoting Hiles v. Episcopal Diocese of Massachusetts, 437 Mass. 505 , 516 n.13 (2002)). “Under this factual challenge to the jurisdiction, the plaintiff’s jurisdictional averments in the complaint are entitled to no presumptive weight . . . .” Hiles, 437 Mass. at 516 (quoting Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001) (internal quotations omitted)).

As noted by the Court in the USDC Action, the issue at the heart of this dispute is whether Plaintiff’s FERC license was valid at the time of Defendant’s taking of the Appleton Mill Property. This issue is currently, and properly, pending before the DC Circuit, as the forum with jurisdiction to appeal FERC’s action pursuant to the FPA. If Plaintiff is successful before the DC Circuit, then his challenge to Defendant’s taking will lie under the FPA. Pursuant to 16 USC § 825p, federal courts have exclusive jurisdiction to hear disputes arising from the FPA. See 16 USC § 825p. Although Plaintiff relies on language in the First Circuit Decision to support jurisdiction in the Land Court, this court does not read the language the same way. The First Circuit noted, “[h]ere, the evident prospect that FERC would revoke the license made clear that the federal interest, such as it was, would likely be mooted; and any objection to the taking, or deficiency in adequate compensation, could be and preferably is to be done in state proceedings.” Lichoulas v. City of Lowell, 555 F. 3d 10, 13 (2009). This court interprets the First Circuit to mean that only challenges to Defendant’s taking that are not brought pursuant to the FPA would lie in state court. This interpretation is bolstered by the First Circuit’s further statement that “[t]o the extent that Lichoulas seeks compensation for the taking, the claim is properly brought in state court, as Williamson makes clear.” Id.

The First Circuit view is consistent with the USDC decision wherein Judge Zobel states “to the extent that one or more of the five parcels which comprise the Appleton Mill Property are not part of the Appleton Trust Project, plaintiff’s claim for just compensation for those parcels belongs in state court.” Lichoulas v. City of Lowell, United States District Court for the District of Massachusetts, Civil Action No. 07-10725-RWZ (emphasis added) (quoting Williamson Count Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985). This court reads the language of both federal courts to mean that to the extent Plaintiff wishes to file a claim for money damages, that claim should be brought in state court. However, because Plaintiff’s claim before this court seeks the return of title to the Appleton Mill Property based, in part, on Defendant’s alleged violation of the FPA, that claim should be brought, if at all, in federal court. [Note 2]

Plaintiff argues that because his complaint also challenges Defendant’s taking under state law that his claim is properly before this court. Plaintiff has alleged in his complaint that Defendant’s taking of the Appleton Mill Property violated G. L. c. 164, §§ 35 and 37, and alleged through counsel at the hearing, that he has a potential claim under G. L. c. 79 as well. However, even if Plaintiff is successful in any or all of these claims, the remedy available to him would not be an invalidation of the taking. Rather, Plaintiff’s remedy would be money damages. Therefore, even if Plaintiff is correct that his claim belongs in state court, this court has no jurisdiction under G. L. c. 185, § 1, to hear a claim for money damages where the underlying action does not involve right, title, or interest to land.

Similarly, Plaintiff is entitled to a memorandum of lis pendens only where his action does involve a right, title, or interest to land. G. L. c. 184, § 15 provides that a lis pendens may be granted whenever the subject matter of the action constitutes “a claim of a right to title to real property or the use and occupation thereof or the buildings thereon.” As stated herein, this court does not have jurisdiction over Plaintiff’s challenge under the FPA, the only claim that arguably might entitle Plaintiff to the issuance of a memorandum of lis pendens. Accordingly, Plaintiff’s motion for lis pendens is DENIED and Defendant’s Motion to Dismiss under Mass. R. Civ. P. is ALLOWED.

So ordered.

By the court (Scheier, C. J.)

Deborah J. Patterson

Recorder

Dated: June 11, 2009