Wharf, Inc. v. District of Columbia
133 F. Supp. 3d 29
| D.D.C. | 2015Background
- Plaintiffs (The Wharf, Captain White, Salt Water Seafood) are long‑term lessees operating seafood businesses at the Municipal Fish Market in Southwest D.C.; leases were originally with the District and assigned in 2014 to private developer defendants.
- D.C. enacted the "Water Street" street‑closing legislation in 2011 that authorized closing Water Street contingent on certain conditions (recordation of a ground lease and plat) necessary to effectuate the closure.
- The ground lease and street‑closing plat were recorded in April–May 2014; Water Street thereafter was intermittently and later permanently closed. Plaintiffs allege the closure impaired access and effected a Fifth Amendment taking.
- Plaintiffs sued (filed July 23, 2015): a Takings Clause claim against the District and multiple state/common‑law claims against the Developer Defendants (breach of lease, trespass, nuisance, etc.).
- Defendants moved to dismiss: District argued Plaintiffs’ takings claim is time‑barred and that plaintiffs lack enforceable leasehold interests; developers argued the leases terminated under a three‑year provision (Rule Against Perpetuities clause).
- The court denied both motions to dismiss, holding the takings claim accrued in May 2014 (when conditions were satisfied) and that the disputed lease provision (Provision 38.E) is ambiguous — a factual question unsuitable for dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accrual/statute of limitations for Takings claim | Accrual occurred when the District completed the contingencies and recorded the plat/ground lease (May 5, 2014); claim timely filed | Accrual occurred when the Water Street Act became effective (Aug 17, 2011); three‑year limitations expired before filing | Court held accrual occurred when District satisfied Act’s contingencies (May 5, 2014); claim not time‑barred |
| Whether Water Street closure constituted a taking | Closure impaired access to the leased property and thus could be a taking | Argues no compensable taking because plaintiffs lacked valid leasehold interest (alternative) | Court assumed injury could be a taking for pleading stage and allowed claim to proceed (denied dismissal) |
| Validity/termination of leases (Provision 38.E) | Provision is reasonably read to mean the lease term commenced on the lease date; leases remain valid; or, at minimum, provision is ambiguous | Provision unambiguously terminates lease if New Rent Commencement Date not triggered within 3 years | Court found Provision 38.E ambiguous (reasonably susceptible to both readings); interpretation requires factual review — denied dismissal |
| Appropriate procedural disposition | Plaintiffs urged denial of dismissal and that several claims (e.g., unjust enrichment, tortious interference) survive regardless of lease status | Defendants sought dismissal of all claims tied to leasehold if leases terminated | Court denied motions to dismiss; left factual disputes (e.g., lease interpretation, merits of takings) for later stages |
Key Cases Cited
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (regulation that goes too far may constitute a taking)
- Chippewa Indians of Minnesota v. United States, 305 U.S. 479 (1939) (statute can create a taking on its effective date when language shows immediate transfer of property)
- National Advertising Co. v. Raleigh, 947 F.2d 1158 (4th Cir. 1991) (takings claim accrues on enactment when ordinance’s effects are certain and immediate)
- Navajo Nation v. United States, 631 F.3d 1268 (Fed. Cir. 2011) (takings claim accrues when all events fixing government liability have occurred)
- Ralls Corp. v. Committee on Foreign Inv. in U.S., 758 F.3d 296 (D.C. Cir. 2014) (court need not accept legal conclusions or unsupported inferences on a motion to dismiss)