By: Brendan Glynn

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In 2018, John Formant, a real estate developer, brought suit against Washington, D.C. claiming that the current iteration of the Retail Service Station Act (“RSSA”) amounted to a taking of his property, which in this case was a piece of land that a full-service gas station sat on.^[1]  The RSSA dates back to 1977 when the D.C. Council, trying to maintain the number of full-service stations, prohibited these gas stations from converting to non-full service gas stations, with the prohibition eventually being codified in 2005.[2] However, in 2015, the D.C. Council amended the prohibition to make it even more far-reaching. Under this amendment, full-service gas stations were not only prohibited from converting to non-full-service stations but were also barred from being discontinued and converted into another use.[3]

To its credit, the RSSA did statutorily provide a mechanism for an exemption to be granted: the Gas Station Advisory Board (“Board”).[4] The Board would be made up of five members that would recommend qualified applicants to the Mayor for exemption.[5] Yet, despite this requirement, the Board has not had any members since 2006.[6] Thus, without anyone to hear his case for an exemption, Formant had no choice but to keep the gas station operating on his property indefinitely.

In the wake of this lawsuit, journalists picked up on the story, and amendments in February 2019 were once again made to the RSSA to create its current form.[7] This time, the D.C. Council dropped the language prohibiting a full-service gas station from closing and transferred exemption powers from the Board to the D.C. Department of Energy and Environment (“DOEE”).[8]

While this seems like a positive step forward for property owners in similar situations to Formant, especially real estate developers, it is not clear how big of a step this was. First, the effectiveness of the DOEE in its new role is uncertain. The RSSA now requires that the DOEE grant an exemption to a petition only if “[t]he operator of the full-service retail service station is experiencing extreme financial hardship” and “[a]nother full-service retail service station exists within one mile of the station which provides equivalent service facilities.”[9] Further, the RSSA now requires the DOEE to publish rules and procedures for this process. However, two years later, the DOEE has not published any rules or procedures. As there is no case law on this subject either, property owners are left to question what exactly qualifies as “extreme financial hardship” or how long the DOEE will take to rule on a petition. Additionally, Formant’s case does not provide clear answers. After three years of litigating, the parties settled in August 2021 with the terms of the settlement remaining confidential.[10]

The second unclear issue is whether the RSSA as it stands still constitutes a government taking of private property. While the 2019 amendments dropped the discontinuation prohibition, the current RSSA still prohibits the conversion of full-service stations for any other use. [11] Formant argued that both iterations of the RSSA constitute a regulatory taking, which is when government restrictions on real property are overreaching, and a physical taking.[12] The D.C. District Court held that the 2015 version of the RSSA was a physical taking, placing major emphasis on the fact that this version of the RSSA required the public to have access to Formant’s property.[13] Regarding the 2019 RSSA, the Court disagreed with Formant that this version constituted a physical taking, saying the amendments remedied the mandatory public access problem with the earlier RSSA by allowing full-service gas stations to close.[14]

The question of whether the current form of the RSSA constitutes a regulatory taking, however, remains unanswered. The court noted that the requirements of the current RSSA are “quite strict” and even remarked that this Act “may well be . . . a regulatory taking.”[15] Thus, while Formant may have statutorily ended perpetual full-service gas stations, the RSSA still lives on, but only on shaky legal ground.

[1] See Petworth Holdings v. District of Columbia, No. 18-3 (JEB), 2021 U.S. Dist. LEXIS 57799, at *1, *3 (D.D.C. Mar. 26, 2021).

[2] See id. at *4 (stating the background of the RSSA and defining full-service gas stations as those stations that have “a garage or similar space for repair, maintenance, and service work”); Martin Austermuhle, Once A Gas Station, Always A Gas Station? D.C. Sued Over Law Blocking Redevelopment, WAMU 88.5 (Jan. 4, 2018), https://wamu.org/story/18/01/04/gas-station-always-gas-station-d-c-sued-law-blocking-redevelopment/ (reporting on Formant’s lawsuit). (reporting on the origins of the RSSA).

[3] See Petworth Holdings, 2021 U.S. Dist. LEXIS 57799 at *5 (“No retail service station which is operated as a full-service retail service station . . . may be discontinued, nor may be structurally altered, modified, or otherwise converted, irrespective of the type or magnitude of the [change] . . . into a nonfull service facility or into any other use.”) (internal quotations omitted); see also D.C. Law 22-289, § 2, 66 D.C. Reg. 1665 (2019).

[4] See D.C. Code §§ 36-304.01(d)–(e) (2015).

[5] See Petworth Holdings, 2021 U.S. Dist. LEXIS 57799 at *6 (noting the absence of Board members).

[6] Id.

[7] See id. at *6–7. See, e.g., Martin Austermuhle, Once A Gas Station, Always A Gas Station? D.C. Sued Over Law Blocking Redevelopment, WAMU 88.5 (Jan. 4, 2018), https://wamu.org/story/18/01/04/gas-station-always-gas-station-d-c-sued-law-blocking-redevelopment/ (reporting on Formant’s lawsuit).

[8] Petworth Holdings, 2021 U.S. Dist. LEXIS 57799 at *6–7.

[9] D.C. Code § 36-304.01(d)(3)(A) (2021).

[10] See generally Joint Stipulation of Dismissal, Petworth Holdings v. District of Columbia, No. 18-3 (JEB), 2021 U.S. Dist. LEXIS 57799 (D.D.C. Aug. 24, 2021).

[11] See D.C. Code § 36-304.01(b) (2021) (detailing the prohibition on converting full-service gas stations).

[12] See Petworth Holdings, 2021 U.S. Dist. LEXIS 57799 at *16 (noting two different types of governmental takings).

[13] Id. at *21.

[14] See id. (explaining why the current RSSA does not rise to a physical taking).

[15] Id. at 24–25.