Back in March of this year, I published an article about how relocation agents and agencies are increasingly met with the threat of legal action. That article argued that relocation agents and agencies are not the proper target of litigation. Fortunately, the Virginia Supreme Court now appears to have agreed with that position.

Fernandez v. Commissioner of Highways addresses whether a displacee can directly sue the displacing agency for relocation benefits. (The legal term is a “private cause of action.”) In that case, Fernandez submitted a claim to the Virginia Department of Transportation for over $550,000 in relocation assistance for the displaced business. Upon review of the claim, VDOT expressed questions and concerns over the sufficiency of documentation. The agency assured the displacee that it would carefully review the claim in a timely manner.

Ultimately, VDOT approved just over $35,000 in reimbursements. It is important to note that VDOT informed Fernandez that a decision could not be made about the balance of the claim until he submitted additional documenting support. Equally important, VDOT also advised Fernandez that he had a right to appeal any decision by that agency.

Fernandez ignored the administrative appeal process, and simply filed suit against VDOT (confusingly under the name “Commissioner of Highways” which is the name that VDOT files formal condemnnation suits under by statute) in Circuit Court. My colleagues Ross Greene and Dave Arnold successfully defended that lawsuit in Circuit Court and had the case dismissed under the theory that there was no private cause of action against the agency. The displacee appealed, and the Virginia Supreme Court agreed to hear the case.

The Virginia Supreme Court noted that the Virginia Relocation Assistance Act was modeled after the Federal Uniform Relocation Act, and after some analysis, concluded that “no private cause of action for payment of relocation expenses can be implied [under the Act].” The Court then ruled in favor of VDOT. The Court’s full opinion can be found here.

There are several valuable lessons for relocation agents to learn from this Virginia case. First and foremost, displacees are becoming more and more litigious in relocation matters. Second, the Virginia court’s opinion importantly noted that the agency in this case followed proper procedures. VDOT informed Fernandez that his documentation was insufficient and assured him that proper documentation would be thoroughly reviewed upon receipt. Most importantly, it advised him of his rights to an administrative appeal. Had the agency not followed proper procedures and advised the displacee of his administrative appeal rights, then this case may have turned out differently. Fortunately, the Virginia Supreme Court protected an agency which followed the rules. Otherwise, the floodgates could have opened for a great deal of litigation in our relocation world.

Kristen Bennett, SR/WA, R/W-RAC is the President of Blackbird Right of Way LLC and the CEO of Pendulum Land Services, LLC.

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