River North Properties, LLC v. City and County of Denver et al
Filing
35
ORDER rejecting the oral recommendation of United States Magistrate Judge Schaffer, and granting 7 Motion to Dismiss as to Count 1, by Judge Christine M. Arguello on 3/26/14.(dkals, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 13-cv-01410-CMA-CBS
RIVER NORTH PROPERTIES, LLC,
Plaintiff,
v.
THE CITY AND COUNTY OF DENVER, and
MIKE ROACH, in his individual and official capacities,
Defendants.
ORDER REJECTING FEBRUARY 7, 2014 ORAL RECOMMENDATION OF UNITED
STATES MAGISTRATE JUDGE AND DISMISSING PLAINTIFF’S FEDERAL CLAIM
WITHOUT PREJUDICE
This matter is before the Court on Defendants’ Motion to Dismiss. (Doc. # 7.)
The motion was referred to United States Magistrate Judge Craig B. Shaffer, who
issued an oral ruling on February 7, 2014, recommending that the Court grant
Defendants’ motion. (Doc. # 34.) The Recommendation is incorporated herein by
reference. See 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b).
Judge Shaffer granted Defendants’ Motion to Dismiss River North’s federal claim
by reasoning that it was not ripe for review. For the following reasons, this Court rejects
Judge Shaffer’s reasoning as to the ripeness of River North’s federal claim but
nevertheless grants Defendants’ motion on an alternative ground and dismisses the
federal claim without prejudice.
I. BACKGROUND
This is a case about alleged municipal abuse of power. The target of the
purported abuse was a Denver real property owner, Plaintiff River North Properties, LLC
(“River North”), which rents to a tenant 1 who grows medical marijuana at the property.
The alleged perpetrators are the two defendants: the City of Denver’s Chief Building
Official, Mike Roach, and the City itself (collectively, “Defendants”).
If this Court is to believe the well-pleaded allegations contained in River North’s
complaint (Doc. # 3, hereinafter “Compl.”), which it must for purposes of the instant
motion to dismiss, Defendants have waged a multi-faceted campaign to thwart the work
of River North and its tenant. As alleged by River North, Defendants have attempted to
achieve this result by: (1) selectively enforcing (and over-enforcing) Denver municipal
codes against River North, and (2) changing and reinterpreting the complicated
architecture of Denver’s zoning laws, such that River North’s property is effectively
worthless to its tenant.
The complaint suggests that Defendants initially opted for the selective
enforcement strategy and changed tacks in favor of the zoning-law approach. The
selective enforcement strategy involved, among other things, “needlessly conducting
multiple inspections” at only River North’s property (Compl., ¶ 18); making misleading
or incorrect statements about the validity of city permits or the necessary steps for
obtaining permits (id., ¶¶ 25-32); improperly revoking permits (id.); improperly refusing
1
The tenant is not a party to this lawsuit and is not identified in the complaint or in any other
record before this Court.
2
to issue permits or improperly requiring expensive changes to River North’s property as
a condition of issuing permits, (id., ¶¶ 42-58); shutting off the power to River North’s
property without notice and under the pretext that River North had not complied with
building code requirements, (id., ¶¶ 68-69); and pressuring the Denver Fire Department
to revoke a permit River North had obtained to use a generator to provide power to the
property, (id., ¶ 70-74).
River North’s theory regarding Defendants’ zoning-law strategy is more difficult
to follow. In short, according to the complaint, a recent change in zoning policy—which
went into effect after River North had bought the real property in question—made
changes to an older Denver zoning policy that applied certain classifications to both
properties and the activities performed at those properties. (Id., ¶ 78.) Under the more
recent zoning policy, certain “new” activities are authorized at a newly classified
property only if a new (and prohibitively expensive) certificate of occupancy is obtained.
(Id., ¶¶ 77-80.) Defendant Roach apparently determines what constitutes a “new use”
activity (id., ¶ 78), though it is less clear if he exercises similar control over the
classification of the buildings themselves. In any case, Defendants apparently have
determined that this new-certificate-of-occupancy policy applies to River North’s building
and to the marijuana-growing activities that its tenant seeks to conduct at the property,
thereby resulting in immense costs to the tenant and a loss of value in the property for
River North. (Id., ¶ 82).
As a result of the Defendants’ actions, River North filed the instant lawsuit,
alleging, as relevant here: (1) violations of its federal constitutional rights under “the
3
[C]ontract [C]lause, [and] the Fifth and Fourteenth Amendments to the United States
Constitution (including the Due Process, Equal Protection and Takings [C]lauses
therein)” (Id., ¶ 89); (2) a Takings Clause claim under the Colorado State Constitution
(Id., ¶¶ 93-99); and (3) a claim under Colorado state law, which Counsel represents
is an inverse condemnation claim. (Id., ¶¶ 100-106; Doc. # 31, at 13) 2
River North initially brought this action in state court, but Defendants sought
to remove the case to federal court in light of River North’s reliance on a federal cause
of action. (Doc. # 1, at 2.) Shortly thereafter, Defendants filed the instant motion to
dismiss, advancing a number of arguments as to why River North’s claims failed.
(Doc. # 7.)
II. ANALYSIS
In his oral ruling, Judge Shaffer recommended that this Court dismiss River
North’s federal claim because it was not ripe for adjudication. He further recommended
that this Court decline to exercise supplemental jurisdiction over the state law claims, as
the only federal claim failed on ripeness grounds. Judge Shaffer therefore did not reach
Defendants’ alternative argument that the federal claim failed under Federal Rule of
Civil Procedure 12(b)(6).
This Court does not concur in Judge Shaffer’s reasoning but nevertheless
dismisses the federal claim. First, this Court explains that it respectfully disagrees with
2
Although River North initially pleaded a separate claim for attorney’s fees under 42 U.S.C.
§ 1988, he withdrew this claim as a separate cause of action. (Doc. # 16, at 14 n.6.) River
North also asks for declaratory relief in the form of a finding from this court that a new certificate
of occupancy is not required for River North’s tenant to use the building to grow marijuana. (Id.,
¶¶ 111-15.)
4
Judge Shaffer as to the ripeness of River North’s federal claim because Defendants
waived the ripeness argument when they removed this case to federal court. Second,
this Court enunciates why it nevertheless grants the motion to dismiss on the alternative
ground that, as currently presented, River North’s federal claim does not survive the
Rule 12(b)(6) motion to dismiss. The Court considers each of these matters in turn.
A. RIPENESS
1. Standard
a. Supreme Court Precedent
First, this Court must consider the ripeness issue raised by Defendants and
considered by Judge Shaffer. “Ripeness doctrine is invoked to determine whether
a dispute has yet matured to a point that warrants decision.” 13B Charles Alan Wright,
et al., Fed. Prac. & Proc. Juris. § 3532 (3d ed. Dec. 2013 update). Determining whether
a case is ripe “turns on the fitness of the issues for judicial decision and the hardship to
the parties of withholding court consideration.” Pac. Gas & Elec. Co. v. State Energy
Res. Conservation & Dev. Comm’n, 461 U.S. 190, 201 (1983) (internal quotation marks
omitted); see also Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 808
(2003) (reiterating this holding).
The instant motion to dismiss concerns in part whether River North’s Fifth
Amendment Takings Clause claim is ripe for review. As Judge Shaffer noted, the
Supreme Court addressed ripeness concerns in the context of a Takings Clause claim
in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City,
473 U.S. 172 (1985). In that case, a plaintiff brought suit against a regional zoning
5
authority, claiming that a zoning decision effected a taking of property without just
compensation. Id. at 182.
Three aspects to the ripeness doctrine announced in Williamson are relevant
here. First, the Williamson Court established a two-pronged test for determining
whether a federal Takings Clause claim is ripe. In particular, the Court determined that
the Williamson plaintiff’s claim failed the ripeness test because: (1) the plaintiff “ha[d]
not yet obtained a final decision regarding the application of the zoning ordinance and
[relevant] regulations to its property,” id. at 190, and (2) he had yet to seek
“compensation [for the alleged taking] through the procedures the State ha[d] provided
for doing so,” id. at 194. In other words, as the Supreme Court recently explained, the
Williamson ripeness rule dictates that “a Fifth Amendment claim is premature until it is
clear that the [g]overnment has both taken property and denied just compensation.”
Horne v. Department of Agriculture, 133 S. Ct. 2053, 2062 (2013) (emphasis in original).
Second, the Williamson Court held that the ripeness rule applies beyond the
context of Takings Clause to claims that are predicated on a resolution of the Takings
Clause claim itself. In particular, the Williamson Court considered as “premature” (id. at
199), a separate claim under the Due Process Clause of the Fourteenth Amendment
that the regulation in question was an invalid exercise of the police power. As the Court
reasoned, resolving the Due Process Clause question depended “in significant part,
upon an analysis of the effect the Commission’s application of the zoning ordinance and
subdivision regulations had on the value of respondent's property,” an effect that could
not be “measured until a final decision is made as to how the regulations will be applied
6
to respondent’s property.” Id. at 200. Thus, the Court declined to consider this related
claim as it was also not ripe for review. Id. 3
Third, the Supreme Court has established that a federal court cannot rule on
claims that fail the Williamson ripeness test because of the prudential, rather than
constitutional or jurisdictional, limitations placed on the power of those courts. In other
words, although the ripeness doctrine can sometimes implicate questions related to a
federal court’s subject matter jurisdiction to hear a case (because the case is not ripe
for purposes of Article III of the Constitution), the Williamson rule implicates only the
prudential aspect of this doctrine. Cf. Reno v. Catholic Social Services, Inc., 509 U.S.
43, 57 n.18 (1993) (noting that the ripeness doctrine “is drawn both from Article III
limitations on judicial power and from prudential reasons for refusing to exercise
jurisdiction”).
As discussed below, this is an important distinction in this case because, while
federal courts “must raise and decide jurisdictional questions that the parties either
overlook or elect not to press,” Henderson ex rel. Henderson v. Shinseki, 131 S.Ct.
1197, 1202 (2011), for an argument implicating only prudential ripeness, this Court
has greater discretion to proceed to the merits or deem such an argument waived
or forfeited, see Finstuen v. Crutcher, 496 F.3d 1139, 1147 (10th Cir. 2007).
3
The Tenth Circuit has extended the same reasoning to bar as not ripe other constitutional
claims predicated on a Takings Clause claim. See, e.g., Bateman v. City of W. Bountiful, 89
F.3d 704, 709 (10th Cir. 1996) (reasoning that an Equal Protection Claim was unripe because
it “rest[s] upon the same facts as a concomitant [unripe] Takings Clause claim”).
7
The Supreme Court first clarified that the Williamson ripeness rule is only
prudential in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), a Takings
Clause case that concerned whether a state had effected a regulatory taking by passing
a law that prevented a landowner from building homes on land he had purchased before
the law was enacted. Id. at 1010. After briefing and argument in front of the state
supreme court but before that court issued its opinion, the state legislature amended
the relevant law in a way that allowed the landowner to apply for a special permit that
provided an exemption from the law. Despite the amendment, the state supreme court
ruled on the merits of the Takings Clause claim. At the Supreme Court, the state
nevertheless argued that the amendment made the landowner’s Takings Clause claim
unripe under Williamson because the landowner had “not yet obtained a final decision
regarding how [he] will be allowed to develop [his] property.” Id. at 1011 (quoting
Williamson; all alterations in the original).
The Supreme Court rejected this argument. As an initial matter, the Court
reasoned that there was no Article III ripeness problem in considering the landowner’s
Takings Clause claim. To the contrary, as the Court noted, the landowner had “properly
alleged Article III injury in fact in this case,” in the form of the “constraints placed on the
use of his [land].” Id. at 1012. At the same time, the Court continued, “[t]hat there is a
discretionary . . . procedure by which [the landowner] may regain—for the future, at
least—beneficial use of his land goes only to the prudential ‘ripeness’ of [his]
challenge.” Id. at 1012-13 (footnote omitted; emphasis added).
8
Next, the Court concluded that prudence did not counsel against deciding the
landowner’s Takings Clause claim. In particular, the Court noted that the amendment
only promised prospective relief to the landowner—i.e., the possibility of gaining
permission to start development on the land, upon acquiring the relevant special
permit. In light of this, the Court concluded that to endorse the state’s position on
ripeness might allow the landowner to pursue future construction on his property, but
it would not remedy the fact that the pre-amendment law constituted—at the least—
a temporary taking of his property which the amendment could not effectively remedy.
Moreover, the Court noted that because the state supreme court’s ruling broadly
rejected the landowner’s Takings Clause claim, it was unlikely that the landowner would
be able to obtain further state-court relief, absent intervention from the Supreme Court.
Id. at 1012. The Court therefore addressed the merits of the landowner’s Takings
Clause claim and found in his favor. 4
4
The Supreme Court has repeatedly reaffirmed the Lucas holding on prudential ripeness in
numerous cases implicating the Williamson rule. See, e.g., Horne, 133 S. Ct. at 2063 & n.6
(noting that for purposes of Article III of the Constitution, “[a] ‘Case’ or ‘Controversy’ exists
once the government has taken private property without paying for it” and that “whether an
alternative remedy exists does not affect the jurisdiction of the federal court”); Stop the Beach
Renourishment, Inc. v. Florida Dep’t of Envtl. Prot., 560 U.S. 702, 733 & n.10 (2010) (noting that
“the claim here is ripe insofar as Article III standing is concerned, since (accepting petitioner’s
version of Florida law as true) petitioner has been deprived of property” and that the Williamson
argument had been waived in light of the respondent’s failure to raise it in briefing before the
Court); Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 733-34 (1997) (describing the
two-pronged Williamson test as presenting “two independent prudential hurdles to a regulatory
Takings Clause claim brought against a state entity in federal court” (emphasis added)); see
also San Remo Hotel, L.P. v. City & Cnty. of San Francisco, 545 U.S. 323, 349 (2005)
(Rehnquist, C.J., concurring) (referring to Williamson’s ripeness rule “as merely a prudential
requirement” (citing Suitum)).
9
b. Tenth Circuit’s Misinterpretation of the Williamson Rule
While Lucas establishes that the Williamson rule is exclusively prudential, the
Tenth Circuit has advanced interpretations of Williamson that are inconsistent with
Lucas or otherwise obscure the difference between prudential ripeness and Article III
ripeness.
As an initial matter, in several post-Lucas cases, the Tenth Circuit has failed
to cite Lucas’s reasoning on prudential ripeness and has suggested that Williamson
implicates only Article III ripeness concerns. For example, in Bateman v. City of
W. Bountiful, 89 F.3d 704 (10th Cir. 1996), the Tenth Circuit suggested that, in the
context of a Takings Clause claim, “whether a claim is ripe for review bears on the
court’s subject matter jurisdiction under Article III of the Constitution.” Id. at 706.
Similarly, in Rocky Mountain Materials & Asphalt, Inc. v. Board of County
Commissioners of El Paso County, 972 F.2d 309 (10th Cir. 1992), the Tenth Circuit
again failed to cite Lucas or discuss prudential ripeness and concluded that Williamson
dictated that a claim “should have been dismissed for lack of jurisdiction on ripeness
grounds.” Id. at 311.
Both Bateman and Rocky Mountain Materials are inconsistent with Lucas. While
the above-cited statement in Bateman about Article III ripeness is technically correct as
a general matter, Lucas teaches that it is incorrect in the context presented in Bateman:
namely, a ripeness argument relying on Williamson. Further, the Supreme Court has
established that prudential ripeness does not affect subject matter jurisdiction. To the
contrary, the Court may determine that prudence dictates it should not hear a claim, but
10
that does not mean the Court lacks jurisdiction under Article III of the Constitution to
consider the matter. See, e.g., Horne, 133 S. Ct. at 2062 n.6 (noting that “whether
an alternative remedy [to pursue a Taking Clause claim] exists does not affect the
jurisdiction of the federal court” (emphasis added)); see also Static Control
Components, Inc. v. Lexmark Int’l, Inc., -- S.Ct. --, No. 12-873, 2014 WL 1168967, at *6
(Mar. 25, 2014) (“Although Static Control’s claim . . . presents a case or controversy that
is properly within federal courts’ Article III jurisdiction, Lexmark urges that we should
decline to adjudicate Static Control’s claim on grounds that are ‘prudential,’ rather than
constitutional.”); Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1154 (10th Cir.
2013) (Gorsuch, J., concurring) (“Prudential standing doctrines are not jurisdictional[.]”),
cert. granted on other grounds, 134 S. Ct. 678 (2013).
Moreover, although the Tenth Circuit has more recently held that the Williamson
rule is prudential, it has often failed to firmly establish that the rule is exclusively so and
continues to suggest that Williamson implicates Article III ripeness concerns. Compare,
e.g., Schanzenbach v. Town of La Barge, 706 F.3d 1277, 1281 (10th Cir. 2013) (noting
that ripeness has Article III and prudential aspects but failing to discuss this matter in
the context of the Williamson rule and failing to cite any of the Supreme Court’s cases
interpreting the Williamson rule as exclusively prudential); Alto Eldorado P’ship v. Cnty.
of Santa Fe, 634 F.3d 1170, 1179 (10th Cir. 2011) (noting that the plaintiffs emphasized
the prudential nature of the Williamson rule but “declin[ing] the [plaintiffs’] invitation to
ignore [Williamson’s] ripeness requirements”), with B. Willis, C.P.A., Inc. v. BNSF Ry.
11
Corp., 531 F.3d 1282, 1300 n.20 (10th Cir. 2008) (recognizing in a footnote that the
Williamson rule implicates “only prudential concerns”).
The Tenth Circuit’s imprecise use of language on this issue has created a ripple
effect of district court rulings holding that the Williamson rule exclusively implicates
Article III ripeness and that applying the rule deprives a court of subject matter
jurisdiction. This problem derives principally from the fact that most district courts
seem to rely on Bateman, 89 F.3d at 706, for its unsound proposition about Article III
ripeness. 5
To be sure, other courts’ reliance on Bateman is understandable because the
Tenth Circuit has never called such cases into question. Further, such reliance might
not have made any difference in those cases, as they could have presented factual
scenarios more closely related to those in Williamson itself. At the same time, Bateman
contradicts clear and frequently reiterated precedent from the Supreme Court and is
therefore bad law.
Further, Bateman seems a good example of what the Supreme Court has termed
a “drive-by jurisdictional ruling”—i.e., a ruling in which a court concludes it lacks subject
5
This Court has determined that cases relying on Bateman for such a proposition include the
following: Bd. of Comm’rs of Catron Cnty., N.M. v. United States, 934 F. Supp. 2d 1298, 1309
(D.N.M. 2013); Rau v. City of Garden Plain, 76 F. Supp. 2d 1173, 1174 (D. Kan. 1999); Marion
Cnty. Landfill, Inc. v. Bd. of Cnty. Comm’rs of Marion Cnty., Kansas, 211 F.R.D. 634, 639
(D. Kan. 2002); Leonard H. Chanda & Associates, L.P. v. Meridian Metro. Dist., No. 09-CV00014-WYD-MEH, 2009 WL 3158168, at *3 (D. Colo. Sept. 28, 2009); Ashton Grove, L.C.
v. City of Norman, No. CIV-09-0467-F, 2009 WL 2230764, at *1 (W.D. Okla. July 22, 2009);
Redwood Prof’l Plaza, L.C. v. City of W. Jordan, No. 1:07-CV-153-TC, 2009 WL 1408217, at
*3 (D. Utah May 19, 2009); Oddo Dev. Co., Inc. v. City of Leawood, Kansas, No. 08-2616-JWL,
2009 WL 975139, at *3 (D. Kan. Apr. 9, 2009); Barton v. City of Midwest City, No. CIV-06-0179HE, 2006 WL 2520260, at *2 (W.D. Okla. Aug. 29, 2006).
12
matter jurisdiction to consider a claim, without much analysis as to why this is the case
or whether the claim fails for some other reason. See, e.g., Reed Elsevier, Inc. v.
Muchnick, 559 U.S. 154, 161 (2010). Most “drive-by jurisdictional” rulings miss the
important distinction between jurisdictional conditions required to proceed with a cause
of action and mere claim-processing rules that could be elements of that same cause of
action. Whereas jurisdictional rules can be raised at any time in the proceedings, nonjurisdictional rules can be waived if not raised. Id. Bateman is like other drive-by
jurisdictional rulings because it fails to even consider that what drives the rule in
Williamson has nothing to do with any jurisdictional or constitutional limitation on the
judiciary’s power. 6
The Supreme Court and the Tenth Circuit have instructed that drive-by
jurisdictional rulings are devoid of precedential effect, regardless of whether they have
been explicitly abrogated by later precedent. See, e.g., Reed Elsevier, Inc. v. Muchnick,
559 U.S. 154, 161 (2010); Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d at 1159
(Gorsuch, J., concurring) (noting that courts can disregard prior opinions, even from the
Tenth Circuit, that invoke the term “jurisdictional” with little or no analysis because they
are “exactly the sort of ‘drive-by jurisdictional rulings’ the [Supreme] Court tells us to
view with a jaundiced eye”), cert. granted on other grounds, 134 S. Ct. 678 (2013).
Thus, even if this Court could not rely on Lucas and its progeny in establishing that
6
There is one distinction—not relevant here—between most so-called “claims processing” rules
and the rules governing prudential ripeness. Whereas arguments related to the former may be
forfeited on appeal and cannot be considered if not raised at the appropriate time, see, e.g.,
Muskrat v. Deer Creek Pub. Sch., 715 F.3d 775, 784 (10th Cir. 2013), a federal court retains
the ability to sua sponte raise and address prudential standing concerns, regardless of when
or even if a party has raised such concerns, see, e.g., Adams ex rel. D.J.W. v. Astrue, 659 F.3d
1297, 1299-1301 (10th Cir. 2011).
13
Bateman and Rocky Mountain Materials are no longer good law, it could disregard such
holdings on the alternative grounds enunciated in such cases as Reed Elsevier.
2. Application
Judge Shaffer fell into the trap of many other district courts in this circuit by
relying on Bateman and Rocky Mountain Materials for the proposition that the
Williamson ripeness rule implicates only this Court’s subject matter jurisdiction. See,
e.g., (Doc. # 34, at 7 (Judge Shaffer noting that his analysis of “subject matter
jurisdiction” in the instant case touches upon the question of whether “the Constitution
and Congress have granted the court’s authority to hear” the case); id. at 8-12 (citing
Bateman and Rocky Mountain Materials). He further reasoned that River North’s other
claims, including the Procedural Due Process Claim and the Equal Protection, were
predicated on resolution of the unripe Takings Clause claim and therefore unripe for
the same reason. (Id. at 13-15.)
Judge Shaffer therefore concluded that this Court lacked subject matter
jurisdiction to consider River North’s Takings Clause claim until it had pursued state law
procedures to obtain compensation for the alleged taking. In particular, Judge Shaffer
suggested that the federal claim would not be ripe until River North had brought an
inverse condemnation claim in state court (id. at 10)—a claim that, as noted on pages
3-4, supra, River North had included in the complaint originally filed in state court.
This Court rejects this aspect of Judge Shaffer’s recommendation. For the
reasons detailed above, Judge Shaffer’s reliance on cases like Bateman was misplaced
because the Williamson ripeness rule is exclusively prudential. Further, River North has
14
satisfied the case or controversy requirement for Article III of the Constitution by alleging
a past and ongoing devaluation of its property because of the Defendants’ acts. 7
Accordingly, this Court has subject matter jurisdiction to hear the federal claim.
The only question that remains is whether, for prudential reasons, this Court
should decline to consider River North’s claims. As to this question, what is dispositive
for this Court is that Defendants removed this case to federal court and now seek to
undermine the federal claim by somewhat paradoxically suggesting that River North
should have proceeded with it in state court.
This Court will not grant Defendants the benefit of the Williamson rule through
such a strategy. Rather, this Court endorses the view articulated in Sansotta v. Town of
Nags Head, 724 F.3d 533 (4th Cir. 2013), where the Fourth Circuit held that under such
circumstances, “allowing [a municipal defendant] to invoke the Williamson . . . statelitigation requirement after removing the case to federal court would fail to fulfill the
rationale for this prudential rule and would create the possibility for judicially condoned
manipulation of litigation.” Id. at 545.
Below, this Court discusses Sansotta in relevant part and supplies additional
reasoning to support the soundness of the Fourth Circuit’s position.
As an initial matter, Sansotta presents a fact pattern similar to the instant case in
that Sansotta also involved a Takings Clause claim originally brought in state court and
7
In scattered portions of Defendants’ motion to dismiss, they suggest that River North lacks
standing because the harm alleged is abstract (Doc. # 7 at 5), or that the claim should be
dismissed “for lack of personal involvement, causation, and standing; because River North is
not the real party in interest.” (Id. at 3.) These arguments all fail because most are conclusory,
some misstate the law, and all ignore the River North’s allegations that the property it owns has
been devalued as a result of the Defendants’ acts.
15
then removed to federal court by state defendants. Like Defendants here, the
defendants in Sansotta then tried to undermine the federal claim by invoking the
Williamson rule. Id. at 536.
The Sansotta court rejected this argument. First, the court noted that in contrast
to a federal court, a state court may “hear ‘simultaneously a plaintiff's request for
compensation under state law and the claim that, in the alternative, the denial of
compensation would violate the Fifth Amendment of the Federal Constitution.’” Id. at
544 (quoting San Remo Hotel, L.P. v. City & Cnty. of San Francisco, Cal., 545 U.S. 323,
346 (2005). Further, the Sansotta court reasoned that while a state court maintains
the ability to simultaneously hear both claims at once, the Williamson rule dictates that
federal courts do not enjoy this same privilege because “state courts undoubtedly have
more experience than federal courts do in resolving the complex factual, technical,
and legal questions related to zoning and land-use regulations.” Id. at 545 (quoting
San Remo, 545 U.S. at 347).
At the same time, continued the Sansotta court, “[t]hat state courts have this
advantage over federal courts in experience with these issues . . . does not mean that
federal courts are incapable of handling them.” Id. For this proposition, the Sansotta
court cited Chief Justice Rehnquist’s concurrence in San Remo, in which he observed
that federal courts can hear First Amendment challenges to municipal land-use
16
regulations despite state courts’ greater familiarity with such ordinances. Id. (citing
San Remo, 545 U.S. at 350–51 (Rehnquist, C.J., concurring in the judgment). 8
In light of these observations, the Sansotta court concluded that, in accord with
San Remo, a state defendant “implicitly agrees” with the conclusion that federal courts
are sufficiently equipped to hear claims touching upon municipal land use matters when
that defendant removes a case involving such a state or municipal law to federal court.
In other words, because the Williamson rule is grounded in such federalism concerns,
the rationale precluding federal review of a Takings Clause claim evaporates when
a local municipal authority decides that, rather than relying on state judicial expertise,
it would prefer to obtain assessment from a federal court. Id.
The Sansotta court also reasoned that its exception to the Williamson rule was
in accord with other Supreme Court precedents that prevented state entities from using
litigation tactics to avoid a decision on the merits of a claim. For this proposition the
Sansotta court relied on Lapides v. Board of Regents of the University System of
Georgia, 535 U.S. 613 (2002). In Lapides, a university professor brought an action
pursuant to 42 U.S.C. § 1983, along with state-law claims, in state court after university
officials put allegations of sexual harassment in his personnel file. Id. at 616. The
defendants then removed the case to federal court and asserted Eleventh Amendment
immunity. Id.
8
Other commentators have noted that this principle extends well beyond the context of First
Amendment municipal land-use challenges. See, e.g., Michael W. McConnell, Horne and the
Normalization of Takings Litigation: A Response to Professor Echeverria, 43 Envtl. L. Rep.
News & Analysis 10749, 10751 (2013) (noting that federal courts also rely on local knowledge
in other circumstances, such as for “First Amendment claims brought by municipal employees
when they are disciplined for speaking out in ways that may or may not be relevant to their jobs
and claims of ‘exigent circumstances’ for warrantless searches”).
17
The Supreme Court rejected the Eleventh Amendment defense. Considering
such a claim, the Lapides Court reasoned that it would be “anomalous or inconsistent
for a State both (1) to invoke federal jurisdiction, thereby contending that the ‘Judicial
power of the United States’ extends to the case at hand, and (2) to claim Eleventh
Amendment immunity, thereby denying that the ‘Judicial power of the United States’
extends to the case at hand.” Lapides, 535 U.S. at 619. Thus, the Lapides Court
concluded that “removal is a form of voluntary invocation of a federal court’s jurisdiction
sufficient to waive the State’s otherwise valid objection to litigation of a matter . . . in a
federal forum.” Id. at 624. 9
Having reviewed the posture of Lapides, the Sansotta court applied the principles
of that case to the Williamson rule and decided that the exception to the rule it
advanced was “both logically and legally sound,” for the following reasons:
First, this reasoning does nothing to undermine the core rationale of
Williamson . . . , as a plaintiff cannot bring a takings claim in federal court
without having been denied just compensation by the state; such a claim
can come into federal court before the state has denied compensation
only when the state or its political subdivision chooses to remove the case
to federal court. Second, it protects an innocent plaintiff who sought to
comply with Williamson . . . and San Remo Hotel but whose efforts were
thwarted by the state or political subdivision's decision to remove the case.
Third, it prevents a state or its political subdivision from manipulating
litigation by removing to federal court claims properly filed in state court
in accordance with San Remo Hotel and then claiming that the plaintiff
cannot proceed on those claims, thereby denying a plaintiff any forum
for having his claim heard. Fourth, and relatedly, it furthers our ‘strong
preference for deciding cases on the merits’ by preventing any procedural
9
The Tenth Circuit has in fact broadly interpreted Lapides to stand for the proposition that
“when a State removes federal-law claims from state court to federal court that it ‘submits its
rights for judicial determination,’ and unequivocally invokes the jurisdiction of the federal courts.”
Estes v. Wyoming Dep’t of Transp., 302 F.3d 1200, 1206 (10th Cir. 2002) (quoting Gunter v. Atl.
Coast Line R. Co., 200 U.S. 273, 284 (1906)).
18
gamesmanship. Heyman v. M.L. Mktg. Co., 116 F.3d 91, 94 (4th Cir.
1997).
Sansotta, 724 F.3d at 546-47.
As applied to the instant case, this Court endorses the excellent analysis from
the Fourth Circuit in full. This Court adds to this analysis the observation that the Fourth
Circuit’s exception to the Williamson ripeness rule is also in keeping with the underlying
rationale for the ripeness doctrine, which, as noted above, turns in part on “the hardship
to the parties of withholding court consideration.” Pac. Gas & Elec. Co., 461 U.S. at
201. The Lucas Court vindicated this hardship concern by noting it was probable that
a remand to state court to address the ripeness issue would have delayed what was
going to become a necessary intervention by the Supreme Court to ultimately decide
the merits of the landowner’s constitutional claim. And yet this intervention was
necessitated by a discretionary decision made by a state actor—in particular, in Lucas,
the state supreme court addressed the merits of the constitutional claim despite having
the option of requiring the landowner to petition for the aforementioned special permit.
Lucas, 505 U.S. at 1012-13 & n.5.
The same hardship concern seems at least relevant here. Indeed, if this Court
were to require River North to switch forums for a second time, River North would have
to submit to another round of filing fees, conform again to a different set of procedural
rules, and experience further delay in resolution of its case—all because of a
discretionary decision made by state actors.
Thus, for the reasons stated above, prudence does not dictate that River North’s
federal Takings Clause claim must first proceed in state court. River North can proceed
19
with both the state law and federal claims in this Court, just as it would have done if
Defendants had not decided to remove the case to federal court. Further, because the
Takings Clause claim can proceed on a parallel track with the inverse condemnation
claim, so too can the other constitutional claims that Judge Shaffer viewed as
connected to the Takings Clause claim. 10
B. FAILURE TO STATE A CLAIM
While this Court concludes that the federal claim is ripe for review, that is not the
end of the matter. As the Supreme Court established in Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the claim also must
be sufficiently pleaded under Federal Rule of Civil Procedure 8(a)(2) to survive a Rule
12(b)(6) motion to dismiss for failure to state a claim. For the following reasons, this
Court concludes that the case does not survive the strictures of the Iqbal/Twombly rule.
1. Standard
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short
and plain statement of the claim showing that the pleader is entitled to relief.” “The
pleading standard Rule 8 announces does not require detailed factual allegations, but
it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.
10
River North suggested that it would withdraw its “Takings Clause” claim based on
Defendants’ ripeness argument. (Doc. # 14 at 6). As noted above, it nevertheless maintained
what Judge Shaffer construed as related claims under the Due Process and Equal Protection
Clauses. As is explained further below, this Court is dismissing River North’s federal claim
essentially because of the confusing manner in which it was presented. To the extent it is
permissible under this Court’s procedural rules, River North can reconsider whether it wishes
to advance the Takings Clause claim in an amended complaint. Further, if River North wishes
to advance constitutional claims that are not connected to the Takings claim, it must do so
explicitly in an amended complaint.
20
A pleading that offers labels and conclusions or a formulaic recitation of the elements of
a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting
and citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation
marks and citations omitted; alterations incorporated)).
Further, “only a complaint that states a plausible claim for relief survives a motion
to dismiss [under Rule 12(b)(6)]. Determining whether a complaint states a plausible
claim for relief will . . . be a context-specific task that requires the reviewing court to
draw on its judicial experience and common sense. But where the well-pleaded facts
do not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged—but it has not shown—that the pleader is entitled to relief.”
Id. at 679 (internal citations and quotation marks omitted; alterations incorporated).
The purpose of this pleading requirement is two-fold: “to ensure that a defendant
is placed on notice of his or her alleged misconduct sufficient to prepare an appropriate
defense, and to avoid ginning up the costly machinery associated with our civil
discovery regime on the basis of a largely groundless claim.” Kansas Penn Gaming,
LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (internal quotation marks and
citations omitted).
2. Application
The federal claim does not survive the above-enunciated standard principally
because it does not provide sufficient notice to the Court or Defendants as to why River
North thinks that its constitutional rights were violated. The problem stems largely from
the manner in which River North has presented its claims. The complaint contains a
21
long and complicated narrative fact pattern—reminiscent of a law-school issue-spotter—
in which various constitutional violations are suggested or insinuated. This fact pattern
ends with a relatively short and vague articulation of alleged constitutional violations,
which are contained entirely within Claim I of the complaint. In full, Claim I states as
follows:
The Defendants acted under color of state law to deprive Plaintiff of its
constitutionally protected rights under the United States Constitution,
including, but not limited to, the ex post facto clause[ 11], the [C]ontract
[C]lause, the Fifth and Fourteenth Amendments to the United States
Constitution (including the Due Process, Equal Protection and Takings
clauses therein) by, including, but not limited to, the following:
a. Depriving Plaintiff of equal protection of the laws in a manner
and for a purpose that was not rationally related to any legitimate
state interest;
b. Depriving Plaintiff of its liberty and property, including but not
limited to its vested property rights, without due process;
c. Taking Plaintiff’s property, by, including but not limited to,
taking away its vested property rights, prohibiting all reasonable
use of the Property, preventing economically viable use of the
Property, physically interfering with the Property, all without just
compensation;
d. Adopting a new policy targeted at Plaintiff and applying that
policy retroactively to take away Plaintiff’s legal and property rights;
11
This claim has since been withdrawn. (Doc. # 16 at 14 n.6)
22
e. Preventing the legal use of the Property and thereby preventing
Plaintiff from contracting with others to rent the Property and
causing Plaintiff’s tenant to be unable to perform its lease
agreement with Plaintiff.
(Doc. # 3, ¶ 89.)
This claim, as presented, is inadequate for purposes of Rule 8. Indeed, the claim
hardly even provides a simple “formulaic recitation of the elements of a cause of action”
but rather advances a laundry list of alleged violations that include “but [are] not limited
to” what this Court counts as four remaining infringements of constitutional rights.
Cf. Allen v. Briggs, No. CIV-08-334-FHS, 2009 WL 756213, at *1 (Mar. 18, 2009)
(disapproving of the laundry list approach and concluding that it does not pass muster
under Rule 8), aff’d, 331 F. App’x 603 (10th Cir. 2009). What specific acts caused River
North to be deprived of property and liberty interests? What are these interests? What
are the “legal rights” that have been lost? The Court and Defendants are both left in the
dark as to these and many more questions.
The main problem with the manner in which the constitutional claim is currently
presented is that River North seems to be operating under the erroneous assumption
that all claims brought under 42 U.S.C. § 1983 must be presented in one single cause
of action. To the contrary, while each separate constitutional violation might be brought
pursuant to that statute, there is no principle or rule dictating that a complaint cannot
allege multiple separate allegations of constitutional violations in different causes of
action in the same complaint. In fact, if River North wishes to amend its complaint, this
Court directs it to set out its allegations of constitutional violations as separate causes
of action.
23
Further, beyond clarifying and simplifying the narrative portion of the complaint, if
it seeks to amend, River North must link the specific factual elements from the narrative
portion of the complaint to the specific alleged violation of constitutional rights, so as to
allow both Defendants and this Court to better assess the viability of each claim. For
example, this Court cannot determine whether River North’s Procedural Due Process
theory is solely related to the complicated zoning issue described in the complaint or
whether River North believes these rights were (also) violated in some other way.
Yet explicitly enunciating the precise Procedural Due Process theory (or theories)
could have an effect on the manner in which this Court reviews such a claim (or claims).
Cf. Schanzenbach, 706 F.3d at 1283 (10th Cir. 2013) (noting that a procedural-dueprocess claim related to the denial of permits to improve property “is factually and
conceptually distinct from [a] takings claim” that implicated zoning changes affecting
the same property).
This same critique applies to River North’s claims under the Takings Clause,
the Contracts Clause, the Equal Protection Clause, and to the Monell theory of liability.
If River North wishes to pursue any of these claims in this Court, it must do a better job
supplying reasoning for why it thinks the alleged conduct of Defendants led to these
violations. 12
12
Finally, if River North presents a valid federal claim, this Court could exercise supplemental
jurisdiction over River North’s state-law claims. At the same time, these claims appear of a
barebones variety and might not survive a renewed motion to dismiss an amended complaint.
In particular, Defendants have alleged a number of defects in these state law theories in their
motion to dismiss—River North should take these into consideration if it seeks to amend its
complaint. The Court withholds ruling on these matters pending amendment of River North’s
federal claim.
24
To be sure, when more fully explained, several (or perhaps all) of these
constitutional theories could still fail to pass muster against a renewed motion to dismiss
or on a motion for summary judgment. But at this point, the Court is left in such doubt
as to how to interpret the claims that to engage in an analysis of their merits would be
a waste of time.
III. CONCLUSION
Accordingly, it is hereby ORDERED that the oral recommendation of United
States Magistrate Judge Schaffer (Doc. # 34) is REJECTED. It is
FURTHER ORDERED that Defendant’s Motion to Dismiss is GRANTED as to
Count I of the complaint. This claim is DISMISSED WITHOUT PREJUDICE. River
North has twenty-one days to file an amended complaint addressing the aboveidentified deficiencies in the original complaint.
DATED: March 26, 2014
BY THE COURT:
________________________________
CHRISTINE M. ARGUELLO
United States District Judge
25
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