White v. Valley County

Filing 128

MEMORANDUM ORDER denying #55 First MOTION for Sanctions filed by Valley County, granting in part and denying in part #47 MOTION for Summary Judgment filed by Valley County, denying #125 MOTION for Reconsideration re #124 Order on Motion for Preliminary Injunction filed by Valley County, ( Status Report due by 11/30/2011., Telephonic Scheduling Conference set for 10/12/2011 01:30 PM in Telephonic Hearing - Boise Chambers before Judge Candy W Dale.). Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by dks)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

KAREN WHITE, an individual, and
ELKHORN, LLC, a Florida limited
liability company,

Case No. 1:09-cv-494-EJL-CWD
MEMORANDUM ORDER

Plaintiffs,
v.
VALLEY COUNTY, a political
subdivision of the State of Idaho,
Defendant.

INTRODUCTION
Before the Court are Defendant Valley County’s Motion for Summary Judgment
(Dkt. 47), Motion for Rule 11 Sanctions (Dkt. 55) and Motion for Reconsideration (Dkt.
125). Chief United States Magistrate Judge Candy W. Dale issued two Report and
Recommendations in this case (Dkt. 86 and 115). Objections and supplemental filings
have been allowed by the Court to narrow the factual and legal issues presented.

Having

fully reviewed the record, the Court finds that the facts and legal arguments are
adequately presented in the briefs and record. Accordingly, in the interest of avoiding

MEMORANDUM ORDER- 1

further delay, and because the Court conclusively finds that the decisional process would
not be significantly aided by oral argument, this matter shall be decided on the record
before this Court without oral argument.
BACKGROUND FACTS
1. Plaintiffs Claims and Request for Relief
Karen White ("White") and Elkhorn, LLC ("Elkhorn") brought this action on
October, 1, 2009, against Valley County claiming that a fee imposed by the county as a
condition for approval of their proposed development violated Idaho state law and
deprived Plaintiffs of due process under both the federal and state constitutions.
Pursuant to the Second Amended Complaint, Dkt. 41, Plaintiffs seek the Court to
enter a declaratory judgment that: 1) finds Valley County did not enact a valid impact fee
ordinance required by the Idaho Development Impact Fees Act ("IDIFA"), Idaho code
§ 67-8201 et seq.; 2) finds the use of required development agreements is illegal; 3)
enjoins Valley County from conditioning approvals of land use applications upon the
developer entering a RDA or any similar agreement to collect monies for the
proportionate share of road improvement costs attributable to traffic generated by their
development; 4) declares White and/or Elkhorn do not have to pay monies for its
proportionate share of road improvement costs attributable to traffic generated by Phase II
of White Cloud Subdivision; 5) declares the RDA entered into by White and Valley
County on Phase I rescinded and refund monies paid by White in an amount of $166,496;
6) declares Valley County's use of RDAs to collect monies from developers an
MEMORANDUM ORDER- 2

unauthorized tax and order Valley County to return the monies paid by White on Phase I
in the amount of $166,496; and 7) awards costs and fees incurred in this action and any
other relief the court deems just and proper.
2. Pending Motions.
Valley County has moved for summary judgment, arguing: (1) White lacks
standing because she transferred her interest in the development to Elkhorn; (2) diversity
jurisdiction is lacking; (3) Plaintiffs have failed to state a claim because the alleged
constitutional violations were not brought under 42 U.S.C. § 1983; (4) even if the Court
were to construe Plaintiffs’ suit as a § 1983 action, Plaintiffs’ claims would nonetheless
be barred by the two-year statute of limitations applicable to § 1983 actions; (5)
Plaintiffs’ state law claims are barred by the statute of limitations; and (6) even if the state
law claims are not barred by the statute of limitations, they nonetheless fail because
White voluntarily paid the impact fee and did not challenge the fee through administrative
or state court proceedings. Valley County also seeks Rule 11 sanctions based on the
contention that Plaintiffs continue to pursue claims that are either incognizable under the
law or that have otherwise been shown to be procedurally barred–either through the statue
of limitations or exhaustion rules applicable to inverse condemnations actions.
The Court granted Plaintiffs' second motion for a preliminary injunction regarding
Phase II requesting an extension of time to seek final plat approval. Defendant has filed a
motion for reconsideration of the Court's order on that motion.

MEMORANDUM ORDER- 3

3. Report and Recommendations
In the Report and Recommendation dated February 14, 2011, Dkt. 86, Judge Dale
recommended the motion for summary judgment be granted in part and denied in part and
the motion for Rule 11 sanctions be denied. Specifically, Judge Dale recommended the
Plaintiffs' federal claims be dismissed and their state claims be allowed to proceed due to
factual disputes. Since the Report and Recommendation was issued additional facts and
supporting documents have been submitted by the parties that were not properly before
Judge Dale, but that can be considered by this Court in ruling on the motion for summary
judgment. Both parties have filed numerous objections to the Report and
Recommendation.
4. Timeline of Events
In 2005, Plaintiff Karen White ("White") and her father, E.T. Usher ("Usher")
(who is not a party to this action), were the developers of White Cloud Subdivision
("White Cloud") in Valley County. The subdivision included a preliminary plat for 80
lots on 210 acres and was approved on May 12, 2005. Dkt. 91-6. Phase I of the
development included only 44 lots. All land within Valley County’s jurisdiction is zoned
multiple use, pursuant to the Valley County’s Land Use Development Ordinance. Within
the district, various uses are listed as “allowed” while others are listed as “conditional”
necessitating a conditional use permit ("CUP").
When Valley County began to experience an increase in development, it initiated
what it called a Capital Improvements Program ("CIP"). The CIP is described in the
MEMORANDUM ORDER- 4

Valley County Master Transportation Plan as follows:
Capital Improvement Program Process and Purpose
Valley County has developed and adopted a Capital
Improvement Program (CIP). The following description of
the CIP is provided by Valley County:
“In 2005, the Valley County Commissioners initiated a Road
Development Agreement (RDA) process to require new
developments to pay a fee to mitigate the impacts of their
developments on the roads and bridges in Valley County.
The RDA process replaced the Capital Contribution
Agreements that were used by Valley County for larger
developments that needed infrastructure improvements. The
RDA requires all developers to pay a fee based on the
number of trips their developments generate. Developers
are, in effect, required to pay for the roadway capacity
their developments use. The fee must be paid at the time
of final plat. Credit is given for ROW required from the
development and any in-lieu-of contributions, such as
construction materials or developer sponsored construction of
portions of roads and bridges.["]
Pl.s’ Statement of Material Facts in Dispute, at 2 (Dkt. 62) (quoting Valley County
Master Transportation Plan (Dkt. 64, Att. 5)) (bolding and underlining in original).
It is undisputed that Valley County did not adopt an impact fee ordinance or
administrative procedures involved with the impact fee process as required by the IDIFA,
Idaho Code §§ 67-8201 et seq. The IDIFA prohibits certain impact fees unless imposed
pursuant to an ordinance in compliance with the statute. Valley County concedes it did
not enact an IDIFA-compliant ordinance, because, at the time, it believed in good faith
that none was required. Recent lawsuits involving other municipalities have successfully
challenged impact and housing fees as being illegal taxes since the contested ordinances
MEMORANDUM ORDER- 5

were not in compliance with state statutes and the municipalities were therefore
exceeding their authority in requiring certain fees from developers. See Mountain
Central Board of Realtors, Inc. v. City of McCall, Civil Case No. CV 2006-490-C,
Memorandum Decision and Order Granting Plaintiff's Motion for Summary Judgment
dated February 9, 2008; Cove Springs Development, Inc. v. Blaine County, Civil Case No.
CV2008-02, Order on Summary Judgment on Counts 2 and 3 dated June 3, 2008. The
Court notes Defendants have not moved for summary judgment on the issue of whether
the impact fees under the RDAs are a legal tax, but seek to have the case dismissed on
other legal arguments.
In response to the pending litigation, Valley County passed a resolution in March
of 2011, providing in part:
In order to avoid litigation costs and uncertainty, the Board of County
Commissioners will no longer into Road Development Agreements calling
for the payment of fees or other contributions for off-site road
improvements until such time as the County adopts an IDIFA-compliant
ordinance, unless the permit holder voluntarily and expressly waives any
objection thereto.
...
If no IDIFA-compliant impact fee ordinance has been enacted at the time of
the negotiation, the County will seek other ways to meet its obligation to
ensure that adequate public services are available to serve the new
development. This could include conditions respecting the sequence and
timing of development so as to ensure that development occur on a schedule
consistent with the availability of public services. Absent an IDIFAcompliant ordinance, the new Road Development Ordinance, as in the past
will contain no requirements for payments or contributions by the permit
holder unless such requirements are expressly and voluntarily agreed to by
the permit holder.
Valley Count represents it is in the process of drafting an IDIFA-compliant impact fee
MEMORANDUM ORDER- 6

ordinance.
The CUP for Phase I of White Cloud was approved by Valley County on
May 24, 2005. Dkt. 48-1. The CUP included as a condition that a Development
Agreement shall be required with the Board of County Commissioners. Id.
To satisfy the Development Agreement requirement in CUP for Phase I in 2005, White
entered into a Road Development Agreement ("RDA") with Valley County.
It appears negotiations on the RDA began sometime in the late spring or summer
of 2005 as the county has provided evidence that a draft RDA was sent to the engineering
firm working on the White Cloud development, Secesh Engineering, in August 2005.
The final RDA was provided to Scott Findlay, Project Manager for White Cloud on or
about June 24, 2006. White signed the RDA on June 26, 2006. White paid the required
fees under the RDA of $166,496 on July 21, 2006. Valley County executed the RDA on
July 24, 2006 and the RDA was recorded on July 26, 2006.
The final RDA differed from the draft RDA in that it only covered the 44 lots
being developed in Phase I and eliminated an offset for a dedicated roadway right of way.
See Dkt. Nos. 48-2 and 104-1. The RDA states: “The developer agrees to pay Valley
County their proportionate share of roadway costs for a total cash payment of $166,496
due at the time of Final Plat approval.” Pl.s’ Compl., Attachment 2, Dkt. 1.
The RDA further states "[the intent of the recordation [of the RDA] will be to document
the official aspect of the contractual obligation set forth in this Agreement." Id.
Phase I of White Cloud subdivision was completed.
MEMORANDUM ORDER- 7

On May 12, 2006, Usher granted a Warranty Deed to Elkhorn, LLC ("Elkhorn"), a
Florida limited liability company, for his interest in the White Cloud subdivision real
property. White assigned her interests in Phase II to Elkhorn. White filed an affidavit
indicating she did not assign her interests in Phase I to Elkhorn. Dkt. 65. White and her
husband are members of the Elkhorn limited liability company and reside in Florida.
White is also the manager of Elkhorn. Accordingly, the sole developer for Phase II is
Elkhorn.
Elkhorn has initiated the land use permitting process for Phase II of the White
Cloud development, and represents that all of the conditions contained in the CUP for the
remaining 36 lots have been satisfied with the exception that Elkhorn has not entered into
a RDA with Valley County. A Development Agreement was again required as a condition
of the CUP.
The CUP required a final plat for Phase II needed to be recorded by July 9, 2009.
After this litigation was filed, the Valley County agreed to an extension to record the final
plat until August 1, 2011 by Valley County. Recently, this Court granted a Preliminary
Injunction related to the expiration of the deadline to record a final plat for Phase II
based on the ongoing litigation.
Valley County maintains White voluntarily agreed to pay the RDA monies. White
denies that the payment was voluntary since it was required in order to get the final plat
approval. It is undisputed White and Usher did not file an appeal of the CUP or final plat
approval for Phase I after she paid the RDA fee of $166,496. Nor did White or Usher file
MEMORANDUM ORDER- 8

an inverse condemnation claim in state court regarding the monies paid under the RDA in
Phase I. As to Phase II, Elkhorn has not filed an appeal of the CUP and has not recorded
a final plat. Nor has Elkhorn entered an RDA for Phase II.
It is undisputed that White was involved in the development of another subdivision
in Valley County called "Elkhorn Subdivision" in 2003 that also required a RDA and the
payment of monies for impact fees under a CIP. The payment of monies under the
Elkhorn Subdivision RDA are not at issue in this case as any claim regarding that
subdivision would be outside the applicable statute of limitations.
It appears undisputed by the parties that the RDA monies paid by White for Phase
I were used by Valley County to complete capital investments for roads in the vicinity of
the White Cloud development. See Exhibit A to RDA, Dkt. 48-2. It is unclear if any of
the monies were used for roads not in the vicinity of the White Cloud development.

MEMORANDUM ORDER- 9

DISCUSSION
1. Standard of Review for Objections to Report and Recommendations
Pursuant to 28 U.S.C. § 636(b)(1)(C), this Court “may accept, reject, or modify, in
whole or in part, the findings and recommendations made by the magistrate judge.”
Moreover, this Court “shall make a de novo determination of those portions of the report
which objection is made.” Id. In United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th
Cir. 2003), the court interpreted the requirements of 28 U.S.C. 636(b)(1)(C):
The statute [28 U.S.C. § 636(b)(1)(C)] makes it clear that the district judge
must review the magistrate judge's findings and recommendations de novo
if objection is made, but not otherwise. As the Peretz Court instructed, “to
the extent de novo review is required to satisfy Article III concerns, it need
not be exercised unless requested by the parties.” Peretz, 501 U.S. at 939,
(internal citation omitted). Neither the Constitution nor the statute requires a
district judge to review, de novo, findings and recommendations that the
parties themselves accept as correct. See Ciapponi, 77 F.3d at 1251
(“Absent an objection or request for review by the defendant, the district
court was not required to engage in any more formal review of the plea
proceeding.”); see also Peretz, 501 U.S. at 937-39, (clarifying that de novo
review not required for Article III purposes unless requested by the parties)
....
See also Wang v. Masaitis, 416 F.3d 993, 1000 & n.13 (9th Cir. 2005). In this case, both
parties have raised numerous objections to the Report and Recommendations and the
record has been supplemented such that the posture of certain issues is different than
when such issues were argued before Judge Dale. Therefore, the Court conducted a de
novo review of the entire record. Portions of the Court's opinion have been copied from
Judge Dale's analysis as a matter of judicial economy on those issues wherein the Court
agrees with Judge Dales legal conclusions.
MEMORANDUM ORDER- 10

2. Valley County’s Motion for Summary Judgment
A. Standard of Review
Summary judgment is appropriate when, viewing the facts in the light most
favorable to the nonmoving party, there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The
moving party bears the initial burden of stating the basis for its motion and identifying
those portions of the record demonstrating the absence of genuine issues of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). “If the party moving for summary
judgment meets its initial burden of identifying for the court those portions of the material
on file that it believes demonstrates the absence of any genuine issues of material fact,”
the burden of production shifts and “the non moving party must set forth, by affidavit or
as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for
trial.’” T.W. Electrical Service, Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 630
(9th Cir. 1987) (quoting Fed. R. Civ. P. 56(e)).
The determination of whether summary judgment is appropriate in a given case is
within the sound discretion of the trial court, “and in cases posing complex issues of fact
and unsettled questions of law, sound judicial administration dictates that the court
withhold judgment until the whole factual structure stands upon a solid foundation of a
plenary trial where the proof can be fully developed, questions answered, issues clearly
focused and facts definitively found.” Petition of Bloomfield Steamship Co., 298 F. Supp.
MEMORANDUM ORDER- 11

1239, 1242 (S.D.N.Y. 1969). The absence of disputed material facts does not
automatically entitle the moving party to summary judgment; Rule 56(c) requires that the
moving party establish, in addition to the absence of a dispute over any material fact, that
it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see also, Custer v. Pan
Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993). This requires the movant to set forth
the legal theory upon which its motion is based and to satisfy the court that undisputed
facts clearly lead to the conclusion that it is entitled to judgment on that legal theory.
B. Standing
Valley County argues that Karen White lacks standing in this case because she
conveyed her interest in the White Cloud development to Elkhorn. Def.’s Brief in Sup. Of
Sum. Jud., at 4, Dkt. 48. In support of its argument, Valley County cites Palazzolo v.
Rhode Island, 533 U.S. 606 (2001). In that case, the United Sates Supreme Court held
that a successive title holder of property is not barred from claiming a land use restriction
constitutes a regulatory taking notwithstanding the fact that the restriction was enacted
before the claimant came into possession of the property. Id., at 626. From this holding,
Valley County extrapolates that when a property owner conveys her interest in a property
that is subject to a regulation requiring just compensation, the right to seek relief for the
taking passes to the new owner.
The record on this matter has now been clarified by supplementation. White
assigned only her interest in Phase II to Elkhorn. Usher assigned all of his interest in
Phase I and Phase II to Elkhorn. Therefore, the Court finds White has standing to bring a
MEMORANDUM ORDER- 12

claim regarding Phase I since she still has an interest as the developer of Phase I and since
she actually paid the monies required under the RDA.
C. Diversity
In Valley County's objections, the county appears to have conceded the diversity
argument that Elkhorn's principal place of business as a limited liability company is in
Florida and that the test for diversity purposes for a limited liability company is different
than for corporation. Furthermore, it is undisputed that Karen and Luther White, who are
the only members of the limited liability, are residents of Florida. The Court finds the
Plaintiffs have satisfied the diversity requirement of 28 U.S.C. 1332 and the Court adopts
Judge Dales' well-reasoned analysis on this issue by reference.
D. Plaintiffs’ Failure to Plead Constitutional Violations Under 42 U.S.C. §
1983
Valley County argues that Plaintiffs were required under Ninth Circuit law to
plead their federal constitutional claims under 42 U.S.C. § 1983 and that Plaintiffs cannot
escape the procedural and jurisdictional limitations (including the statute of limitations)
applicable to § 1983 by bringing the claims under the Declaratory Judgment Act. Under
Valley County’s argument, all of White’s federal constitutional claims are barred by the
statute of limitations. Judge Dale agreed and Plaintiffs raised an objection to the Report
and Recommendation urging this Court to rule the Ninth Circuit law is incorrect and the
binding precedent is the Supreme Court decision in First English Evangelical Lutheran
Church of Glendale v. Los Angeles County, 482 U.S. 304 (1987) (hereinafter First
MEMORANDUM ORDER- 13

English). The Court respectfully declines.
The Ninth Circuit has held expressly that a violation of the Takings Clause can be
redressed only through a claim under § 1983. Hacienda Valley Mobile Estates v. City of
Morgan Hill, 353 F.3d 651, 655 (9th Cir. 2003) (“Taking claims must be brought under §
1983.”) (emphasis added); Azul-Pacifico, Inc. v. City of Los Angeles, 973 F.2d 704, 705
(9th Cir. 1992). In Azul-Pacifico, the Ninth Circuit held that a plaintiff alleging a
violation of the Takings Clause “has no cause of action directly under the United States
Constitution. Id. The court further stated that “[w]e have previously held that a litigant
complaining of a violation of a constitutional right must utilize 42 U.S.C. § 1983.” Id.
Plaintiffs argue that they should be allowed to bring a direct action under the
Takings Clause without pleading it under § 1983. In doing so, Plaintiffs rely on the
United States Supreme Court’s holding in First English. In First English the Supreme
Court stated that “it has been established at least since Jacobs v. United States, 290 U.S.
13 (1933), that claims for just compensation are grounded in the Constitution itself.” Id.,
at 315. The Court also stated: “The cases cited in the text, we think, refute the argument
of the United States that ‘the Constitution does not, of its own force, furnish a basis for a
court to award money damages against the government.’” Id., at 316 n. 9 (citation
omitted).
Plaintiffs argue that the Supreme Court’s language in First English is in conflict
with the Ninth Circuit’s holding in Azul-Pacifico. Plaintiffs are not alone in their view.
The Fourth Circuit also has recognized the tension between First English and the rule that
MEMORANDUM ORDER- 14

federal constitutional claims must be asserted under § 1983. J.C. Lawyer v. Hilton Head
Public Service Dist. No. 1, 220 F.3d 298, 303 n. 4 (4th Cir. 2000) (stating that courts have
held, “in apparent conflict with First English, that a violation of the Takings Clause can
only be redressed through a claim under § 1983"). Regardless of whether Plaintiffs’
interpretation of First English is correct, this Court is bound by the Ninth Circuit
precedent that takings claims must be brought under § 1983 as the Ninth Circuit opinion
in Azul-Pacifico was issued after First English, so it can be assumed the Ninth Circuit
considered Plaintiff's argument and rejected the same when it issued its opinion.
The Court realizes this ruling results in the dismissal of the federal takings claim as
the statute of limitations for 42 U.S.C. § 1983 claims has run. In Wilson v. Garcia, 471
U.S. 261, 266-67 (1985), the United States Supreme Court held that § 1983 claims are
best characterized as tort actions for personal injuries and federal courts must borrow the
statute of limitations governing personal injury actions in the state in which the action is
brought. This bright-line rule was reaffirmed in Owens v. Okure, 488 U.S. 235 (1989).
And the rule applies even where the state courts have ruled that some other statute of
limitations applies to the specific alleged violation–in this case, a takings claim. See
Banks v. City of Whitehall, 344 F.3d 550, 553 (6th Cir. 2003) (applying Ohio two-year
statute of limitations for personal injuries to takings claim where plaintiffs argued that the
two-year statute of limitations was contrary to Ohio law); see also, Hacienda Valley
Mobile Estates v. City of Morgan Hill, 353 F.3d 651 (9th Cir. 2003) (applying California
statute of limitations for personal injury torts to plaintiff’s takings claim under § 1983).
MEMORANDUM ORDER- 15

The statute of limitations in Idaho for personal injury actions is two years. Idaho
Code § 5-219. Although the parties dispute when the alleged taking occurred in this case,
White argues that the taking accrued on July 21, 2006, the date White paid the road
development fee to Valley County. This action was filed on October 1, 2009, well
outside the two-year statute of limitations. Therefore, the Court finds even in applying
the date the impact fees were paid on July 21, 2006 as the accrual date, White’s federal
constitutional claims barred by the statute of limitations and the claims must be
dismissed.

E. Elkhorn’s Federal Due Process Claim

Plaintiffs’ federal takings claim is limited to Karen White for Phase I. Plaintiffs,
however, also allege in their Second Amended Complaint (Dkt. 41) that Valley County’s
Capital Improvements Program ("CIP"), which requires developers to enter into a RDA as
a condition for approval of a proposed development, violated Elkhorn’s right to due
process under the Fourteenth Amendment. For the reasons discussed below, the Court
agrees with Judge Dale that Elkhorn’s federal due process claim is barred by the United
States Supreme Court’s holding in Williamson County Regional Planning Commission v.
Hamilton Bank of Johnson City, 473 U.S. 172 (1985) (hereinafter Williamson County).
In Williamson County, a developer sought zoning approval for a residential
subdivision. Id., at 177. The developer obtained preliminary plat approval, but before the
final plat was submitted the county amended its zoning ordinance resulting in a
substantial reduction in the number of lots allowed. Id., at 177-79. The county then
disapproved the plaintiff’s final plat based on noncompliance with the revised ordinance.
MEMORANDUM ORDER- 16

Id., at 179-80. The developer brought an action in federal court under 42 U.S.C. § 1983
alleging that the county’s actions amounted to a taking without just compensation and
that the county’s actions violated the developer’s right to due process under the
Fourteenth Amendment.
In issuing its decision, the Supreme Court established two tests for plaintiffs
alleging that the application of a land use regulation effected a taking of their property
and/or violated their right to due process under the federal constitution. First, the claim
must be ripe in the sense that the would-be plaintiff has availed herself of all
opportunities to obtain relief at the administrative level. Id., at 186-87. Second, before
seeking federal court jurisdiction, the plaintiff must utilize state judicial procedures for
inverse condemnation and be denied compensation. Id., at 194. Under the first test, the
Supreme Court held that “a claim that the application of governmental regulations effects
a taking of property is not ripe until the government entity charged with implementing the
regulations has reached a final decision regarding application of the regulations to the
property at issue.” Id., at 186. Under this test, the plaintiff must demonstrate that she
“availed [herself] of the opportunities . . . to obtain administrative relief by requesting
either a variance . . . or a waiver from [the complained of regulation or policy].” Id., at
187 (quoting Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264
(1981)).
Although Elkhorn has not alleged a "taking" of its property since no impact fees
have been assessed for Phase II, the Supreme Court indicated in Williamson County that
MEMORANDUM ORDER- 17

the ripeness requirements set forth in that opinion also apply to alleged violations of the
Due Process Clause. Williamson County, 473 U.S. at 185 (“whether we examine the
Planning Commission’s application of its regulations under Fifth Amendment ‘taking’
jurisprudence, or under the precept of due process, we conclude that respondent’s claim is
premature.”). The Ninth Circuit also has had occasion to address alleged violations of
procedural due process in the context of land use regulations. See Herrington v. County of
Sonoma, 857 F.2d 567, 569 (9th Cir. 1988) (holding that the Williamson County ripeness
tests apply to equal protection and substantive due process claims, and stating that “we
see no reason, under the circumstances of this case, to apply a different standard to
[Plaintiff’s] procedural due process claim.”). And in Harris v. County of Riverside, 904
F.2d 497, 500 (9th Cir. 1990), the court of appeals stated that “[p]rocedural due process
claims arising from an alleged taking may be subject to the same ripeness requirements as
the taking claim itself depending on the circumstances of the case.”
In determining whether a procedural due process claim is subject to the ripeness
requirements set forth in Williamson County, the Ninth Circuit looks to the relationship
between the takings claim and the due process claim; if the alleged due process violation
arises from the same facts giving rise to the takings claim, then both claims will be
subject to the ripeness inquiry. Harris, 904 F.2d at 501. Conversely, if the procedural due
process claim arises from facts independent of the alleged taking, the due process claim is
not subject to the ripeness inquiry. For instance, where a county planning agency failed
to provide a hearing before halting a previously approved land development project, and
MEMORANDUM ORDER- 18

the developer alleged a taking based upon deprivation of all economic use of the property
and an independent violation of procedural due process based upon the lack of a hearing,
the Ninth Circuit held that the procedural due process claim was sufficiently unrelated to
the takings claim and therefore not subject to the ripeness analysis. Weinberg v. Whatcom
County, 241 F.3d 746 (9th Cir. 2001).
Upon review of Plaintiffs’ Second Amended Complaint in this case, Elkhorn’s due
process claim is indistinguishable from White’s takings claim; both allege constitutional
violations based on the requirement that they enter into road development agreements
(and pay the associated fee) as a condition for final plat approval. Indeed, the only
difference between the Plaintiffs’ claims is that Elkhorn has not paid the fee required
under the RDA. Under these circumstances the Court finds Elkhorn’s due process claim
sufficiently related to the associated takings claim to subject both claims to the ripeness
test set forth in Williamson County.
The Court finds that, under Williamson County, Elkhorn’s due process claim is not
ripe since Elkhorn has not paid any impact fee for Phase II (the parties are allegedly still
negotiating a development agreement); Valley County has passed a resolution in May of
2011 indicating it does not intend to charge road impact fees until an IDIFA complaint
ordinance is passed; Elkhorn has not sought a variance or waiver of the development
agreement requirement; and, Elkhorn has not challenged the requirement that developers
pay a fee to mitigate the impacts of a proposed development in Idaho state court. Perhaps
most importantly for the due process analysis under the Fourteenth Amendment, Elkhorn
MEMORANDUM ORDER- 19

has not been denied final plat approval. The question whether Valley County violated
state law by requiring developers to enter into road development agreements as a
condition for approval of a proposed project is a separate question from whether the
County deprived Elkhorn of its right to due process. Whether Elkhorn has stated a claim
under state law will be addressed below. The Court finds Elkhorn’s federal due process
claim should be dismissed without prejudice since it is not ripe for federal adjudication.
F. Plaintiffs’ State Law Claims
Although the Court has found White’s federal constitutional claims barred by the
statue of limitations applicable to 42 U.S.C. § 1983 and Elkhorn’s federal constitutional
claims barred by the Supreme Court’s holding in Williamson County, the Court
nonetheless has jurisdiction to entertain Plaintiffs’ state law claims because diversity
exists between the parties. Plaintiffs allege that Valley County has not enacted a valid
impact fee ordinance in accordance with the IDIFA and that Valley County’s imposition
of impact fees in the absence of a valid ordinance violates state law. Similarly, Plaintiffs
allege that Valley County’s requirement that developers enter into RDAs as a condition of
receiving final plat approval for proposed developments constitutes an unauthorized tax
in violation of the Idaho Constitution. Given Plaintiffs’ argument that the imposition of
fees to mitigate the impact of new developments on the County’s roads constitutes an
illegal tax under Idaho state law, Plaintiff White claims that the RDA between her and the
County is invalid and she seeks an order from the Court declaring the agreement
rescinded. See Second Amended Complaint (Dkt. 41.) Plaintiffs also generally allege
MEMORANDUM ORDER- 20

violations of the Takings and Due Process clauses of the Idaho Constitution.
In the motion for summary judgment, Valley County does not move for summary
judgment on whether the impact fee charged on Phase I was a legal fee. Instead, Valley
County argues that Plaintiffs’ state law claims (including the alleged violations of the
Idaho Constitution) are barred by the four-year statute of limitations applicable to inverse
condemnation claims in Idaho, Idaho Code § 5-224, and the Idaho Supreme Court’s
holding in KMST, LLC, v. County of Ada, 67 P.3d 56 (Idaho 2003).1 Alternatively
Defendant argues the claim of an illegal tax should be dismissed as the impact fees were
voluntarily paid by White for Phase I.
I. Idaho Statute of Limitations Applicable to Inverse Condemnation
The limitations period for inverse condemnation claims in Idaho is contained in
§ 5-224 of the Idaho Code, which is the statute of limitations for all actions not
specifically provided for in another statute. Idaho Code § 5-224 requires that claims
within its purview “must be commenced within four (4) years after the cause of action
shall have accrued.”
The issue here is when the cause of action accrued. Valley County originally

1

Valley County also argues that Plaintiffs’ claims are barred by, and the County is entitled to
summary judgment based upon, various equitable principles, including: unjust enrichment; quantum
meruit; promissory estoppel; and laches. In response, Plaintiffs argue that Valley County should not be
allowed to “hide behind equitable theories to justify its illegal conduct.” (Dkt. 63.) On this point, the
Court agrees with Plaintiffs; if the County’s conduct was illegal under Idaho law, the equitable principles
cited would not bar Plaintiffs’ claims. In any event, the Court finds that these issues require more factual
development and that Valley County has not met its burden under Federal Rule of Civil Procedure 56
warranting summary judgment based upon the equitable principles referenced in passing in the County’s
motion.
MEMORANDUM ORDER- 21

argued in this litigation that the inverse condemnation claim accrued when the Planning
and Zoning Commission issued the Conditional Use Permit on May 24, 2005, which
notified the developers of White Cloud that they would be required to enter into a
development agreement with the County Board of Commissioners. In the objections,
Valley County now argues the latest possible accrual date is the date the draft RDA was
provided to Plaintiff White's engineer in 2005. White argues, on the other hand, that the
inverse condemnation claim did not accrue until she payed the impact fee. For the
reasons discussed below, both parties are incorrect.
The Idaho Supreme Court has held that inverse condemnation claims accrue at the
time the taking occurs. McCuskey v. Canyon County Commissioners, 912 P.2d 100, 104
(Idaho 1996). “The time of taking occurs, and hence the cause of action accrues, as of the
time that the full extent of the plaintiff’s loss of use and enjoyment of the property
becomes apparent,” that is, when the plaintiff “was fully aware of the extent to which [the
government] interfered with his full use and enjoyment of the property.” Id. The statute
runs even though plaintiff does not know “the full extent of his damages.” Id. In Rueth v.
State, 644 P.2d 1333, 1338 (Idaho 1982), the Idaho Supreme Court held that the statute
ran on the date of a meeting between the parties at which time there was “recognition of
the severity of the problem.”
Judge Dale determined that under the Idaho Supreme Court’s interpretation of the
applicable statute of limitations, the taking accrued when Valley County provided a copy
of the RDA to White describing the impact fees requirement. This finding led to
MEMORANDUM ORDER- 22

additional supplementation of the record. Valley County now argues that the statute of
limitations should begin to run when the "draft" RDA was provided to the project's
engineer allegedly in August of 2005. See Declaration of Cody Janson, Dkt. 104-1 (based
on his time sheet entries he believes a draft RDA was sent to Secesh Engineering in
August 2005, but he has no independent recollection of sending the draft RDA for this
particular project). Plaintiff White and the project manager for Phase I dispute the scope
of the engineer's authority to act as an agent for the project and the receipt of a draft RDA
by the engineer. See Affidavit of Scott Findlay In Opposition to Motion for Summary
Judgment, Dkt. 69; Affidavit of Scott Acker, Dkt. 123-1(engineer has no recollection of
receiving a copy of a draft RDA from Mr. Janson on August 24, 2005 or any other day);
White argues that sending the draft RDA to the project engineer did not make her "fully
aware" of the inverse condemnation as the engineer was not her agent on the project.
Plaintiffs also renew their argument in the objections that the Court should apply the date
the monies were paid as the accrual date.
The law regarding determining the accrual date for an inverse condemnation claim
is not disputed and the inverse condemnation statute of limitations runs even though
plaintiff may not know the full extent of his damages. Rueth v. State, 644 P.2d 1333
(Idaho 1982). However, what it is disputed in this case is how to apply the law to
determine "when" Plaintiffs were fully aware of the road impact fees that had to be paid
before a final plat would be issued. This is a close call, but the accrual date is a legal
question as "the determination of whether or not there was a taking is a matter of law to
MEMORANDUM ORDER- 23

be resolved by the trial court.” Tibbs v. City of Sandpoint, 603 P.2d 1001, 1004 (Idaho
1979). Therefore, the Court finds the accrual date question can be ruled upon even
though the parties dispute some of the facts regarding if and when a draft RDA was
provided and to whom. The Court finds the disputed facts are not determinative of the
legal question of what event would serve as the accrual date for an inverse condemnation
action in this particular case.
The Court finds that White was not "fully aware" of the alleged taking until her
project manager on Phase 1, Mr. Findlay, received the final RDA with the requirement
that $166,496 was due for proportional road impact fees related to Phase I. The delivery
of the draft RDA did not start the statute of limitations clock as until there was a final
agreement as to the amount of fees for Phase 1, White could not be "fully aware" of the
required fees.
The Court reaches this conclusion even though White had been involved with
another development in 2003 that had an RDA. It would be unfair to infer White was
"fully aware" of the scope of Valley County's demands for impact fees related to the
property included in Phase I because she had paid fees on a prior development. This case
is distinguishable from some of the other inverse condemnation cases as at the time the
road impact fees were paid, the developer did not know the fees were arguably illegal due
to the fact the county's ordinance did not comply with IDIFA. In Rueth, the plaintiffs'
land was flooding when they met with governmental authorities so the severity of the
problem was known as there was substantial evidence to support the water had already
MEMORANDUM ORDER- 24

flooded the plaintiffs land.
In this case, the road impact fees were not known for Phase I until the final RDA
was provided and required to be signed. Under the facts of this case, the Court finds
White was "fully aware" and the full extent of her loss of use and enjoyment of the lots
involved in Phase I became "apparent" when the county provided the project manager
with the final RDA Valley County was requiring as satisfaction of the CUP's mandatory
condition that a development agreement be entered.
Specifically, the draft RDA being provided to the project engineer (if that
occurred) could not make White "fully aware" as the draft RDA contained different dollar
amounts and terms, the final RDA was limited to the 44 lots being developed as Phase I,
and negotiations were not complete. The Court acknowledges Valley County's argument
that White was fully aware in 2005 as the draft RDA included the same calculated cost
per lot which flowed from the county's CIP. However, this argument is not persuasive as
until Valley County indicated to White the RDA which had to be signed for approval of
the Phase I property, the terms of the RDA were not finalized. It would be against basic
contract principles to say just because one side has provided a draft agreement, there are
no further negotiations and the parties are fully aware of all terms.
Defendants urge the Court to consider other state court decisions where the courts
have determined the claim for inverse condemnation runs from an earlier date. The Court
has reviewed the cases cited by Defendants and finds they are not dispositive of the case
at bar. For example, in Buckskin Properties, Inc. v. Valley County, Case No. CV-2009MEMORANDUM ORDER- 25

554-C, Memorandum Decision dated January 7, 2011, Dkt. 102, Valley County argued
the statue of limitations should run from the date the plaintiff received the conditional use
permit and signed the final Capital Contribution Agreement setting out the contribution
requirements in full and plaintiffs argued it was the date the impact fees were paid. The
state court ruled at the very latest, it was the date when the dedication of right of way was
accepted and that at the point in time the interference with plaintiffs' property interest
became apparent. This date was after the impact fee agreement was final, but before the
payment of impact fees was made.
While the parties acknowledge the Buckskin case is now on appeal, this Court's
reasoning is similar to Judge McLaughlin's – the accrual date is not the date the impact
fees were paid, but when the terms were final and the developer was fully aware of the
impact fees owed. Even if this Court was to adopt as the accrual date the date Valley
County signed or recorded the final RDA (instead of the date White signed the RDA), the
inverse condemnation claim would still be within the four year statute of limitations for
an inverse condemnation action.
To the extent Valley County still maintains the accrual date is the date the
conditional use permit is approved, the Court rejects this argument in this case as it is
undisputed that the required development agreement was not even negotiated or in draft
form when the conditional use permit was approved. Instead, the Court finds it
persuasive the conclusion in Buckskin that the accrual date was not before the Capital
Contribution Agreement setting the actual impact fees to be paid was final. This is
MEMORANDUM ORDER- 26

consistent with this Court's determination of when a developer becomes "fully aware" of
the alleged takings associated with the road impact fees.
In applying this accrual date to the undisputed facts, the Court notes it is unclear
from the record when the final agreement provided to the Project Manager, but it was on
or about June 26, 2006 as White signed the agreement on June 26, 2006. The Complaint
was filed on October 1, 2009. Dkt. 1. Thus, viewing the evidence in a light most
favorable to the Plaintiffs for purposes of summary judgment, Valley County has not
satisfied the Court that White’s claim is barred by the four year statute of limitations for
inverse condemnation proceedings under § 5-224 of the Idaho Code.
The Court also finds it need not decide the issue raised in Valley County's motion
for reconsideration related to whether the accrual date for Phase II is the same as Phase I
as the inverse condemnation action Phase 1 is deemed to have been timely filed.
Plaintiffs responded to the motion for reconsideration arguing that they have two
theories of recovery of the impact fees paid for Phase 1: inverse condemnation and
imposition of an illegal tax. The Court finds the briefing submitted by the parties on the
pending motion for summary judgment does not address the statute of limitations and
accrual date for a claim of imposition of an illegal tax. Therefore, the Court declines to
discuss this issue at this time, but leaves open the possibility of motion for summary
judgment by one of the parties on the issue of what the applicable statute of limitations
for the illegal tax claim would be under Idaho law.
Moreover, to the extent the Plaintiffs have alleged a due process claim pursuant to
MEMORANDUM ORDER- 27

the Idaho Constitution, the Court does not have before it adequate briefing to determine if
such a claims would be subject to the four year "catchall" statute of limitations pursuant
to Idaho Code § 5-224 or a different statute of limitations. The Court will defer its
consideration of the applicable statute of limitations for a due process claim to a later
date.
ii. Whether Plaintiffs’ Claims is Barred Monies Were Paid Voluntarily
Valley County also argues that Plaintiffs’ claims are barred by the Idaho Supreme
Court’s holding in KMST, LLC v. County of Ada, 67 P.3d 56 (Idaho 2003). In that case,
the developer, KMST, desired to develop a piece of property into a commercial retail
center. Id. at 57. The development required a zoning change from rural transitional to
high-density commercial, and KMST submitted an application to the Ada County
planning and Zoning Commission to begin the process of obtaining a zoning change. Id.
As part of the development approval process, KMST also submitted a land use
application to the Ada County Highway District (“ACHD”). Id. In its application to
ACHD, KMST stated that it would construct a public street along the east side of the
property. Id., at 58. After hearings before the Planning and Zoning Commission and the
county board of commissioners, the county approved the proposed development. Id.
Following the construction of the development, including construction of the public street
and the payment of an impact fee to ACHD, KMST filed an inverse condemnation action
against the county and ACHD alleging that the impact fee and the requirement that
KMST construct the public street constituted a taking in violation of the federal and state
MEMORANDUM ORDER- 28

constitutions. Id., at 59.
The Idaho Supreme Court upheld the trial court’s dismissal of both claims on
procedural grounds. First the court held that under Williamson County the claim that the
dedication of the public street constituted a taking was not ripe.2 The court next held that
the claim concerning the impact fee was barred because the plaintiff had failed to exhaust
its administrative remedies. The court stated that “[a]s a general rule, a party must
exhaust administrative remedies before resorting to court to challenge the validity of
administrative acts.” Id., at 62. As to the dedication of the public street, the court stated:
“KMST’s property was not taken. It voluntarily decided to dedicate the road to the public
in order to speed the approval of its development. Having done so, it cannot now claim
that its property was ‘taken.’” Id., at 61. As to the impact fee, the court stated: KMST
“did not appeal the calculation of the fees; and it did not pay the fees assessed under
protest. It simply paid the impact fees in the amount initially calculated. Having done so,
it cannot now claim that the amount of the impact fees constituted an unconstitutional
taking of its property.” Id., at 62. The court did, however, provide the following caveat:
We are not holding that there was no taking simply because
KMST built the public street before challenging that
requirement in court. We are holding that there was no taking
because KMST itself proposed that it would construct and
dedicate the street as part of its development. We express no
opinion as to whether a developer who contends that a
condition of approval amounts to an unconstitutional taking
2

The Idaho Supreme Court has adopted the United States Supreme Court’s test set forth in
Williamson County for determining whether an inverse condemnation claim is ripe under Idaho state law.
See City of Coeur d’Alene v. Simpson, 136 P.3d 310, 316-17 (Idaho 2006).
MEMORANDUM ORDER- 29

of property must litigate that issue before proceeding with the
development.
Id., at 61 n. 1 (emphasis added).
Valley County argues that, since Karen White voluntarily payed the impact fee in
connection with Phase I of the White Cloud project, she is now barred under the Idaho
Supreme Court’s holding in KMST from bringing a claim for inverse condemnation.
White contests the proposition that her payment of the fee was voluntary and argues that
under the Idaho Supreme Court’s decision in Lochsa Falls, L.L.C. v. Idaho, 207 P.3d 963
(Idaho 2009), her inverse condemnation claim is not barred.
In Lochsa Falls, a developer proposed a 740 residential development along the
highway in Meridian, Idaho, and presented a preliminary plat of the subdivision to the
city for approval. Id., at 966. The Idaho Transportation Department (“ITD”) required the
developer to obtain an encroachment permit. Id. As part of the application process for the
permit the developer was required to submit a transportation impact study. Id. The traffic
study recommended that a traffic signal be installed to accommodate the increased traffic
created by the development. Id. The impact study estimated construction costs for the
signal at approximately $180,000. Id. ITD’s encroachment permit included a condition
that the developer construct the signal prior to any work being done on the highway right
of way. Id., at 966-67. The developer received final plat approval from the city, but was
informed that building permits would not issue until the developer payed for the signal as
required by ITD. Id., at 967. The developer submitted a letter of credit to cover

MEMORANDUM ORDER- 30

construction costs.
After the development was underway and the traffic signal was installed, the
developer initiated an action seeking reimbursement for the expenses incurred in
constructing the traffic signal. Id. The developer claimed that the requirement that it pay
for the construction of the traffic signal was an unconstitutional tax, that it constituted a
taking, and that it violated the developer’s right to due process. In other words, the
developer in Lochsa Falls alleged the same violations presented in this case. The trial
court dismissed the developer’s claims without prejudice for failure to exhaust. Id.
The Idaho Supreme Court reversed the trial court’s dismissal based on the
determination that ITD had no process for the developer to challenge the approved permit
that was subject to the condition that the traffic signal be constructed. Id., 971. The court
pointed out that, although “the administrative rules provide a process whereby a denial of
a permit application can be appealed internally within ITD . . . those rules provide no
mechanism whereby an applicant, whose permit application has been approved subject to
the imposition of additional requirements, can challenge those conditions.” Id. The court
stated that the “failure to exhaust administrative remedies is not a bar to litigation when
there are no remedies to exhaust.” Id., at 970-71 (citing James v. Dep’t of Transp., 876
P.2d 590 (Idaho 1994).
In this case, Plaintiffs have submitted the deposition testimony of Gordon
Cruickshank. (Dkt. 64-1.) Mr. Cruickshank was the road department supervisor for
Valley County between 1998 and 2007, and in 2007 he was appointed to the Valley
MEMORANDUM ORDER- 31

County Board of County Commissioners. Id., at 9-10. In his deposition, Mr. Cruickshank
sets forth the process through which a developer seeks and receives final plat approval for
a proposed development. First, the developer must seek preliminary plat approval from
the Planning and Zoning Commission. Id., at 17-18. Once the developer receives
preliminary approval, construction may begin. Id., at 20. According to Valley County’s
Master Transportation Plan, “[i]n 2005, the Valley County Commissioners initiated a
Road Development Agreement (RDA) process to require new developments to pay a fee
to mitigate the impacts of their developments on the roads and bridges in Valley County.”
(Dkt. 64-5) (emphasis omitted). According to Mr. Cruickshank, pursuant to the above
policy, the County requested that the Planing and Zoning Commission begin issuing
conditional use permits containing the requirement that developers “enter into an
agreement with the county on the proportionate share of cost to improve the road in the
area of that development.” Id., at 45.
In light of the conditional use permit, the applicant then would meet with a
representative of the County, who would disclose to the developer the “proportionate
share that the county felt was appropriate for their development and explain[] the road
development agreement to them.” Id., at 53. After the conditions in the conditional use
permit are met, including the requirement that the developer enter into a road
development agreement with the county, the developer may seek final plat approval from
the Planing and Zoning Commission. The Planing and Zoning Commission then makes a
recommendation to the Board of County Commissioners whether to grant final approval
MEMORANDUM ORDER- 32

to the developer. Id., at 23. The county commissioners then hold a public hearing and
vote on whether to approve the development. Id., at 26.
According to Mr. Cruickshank, if an applicant disagrees with a decision of the
Planing and Zoning Commission, the applicant has ten days after preliminary plat
approval and again after final plat approval to appeal a decision. Appeals from decisions
of the Planing and Zoning Commission are made to the Board of County Commissioners.
Id., at 23.
The Court finds Valley County's objection that Judge Dale failed to properly apply
KMST the facts of this case and to grant summary judgment to Valley County because the
RDA payment was voluntary to be without merit. Regardless of the fact that Mr.
Cruickshank states in his declaration that he believes agreement by White to pay road
impact fees was voluntary, all other evidence (including but not limited to Mr.
Cruickshank's deposition answers) establish the RDA requirements and the payments of
monies under the RDA were not voluntary and that distinguishes this case from KMST.
The developer in KMST offered to put in the public roadway before such was
required by the municipality. Here, the payment of the road impact fees as calculated
under the RDA was driven by Valley County's CIP, not the developers' alleged voluntary
offer to pay for road improvements. Valley County made it a mandatory condition of the
CUP: enter a RDA and pay the related fees calculated by Valley County or the final plat
would not be approved. Characterizing the payments as "voluntary" now that there is
litigation appears to the Court to be an "after the fact" attempt to create a defense to the
MEMORANDUM ORDER- 33

impact fees imposed being found to be illegal.
Further, the Court agrees with Judge Dale that the facts presented in this case are
closer to those presented in Lochsa Falls than in KMST. In this case, Valley County
instructed the Planning and Zoning Commission to require developers to enter into road
development agreements with the County as a condition for final plat approval. At the
time conditional use permits are issued, the developer does not know what, if any,
contribution will be required under the agreement. Once the developer learns of the fee
required under the road development agreement, there does not appear to be any means of
challenging the agreement other than failing to accept its terms and to the appear before
the Planning and Zoning Commission having failed to satisfy all the conditions contained
in the conditional use permit. If the developer desires to challenge the road development
agreement, the only mechanism in place appears to be an appeal before the Board of
County Commissioners–the very body that required the agreement in the first place.
Further, it is unclear from the record whether administrative remedies were in fact
available. Regardless of whether White is ultimately entitled to relief on her state law
claims, the Court finds Valley County has failed to carry its burden to establish no
genuine issue of material fact exists regarding its argument the payment of impact fees
was "voluntary" by White. Valley County is not entitled to judgment as a matter of law
on this issue.
The Court understands the requirement for RDA's was arguably Valley County's
"good faith" method of collecting road impact fees without complying with the IDIFA.
MEMORANDUM ORDER- 34

See Resolution 11-6, Dkt. 96-1. Certainly there is nothing wrong with municipalities
requiring developers to pay the proportionate share of road improvements related to their
developments, but such impact fees need to be in compliance with the state statute on
impact fees or the imposition of such fees may be outside the authority of the
municipality. But genuine issues of material fact exist which prevent Valley County from
establishing as a matter of law the payment of impact fees for Phase 1 was voluntary.
iii. Exhaustion
To the extent Valley County argues in its objections that the exhaustion
requirement should prevent Plaintiffs state law claims, the Court finds the Defendant has
failed to carry its burden that no genuine issues of material fact exist. It appears Valley
County has conceded its ordinance allowing road impact fees was not compliant with the
IDIFA and the argument the payments for Phase I were voluntary is disputed. If it is
determined the payments were not voluntary and the road impact fees imposed were
outside Valley County's authority, then the Court agrees with Plaintiffs at this stage in the
litigation that an exception to the requirement exhaustion may apply in to the facts of this
case. See Regan v. Kootenai County, 100 P.3d 615, 619 (Idaho 2004).
iv. Elkhorn’s State Law Claims
Elkhorn seeks a declaration from the Court that Valley County’s use of road
development agreements to collect money from developers as a condition for approval of
proposed developments is a disguised impact fee, constitutes an unauthorized tax, and is
therefore illegal under Idaho law. Elkhorn also requests that the Court enjoin Valley
MEMORANDUM ORDER- 35

County’s practice of conditioning approval of land use applications upon developers
entering into the above road development agreements. Valley County moves for
summary judgment on Elkhorn’s claims, arguing that since Elkhorn remains in
negotiations with the County concerning the road development agreement applicable to
Phase II of the White Cloud project, Elkhorn’s claims relate to future actions and are not
ripe for adjudication.
This issue was also addressed in the Court's ruling on the second motion for a
preliminary injunction, Dkt. 124. The Court agrees with Plaintiffs that the requirement for
a development agreement has not been vacated by Valley County and final plat approval
of Phase II is contingent upon a development agreement being entered. Although Valley
County has passed a resolution saying it will not charge impact fees, the resolution is not
binding. The declaratory relief request is appropriate since there has not been payment of
road impact fees associated with Phase II and "pre-takings" actions are not permitted.
The question of whether Elkhorn’s state law claims are ripe is a separate inquiry
from whether Elkhorn’s federal due process claim is barred by the United States Supreme
Court’s holding in Williamson County. As discussed in detail above, in Williamson
County the United States Supreme Court established special requirements (loosely
referred to as “ripeness” requirements) for claims alleging that the implementation of land
use regulations resulted in a taking requiring just compensation under the Fifth
Amendment or a depravation of due process in under the Fourteenth Amendment.
Conversely, the question here is one of subject matter jurisdiction; that is, whether a case
MEMORANDUM ORDER- 36

and controversy exists between Elkhorn and Valley County for the purposes of Article III
of the United States Constitution. The Court agrees with Judge Dale's analysis that
Elkhorn’s state law claims are ripe for the purposes of Article III.
Article III of the United States Constitution limits the exercise of the judicial
power to actual cases and controversies. U.S. Const. art. III, § 2. As a result of this
provision, a case must be “ripe” before the Court asserts subject matter jurisdiction. “The
ripeness doctrine precludes federal courts from exercising their jurisdiction over an action
that is filed before a real dispute exists between the parties.” Hawaii Newspaper Agency
v. Bronster, 103 F.3d 742, 746 (9th Cir. 1996). According to the United States Supreme
Court, the ripeness doctrine is designed “to prevent the courts, through avoidance of
premature adjudication, from entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from judicial interference until an
administrative decision has been formalized and its effects felt in a concrete way by the
challenging parties.” Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49 (1967).
Unless an actual controversy exists, the District Court is without power to grant
declaratory relief. Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).
“The difference between an abstract question and a ‘controversy’ contemplated by the
Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it
would be possible, to fashion a precise test for determining in every case whether there is
such a controversy.” Id., at 273. “[The question in each case is whether the facts alleged,
under all the circumstances, show that there is a substantial controversy, between parties
MEMORANDUM ORDER- 37

having adverse legal interests, of sufficient immediacy and reality to warrant the issuance
of a declaratory judgment.” Id.
In actions seeking relief under the Declaratory Judgment Act, courts have declined
to entertain cases in which it is too early to determine what harm, if any, will be suffered
by the claimant. See, e.g., California v. Oroville-Wyandotte Irrigation District, 409 F.2d
532 (9th Cir. 1969). Courts, however, “have not hesitated to issue a declaration if ‘one or
both parties have taken steps or pursued a course of conduct which will result in
‘imminent’ and ‘inevitable’ litigation.” 10B Wright, Miller & Kane, Federal Practice and
Procedure § 2757 (3d ed. 1998) (quoting Bruhn v. STP Corp., 312 F. Supp. 903, 906 (D.
Colo. 1970)).
In this case, Elkhorn has initiated the permitting process for Phase II of the White
Cloud Project; it has appeared before the Planning and Zoning Commission; it has met all
the conditions of approval in the conditional use permit with the exception that it has not
entered into a road development agreement; and it has otherwise obtained all the
necessary approvals to begin construction with the exception of final plat approval from
the Valley County Commissioners. See Aff. of Scott Findlay, ¶ 14 (Dkt. 69.) While
Valley County has passed a resolution indicating it will not charge road impact fees until
it passes an IDIFA compliant ordinance, the county has not eliminated the requirement
that a development agreement is entered. In other words, Elkhorn cannot receive final
approval until it signs a development agreement.
Based on record before the Court, the Court finds the controversy between Elkhorn
MEMORANDUM ORDER- 38

and Valley County is sufficiently ripe for the purposes of Article III and for the Court to
assert subject matter jurisdiction.
G. Conclusion
For the reasons discussed in this Memorandum Order, the Court finds that Valley
County has failed to carry its burden to establish no genuine issue of material fact exist
such that summary judgment can be granted except on the federal law claims. Therefore,
after fully considering the objections of the parties to the Report and Recommendation,
summary judgment will be granted in part and denied in part.

4.

Valley County’s Motion for Sanctions
In addition to its motion for summary judgment, Valley County also has filed a

Motion for Rule 11 Sanctions. (Dkt. 55.)3 The County argues that Plaintiffs have no legal
basis to bring this suit, that Plaintiffs have been informed of these deficiencies, and that
the Plaintiffs have nonetheless continued to pursue their claims. The Court finds Judge
Dale's analysis on this motion is well-reasoned and consistent with this Court's
determination that Valley County has not carried its burden on its motion for summary
judgment on the state law claims. The Court adopts by reference Judge Dale's analysis on
this motion.

3

The record reflects that Valley County complied with Rule 11's safe harbor provision. Fed. R.
Civ. Pro. 11(c)(2).
MEMORANDUM ORDER- 39

5. Valley County's Motion for Reconsideration
Valley County moves for reconsideration of the Order granting the Plaintiff's
second motion for preliminary injunction related to Phase II. A party may seek
reconsideration of a court order under either Fed. R. Civ. P. 59(e) or 60. In this case,
Defendants have moved for reconsideration pursuant to both rules. The Ninth Circuit has
determined the same analysis applies under both rules. See Fidelity Fed. Bank, F.S.B. v.
Durga Ma Corp., 387 F.3d 1021, 1023 (9th Cir. 2004) (discussing Fed. R. Civ. P. 60(b);
Fuller v. M.G. Jewelry, 950 F.2d 1437, 1441 (9th Cir. 1991) (discussing Fed. R. Civ. P.
59(e)). The motion must be filed within twenty-eight days pursuant to Fed. R. Civ. P.
59(e) and within a “reasonable time” pursuant to Fed. R. Civ. P. 60 (c). In this case, the
motion was filed timely filed within the twenty-eight day deadline.
The Ninth Circuit has identified three reasons sufficient to warrant a court’s
reconsideration of a prior order: (1) an intervening change in controlling law; (2) the
discovery of new evidence not previously available; and (3) the need to correct clear or
manifest error in law or fact, to prevent manifest injustice. School Dist. No. 1J,
Multnomah County, OR.v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). Upon
demonstration of one of these three grounds, the movant must then come forward with
“facts or law of a strongly convincing nature to induce the court to reverse its prior
decision.” Donaldson v. Liberty Mut. Ins. Co., 947 F. Supp. 429, 430 (D. Haw. 1996).
Defendants appear to be arguing only the third ground – the need to correct clear or
manifest error in law.
MEMORANDUM ORDER- 40

For the reasons discussed earlier in this Memorandum Order regarding the inverse
condemnation claim and the fact the Court finds Plaintiffs' request for declaratory relief
on Phase II is claim that can be heard by the Court, the Court finds Defendant has not
come forward with facts or laws to induce the Court to reverse its prior ruling and the
motion for reconsideration is summarily is denied. It is unclear to the Court as to why
the parties have not completed the negotiations on the development agreement required
for final plat approval for Phase II. Valley County's Resolution 11-6 does not indicate
that development agreements will not be entered into. Therefore, the Court directs the
parties to confer on this issue and try to complete negotiations regarding the development
agreement for Phase II within the next sixty (60) days. This may moot the need for the
preliminary injunction and for the Court to rule on the request for a declaratory judgment.

ORDER
IT IS ORDERED:
1. Defendant’s Motion for Summary Judgment (Dkt. 47) is GRANTED IN
PART AND DENIED IN PART consistent with this Memorandum Order.
2. Defendant’s Motion for Rule 11 Sanctions (Dkt. 55) is DENIED;
3. Defendant's Motion for Reconsideration (Dkt. 125) is DENIED.
4. The parties are directed to meet and attempt to negotiate a development
agreement for Phase II within the next sixty (60) days. The parties are directed to file a
status report regarding this issue at the conclusion of the sixty (60) days to inform the
MEMORANDUM ORDER- 41

Court whether the request for declaratory relief as to Phase II is still at issue.
5. The parties are further ordered to participate in a telephonic scheduling
conference with Judge Dale on October 12, 2011 at 1:30 p.m. Mountain Time to set forth
new deadlines to keep this case moving forward. Plaintiffs' counsel shall initiate the call
and will conference with the Court at 208-334-1504 after having all counsel on the line.
DATED: September 30, 2011

Honorable Edward J. Lodge
U. S. District Judge

MEMORANDUM ORDER- 42