Clifty Properties, LLC v. The City of Somerset, Pulaski County, Kentucky et al
OPINION & ORDER: 1) Pla's motion to remand 5 is DENIED; 2) Dfts' motion to dismiss 4 is GRANTED as follows: a) Clifty Properties' federal substantive and procedural due process claims are DISMISSED w/prejudice; b) Clifty Properti es' federal takings claim is DISMISSED w/out prejudice; c) Clifty Properties' state law claims are DISMISSED w/out prejudice; and 3) Clifty Properties' request for sanctions is DENIED; and; 4) Jgm shall be entered. Signed by Judge Karen K. Caldwell on 9/11/17.(MRS)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION -- LONDON
CLIFTY PROPERTIES, LLC,
CIVIL NO. 6:17-41-KKC
OPINION AND ORDER
THE CITY OF SOMERSET,
KENTUCKY, et al.
This matter is before the Court on the motion to dismiss filed by the defendants (DE 4)
and the motion to remand (DE 5) filed by the plaintiff. For the following reasons, the motion
to dismiss will be granted and the motion to remand will be denied.
This matter is rooted in a zoning dispute between the plaintiff Clifty Properties, LLC and
the defendant, the city of Somerset, Kentucky. Clifty Properties owns some land in Somerset
that is currently zoned only for residential purposes. Clifty Properties wants it designated
for commercial development but the city of Somerset has rejected Clifty Properties’
application for a zoning change.
Clifty Properties has sought relief through the courts. It filed its first complaint to that
end in state court on June 9, 2015. The defendants removed that action to this Court and the
matter proceeded to summary judgment. Clifty Properties, LLC v. City of Somerset, No. 15115, 2016 WL 7015641 (E.D. Ky. Nov. 30, 2016). United States District Judge Gregory Van
Tatenhove construed Clifty Properties’ complaint to assert three constitutional claims: a
claim that the city’s actions constituted a “taking” of Clifty Properties’ property without just
compensation in violation of the Fifth Amendment; a claim that the city’s actions constituted
a violation of Clifty Properties’ substantive due process rights; and a claim that the city’s
actions constituted a violation of Clifty Properties’ procedural due process rights. In addition,
Judge Van Tatenhove determined that Clifty Properties asserted various violations of state
As to the procedural and substantive due process claims, Judge Van Tatenhove
determined that both claims must be dismissed. With regard to the substantive due process
claim, Judge Van Tatenhove determined that, to the extent Clifty Properties sought
monetary damages, the claim need not be addressed by the court because that claim was
subsumed by the federal takings claim. Id. at *5. To the extent Clifty Properties sought
injunctive relief with the claim, Judge Van Tatenhove determined that the claim had to be
dismissed because Clifty Properties did not have a constitutionally protected property
interest in a not-yet-granted rezoning of its land. Id. For the same reason, Judge Van
Tatehnove dismissed the procedural due process claim. Id. at *6.
As to Clifty Properties’ Fifth Amendment takings claim, Judge Van Tatenhove
determined that this claim was not ripe for review. Id. at *5. A federal regulatory takings
claim must meet two requirements to be ripe. First, the regulatory authorities must have
come to a “final” decision. DLX, Inc. v. Kentucky, 381 F.3d 511, 518 (6th Cir. 2004) (citing
Williamson County Regional Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 186-191
(1985)). Second, the plaintiff must have sought compensation through the procedures the
state has provided. Id. This means the plaintiff must have pursued an action for just
compensation or inverse or reverse condemnation in the state courts. Id. No violation of the
Fifth Amendment occurs until a plaintiff has actually pursued procedures for just
compensation in state courts and been denied. Id at 519.
Judge Van Tatenhove noted that Kentucky law provides for a reverse or inverse
condemnation procedure in state court by which a plaintiff may allege his property has been
wrongfully taken. Clifty Properties, 2017 WL 7015641, at * 4. Clifty Properties had not
initiated such a procedure. Accordingly, Judge Van Tatenhove dismissed the takings claim
without prejudice as unripe. Id.
The requirement that the plaintiff must pursue a claim for just compensation in state
court before asserting a federal takings claim in a federal court, however, could mean that a
plaintiff could never actually pursue the federal takings claim in federal court. This is
because, in the federal court, “preclusive effect must be given to that prior state-court action
. . . according to the res judicata law of the state.” DLX, Inc., 381 F.3d at 520. Under
Kentucky’s res judicata law, plaintiffs are barred not just from reasserting claims that they
actually litigated in a prior action but also from asserting any claims that should have been
raised in the prior litigation. Id. Under this law, even after a plaintiff pursues a state
compensation claim, as required for federal ripeness, the federal takings claim would still
have to be dismissed because it could have been asserted in the state just-compensation
action. Thus, the federal ripeness requirements for the takings claim and the state doctrine
of claim preclusion “could possibly operate to keep every regulatory-takings claimant out of
federal court.” Id. at 521.
To prevent that situation, the Sixth Circuit has recognized a so-called England
reservation named for England v. Louisiana State Board of Medical Examiners, 375 U.S. 411
(1964). DLX, Inc., 381 F.3d at 521. With an England reservation, the plaintiff does not litigate
its federal takings claim in its state court action for just compensation but instead makes “an
explicit reservation of their federal claims to federal court.” Id. The Sixth Circuit holds that
“a party’s England reservation of federal takings claims in a state takings action will suffice
to defeat claim preclusion in a subsequent federal action.” Id. at 523.
After dismissing all of the federal claims, Judge Van Tatenhove declined to exercise
jurisdiction over the state law claims and dismissed them without prejudice. He then entered
judgment in favor of the defendants. In accordance with an England reservation, Judge Van
Tatenhove instructed, “If the state court denies Clifty Properties just compensation through
the reverse condemnation procedure and if Clifty Properties reserves its other federal
claim(s) during that litigation, it may litigate its federal takings claim in federal court at that
time, provided the ripeness requirements have been fully satisfied.” Clifty Properties, 2016
WL 7015641, at *4 n.3.
Clifty Properties then filed another action in state court. With the complaint, Clifty
Properties again asserts that the city authorities failed to afford Clifty Properties substantive
due process and procedural due process. (DE 1-2, Complaint, ¶¶ 29, 30.) It also asserts a
federal takings claim. (DE 1-2, Complaint ¶33.) The complaint cannot be read to contain an
England reservation of these claims as provided for in DLX, Inc. See DLX, Inc., 381 F.3d at
The defendants again removed the action to this Court and now move to dismiss Clifty
Properties’ complaint. The defendants argue that this second complaint by Clifty Properties
again asserts a federal constitutional takings claim. It asks the Court to dismiss that claim
without prejudice so that Clifty Properties “can refile its cause of action (hopefully without
federal allegations) in the Pulaski Circuit Court.”
Clifty Properties also asks the Court to take action that would permit this matter to
proceed in state court. It does so through a motion to remand, asking the Court to remand its
state law claims and to stay its federal claims pending a resolution of the state law claims.
In the alternative, it asks the Court to remand all of its claims to Pulaski Circuit Court “for
resolution of the state law claims while preserving the federal claims.”
Clifty Properties asserts federal constitutional claims in its state court complaint.
Accordingly, the matter was properly removed under 28 U.S.C. § 1441(a). “Federal courts
have a virtually unflagging obligation to exercise the jurisdiction given them.” Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15 (1983). Accordingly, the Court will
exercise jurisdiction over this action and the motion to remand must be denied.
The substantive and procedural due process claims must be dismissed with prejudice
because Clifty Properties has no constitutionally protected property interest in a future
rezoning of its land. Clifty Properties, 2016 WL 7015641, at *5-6. To the extent that Clifty
Properties seeks monetary damages on its substantive due process claim, the claim must be
dismissed because it is subsumed by its federal takings claim. Id. at *5.
With regard to the federal takings claim, the Court must again dismiss it because it is
not ripe. Clifty Properties still has not received a final decision in a reverse condemnation
procedure in Kentucky state court. See Clifty Properties, 2016 WL 7015641, at *4.
That leaves Clifty Properties’ state law claims. Pursuant to the discretion granted under
28 U.S.C. § 1367(c), the Court will decline to exercise jurisdiction over these claims in order
“to avoid needless decisions of state law.” Experimental Holdings, Inc. v. Farris, 503 F.3d 514,
521 (6th Cir. 2007). The state law claims will be dismissed without prejudice.
Clifty Properties may again assert a compensation claim in Kentucky state court. If it
desires to preserve its ability to later pursue a federal takings claim in this Court – and if it
desires to avoid removal of its state compensation claim – it should make an explicit
reservation of its federal takings claim in its state court complaint in accordance with DLX,
Inc. See DLX, Inc., 381 F.3d at 515.
For all these reasons, the Court hereby ORDERS as follows:
1) the plaintiffs’ motion to remand (DE 5) is DENIED;
2) the defendants’ motion to dismiss (DE 4) is GRANTED as follows:
a) Clifty Properties’ federal
substantive and procedural due process claims are
DISMISSED with prejudice;
b) Clifty Properties’ federal takings claim is DISMISSED without prejudice; and
c) Clifty Properties’ state law claims are DISMISSED without prejudice; and
3) Clifty Properties’ request for sanctions under 28 U.S.C. § 1447(c) is DENIED; and
4) judgment consistent with this opinion will be entered.
Dated September 11, 2017.
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