Lumbard et al v. Ann Arbor

Filing 13

OPINION and ORDER Granting 6 Motion to Dismiss. Signed by District Judge Stephen J. Murphy, III. (DPar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LYNN LUMBARD, et al.,
Case No. 2:17-cv-13428
Plaintiffs,
HON. STEPHEN J. MURPHY, III
v.
CITY OF ANN ARBOR,
Defendant.
/
OPINION AND ORDER GRANTING ANN ARBOR'S MOTION TO DISMISS [6]
Plaintiffs are residents of Ann Arbor affected by a city ordinance regulating
residential drainage and sewage systems. They allege that the implementation and
enforcement of the ordinance violates, inter alia, their rights under the Fifth Amendment.
Before the Court is Ann Arbor's motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). After reviewing the briefs, the Court finds that a hearing is
unnecessary. E.D. Mich. LR 7.1(f). For the reasons set forth below, the Court will grant
the motion.
BACKGROUND
After bouts of heavy rainfall, Ann Arbor's sanitary-sewer system kept overflowing.
ECF 6, PgID 150. To remedy the issue, Ann Arbor passed an ordinance requiring some
citizens to connect their drainage systems to Ann Arbor's storm-sewer system instead of
the sanitary-sewer system. Id. In some cases, this change required installation of sump
pits, sump pumps, and related equipment. Id. Plaintiffs believed the ordinance violated
their rights, so they filed lawsuits in Michigan courts alleging violations of Michigan's
Takings Clause. ECF 6-5, 6-6, 6-7. Ann Arbor removed one of the cases to federal
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court. Yu v. City of Ann Arbor, Case No. 2:14-cv-11129, ECF 1. But the plaintiffs filed a
motion to remand, which the Court granted. Id., ECF 7, 12. After the remand, the
Michigan trial courts dismissed the lawsuits with prejudice; Plaintiffs then appealed.
ECF 6-2. The Michigan Court of Appeals consolidated the appeals, heard the case, and
affirmed the dismissals. Id. Plaintiffs then filed the present suit in federal court seeking
relief under the federal Takings Clause.
STANDARD OF REVIEW
The Court may grant a Rule 12(b)(6) motion to dismiss if the complaint fails to
allege facts "sufficient 'to raise a right to relief above the speculative level,' and to 'state
a claim to relief that is plausible on its face.'" Hensley Mfg. v. ProPride, Inc., 579 F.3d
603, 609 (6th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570
(2007)). The Court views the complaint in the light most favorable to the plaintiff,
presumes the truth of all well-pled factual assertions, and draws every reasonable
inference in favor of the non-moving party. Bassett v. Nat'l Collegiate Athletic Ass'n, 528
F.3d 426, 430 (6th Cir. 2008). If "a cause of action fails as a matter of law, regardless of
whether the plaintiff's factual allegations are true or not," then the Court must dismiss.
Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1005 (6th Cir. 2009).
DISCUSSION
Plaintiffs allege five "causes of action": (1) violations of the Fifth Amendment; (2)
42 U.S.C. § 1983 claims for violations of the Fifth Amendment and the "right to be free
from mandatory work"; (3) injunctive relief; (4) declaratory relief; and (5) attorney's fees.
ECF 1. The complaint confuses the important differences between substantive rights,
causes of action, and remedies. Even forgiving that technical imprecision, however,

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Plaintiffs fail to state a claim upon which relief can be granted because their action is
barred by res judicata. The Court will therefore dismiss the case.
I.

Res Judicata
Generally, res judicata principles govern the relationship between separate

lawsuits about the same subject matter. 18 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 4401 (3d ed. 2017). The concept governs two subtly
different scenarios: (1) the litigation of matters that have been previously litigated and
decided; and (2) the litigation of matters that have not been previously litigated but
should have been raised in an earlier lawsuit. The first scenario is known as issue
preclusion, the second is known as claim preclusion.1 Id. at § 4402. Under the
doctrines, if certain conditions are met, then a plaintiff is barred from litigating particular
issues or claims. The principles serve the dual purpose of protecting litigants from the
burden of relitigating issues and promoting judicial economy. Parklane Hosiery Co., Inc.
v. Shore, 439 U.S. 322, 326 (1979). For the reasons set forth below, the Court finds that
the decision in Yu v. City of Ann Arbor bars litigation of the issues presented here. No.
331501, 2017 WL 1927846, at *1 (Mich. Ct. App. May 9, 2017).
A. Applicability of Res Judicata
As a preliminary matter, the Court finds that res judicata applies. Plaintiffs
contend that, pursuant to Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank of
Johnson City, 473 U.S. 172 (1985), they were required to litigate their Takings Clause
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As Professors Wright and Miller note in their influential treatise, the terminology has
fluctuated over time—which has often led to confusion in the doctrine. Claim preclusion
is sometimes called res judicata or true res judicata; issue preclusion is sometimes
called collateral estoppel. 18 Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 4402 (3d ed. 2017). For clarity, the Court will use the terms issue
preclusion and claim preclusion.
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claims in state court before proceeding in federal court. And because of that
"requirement," Plaintiffs contend that they properly proceeded in state court while
preserving their federal claims in accord with England v. Louisiana State Bd. of Med.
Examiners, 375 U.S. 411 (1964). Plaintiffs' argument is unpersuasive for several
reasons.
First, Plaintiffs overstate the exhaustion requirement. Exhaustion of TakingsClause claims is not a mandatory jurisdictional requirement but rather a waivable
defense. Stop the Beach Renourishment, Inc. v. Florida Dep't of Envtl. Prot., 560 U.S.
702, 729 (2010); Lilly Investments v. City of Rochester, 674 F. App'x 523, 531 (6th Cir.
2017). So when Ann Arbor removed the original state case to federal court, Plaintiffs did
not need to litigate in state court to exhaust their Takings Clause remedies.
Second, Plaintiffs' "reservations of rights" is inoperative. Congress has ordered
that state judicial proceedings shall have "full faith and credit in every court within the
United States[.]" 28 U.S.C. § 1738. And the Supreme Court has made clear that federal
courts "are not free to disregard 28 U.S.C. § 1738 simply to guarantee that all takings
plaintiffs can have their day in federal court." San Remo Hotel, L.P. v. City & Cty. of San
Francisco, Cal., 545 U.S. 323, 338 (2005). Consequently, an England reservation does
not grant a plaintiff a "second bite at the apple" when, as here, a plaintiff already sought
state review of the same substantive issue. Id. 346. As Justice Thomas later clarified,
San Remo Hotel "dooms" a plaintiff's ability to seek review of federal claims in federal
court after proceeding in state court. Arrigoni Enters., LLC v. Town of Durham, Conn.,
136 S. Ct. 1409, 1410 (2016) (Thomas, J. dissenting from denial of certiorari).

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In addition to comporting with a Congressional mandate, the San Remo Hotel
holding is consistent with the purpose of an England reservation. In England, the
Supreme Court clarified that a plaintiff could reserve his federal claims if he was sent to
state court under the abstention doctrine. 375 U.S. at 420–21. The Supreme Court’s
decision makes sense given the logistics of abstention. Generally, a federal court
abstains to determine whether the resolution of a distinct state issue obviates the need
to answer a federal question. San Remo Hotel, 545 U.S. at 339. Consequently, state
litigation after abstention is usually about a state issue distinct from a plaintiff's federal
claims. And the federal claims are typically not litigated because of a Court order—not a
party's strategic decision. Under those circumstances, it can be unfair to let the state
decision bar federal litigation of the federal claims because doing so would deprive the
plaintiff of an opportunity to advance his federal claims through no fault of his own. That
scenario is inapposite to the one here. The federal court did not deprive Plaintiffs of their
forum of choice. Rather, Plaintiffs moved to remand the case to state court. And once in
state court, Plaintiffs advanced claims that are nearly identical to the ones presented
here. Consequently, applying res judicata does not unfairly deprive Plaintiffs of the
opportunity to advance their claims—they had their day in court.
In sum, while the Court recognizes that applying res judicata in Takings Clause
cases can result in harsh consequences, see Arrigoni Enters., 136 S. Ct. at 1410–12
(2016), that is exactly what Congress and the Supreme Court have said the law
requires. Moreover, applying res judicata in situations like the one at bar ensures
federal courts are not arrogantly second-guessing the work of their state court

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colleagues, returning inconsistent verdicts, and ignoring the important principles of
federalism, comity, and judicial economy.
B. Issue Preclusion
Plaintiffs' Takings Clause claims are barred under the issue preclusion doctrine.
A state-court judgment has the same preclusive effect in federal court as it would have
in the state where it was rendered. Migra v. Warren City Sch. Dist. Bd. of Educ., 465
U.S. 75, 81 (1984). Under Michigan law, issue preclusion applies if Ann Arbor can prove
that: (1) the subject matter of the case here is the same as was previously litigated in
state court; (2) the parties in both suits are the same; and (3) the judgment in state court
was on the merits. Southfield Educ. Ass'n v. Southfield Bd. of Educ., 570 F. App'x 485,
488 (6th Cir. 2014). The Court finds that all three prongs have been satisfied.
The subject matter of the claims are the same. In pertinent part, Plaintiffs seek
relief under the Takings Clause of the Fifth Amendment of the United States
Constitution. In state court, Plaintiffs sought relief under the Takings Clause of the
Michigan Constitution. Although the clauses are from different constitutions, that
difference does not preclude finding that the subject matter is the same. Id. (holding that
the subject matter was the same when the only difference between the first and second
actions was that the first stemmed from the Michigan Constitution and the second
stemmed from the United States Constitution). That is particularly true when, as here,
the clauses in each constitution are "substantially similar." Tolksdorf v. Griffith, 464
Mich. 1, 2 (2001).
The parties in both actions are the same. Here, Lynn Lumbard, Anita Yu, John
Boyer, and Mary Raab are suing Ann Arbor. In Yu v. City of Ann Arbor, No. 331501,

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2017 WL 1927846, at *1 (Mich. Ct. App. May 9, 2017), the Michigan Court of Appeals
consolidated two cases brought, collectively, by the same Plaintiffs against Ann Arbor.
The Michigan Court of Appeals then rendered a judgment, and that judgment bound the
exact same parties present here.
The judgment in state court was on the merits. The Michigan Court of Appeals'
decision thoroughly analyzed the Takings Clause issue, decided Ann Arbor was entitled
to summary disposition, and affirmed the resolution of the case with prejudice. Yu, 2017
WL1927846, at *1. The Takings Clause analysis was necessary to the court's decision,
and the time has passed for Plaintiffs to seek further review in the Michigan courts. See
Mich. Ct. R. 7.305(C)(2). Because a resolution with prejudice "finally disposes of a
party's claim and bars any future action on that claim," the Court finds that the third
prong is satisfied. With Prejudice, Black's Law Dictionary (10th ed. 2014).
Because all three prongs are satisfied, the state court judgment bars Plaintiffs
from relitigating the Takings Clause issue here. Plaintiffs consequently cannot obtain
any legal relief, so a dismissal of the Takings Clause claims is proper.
C. Claim Preclusion
To the extent Plaintiffs are bringing an additional claim under their "right to be
free from mandatory work," that too is barred but under the claim preclusion doctrine.2
The Court again applies state law to determine the preclusive effect of a state judgment
under the claim preclusion doctrine. Southfield Educ. Ass'n, 570 F. App'x at 489 (citing
Hapgood v. City of Warren, 127 F.3d 490, 493–94 (6th Cir.1997)). Under Michigan law,
claim preclusion applies when: (1) the original decision was on the merits; (2) an issue

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The Court assumes, arguendo, that Plaintiffs' claim is cognizable.
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in the subsequent action should have been litigated in the original action; and (3) the
parties in the subsequent action are the same as the parties in the original action. Id.
(citing Dart v. Dart, 460 Mich. 573, 586 (1999)). The first and third prongs are
duplicative of the analysis under issue preclusion, so those prongs are satisfied for the
same reasons provided in Section I.A.
As to the second prong, whether any new issues presented here should have
been litigated in the earlier state court proceedings, Michigan courts have adopted a
"broad approach" meaning that "all claims arising from the same transaction that could
have been raised in state court, but were not, are barred." Id. All claims here arise from
the exact same transaction underlying the state court proceedings. And although the
claims here are federal, nothing suggests Plaintiffs could not have raised the federal
issues in the state court proceedings.3 See Migra, 465 U.S. at 84 (holding that res
judicata principles apply even when plaintiffs opt not to bring related federal claims in
state court proceedings); San Remo Hotel, 545 U.S. at 342 (rejecting argument that
plaintiffs "have a right to vindicate their federal claims in a federal forum"). Accordingly,
the Court finds that the second prong is satisfied.
Because all three prongs are satisfied, the state court judgment bars Plaintiffs
from raising the new federal issues presented here. Plaintiffs consequently cannot
obtain any legal relief, so a dismissal of any remaining claims is proper.

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The one exception may be Plaintiffs' claim for declaratory relief because 28 U.S.C.
§ 2201 provides that a "court of the United States" can provide declaratory relief. But
"the availability of such relief presupposes the existence of a judicially remediable right."
Schilling v. Rogers, 363 U.S. 666, 677 (1960). Because no remediable rights remain,
the relief sought is unavailable.
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II.

Conclusion
Because Plaintiffs cannot obtain any legal relief based on the claims listed in the

complaint, the Court will grant Ann Arbor's motion and dismiss the case.
ORDER
WHEREFORE, it is hereby ORDERED that Defendant's Motion to Dismiss [6] is
GRANTED.
This is a final order that closes the case.
SO ORDERED.
s/ Stephen J. Murphy, III
STEPHEN J. MURPHY, III
United States District Judge
Dated: February 7, 2018
I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on February 7, 2018, by electronic and/or ordinary mail.
s/ David Parker
Case Manager

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