Town of Nags Head v. Toloczko, et al
Filing
54
ORDER - The Court declines to exercise jurisdiction over the case at this time. Accordingly, the Court dismisses without prejudice Defendants' first through fifteenth, seventeenth and eighteenth counterclaims, and dismisses the Town's firs t and second claims. The Court stays Defendants' sixteenth, ninteenth, twentieth and twenty-first counterclaims, and the Town's third claim. The Court grants in part and dismisses in part without prejudice the Town's 17 motion to dismiss. The Court denies without prejudice Defendants' 25 motion for partial summary judgment. Signed by Chief Judge James C. Dever III on 03/28/2012. (Skinner, J.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
NORTHERN DIVISION
No.2:11-CV-I-D
TOWN OF NAGS HEAD,
Plaintiff,
v.
MATTHEW A. TOLOCZKO,
and LYNN B. TOLOCZKO,
Defendants.
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ORDER
At its core, this case involves whether the Town ofNags Head ("Town" or "plaintiff') can
enforce land-use ordinances against the owners of a private home abutting the ocean beach. The
case raises profound and unresolved issues of North Carolina law that transcend this particular
case. As the Fourth Circuit has recognized on several occasions, it is not the role ofa federal court
to intervene in such delicate state-law matters. Accordingly, and as explained in detail below, the
court dismisses without prejudice defendants' counterclaims for equitable or declaratory relief,
abstains from hearing defendants' other counterclaims and the Town's claim for damages and
stays those claims and counterclaims, and dismisses certain claims and counterclaims that are
moot or unripe.
I.
Matthew A. Toloczko and Lynn B. Toloczko (collectively "Toloczkos" or "defendants")
own an oceanfront cottage ("Cottage") located at 199 East Seagull Drive, Nags Head, North
Carolina. Countercl. [D.E. 7]
~~
3, 7. Over the years, natural forces have gradually eroded the
beach that once separated defendants' Cottage from the Atlantic Ocean. See Pl.'s Resp. Defs.'
Mot. Summ. 1. [D.E. 30] 2-3. On November 12, 2009, a powerful storm struck the Town.
Countercl. ~, 30-32. This storm damaged the Cottage and washed away a significant amount of
surrounding sand, including the sand around the Cottage's septic tank. Id. ~~ 32-33.
On November 14,2009, the Town sent the town manager to inspect defendants' Cottage.
Am. Compl. [D.E. 1-3]
~
5. Based on the damage observed during this inspection, the Town
condemned the Cottage. Id. ~~ 4-6; Countercl. ~ 37. On November 30, 2009, the Town issued
a declaration ofnuisance (''Nuisance Declaration"), an order ofabatement, and a warning citation
to defendants. Am. Compl. ~ 8; id. Ex. A; Countercl. ~ 38; id. Ex. A. The Nuisance Declaration
informed defendants that the Cottage created a "likelihood of personal and property injury" and
was located in the ''public trust," in violation of Town Ordinance § 16-31(6)(b) and (c)
("Ordinance 16-31(6)"). Am. Compl. Ex. A; Countercl. Ex. A.I The Town instructed defendants
to demolish the Cottage within eighteen days or face daily $100 fines. Am. Compl. ~~ 9, 10; id.
Ex. A; Countercl. ~~ 40,42; id. Ex. A. The Town also warned defendants that it would take action
to demolish the Cottage ifdefendants refused to do so themselves. Am. Compl. Ex. A; Countercl.
~ 40;
id. Ex. A. On January 15,2010, the Town issued defendants a civil citation for failure to
comply with the Nuisance Declaration and began assessing daily $100 civil penalties. Am. Compl.
~
15; id. Ex. B; Countercl. Ex. B.
I
Ordinance 16-31(6) provides:
Storm or erosion damaged structures and resulting debris. The existence of any of
the following conditions associated with storm-damaged or erosion-damaged
structures or their resultant debris shall constitute a public nuisance.
(a) Damaged structure in danger of collapsing;
(b) Damaged structure or debris from damaged structures where it can
reasonably be determined that there is a likelihood of personal or property
injury;
(c) Any structure, regardless of condition, or any debris from damaged
structure which is located in whole or in part in a public trust area or public
land.
Nags Head, N.C., Code § 16-31(6).
2
On July 7, 2010, the Town adopted Ordinance No. 10-07-021 ("Ordinance 10-07-021 "),
which amended various sections ofthe Town's Code ofOrdinances. Countercl.,-r 63; Nags Head,
N.C., Ordinance No. 10-07-021 (July 7, 2010). 2 In essence, Ordinance 10-07-021 requires owners
of properties located within the ''public trust beach area" to obtain building pennits before
undertaking any construction-related work on their properties. See Ordinance No. 10-07-021. It
also prohibits the issuance of building pennits for structures that have been declared public
nuisances pursuant to Ordinance 16-31(6). Id.
On December 6,2010, the Town filed suit in the Dare County, North Carolina Superior
Court ("Dare County Superior Court"), requesting an expedited hearing and seeking an order of
abatement for the Cottage and recovery ofthe civil penalties that it had assessed against defendants
[D.E. 1-2]. The Town amended its complaint on January 6, 2011 [D.E. 1-3]. The Town now
asserts three claims:
(1) An order of abatement pursuant to N.C. Gen. Stat. § 160A-175. Am. Compl.
,-r B.
(2) In the alternative, an order of abatement pursuant to N.C. Gen. Stat. § 160A
193. Id.,-r C.
(3) Recovery of civil penalties pursuant to N.C. Gen. Stat. § 160A-175. Id.,-r D.
On January 7, 2011, defendants removed the case to this court based on diversity of
citizenship [D.E. 1]. On January 21,2011, defendants filed an answer and asserted twenty-one
2 Ordinance 10-07-021 is available at http://216.92.112.133/departmentsiadministrationl
Board-ordinances/index-ordinances.htm (last visited Mar. 28,2012) (available under the heading
"Public trust land pennitting"). The ordinance contains four amendments to the Town's Code of
Ordinances. The first amendment defines the term ''public trust beach area." See Nags Head, N.C.,
Code § 48-7. The second classifies as "prohibited" any structure that existed in the public trust
beach area and states that a Nuisance Declaration issued pursuant to Ordinance 16-31(6)(c) is
sufficient, but not necessary, to "prohibit" a structure. See id. § 48-87(c). In addition, any
construction or maintenance work (but not demolition work) on prohibited structures now requires
building pennits. See id. The third amendment adds similar building restrictions to another section
of the Town's Code. See id. § 48-123. The fourth bans the issuance of building pennits for any
structure subject to a Nuisance Declaration. See id. § 16-33(c).
3
counterclaims against the Town [D.E. 7]:
(1) Declaratory judgment that the Cottage is not in the "[P]ublic [t]rust" area.
Countercl." 106-14.
(2) Declaratory judgment that the Town's enactment of Ordinance 16-31(6)(c)
exceeded the Town's state statutory authority. Id." 115-22.
(3) Declaratory judgment that the Town's ordering defendants to demolish the
Cottage violated N.C. Gen. Stat. §§ 160A-441 to -540. Id." 123-30.
(4) Declaratory judgment that the Cottage is "not likely to cause personal or
property injury." Id. ,,131-37.
(5) Declaratory judgment that the Town lacks the authority to declare structures on
the "dry sand beach" nuisances. Id." 138-53.
(6) Declaratory judgment that Ordinance 16-31 (6)(c) does not authorize the Town
to declare as nuisances structures located on the "dry sand beach." Id." 154-62.
(7) Declaratory judgment that N.C. Gen. Stat. § 143-138 preempts Ordinance 10
07-021. Id." 163-78.
(8) Declaratory judgment that the Town's enactment of Ordinance 10-07-021
exceeded the Town's zoning authority. Id." 179-91.
(9) Declaratory judgment that the Town's enactment of Ordinance 10-07-021
exceeded the Town's nuisance authority. Id." 192-209.
(10) Declaratory judgment that Ordinance 10-07-021 unlawfully delegates the
Town's zoning power to the town manager. Id." 210-21.
(11) Declaratory judgment that the Cottage is not subject to Ordinance 10-07-021.
Id. " 222-31.
(12) Declaratory judgment that the Town's enactment of Ordinance 10-07-021
violated defendants' vested rights to the application of the Town's unamended
ordinances. Id." 232-52.
(13) Declaratory judgment that the Town's actions deprived defendants of their
substantive due process rights as provided by the United States and North Carolina
Constitutions. Id." 253-56.
(14) Declaratory judgment that the Town's actions deprived defendants of their
procedural due process rights as provided by the United States and North Carolina
Constitutions. Id." 257-60.
(15) Declaratory judgment that the Town's actions deprived defendants of equal
protection under the law as provided by the United States and North Carolina
Constitutions. Id." 261-68.
4
(16) The Town acted Wlder color of state law to deprive defendants oftheir rights
secured by the Fifth and Fourteenth Amendments ofthe United States Constitution,
in violation of 42 U.S.C. § 1983. Id." 269-73.
(17) Preliminary and permanent injWlctions against the Town's demolishing the
Cottage. Id." 274--82.
(18) The Town's actions were a regulatory taking Wlder the United States and
North Carolina Constitutions. Id." 283-92.
(19) Initiation of an inverse condemnation proceeding against the Town. Id."
293-306.
(20) The Town slandered defendants' property title. Id." 307-15.
(21) The Town was negligent in determining that the Cottage violated Ordinance
16-31(6). Id." 316-21.
On February 25,2011, the Town filed an answer to defendants' coWlterclaims [D.E. 12,
15].
On March 8, 2011, the Town moved to dismiss two of defendants' cOWlterclaims
(coWlterclaims three and twenty-one) and filed a supporting memorandum [D.E. 17, 19]. On
March 22,2011, defendants responded [D.E. 20].
On JWle 14, 2011, defendants moved for partial summary judgment, arguing that they were
entitled to judgment as a matter of law as to all of the Town's claims and five of defendants'
coWlterclaims (coWlterclaims one through five) [D.E. 25, 26]. The Town responded in opposition
on July 25,2011 [D.E. 30], and defendants replied on July 27,2011 [D.E. 31].
On September 19,2011, defendants asked the court to hold a status hearing [D.E. 32], to
which the Town did not object [D.E. 34]. The Town and defendants informed the court that a
beach nourishment project had restored the beach sand in front ofthe Cottage and, as a result, the
Town had withdrawn the Nuisance Declaration on September 14, 2011. See Defs.' Mot. Status
Conf. [D.E. 32] Ex. A; PI. 's Resp. Defs.' Mot. Status Conf. [D.E. 34] 1-2. Specifically, the Town
notified defendants that the Cottage "no longer constitutes a violation of Town Code Sec. 16
31(6)(b) & (c)," and the Town invited defendants to apply for permits to repair any damage to the
Cottage. Defs.' Mot. Status Conf. Ex. A. The Town explained that even though the Cottage was
5
"clearly still" in the public trust area, the Town had lifted the Nuisance Declaration because the
Cottage no longer impeded ''use of and access to the ocean beach." Id.
On November 7, 2011, defendants moved for partial summary judgment as to fourteen of
their counterclaims (counterclaims six through sixteen and eighteen through twenty) [D.E. 37,
38-43]. On December 9,2011, the Town responded in opposition [D.E. 46]. On December 23,
2011, defendants replied [D.E. 47].
On February 23, 2012, defendants supplemented their summary judgment motions by
notifying the court ofTown ofNags Head v. Cherry. Inc., _N.C. App. ---' 2012 WL 540742
(2012) [D.E. 48]. Relying on Cherry, defendants also requested leave to file a motion to dismiss
the Town's claims [D.E.49]. The Town responded in opposition [D.E. 50], and defendants replied
[D.E.51]. On March 23,2012, the Town filed a motion for leave to file a motion for summary
judgment [D.E. 53].
n.
Because this case involves diverse parties, the court has subject-matter jurisdiction over
the claims and counterclaims. 28 U.S.C. § 1332. Initially, however, the court addresses whether
it should exercise its jurisdiction.
A.
Federal courts may decline to exercise jurisdiction in "exceptional circumstances."
Quackenbush v. Allstate Ins. Co., 517U.S. 706, 716 (1996)(quotationomitted); see New Orleans
Pub. Serv.. Inc. v. Council ofCity ofNew Orleans (NOPSD. 491 U.S. 350, 358-59 (1989); Colo.
River Water Conservation Dist. v. United States, 424 U.S. 800. 813-14 (1976); Martin v. Stewart,
499 F.3d360, 363 (4thCir. 2007). The abstention doctrine recognizes "that a federal court has the
authority to decline to exercise jurisdiction when it is asked to employ its historic powers as a court
of equity." Quackenbush, 517 U.S. at 717 (quotation omitted). Despite the doctrine's equity
based roots, "the authority ofa federal court to abstain from exercising its jurisdiction extends to
6
all cases in which the court has discretion to grant or deny relief." Qyackenbush, 517 U.S. at 718;
see NOPSI, 491 U.S. at 359. Thus, the abstention doctrine pennits federal courts to decline to
exercise jurisdiction over declaratory judgment actions. Qyackenbush, 517 U.S. at 718; see, ~
Samuels v. Mackell, 401 U.S. 66,69-70 (1971); Great Lakes Dredge & Dock Co. v. Huffman, 319
U.S. 293,297 (1943). In addition, federal courts may abstain from exercising jurisdiction over
actions "at law" by postponing federal adjudication of a dispute. Quackenbush, 517 U.S. at
719-20; Johnson v. Collins Entm't Co.• Inc., 199 F.3d 710, 727-28 (4th Cir. 1999).
Abstention "remains the exception, not the rule." NOPSI, 491 U.S. at 359; see Colo. River,
424 U.S. at 813. A federal court may abstain only ''when principles of federalism and comity
outweigh the federal interest in deciding a case." Martin, 499 F.3d at 363 (quotation omitted); see
Qyackenbush, 517 U.S. at 716. Moreover, "[t]he Supreme Court has never allowed abstention to
be a license for free-form ad hoc judicial balancing ofthe totality of state and federal interests in
a case. The Court has instead defined specific doctrines that apply in particular classes ofcases."
Martin, 499 F.3d at 364 (emphasis omitted); see NOPSI, 491 U.S. at 359. Although the court has
identified specific classes ofcases warranting abstention, these classes "are not rigid pigeonholes
into which federal courts must tIy to fit cases." Pennzoil Co. v. Texaco Inc., 481 U.S. 1, 11 n.9
(1987); see Martin, 499 F.3d at 364~ Johnson, 199 F.3d at 728. "Rather, they reflect a complex
of considerations designed to soften the tensions inherent in a system that contemplates parallel
judicial processes." Pennzoil, 481 U.S. at 11 n.9; see Johnson, 199 F.3d at 728.
The abstention doctrine announced in Burford v. Sun Oil Co., 319 U.S. 315 (1943), is
particularly relevant here. In Burford, an oil company challenged a state agency's order regulating
oil and gas pennitting. Id. at 316-19. The oil company sought to enjoin the order's enforcement
and, based on diversity ofcitizenship and an alleged denial offederal rights, brought its claims in
federal court. Id. at 317. The district court abstained, and the Supreme Court affirmed. Id. at 334.
The Court noted that oil and gas exploration raised important and complex state issues, causing
7
the state to enact an elaborate regulatory and appellate scheme for oil and gas exploration
permitting. See id. 318-24. Because a federal decision interpreting that scheme could create
conflicting precedents and generate confusion in a well-regulated area of great state importance,
the Court held that "equitable discretion should be exercised." Id. at 327-32. Subsequently, the
Court made clear that Burford requires a federal court to abstain when adjudication would unduly
intrude upon a complex state regulatory scheme because a case raises difficult and important
questions of state law that transcend the case or because federal adjudication would disrupt a
state's coherent public policy. See Quackenbush, 517 U.S. at 725-27; NOPSI, 491 U.S. at 361;
Colo. River, 424 U.S. at 814-16; Martin, 499 F.3d at 364; Johnson, 199 F.3d at 719; Pomponio
v. FauquierCnty. Bd. of Supervisors, 21 F.3d 1319,1325 (4th Cir. 1994) (en banc), overruled on
other grounds by Quackenbush, 517 U.S. at 730-31. Notably, Burford abstention is appropriate
when a federal court's ruling would interfere with "complex state administrative procedures."
Great Am. Ins. Co. v. Gross, 468 F.3d 199,206 n.5 (4th Cir. 2006); Chase Brexton Health Servs.,
Inc. v. MaIyland, 411 F.3d 457, 462 n.l (4th Cir. 2005); see Martin, 499 F.3d at 364; see also
NOPSI, 491 U.S. at 361; Pomponio, 21 F.3d at 1325.
Louisiana Power & Light Co. v. City ofThibodaux, 360U.S. 25 (1959), is also noteworthy.
In Thibodaux, a Louisiana municipality exercised its eminent domain power to expropriate a
Florida-based power company's land, buildings, and equipment. Id. at 25. The power company
removed the case to federal court based on diversity ofcitizenship. Id. However, the district court
stayed the action to allow the Louisiana Supreme Court to interpret the state statute at issue. Id.
at 26,30. The United States Supreme Court affirmed the district court's decision to abstain. Id.
at 30-31. The Court stated that ''the justification for [a court's abstention] power ... lies in regard
for the respective competence of the state and federal courts systems and for the maintenance of
harmonious federal-state relations in a matter close to the political interests of a State." Id. at 29.
Not only was eminent domain "intimately involved with sovereign prerogative," but determining
8
the bounds of a municipality's eminent domain power would have required intrusion into the
"apportionment ofgovernmental powers between City and State." Id. at 28. The Court noted that
no Louisiana court, in a similar context, had interpreted the statute at issue. Id. at 30. Rather than
forcing the district court to "make a dubious and tentative forecast" ofstate law, the prudent course
was to delay the federal proceedings until Louisiana courts had spoken to the issue. Id. at 29-30.
The Court held that the "hazards ofserious disruption by federal courts of state government" and
the "needless friction between state and federal authorities" justified the district court's decision
to abstain. Id. at 28. Thibodaux thus established grounds for abstention "where there have been
presented difficult questions ofstate law bearing on policy problems of substantial public import
whose importance transcends the result in the case then at bar." Colo. River, 424 U.S. at 814;
Country Vintner of N.C., LLC v. E & J Gallo Winery, Inc., No. 10-2289,2012 WL 29166, at *2
(4th Cir. Jan. 6, 2012) (unpublished) (quotation omitted); see Neufeld v. City of Balt., 964 F.2d
347,349 (4thCir. 1992); see also Quackenbush, S17U.S. at 717 ("[F]ederalcourtshavethepower
to refrain from hearing cases ... raising issues intimately involved with the State's sovereign
prerogative, the proper adjudication ofwhich might be impaired by unsettled questions ofstate law
...." (quotation and alterations omitted»; Gross, 468 F.3d at 206 n.S; Chase Brexton, 411 F.3d
at 462 n.!.
Despite their factual differences, Burford and Thibodaux support abstention based on the
danger offederal interference with unsettled, important policy matters reserved to the states. Colo.
River, 424 U.S. at 814.3 As the Court discussed in Thibodaux, challenges to municipal regulation
3 The Court has indicated that Burford and Thibodaux give rise to a single abstention
doctrine. See Colo. River, 424 U.S. at 814-16 & n.21 (grouping the two cases' abstention rules
within the same "general categor[y]" of abstention); see also NOPSI, 491 U.S. at 361 (articulating
a single "Burford doctrine" based on the Colorado River Court's unified description ofBurford and
Thibodaux). The Fourth Circuit treats Burford and Thibodaux as articulating two distinct abstention
rationales. See,~, Country Vintner, 2012 WL 29166, at *2; Gross, 468 F.3d at 206 n.S; Chase
Brexton, 411 F.3d at 462 n.l; Pomponio, 21 F.3d at 1325.
9
ofloca1 property are rife with difficult and important state-law questions that transcend a particular
case. See 360 U.S. at 28-30. Although the presence ofa municipal land-use issue does not alone
warrant abstention, see Cnty. ofAllegheny v. Frank Mashuda Co., 360 U.S. 185, 191-92 (1959);
Neufeld, 964 F.2d at 350-51, the Fourth Circuit has repeatedly counseled district courts to avoid
interference with a municipality's land-use regulation authority. See Pomponio, 21 F.3d at 1328;
Front Royal & Warren Cnty. Indus. Park Com. v. Town of Front Royal. Va., 945 F.2d 760, 765
(4th Cir. 1991); Beacon Hill Farm Assocs. IT Ltd. P'ship v. Loudoun Cnty. Bd. ofSupervisors, 875
F.2d 1081, 1085 n.6 (4th Cir. 1989); Meredith v. Talbot Cnty.• Md., 828 F.2d 228, 231-32 (4th
Cir. 1987); Browning-Ferris, Inc. v. Balt. Cnty., Md., 774 F.2d 77, 79 (4th Cir. 1985); Caleb Stowe
Assocs.. Ltd. v. Albemarle Cnty.. Va., 724 F.2d 1079, 1080 (4th Cir. 1984); Nature Conservancy
v. Machipongo Club, Inc., 579 F.2d 873, 875-76 (4th Cir. 1978) (per curiam); Fralin & Waldron.
Inc. v. City ofMartinsville. Va., 493 F.2d 481, 482-83 (4th Cir. 1974).4 Accordingly, the Fourth
Circuit has approved abstaining from deciding municipal land-use questions based on Burforg, see,
~
Pomponio, 21 F.3d at 1328; Front Royal, 945 F.2d at 763; Meredith, 828 F.2d at 232;
Browning-Ferris, 774 F.2d at 79-80, and Thibodaux, see,~, Caleb Stowe, 724 F.2d at 1080;
Machipongo, 579 F.2d at 873; Fralin & Waldron, 493 F.2d at 483. In Pomponio, the Fourth
Circuit declared that "[i]n cases in which plaintiffs' federal claims stem solely from construction
of state or localland[-luse or zoning law ... the district courts should abstain under the Burford
doctrine to avoid interference with the State's or locality's land[-]use policy." 21 F.3d at 1328.
Regardless ofwhich abstention doctrine a court cites in a land-use case, the central theme
is the same--land use is an important public policy that lies within the prerogative ofa sovereign
state, see Pomponio, 21 F.3d at 1327 ("We can conceive of few matters ofpublic concern more
4 The court has located only one land-use case in which the Fourth Circuit held that
abstention was inappropriate. See Neufeld, 964 F.2d at 350-51. In Neufeld, the court held that the
land-use issues were straightforward under state law and merely "peripheral" to the preemption
question at the case's heart. See id.
10
substantial than zoning and land[-]use laws."); Meredith, 828 F.2d at 232; Browning-Ferris, 774
F.2d at 79; Caleb Stowe, 724 F.2d at 1080; Machipongo, 579 F.2d at 876; Fralin & Waldron, 493
F .2d at 483, and state courts have expertise in handling this public policy issue. See Front Royal,
945 F.2d at 765; Caleb Stowe, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482. In other
words, especially where the legal issues are important and unresolved, "state and local zoning and
land[-]use law is particularly the province of the State and ... federal courts should be wary of
intervening in that area in the ordinary case." Pomponio, 21 F.3d at 1327.
These abstention doctrines apply to cases, such as this one, that arise under the court's
diversity jurisdiction.
See,~,
Burford, 319 U.S. at 317-18; Thibodaux, 360 U.S. at 25;
Machipongo, 579 F.2d at 875. Furthermore, the court can abstain sua sponte. E.g., Front Royal,
945 F.2d at 763; Caleb Stowe, 724 F.2d at 1080.
B.
Fifteen of defendants' counterclaims seek declaratory relief. The Declaratory Judgment
Act allows a court, "[i]n a case of actual controversy within its jurisdiction ... [, to] declare the
rights and other legal relations of any interested party seeking such declaration, whether or not
further relief is or could be sought." 28 U.S.C. § 2201. The Declaratory Judgment Act is an
enabling provision, conferring on courts discretion to grant declaratory relief; it does not confer
"an absolute right upon [a] litigant." Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995)
(quotation omitted). "[D]istrict courts have great latitude in determining whether to assert
jurisdiction over declaratory judgment actions." United Capitol Ins. Co. v. Kapiloff, 155 F.3d488,
493 (4th Cir. 1998) (quotation omitted); Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co., 139 F.3d
419,422 (4th Cir. 1998) (per curiam).
However, this discretion is not unbridled.
See,~,
Kapiloff, 155 F.3d at 493; Ind-Com,
139 F.3d at 422. When deciding whether to render a declaratory judgment, a court should
determine whether the controversy is better suited for state-court resolution. See, e.g., Ind-Com,
11
139 F.3d at 422-23; Chapman v. Clarendon Nat'llns. Co., 299 F. Supp. 2d 559, 563 (E.D. Va.
2004); Aetna Cas. & Sur. Co. v. Alpha Mech.. Inc., 9 F. Supp. 2d 585,586-89 (W.D.N.C. 1998);
cf. Wilton, 515 U.S. at 282; Kapiloff, 155 F.3d at 493-94. The court should consider:
(i) the strength of the state's interest in having the issues raised in the federal
declaratory action decided in the state courts; (ii) whether the issues raised in the
federal action can more efficiently be resolved in [state court]; (iii) whether
permitting the federal action to go forward would result in unnecessary
entanglement between the federal and state court systems, because ofthe presence
of overlapping issues of fact or law; and (iv) whether the declaratory judgment
action is being used merely as a device for procedural fencing.
Am. Nat'l Prop. & Cas. Co. v. Skiles, 5 F. App'x 206, 208 (4th Cir. 2001) (per curiam)
(unpublished) (quotations and alterations omitted); see Kapiloff, 155 F.3d at 493-94; Ind-Com,
139 F.3d at 422. In essence, the court should base its analysis on federalism, efficiency, and
comity concerns.
See,~,
Ind-Com, 139 F.3d at 422-23; Alpha Mech., 9 F. Supp. 2d at 587 &
n.5. Moreover, before abstaining, the court need not fmd that each enumerated factor has been
satisfied. See Kapiloff, 155 F.3d at 494 (district court did not abuse its discretion when there was
a "set ofmixed indicators").
A federal court should not grant declaratory relief when doing so would cause the court "to
break: new ground or [face] novel issues of state interest." Kapiloff, 155 F.3d at 494; see also
Ind-Com, 139 F.3d at 424; Mitcheson v. Harris, 955 F.2d235, 236, 238, 240 (4th Cir. 1992); Am.
Motorists v. Commonwealth Med. Liab. Ins., 306 F. Supp. 2d 576,581 (E.D. Va. 2004); Chapman,
299 F. Supp. 2d at 563-64; Alpha Mech., 9 F. Supp. 2d at 588. "In other words, in declaratory
actions Congress has afforded the federal courts a freedom not present in ordinary diversity suits
to consider the state interest in having state courts determine questions of state law." Mitcheson,
955 F.2d at 238. Moreover, as a federal district court in North Carolina, this court lacks authority
to certify questions of North Carolina law to the Supreme Court of North Carolina. See In re
McCormick, 669 F.3d 177, 182 n* (4th Cir. 2012).
12
m.
In light of these principles, the court considers whether to exercise jurisdiction over
defendants' counterclaims and the Town's claims.
A.
Defendants' first six counterclaims seek declarations that Ordinance 16-31 (6)(c) is either
invalid or inapplicable to defendants' Cottage. The court declines to exercise jurisdiction over
these counterclaims based both on abstention principles and the discretionary nature ofthe court's
declaratory judgment power.
Here, defendants contest a local land-use regulation's application. Although Ordinance
16-31 (6)(c) may not be a traditional zoning law, the ordinance is nonetheless a land-use regulation.
In general, nuisance laws are closely related to zoning laws. See 83 Am. Jur. 2d Zoning &
Planning § 1 (2012); lOlA C.J. S. Zoning & Land Planning § 1 (2011). The significant difference
between the two is their respective objectives: nuisance laws seek to prevent one owner's land
use from interfering with another owner's land use. See 66 C.J.S. Nuisances § 1 (2011). Zoning
laws, onthe other hand, promote a community's "health, safety, morals, and general welfare." See
83 Am. Jur. 2d Zoning & Planning § 1 (2012). Despite having different objectives, zoning and
nuisance laws have the same effect-they regulate land use. Compare 83 Am. Jur. 2d Zoning &
Planning § 1 (2012) (zoning decisions control individual and community land use), and lOlA
C.J.S. Zoning & Land Planning § 1 (2011 ) (zoning is the regulation of land use), with Phlla. Elec.
Co. v. Hercules. Inc., 762 F.2d 303, 314 & n.lO (3d Cir. 1985) ("[T]he goal ofnuisance law is to
achieve efficient and equitable solutions to problems created by discordant land uses. " (emphasis
removed)), 58 Am. Jur. 2d Nuisances § 151 (2012) (the law of nuisance entails a balancing of
competing land uses), and 66 C.J.S. Nuisances § I (2011) (same). Thus, a public nuisance
ordinance is classifiable as a land-use regulation. See Cleveland Housing Renewal Project v.
Deutsche Bank Trust Co., 621 F.3d554, 566-68 (6thCir. 201 O)(finding public nuisance ordinance
13
to be a land-use regulation, but holding that Burford abstention was inappropriate because district
court's ruling would not disrupt state's uniform policy); cf. Lucas v. S.C. Coastal Council, 505
U.S. 1003, 1028-32 (1992) (a landowner is not entitled to compensation when a government
enacts a "confiscatory regulation" that "do[es] no more than duplicate the result that could have
been achieved ... by adjacent landowners ... under the State's law of private nuisance ....").
Ordinance 16-31 (6)(c), which essentially prohibits landowners from using property in a way that
obstructs the ocean beach, is a land-use regulation. Despite its "nuisance" caption, the ordinance
promotes the public's safety and general welfare by ensuring unobstructed use of the ocean
beaches.
Defendants' counterclaims ask the court to construe a municipal land-use regulation.
Defendants seek a declaratory judgment that the Cottage is not in the "public trust area," see
Countercl. W106-14, and argue that the "public trust area" does not include the "dry sand beach,"
see id.
~~
154-62. To rule on these counterclaims, the court would need to determine the
definition ofthe term "public trust area," as used in Ordinance 16-31 (6)(c). Thus, defendants ask
the court to interpret a municipal land-use regulation. See Caleb Stowe, 724 F.2d at 1080; Fralin
& Waldron, 493 F.2d at 482-83. Moreover, the court would have little state-law guidance to
assist it in doing so. See Burford, 319 U.S. at 331; Johnson, 199 F.3d at 721; Machipongo, 579
F.2dat 87. s
s The court would have to rely on a hodgepodge of tangential and conflicting sources in
construing the ordinance. For instance, according to statute, "public trust rights" include ''the right
to freely use and enjoy the State's ocean and estuarine beaches ...." N.C. Gen. Stat. § 1-45.1. In
addition, citizens have public trust rights in the "ocean beaches," N.C. Gen. Stat. § 77-20(d), and
"ocean beaches" include the "dry sand area ... that is subject to occasional flooding by tides ...."
Id. § 77-20(e). Thus, public trust rights arguably include at least a portion of the dry sand area.
However, inCooperv. United States, 779F. Supp. 833 (E.D.N.C. 1991), the court noted that
"[t]he extent to which the public trust doctrine applies to dry sand in North Carolina is an unsettled
question." Id. at 835; cf. Concerned Citizens of Brunswick Cnty. Taxpayers Ass'n v. State ex reI.
Rhodes, 329 N.C. 37, 55, 404 S.E.2d 677, 688 (1991) ("We note dicta in the Court of Appeals
opinion to the effect that the public trust doctrine will not secure public access to a public beach
across the land of a private property owner. As the statement was not necessary to the Court of
14
Defendants also challenge the Town's authority to enact Ordinance 16-31(6)(c) and to
enforce the ordinance against the Cottage.
See Countercl. -,r-,r 115-22, 123-30, 138-53.
Defendants do not question North Carolina's authority to abate a nuisance such as the Cottage;
instead, defendants contend that the state legislature has not delegated this power to the Town. See
id.6 Defendants' request is strikingly similar to the one made by the power company in Thibodaux,
which required the district court to determine the "apportionment of [eminent domain] powers
Appeals opinion, nor is it clear that in its unqualified form the statement reflects the law ofthis state,
we expressly disavow this comment." (citation omitted)). Thus, "in the absence of a clear
precedent[,]" the Cooper court held that the public trust doctrine did not apply to a privately owned
dry sand area. 779 F. Supp. at 835; cf. West v. Slick, 313 N.C. 33,60-62,326 S.E.2d 601,617-18
(1985) (recognizing the "long standing right of the public to pass over and along" wet sand area).
Further complicating the matter, the North Carolina Constitution declares that "it shall be a
proper function ofthe State ofNorth Carolina and its political subdivisions ... to preserve as a part
ofthe common heritage ofthis State its ... beaches ... and places ofbeauty." N.C. Const. art. XIV,
§ 5. Yet, it is unclear whether, in preserving "beaches," the state should preserve only wet sand, or
wet and dry sand.
Finally, even if the court were able to determine the boundaries of the "public trust rights,"
it is unclear whether the term "public trust area," as used in Ordinance 16-31(6)(c), is synonymous
with the "public trust rights" referred to in section 77-20, or whether "public trust area" in the
ordinance means something else.
In Cherry, the Court of Appeals of North Carolina held that only the State of North
Carolina, acting through the Attorney General, has the authority to enforce public trust rights.
2012 WL 540742, at *6. The appellate court also rejected the Town's arguments that enforcing
a nuisance ordinance against a property located in the public trust is distinct from enforcing the
public trust itself. See id. at *5. However, the issue is far from settled. The Town has fifteen days
from the issuance ofthe appellate court's mandate to petition the Supreme Court ofNorth Carolina
for discretionary review and has stated its intent to file such a petition. See N.C. R. App. P. 15(b).
The appellate court's mandate did not issue until twenty days after the opinion was filed (which
was on February 21, 2011). Id.32(b). Furthermore, upon petition for discretionary review, the
Supreme Court of North Carolina will likely stay the mandate until it can determine whether
review is warranted. See id. 23(b). At present, this court is not prepared to say whether the North
Carolina Court of Appeals accurately has predicted how the Supreme Court of North Carolina
would (or will) rule on the issues in controversy in Cherry. Cf. Time Warner Entm't
AdvanceINewhouse P'ship v. Carteret-Craven Elec. Membership Corp., 506 F.3d 304, 314 (4th
Cir. 2007) (federal court construing state law should not create or expand state public policy);
Twin Cities Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage Co., 433 F.3d 365, 369 (4th Cir. 2005)
(in diversity cases, a court must predict how the state supreme court will resolve a contested issue
of state law).
6
15
between City and State." 360 U.S. at 28. More generally, though, federal courts should be
reluctant to interfere with a municipality's authority regarding land use. See Fralin & Waldron,
493 F.2d at 482; Caleb Stowe, 724 F.2d at 1080.
Of greatest concern, defendants ask the court to resolve profound, unresolved state-law
issues that transcend the case at hand. Land use "involves important matters of state and local
policy[.]" Meredith, 828 F.2d at 232; see Front Royal, 945 F.2d at 763 ("[L]and[-]use questions,
... are the peculiar concern of local and state governments ...." (quotation omitted) (third
alteration in original)); Browning-Ferris, 774 F.2d at 79 (same); see also Pomponio, 21 F.3d at
1327 ("We can conceive offew matters ofpublic concern more substantial than zoning and land[
]use laws."). Moreover, use ofNorth Carolina's beaches "raises fundamental questions ofpublic
policy." Machipongo, 579 F.2d at 875-76. The court is not "unmindful that an incorrect federal
decision might adversely affect property owners throughout all of [North Carolina]'s coastal
regions." rd. at 876; cf. Pomponio, 21 F.3d at 1327 ("[F]ederal courts should not leave their
indelible print on local and state land[-]use and zoning law ...." (quotation omitted)). Given the
far-reaching implications ofthe land-use issues that defendants raise, the court should defer to the
state courts, which have "extensive familiarity and experience with such matters." Front Royal,
945 F.2d at 763 (quotation omitted); Caleb Stowe, 724 F.2d at 1080 (quotation omitted); Fralin
& Waldron, 493 F.2d at 482.
Collectively, these considerations demonstrate that the primary issues raised by defendants'
first six counterclaims are issues that are particularly within the province of North Carolina's
courts. Accordingly, the court abstains from hearing counterclaims one through six and dismisses
them without prejudice.
Alternatively, because the court may decline to render declaratory relief, it exercises that
discretionary power here. First, defendants' first six counterclaims would require the court to
resolve novel and important state-law issues.
See,~,
16
Kapiloff, 155 F.3d at 494; Ind-Com, 139
F.3d at 424; Mitcheson, 955 F.2d at 236, 238, 240; Am. Motorists, 306 F. Supp. 2d at 581;
Chapman, 299 F. Supp. 2d at 563-64; Alpha Mech., 9 F. Supp. 2d at 588. Second, at these
counterclaims' cores are not disputed facts, but rather important and novel issues of state law,
which North Carolina courts are far better equipped to efficiently (and defInitively) resolve. See
Front Royal, 945 F.2d at 765; Caleb Stowe, 724 F.2dat 1080; Fralin & Waldron, 493 F.2d at 482.
Third, because the litigation in Cherry raises similar issues of law and fact, a ruling by the court
at this time "might create unnecessary 'entanglement' between the state and federal courts."
Kapiloff, 155 F.3d at 494. Although there is no evidence of"procedural fencing," the court need
not find that each factor has been satisfied in order to decline to exercise jurisdiction. See id. Due
to the overriding federalism, efficiency, and comity concerns, the court declines to grant
declaratory relief to defendants and dismisses their first six counterclaims without prejudice. See,
e.g., Ind-Com, 139 F.3d at 422-23; Alpha Mech., 9 F. Supp. 2d at 587 & n.5.
B.
Defendants also assert six counterclaims that essentially seek declarations that the Town
lacked authority to enact Ordinance 10-07-021 and that the ordinance does not apply to the
Cottage. Countercl.
~~
163-252. The court dismisses these counterclaims because they are not
ripe, because federal courts should abstain from intervening in land-use issues, and because federal
courts should decline to provide declaratory relief that would require the resolution novel and
important state-law issues.
These counterclaims are not ripe. Defendants do not contend that the Town denied them
a permit due to Ordinance 10-07-021. In fact, defendants do not allege that they ever sought a
building permit from the Town. 7 Instead, defendants appear to argue that judicial review is
7 Although defendants
have not applied for permits from the Town, they have applied for
permits from Dare County and North Carolina to repair the Cottage's septic system. Countercl.
~~ 80-96. Dare County approved defendants' application. Id. ~ 82. Defendants requested a permit
from North Carolina on October 28, 2010. Id. ~ 86. The state had not rendered a decision on
17
warranted because the Town threatened to deny defendants a pennit. See id.
~
99. Defendants
cannot challenge Ordinance 10-07-021 based solely on the Town's threatened or hypothetical
denial of a pennit.
See,~,
Texas v. United States, 523 U.S. 296, 300 (1998); O'Shea v.
Littleton, 414 U.S. 488, 496 (1974). Rather, defendants must show that the Town's action "has
been formalized and its effects felt in a concrete way ...." Pac. Gas & Elec. v. State Energy Res.
Conservation & Dev. Comm'n, 461 U.S. 190,200 (1983)(quotation omitted). Because defendants
do not allege that Ordinance 10-07-021 caused the Town to deny them a pennit, their challenges
to the ordinance are not ripe.
Alternatively, the court abstains from adjudicating these counterclaims because doing so
would require the court to construe Ordinance 10-07-021, a municipal land-use regulation, see,
~,
Meredifu, 828 F.2d at 232; Pomponio, 21 FJd at 1327; Browning-Ferris, 774 F.2d at 79;
Caleb Stowe, 724 F.2dat 1080; Machipongo, 579 F.2d at 876; Fralin & Waldron, 493 F.2dat483,
and determine the extent to which North Carolina has delegated its eminent domain power to the
Town. See Thibodaux, 360 U.S. at 28; Caleb Stowe, 724 F.2d at 1080; Fralin & Waldron, 493
F.2d at 482. Although the court's rulings on counterclaims seven through twelve might not have
as far-reaching effects as would rulings on defendants' first six counterclaims, the questions raised
in counterclaims seven through twelve nevertheless involve novel and important issues ofstate and
local concern. See Pomponio, 21 F.3d at 1327; Front Royal, 945 F.2d at 763; Meredith, 828 F.2d
at 232; Browning-Ferris, 774 F .2d at 79. Ifdefendants' counterclaims do ripen, the questions that
they raise are better addressed in North Carolina state court. See Front Royal, 945 F .2d at 764-65;
Caleb Stow, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482. Thus, the court abstains from
hearing counterclaims seven through twelve.
defendants' request when defendants filed their counterclaims on January 21, 2011. Id. ~ 90.
Defendants allege that the state's pennitting agent is a Town employee who is in cahoots with the
Town to wrongfully delay the approval of defendants' application. See id. W 91-92, 94-97.
18
Moreover, the court declines to exercise jurisdiction over these counterclaims for
declaratory relief. Like defendants' first six counterclaims, resolving counterclaims seven through
twelve would require the court to decide novel and important state-law issues regarding the Town's
land-use authority.
See,~, Kapiloff,
155 F.3d at 494; Ind-Com, 139 F.3d at 424; Mitcheson, 955
F.2d at 236, 238, 240; Am. Motorists, 306 F. Supp. 2d at 581; Chapman, 299 F. Supp. 2d at
563--64; Alpha Mech., 9 F. Supp. 2d at 588. North Carolina courts are best equipped to efficiently
and finally resolve these counterclaims. See Front Royal, 945 F.2d at 764--65; Caleb Stowe, 724
F.2d at 1080; Fralin & Waldron, 493 F.2d at 482; cf. Kapiloff, 155 F.3d at 493. Federalism,
efficiency, and comity concerns weigh in favor of the court's declining to grant declaratory relief
on counterclaims seven through twelve. See, ~ Ind-Com, 139 F.3d at 422-23; Alpha Mech.,
9 F. Supp. 2d at 587 & n.5. Accordingly, the court dismisses counterclaims seven through twelve
without prejudice.
C.
Defendants also seek declarations that the Town's actions violated defendants' substantive
an4 procedural due process rights under the United States and North Carolina Constitutions.
Countercl. ~~253--60. The court dismisses these counterclaims because at their cores are state-law
land-use issues and because the court is reluctant to provide declaratory reliefwhen doing so would
require it to resolve novel and important state-law issues.
A federal claim that rests on a violation of state law is "a state [-]law [claim] in federal [-]
law clothing." Martin, 499 F.3d at 368 (quotation omitted) (second alteration in original);
Johnson, 199 F.3d at 721 (quotation omitted); see Shirvinski v. United States, _ F.3d _,2012
WL 764464, at *3, *5 (4th Cir. 2012); Pomponio, 21 F.3d at 1326. Federal courts abstain from
hearing such claims "[b]ecause of the diminished federal interest in adjudicating [them] and the
heightened threat [that federal adjudication ofthem] pose[s] to uniform state regulation[.]" Martin,
499 F.3d at 368; see also Johnson, 199 F.3d at 721; cf. Burford, 319 U.S. at 317. Defendants
19
allege that the Town violated their substantive due process rights by arbitrarily and capriciously
issuing and enforcing the Nuisance Declaration. See Countercl. "253-56. However, close
examination of this counterclaim reveals that defendants are simply recasting their first twelve
state-law counterclaims as one federal constitutional claim. Defendants reason that because the
Town did not have authority to enact and enforce Ordinances 16-31(6)(c) and 10-07-021, the
Town's actions were necessarily arbitrary and capricious. Thus, according to defendants, because
the Town acted arbitrarily and capriciously, it violated defendants' substantive due process rights.
See id. A violation of state law is a necessary antecedent to defendants' federal constitutional
counterclaim. Hence, defendants have given their state-law counterclaims federal clothing. See
JohnsoI!, 199 F.3d at 721-22; Pomponio, 21 F.3d at 1326. Likewise, defendants allege that the
Town acted arbitrarily and capriciously and did not comply with "local, state or federal law," thus
depriving them oftheir federal rights to procedural due process. See Countercl. ,,257-60. Again,
the Town's alleged non-compliance with state law is at this counterclaim's heart. 8 Defendants'
"[fjederal [counter]claims rest ... on allegations that a state agency ... violated state law," Mm,
499 F.3d at 368, and, as discussed, the state laws at issue regulate land use, a matter into which
federal courts are reluctant to delve. See Pomponio, 21 F.3d at 1328; Front Royal, 945 F.2d at
764-65; Beacon Hill, 875 F.2d at 1085 n.6; Meredith, 828 F.2d at 231-32; Browning-Ferris, 774
F.2d at 79; Caleb Stowe, 724 F.2d at 1080; Machipongo, 579 F.2d at 875-76; Fralin & Waldron,
493 F.2d at 482-83. Federal courts should avoid "adjudicat[ing] ... disputes involving the most
sensitive questions of state law and policy that arrive at their door[s] under the guise of federal
8 Defendants claim that the Town violated their procedural due process rights by not
complying with ''the procedural requirements of applicable ... federal law." Countercl., 258.
Defendants do not identify any federal statutory or administrative procedural requirements that the
Town allegedly violated. Therefore, the only applicable federal law is the Due Process Clause of
the Fourteenth Amendment ofthe United States Constitution. Relying on the Due Process Clause,
however, is a circular argument: the Town violated defendants' federal procedural due process rights
by violating defendants' federal procedural due process rights. Accordingly, defendants' procedural
due process counterclaims can rest only on the Town's alleged violation of state law.
20
claims." Johnson, 199 F .3d at 721. Accordingly, the court abstains from entertaining defendants'
federal due process counterclaims.
The court has an even greater interest in not deciding whether the Town violated
defendants' rights guaranteed by the North Carolina Constitution. Defendants' counterclaims
allege that the Town violated the North Carolina Constitution when it violated state law-these
counterclaims are state statutory claims clothed in the state constitution. The court will not peel
through these counterclaims and in so doing construe the state constitution and land-use
regulations. Cf. Pomponio, 21 FJd at 1327; Front Royal, 945 F.2d at 763; Meredith, 828 F.2d at
232; Browning-Ferris, 774 F.2d at 79.
Accordingly, the court abstains from adjudicating
defendants' counterclaims grounded in the Law of the Land Clause in the North Carolina
Constitution.
Alternatively, the court declines to exercise jurisdiction over defendants' requests for
declaratory relief. As discussed, counterclaims thirteen and fourteen are essentially defendants'
first twelve counterclaims recast as constitutional claims. Consequently, to grant defendants'
requested relief, the court would need to delve into novel and important state-law issues. See,~,
Kapiloff, 155 F.3d at 494; Ind-Com, 139 F.3d at 424; Mitcheson, 955 F.2d at 236, 238, 240; Am.
Motorists, 306 F. Supp. 2d at 581; Chapman, 299 F. Supp. 2d at 563-64; Alpha Mech., 9 F. Supp.
2d at 588. North Carolina's courts are far better equipped to resolve these legal issues. See Front
Royal, 945 F.2d at 765; Caleb Stowe, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482; cf.
Kapiloff, 155 F.3d at 493. Federalism, efficiency, and comity concerns weigh in favor of the
court's declining to grant declaratory relief on counterclaims thirteen and fourteen.
See,~,
Ind-Com, 139 F.3d at 422-23; Alpha Mech., 9 F. Supp. 2d at 587 & n.5. In sum, the court
dismisses counterclaims thirteen and fourteen without prejudice.
D.
Additionally, defendants seek a declaration that the Town's actions violated defendants'
21
equal protection rights under both the United States and North Carolina Constitutions. Countercl.
~~
261-68. To prevail on a federal equal protection claim, defendants must show that the Town
treated them differently than it treated similarly situated individuals. See,~, Morrison v.
Garraghty, 239 F.3d 648, 653-54 (4th Cir. 2001). Defendants allege that the Town did so by
enforcing Ordinance 16-31(6) against them as the Cottage's owners, but not against owners of
other beach houses located partially or wholly in the "public trust area." Countercl. ~ 262-65.
Admittedly, this counterclaim is not a prototypical "state[-]law [claim] in federal law clothing."
Martin, 499 F.3d at 368 (quotation omitted) (second alteration in original); Johnson, 199 F.3d at
721 (quotation omitted). Yet, to determine whether other beach house owners were actually
situated similarly to defendants, the court would need to defme the term "public trust area." See
Caleb Stowe, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482-83. Not only does the court
have inadequate state-law guidance to construe this term, see Burford, 319 U.S. at 331;
Machipongo, 579 F .2d at 87, but the court's ruling on the issue would have implications beyond
the case at hand. See Machipongo, 579 F.2dat876; cf. Pomponio, 21 F.3dat 1327. Accordingly,
the court abstains from hearing defendants' fifteenth counterclaim.
Similar to defendants' state Law ofthe Land Clause counterclaims, the court has an even
greater interest in not entertaining defendants' contention that the Town violated their equal
protection rights secured by the North Carolina Constitution. Defendants' argument is a state-law
claim wrapped in a state constitutional claim. Accordingly, the court abstains from entertaining
defendants' state equal protection counterclaim.
Alternatively, the court declines to exercise jurisdiction over defendants' requests for
declaratory relief. To grant defendants' requested declaratory relief, the court would need to delve
into novel and important state-law issues. See,~, Kapiloff, 155 F.3d at 494; Ind-Com, 139 F.3d
at 424; Mitcheson, 955 F.2d at 236, 238, 240; Am. Motorists, 306 F. Supp. 2d at 581; Chapman,
299 F. Supp. 2d at 563-64; Alpha Mech., 9 F. Supp. 2d at 588. North Carolina courts are better
22
equipped to resolve these issues. See Front Royal, 945 F.2d at 765; Caleb Stowe, 724 F.2d at
1080; Fralin & Waldron, 493 F.2d at 482; cf. Kapiloff, 155 F.3d at 493. Federalism, efficiency,
and comity concerns weigh in favor of the court's declining to grant declaratory relief on
counterclaim fifteen.
See,~,
Ind-Com, 139 F.3d at 422-23; Alpha Mech., 9 F. Supp. 2d at 587
& n.5. Accordingly, the court dismisses counterclaim fifteen without prejudice.
E.
Defendants also seek damages pursuant to 42 U.S.C. § 1983 alleging that the Town
violated defendants' federal constitutional rights. Countercl. ~~ 269-73. To state a section 1983
claim, defendants must show that the Town deprived them ofa federal right and did so under color
of state law. See Gomez v. Toledo, 446 U.S. 635, 640 (1980); Hall v. Quillen, 631 F.2d 1154,
1155-56 & nn. 2-3 (4th Cir. 1980). A section 1983 claim fails as a matter oflaw where there is
no underlying constitutional violation. See, ~ Young v. City of Mount Ranier, 238 F.3d 567,
579 (4th Cir. 2001); Grayson v. Peed, 195 F.3d 692,697 (4th Cir. 1999); S.P. v. City of Takoma
Park, Md., 134 F.3d 260, 274 (4th Cir. 1998). Because the court abstains from determining
whether the Town violated defendants' federal constitutional rights, the court abstains from
determining whether the Town is liable under section 1983. Accordingly, the court stays
defendants' sixteenth counterclaim. See, ~ Quackenbush, 517 U.S. at 721; Johnson, 199 F.3d
at 727-28.
F.
Defendants next ask the court to enjoin the Town from assessing and collecting civil
penalties, and taking "any other adverse action" against defendants. 9 Countercl.
mr 274-82.
Before enjoining the Town's enforcement actions, the court would need to construe a municipal
land-use regulation, see Caleb Stowe, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482-83,
9 Because the Town withdrew the Nuisance Declaration, defendants' request to enjoin
demolition of the Cottage is moot. See Countercl. ~ 282(a).
23
and scrutinize the state authority delegated to the Town. See Thibodaux, 360 U.S. at 28; Caleb
Stowe, 724 F.2d at 1080; Fralin & Waldron, 493 F.2d at 482. Considering either matter would
require the court to delve into important areas ofstate prerogative, see Pomponio, 21 F.3d at 1327;
Front Royal, 945 F.2d at 763; Meredith, 828 F.2d at 232; Browning-Ferris, 774 F.2d at 79;
Machipongo, 597 F.2d at 876, without adequate state-law guidance. See Burford, 319 U.S. at 331;
Machipongo, 579 F.2d at 87. To avoid creating "needless friction by unnecessarily enjoining state
officials from executing domestic policies," Thibodaux, 360 U.S. at 33, the court abstains from
hearing counterclaim seventeen and dismisses the counterclaim without prejudice.
G.
Through counterclaims eighteen and nineteen, defendants seek compensation under the
United States and North Carolina Constitutions for the Town's alleged uncompensated regulatory
taking of the Cottage. Countercl." 283-306. Defendants cannot prevail on a federal takings
claim until first seeking and being denied compensation from the state. See Williamson Cnty.
Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172,195 (1985); Ruckelshaus v. Monsanto
Co., 467 U.S. 986, 1016, 1019-20 (1984). Defendants may only seek such compensation by
commencing an inverse condemnation proceeding. See N.C. Gen. Stat. § 40A-51. Similarly,
inverse condemnation is the exclusive remedy for a taking in violation of the North Carolina
Constitution. Long v. City ofCharlotte, 306 N.C. 187, 196-97,293 S.E.2d 101, 107-08 (1982);
Harwood v. City of Concord, 201 N.C. 781, 781, 161 S.E. 534, 535 (1931) (per curiam).IO
Therefore, at this time, defendants' sole means ofseeking compensation for the alleged regulatory
10 Although the North Carolina Constitution does not expressly prohibit governments from
taking ofproperty without compensation, the Supreme Court ofNorth Carolina has inferred such a
prohibition from the Law ofthe Land Clause, N.C. Const. art. I, § 19. Finch v. City ofDurham, 325
N.C. 352, 362-63, 384 S.E.2d 8, 14 (1989). The standard for determining whether a government
took property in violation of the North Carolina Constitution is the same as the standard used to
assess federal takings claims. See,~, id. at 371-72,384 S.E.2d at 19; N.C. Dep't of Transp. v.
Cromartie, _ N.C. App. _, 716 S.E.2d 361,367 (2011).
24
taking is an inverse condemnation action, which defendants have initiated through their nineteenth
counterclaim. See Countercl. ~~293-306. Thus, counterclaim eighteen is unripe and is dismissed.
As for counterclaim nineteen, compensation is not required when a novel regulatory
restriction already "inhere(s] in the title itself, in the restrictions that background principles ofthe
State's law ofproperty and nuisance already place upon land ownership." Lucas, 505 V. S. at 1029.
Thus, "a taking does not occur when a state eliminates a nuisance." Trobough v. City of
Martinsburg, No. 96-1607,1997 WL 425688, at *3 (4th Cir. July 30, 1997) (unpublished) (citing
Keystone Bituminous Coal Ass'n v. DeBenedictus, 480 V.S. 470, 489-91 (1987); Lucas, 505
V.S. at 1023-24). Critically, though, a nuisance ordinance does not necessarily stem from a
"background principle of (a] State's law." For a government to avoid paying compensation for
a regulatory taking, a regulation must be "derived from a State's legal tradition." Palazzolo v.
Rhode Island, 533 V.S. 606,630 (2001).
Because defendants contend that the Town's enforcement of Ordinance 16-31 (6) caused
the alleged regulatory taking, the court would first need to decide whether the ordinance is derived
from North Carolina law's "background principles." See Lucas, 505 V.S. at 1029. It might be that
Ordinance 16-31 (6) comes from such a background principle, especially ifthe ordinance reflects
the "public trust" as recognized by N.C. Gen. Stat. § 77-20. However, for the court to make this
determination, it would need to construe a local ordinance and a state statute, without adequate
guidance as to either. In addition, the court would have to decide whether North Carolina
bestowed the authority on the Town to abate a nuisance. Resolving these issues would require
inquiries identical to those required by counterclaims one through six, and the issues' complexity
and importance to North Carolina warrants the court's abstention. Accordingly, the court stays
counterclaim nineteen.
See,~,
Quackenbush, 517 V. S. at 721; Johnson, 199 F.3d at 727-28.
H.
Defendants also allege that the Town slandered their title by repeatedly stating that the
25
Cottage is in the public trust area. Counterci.
~~
307-15. Slander of title occurs when an
individual maliciously makes false statements about the title of another's property, thus causing
special damages. See Mecimore v. Cothren, 109N.C.App. 650, 654,428 S.E.2d470,473 (1993).
It appears, however, that the Town's statements that give rise to the counterclaim were only false
if the Cottage is outside of the public trust area. Thus, resolution of this counterclaim would
depend on resolving the issues contained in the first six counterclaims. The court abstains from
addressing theses issues and stays counterclaim twenty.
See,~,
Quackenbush, 517 U. S. at 721 ;
Johnson, 199 F.3d at 727-28.
1.
Defendants next assert that the Town was negligent under North Carolina law in failing to
properly inspect the Cottage before declaring that the Cottage violated Ordinance 16-31(6).
Countercl. ~~ 316-21. To determine whether the Town acted negligently in declaring the Cottage
a nuisance, the court would need to construe Ordinance 16-31 (6). Doing so would entail the same
problems inherent in adjudicating defendants' first six counterclaims. Because the court abstains
from addressing these issues, it stays counterclaim twenty-one.
See,~,
Quackenbush, 517 U.S.
at 721; Johnson, 199 F.3d at 727-28.
J.
Finally, the Town raises two claims seeking an abatement order against the Cottage, Am.
Compi. ~~ B-C, and another that seeks civil penalties for defendants' refusal to comply with the
Nuisance Declaration. Id. ~ D. In light ofthe Town having withdrawn the Nuisance Declaration,
the Town no longer seeks an order ofabatement, making the Town's first two claims moot. The
Town's third claim, however, is not moot. To grant the Town's request, though, the court would
need to resolve the various state-law issues that defendants' ftrst six counterclaims raise.
Accordingly, the court stays the Town's third claim.
Johnson, 199 F.3d at 727-28.
26
See,~,
Quackenbush, 517 U.S. at 721;
IV.
Each claim and counterclaim in this case is a variation on a fundamental state-law
question-to what extent can a municipality enforce land-use ordinances against private beachfront
property owners? The ultimate answer to this question will "reflect a delicate trade-off" between
individual liberty and social utility on North Carolina coast, and federal courts have recognized
that "state authority has long been preeminent" in such areas oflaw and policy. See Johnson, 199
F.3d at 720. Accordingly, the issues at this case's heart should "be committed above all to the
legislative,judicial, and regulatory processes of [North] Carolina." See id. at 715. Therefore, in
deference to federalism and comity, see,
~,
Martin, 499 F.3d at 363; Ind-Com, 139 F.3d at
422-23, the court declines to exercise jurisdiction over the case at this time. Accordingly, the
court DISMISSES without prejudice defendants' fIrst through fIfteenth, seventeenth, and
eighteenth counterclaims, and dismisses the Town's fIrst and second claims. The court STAYS
defendants' sixteenth, nineteenth, twentieth, and twenty-fIrst counterclaims, and the Town's third
claim. The court GRANTS in part and DISMISSES in part without prejudice the Town's motion
to dismiss [D.E. 17]. The Court DENIES without prejudice defendants' motion for partial
summary judgment [D.E. 25].
SO ORDERED. This
za day of March 2012.
27
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